Edgar Filing: TOWER AUTOMOTIVE INC

PROSPECTUS

EXCHANGE OFFER FOR
EURO150,000,000 [TOWER AUTOMATIVE LOGO]
R.J. TOWER CORPORATION
9.25% SENIOR NOTES DUE 2010
GUARANTEED BY TOWER AUTOMOTIVE, INC.

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

We are offering to exchange:

up to Euro150,000,000 of our new 9.25% senior notes due 2010

for
a like amount of our outstanding 9.25% senior notes due 2010.
--------------------------------------------------------------------------------

Material Terms of Exchange Offer:

- The terms of the notes to be issued in the exchange offer are substantially
identical to the outstanding notes, except that the transfer restrictions and
registration rights relating to the outstanding notes will not apply to the
exchange notes.
- The outstanding notes are listed on the Luxembourg Stock Exchange and we
expect that the exchange notes will also be listed on that exchange. We do not
intend to list the exchange notes on any other securities exchange or seek
approval for quotation through any automated trading system.

- The exchange offer expires at 5:00 p.m., London time, February 6, 2001, unless
extended.

- We believe that the exchange of notes will not be a taxable event for U.S.
federal income tax purposes.
- You may withdraw your tender of notes at any time before the expiration of the
exchange offer. We will exchange all of the outstanding notes that are validly
tendered and not withdrawn.
- We will not receive any proceeds from the exchange offer.

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

Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for outstanding notes where
such outstanding notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. We have agreed that, for a
period of 180 days after the expiration date of the exchange offer, we will make
this prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
--------------------------------------------------------------------------------

FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 12 OF
THIS PROSPECTUS.
--------------------------------------------------------------------------------

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES
TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------

The date of this prospectus is December 22, 2000.

TABLE OF CONTENTS

PAGE
----

Prospectus Summary................... 1
Risk Factors......................... 12
Disclosure Regarding Forward-Looking
Statements......................... 17
Use of Proceeds...................... 18
Currencies and Exchange Rate Data.... 19
Capitalization....................... 20
Unaudited Pro Forma Financial
Statements......................... 21
Selected Consolidated Financial
Data............................... 26
Management's Discussion and Analysis
of Results of Operations and
Financial Condition................ 28
Business............................. 39
Management........................... 51
Security Ownership of Certain
Beneficial Owners and
Management......................... 57
Certain Relationships and Related
Transactions....................... 58

PAGE
----

Description of Other Indebtedness.... 59
The Exchange Offer................... 63
Description of the Notes............. 72
U.S. Federal Income Tax
Consequences....................... 86
Book Entry; Delivery and Form........ 87
Plan of Distribution................. 94
Legal Matters........................ 95
Experts.............................. 95
Where You Can Find More
Information........................ 95
Incorporation of Documents By
Reference.......................... 95
General Listing Information.......... 96
Information About the Issuer and the
Guarantors......................... 97
Index to Financial Statements........ F-1

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

You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.

i
3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and related notes appearing
elsewhere or incorporated by reference in this prospectus. Unless the context
indicates otherwise, as used in this prospectus, the terms "us," "we," "our" and
"Tower Automotive" refer to Tower Automotive, Inc., its consolidated
subsidiaries and their respective predecessors; "Parent" refers to Tower
Automotive, Inc., exclusive of its consolidated subsidiaries; and "Issuer"
refers to R.J. Tower Corporation, a direct, wholly owned subsidiary of Parent.

TOWER AUTOMOTIVE

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.

Since our inception in April 1993, our revenues and EBITDA have grown
rapidly through a focused strategy of internal growth and a highly disciplined
acquisition program. We have successfully completed 13 acquisitions and
established joint ventures in China, Mexico, Korea and the United States. As a
result of these acquisitions and internal growth, our revenues and EBITDA have
increased from approximately $165.5 million and $18.4 million in 1994 to
approximately $2.2 billion and $336.7 million in 1999, representing compound
annual growth rates of approximately 67% and 79%, respectively. Our North
American content per vehicle has increased from $10.83 in 1994 to $123.13 in
1999.

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.
4

We have both a diversified base of OEM customers as well as a broad array
of structural products. The following charts set forth our revenues by major
customer and principal product category for 1999:

REVENUE BY CUSTOMER

[REVENUE BY CUSTOMER PIE CHART]

Ford 38
DaimlerChrysler 29
GM 10
Heavy Truck OEMs 7
Fiat 5
Honda 3
Toyota 2
Nissan 1
Other 5

REVENUE BY PRODUCT CATEGORY
[REVENUE BY PRODUCT CATEGORY PIE CHART]

Lower Vehicle Structures 50
Other 1
Suspension Components, Modules and Systems 20
Body Structures and Assembles 24
Class A Surfaces and Modules 5

INDUSTRY OVERVIEW

We operate in the large and highly fragmented structural segment of the
automotive supply industry, which continues to undergo significant
consolidation. In order to lower costs and improve quality, OEMs are reducing
their supplier base by awarding sole-source contracts to full-service suppliers
who are able to supply larger portions of a vehicle on a global basis. OEMs'
criteria for supplier selection include not only cost, quality and
responsiveness, but also full-service design, engineering and program management
capabilities. OEMs are increasingly seeking suppliers capable of providing
complete systems or modules rather than suppliers who only provide separate
component parts. In addition, OEMs are increasingly requiring their suppliers to
have the capability to design and manufacture their products in multiple
geographic markets. As a full-service supplier with strong OEM relationships, we
expect to continue to benefit from these trends within the structural segment of
the automotive supply industry.

COMPETITIVE STRENGTHS

We have developed key competitive strengths that allow us to capitalize on
industry trends and provide us the opportunity to successfully execute our
operating and growth strategies. These key strengths include:

Strong OEM Partnerships. We have formed strong relationships with our major
OEM customers due to our high level of product quality, engineering
capabilities, product design and customer service.
2
5

BUSINESS STRATEGY

Our business objective is to continue to capitalize on the consolidation,
globalization and system/modular sourcing trends in the automotive supply
industry. Where appropriate, we outsource the production of commodity components
to Tier II and Tier III manufacturers, as well as seek to provide program
management and administrative services to these manufacturers to maximize supply
chain efficiency. This also allows us to optimize the use and return on capital
employed in our operations. In addition, we have implemented an economic value
added management system to aid in guiding our investment decisions, rewarding
our colleagues and measuring our performance.

Key elements of our operating and growth strategies are as follows:

Operating Strategy

- Offer full-service technical design, engineering and program management
capabilities;

- Utilize efficient manufacturing/continuous improvement programs;

- Expand our global presence; and

- Promote a decentralized, participative culture.

Growth Strategy

- Pursue strategic acquisitions;

- Continue to expand modular product opportunities;

- Increase vehicle penetration; and

- Pursue "world car" opportunities.

RECENT DEVELOPMENTS

On December 7, 2000, we sold our Roanoke, Virginia heavy truck rail
manufacturing business to our existing joint venture, Metalsa S. de R.L. for $55
million, which approximates its book value as of September 30, 2000, plus an
earnout of up to $30 million based on achieving specified profit levels over the
next three years. We acquired our 40% equity interest in Metalsa in October
1997. Metalsa is the largest supplier of vehicle frames and structures in
Mexico. The remaining 60% of Metalsa is owned by Promotora de Empresas Zano,
S.A. de C.V., known as "Proeza." In connection with that joint venture, we
entered into a technology sharing arrangement with Proeza with respect to the
sharing of product and process technology.

Additionally, on October 2, 2000, our board of directors approved a
comprehensive operational realignment plan, which is intended to improve our
long-term competitive position and lower our cost structure. The plan currently
includes phasing out the heavy truck rail manufacturing in Milwaukee, Wisconsin;
reducing stamping capacity by closing the Kalamazoo, Michigan facility; and
consolidating related support activities across the enterprise. We plan to
record a charge to operations of approximately $140 million in the fourth
quarter of 2000, which reflects the estimated qualifying "exit costs" to be
incurred over the next 12 months under the plan. Certain of the estimates used
for the severance and outplacement costs are subject to

3
6

collective bargaining discussions and thus these costs will qualify as "exit
costs" only upon completion of these negotiations.

The charge will include costs associated with asset impairments, severance
and outplacement costs related to employee terminations, and loss contract
provisions. These activities are anticipated to result in a reduction of more
than 800 employees. The estimated realignment charge does not cover certain
aspects of the plan, including movement of equipment and employee relocation and
training. These costs will be recognized in future periods as incurred.

The asset impairments consist of long-lived assets, including fixed assets,
manufacturing equipment and land, from the facilities we intend to dispose of or
discontinue. For assets that will be disposed of currently, we measured
impairment based on estimated proceeds on the sale of the facilities and
equipment. For assets that will be held and used in the future, we prepared a
forecast of expected undiscounted cash flows to determine whether asset
impairment existed, and we used fair values to measure the required write-downs.

Based on the current plan, we anticipate this charge will require cash
payments of approximately $38 million over the next 12 months combined with the
write-off of assets having a book value of approximately $102 million. These
assets include Milwaukee heavy truck rail manufacturing machinery and equipment
of approximately $47 million, Milwaukee and corporate campus support operating
assets of approximately $52 million, and the Kalamazoo stamping operation's
land, buildings and equipment of approximately $3 million.

Based upon the historical financial results of the discontinued and
transferred operations, as well as certain assumptions relating to the future
performance of the transferred business, the costs of implementing the
restructuring, and other factors over which we have no control, we could realize
annual savings of between 15 and 25 cents per share from this restructuring.

In addition to the gross proceeds of $55 million realized on the sale of
Roanoke, we expect working capital savings of approximately $20 million relating
to the exiting businesses. We also expect to realize approximately $10 million
in cash tax savings as a result of the above actions. These cash proceeds will
more than offset the approximately $38 million of cash payments expected to be
incurred due to the restructuring activities.

4
7

SUMMARY OF THE EXCHANGE OFFER

The Initial Offering of
Outstanding Notes........ We sold the outstanding notes on July 25, 2000 in a
private placement to Chase Manhattan International
Limited, Bank of America International Limited, ABN
AMRO Incorporated, Donaldson, Lufkin & Jenrette
International, First Chicago Limited and Scotia
Capital (USA) Inc. We collectively refer to the
parties in this prospectus as the "initial
purchasers." The initial purchasers subsequently
resold the outstanding notes to qualified
institutional buyers pursuant to Rule 144A under
the Securities Act and to qualified buyers outside
the United States in reliance upon Regulation S
under the Securities Act.

Exchange and Registration
Rights Agreement......... Simultaneously with the initial sale of the
outstanding notes, we entered into an exchange and
registration rights agreement. In the registration
rights agreement, we agreed, among other things, to
use our reasonable best efforts to file a
registration statement with the SEC and to complete
an exchange offer by January 21, 2001. Under
certain circumstances outlined in the registration
rights agreement, we may be required to file a
"shelf" registration statement for a continuous
offering pursuant to Rule 415 under the Securities
Act with respect to the outstanding notes. This
exchange offer is intended to satisfy certain of
our obligations under the registration rights
agreement. After the exchange offer is complete,
you may no longer be entitled to any exchange or
registration rights with respect to your
outstanding notes.

The Exchange Offer......... We are offering to exchange E1,000 principal amount
of exchange notes, which have been registered under
the Securities Act, for each E1,000 principal
amount of outstanding notes, which were issued on
July 25, 2000 in the initial offering. In order to
be exchanged, an outstanding note must be properly
tendered and accepted. All outstanding notes that
are validly tendered and not withdrawn will be
exchanged. We will issue exchange notes promptly
after the expiration of the exchange offer.

Resales of the Exchange
Notes.................... We believe that the exchange notes issued in the
exchange offer may be offered for resale, resold
and otherwise transferred by you without compliance
with the registration and prospectus delivery
provisions of the Securities Act provided that:

- you acquire the exchange notes in the ordinary
course of your business;

- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate, in
the distribution of the exchange notes issued to
you in the exchange offer; and

- you are not an affiliate of ours within the
meaning of Rule 405 under the Securities Act.

5
8

If any of these conditions are not satisfied and
you transfer any exchange notes issued to you in
the exchange offer without delivering a prospectus
meeting the requirements of the Securities Act or
without an exemption from registration of your
exchange notes from these requirements, you may
incur liability under the Securities Act. We will
not assume, nor will we indemnify you against, any
such liability.

Each broker-dealer that is issued exchange notes in
the exchange offer for its own account in exchange
for outstanding notes that were acquired by that
broker-dealer as a result of market-making or other
trading activities, must acknowledge that it will
deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of
the exchange notes.

A broker-dealer may use this prospectus for an
offer to resell, resale or other retransfer of the
exchange notes issued to it in the exchange offer.
We have agreed that, for a period of 180 days after
the date this exchange offer is completed, we will
make this prospectus available to any broker-dealer
for use in connection with any such resale.

Accrued Interest on the
Exchange Notes and the
Outstanding Notes........ Each exchange note will bear interest from its
issuance date. The holders of outstanding notes
that are accepted for exchange will receive, in
cash, accrued interest on those notes to, but not
including, the issuance date of the exchange notes.
This interest will be paid with the first interest
payment on the exchange notes. Interest on the
outstanding notes accepted for exchange will cease
to accrue upon issuance of the exchange notes.

Consequently, if you exchange your outstanding
notes for exchange notes you will receive the same
interest payment that you would have received if
you had not accepted this exchange offer.

Record Date................ We mailed this prospectus and the related exchange
offer documents to the registered holders of
outstanding notes as of January 8, 2001.

Expiration Date............ The exchange offer will expire at 5:00 p.m., London
time, February 6, 2001, unless we decide to extend
the expiration date.

Conditions to the Exchange
Offer.................... The exchange offer is subject to certain customary
conditions, including the condition that the
exchange offer not violate applicable law or any
applicable interpretation of the Staff of the SEC.
The exchange offer is not conditioned upon any
minimum principal amount of the outstanding notes
being tendered.

Procedures for Tendering
Outstanding Notes........ We issued the outstanding notes as global
securities. When the outstanding notes were issued,
we deposited the global notes with Deutsche Bank
Luxembourg S.A., as book-entry

6
9

depositary. Deutsche Bank Luxembourg S.A. issued a
certificateless depositary interest in each global
note, which represents a 100% interest in the
notes, to Deutsche Bank AG London, as depositary
for Euroclear and Clearstream, Luxembourg.
Beneficial interests in the outstanding notes,
which are held by direct or indirect participants
in Euroclear and Clearstream, Luxembourg through
the certificateless depositary interest, are shown
on records maintained in book-entry form by
Euroclear and Clearstream, Luxembourg.

You may tender your outstanding notes through the
book-entry transfer systems of Euroclear and/or
Clearstream, Luxembourg. To tender your outstanding
notes by a means other than book-entry transfer, a
letter of transmittal must be completed and signed
according to the instructions contained in the
letter. The letter of transmittal and any other
documents required by the letter of transmittal
must be delivered to the exchange agent by mail,
facsimile, hand delivery or overnight carrier. In
addition, you must deliver the outstanding notes to
the exchange agent. See "The Exchange
Offer -- Procedures for Tendering Outstanding
Notes" for more information.

Do not send letters of transmittal and certificates
representing outstanding notes to us. Send these
documents only to the exchange agent. See "The
Exchange Offer -- Exchange Agent" for more
information.

Special Procedures for
Beneficial Owners........ If you are the beneficial owner of book-entry
interests and your name does not appear on a
security position listing of Euroclear and/or
Clearstream, Luxembourg as the holder of the
book-entry interests or if you are a beneficial
owner of outstanding notes that are registered in
the name of a broker, dealer, commercial bank,
trust company or other nominee and you wish to
tender the book-entry interest or outstanding notes
in the exchange offer, you should contact the
person in whose name your book-entry interests or
outstanding notes are registered promptly and
instruct that person to tender on your behalf.

Withdrawal Rights.......... You may withdraw the tender of your outstanding
notes at any time prior to 5:00 p.m., London time,
on February 6, 2001.

Federal Income Tax
Considerations........... Based upon advice of counsel, we believe that the
exchange of outstanding notes will not be a taxable
event for United States federal income tax
purposes.

Use of Proceeds............ We will not receive any proceeds from the issuance
of exchange notes pursuant to the exchange offer.
We will pay all of our expenses incident to the
exchange offer.

Exchange Agent............. Deutsche Bank AG London is serving as principal
exchange agent in connection with the exchange
offer. Deutsche Bank Luxembourg S.A. is serving as
Luxembourg exchange agent in connection with
exchange offer.

7
10

SUMMARY OF THE EXCHANGE NOTES

The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes, except that the exchange notes will be registered
under the Securities Act. As a result, the exchange notes will not bear legends
restricting their transfer and will not contain the registration rights and
liquidated damage provisions contained in the outstanding notes. The exchange
notes represent the same debt as the outstanding notes. Both the outstanding
notes and the exchange notes are governed by the same indenture. We use the term
notes in this prospectus to collectively refer to the outstanding notes and the
exchange notes.

Issuer..................... R.J. Tower Corporation, a Michigan corporation.

Notes Offered.............. E150,000,000 aggregate principal amount of 9.25%
senior notes due 2010.

Maturity................... August 1, 2010.

Interest Payment Dates..... February 1 and August 1 of each year, commencing
February 1, 2001.

Sinking Fund............... None.

Optional Redemption........ The exchange notes will be redeemable, at the
option of the Issuer, at any time, in whole or in
part, at a redemption price equal to the greater of
(1) 100% of the principal amount of the notes to be
redeemed or (2) the sum of the present values of
the Remaining Scheduled Payments on the notes to be
redeemed, discounted to the date of redemption, on
a semiannual basis, at the Reference Dealer Rate
plus 50 basis points, plus, in either case, accrued
interest to the date of redemption. See
"Description of the Notes -- Optional Redemption."

Ranking.................... The exchange notes will be senior unsecured
obligations of the Issuer and will rank:

- equally with all of the Issuer's unsecured
indebtedness

- senior to all of the Issuer's subordinated
indebtedness and

- effectively subordinated to the Issuer's secured
indebtedness to the extent of the value of the
assets securing such indebtedness.

See "Description of the Notes -- Ranking."

Guarantees................. The exchange notes will be guaranteed on a senior
unsecured basis (collectively, the "Guarantees") by
Parent and by each existing and future U.S.
subsidiary of the Issuer (collectively, the
"Guarantors") on a joint and several basis under
the circumstances set forth herein. Each Guarantee
will rank:

- equally with all of the Guarantor's unsecured
indebtedness

- senior to all of the Guarantor's subordinated
indebtedness and

- effectively subordinated to the Guarantor's
secured indebtedness to the extent of the value
of the assets securing such indebtedness.

8
11

Change of Control.......... Upon the occurrence of a "Change of Control," the
Issuer will be required to make an offer to
repurchase each holder's exchange notes at a price
equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of
repurchase. See "Description of the Notes -- Change
of Control."

Certain Covenants.......... The exchange notes will be issued under the same
indenture under which the outstanding notes were
issued. This indenture contains covenants, which
impose, among other things:

- limitations on the creation of liens,

- limitations on sale and lease-back transactions
and

- restrictions on consolidations, mergers and the
sale or lease of substantially all of our assets.

These covenants are subject to a number of
important exceptions. See "Description of the
Notes -- Certain Covenants."

Absence of a Public Market
for the Notes............ The exchange notes generally will be freely
transferable, but they will be new securities for
which there will be no established market.
Accordingly, there can be no assurance as to the
development or liquidity of any market for any of
the exchange notes. Application has been made to
list the exchange notes on the Luxembourg Stock
Exchange. The initial purchasers have advised us
that they intend to make a market in the exchange
notes. However, they are not obligated to do so,
and may discontinue any market making with respect
to the exchange notes, at any time in their sole
discretion. We do not intend to apply for listing
of the exchange notes on any other securities
exchange or to arrange for any quotation system to
quote them.

RISK FACTORS

You should carefully consider the discussion of risks beginning on page 12
and the other information included in this prospectus before making a decision
to participate in the exchange offer.

ADDITIONAL INFORMATION

The Issuer, R.J. Tower Corporation, was incorporated under the laws of the
State of Michigan in August 1955. Our principal executive offices are located at
5211 Cascade Road, Suite 300, Grand Rapids, Michigan 49546, and our telephone
number is (616) 802-1600.

9
12

SUMMARY HISTORICAL FINANCIAL DATA

The following information is qualified in its entirety by our consolidated
financial statements. The following summary consolidated financial data as of
the dates and for the periods indicated were derived from the audited and
unaudited consolidated financial statements of Tower Automotive contained
elsewhere in this prospectus. The unaudited consolidated financial data at
September 30, 2000 and for the nine months ended September 30, 1999 and
September 30, 2000 include all adjustments (consisting only of normal recurring
adjustments) that management considers necessary for a fair presentation of the
financial information for these unaudited periods. The results of operations for
the nine months ended September 30, 2000 are not necessarily indicative of the
results of operations that may be expected for the full year. The following
summary consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and the consolidated financial statements of Tower Automotive and the
related notes thereto.

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ -----------------------
1997 1998 1999 1999 2000
---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT RATIOS AND CONTENT PER VEHICLE AMOUNTS)

INCOME STATEMENT DATA:
Revenues.............................. $1,235.8 $1,836.5 $2,170.0 $1,565.4 $1,902.6
Gross profit.......................... 177.1 274.3 346.9 248.8 290.8
Operating income...................... 109.7 175.7 225.1 160.7 175.4
Interest expense...................... 36.7 42.5 39.5 25.2 43.1
Net income............................ $ 46.2 $ 88.0 $ 117.1 $ 84.4 $ 83.4
OTHER DATA:
Capital expenditures, net............. $ 117.4 $ 185.1 $ 197.3 $ 160.3 $ 157.5
Depreciation and amortization......... 48.0 87.4 111.6 80.7 112.8
EBITDA(1)............................. 157.7 263.1 336.7 241.4 288.2
North American content per
vehicle(2).......................... 71.3 112.6 123.1 123.0 140.5
Ratio of earnings to fixed
charges(3).......................... 2.6x 2.9x 3.3x 3.3x 2.5x

SEPTEMBER 30,
2000
-------------
ACTUAL
-------------

BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 1.4
Working capital........................................... 187.4
Total assets.............................................. 2,909.6
Total debt................................................ 1,472.4
Stockholders' investment.................................. 825.0

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

(1) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered as an alternative to net income
or cash flow from operations, as determined by generally accepted accounting
principles, and our calculation thereof may not be comparable to that
reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service
and/or incur indebtedness. This belief is based on our negotiations with our
lenders who have indicated that the amount of indebtedness we will be
permitted to incur will be based, in part, on our EBITDA. EBITDA does not
take into account our working capital requirements, debt service
requirements and other commitments and, accordingly, is not necessarily
indicative of amounts that may be available for discretionary use.

10
13

(2) "North American content per vehicle" is our North American revenues divided
by total North American vehicle production, which is comprised of car and
light truck production in the United States, Canada and Mexico, as estimated
by us from industry sources.

(3) 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.

11
14

RISK FACTORS

You should read and consider carefully each of the following factors, as
well as the other information contained in or incorporated by reference into
this prospectus, before making a decision to participate in the exchange offer.

RISKS ASSOCIATED WITH THE EXCHANGE OFFER

WE CANNOT GUARANTEE THAT A PUBLIC MARKET FOR THE EXCHANGE NOTES WILL DEVELOP
AND, AS A RESULT, YOU MAY NOT BE ABLE TO RESELL YOUR EXCHANGE NOTES

The exchange notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:

- the liquidity of any trading market that may develop;

- the ability of holders to sell their exchange notes; or

- the price at which the holders would be able to sell their exchange
notes.

We expect to list the exchange notes on the Luxembourg Stock Exchange, but the
liquidity of the market, if any, achieved through this listing may be limited.
If a trading market were to develop, the exchange notes might trade at higher or
lower prices than their principal amount or purchase price, depending on many
factors, including prevailing interest rates, the market for similar notes and
our financial performance.

We understand that the initial purchasers presently intend to make a market
in the notes. However, they are not obligated to do so, and any market-making
activity with respect to the notes may be discontinued at any time without
notice. In addition, any market-making activity will be subject to the limits
imposed by the Securities Act and the Securities Exchange Act, and may be
limited during the exchange offer or the pendency of an applicable shelf
registration statement. There can be no assurance that an active trading market
will exist for the notes or that any trading market that does develop will be
liquid.

In addition, any outstanding note holder who tenders in the exchange offer
for the purpose of participating in a distribution of the exchange notes may be
deemed to have received restricted securities, and if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.

YOU OUTSTANDING NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW
THE EXCHANGE OFFER PROCEDURES

We will issue exchange notes pursuant to this exchange offer only after a
timely receipt of your outstanding notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your outstanding notes, please allow sufficient time to ensure timely
delivery. We are under no duty to give notification of defects or irregularities
with respect to the tenders of outstanding notes for exchange.

IF YOU DO NOT EXCHANGE YOUR OUTSTANDING NOTES, YOUR OUTSTANDING NOTES WILL
CONTINUE TO BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND YOU MAY BE
UNABLE TO SEE YOUR OUTSTANDING NOTES

We did not register the outstanding notes, nor do we intend to do so
following the exchange offer. Outstanding notes that are not tendered will
therefore continue to be subject to the existing transfer restrictions and may
be transferred only in limited circumstances under the U.S. federal securities
laws. If you do not exchange your outstanding notes, you may lose your right to
have your outstanding notes registered under the federal securities laws. As a
result, if you hold outstanding notes after the exchange offer, you may be
unable to sell your outstanding notes.

12
15

RISKS RELATED TO THE NOTES

OUR BUSINESS MAY BE ADVERSELY IMPACTED AS A RESULT OF OUR LEVERAGE

We have a significant amount of indebtedness. As of September 30, 2000, our
ratio of total debt to total capitalization was approximately 55%. We may also
incur substantial debt in the future. As of September 30, 2000, we were able to
incur approximately $390 million of additional borrowings under the terms of our
new senior credit facility.

Our indebtedness could have several important consequences to you,
including but not limited to the following:

- it may be difficult for us to satisfy our obligations with respect to the
notes;

- our ability to obtain additional financing in the future for working
capital, capital expenditures, potential acquisition opportunities,
general corporate purposes or other purposes may be impaired;

- a substantial portion of our cash flow from operations must be dedicated
to the payment of principal and interest on our indebtedness;

- we may be more vulnerable to economic downturns, may be limited in our
ability to withstand competitive pressures and may have reduced
flexibility in responding to changing business, regulatory and economic
conditions; and

- fluctuations in market interest rates will affect the cost of our
borrowings to the extent not covered by interest rate hedge agreements
because a portion of our indebtedness is payable at variable rates.

In the future, our business may not continue to generate sufficient cash
flow from operations to service our debt and make necessary capital
expenditures. If this occurs, we may be required to adopt one or more
alternatives, such as reducing or delaying planned expansion, selling assets,
restructuring debt or obtaining additional equity capital. There is no certainty
that any of these strategies could be implemented on satisfactory terms or
without substantial additional expenses for us. These and other factors could
have a material adverse effect on our results of operations, liquidity and
financial condition and on the marketability, price and future value of the
notes.

WE ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS AND COVENANTS UNDER THE NEW SENIOR
CREDIT FACILITY

Our new senior credit facility limits our ability to incur additional debt
and to dispose of assets. The new senior credit facility also requires us to
make interest and principal payments and payments from material dispositions,
from "excess cash flow" and from the proceeds of certain issuances of capital
stock or debt. We are also required to comply with certain financial ratios and
minimum net worth tests. There is no certainty that these requirements will be
met in the future. If we do not comply with these requirements, the resulting
default under the new senior credit facility could lead to acceleration of other
debt that contains cross-acceleration or cross-default provisions. In such a
case, we might not be able to refinance or otherwise repay such indebtedness.
See "Description of Other Indebtedness -- New Senior Credit Facility."

THE NOTES AND THE GUARANTEES ARE UNSECURED OBLIGATIONS OF THE ISSUER AND THE
GUARANTORS

The notes are unsecured obligations of the Issuer, and the Guarantees are
unsecured obligations of the Guarantors. The payment of principal of, and
premium (if any) and interest on the notes is effectively subordinated in right
of payment to all secured indebtedness of the Issuer, and the payment of the
Guarantees is effectively subordinated in right of payment to all secured
indebtedness of the Guarantors, in each case to the extent of the value of the
assets securing

13
16

such indebtedness. As of September 30, 2000, the Issuer had no secured
indebtedness and the Guarantors had approximately $66 million of secured
indebtedness.

THE ISSUER CONDUCTS SUBSTANTIALLY ALL OF ITS OPERATIONS THROUGH SUBSIDIARIES
AND NOT ALL OF THE ISSUER'S SUBSIDIARIES ARE GUARANTORS OR RESTRICTED UNDER
THE INDENTURE

The Issuer conducts substantially all of its operations through
subsidiaries. Distributions and intercompany transfers from the Issuer's
subsidiaries to the Issuer may be restricted by covenants contained in debt
agreements and other agreements to which such subsidiaries may be subject and
may be restricted by other agreements entered into in the future and by
applicable law. We cannot assure you that the operating results of the Issuer's
subsidiaries at any given time will be sufficient to make distributions to the
Issuer. In addition, the Issuer does not own all of the equity interests of
certain of its foreign subsidiaries, and consequently must share profits with
certain minority shareholders.

The Guarantors will include Parent and the Issuer's existing or future U.S.
subsidiaries. As a result, the notes are effectively subordinated to all
existing and future liabilities (including trade payables) of the Issuer's
foreign subsidiaries. In addition, all of the Issuer's existing and future
foreign subsidiaries who do not have manufacturing facilities in the United
States will not be subject to the covenants contained in the indenture.

THERE IS NO ASSURANCE THAT THE ISSUER WILL BE ABLE TO PURCHASE THE NOTES UPON
A CHANGE OF CONTROL

If the Issuer undergoes a Change of Control (as defined in the indenture),
we may need to refinance large amounts of our debt, including the notes and the
debt under our new senior credit facility. If a Change of Control occurs, we
must offer to buy back the notes for a price equal to 101% of the notes'
principal amount, plus any interest that has accrued and remains unpaid as of
the repurchase date. We would fund any repurchase obligation with our available
cash, borrowings, sales of equity, or funds provided by a new controlling
person. However, we cannot assure you that there will be sufficient funds
available for any required repurchases of the notes if a Change of Control
occurs. If we fail to repurchase the notes in that circumstance, we will go into
default under both the notes and the new senior credit facility. Any future debt
that we incur may also contain restrictions on repayment which come into effect
upon a Change of Control. If a Change of Control occurs, we cannot assure you
that we will have sufficient funds to satisfy all of our debt obligations. These
buyback requirements may also delay or make it harder for others to obtain
control of our company. In addition, certain important corporate events, such as
leveraged recapitalizations, that would increase the level of our indebtedness,
would not constitute a Change of Control under the Indenture. See "Description
of the Notes -- Change of Control."

A COURT MAY VOID THE GUARANTEES OF THE NOTES OR SUBORDINATE THE GUARANTEES TO
OTHER OBLIGATIONS OF THE GUARANTORS

Although standards may vary depending on the applicable body of law,
generally under the federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, if a court

14
17

were to find that, at the time any Guarantor of the notes incurred the debt
evidenced by its Guarantee of the notes, such Guarantor:

either:

- was insolvent or rendered insolvent by reason of such incurrence;

- was engaged or about to engage in a business or transaction for which
that Guarantor's remaining assets constituted unreasonably small capital;

- was a defendant in an action for money damages, or had a judgment for
money damages docketed against it, if in either case, after a final
judgment, the judgment were unsatisfied, or

- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature;

and

- that Guarantor received less than reasonably equivalent value or fair
consideration for the incurrence of such debt; or

- that Guarantor incurred such debt or made related distributions or
payments with the intent of hindering, delaying or defrauding creditors,

the court could void the Guarantee of that Guarantor, or claims by holders of
the notes under that Guarantee could be subordinated to other debts of that
Guarantor. In addition, any payment by that Guarantor pursuant to its Guarantee
could be required to be returned to that Guarantor or to a fund for the benefit
of the creditors of that Guarantor.

The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law applied in any proceeding. Generally, however, a
Guarantor of the notes would be considered insolvent if: (1) the sum of its
debts, including contingent liabilities, was greater than the saleable value of
all of its assets at a fair valuation; or (2) the present fair saleable value of
its assets was less than the amount that would be required to pay its probable
liability on its existing debts, including contingent liabilities, as they
become absolute and mature; or (3) it could not pay its debts as they become
due.

RISKS RELATING TO TOWER AUTOMOTIVE AND THE AUTOMOTIVE SUPPLY INDUSTRY

WE ARE DEPENDENT ON FORD, DAIMLERCHRYSLER AND GM AS OUR LARGEST CUSTOMERS

Our revenues from Ford, DaimlerChrysler and GM represented approximately
38%, 29%, and 10%, respectively, of our revenues in 1999. The loss of Ford,
DaimlerChrysler or GM or any other significant customer could have a material
adverse effect on us. The contracts we have entered into with many of our
customers provide for supplying the customers' requirements for a particular
model, rather than for manufacturing a specific quantity of products. These
contracts range from one year to the life of the model, usually three to seven
years, and do not require the purchase by the customer of any minimum number of
parts. Therefore, the loss of any one of such customers or a significant
decrease in demand for certain key models or a group of related models sold by
any of our major customers could have a material adverse effect on us.

There is substantial and continuing pressure from the major OEMs to reduce
costs, including the cost of products purchased from outside suppliers such as
us. If we are unable to generate sufficient production cost savings in the
future to offset price reductions, our gross margin could be adversely affected.

15
18

WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS

We have significant international operations, specifically in Europe and
South America. Certain risks are inherent in international operations,
including:

- we may have difficulty enforcing agreements and collecting receivables
through certain foreign legal systems;

- foreign customers may have longer payment cycles than customers in the
United States;

- tax rates in certain foreign countries may exceed those in the United
States, and foreign earnings may be subject to withholding requirements
or the imposition of tariffs, exchange controls or other restrictions;

- general economic and political conditions in countries where we operate
may have an adverse effect on our operations in those countries;

- we may find it difficult to manage a large organization spread throughout
various countries; and

- we may find it difficult to comply with foreign laws and regulations.

As we continue to expand our business globally, our success will depend, in
part, on our ability to anticipate and effectively manage these and other risks.
We cannot assure you that these and other factors will not have a material
adverse effect on our international operations or our business as a whole. In
addition, we generate a significant portion of our revenues and incur a
significant portion of our expenses in currencies other than U.S. dollars. To
the extent that we are unable to match revenues received in foreign currencies
with costs paid in the same currency, exchange rate fluctuations in any such
currency could have an adverse effect on our financial results.

WE MAY BE ADVERSELY IMPACTED BY WORK STOPPAGES AND OTHER LABOR MATTERS

Many OEMs and their suppliers have unionized work forces. Work stoppages or
slow-downs experienced by OEMs or their suppliers could result in slow-downs or
closures of assembly plants where our products are included in assembled
vehicles. For example, strikes by the United Auto Workers led to the shutdown of
most of GM's North American assembly plants in June and July 1998. We estimate
that this work stoppage at GM's facilities had an unfavorable impact of
approximately $24.7 million on our 1998 revenues. In the event that one or more
of our customers experiences a material work stoppage, such work stoppage could
have a material adverse effect on our business.

In addition, approximately 6,500 of our employees are unionized
(representing approximately 50% of our employees at September 30, 2000). No
assurance can be given that we will not encounter strikes, further unionization
efforts or other types of conflicts with labor unions or our employees. Any of
these factors may have an adverse effect on us or may limit our flexibility in
dealing with our workforce.

WE MAY BE ADVERSELY AFFECTED BY THE IMPACT OF ENVIRONMENTAL AND SAFETY
REGULATIONS TO WHICH WE ARE SUBJECT

We are subject to the requirements of federal, state, local and foreign
environmental and occupational health and safety laws and regulations. There can
be no assurance that we are at all times in complete compliance with all such
requirements. We have made and will continue to make capital and other
expenditures to comply with environmental regulations. If a release of hazardous
substances occurs on or from one of our properties or any associated offsite
disposal location, or if contamination is discovered at any of our current or
former properties, we may be

16
19

held liable, and the amount of such liability could be material. See
"Business -- Environmental Matters."

CYCLICALITY AND SEASONALITY COULD ADVERSELY AFFECT US

The automotive market is highly cyclical and is dependent on consumer
spending. The automotive industry is currently experiencing a downturn in
production levels as compared to 1999 levels. Economic factors adversely
affecting automotive production and consumer spending could adversely impact us.
In addition, our business is somewhat seasonal. We typically experience
decreased revenues and operating income during the third calendar quarter of
each year due to the impact of scheduled OEM plant shutdowns in July and August
for vacations and new model changeovers.

WE OPERATE IN THE HIGHLY COMPETITIVE AUTOMOTIVE SUPPLY INDUSTRY

The automotive component supply industry is highly competitive. Some of our
competitors are companies, or divisions or subsidiaries of companies, that are
larger and have greater financial and other resources than we do. In addition,
with respect to certain of our products, we compete with divisions of our OEM
customers. There can be no assurance that our products will be able to compete
successfully with the products of these other companies. Our competitive
position in the automotive component supply industry could be adversely affected
in the event that we are unsuccessful in making strategic acquisitions or
establishing joint ventures that will enable us to expand our global presence.

We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models by our major
customers. New model development generally begins two to five years prior to the
marketing of such models to the public. The failure to obtain new business on
new models or to retain or increase business on redesigned existing models could
adversely affect our business. In addition, as a result of the relatively long
lead times required for many of our complex structural components, it may be
difficult in the short term for us to obtain new sales to replace any unexpected
decline in the sale of existing products. We may incur significant expense in
preparing to meet anticipated customer requirements which may not be recovered.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are subject to
risks and uncertainties. You should not place undue reliance on those statements
because they only speak as of the date of this prospectus. Forward-looking
statements include information concerning our possible or assumed future results
of operations, including descriptions of our business strategy. These statements
often include words such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," or similar expressions. These statements are based on assumptions
that we have made in light of our experience in the industry as well as our
perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the
circumstances. As you read and consider this prospectus, you should understand
that these statements are not guarantees of performance or results. They involve
risks, uncertainties and assumptions. Although we believe that these
forward-looking statements are based on reasonable assumptions, you should be
aware that many factors could affect our actual financial results or results of
operations and could cause actual results to differ materially from those in the
forward-looking statements. These factors include:

- general economic or business conditions affecting the automotive industry
(which is dependent on consumer spending), either nationally or
regionally, being less favorable than expected;

17
20

- our failure to develop or successfully introduce new products;

- increased competition in the automotive components supply market;

- unforeseen problems associated with international sales, including gains
and losses from foreign currency exchange;

- implementation of or changes in the laws, regulations or policies
governing the automotive industry that could negatively affect the
automotive components supply industry;

- changes in general economic conditions in the United States and Europe;
and

- various other factors beyond our control.

All future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Except for our ongoing obligations to
disclose material information as required by the federal securities laws, we do
not have any obligation or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the future or
to reflect the occurrence of unanticipated events. YOU SHOULD ALSO READ
CAREFULLY THE FACTORS DESCRIBED IN THE "RISK FACTORS" SECTION OF THIS
PROSPECTUS.

USE OF PROCEEDS

This exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any cash proceeds from
the issuance of the exchange notes. In consideration for issuing the exchange
notes contemplated in this prospectus, we will receive outstanding notes in like
principal amount, the form and terms of which are the same as the form and terms
of the exchange notes, except as otherwise described in this prospectus.

Our net proceeds from the sale of the outstanding notes (after deducting
the initial purchasers' discounts and commissions and offering expenses payable
by Tower Automotive) were approximately $134.7 million. We used the net proceeds
to reduce our revolving credit borrowings under our then-existing senior credit
facility.

Our then-existing senior credit facility had a scheduled final maturity in
April 2003 with respect to the revolving credit facility and June 2004 with
respect to the term loan. The revolving credit facility bore interest at a rate
per annum equal to, at our option, the prime rate or LIBOR plus a margin ranging
from 17 to 50 basis points depending upon the ratio of our consolidated
indebtedness to our total capitalization. The weighted average interest rate for
such borrowings was 6.95% at September 30, 2000. Borrowings under our existing
senior credit facility were used to finance the acquisitions of Caterina,
Algoods and Dr. Meleghy and our investments in Seojin and J. L. French (each as
defined herein).

On July 25, 2000, we entered into a new unsecured senior credit facility
that provides for revolving credit borrowings of up to $825.0 million and a term
loan of $325.0 million. Our new senior credit facility matures in July 2006. See
"Description of Other Indebtedness -- New Senior Credit Facility."

We continually evaluate possible acquisitions and engage in discussions
with acquisition candidates from time to time. Except as otherwise discussed
herein, we currently do not have any acquisitions that are probable.

Affiliates of certain of the initial purchasers were lenders under our
former senior credit facility and are be lenders under our new senior credit
facility.

18
21

CURRENCIES AND EXCHANGE RATE DATA

References in this prospectus to "U.S. dollars," "dollars" or "$" are to
the currency of the United States of America and references to "euro" or "E" are
to the currency that was introduced at the start of the third stage of economic
and monetary union pursuant to the treaty establishing the European Economic
Community, as amended by the Treaty on European Union, signed at Maastricht, the
Netherlands on February 7, 1992.

The following table sets forth, for the periods indicated, certain exchange
rates set forth as U.S. dollars per euro based on the noon buying rates in New
York City for cable transfers in euro as certified for customs Federal Reserve
Bank of New York. On November 24, 2000, the noon buying rate was $0.8436 =
E1.00. These exchange rates are provided solely for your convenience and you
should not construe them as a representation that amounts of euro actually
represent such dollar amounts or that euro could be converted into dollars at
these or any other rates.

U.S. DOLLARS PER EURO
--------------------------------------
AS OF AND AS OF AND
FOR THE FOR THE NINE
YEAR ENDED MONTHS ENDED
DECEMBER 31, 1999 SEPTEMBER 30, 2000
----------------- ------------------

Exchange rate at end of period........................... $1.0062 $0.8830
Average exchange rate during period(a)................... 1.0597 0.9417
Highest exchange rate during period...................... 1.1837 1.0336
Lowest exchange rate during period....................... 1.0013 0.8480

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

(a) The average of the noon buying rates as of the last day of each month of
the respective periods.

19
22

CAPITALIZATION

The following table sets forth our actual capitalization as of September
30, 2000. This table should be read in conjunction with our consolidated
financial statements and notes thereto included elsewhere in this prospectus.

SEPTEMBER 30, 2000
--------------------
(IN MILLIONS, EXCEPT
SHARE AMOUNTS)

Cash and cash equivalents................................... $ 1.4
========
Long-term debt, including current maturities:
Senior credit facility(1)................................. $ 752.9
Industrial development revenue bonds and other(2)......... 127.2
9.25% senior notes (3).................................... 132.6
--------
Total senior debt................................. 1,012.7
5.0% convertible subordinated notes....................... 200.0
Edgewood notes............................................ 0.9
--------
Total debt........................................ 1,213.6
Trust Preferred Securities(4)............................... 258.8
Stockholders' investment:
Preferred stock, par value $1.00; 5,000,000 shares
authorized; no shares issued or outstanding............ --
Common stock, par value $.01; 200,000,000 shares
authorized; 47,445,675 shares outstanding on an actual
and pro forma basis.................................... 0.5
Additional paid-in capital................................ 452.4
Retained earnings......................................... 377.9
Deferred income stock plan................................ (8.9)
Accumulated other comprehensive income.................... 3.1
--------
Total stockholders' investment.................... 825.0
--------
Total capitalization.............................. $2,297.4
========

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

(1) The weighted average interest rate for such borrowings was 6.95% at
September 30, 2000. Our new senior credit facility provides for revolving
credit borrowings of up to $825.0 million and a term loan of $325.0 million.

(2) Includes: (i) an aggregate of $43.8 million of indebtedness from the
issuance of industrial development revenue bonds to finance the construction
of our Bardstown facility and the purchase of related equipment, (ii)
capitalized lease obligations of $22.4 million and (iii) other indebtedness
of $61.0 million.

(3) In consideration for issuing the exchange notes contemplated by this
prospectus, we will receive outstanding notes in like principal amount. As a
result, the exchange offer will not have any effect on our capitalization.

(4) Represents the 6 3/4% Trust Convertible Preferred Securities (the "Trust
Preferred Securities") issued by the Tower Automotive Capital Trust in June
1998. The sole assets of the Trust are approximately $266.8 million in
principal amount of Parent's 6 3/4% Convertible Subordinated Debentures due
June 30, 2018, such amount being the sum of the stated liquidation
preference of the Trust Preferred Securities and the capital contributed by
Parent in exchange for the common securities of the Trust.

20
23

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following Unaudited Pro Forma Statements of Operations for the year
ended December 31, 1999, the nine months ended September 30, 1999 and 2000, give
effect to the following transactions as if these transactions had occurred at
the beginning of the period:

- the acquisitions of Dr. Meleghy and Active (each as defined herein),

- the refinancing of our existing bank indebtedness under our new senior
credit facility, and

- the completion of the sale of the notes and the application of the net
proceeds therefrom.

The unaudited pro forma financial data presented in this prospectus are
based on the assumptions and adjustments described in the accompanying notes.
The Unaudited Pro Forma Statements of Operations do not purport to represent
what our results of operations actually would have been if the events described
above had occurred as of the dates indicated or what our results will be for any
future periods. The Unaudited Pro Forma Financial Statements are based upon
assumptions and adjustments that we believe are reasonable. You should read the
Unaudited Pro Forma Financial Statements and the accompanying notes in
conjunction with the historical financial statements, including the related
notes, included elsewhere in this prospectus.

The acquisitions of Dr. Meleghy and Active have been accounted for using
the purchase method of accounting and, accordingly, the assets acquired and
liabilities assumed have been recorded at their fair values as of the dates of
their respective acquisitions. These amounts have been recorded based upon
preliminary estimates as of such dates. Further adjustments to the acquired
assets and assumed liabilities will be reflected as a change in goodwill.

21
24

TOWER AUTOMOTIVE, INC.

UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN MILLIONS)

TOWER PRO FORMA
AUTOMOTIVE(1) ACTIVE(2) DR. MELEGHY(3) ADJUSTMENTS PRO FORMA
------------- --------- -------------- ----------- ---------

Revenues......................... $1,565.4 $193.9 $89.3 $ -- $1,848.6
Cost of sales.................... 1,316.6 167.7 71.1 -- 1,555.4
-------- ------ ----- ------ --------
Gross profit........... 248.8 26.2 18.2 -- 293.2
Selling, general and
administrative expenses........ 76.4 20.6 7.1 -- 104.1
Amortization expense............. 11.7 -- -- 4.6(4) 16.3
-------- ------ ----- ------ --------
Operating income
(loss)............... 160.7 5.6 11.1 (4.6) 172.8
Interest expense................. 25.9 3.2 -- 27.7(5) 56.8
Interest income.................. (0.7) -- -- -- (0.7)
-------- ------ ----- ------ --------
Income (loss) before
provision for income
taxes, equity in
earnings of joint
ventures and minority
interest............. 135.5 2.4 11.1 (32.3) 116.7
Provision for income taxes....... 54.2 -- -- (7.5)(6) 46.7
-------- ------ ----- ------ --------
Income (loss) before
equity in earnings of
joint ventures and
minority interest.... 81.3 2.4 11.1 (24.8) 70.0
Equity in earnings of joint
ventures....................... 11.0 -- -- -- 11.0
Minority interest -- dividends on
trust preferred securities,
net............................ (7.9) -- -- -- (7.9)
-------- ------ ----- ------ --------
Income before
extraordinary loss... $ 84.4 $ 2.4 $11.1 $(24.8) $ 73.1
======== ====== ===== ====== ========

22
25

TOWER AUTOMOTIVE, INC.

UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN MILLIONS)

TOWER PRO FORMA
AUTOMOTIVE(1) ADJUSTMENTS PRO FORMA
------------- ----------- -----------

Revenues............................................. $1,902.6 $ -- $1,902.6
Cost of sales........................................ 1,611.8 -- 1,611.8
-------- ----- --------
Gross profit............................... 290.8 -- 290.8
Selling, general and administrative expenses......... 99.6 -- 99.6
Amortization expense................................. 15.8 -- 15.8
-------- ----- --------
Operating income........................... 175.4 -- 175.4
Interest expense..................................... 48.3 6.1(5) 54.4
Interest income...................................... (5.2) -- (5.2)
-------- ----- --------
Income (loss) before provision for income
taxes, equity in earnings of joint
ventures and minority interest........... 132.3 (6.1) 126.2
Provision for income taxes........................... 52.9 (2.4)(6) 50.5
-------- ----- --------
Income (loss) before equity in earnings of
joint ventures and minority interest..... 79.4 (3.7) 75.7
Equity in earnings of joint ventures................. 14.9 -- 14.9
Minority interest -- dividends on trust preferred
securities, net.................................... (7.9) -- (7.9)
-------- ----- --------
Income before extraordinary loss........... $ 86.4 $(3.7) $ 82.7
======== ===== ========

23
26

TOWER AUTOMOTIVE, INC.

UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN MILLIONS)

TOWER PRO FORMA
AUTOMOTIVE(1) ACTIVE(2) DR. MELEGHY(3) ADJUSTMENTS PRO FORMA
------------- --------- -------------- ----------- ---------

Revenues......................... $2,170.0 $193.9 $117.1 $ -- $2,481.0
Cost of sales.................... 1,823.1 167.7 93.2 -- 2,084.0
-------- ------ ------ ------ --------
Gross profit........... 346.9 26.2 23.9 -- 397.0
Selling, general and
administrative expenses........ 106.0 20.6 9.4 -- 136.0
Amortization expense............. 15.8 -- -- 4.2(4) 20.0
-------- ------ ------ ------ --------
Operating income....... 225.1 5.6 14.5 (4.2) 241.0
Interest expense................. 39.5 3.2 -- 30.2(5) 72.9
Interest income.................. (1.5) -- -- -- (1.5)
-------- ------ ------ ------ --------
Income before provision
for income taxes,
equity in earnings of
joint ventures and
minority interest.... 187.1 2.4 14.5 (34.4) 169.6
Provision for income taxes....... 74.9 -- -- (7.1)(6) 67.8
-------- ------ ------ ------ --------
Income before equity in
earnings of joint
ventures and minority
interest............. 112.2 2.4 14.5 (27.3) 101.8
Equity in earnings of joint
ventures....................... 15.3 -- -- -- 15.3
Minority interest -- dividends on
trust preferred securities,
net............................ (10.4) -- -- -- (10.4)
-------- ------ ------ ------ --------
Net income............. $ 117.1 $ 2.4 $ 14.5 $(27.3) $ 106.7
======== ====== ====== ====== ========

24
27

NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS

(1) Represents the results of operations of Tower Automotive for the year ended
December 31, 1999 and the results of operations of Active and Dr. Meleghy
from their respective dates of acquisition.

(2) Represents the results of operations for Active from January 1, 1999 through
the date of acquisition, July 29, 1999.

(3) Represents the results of operations for Dr. Meleghy from January 1, 1999
through the effective date of the acquisition, January 1, 2000.

(4) Represents the additional amortization of goodwill arising from the
acquisitions of Active and Dr. Meleghy (in millions):

NINE MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ ------------------ -----------------

Active................. $3.3 -- $2.5
Dr. Meleghy............ 1.3 -- 1.7
---- --- ----
$4.6 $-- $4.2
==== === ====

Goodwill is amortized on a straight-line basis over a forty-year period.

(5) Represents the change in interest expense arising from (in millions):

NINE MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ ------------------ -----------------

Interest expense on
senior credit
facility............. $ 11.0 $ 36.0 $ 20.9
Interest expense on
Notes offered
hereby............... 11.2 9.8 14.7
Interest expense
related to Active
acquisition.......... 17.8 -- 13.8
Interest expense
related to Dr.
Meleghy
acquisition.......... 6.9 -- 9.2
------ ------ ------
46.9 45.8 58.6
Less: interest expense
previously recorded.. (19.2) (39.7) (28.4)
------ ------ ------
Net increase........... $ 27.7 $ 6.1 $ 30.2
====== ====== ======

(6) Adjusts the provision for income taxes on a pro forma basis to reflect our
estimated annual tax rate of 40%.

25
28

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data for Tower Automotive presented
below for and as of the end of each of the years in the five-year period ended
December 31, 1999, is derived from Tower Automotive's Consolidated Financial
Statements, which have been audited by Arthur Andersen LLP, independent public
accountants. The consolidated financial statements at December 31, 1998 and 1999
and for each of the three years in the period ended December 31, 1999 and the
report of independent public accountants thereon are included elsewhere in this
prospectus. The consolidated financial statements at and for the years ended
December 31, 1994, 1995 and 1996 are not included herein. The consolidated
financial data for the nine months ended September 30, 1999 and 2000 have been
derived from the unaudited consolidated financial statements of Tower
Automotive, which, in the opinion of management, reflect all adjustments
(consisting of only normal recurring adjustments) necessary for fair
presentation. Results for the nine months ended September 30, 2000 are not
necessarily indicative of results for the full year. The selected consolidated
financial data below should be read in conjunction with the consolidated
financial statements and the notes thereto of Tower Automotive included
elsewhere in this prospectus and "Management's Discussion and Analysis of
Results of Operations and Financial Condition."

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------ ---------------------
1995 1996 1997 1998 1999 1999 2000
------- ------- ---------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT RATIOS AND PER SHARE AND CONTENT PER VEHICLE AMOUNTS)

INCOME STATEMENT DATA:
Revenues..................... $222.8 $399.9 $ 1,235.8 $1,836.5 $2,170.0 $1,565.4 $1,902.6
Cost of sales................ 185.4 338.3 1,058.7 1,562.2 1,823.1 1,317.6 1,611.8
Gross profit................. 37.4 61.6 177.1 274.3 346.9 248.8 290.8
Selling, general and
administrative expenses.... 14.3 20.0 57.9 85.2 106.0 76.4 99.6
Amortization expense......... 1.2 2.2 9.5 13.5 15.8 11.6 15.8
Operating income............. 21.9 39.4 109.7 175.7 225.1 160.7 175.4
Interest expense, net........ 1.8 5.1 29.0 40.3 38.0 25.2 43.1
Provision for income taxes... 8.1 13.7 32.3 54.1 74.9 54.2 52.9
Net income................... 12.1 20.6 46.2 88.0 117.1 84.4 83.4
Basic earnings per share..... $ 0.56 $ 0.81 $ 1.14 $ 1.91 $ 2.50 $ 1.80 $ 1.75
Diluted earnings per share... 0.52 0.77 1.09 1.68 2.10 1.52 1.49
OTHER DATA:
Capital expenditures, net.... $ 26.1 $ 16.3 $ 117.4 $ 185.1 $ 197.3 $ 160.3 $ 157.5
Depreciation and
amortization............... 6.5 12.8 48.0 87.4 111.6 80.7 112.8
EBITDA(1).................... 28.5 52.2 157.7 263.1 336.7 241.4 288.2
Cash provided by (used in):
Operating activities....... 13.9 30.0 100.9 221.1 227.3 99.7 137.2
Investing activities....... (34.1) (88.9) (1,006.9) (267.4) (599.2) (489.4) (390.2)
Financing activities....... 21.1 97.5 866.4 49.7 372.1 387.3 250.8
Ratio of earnings to fixed
charges(2)................. 6.2x 5.0x 2.6x 2.9x 3.3x 3.3x 2.5x
North American content per
vehicle(3)................. 14.9 26.7 71.3 112.6 123.1 123.0 140.5
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash and cash equivalents.... $ 1.0 $ 39.6 $ -- $ 3.4 $ 3.6 $ 3.6 $ 1.4
Working capital.............. 32.2 85.5 140.6 106.9 126.9 126.9 187.4
Total assets................. 209.5 402.6 1,680.1 1,936.2 2,552.6 2,552.6 2,909.6
Total debt................... 71.1 114.2 748.9 560.5 935.1 1,198.3 1,472.4
Stockholders' investment..... 85.6 181.9 515.3 606.8 727.1 727.1 825.0

------------------------
Footnotes to table appear on the following page.

26
29

Footnotes to table on the previous page:

(1) "EBITDA" is operating income plus depreciation and amortization. EBITDA does
not represent and should not be considered an alternative to net income or
cash flow from operations, as determined by GAAP, and our calculation
thereof may not be comparable to that reported by other companies. We
believe that it is widely accepted that EBITDA provides useful information
regarding a company's ability to service and/or incur indebtedness. This
belief is based on our negotiations with our lenders who have indicated that
the amount of indebtedness we will be permitted to incur will be based, in
part, on our EBITDA. EBITDA does not take into account our working capital
requirements, debt service requirements and other commitments and,
accordingly, is not necessarily indicative of amounts that may be available
for discretionary use.

(2) 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.

(3) "North American content per vehicle" is our North American revenues divided
by total North American vehicle production, which is comprised of car and
light truck production in the United States, Canada and Mexico, as estimated
by us from industry sources.

27
30

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

This discussion should be read in conjunction with our consolidated
financial statements and notes to consolidated financial statements included
elsewhere in this prospectus.

HISTORY

Parent was formed to acquire R.J. Tower Corporation, the acquisition of
which was completed in April 1993 for an aggregate cost of approximately $26
million. During the last five years, we have successfully completed ten
strategic acquisitions and established four joint ventures. A summary of certain
of these transactions is set forth below:

Yorozu. On September 21, 2000, we acquired a 17 percent equity interest in
Yorozu Corporation or "Yorozu", a supplier of suspension modules and structural
parts to the Asian and North American automotive markets, from Nissan Motor Co.
Ltd. or "Nissan". Yorozu is based in Japan and is publicly traded on the first
tier of the Tokyo Stock Exchange. Its principal customers include Nissan, Auto
Alliance, General Motors, Ford, and Honda. We will pay Nissan approximately $38
million over the next two and a half years to acquire the 17 percent interest.
In addition, we will have the opportunity to increase our holdings in Yorozu
through the purchase of additional Yorozu shares.

Algoods. On May 3, 2000, we announced the acquisition of Algoods Inc., or
"Algoods," a manufacturer of aluminum heat shields and impact discs for the
North American automotive industry. We paid approximately $33 million for the
acquisition. Algoods had 1999 revenues of approximately $55 million, and its
principal customer is DaimlerChrysler. Algoods operates a mini-mill and
manufacturing facility located in Toronto, Ontario. This acquisition benefits
our existing business by adding patent rights to processing technology for
lightweight materials. This acquisition also complements our existing heat
shield capabilities and provides a leadership team that has extensive experience
in providing technical solutions for lightweight structural products.

DTA Development. On March 23, 2000, we announced the formation of a product
technology and development joint venture with Defiance Testing & Engineering
Services, Inc., a subsidiary of GenTek Inc. The joint venture, DTA Development,
located in Westland, Michigan, is expected to be fully operational in the third
quarter of 2000 and will provide us with product-testing services.
Traditionally, we utilize both internal and external product testing extensively
to validate complex systems during the development stage of a program. This
joint venture will allow us to have access to a broader and more cost efficient
range of testing capabilities. DTA Development will blend the benefits of
chassis product technology and development activities with leading edge
commercial testing services.

Dr. Meleghy. Effective January 1, 2000, we acquired all of the outstanding
shares of Dr. Meleghy GmbH & Co. KG Werkzeugbau und Presswerk, Bergisch
Gladbach, or "Dr. Meleghy," for approximately $86 million, plus the assumption
of $22 million of indebtedness. Dr. Meleghy designs and produces structural
stampings, exposed surface panels and modules for the European automotive
industry. Dr. Meleghy had 1999 revenues of approximately $100 million. Dr.
Meleghy also designs and manufactures tools and dies for use in its production
and for the external market. Dr. Meleghy operates three facilities in Germany
and one facility in each of Hungary and Poland. Dr. Meleghy's principal
customers include DaimlerChrysler, Audi, Volkswagen, Ford, Opel and BMW.
Products offered by Dr. Meleghy include body side panels, floor pan assemblies,
and miscellaneous structural stampings. We may pay an additional $38 million for
this acquisition if it achieves certain operating targets in 2000. The
acquisition was financed under our existing senior credit facility.

Seojin. In October 1999, we invested $21 million for new shares
representing a 49% equity interest in Seojin Industrial Company Limited, or
"Seojin." Seojin is a supplier of frames, modules

28
31

and structural components to the Korean automotive industry. Total consideration
for the equity interest was financed under our senior credit facility. In
addition, we advanced $19 million to Seojin in exchange for variable rate
convertible bonds due October 30, 2009. The convertible bonds are unsecured and
rank equally with all other present and future obligations of Seojin. Interest
on the convertible bonds is payable annually beginning October 30, 2000 and each
October 30 thereafter until maturity. We have the right to convert the bonds
into common stock of Seojin any time on or after October 30, 2000. The
conversion rate is based upon a predetermined formula that would increase our
equity interest to approximately 66%. On October 31, 2000, we exercised our
right to convert the bonds into 17% of the common stock of Seojin. Based upon
the formula for conversion of the Seojin variable rate bonds, we paid $1.2
million for the additional equity interest.

Active. On July 29, 1999, we acquired all of the outstanding stock of
Active Tool & Manufacturing Co., Inc., and Active Products Corporation, or
collectively, "Active" for approximately $315 million. Active, which has five
facilities, designs and produces a variety of large unexposed structural
stampings, exposed surface panels, and modules for the North American automotive
industry. Active had 1998 revenue of approximately $311 million. Active's
principal customers include DaimlerChrysler, Ford, General Motors and Saturn.
Active's products include body sides, pick-up box sides, fenders, floor pan
assemblies, door panels, pillars and heat shields. Our acquisition of Active
enhances our ability to manufacture large and complex structures, as well as
exposed surface panels. The acquisition was financed under our existing senior
credit facility.

IMAR and OSLAMT. In July 1998, we acquired IMAR s.r.l., or "IMAR," and
OSLAMT S.p.A., or "OSLAMT." IMAR designs and manufactures structural parts and
assemblies from two facilities in Italy, primarily for Fiat. OSLAMT designs and
manufactures tools and assemblies for the automotive market from its facility in
Turin, Italy. The purchase price consisted of approximately $32.5 million cash
plus the assumption of approximately $17 million of indebtedness, and an
additional amount of $15 million as a result of IMAR achieving certain operating
targets subsequent to the acquisition.

Caterina. In March 1998, we acquired a 40% equity interest in Caterina, a
supplier of structural stampings and assemblies to the Brazilian automotive
market. This investment provided us with a substantial manufacturing presence in
one of the fastest growing automotive markets in the world and added Volkswagen
and Mercedes as new customers. In July 2000, we acquired the remaining 60% of
the equity of Caterina for approximately $42 million in cash. We paid
approximately $44 million for our initial equity interest.

Metalsa. In October 1997, we acquired a 40% equity interest in Metalsa S.
de R.L., or "Metalsa." In addition, we have entered into a technology sharing
arrangement that will allow us to utilize the latest available product and
process technology. Metalsa is the largest supplier of vehicle frames and
structures in Mexico. We paid approximately $120 million for our equity interest
with an additional amount of up to $45 million payable based upon Metalsa's
future net earnings. Based upon Metalsa's earnings to date, we have paid
approximately $17 million of additional consideration.

SIMES. In May 1997, we acquired Societa Industria Meccanica e Stampaggio
S.p.A., or "SIMES," an Italian automotive parts manufacturer, for approximately
$50.7 million in cash, plus an additional $3.0 million as a result of SIMES
achieving certain operating targets following the acquisition. SIMES generated
revenues of approximately $70.0 million in 1996, with Fiat representing
substantially all of these revenues. The acquisition of SIMES:

- significantly expanded our global capabilities by providing us with a
manufacturing presence in Europe;

- added Fiat as a new customer; and

- enhanced our design and engineering capabilities.

29
32

APC. In April 1997, we acquired Automotive Products Company, or "APC," from
A.O. Smith Corporation for approximately $700 million. APC is a leading designer
and producer of structural and suspension components for the automotive, light
truck and heavy truck markets. APC had revenues of $863.0 million in 1996. We
believe that the acquisition of APC provided us with several strategic benefits,
including:

- expanded product offerings and modular product opportunities;

- increased customer penetration within each of the three major North
American OEMs and within certain foreign OEMs with manufacturing
operations in North America;

- increased penetration in the light truck segment and other key models;

- complementary new technology;

- opportunities to reduce costs and improve operational efficiency; and

- an expanded presence in China (through a joint venture known as Tower
Golden Ring), Japan and South America, which complemented our existing
European initiatives.

MSTI. In May 1996, we acquired MascoTech Stamping Technologies, Inc., or
"MSTI," from MascoTech, Inc. for approximately $75 million, plus additional
earn-out payments of approximately $30 million as a result of MSTI achieving
certain operating targets in the first three years following the acquisition.
MSTI had revenues of $152.9 million in 1995. The acquisition of MSTI:

- expanded our product capabilities into chassis and suspension components;

- provided chassis and suspension technology as well as value-added
processing technologies including assembling, painting and welding; and

- increased our content per vehicle on key light truck and sport utility
vehicles such as the Ford F-Series, Explorer and Windstar and the
DaimlerChrysler Ram and Dakota as well as on high volume passenger cars
such as the Ford Taurus/Sable.

Trylon. In January 1996, we acquired Trylon Corporation, or "Trylon," from
MascoTech, Inc. for approximately $25 million in cash. Trylon generated $47.9
million in revenues in 1995. The acquisition of Trylon:

- broadened our product offerings to include small, precision metal
stampings and assemblies, which were previously outsourced to third
parties;

- established a relationship with General Motors; and

- increased our content on Ford models, primarily the Villager.

OTHER TRANSACTIONS

J.L. French. In October 1999, we invested $30.0 million in J.L. French
Automotive Castings, Inc., or "J.L. French." This investment was originally
evidenced by a convertible subordinated promissory note due October 15, 2009. On
November 30, 2000, we converted this subordinated promissory note into 7,124
shares of J.L. French's Class A-1 common stock, which has a 7.5% pay-in-kind
dividend right. In May 2000, we invested an additional $11.0 million in J.L.
French through the purchase of Class A common stock.

Hinge Business. In August 1998, we sold our hinge business to Dura
Automotive Systems, Inc. for net proceeds of approximately $36.9 million, which
approximated the book value of the net assets sold. The net proceeds were used
to repay outstanding indebtedness under our existing senior credit facility.

30
33

RESULTS OF OPERATIONS

The following table sets forth the percentage relationship of certain items
to revenues for the periods indicated:

NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------- --------------
1997 1998 1999 1999 2000
------ ------ ------ ----- -----

Revenues................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........................... 85.7 85.1 84.0 84.1 84.7
----- ----- ----- ----- -----
Gross profit.................. 14.3 14.9 16.0 15.9 15.3
Selling, general and administrative
expenses.............................. 4.7 4.6 4.9 4.9 5.2
Amortization expense.................... 0.8 0.7 0.7 0.7 0.8
----- ----- ----- ----- -----
Operating income...................... 8.8 9.6 10.4 10.3 9.3
Interest expense, net................... 2.3 2.2 1.8 1.6 2.3
----- ----- ----- ----- -----
Income before provision for income
taxes, equity earnings of joint
ventures and minority interest..... 6.5 7.4 8.6 8.7 7.0
Provision for income taxes.............. 2.6 3.0 3.4 3.5 2.8
----- ----- ----- ----- -----
Income before equity earnings of joint
ventures and minority interest..... 3.9 4.4 5.2 5.2 4.2
Equity in earnings of joint ventures.... -- 0.7 0.7 0.7 0.8
Minority interest -- dividends on trust
preferred securities.................. -- (0.3) (0.5) (0.5) (0.4)
----- ----- ----- ----- -----
Income before extraordinary item........ 3.9% 4.8% 5.4% 5.4% 4.6%
===== ===== ===== ===== =====

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1999

Revenues. Revenues for the nine months ended September 30, 2000 were
$1,902.6 million, compared to $1,565.4 million for the nine months ended
September 30, 1999. The increase in revenue of $337.2 million was composed
primarily of net new business on the Lincoln LS/Jaguar S-Type, Ford Explorer,
Ford Focus, and Ford Excursion of $111.2 million. These increases were offset by
decreases of $92.3 million on the General Motors truck programs, which ended
during the 1999 period. Additionally, the acquisitions of Active, Dr. Meleghy,
Algoods, and Caterina contributed approximately $370 million of our new sales.
These new sales related predominately to our customer DaimlerChrysler, both in
North America and in Europe. Heavy Truck rail manufacturing sales declines
totaled $36.1 million in 2000 compared to the 1999 period. Overall net declines
on all other platforms of $15.6 million composed the balance of the revenue
change.

Cost of Sales. Cost of sales as a percentage of revenues for the nine
months ended September 30, 2000 was 84.7% compared to 84.1% for the nine months
ended September 30, 1999. The increase in cost of sales during the 2000 period
was primarily due to the accelerated softening of Heavy Truck rail sales of
approximately $9.1 million and the impact of costs incurred to support launch
and pre-launch activity on new programs, including the next generation Ford
Explorer, of approximately $3 million. Additional impacts on cost of sales due
to softening volumes during the third quarter of 2000 were effectively offset by
increased volumes during the first and second quarters.

S, G & A Expenses. Selling, general and administrative expenses increased
to $99.6 million, or 5.2% of revenues, for the nine months ended September 30,
2000 compared to $76.4 million, or 4.9% of revenues, for the nine months ended
September 30, 1999. The increased expense

31
34

was due to incremental costs associated with our acquisitions of Active, Dr.
Meleghy, Algoods, and Caterina of $19.7 million and increased engineering,
program development, and launch costs related to new business of approximately
$5.4 million. The realization of gains on the cash settlement of amounts due
under the interest rate swap and lock agreements during the first nine months of
1999 had the effect of reducing the 1999 expense by $1.9 million.

Amortization Expense. Amortization expense for the nine months ended
September 30, 2000 was $15.8 million compared to $11.6 million for the nine
months ended September 30, 1999. The increase was due to amortization related to
incremental goodwill amortization related to the acquisitions of Active in July
1999, Dr. Meleghy in January 2000, Algoods in May 2000, and Caterina in July
2000.

Interest Expense. Interest expense for the nine months ended September 30,
2000 was $43.1 million compared to $25.2 million for the nine months ended
September 30, 1999. The increase in interest expense was primarily due to
increased borrowings to fund our acquisitions of Active, Dr. Meleghy, Algoods,
Caterina, and investments in J.L. French and Seojin of approximately $17.9
million. Additionally, the effects of a general increase in rates, the increased
spreads on the new credit facility and the rate increase with the new Euro bonds
of $7.9 million was offset by increases in interest income and capitalized
interest of $7.8 million.

Income Taxes. The effective income tax rate was 40% for the nine months
ended September 30, 2000 and 1999. The effective rates differed from the
statutory rates primarily as a result of state taxes and non-deductible goodwill
amortization.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures
for the first nine months of 2000 and 1999 represents our share of the earnings
from our joint venture interests in Metalsa, Caterina and Tower Golden Ring, and
Seojin.

Minority Interest. Minority interest for the first nine months of 2000 and
1999 represents dividends, net of income tax benefits, on the Preferred
Securities.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31,
1998

Revenues. Revenues for the year ended December 31, 1999 were $2.2 billion,
an 18.2% increase, compared to $1.8 billion for the year ended December 31,
1998. The increase was partially due to net new business of approximately $157.3
million. The new business related primarily to the Ford Explorer, F-Series
pick-up, Ranger, Excursion and Lincoln LS/Jaguar S Type, Dodge Durango and
Dakota, Chrysler LH, and Fiat. Additional increases of $190.5 million related to
the acquisitions of IMAR and OSLAMT in July 1998, and Active in July 1999 were
offset by $39.0 million related to the sale of Tower Automotive's hinge business
in August 1998. The General Motors strike reduced our revenues in the 1998
period by approximately $24.7 million.

Cost of Sales. Cost of sales as a percent of revenues for the year ended
December 31, 1999 was 84.0% compared to 85.1% for the year ended December 31,
1998. Improvement in gross profit was due to increased production volumes and
product mix on light truck, sport utility and other models served by us. The
improvement from increased production was partially offset by inefficiencies
caused by customer demand exceeding planned capacity at certain locations,
resulting in weekend overtime to meet production, and inefficiencies due to
significant launch activity.

S, G & A Expenses. Selling, general and administrative expenses increased
to $106.0 million, or 4.9% of revenues, for the year ended December 31, 1999
compared to $85.2 million, or 4.6% of revenues, for the year ended December 31,
1998. The increased expense was due to incremental costs associated with our
acquisitions of IMAR, OSLAMT, and Active of $11.9 million and increased
engineering, program development, and launch costs related to new business of

32
35

approximately $9.1 million. Additionally, we wrote off certain expenses of
approximately $1.7 million relating to unsuccessful acquisition efforts. This
increase was offset partially by the realization of gains totaling $1.9 million
on the cash settlement of amounts due under the interest rate swap and lock
agreements during 1999.

Amortization Expense. Amortization expense for the year ended December 31,
1999 was $15.8 million compared to $13.5 million for the year ended December 31,
1998. The increase was due to amortization related to the costs associated with
the June 1998 offering of the Trust Preferred Securities, incremental goodwill
amortization related to the acquisitions of IMAR and OSLAMT including
performance payments, and the goodwill amortization associated with the Active
acquisition.

Interest Expense. Interest expense for the year ended December 31, 1999 was
$38.0 million compared to $40.3 million for the year ended December 31, 1998.
Interest expense was affected by:

- increased borrowings incurred to fund our joint venture interest in
Caterina in March 1998,
- increased borrowings to fund our acquisition of IMAR and OSLAMT in July
1998,
- increased borrowings to fund our acquisition of Active in July 1999,
- the proceeds from the June 1998 offering of the Trust Preferred
Securities, which were used to reduce borrowings under our senior credit
facility, and
- increased capitalized interest on construction projects.

Income Taxes. The effective income tax rate was 40% for the years ended
December 31, 1999 and 1998. The effective rates differed from the statutory
rates primarily as a result of state taxes and non-deductible goodwill
amortization.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures
net of tax was $15.3 million and $12.7 million for the years ended December 31,
1999 and 1998, respectively. These amounts represent our share of the earnings
from our joint venture interests in Metalsa, Caterina, Tower Golden Ring and
Seojin.

Minority Interest. Minority interest for the years ended December 31, 1999
and 1998 represents dividends, net of income tax benefits, on the Trust
Preferred Securities.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER 31,
1997

Revenues. Revenues for the year ended December 31, 1998 were $1.8 billion,
a 48.6% increase, compared to $1.2 billion for the year ended December 31, 1997.
The increase is due to the acquisitions of APC in April 1997, SIMES in May 1997
and IMAR and OSLAMT in July 1998, which totaled approximately $352.9 million,
and new business awards, which totaled approximately $310.5 million, including
business relating to the Ford Ranger, Explorer, F-Series and Econoline, Dodge
Durango, Dakota and Ram Club Cab pick-ups, Honda Accord and the Chrysler LH
line. These increases were offset by a decline in production of certain models
served by us of approximately $38.7 million. In addition, the General Motors
strike reduced our revenues by approximately $24.7 million during 1998.

Cost of Sales. Cost of sales as a percent of revenues for the year ended
December 31, 1998 was 85.1% compared to 85.7% for the year ended December 31,
1997. The increase in gross margin was due to operating efficiencies and
productivity initiatives of approximately $12.6 million implemented particularly
at certain of our business units acquired from A.O. Smith Corporation in 1997 as
well as increased production volumes on models served by us. These increases
were partially offset by a higher proportion of components purchased from
outside suppliers as a result of the APC acquisition and launch costs associated
with new business totaling approximately $1.8 million.

33
36

S, G & A Expenses. Selling, general and administrative expenses increased
to $85.2 million, or 4.6% of revenues, for the year ended December 31, 1998
compared to $57.9 million, or 4.7% of revenues, for the year ended December 31,
1997. Approximately $4.8 million of the increase relates to a charge taken to
mark to market an interest rate agreement. The remaining increase was due
primarily to incremental costs associated with our acquisitions of APC, SIMES,
IMAR and OSLAMT as well as increased engineering and program development costs
related to new business.

Amortization Expense. Amortization expense for the year ended December 31,
1998 was $13.5 million compared to $9.5 million for the year ended December 31,
1997. The increase was due to amortization related to the costs associated with:

- the July 1997 sale of $200 million of 5% convertible subordinated notes,

- the June 1998 offering of the Trust Preferred Securities, and

- incremental goodwill amortization related to the acquisitions of APC,
SIMES, IMAR and OSLAMT.

Interest Expense. Interest expense for the year ended December 31, 1998 was
$40.3 million compared to $29.0 million for the year ended December 31, 1997.
Interest expense was affected by:

- increased borrowings incurred to fund the acquisitions of APC, SIMES,
IMAR and OSLAMT,

- increased borrowings incurred to fund our investments in our joint
venture interests in Metalsa in October 1997 and Caterina in March 1998,

- more favorable terms related to our borrowings under the credit agreement
entered into in April 1997,

- the proceeds from the April 1997 offering of 17,000,000 shares of common
stock at $17.50 per share,

- the proceeds from the July 1997 sale of the 5.0% convertible subordinated
notes, and

- the proceeds from the June 1998 offering of the Trust Preferred
Securities.

Income Taxes. The effective income tax rate was 40% for the year ended
December 31, 1998 and 39.9% for the year ended December 31, 1997. The effective
rates differed from the statutory rates primarily as a result of state taxes and
non-deductible goodwill amortization.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures,
net of tax, was $12.7 million and $0.2 million for the years ended December 31,
1998 and 1997, respectively. These amounts represent our share of the earnings
from our joint venture interests in Metalsa, Caterina, and Tower Golden Ring.

Minority Interest. Minority interest for the year ended December 31, 1998
represents dividends, net of income tax benefits, on the Trust Preferred
Securities.

LIQUIDITY AND CAPITAL RESOURCES

During the first nine months of 2000, we generated $137.2 million of cash
from operations compared with $99.7 million in the comparable 1999 period. Cash
provided by net income, depreciation and amortization, deferred income tax
provision and the extraordinary loss of $213.8 million in 2000 and $165.1
million in 1999, was partially offset by cyclical increases in working capital
requirements of $76.5 million and $65.3 million, respectively. During the year
ended December 31, 1999, we generated $227.3 million of cash from operations.
This compares with $221.1 million provided during the same period in 1998. Cash
provided by net income before depreciation and amortization was $228.7 million
and $175.4 million for 1999 and 1998, respectively. Other operating items and
working capital requirements relating to customer tooling development and
related receivables during the pre-launch phase decreased operating cash flow

34
37

by approximately $1.4 million during 1999 and increased operating cash flow
$45.7 million during the 1998 period.

Net cash used in investing activities was $390.2 million during the first
nine months of 2000 as compared to $489.4 million in the prior comparable 1999
period. For the first nine months of 2000, acquisitions and investments in joint
ventures were approximately $232.9 million and $329.1 million, respectively. Net
capital expenditures totaled $157.5 million in the first nine months of 2000 for
equipment and dedicated tooling purchases related to new or replacement
programs. This compares with net capital expenditures of $160.3 million for the
prior period. Net cash used in investing activities was $599.2 million during
the year ended December 31, 1999 as compared to $267.4 million in the prior
period. Net capital expenditures totaled $197.3 million and $185.1 million for
the comparable 1999 and 1998 periods, respectively. Acquisitions and investments
in joint ventures were approximately $401.9 million and $119.2 million for the
1999 and 1998 periods, respectively. The sale of our hinge business contributed
$36.9 million during the 1998 period.

Net cash provided by financing activities totaled $250.8 million for the
first nine months of 2000 compared with $387.3 million in prior comparable 1999
period. Net cash provided by financing activities totaled $372.1 million for the
year ended December 31, 1999 compared with $49.7 million in the prior period.
Net proceeds from borrowings were $367.5 million in 1999, and net repayments of
borrowings were $203.3 million in 1998. The issuance of stock contributed $4.6
million and $253.0 million to cash flow for 1999 and 1998, respectively.

On July 25, 2000, we replaced our existing $675 million revolving credit
agreement and our $325 million term loan with a new six-year $1.15 billion
senior unsecured credit agreement. The new credit agreement includes a
non-amortizing revolving facility of $825 million along with an amortizing term
loan of $325 million. The new facility also includes a multi-currency borrowing
feature that allows us to borrow up to $500 million in certain freely tradeable
offshore currencies, and letter of credit sublimits of $100 million. As of
September 30, 2000, approximately $8.7 million of the outstanding borrowings are
denominated in Japanese yen and $52.1 million of the outstanding borrowings are
denominated in Euro. Interest on the new credit facility is at the financial
institution's reference rate, LIBOR, or the Eurodollar rate plus a margin
ranging from 0 to 200 basis points depending on the ratio of the consolidated
funded debt for our restricted subsidiaries to our total EBITDA. The weighted
average interest rate for such borrowings was 6.95% for the nine months ended
September 30, 2000. The new credit agreement has a final maturity of 2006. As a
result of the debt replacement, we recorded an extraordinary loss, net of tax,
of $3.0 million during the third quarter of 2000.

On July 25, 2000, we issued Euro-denominated senior unsecured notes in the
amount of E150 million. The notes bear interest at a rate of 9.25%, payable
semi-annually. The notes rank equally with all of our other unsecured and
unsubordinated debt. The net proceeds after issuance costs were used to repay a
portion of our existing Euro-denominated indebtedness under our existing credit
facility. The notes mature on August 1, 2010.

For the periods presented through July 24, 2000, our former credit
agreement included a revolving credit facility that provided for borrowings of
up to $750 million on an unsecured basis with a letter of credit sublimit of $75
million. In addition, under the terms of this revolving credit facility, the
equivalent of up to $85 million in borrowings could be denominated in Italian
lira. The amount available under the revolving credit facility reduced to $675
million in April 2000, $600 million in April 2001 and $500 million in April
2002. The credit agreement had a final maturity of April 2003. Interest on the
credit facility was at the prime rate or LIBOR plus a margin ranging from 17 to
50 basis points depending upon the ratio of our consolidated indebtedness to our
total capitalization.

During September 2000, we entered into an interest rate swap contract to
hedge against interest rate exposure on approximately $160 million of our
floating rate indebtedness. The
35
38

contracts have the effect of converting the floating rate interest to a fixed
rate of approximately 6.9%, plus any applicable margin required under the
revolving credit facility. The interest rate swap contract was executed to
balance our fixed-rate and floating-rate debt portfolios.

During 1997, we entered into interest rate swap contracts to hedge against
interest rate exposures on certain floating-rate indebtedness. These contracts,
which were to expire in November 2002, had the effect of converting the
floating-rate interest related to a notional amount of $300 million of
borrowings outstanding under the revolving credit facility into a fixed rate of
approximately 6.75%. The interest rate swap contract was executed to balance our
fixed rate and floating-rate debt portfolios. During June 1999, we terminated
our position in the interest rate swap contracts resulting in a gain of $0.5
million.

During 1997, we entered into an interest rate contract in a notional amount
of $75 million in anticipation of financing that did not materialize.
Accordingly, we adjusted the interest rate contract to market as of December 31,
1998 and 1997. The write-down to fair value of approximately $6.4 million and
$2.0 million, respectively, was recorded as an expense in the consolidated
statements of operations. During the first quarter of 1999, we settled the $75
million contract with a cash payment of approximately $7.0 million.

In certain instances, we are committed under existing agreements to supply
products to our customers at selling prices that are not sufficient to cover our
direct costs to produce those parts. We are obligated to supply these products
to our customers for the life of the related vehicles, three to ten years.
Accordingly, we recognize losses at the time these losses are probable and
reasonably estimable at an amount equal to the minimum amount necessary to
fulfill our obligations to our customers. The reserves established in connection
with these recognized losses are reversed as the product is shipped to the
customers. Such amounts reversed during the years ended December 31, 1999, 1998
and 1997 were $16.8 million, $9.7 million, and $4.6 million, respectively.

In June 1998, Tower Automotive Capital Trust, a statutory business trust
created at our direction, completed the offering of $258.8 million of the Trust
Preferred Securities, resulting in net proceeds of approximately $249.7 million.
The Trust Preferred Securities are redeemable, in whole or in part, on or after
June 30, 2001 and all Trust Preferred Securities must be redeemed no later than
June 30, 2018. The Trust Preferred Securities are convertible, at the option of
the holder, into our common stock at a rate of 1.6280 shares of common stock for
each Trust Preferred Security, which is equivalent to a conversion price of
$30.713 per share. The net proceeds of the offering were used to repay
outstanding indebtedness.

In July 1997, we completed the sale of our 5.0% convertible subordinated
notes in a private placement. The convertible notes are due on August 1, 2004
and are convertible into our common stock at a conversion price of $25.88 per
share. The convertible notes are unsecured and may not be redeemed until August
1, 2000, except in the event of a change of control. Proceeds from the notes
were used to repay outstanding indebtedness under the revolving credit facility.

In conjunction with our acquisitions, we have established reserves for
certain costs associated with facility shutdown and consolidation activities and
for general and payroll related costs primarily for planned employee termination
activities. As of December 31, 1998, approximately $21.1 million and $3.6
million were recorded for facility shutdown and payroll related costs,
respectively. Additional reserves of $5.4 million related to facility shutdown
costs and $8.7 million for payroll related costs were recorded for the year
ended December 31, 1999. Costs incurred and charged to such reserves amounted to
$2.5 million for facility shutdown costs and $5.2 million for payroll related
termination costs during the year ended December 31, 1999. Additionally, as a
result of revisions to these restructuring plans, $10.2 million of facility
related costs and $0.7 million of payroll related costs were reversed against
goodwill in 1999. At December 31, 1999, liabilities for approximately $13.8
million for costs associated with facility
36
39

shutdown and consolidation and $6.4 million of costs for planned employee
termination activities remained. The timing of facility shutdown and
consolidation activities has been adjusted to reflect customer concerns with
supply interruption. These reserves have been utilized as originally intended
and management believes the liabilities recorded for shutdown and consolidation
activities are adequate but not excessive as of December 31, 1999.

At September 30, 2000, we had unused borrowing capacity of approximately
$390 million under the most restrictive debt covenant of our then existing
senior credit facility. We believe the borrowing availability under our new
senior credit facility, together with funds generated by operations, should
provide liquidity and capital resources to pursue our business strategy for the
foreseeable future, with respect to working capital, capital expenditures, and
other operating needs. We estimate our 2000 capital expenditures will
approximate $225 million. Under present conditions, management does not believe
access to funds will restrict our ability to pursue our acquisition strategy.

EFFECTS OF INFLATION

Inflation generally affects us by increasing the interest expense of
floating-rate indebtedness and by increasing the cost of labor, equipment and
raw materials. We believe that inflation has not significantly affected our
business over the past 12 months. However, because selling prices generally
cannot be increased until a model changeover, the effects of inflation must be
offset by productivity improvements and volume from new business awards.

MARKET RISK

We are exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. Our policy is to not enter into
derivatives or other financial instruments for trading or speculative purposes.
We periodically enter into financial instruments to manage and reduce the impact
of changes in interest rates.

Interest rate swaps are entered into as a hedge of underlying debt
instruments to effectively change the characteristics of the interest rate
without actually changing the debt instrument. Therefore, these interest rate
swap agreements convert outstanding floating rate debt to fixed rate debt for a
period of time. For fixed rate debt, interest rate changes affect the fair
market value but do not impact earnings or cash flows. Conversely for floating
rate debt, interest rate changes generally do not affect the fair market value
but do impact future earnings and cash flows, assuming other factors are held
constant.

At September 30, 2000, we had total debt and obligations under capital
leases of $1.2 billion. The debt is comprised of fixed rate debt of $493 million
and floating rate debt of $721 million. The pre-tax earnings and cash flows
impact for the next year resulting from a one percentage point increase in
interest rates on variable rate debt would be approximately $7.2 million,
holding other variables constant. A one percentage point increase in interest
rates would not materially affect the fair value of the fixed rate debt.

During September 2000, we entered into an interest rate swap contract to
hedge against interest rate exposure on approximately $160 million of our
floating rate indebtedness. The contracts have the effect of converting the
floating rate interest to a fixed rate of approximately 6.9%, plus any
applicable margin required under the revolving credit facility. The interest
rate swap contract was executed to balance our fixed-rate and floating-rate debt
portfolios.

During June 1999, we terminated our position in interest rate swaps in the
notional amount of $300 million, resulting in a gain of $0.5 million. The swaps
were held as a hedge to convert floating rate indebtedness to fixed rate
indebtedness without changing the underlying debt instrument. We believe that
over the life of the revolving credit facility, interest rates will continue to
remain stable, decreasing the effectiveness of the interest swap, and therefore,
we terminated the hedge.
37
40

A portion of our revenues were derived from manufacturing operations in
Europe. The results of operations and financial position of our operations in
Europe are principally measured in the respective currency and translated into
U.S. dollars. The effects of foreign currency fluctuations in Europe are
somewhat mitigated by the fact that expenses are generally incurred in the same
currency in which revenues are generated. The reported income of these
subsidiaries will be higher or lower depending on a weakening or strengthening
of the U.S. dollar against the respective foreign currency.

A portion of our assets is based in our foreign operations and translated
into U.S. dollars at foreign currency exchange rates in effect as of the end of
each period, with the effect of such translation reflected as a separate
component of stockholders' investment. Accordingly, our consolidated
stockholders' investment will fluctuate depending upon the weakening or
strengthening of the U.S. dollar against the respective foreign currency.

Our strategy for management of currency risk relies primarily upon
conducting our operations in a country's respective currency and we may, from
time to time, engage in hedging programs intended to reduce our exposure to
currency fluctuations. As of September 30, 2000, we held no foreign currency
hedge positions. Management believes the effect of a one percent change in
foreign currency rates would not materially affect our financial position or
results of operations for the nine months ended September 30, 2000 or the years
ended December 31, 1999 and 1998.

YEAR 2000

We have completed our effort in resolving the impact of the year 2000 on
the processing of date-sensitive information by our computerized and embedded
systems. We experienced no significant business interruption as a result of the
year 2000; either internally or externally from suppliers. We do not anticipate
any further impact relating to date-sensitive information processing
capabilities. We spent approximately $2.0 million on year 2000 readiness
activities.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No.'s 137 and 138, becomes effective for the
years beginning after June 15, 2000. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge criteria are met. Special accounting
for qualifying hedges allows a derivative's gains or losses to offset related
results on the hedged item in the income statement and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. We are currently analyzing and quantifying the
impact of adopting SFAS No. 133, 137 and 138, and believe the impact will not be
material to the financial statements.

In April 1998, the Financial Accounting Standards Board issued Statement of
Position (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities." SOP
98-5 requires the expensing of start-up activities as incurred, versus
capitalizing and expensing them over a period of time. Our adoption of SOP 98-5
during the first quarter of 1999 did not materially affect our consolidated
results of operations or our financial position.

38
41

BUSINESS

GENERAL

We are a leading global designer and producer of structural components and
assemblies used by every major automotive 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.

INDUSTRY TRENDS

We operate in the large and highly fragmented structural segment of the
automotive supply industry, which continues to undergo significant
consolidation. Our performance and growth are directly related to certain trends
within the automotive market, including the consolidation of the component
supply industry, the increase in global sourcing and the growth of
system/modular sourcing.

Supplier Consolidation. The automotive supply industry has been undergoing
significant consolidation. In order to lower costs and improve quality, OEMs are
reducing their supplier base by awarding sole-source contracts to full-service
suppliers who are able to supply larger segments of a vehicle. OEMs' criteria
for supplier selection include not only cost, quality and responsiveness, but
also full-service design, engineering and program management capabilities. For
full-service suppliers like us, this environment provides an opportunity to grow
by obtaining business previously provided by other non-full service suppliers
and by acquiring suppliers that further enhance product, manufacturing and
service capabilities. OEMs rigorously evaluate

39
42

suppliers on the basis of product quality, cost control, reliability of
delivery, product design capability, financial strength, new technology
implementation, quality and condition of facilities and overall management.
Suppliers that obtain superior ratings are considered for sourcing new business.
Although these new supplier policies have already resulted in significant
consolidation of component suppliers in certain segments, we believe that
consolidation within the structural and suspension component segments of the
automotive industry will continue to provide attractive opportunities to acquire
high-quality companies that complement our existing business.

Global Sourcing. Regions such as Asia, Latin America, Mexico and Eastern
Europe are expected to experience significant growth in vehicle demand over the
next ten years. OEMs are positioning themselves to reach these emerging markets
in a cost-effective manner by seeking to design and produce "world cars" which
can be designed in one vehicle center to a single global standard but produced
and sold in different geographic markets, thereby allowing OEMs to reduce design
costs, take advantage of low-cost manufacturing locations and improve product
quality and consistency. OEMs increasingly are requiring their suppliers to have
the capability to design and manufacture their products in multiple geographic
markets.

System/Modular Sourcing. OEMs are increasingly seeking suppliers capable of
providing complete systems or modules rather than suppliers who only provide
separate component parts. A system is a group of component parts that operate
together to provide a specific engineering driven functionality, whereas a
module is a group of systems and/or component parts that are assembled and
shipped to the OEM for installation in a vehicle as a unit. By outsourcing
complete systems or modules, OEMs are able to reduce their costs associated with
the design and integration of different components and improve quality by
enabling their suppliers to assemble and test major portions of the vehicle
prior to beginning production.

COMPETITIVE STRENGTHS

Comprehensive Technical Design and Engineering Support. We operate eight
technical design and engineering support facilities worldwide, have over 400
full time engineers and employ the latest simulation technology. We have
internally developed predictive software enhancements to perform ride and
handling analysis, weld distortion simulation, hydroform simulation, and
predictive crash and virtual proving ground analysis. By utilizing our
proprietary predictive analysis, we can avoid costly prototype construction and
provide cost savings and higher quality products to our customers. We also use
our advanced technology to continuously develop alternative products and
processes to deliver the same functional requirements at a lower price and
lighter weight. In order to integrate our product design efforts with those of
OEMs, we frequently place design engineers at customer facilities. The
technologically advanced capabilities that we possess enable us to successfully
bid product and platform contracts with OEM customers.

Strong OEM Partnerships. We have formed strong relationships with our major
OEM customers due to our high level of product quality, engineering
capabilities, product design and customer service. We currently supply products
on each of the 1999 top ten selling vehicles in North America and four of the
top ten selling vehicles in Europe. We believe that we are the largest supplier
of frames, engine cradles, body structures and suspension components to Ford and
the largest supplier of frames and body structures to DaimlerChrysler. Our
strong focus on meeting our customers' requirements has been recognized through
various quality awards, including Ford's "Q1" and DaimlerChrysler's "Pentastar,"
as well as consistently receiving Ford's highest commercial ratings for
suppliers in the stamping segment. These strong relationships and our focus on
meeting customer expectations have resulted in winning new business including

40
43

increased content on the redesigned 2001 Ford Explorer and new programs such as
the GM Sigma platform, BMW x5, Ford Escape and Dodge Dakota Quad Cab.

Broad Product Offering and Program Management Capability. We believe that
we produce the largest array of structural products in the automotive supply
industry and are the only supplier able to deliver a full range of structural
components and assemblies on a global basis. For example, we supply 146 distinct
components in various assemblies for the Lincoln LS model. In addition, our
program management skills enable us to efficiently coordinate the sourcing of
components produced by Tier II and Tier III suppliers and assemble these into
complete modules. By delivering these modules to our OEM customers, we allow the
OEMs to reduce their production and inventory management costs.

Proven Management Team. Our management team, led by President and CEO
Dugald Campbell, who has over 27 years of experience in the automotive industry,
has successfully executed a targeted growth and acquisition program that has
increased our revenues and EBITDA from approximately $165.5 million and $18.4
million in 1994 to approximately $2.2 billion and $336.7 million in 1999,
respectively. We possess a strong track record of accretive acquisitions and
have proven our consolidation abilities by successfully integrating multiple
acquisitions and extracting significant cost savings and synergies. In 1997, we
successfully integrated the acquisition of Automotive Products Company, which at
that time more than doubled our size in terms of revenues.

BUSINESS STRATEGY

Key elements of our operating and growth strategies are outlined below:

OPERATING STRATEGY

Offer Full-Service Technical Design, Engineering and Program Management
Capabilities. We strive to maintain a competitive advantage through investment
in research and product development, advanced engineering and program
management. We work with OEMs throughout the product development process from
concept vehicle and prototype development through the design and implementation
of manufacturing process to provide full-service capabilities to our customers.
In some cases, we place design engineers at customer facilities to coordinate
our product design efforts with those of our OEM customers. During 1999, we
added a technical and customer service center in Hyderabad, India to enable
around-the-clock product development across several time zones.

Utilize Efficient Manufacturing/Continuous Improvement Programs. We utilize
manufacturing practices designed to maximize product quality, timeliness of
delivery and eliminate waste and inefficiency. We continue to upgrade our
manufacturing equipment and processes through substantial investment in new
equipment, maintenance of existing equipment and utilization of our
manufacturing engineering capabilities. We employ flexible manufacturing
processes that allow us to maximize equipment utilization in meeting our
customers' expectations for product quality and timely delivery.

41
44

Expand Our Global Presence. We offer manufacturing and support services to
our customers on a global basis through a combination of international wholly
owned facilities and by entering into joint ventures and partnerships with
foreign suppliers. We have technical/customer service centers in Yokohama,
Japan; Turin, Italy; Hyderabad, India; and with the acquisition of Dr. Meleghy,
Bergisch-Gladbach, Germany. The acquisition of Dr. Meleghy complements our
existing European operations and provides a strong base for continued expansion.
Furthermore, we have relocated certain technical personnel resources to
locations where OEMs are developing "world cars."

Promote Decentralized, Participative Culture. Our decentralized approach to
managing our manufacturing facilities encourages decision making and employee
participation in areas such as manufacturing processes and customer service. Our
leadership team meets frequently at various company locations in order to
maintain a unified company culture. To increase employee productivity, we
utilize incentive programs for all salaried and hourly employees and provide
incentives for employees who take advantage of our continuous improvement
programs and who provide cost savings ideas.

GROWTH STRATEGY

Pursue Strategic Acquisitions. We continue to believe that consolidation in
the automotive supply industry will provide further attractive opportunities to
acquire high-quality companies that complement our existing business. We seek to
make acquisitions that:

- provide additional product, manufacturing and technical capabilities;

- broaden our geographic coverage to strengthen our ability to supply
products on a global basis;

- increase the number of models for which we supply products and the
content supplied for existing models; and

- add new customers.

Continue to Expand Modular Product Opportunities. We have capitalized on
the system/modular sourcing needs of OEMs by offering higher value-added module
production capabilities through an increasing focus on the production of
engineered assemblies consisting of multiple components. We have the ability to
supply OEMs with modular assemblies on a global basis.

Increase Vehicle Penetration. We have developed strong relationships with
certain OEM engineering and purchasing personnel that allow us to identify
business opportunities and to react to customer needs in the early stages of
vehicle design. We believe that these relationships give us a competitive
advantage over smaller and less capable suppliers in marketing our broad range
of products and in developing new product concepts that complement our existing
product lines, including the expanded use of modules.

Pursue "World Car" Opportunities. We have been working closely with certain
customers on the development of "world cars," which are designed by OEMs in one
vehicle center to a single global standard but produced and sold in different
geographic markets. Suppliers for a specific "world car" are often required to
provide their products on a worldwide basis. We believe that we have a
competitive advantage in supplying certain "world cars" given our international
presence, full-service capabilities and existing position as a leading supplier
on the Ford Focus and Lincoln LS luxury car, as well as on other existing
vehicle platforms that may eventually evolve into "world cars."

42
45

PRODUCTS

We produce a broad range of structural components and assemblies, many of
which are critical to the structural integrity of a vehicle. Many of our
stamped, formed and welded components and assemblies are attached directly to
the frame of an automobile at the OEM assembly plant and comprise the major
structure of a vehicle. Our products generally can be classified into the
following categories: lower vehicle structures; body structures and assemblies;
suspension components, modules and systems; and Class A surfaces and modules.

Lower Vehicle Structures. Our lower vehicle structures include products
that form the basic lower body structure of the vehicle and include large metal
stampings such as light truck frames, automotive engine cradles, floor pan
components, cross members and heavy truck frame rails. Critical to the strength
and safety of vehicles, these products carry the load of the vehicle and provide
crash integrity.

Body Structures and Assemblies. Our body structures include products that
form the basic upper body structure of the vehicle and include large metal
stampings such as body pillars, roof rails, side sills, parcel shelves and
intrusion beams. Our current assemblies include a broad array of highly
engineered parts such as brake components and fuel filler assemblies. Such
engineered assemblies are a natural extension to our other products in that they
are attached to both lower vehicle and body structures.

Suspension Components, Modules and Systems. Our current suspension
component products include stamped, formed and welded products such as control
arms, suspension links, track bars, spring and shock towers and trailing axles.
Critical to the ride, handling and noise characteristics of a vehicle,
suspension components are a natural extension of our larger structural
components.

Class A Surfaces and Modules. Our current Class A surfaces include exposed
sheet metal components such as body sides, pick-up box sides, door panels and
fenders. The capability to produce these type of components complements our
substantial presence in lower vehicle and body structures and allows for the
combination of these offerings into modules for supply to customers.

Other. We also manufacture a variety of other products, including heat
shields and other precision stampings, for our OEM customers.

The following table sets forth the percentage of revenues derived from the
sale of certain products in the years indicated:

PERCENTAGE OF REVENUES BY PRODUCT CATEGORY

YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----

PRODUCT CATEGORY
Lower vehicle structures................................... 50% 54% 41%
Body structures and assemblies............................. 24 29 46
Suspension components, modules and systems................. 20 17 13
Class A surfaces and modules............................... 5 -- --
Other...................................................... 1 -- --
--- --- ---
Total............................................ 100% 100% 100%
=== === ===

We produce value-added assemblies and systems comprised of components that
we manufacture as well as those produced by other manufacturers. Assemblies are
groups of components that are grouped according to their relative location,
while systems are components that are grouped based upon providing
functionality. We sell these products to OEMs who have

43
46

been increasingly outsourcing assemblies and systems in order to reduce their
production and inventory management costs. We currently produce axle assemblies,
which consist of stamped metal trailing axles, assembled brake shoes, hoses and
tie rods and front and rear structural suspension systems, which are consist of
control arms and suspension links.

CUSTOMERS AND MARKETING

The North American automotive market is dominated by General Motors, Ford
and DaimlerChrysler, with foreign OEMs with manufacturing operations in North
America representing approximately 23% of this market in 1999. We currently
supply our products primarily to Ford, DaimlerChrysler, General Motors, Saturn,
Honda, Toyota, Nissan, Auto Alliance, Fiat, BMW and Volkswagen. We also supply
products to a number of heavy truck OEMs such as Freightliner, Peterbilt, Mack
and Volvo.

The following table sets forth the percentage of revenues derived from the
sale of products to certain customers in the years indicated:

YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----

CUSTOMER
Ford....................................................... 38% 40% 48%
DaimlerChrysler............................................ 29 27 19
General Motors............................................. 10 10 13
Heavy truck OEMs........................................... 7 7 6
Fiat....................................................... 5 2 3
Other...................................................... 11 14 11
--- --- ---
Total............................................ 100% 100% 100%
=== === ===

OEMs typically award contracts that cover parts to be supplied for a
particular car model. These contracts range from one year to over the life of
the model, which is generally three to ten years, and do not require the
customer to purchase any minimum number of parts. We also compete for new
business to supply parts for successor models and therefore we are subject to
the risk that the OEM will not select us to produce parts on a successor model.
We supply parts for a broad cross-section of both new and mature models, thereby
reducing our reliance on any particular model. For example, we supply parts for
substantially all models produced by Ford, Honda and DaimlerChrysler and also
currently supply DaimlerChrysler with substantially all of its

44
47

full frame requirements. The following table presents an overview of the major
models for which we supply products:

CUSTOMER CAR MODELS TRUCK MODELS
-------- ---------- ------------

Ford......................... Taurus/Sable, Contour/ Explorer, Ranger, F-Series,
Mystique, Mustang, Escort, Econoline, Villager,
Crown Victoria, Grand Windstar, Medium Trucks,
Marquis, Fiesta, Expedition/Navigator,
Continental, Focus, Excursion
LS/Jaguar S-Type, Cougar,
Thunderbird, Towncar,
Mondeo
DaimlerChrysler.............. Concorde/Intrepid, Neon, Ram Pick-up, Dakota, Grand
Viper, Avenger, Stratus/ Cherokee, Voyager,
Cirrus/Breeze, 300m, Sprinter, Caravan, Ram Van,
Sebring, C-Class, E-Class Wrangler, Durango,
Sprinter, S-KN, L-KN
General Motors............... Cavalier, Sunfire, Grand Am, C/K Pick-up, Silverado,
Lumina, Grand Prix Sierra, Tahoe, Yukon,
Astro, Safari
Saturn....................... LS
Honda........................ Accord, Civic, Acura Integra Odyssey
Mazda........................ 626, MX6
Toyota....................... Avalon, Camry, Solara Sienna, Tacoma, Tundra
Nissan....................... Sentra, Altima Quest, Xterra, Frontier
Isuzu........................ Rodeo, Amigo
Fiat......................... Marea, Punto, Bravo
Audi/Volkswagen.............. Passat, Audi A4, Audi A6
BMW.......................... 3 Series, 5 Series
Opel......................... Omega, Astra, Agila

Most of the parts we produce have a lead time of two to five years from
product development to production. See "Design and Engineering Support." We
generally negotiate the selling prices of these products with our customers and
are typically not subject to a competitive bid process.

Sales of our products to OEMs are made directly by our sales and
engineering forces, located at our technical/customer service centers in Novi,
Rochester Hills and Roseville, Michigan; Milwaukee, Wisconsin; Yokohama, Japan;
Turin, Italy; Bergisch-Gladbach, Germany; and Hyderabad, India. Through our
technical centers, we service our OEM customers and manage our continuing
programs of product design improvement and development. We periodically place
engineering staff at various customer facilities to facilitate the development
of new programs.

DESIGN AND ENGINEERING SUPPORT

We strive to maintain a technological advantage through investment in
product development and advanced engineering capabilities. Our manufacturing
engineering capabilities enable us to design and build high-quality and
efficient manufacturing systems, processes and equipment and to continually
improve our production processes and equipment. Our manufacturing engineers are
located at each of our manufacturing facilities. Our engineering staff currently
consists of over 400 full-time engineers, whose responsibilities range from
research and development,

45
48

advanced product development, product design, testing and initial prototype
development to the design and implementation of manufacturing processes.

Because assembled parts must be designed at an early stage in the
development of new vehicles or model revisions, we are increasingly given the
opportunity to utilize our product engineering resources early in the planning
process. Advanced development engineering resources create original engineering
designs, computer-aided designs, feasibility studies, working prototypes and
testing programs to meet customer specifications. We also have full-service
design capability for chassis components.

GLOBAL INITIATIVES

A current focus of our acquisition strategy is to continue to acquire
foreign suppliers that will provide us with a manufacturing presence in new
geographic areas and afford us access to new customer opportunities. For
example, we recently acquired Dr. Meleghy, which operates three facilities in
Germany and one facility in each of Hungary and Poland, and purchased the
remaining 60% equity interest in Caterina. In addition, we have formed, or are
in the process of forming, strategic alliances with other suppliers throughout
the world, including those located in Europe, Asia and Latin America. As part of
our acquisition of APC, we acquired a 60% equity interest in a joint venture,
Tower Golden Ring, that manufactures structural components in China. We also
have equity interests in Metalsa and Seojin. We also have a European sales and
engineering office to service our U.K. and German OEM customers.

MANUFACTURING

Our manufacturing operations consist primarily of stamping operations,
system and modular assembly operations, roll-forming and hydroforming operations
and associated coating and other ancillary operations.

Stamping involves passing metal through dies in a stamping press to form
the metal into three-dimensional parts. We produce stamped parts using over 640
precision single-stage, progressive and transfer presses, ranging in size from
150 to 4,000 tons, that perform multiple functions as raw material proceeds
through the press and is converted into a finished product. We continually
invest in our press technology to increase flexibility, improve safety and
minimize die changeover time.

After forming is completed, stampings that are to be used in assemblies are
placed in work-in-progress staging areas from which they are fed into
cell-oriented assembly operations that produce complex, value-added assemblies
through the combination of multiple parts that are welded or fastened together.
Our assembly operations are performed on either dedicated, high-volume
welding/fastening machines or on flexible-cell oriented robotic lines for units
with lower volume production runs. The assembly machines attach additional
parts, fixtures or stampings to the original metal stampings. In addition to
standard production capabilities, our assembly machines are also able to perform
various statistical control functions and identify improper welds and
attachments. We continually work with manufacturers of fixed/robotic welding
systems to develop faster, more flexible machinery. We designed several of the
welding systems.

In manufacturing our products, we use various grades and thicknesses of
steel and aluminum, including hot and cold rolled, galvanized, organically
coated, stainless and aluminized steel. We also produce exposed sheet metal
components, such as exterior body panels. See "Suppliers and Raw Materials."

OEMs have established quality rating systems involving rigorous inspections
of suppliers' facilities and operations. OEMs' factory rating programs provide a
quantitative measure of a company's success in improving the quality of its
operations. We have received quality awards from Ford (Q1) and DaimlerChrysler
(Pentastar) and have consistently received Ford's highest

46
49

commercial ratings for suppliers in the stamping segment. The automotive
industry adopted a quality rating system known as QS-9000. We have received
QS-9000 certification in compliance with the automotive industry requirements.

COMPETITION

We operate in a highly competitive, fragmented market segment of the
automotive supply industry, with a limited number of competitors generating
revenues in excess of $200 million. The number of our competitors has decreased
in recent years and is expected to continue to decrease due to the supplier
consolidation resulting from changing OEM policies. Our principal competitors
include The Budd Company, a subsidiary of Thyssen-Krupp AG ("Budd"), Magna
International, Inc. ("Magna") and Dana Corporation ("Dana"), with whom which we
compete across most of our product categories. With respect to body structures
and assemblies, we also compete with Midway Products Corp., Modern Tool & Die
Co., Oxford Automotive, Inc. and Veltri Corporation. Our principal competitors
in suspension components, modules and systems include Magna, Dana, TRW Inc.,
Thyssen-Krupp, Delphi Automotive Systems, Inc. and Visteon. Our principal
competitors in Class A surfaces and modules include divisions of OEMs with
internal stamping and assembly operations. Many of our competitors have
substantial financial resources.

We principally compete for new business both at the beginning of the
development of new models and upon the redesign of existing models. New model
development generally begins two to five years before the marketing of such
models to the public. Once a producer has been designated to supply parts for a
new program, an OEM usually will continue to purchase those parts from the
designated producer for the life of the program, although not necessarily for a
redesign. Competitive factors in the market for our products include product
quality and reliability, cost and timely delivery, technical expertise and
development capability, new product innovation and customer service.

SUPPLIERS AND RAW MATERIALS

The primary raw material used to produce the majority of our products is
steel. We purchase hot and cold rolled, galvanized, organically coated,
stainless and aluminized steel from a variety of suppliers. We employ
just-in-time manufacturing and sourcing systems enabling us to meet customer
requirements for faster deliveries while minimizing our need to carry
significant inventory levels. We have not experienced any significant shortages
of raw materials and normally do not carry inventories of raw materials or
finished products in excess of those reasonably required to meet production and
shipping schedules. Raw material costs represented approximately 52% of our
revenues in 1999.

Ford, Honda and DaimlerChrysler currently purchase all of the steel used by
us for their models directly from steel producers. As a result, we have minimal
exposure to changes in steel prices for parts supplied to Ford, Honda and
DaimlerChrysler, which collectively represented 70% of our revenues in 1999.

We expect that the content level of metal in cars and light trucks will
remain constant or increase slightly due to the trend toward increased vehicle
size and a greater emphasis on metal recycling. Although the search for improved
fuel economy and weight reduction has resulted in attempts to reduce the sheet
metal content of light vehicles, an efficient, cost-effective substitute for
steel used in our structural products has not been found. While various polymers
have been used recently for fenders, hoods and decks, such products do not have
the inherent strength or structural integrity on a cost-effective basis to be
used for structural components. We are involved in ongoing evaluations of the
potential for the use of aluminum and of specialty steel in our products.

Other raw materials purchased by us include dies, fasteners, tubing,
springs, rivets and rubber products, all of which are available from numerous
sources.
47
50

EMPLOYEES

As of September 30, 2000, we had approximately 13,000 employees, of whom
approximately 6,500 are covered under collective bargaining agreements. These
collective bargaining agreements expire between 2000 and 2005. We believe that
our future success will depend in part on our ability to continue to recruit,
retain and motivate qualified personnel at all levels. We have instituted a
large number of employee programs to increase employee morale and expand the
employees' participation in our business. We have not experienced any work
stoppages and consider our relations with our employees to be good.

PROPERTIES

The following table provides information regarding our principal
facilities. We maintain several manufacturing facilities located in close
proximity to many of the high-volume vehicle assembly plants of our customers.
Our facilities are geographically located in such a way as to enable us to
optimize our management and logistical capabilities on a regional basis.

SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
-------- --------- -------- ------------------

Milwaukee, Wisconsin..................... 3,465,000 Owned Manufacturing/Engineering
Elkton, Michigan......................... 1,100,000 Owned Manufacturing
Caserta, Italy (2 locations)............. 751,000 Owned Manufacturing
Milan, Tennessee......................... 531,000 Owned Manufacturing
Turin, Italy (4 locations)............... 512,000 Mixed Manufacturing/Engineering/Office
Granite City, Illinois................... 458,000 Owned Manufacturing
Zwickau, Germany......................... 409,000 Owned Manufacturing
Clinton Township, Michigan............... 385,000 Owned Manufacturing
Sebewaing, Michigan...................... 366,000 Owned Manufacturing
Toronto, Ontario......................... 329,400 Owned Manufacturing/Office
Bardstown, Kentucky...................... 300,000 Owned Manufacturing
Plymouth, Michigan....................... 294,000 Leased Manufacturing
Corydon, Indiana......................... 290,000 Leased Manufacturing
Kalamazoo, Michigan (2 locations)........ 220,000 Mixed Manufacturing/Warehouse/Office
Roanoke, Virginia........................ 185,000 Owned Manufacturing
Sao Paulo, Brazil........................ 171,000 Owned Manufacturing/Office
Traverse City, Michigan.................. 170,000 Owned Manufacturing
Greenville, Michigan..................... 156,000 Owned Manufacturing/Office
Changchun, China......................... 140,500 Leased(1) Manufacturing
Rockford, Illinois....................... 140,000 Leased Manufacturing
Auburn, Indiana.......................... 132,000 Owned Manufacturing/Office
Kendallville, Indiana.................... 131,000 Owned Manufacturing
Bellevue, Ohio........................... 126,000 Owned Manufacturing
Bluffton, Ohio........................... 102,000 Owned Manufacturing
Bergisch-Gladbach, Germany............... 102,000 Owned Manufacturing/Engineering/Office
Rochester Hills, Michigan................ 89,000 Leased Office/Engineering/Design
Barrie, Ontario.......................... 72,000 Leased Manufacturing
Belcamp, Maryland........................ 70,000 Owned Manufacturing
Minas Gerais, Brazil..................... 60,000 Owned Manufacturing
Upper Sandusky, Ohio..................... 56,000 Owned Manufacturing
Buchholz, Germany........................ 54,000 Owned Manufacturing
Opole, Poland............................ 54,000 Owned Manufacturing
Novi, Michigan........................... 47,000 Leased Engineering/Design/Sales
Bowling Green, Kentucky.................. 46,000 Owned Manufacturing
Fenton, Missouri......................... 41,000 Leased Warehouse

48
51

SQUARE TYPE OF
LOCATION FOOTAGE INTEREST DESCRIPTION OF USE
-------- --------- -------- ------------------

Tokod, Hungary........................... 22,000 Owned Manufacturing
Roseville, Michigan...................... 21,000 Owned Office/Engineering
Grand Rapids, Michigan................... 11,000 Leased Operating Headquarters
Minneapolis, Minnesota................... 5,700 Leased Corporate Headquarters
Hyderabad, India......................... 2,800 Leased Engineering/Design
Yokohama, Japan.......................... 1,000 Leased Sales/Engineering

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

(1) Facility is leased by a joint venture in which Tower Automotive holds a 60%
equity interest.

Management believes that substantially all of our property and equipment is
in good condition. In order to increase efficiency, we expect to continue to
make capital expenditures for equipment upgrades at our facilities as necessary.

We believe that our existing facilities will be adequate to meet our
production demands for the foreseeable future. Our facilities were specifically
designed for the manufacturing of our products. The utilization and capacity of
such facilities are dependent upon the mix of products being produced by us.

LEGAL PROCEEDINGS

We are not currently involved in any material lawsuits. We believe we
maintain adequate insurance, including product liability coverage. We
historically have not been required to pay any material liability claims.

ENVIRONMENTAL MATTERS

We believe we conduct our operations in substantial compliance with
applicable environmental and occupational health and safety laws. We do not
expect to incur material capital expenditures for environmental compliance
during our current or succeeding fiscal year. However, as is the case with
manufacturers in general, if a release of hazardous substances occurs on or from
our properties or at any associated offsite disposal location, if contamination
from prior activities is discovered at any of our properties or if
non-compliance with environmental regulations or permits is discovered, we may
be held liable and the amount of such liability could be material.

In connection with our acquisition of Trylon, MascoTech agreed to indemnify
us for all losses (including reasonable legal expenses) resulting from:

- each known environmental condition identified on a schedule to the
acquisition agreement.

In connection with our acquisition of MSTI, MascoTech agreed to indemnify
us for all losses (including reasonable legal expenses) resulting from:

- a breach of its representations set forth in the acquisition agreement
relating to environmental and safety matters (to the extent that such
breach results in a claim being made by May 2001 and subject to a $1.5
million threshold for all losses resulting from breaches of
representations and warranties contained in the acquisition agreement);

- MSTI's non-compliance with applicable federal, state, local and foreign
statutes, regulations, ordinances and similar provisions that have the
force or effect of law, judicial orders

49
52

and common law concerning public health and safety, worker health and
safety and pollution or protection of the environment prior to the
acquisition; and

- any remediation that may be required at the Kendallville facility.

In connection with our acquisition of APC, A.O. Smith agreed to retain
environmental liabilities for offsite disposal of hazardous substances prior to
our acquisition of APC.

In connection with our acquisition of Active, we will be indemnified,
subject to certain limitations, for all losses (including reasonable legal fees
and expenses) resulting from claims arising under environmental laws relating to
pre-closing environmental matters. This indemnification obligation applies to
certain claims submitted by us by July 2001 that exceed a $1.0 million threshold
for all indemnification claims. To the extent that indemnification claims exceed
the $1.0 million threshold, this indemnification obligation will be satisfied
only out of escrowed funds held pursuant to an escrow agreement, up to a maximum
indemnification obligation of $15.0 million under the acquisition agreement.

50
53

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
directors and executive officers of Parent as of September 30, 2000:

NAME AGE POSITION
---- --- --------

S.A. Johnson.......................... 60 Chairman and Director
Dugald K. Campbell.................... 53 President, Chief Executive Officer and
Director
James W. Arnold....................... 47 Vice President
Anthony A. Barone..................... 50 Vice President and Chief Financial
Officer
Richard S. Burgess.................... 46 Vice President
Roland J. Loup........................ 57 Vice President
Tommy G. Pitser....................... 52 Vice President
Scott D. Rued......................... 43 Vice President, Corporate Development
and Director
Antonio R. Zarate..................... 55 Vice President
Kim B. Clark.......................... 50 Director
Jurgen M. Geissinger.................. 40 Director
F.J. (Joe) Loughrey................... 50 Director
James R. Lozelle...................... 54 Director
Enrique Zambrano...................... 44 Director

S.A. (Tony) Johnson has served as Chairman and a Director since April 1993.
Mr. Johnson is the founder, Chief Executive Officer and President of Hidden
Creek Industries ("Hidden Creek"), a private industrial management company based
in Minneapolis that has provided certain management and other services to Tower
Automotive. Mr. Johnson is also the managing partner of J2R Partners ("J2R"), an
investment partnership that participated in the acquisition of R.J. Tower. Prior
to forming Hidden Creek, Mr. Johnson served from 1985 to 1989 as Chief Operating
Officer of Pentair, Inc., a diversified industrial company. From 1981 to 1985,
Mr. Johnson was President and Chief Executive Officer of Onan Corp., a
diversified manufacturer of electrical generating equipment and engines for
commercial, defense and industrial markets. Mr. Johnson currently serves as
Chairman and a director of Dura Automotive Systems, Inc., a manufacturer of
mechanical assemblies and integrated systems for the automotive industry, and
J.L. French, a manufacturer of aluminum die cast components, and served as
Chairman and a director of Automotive Industries Holding, Inc., a supplier of
automotive interior trim components, from May 1990 until its sale to Lear
Corporation in August 1995.

Dugald K. Campbell has served as President, Chief Executive Officer and a
Director since December 1993. From 1991 to 1993, Mr. Campbell served as a
consultant to Hidden Creek. From 1988 to 1991, he served as Vice President and
General Manager of the Sensor Systems Division of Siemens Automotive, a
manufacturer of engine management systems and components. From 1972 to 1988, he
held various executive, engineering and marketing positions with Allied
Automotive, a manufacturer of vehicle systems and components and a subsidiary of
Allied Signal, Inc. Mr. Campbell also currently serves as a director of J.L.
French.

James W. Arnold has served as Vice President since 1999, with current
responsibility for Tower Automotive's Asian strategy. Mr. Arnold joined Tower
Automotive in 1998. From 1977 to 1998, Mr. Arnold held a variety of
manufacturing, sales, marketing and Asian general management positions at Allied
Signal.

51
54

Anthony A. Barone has served as Vice President and Chief Financial Officer
since May 1995. From 1984 to 1995, Mr. Barone served as Chief Financial Officer
of O'Sullivan Corporation, a manufacturer of interior trim components for the
automotive industry.

Richard S. Burgess has served as Vice President with responsibility for
colleague growth and development since January 1996. From June 1994 to January
1996, Mr. Burgess served as the colleague growth and development leader during
the start-up of the Bardstown, Kentucky operation. From October 1991 to June
1994, Mr. Burgess filled various roles in colleague growth and development of
R.J. Tower Corporation.

Roland J. Loup has served as Vice President since May 2000, with
responsibility for constructing systems, processes and procedures to facilitate
the exchange of information throughout Tower Automotive. From 1986 to 2000, Mr.
Loup was a partner in Dannemiller Tyson Associates, a consulting firm.

Tommy G. Pitser has served as Vice President since May 1996, with current
responsibility for Tower Automotive's European and South American strategy. Mr.
Pitser previously had responsibility for Tower Automotive's joint venture
investment in China and operations in Bane, Ontario; Plymouth, Michigan;
Yokohama, Japan; Romulus, Michigan; Manchester, Michigan and Novi, Michigan,
since May 1996. Prior to joining Tower Automotive, Mr. Pitser served in various
sales and marketing capacities at MSTI. Prior to joining MSTI, Mr. Pitser served
as Market Director-Automotive at AE Goetze North America. From 1969 to 1992, Mr.
Pitser was an employee of Borg-Warner Corporation, most recently as General
Manager-Marine & Industrial Transmissions.

Scott D. Rued has served as Vice President, Corporate Development and a
Director since April 1993. Mr. Rued served as Vice President, Chief Financial
Officer and a director of Automotive Industries Holding, Inc. from April 1990
until its sale to Lear Corporation in August 1995. Mr. Rued, a partner of J2R,
has also served as Executive Vice President and Chief Financial Officer of
Hidden Creek since January 1994 and served as its Vice President-Finance and
Corporate Development from June 1989 through 1993. Mr. Rued is also a director
of The Rottlund Company, Inc., a corporation engaged in the development and sale
of residential real estate.

Antonio R. Zarate has served as Vice President since May 2000, with
responsibility for Tower Automotive's operations in Mexico and South America.
From 1994 to 2000, Mr. Zarate served as President of the Automotive Division of
Proeza, S.A. de C.V., a diversified international company that has operations
primarily in the automotive and citrus juice processing industries.

Kim B. Clark has served as a Director since December 1995. Mr. Clark has
served as Dean of the Graduate School of Business Administration at Harvard
University in Cambridge, Massachusetts since September 1995. Since 1978, Dean
Clark has served as a professor of business administration at Harvard Business
School. Dean Clark is also a director of Guidant Corp., a manufacturer of
medical implants, and Fleet Financial, a financial services company.

Jurgen M. Geissinger has served as a Director since May 2000. Mr.
Geissinger has served as President and Chief Executive Officer of INA Holding
GmbH & Co. KG, a global manufacturer of bearings, linear guidance systems,
automotive transmissions and engine systems since November 1998. From 1992 to
October 1998, Mr. Geissinger served in various positions at ITT Automotive, most
recently as Senior Vice President with responsibility for the Brakes and Chassis
Engineering Division worldwide.

F.J. (Joe) Loughrey has served as a Director since November 1994. Mr.
Loughrey joined Cummins Engine Company, Inc. in 1974 and has served as Executive
Vice President and President -- Engine Business since October 1999. Prior
thereto, Mr. Loughrey served as Executive Vice President and Group
President -- Industrial and Chief Technical Officer from 1996 to 1999.
52
55

James R. Lozelle has served as a Director since May 1994. Mr. Lozelle
served as Executive Vice President for Tower Automotive, with responsibility for
Tower Automotive's operations in Milwaukee, Wisconsin and Roanoke, Virginia from
April 1997 to January 1999. From the acquisition of Edgewood Tool and
Manufacturing Company in May 1994 until March 1997, Mr. Lozelle served at the
Tower Automotive Technical Centers, with responsibility for advanced product
development and customer service. Mr. Lozelle served as President of Edgewood
from 1982 until it was acquired by Tower Automotive. Mr. Lozelle joined Edgewood
in 1970 and served as Vice President from 1971 to 1982. Mr. Lozelle is chairman
of the Near Zero Stamping research project of the Autobody Consortium.

Enrique Zambrano has served as a Director since December 1997. Mr. Zambrano
has served as Chief Executive Officer and a director of Proeza, S.A. de C.V., a
diversified international company that has operations primarily in the
automotive and citrus juice processing industries, since 1988. Mr. Zambrano is
also a Director of IMSA, a steel processing company, Dataflux, a leading value
added distributor of computer equipment, and ITESM, the largest private
University in Mexico.

There are no family relationships between any of the foregoing persons or
any of Tower Automotive's executive officers. There are no arrangements or
understandings between any of these officers pursuant to which any of them
served as an officer.

COMMITTEES OF THE BOARD

The Board of Directors has established the following committees, the
functions and current members of which are noted below.

Executive Committee. The Executive Committee of the Board of Directors
consists of S.A. Johnson (Chairman), Dugald K. Campbell, James R. Lozelle and
Scott D. Rued. The Executive Committee has all the power and authority vested in
or retained by the Board of Directors and may exercise its power and authority
in any manner as it shall deem for the best interest of Tower Automotive in all
cases in which specific direction shall not have been given by the Board of
Directors and subject to any specific limitations imposed by law or a resolution
of the Board of Directors.

Audit Committee. The Audit Committee of the Board of Directors consists of
Kim B. Clark and F.J. Loughrey. The Audit Committee is responsible for
reviewing, as it shall deem appropriate, and recommending to the Board of
Directors, internal accounting and financial controls for Tower Automotive and
accounting principles and auditing practices and procedures to be employed in
the preparation and review of Tower Automotive's financial statements. The Audit
Committee is also responsible for recommending to the Board of Directors
independent public accountants to audit the annual financial statements of Tower
Automotive.

Compensation Committee. The Compensation Committee of the Board of
Directors consists of Kim B. Clark and F.J. Loughrey. During the last fiscal
year, the Compensation Committee made recommendations to the Board of Directors
with respect to salaries, compensation and benefits of directors and executive
officers of Tower Automotive and granted options under the 1998 Tower
Automotive, Inc. Long-Term Incentive Plan to purchase common stock of Tower
Automotive.

COMPENSATION OF DIRECTORS

For service in 1999, directors who are not employees of Tower Automotive or
any of its affiliates each receive an annual fee of $18,000 for serving as a
director of Tower Automotive. In addition, each non-employee director receives
$1,000 for each Board of Directors meeting attended, $500 for each committee
meeting attended and reimbursement of out of pocket expenses incurred to attend
such meetings.

53
56

Effective May 2000, each director that is not an employee or otherwise
associated with a significant shareholder will be paid an annual retainer of
$75,000. No other amounts for meetings or other services will be paid, nor will
any options be granted for such year.

EXECUTIVE COMPENSATION

The following table sets forth compensation packages for the years ended
December 31, 1999, 1998 and 1997 for the chief executive officer and the four
other executive officers of Tower Automotive who were the most highly
compensated officers of Tower Automotive for the year ended December 31, 1999.
We refer to these five individuals as our "named executive officers."

SUMMARY COMPENSATION TABLE

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND SALARY BONUS COMPENSATION GRANTED COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($) (#) ($)(6)
------------------ ---- -------- -------- ------------ ------------ ------------

Dugald K. Campbell......... 1999 $531,690 $248,400 $ -- 115,000 $18,783
President and Chief 1998 487,812 200,000 -- 100,000 19,392
Executive Officer 1997 386,250 585,000 -- 40,000 11,069
Anthony A. Barone.......... 1999 254,443 137,500 -- 50,000 17,117
Vice President and 1998 218,222 57,500 -- 40,000 17,211
Chief Financial Officer 1997 165,750 180,000 -- 20,000 12,526
Luigi Candusso............. 1999 243,417 100,000 -- 40,000 17,128
Vice President(4) 1998 220,344 -- 38,246(3) 40,000 17,166
1997 173,750 185,000 -- 30,000 12,298
Tommy G. Pitser............ 1999 247,482 96,000 -- 40,000 17,040
Vice President 1998 220,787 68,100 -- 40,000 17,352
1997 174,738 180,000 -- 40,000 12,175
James W. Arnold............ 1999 210,319 -- -- 15,000 9,598
Vice President(5) 1998 57,517 -- -- 15,000 214

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

(1) Includes amounts deferred by employees under our 401(k) employee savings
plan, pursuant to Section 401(k) of the Internal Revenue Code.

(2) Represents amounts earned under our bonus plan, but excludes amounts
foregone at the election of the named executive officer and payable in
shares of our common stock under the Tower Automotive's Key Leadership
Deferred Income Stock Purchase Plan, as reported in the Long-Term Incentive
Plan table.

(3) Represents reimbursement of relocation costs in 1998.

(4) Effective May 25, 2000, Mr. Candusso ceased to be employed by us.

(5) Mr. Arnold became our employee on September 16, 1998.

54
57

(6) The amounts disclosed in this column include: (a) amounts contributed by us
to our 401(k) employees savings plan and profit sharing plan, and (b) dollar
value of premiums paid by us for term life insurance on behalf of the named
executive officers as follows:

1999 1998 1997
------- ------- -------

D.K. Campbell.................................. (a) $15,747 $16,528 $11,069
(b) 3,036 2,864 --
A.A. Barone.................................... (a) 15,797 16,480 12,180
(b) 1,320 731 346
L. Candusso.................................... (a) 15,872 16,435 11,945
(b) 1,256 731 353
T.G. Pitser.................................... (a) 15,797 16,142 11,639
(b) 1,243 1,210 518
J.W. Arnold.................................... (a) 8,949 -- --
(b) 649 214 --

OPTION GRANT TABLE

The following table shows all grants of options to acquire shares of our
common stock to the named executive officers under the Stock Option Plan during
the last fiscal year.

OPTION GRANTS IN LAST FISCAL YEAR

NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES % OF TOTAL ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME (#)(1) FISCAL YEAR (PER SHARE) DATE 5% 10%
---- ---------- ------------ ----------- ---------- ------------- -------------

D.K. Campbell........ 115,000 9.6% $19.25 3/2/2009 $1,392,215 $3,528,147
A.A. Barone.......... 50,000 4.2% 19.25 3/2/2009 605,311 1,533,977
L. Candusso.......... 40,000 3.3% 19.25 3/2/2009 484,249 1,227,182
T.G. Pitser.......... 40,000 3.3% 19.25 3/2/2009 484,249 1,227,182
J.W. Arnold.......... 15,000 1.2% 19.25 3/2/2009 181,593 460,193

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

(1) These options vest ratably over four years commencing one year from the date
of grant.

(2) Amounts reflect certain assumed rates of appreciation set forth in the
executive compensation disclosure rules of the Securities and Exchange
Commission. Actual gains, if any, on stock option exercises depend on future
performance of our common stock and overall stock market conditions. No
assurances can be made that the amounts reflected in these columns will be
achieved.

55
58

OPTION EXERCISE AND YEAR-END VALUE TABLE

The following table shows aggregate exercise of options in the year ended
December 31, 1999 by the named executive officers and the aggregate number and
value of unexercised options held by each named executive officer as of December
31, 1999.

AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES

NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
YEAR-END(#) YEAR-END($)(2)
SHARES VALUE -------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- -------------- --------------------

D.K. Campbell................... 40,000 $731,846 45,000/220,000 $0/$78,750
A.A. Barone..................... 18,000 337,642 20,000/92,500 0/39,375
L. Candusso..................... 4,000 75,564 44,000/92,500 162,375/59,063
T.G. Pitser..................... -- -- 30,000/90,000 0/0
J.W. Arnold..................... -- -- 3,750/26,250 0/0

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

(1) Represents the aggregate market value of shares acquired at time of
exercise, less aggregate exercise price paid by the employee to us.

(2) Values are based on the difference between the closing bid price of our
common stock on December 31, 1999 ($15.4375) and the exercise prices of the
options.

LONG-TERM INCENTIVE PLAN

NUMBER OF SHARES, PERFORMANCE OR OTHER
UNITS OR OTHER PERIOD UNTIL MATURATION
NAME RIGHTS(#)(1) OR PAYOUT(2)
---- ----------------- -----------------------

D.K. Campbell.......................................... 47,193.89 3 years
A.A. Barone............................................ 11,195.93 3 years
L. Candusso............................................ 12,213.75 3 years
T.G. Pitser............................................ 11,725.19 3 years
J.W. Arnold............................................ 13,435.12 3 years

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

(1) Represents the number of units credited to an employee's account under the
terms of our Key Leadership Deferred Income Stock Purchase Plan, or the
"DISP Plan." Under the terms of the DISP Plan, participants may elect to
defer all or a portion (but not less than 25%) of their cash bonus payment.
Deferred amounts are credited in stock units, based on the value of our
stock as of the end of the month in which the bonus would have been paid to
the employee. Stock units are payable only in shares of our common stock.
Includes the following number of restricted stock units credited to each of
the named executive officer's premium account, as described in footnote 2
below: D.K. Campbell -- 11,798.47, A.A. Barone -- 2,798.98, L.
Candusso -- 3,053.44, T.G. Pitser -- 2,931.30, and J.W. Arnold -- 3,358.78

(2) Under the terms of the DISP Plan, the number of restricted stock units
credited to a participant's basic account must equal the amount of the
deferred bonus, divided by the value of a share of our common stock on the
last day of the month in which the cash bonus would otherwise be paid. In
addition, participants are concurrently credited with additional stock units
to a separate premium account equal to one-third of the number of the
restricted stock units credited to their basic account. Restricted stock
units credited to this premium account do not vest until the first day of
the third plan year following the date the units are credited to a
participant's account, provided that the participant is then a colleague of
ours. The DISP Plan allows for accelerated vesting in the event of a
participant's death, disability, retirement or termination during a period
of 24 months following a change in our control.

56
59

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

All of the outstanding capital stock of the Issuer is owned by Parent.
Unless otherwise noted, the following table sets forth certain information
regarding ownership of the common stock of Parent as of September 30, 2000 by
(i) the beneficial owners of more than 5% of the common stock, (ii) each of our
directors and named executive officers and (iii) all of our directors and
executive officers as a group. To our knowledge, each of these stockholders has
sole voting and investment power as to the shares shown unless otherwise noted.
Beneficial ownership of the common stock listed in the table has been determined
in accordance with the applicable rules and regulations promulgated under the
Securities Exchange Act of 1934.

BENEFICIAL OWNERSHIP OF
COMMON STOCK
------------------------
NUMBER OF PERCENT OF
DIRECTORS, EXECUTIVE OFFICERS AND 5% STOCKHOLDERS SHARES CLASS
------------------------------------------------- --------- ----------

S.A. Johnson................................................ 380,812 *
Dugald K. Campbell(1)....................................... 519,636 1.1%
James W. Arnold............................................. 11,250 *
Anthony A. Barone........................................... 65,713 *
Tommy G. Pitser............................................. 62,700 *
Scott D. Rued............................................... 89,478 *
Kim B. Clark................................................ 45,600 *
Jurgen M. Geissinger........................................ -- --
F.J. Loughrey............................................... 49,600 *
James R. Lozelle(2)......................................... 487,808 1.0
Enrique Zambrano............................................ -- --
American Express Company(3)................................. 3,891,930 8.2
Capital Research and Management Co.(4)...................... 3,688,000 7.8
Morgan Stanley Dean Witter & Co.(5)......................... 2,813,388 5.9
Lazard Freres & Co. LLC(6).................................. 2,666,887 5.6
All Directors and Executive Officers as a group (11
persons).................................................. 1,767,753 3.7

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

* Less than one percent.

(1) Includes: (i) 365,309 shares held in an annuity trust, of which Mr. Campbell
is the trustee; (ii) 9,781 shares held in an annuity trust, of which Mr.
Campbell's wife is the trustee, and (iii) 118,750 shares issuable upon the
exercise of currently exercisable options held by Mr. Campbell. Mr. Campbell
disclaims beneficial ownership of the shares held by his wife in trust.

(2) Includes: (i) 163,882 shares of common stock issuable upon the conversion of
convertible notes, and (ii) 309,468 shares issuable upon the exercise of
currently exercisable options held by Mr. Lozelle.

(3) American Express Company ("AEC") and American Express Financial Corporation
("AEFC") each reported as of December 31, 1999 shared dispositive power with
respect to 3,891,930 shares of common stock and shared voting power with
respect to 145,000 shares of common stock. The address for AEC is American
Express Tower, 200 Vesey Street, New York, New York 10285 and the address
for AEFC is IDS Tower 10, Minneapolis, Minnesota 55440.

(4) Capital Research and Management Company reported as of February 10, 2000
sole dispositive power with respect to 3,688,000 shares of common stock. The
address for Capital Research and Management Company is 333 South Hope
Street, Los Angeles, California 90071.

57
60

(5) Morgan Stanley Dean Witter & Co. reported as of February 4, 2000 shared
voting power with respect to 2,721,088 shares of common stock and shared
dispositive power with respect to 2,813,388 shares of common stock. The
address of Morgan Stanley Dean Witter & Co. is 1585 Broadway, New York, New
York 10036.

(6) Lazard Freres & Co. LLC reported as of February 2, 2000 sole voting power
with respect to 2,250,990 shares of common stock and sole dispositive power
with respect to 2,666,877 shares of common stock. The address of Lazard
Freres & Co. LLC is 30 Rockefeller Plaza, New York, New York 10020.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Parent, Onex Corporation and certain stockholders, including J2R, S.A.
Johnson, Scott Rued, James Lozelle, the former stockholders of Edgewood Tool and
Manufacturing Company, including James Lozelle's brother, and MascoTech, Inc.
are parties to a registration agreement pursuant to which Parent has granted
certain rights to register its shares of common stock under the Securities Act.

Directors S.A. Johnson and Scott Rued are partners in Hidden Creek. During
1999, we made payments to Hidden Creek for acquisition-related assistance such
as initiating contacts, due diligence, financing, contract negotiation and
modeling and for various other management services totaling $3.1 million. We
will pay Hidden Creek a fee of $1.8 million for services rendered in connection
with the Offering and the new senior credit facility.

58
61

DESCRIPTION OF OTHER INDEBTEDNESS

NEW SENIOR CREDIT FACILITY

On July 25, 2000, the Issuer entered into a new senior credit facility with
Bank of America, N.A., as administrative agent, and The Chase Manhattan Bank, as
syndication agent, and the other lenders named therein. The new senior credit
facility provides for a six year multicurrency revolving credit facility of up
to $825.0 million, with a letter of credit sublimit of $75.0 million. The senior
credit facility also provides a $325.0 million term loan. Borrowings under the
revolving credit facility may be used for working capital and other general
corporate purposes, including permitted acquisitions. As of September 30, 2000,
we had outstanding borrowings under the senior credit facility of approximately
$752.9 million.

The new senior credit facility has a final maturity of July 2006. Loans
made under the term loan will be available in a single borrowing at closing. The
term loan will be generally subject to quarterly amortization of principal,
based upon the annual amounts set forth below:

YEAR AMOUNT
---- ------------

2001........................................................ $ 0
2002........................................................ 55,000,000
2003........................................................ 70,000,000
2004........................................................ 70,000,000
2005........................................................ 82,500,000
2006........................................................ 47,500,000

Indebtedness under the senior credit facility is guaranteed by Parent and
each existing and future domestic subsidiary and may be guaranteed in the future
by certain material foreign subsidiaries of the Issuer in the event that such a
guarantee does not result in material adverse tax consequence to the Issuer. No
foreign subsidiaries of the Issuer are currently guarantors under the new senior
credit facility.

The borrowings under the senior credit facility bear interest at a rate
equal to the Eurodollar Rate plus the Applicable Margin or the Base Rate
(defined as the higher of (i) the Bank of America reference rate and (ii) the
Federal Funds rate plus .50%) plus the Applicable Margin. The Applicable Margin
will be determined as follows:

BASIS POINTS
-----------------------------------------------
APPLICABLE
APPLICABLE MARGIN FOR MARGIN FOR
RATIO OF TOTAL EURODOLLAR RATE COMMITMENT BASE RATE
FUNDED DEBT TO EBITDA LOANS FEE LOANS
--------------------- --------------------- ---------- ----------

<2.25x.................................. 100.0 20.0 0.0
2.25xm2.75x............................. 125.0 25.0 0.0
2.75xm3.25x............................. 150.0 35.0 25.0
3.25xm3.75x............................. 175.0 40.0 50.0
M3.75x.................................. 200.0 50.0 75.0

The new senior credit facility will require us to meet certain financial
tests, including a minimum interest coverage ratio (defined as EBITDA to
interest expense) of 2.75x at closing and increasing to 3.75x as of June 30,
2004 and a maximum leverage ratio (defined as indebtedness to EBITDA) of 4.25x
at closing and decreasing to 3.25x as of June 30, 2004. The new senior credit
facility also contain covenants which, among other things, limit:

- the incurrence of additional indebtedness (subject to a basket of up to
15% of net worth) and contingent obligations;
- the creation of liens and encumbrances;
- restricted payments (subject to a $125 million basket for common stock
repurchases);
59
62

- additional investments;
- prepayments of subordinated indebtedness;
- asset sales, acquisitions, joint ventures, mergers and consolidations;
- transactions with affiliates; and
- other matters customarily restricted in such agreements.

The new senior credit facility contains customary events of default
including but not limited to:

- payment defaults;
- breach of representations and warranties;
- noncompliance with covenants;
- bankruptcy;
- judgments in excess of specified amounts;
- failure of any guaranty or pledge agreement supporting the senior credit
facility to be in full force and effect;
- defaults under other instruments or agreements of indebtedness; and
- a change of control (as such term is defined in the senior credit
facility).

5.0% CONVERTIBLE SUBORDINATED NOTES

The 5.0% convertible subordinated notes were issued pursuant to an
indenture, dated as of July 28, 1997, between Parent and The Bank of New York,
as trustee. The convertible notes are limited in aggregate principal amount to
$200.0 million. The net proceeds from the sale of the convertible notes were
used to repay a portion of the bank indebtedness incurred by us to finance the
acquisitions of APC and SIMES. The convertible notes were initially sold by us
in an underwritten private placement.

The convertible notes will mature on August 1, 2004. The convertible notes
bear interest at the rate of 5.0% per annum, payable semiannually on February 1
and August 1 of each year, to the persons in whose names such convertible notes
are registered at the close of business on the January 15 and July 15
immediately preceding such interest payment date.

The convertible notes are general unsecured obligations of Parent,
subordinated in right of payment to all existing and future senior indebtedness
of Parent. Senior indebtedness is generally defined under the convertible notes
indenture to include, subject to limited exceptions, all obligations of Parent
to pay the principal of, and premium, if any, interest and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, any indebtedness of Parent, unless the instrument
creating or evidencing such indebtedness provides that such indebtedness is not
senior or superior in right of payment to the convertible notes or which is pari
passu with, or subordinated to, the convertible notes. In addition, the
convertible notes are effectively subordinated to all of the obligations of
Parent's subsidiaries, including trade creditors. The convertible notes
indenture does not restrict the incurrence of senior indebtedness or other
indebtedness by Parent or its subsidiaries.

The convertible notes are convertible into shares of common stock of Parent
at any time prior to the close of business on August 1, 2004, unless previously
redeemed or repurchased, at a conversion price of $25 7/8 per share (equivalent
to a conversion rate of 38.6473 shares per $1,000 principal amount of
convertible notes), subject to adjustment in certain events, for an aggregate of
7,729,469 shares of common stock.

The convertible notes are not subject to redemption prior to August 1, 2000
and will be redeemable thereafter at the option of Parent, in whole or in part,
upon not less than 30 nor more than 60 days' notice to each holder, at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the 12-month period commencing August 1 of the years
indicated below, in each case (subject to the right of holders of record on

60
63

a record date to receive interest due on an interest payment date that is on or
prior to such redemption date) together with accrued and unpaid interest and
liquidated damages, if any, to, but excluding, the redemption date:

YEAR PERCENTAGE
---- ----------

2000.................................................... 102.857%
2001.................................................... 102.143
2002.................................................... 101.429
2003.................................................... 100.714
2004.................................................... 100.000

If a change of control occurs, Parent will be required to offer to purchase
the convertible notes at 100% of the principal amount thereof, plus accrued and
unpaid interest and liquidated damages, if any, to the date of purchase. Change
of control is generally defined under the convertible notes indenture to mean:

- an event or series of events as a result of which any person or group is
or becomes, directly or indirectly, the beneficial owner of more than 50%
of the combined voting power of the then outstanding securities entitled
to vote generally in elections of directors of Parent or any successor
entity ("Voting Stock"),

- the completion of any consolidation with or merger of Parent into any
other person, or sale, conveyance, transfer or lease by Parent of all or
substantially all of its assets to any person, or any merger of any other
person into Parent in a single transaction or series of related
transactions, and, in the case of any such transaction or series of
related transactions, the outstanding common stock of Parent is changed
or exchanged, unless the stockholders of Parent immediately before such
transaction own, directly or indirectly, immediately following such
transaction, at least a majority of the combined voting power of the
outstanding voting securities of the person resulting from such
transaction in substantially the same proportion as their ownership of
the Voting Stock immediately before such transaction, or

- such time as the continuing directors do not constitute a majority of the
Board of Directors of Parent (or, if applicable, a successor corporation
to Parent).

The convertible notes indenture does not contain any financial covenants or
any restrictions on the payment of dividends, the repurchase of securities of
Parent or the incurrence of senior indebtedness. The convertible notes indenture
contains no covenants or other provisions to afford protection to holders of
convertible notes in the event of a highly leveraged transaction or a change of
control of Parent, except to the limited extent described above relating to a
change of control.

TRUST PREFERRED SECURITIES

On June 9, 1998, Tower Automotive Capital Trust (the "Trust"), a statutory
business trust created at the direction of Parent, completed the offering of
$258.8 million of its 6 3/4% Trust Preferred Securities resulting in net
proceeds of approximately $249.7 million. Parent owns all of the outstanding
common securities issued by the Trust. The sole assets held by the Trust are the
6 3/4% subordinated convertible debentures due 2018 issued by Parent in an
aggregate principal amount of $266.8 million. The Trust Preferred Securities are
redeemable, in whole or in part, on or after June 30, 2001, and all Trust
Preferred Securities must be redeemed no later than June 30, 2018. The Trust
Preferred Securities are subject to redemption at the following percentages of
the liquidation amount thereof plus accrued and unpaid distributions, if any, to
the

61
64

date fixed for redemption if redeemed during the twelve-month period commencing
on June 30, in each of the following years indicated:

REDEMPTION
YEAR PRICE
---- ----------

2001..................................................... 104.725%
2002..................................................... 104.050
2003..................................................... 103.375
2004..................................................... 102.700
2005..................................................... 102.025
2006..................................................... 101.350
2007..................................................... 100.675
2008 and thereafter...................................... 100.000

The Trust Preferred Securities are convertible, at the option of the holder,
into common stock of Parent at a rate of 1.6280 shares of common stock for each
Trust Preferred Security, which is equivalent to a conversion price of $30.713
per share. The net proceeds of the offering of the Trust Preferred Securities
were used to repay outstanding indebtedness.

62
65

THE EXCHANGE OFFER

GENERAL

We hereby offer to exchange the exchange notes, which have been registered
under the Securities Act, for a like principal amount of our original
unregistered outstanding notes. The exchange offer is subject to the terms and
conditions set forth in this prospectus.

Following the consummation of the exchange offer, holders of the
outstanding notes who were eligible to participate in the exchange offer but who
did not tender its outstanding notes may not have any further registration
rights and the outstanding notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for the
outstanding notes could be adversely affected.

BACKGROUND, PURPOSE AND EFFECT OF THE EXCHANGE OFFER

We originally sold the outstanding notes on July 25, 2000 to the initial
purchasers. The initial purchasers subsequently resold the outstanding notes to
(1) qualified institutional buyers pursuant to Rule 144A under the Securities
Act and (2) qualified buyers outside the United States in reliance upon
Registration S under the Securities Act.

As a condition to that sale to the initial purchasers, we entered into a
registration rights agreement with the initial purchasers. Pursuant to that
registration rights agreement, we agreed to:

(1) file with the SEC on or prior to September 23, 2000, a
registration statement on an appropriate form under the Securities Act,
relating to a registered exchange offer for the outstanding notes under the
Securities Act and

(2) use our reasonable best efforts to cause the exchange offer
registration statement to be declared effective under the Securities Act on
or prior to December 22, 2000.

As soon as reasonably practicable after the effectiveness of the exchange offer
registration statement, we agreed to offer to the holders of the restricted
securities who are not prohibited by any law or policy of the SEC from
participating in the exchange offer the opportunity to exchange their securities
for the exchange notes, which will be identical in all material respects to the
outstanding notes (except that the exchange notes will not contain transfer
restrictions) and that would be registered under the Securities Act. We agreed
to keep the exchange offer open for not less than 30 days (or longer, if
required by applicable law) after the date on which notice of the exchange offer
is mailed to the holders of the notes.

In addition, we agreed to file with the SEC a shelf registration statement
to cover resales of restricted securities by those holders who satisfy certain
conditions relating to the provision of information in connection with the shelf
registration statement, if:

(1) because of any change in law or applicable interpretations thereof
by the staff of the SEC, we are not permitted to effect the offer as
contemplated thereby,

(2) any notes validly tendered pursuant to the exchange offer are not
exchanged for exchange notes on or prior to January 21, 2001 and the
exchange offer is not scheduled to expire prior to February 20, 2001,

(3) any initial purchaser so requests with respect to notes not
eligible to be exchanged for exchange notes in the exchange offer,

(4) any applicable law or interpretations do not permit any holder of
notes to participate in the exchange offer,

(5) any holder of notes that participates in the exchange offer does
not receive freely transferable exchange notes in exchange for tendered
notes, or
63
66

(6) we so elect.

We agreed to use our reasonable best efforts to have the exchange offer
registration statement or, if applicable, the shelf registration statement
declared effective by the SEC as promptly as practicable after the filing
thereof. Unless the exchange offer would not be permitted by a policy of the
SEC, we have agreed to commence the exchange offer and use our reasonable best
efforts to consummate the exchange offer as promptly as practicable, but in any
event prior to 180 days after the issue date. If applicable, we will use our
reasonable best efforts to keep the shelf registration statement effective for a
period ending on the earlier of (a) two years after the issue date or the date
on which all the notes covered by the shelf registration statement have been
sold pursuant thereto, if that happens first, and (b) the date on which the
notes become eligible for resale without volume restrictions pursuant to Rule
144 under the Securities Act.

We will be obligated to pay liquidated damages to each holder of restricted
securities, during the period of one or more of the registration defaults
outlined below if:

(1) the applicable registration statement is not filed with the SEC on
or prior to September 23, 2000;

(2) the exchange offer registration statement or the shelf
registration statement, as the case may be, is not declared effective on or
prior to December 22, 2000 (or in the case of a shelf registration
statement required to be filed in response to a change in law or the
applicable interpretations of the SEC's staff, if later, within 90 days
after publication of the change in law or interpretation);

(3) the exchange offer is not consummated on or prior to 180 days
after the issue date; or

(4) the shelf registration statement is filed and declared effective
within 150 days after the issue date but shall thereafter cease to be
effective (at any time that we are obligated to maintain the effectiveness
thereof) without being succeeded within 30 days by an additional
registration statement filed and declared effective.

(each such event referred to in clauses (1) through (4), a "registration
default"). The amount of the liquidated damages will be equal to 0.5% per annum
over the stated rate for the notes with respect to the first 90-day period
following such registration default until the applicable registration statement
is filed, the exchange offer registration statement is declared effective and
the exchange offer is consummated or the shelf registration statement is
declared effective or again becomes effective, as the case may be. The amount of
the liquidated damages will increase by an additional 0.5% per annum over the
stated rate for the notes at the beginning of each subsequent 90-day period
until all registration defaults have been cured, up to a maximum amount of
liquidated damages for all registration defaults of 1.0% per annum over the
stated rate for the notes. All accrued liquidated damages shall be paid to
holders in the same manner as interest payments on the notes on semi-annual
payment dates which correspond to interest payment dates for the notes.
Following the cure of all registration defaults, the accrual of liquidated
damages will cease.

Under the existing interpretations of the Staff of the SEC contained in
several no-action letters to third parties, the exchange notes will in general
be freely tradeable after the exchange offer without further registration under
the Securities Act. However, any purchaser of outstanding notes who is our
"affiliate" or who intends to participate in the exchange offer for the purpose
of distributing the exchange notes:

(1) will not be able to rely on the interpretation of the Staff of the
SEC;

(2) will not be able to tender its outstanding notes in the exchange
offer; and

64
67

(3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or transfer
of the exchange notes, unless such sale or transfer is made pursuant to an
exemption from such requirements.

As contemplated by these no-action letters and the registration rights
agreement, each holder accepting the exchange offer is required to represent to
us that:

(1) the exchange notes are to be acquired by the holder or the person
receiving such exchange notes, whether or not such person is the holder, in
the ordinary course of business;

(2) the holder or any such other person (other than a broker-dealer
referred to in the next sentence) is not engaging and does not intend to
engage, in distribution of the exchange notes;

(3) the holder or any such other person has no arrangement or
undertaking with any person to participate in the distribution of the
exchange notes;

(4) neither the holder nor any such other person is our "affiliate"
within the meaning of Rule 405 under the Securities Act; and

(5) the holder or any such other person acknowledges that if such
holder or any other person participates in the exchange offer for the
purpose of distributing the exchange notes it must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale of the exchange notes and cannot rely on those
no-action letters.

As indicated above, each participating broker-dealer that receives an exchange
note for its own account in exchange for outstanding notes must acknowledge that
it: (A) acquired the outstanding notes for its own account as a result of
market-making activities or other trading activities, (B) has not entered into
any arrangement or understanding with us or any of our "affiliates" (within the
meaning of Rule 405 under the Securities Act) to distribute the exchange notes
to be received in the exchange offer and (C) will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
exchange notes. For a description of the procedures for resales by participating
broker-dealers, see "Plan of Distribution."

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all outstanding notes
validly tendered and not withdrawn prior to 5:00 p.m., London time, on the
expiration date of the exchange offer. We will issue E1,000 principal amount of
exchange notes in exchange for each E1,000 principal amount of outstanding notes
accepted in the exchange offer. Holders may tender some or all of their
outstanding notes pursuant to the exchange offer. However, outstanding notes may
be tendered only in integral multiples of E1,000.

The form and terms of the exchange notes are the same as the form and terms
of the outstanding notes except that:

- the exchange notes bear a different ISIN and common code numbers from the
outstanding notes;

- the exchange notes have been registered under the Securities Act and
hence will not bear legends restricting the transfer thereof; and

- the holders of the exchange notes will not be entitled to certain rights
under the registration rights agreement, including the provisions
providing for an increase in the

65
68

interest rate on the outstanding notes in certain circumstances relating to the
timing of the exchange offer, all of which rights will terminate when the
exchange offer is terminated.

The exchange notes will evidence the same debt as the outstanding notes and
will be entitled to the benefits of the indenture. As of the date of this
prospectus, E150,000,000 aggregate principal amount of the notes were
outstanding. We have fixed the close of business on January 8, 2001, as the
record date for the exchange offer for purposes of determining the persons to
whom this prospectus and the letter of transmittal will be mailed initially.

Holders of outstanding notes do not have any appraisal or dissenters'
rights under the Michigan Business Corporation Act, or the indenture in
connection with the exchange offer. We intend to conduct the exchange offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the SEC thereunder.

We will be deemed to have accepted validly tendered outstanding notes when,
as and if we have given oral or written notice thereof to the exchange agent.
The exchange agent will act as agent for the tendering holders for the purpose
of receiving the exchange notes from us.

If any tendered outstanding notes are not accepted for exchange because of
an invalid tender, the occurrence of specified other events set forth in this
prospectus or otherwise, the certificates for any unaccepted outstanding notes
will be returned, without expense, to the tendering holder thereof as promptly
as practicable after the expiration date of the exchange offer.

Holders who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
outstanding notes pursuant to the exchange offer. We will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the exchange offer. See "-- Fees and Expenses."

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The term "expiration date" will mean 5:00 p.m., London time, on February 6,
2001, unless we, in our sole discretion, extend the exchange offer, in which
case the term "expiration date" will mean the latest date and time to which the
exchange offer is extended.

In order to extend the exchange offer, we will notify the exchange agent of
any extension by oral or written notice and will mail to the registered holders
an announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.

We reserve the right, in our sole discretion,

- to delay accepting any outstanding notes, to extend the exchange offer or
to terminate the exchange offer if any of the conditions set forth below
under "-- Conditions" have not been satisfied, by giving oral or written
notice of any delay, extension or termination to the exchange agent or

- to amend the terms of the exchange offer in any manner. Any delay in
acceptance, extension, termination or amendment will be followed as
promptly as practicable by oral or written notice thereof to the
registered holders.

INTEREST ON THE EXCHANGE NOTES

The exchange notes will bear interest from their date of issuance. Holders
of outstanding notes that are accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the date of issuance of the
exchange notes. Such interest will be paid with the first

66
69

interest payment on the exchange notes on February 1, 2001. Interest on the
outstanding notes accepted for exchange will cease to accrue upon issuance of
the exchange notes.

Interest on the exchange notes is payable semi-annually on each February 1
and August 1, commencing on February 1, 2001.

PROCEDURES FOR TENDERING

Only a holder of outstanding notes may tender such outstanding notes in the
exchange offer. To tender in the exchange offer, a holder must: (i) read this
prospectus and the accompanying letter of transmittal and (ii) comply with the
procedures established by Euroclear and/or Clearstream, Luxembourg, as
appropriate, for transfer of book-entry interests through the electronic
transfer systems of Euroclear and/or Clearstream, Luxembourg, prior to 5:00
p.m., London time, on the expiration date. For tender of the outstanding notes
to be effective, book-entry interests in the outstanding notes must be
transferred through Euroclear and/or Clearstream, Luxembourg's electronic
transfer system prior to 5:00 p.m., London time, on the expiration date.
Delivery of the outstanding notes must be made by book-entry transfer in
accordance with the procedures communicated to the holders of the outstanding
notes through the electronic transfer systems of Euroclear and/or Clearstream,
Luxembourg. Confirmation of such book-entry transfer must be received by the
exchange agent prior to the expiration date.

The tender by a holder of outstanding notes and the acceptance thereof by
the Issuer will constitute agreement between such holder and the Issuer in
accordance with the terms and subject to the conditions set forth herein and in
the letter of transmittal, including the representations and warranties set
forth in the letter of transmittal. In addition, by tendering outstanding notes,
the tendering holder acknowledges that Euroclear and/or Clearstream, Luxembourg,
as applicable, will disclose the identity of such tendering holder to the
exchange agent and the Issuer.

THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH
TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO US. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM.

Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the letter of transmittal.

Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member of the Medallion System unless the
outstanding notes tendered pursuant to the letter of transmittal are tendered
(1) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the letter of
transmittal or (2) for the account of a member firm of the Medallion System. In
the event that signatures on a letter of transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, the guarantee must be by a
member firm of the Medallion System.

If the letter of transmittal is signed by a person other than the
registered holder of any outstanding notes listed in this prospectus, the
outstanding notes must be endorsed or accompanied by a properly completed bond
power, signed by the registered holder as the

67
70

registered holder's name appears on the outstanding notes with the signature
thereon guaranteed by a member firm of the Medallion System.

If the letter of transmittal or any outstanding notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations or others acting in a fiduciary or representative
capacity, the person signing should so indicate when signing, and evidence
satisfactory to us of its authority to so act must be submitted with the letter
of transmittal.

All questions as to the validity, form, eligibility, including time of
receipt, acceptance of tendered outstanding notes and withdrawal of tendered
outstanding notes will be determined by us in our sole discretion, which
determination will be final and binding. We reserve the absolute right to reject
any and all outstanding notes not properly tendered or any outstanding notes our
acceptance of which would, in the opinion of our counsel, be unlawful. We also
reserve the right in our sole discretion to waive any defects, irregularities or
conditions of tender as to particular outstanding notes. Our interpretation of
the terms and conditions of the exchange offer, including the instructions in
the letter of transmittal, will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of outstanding
notes must be cured within the time we determine. Although we intend to notify
holders of defects or irregularities with respect to tenders of outstanding
notes, neither we, the exchange agent nor any other person will incur any
liability for failure to give the notification. Tenders of outstanding notes
will not be deemed to have been made until the defects or irregularities have
been cured or waived. Any outstanding notes received by the exchange agent that
are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the exchange agent to the tendering
holders, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.

WITHDRAWAL OF TENDERS

Except as otherwise provided in this prospectus, tenders of outstanding
notes may be withdrawn at any time prior to 5:00 p.m., London time, on the
expiration date.

To withdraw a tender of outstanding notes in the exchange offer, a tested
telex of SWIFT message relating to such withdrawal must be received by Euroclear
and/or Clearstream, Luxembourg, as applicable, prior to 5:00 p.m., London time,
on the expiration date. Any such notice of withdrawal must comply with the
procedures for withdrawal of tenders established by Euroclear and/or
Clearstream, Luxembourg, as appropriate.

All questions as to the validity, form and eligibility, including time of
receipt, of the notices will be determined by us, whose determination will be
final and binding on all parties. Any outstanding notes so withdrawn will be
deemed not to have been validly tendered for purposes of the exchange offer and
no exchange notes will be issued with respect thereto unless the outstanding
notes so withdrawn are validly retendered. Any outstanding notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without cost to the holder as soon as practicable after withdrawal,
rejection of tender or termination of the exchange offer. Properly withdrawn
outstanding notes may be retendered by following one of the procedures described
above under "-- Procedures for Tendering" at any time prior to the expiration
date.

68
71

CONDITIONS

Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange notes for, any outstanding notes,
and may terminate or amend the exchange offer as provided in this prospectus
before the acceptance of the outstanding notes, if:

(1) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might materially impair our ability to proceed
with the exchange offer or any material adverse development has occurred in
any existing action or proceeding with respect to us or any of our
subsidiaries; or

(2) any law, statute, rule, regulation or interpretation by the Staff
of the SEC is proposed, adopted or enacted, which, in our sole judgment,
might materially impair our ability to proceed with the exchange offer or
materially impair the contemplated benefits of the exchange offer to us; or

(3) any governmental approval has not been obtained, which approval we
will, in our sole discretion, deem necessary for the consummation of the
exchange offer as contemplated by this prospectus.

If we determine in our sole discretion that any of the conditions are not
satisfied, we may

- refuse to accept any outstanding notes and return all tendered
outstanding notes to the tendering holders,

- extend the exchange offer and retain all outstanding notes tendered prior
to the expiration of the exchange offer, subject, however, to the rights
of holders to withdraw the outstanding notes (see "-- Withdrawal of
Tenders") or

- waive the unsatisfied conditions with respect to the exchange offer and
accept all properly tendered outstanding notes which have not been
withdrawn.

EXCHANGE AGENT

Deutsche Bank AG London has been appointed as principal exchange agent for
the exchange offer. Questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal should be
directed to the exchange agent in London addressed as follows:

By Mail or Hand Delivery:

Deutsche Bank AG London

Winchester House

1 Great Winchester Street

EC2N 2DB London

United Kingdom

Attention: Corporate Trust and Agency Services

Facsimile Transmission:

(44 20) 7547-0271

Confirm by Telephone:

(44 20) 7545-8000

Deutsche Bank Luxembourg S.A. has been appointed as Luxembourg Exchange
Agent for the exchange offer. The Luxembourg exchange agent can be reached at
the following address:

Deutsche Bank Luxembourg, S.A.

2 Boulevard Konrad, Adenauer

L-1115 Luxembourg

Attention: Coupon Paying Department

Facsimile Transmission:

+352 47 31 36

Confirm by Telephone:

+352 42 12 21

DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.

69
72

FEES AND EXPENSES

We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telecopy, telephone or in person by our and our affiliates' officers
and regular employees.

We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses incurred in connection with these services.

We will pay the cash expenses to be incurred in connection with the
exchange offer. Such expenses include fees and expenses of the exchange agent
and trustee, accounting and legal fees and printing costs, among others.

ACCOUNTING TREATMENT

The exchange notes will be recorded at the same carrying value as the
outstanding notes, which is face value, as reflected in our accounting records
on the date of exchange. Accordingly, we will not recognize any gain or loss for
accounting purposes as a result of the exchange offer. The expenses of the
exchange offer will be deferred and charged to expense over the term of the
exchange notes.

CONSEQUENCES OF FAILURE TO EXCHANGE

The outstanding notes that are not exchanged for exchange notes pursuant to
the exchange offer will remain restricted securities. Accordingly, the
outstanding notes may be resold only:

(1) to us upon redemption thereof or otherwise;

(2) so long as the outstanding notes are eligible for resale pursuant
to Rule 144A, to a person inside the United States whom the seller
reasonably believes is a qualified institutional buyer within the meaning
of Rule 144A under the Securities Act in a transaction meeting the
requirements of Rule 144A, in accordance with Rule 144 under the Securities
Act, or pursuant to another exemption from the registration requirements of
the Securities Act, which other exemption is based upon an opinion of
counsel reasonably acceptable to us;

(3) outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act; or

(4) pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.

RESALE OF THE EXCHANGE NOTES

Based on interpretations by the Staff of the SEC set forth in no-action
letters issued to third parties, we believe that a holder or other person who
receives exchange notes will be allowed to resell the exchange notes to the
public without further registration under the Securities Act and without
delivering to the purchasers of the exchange notes a prospectus provided that
exchanging holder:

- acquired the outstanding notes in the ordinary course of its business;

- is not participating, does not intend to participate, and has no
arrangement or understanding with any person to participate, in the
distribution of the exchange notes; and

70
73

- is not an affiliate of ours within the meaning of Rule 405 under the
Securities Act.

If any holder acquires exchange notes in the exchange offer for the purpose of
distributing or participating in a distribution of the exchange notes, the
holder cannot rely on the position of the Staff of the SEC expressed in the
no-action letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. In addition, each broker-dealer that receives exchange
notes for its own account in exchange for outstanding notes, where the
outstanding notes were acquired by the broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of the exchange notes.

NOTICES

Application has been made to list the exchange notes on the Luxembourg
Stock Exchange. The exchange notes will be accepted for clearance through the
accounts of Euroclear and Clearstream, Luxembourg and they will have new common
codes and new ISIN numbers which will be transmitted to the Luxembourg Stock
Exchange. All documents prepared in connection with the exchange offer will be
available at the office of the exchange agent in Luxembourg and all necessary
actions and services in respect of the exchange offer may be done at the office
of the exchange agent in Luxembourg. The exchange agent appointed for these
purposes is Deutsche Bank Luxembourg S.A.

All notices relating to the exchange offer will be published in accordance
with the notice provisions of the Indenture. See "Description of the
Notes -- Notices." So long as the notes are listed on the Luxembourg Stock
Exchange and the rules of such stock exchange shall require, prior to the
commencement of the exchange offer, notice of the exchange offer will be given
to the Luxembourg Stock Exchange and will be published in a newspaper having a
general circulation in Luxembourg (which is expected to be the Luxemburger
Wort). Such notice will, among other things, provide details of the conditions
to the exchange offer, the interest rate of the exchange notes and the
commencement and expected completion date of the exchange offer. So long as the
notes are listed on the Luxembourg Stock Exchange and the rules of such stock
exchange shall require, notice of the results of the exchange offer will be
given to the Luxembourg Stock Exchange and will be published in a newspaper
having a general circulation in Luxembourg (which is expected to be the
Luxemburger Wort), in each case as promptly as practicable, following the
completion of the exchange offer.

71
74

DESCRIPTION OF THE NOTES

GENERAL

The Notes to be issued in connection with the exchange offer will be issued
under an indenture dated as of July 25, 2000 (the "Indenture") among the Issuer,
as issuer, the Guarantors, as guarantors, and United States Trust Company of New
York, as trustee (the "Trustee"). The following summary of certain provisions of
the Notes, the Indenture and the Deposit Agreement, dated July 25, 2000, does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the Notes, the Indenture and the Deposit
Agreement, including the definitions of certain terms contained therein and
those terms made part of the Indenture through the incorporation by reference of
the Trust Indenture Act. Copies of the Indenture and the Deposit Agreement have
been filed as exhibits to the registration statement of which this prospectus
forms a part. We urge you to read the Indenture because it, and not this
description, defines your rights as holders of the Notes. See "Where You Can
Find More Information." For definitions of certain capitalized terms used in
this summary, see "Certain Definitions" below.

The Notes will be issued in denominations of E1,000 in principal amount or
an integral multiple thereof and will be limited in aggregate principal amount
to E200,000,000, of which E150,000,000 was issued in the original offering. The
Issuer may issue additional Notes (the "Additional Notes") from time to time.
The Notes and any Additional Notes subsequently issued will be treated as a
single class for all purposes under the Indenture, including waivers,
amendments, redemptions and offers to purchase. The Notes will mature on August
1, 2010 (the "Stated Maturity Date"). Unless they have been redeemed earlier,
the Issuer will redeem the Notes at 100% of their principal amount on the Stated
Maturity Date.

Interest will accrue from the date of issuance and will be payable on
February 1 and August 1 in each year (each, an "Interest Payment Date") to the
applicable Book-Entry Depositary (as hereinafter defined) and to the holders of
record of Definitive Registered Notes (as hereinafter defined), if any, at the
close of business on January 15 or July 15 immediately preceding the next
Interest Payment Date (each such date a "record date"). The first Interest
Payment Date will be February 1, 2001. Interest will be computed on the basis of
a 360-day year composed of twelve 30-day months. If the Issuer defaults on any
payment of principal, whether at maturity, redemption or otherwise, interest
will continue to accrue and, to the extent permitted by law, interest will
accrue on overdue installments of interest at the rate of interest borne by the
applicable Notes. For the purposes of this prospectus, "interest" includes any
liquidated damages payable with respect to the Notes.

Application has been made to list the Notes on the Luxembourg Stock
Exchange. So long as the Notes are listed on the Luxembourg Stock Exchange and
the rules of such exchange so require, the Issuer will maintain a Paying Agent
with offices in Luxembourg where holders of Definitive Registered Notes (as
defined) will be able to present their Notes for exchange, registration of
transfer and redemption and obtain copies of the Indenture and the Deposit
Agreement.

OPTIONAL REDEMPTION

The Issuer may at its option redeem all or part of the Notes on at least 30
days, but not more than 60 days, prior notice mailed to the registered address
of each registered holder of Notes and published in Luxembourg in a daily
newspaper with general circulation in Luxembourg (which is expected to be the
Luxembourg Wort). The redemption price will equal the greater of:

(1) 100% of the principal amount of the Notes to be redeemed; or

(2) as determined by a Quotation Agent, the sum of the present values
of the Remaining Scheduled Payments of the Notes discounted to the date of
redemption, on a
72
75

semiannual basis (assuming a 360-day year consisting of twelve 30 day
months), at the Reference Dealer Rate plus 50 basis points

plus, in each case, accrued interest thereon to the date of redemption.

"Quotation Agent" means a Reference Dealer (as defined below).

"Reference Dealer" means Chase Manhattan International Limited or Bank of
America International Limited or their respective successors.

"Reference Dealer Rate" means with respect to a Reference Dealer and any
redemption date, the midmarket annual yield to maturity, as determined by a
Reference Dealer, of the German Government Bund 5.25% due July 1, 2010 or, if
that security is no longer outstanding, a similar security in the reasonable
judgment of such Reference Dealer, at 11:00 a.m. (London time) on the third
business day in London preceding such redemption date quoted in writing to the
Trustee by such Reference Dealer.

"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of the principal thereof and interest
thereon that would be due after the related redemption date if such Note were
not redeemed. However, if such redemption date is not an interest payment date
with respect to such Note, the amount of the next succeeding scheduled interest
payment thereon will be reduced by the amount of interest accrued thereon to
such redemption date.

On and after the redemption date, interest will cease to accrue on the
Notes or any portion thereof called for redemption. On or before the redemption
date, the Issuer will deposit with a paying agent (or the Trustee) money
sufficient to pay the redemption price of and accrued interest on the Notes to
be redeemed on such date. If less than all of the Notes are to be redeemed, the
Trustee will select the Notes to be redeemed by a method determined by the
Trustee to be fair and appropriate.

CHANGE OF CONTROL

If a Change of Control occurs, each holder of Notes will have the right to
require the Issuer to repurchase all or any part (equal to E1,000 or an integral
multiple of E1,000) of the holder's Notes pursuant to the Change of Control
offer on the terms set forth in the Indenture (the "Change of Control Offer").
In the Change of Control Offer, the Issuer will offer a Change of Control
payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest and liquidated damages, if any, on
the Notes repurchased to the date of purchase. Within 30 days following any
Change of Control, the Issuer will publish a notice in Luxembourg in a daily
newspaper with general circulation in Luxembourg (which is expected to be the
Luxembourg Wort) and mail a notice to each holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the Change of Control payment date specified in the notice, which date
shall be no earlier than 30 days and no later than 60 days from the date the
notice is mailed, pursuant to the procedures required by the Indenture and
described in the notice (the "Change of Control Payment Date"). The Issuer will
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
the Indenture, the Issuer will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the Indenture by virtue of such conflict.

73
76

On the Change of Control Payment Date, the Issuer will, to the extent
lawful:

(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of
Control payment in respect of all Notes or portions of Notes properly
tendered; and

(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an officers' certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Issuer.

The paying agent will promptly mail to each holder of Notes properly
tendered the Change of Control payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of E1,000 or an integral multiple of E1,000.

The Issuer will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require the Issuer to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the holders of the Notes to require that the
Issuer repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.

The Issuer will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Issuer and
purchases all Notes properly tendered and not withdrawn under such Change of
Control Offer.

"Change of Control" means the occurrence of any of the following:

(1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Issuer and its Subsidiaries taken as a whole to
any "person" (as that term is used in Section 13(d)(3) of the Exchange
Act);

(2) the adoption of a plan relating to the liquidation or dissolution
of the Issuer;

(3) the first day on which Parent ceases, either directly or
indirectly, to own all of the outstanding equity interests of the Issuer;

(4) the consummation of any transaction (including without limitation,
any merger or consolidation) the result of which is that any "person" (as
defined above), other than an employee trust sponsored by the Issuer,
becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the voting stock of the Issuer, measured by voting power rather than number
of shares; or

(5) the first day on which a majority of the members of the Board of
Directors of the Issuer are not Continuing Directors.

The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of the Issuer and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of
74
77

the phrase under applicable law. Accordingly, the ability of a Holder of Notes
to require the Issuer to repurchase such Notes as a result of a sale, lease,
transfer, conveyance or other disposition of less than all of the assets of the
Issuer and its Subsidiaries taken as a whole to another Person or group may be
uncertain.

SELECTION; NOTICE OF REDEMPTION

If less than all the Notes are to be redeemed, the particular Notes to be
redeemed will be selected not more than 60 days prior to the redemption date by
the applicable Trustee in compliance with any applicable rules of the principal
U.S. securities exchange, if any, on which the Notes are listed or, if the Notes
are not listed on the Luxembourg Stock Exchange or a U.S. securities exchange or
if there are no applicable rules, on a pro rata basis, by lot or by such other
method as such Trustee will deem fair and appropriate; provided, however, that
no holder will be permitted to elect partial redemption if such redemption would
reduce the principal amount of Notes held by such holder below E1,000. At least
30 but no more than 60 days before any redemption date the Issuer will deliver
written notice of such redemption to the Trustee and, (i) so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of such exchange so
require, (a) publish a notice in a newspaper having a general circulation in
Luxembourg (which is expected to be the Luxemburger Wort) and (b) deliver
written notice of such redemption to the Luxembourg Stock Exchange, and (ii)
mail a notice of redemption first-class postage prepaid to each holder of Notes
to be redeemed at its registered address. If any Note is to be redeemed in part
only, the notice of redemption that relates to such Note will state the portion
of the principal amount thereof to be redeemed. A Global Note redeemed in part
will be surrendered to the Paying Agent who will make a notation thereon to
reduce the principal amount of such Global Note to an amount equal to the
unredeemed portion and, in the case of Definitive Registered Notes, a new
Definitive Registered Note, in principal amount equal to the unredeemed portion
thereof will be issued (and may be obtained from any Paying Agent) in the name
of the Holder thereof upon presentation of the original Definitive Registered
Note to such Paying Agent and cancellation thereof for redemption unless, upon
due presentation, payment of the principal and premium (if any) is improperly
withheld or refused or unless default is otherwise made in respect of payment,
in any of which events interest shall continue to accrue as provided in the
Indenture. On and after the redemption date, cash interest will cease to accrue,
with respect to Notes or portions thereof called for redemption and accepted for
payment.

THE GUARANTEES

Each of the Subsidiaries of the Issuer that has guaranteed indebtedness
under the Credit Agreement will unconditionally guarantee on a joint and several
basis all of the Issuer's obligations under the Indenture and the Notes. Each of
the Guarantees shall be a guarantee of payment and not of collection. The
obligations of each Guarantor under its Guarantee are limited to the maximum
amount that can be guaranteed by such Guarantor without resulting in the
obligations of such Guarantor constituting a fraudulent conveyance or fraudulent
transfer under applicable federal or state law. Despite this limitation, there
is a risk that the Guarantees will involve a fraudulent conveyance or transfer,
and thus will be unenforceable.

The Guarantors on the date of the Indenture will be all of the Issuer's
U.S. Subsidiaries. Each Subsidiary of the Issuer that becomes a guarantor under
the Credit Agreement (or any other credit agreement renewing, refunding,
replacing, restating, refinancing or extending the Credit Agreement), after the
date of the Indenture will become a Guarantor. If a Subsidiary that is a
Guarantor ceases to be a guarantor under the Credit Agreement (or substitute
credit agreement described in the prior sentence), such Subsidiary will also
cease to be a Guarantor, whether or not a Default or Event of Default is then
outstanding. A Subsidiary may cease to be a

75
78

Guarantor upon sale or other disposal of such subsidiary or otherwise. The
Issuer is not restricted from selling or otherwise disposing of any of the
Guarantors.

Parent will unconditionally guarantee the Notes on a senior unsecured
basis. Parent is a holding company whose sole source of operating income and
cash flow is derived from the Issuer and whose only material asset is the
Issuer's capital stock. Accordingly, Parent will be dependent upon the earnings
and cash flow of, and dividends and distributions from, the Issuer to perform on
its Guarantee. As a result, the Parent's Guarantee provides little, if any,
additional credit support for the Notes and investors should not rely on the
Parent's Guarantee in evaluating an investment in the Notes.

If the Notes are defeased in accordance with the terms of the Indenture,
then the Guarantors will be released and discharged from their obligations under
the Guarantees.

For as long as the Notes are listed on the Luxembourg Stock Exchange and
the rules of such exchange so require, each time a new Restricted Subsidiary
issues a Guarantee, the Issuer will publish a notice of such new Subsidiary
Guarantee in a newspaper having a general circulation in Luxembourg (which is
expected to be the Luxemburger Wort).

RANKING

The Notes will be unsecured obligations of the Issuer, ranking equal in
right of payment with all other unsecured and unsubordinated indebtedness of the
Issuer, and ranking senior in right of payment to the outstanding subordinated
indebtedness of the Issuer and any future subordinated indebtedness of the
Issuer. The Guarantees will be unsecured obligations of the Guarantors, ranking
equal in right of payment with all other unsecured and unsubordinated
indebtedness of the Guarantors, and ranking senior in right of payment to the
outstanding subordinated indebtedness of the Guarantors and any future
subordinated indebtedness of the Guarantors. As of September 30, 2000, the
Issuer had outstanding approximately $911.3 million of unsecured and
unsubordinated indebtedness and approximately $0.9 million of subordinated
indebtedness, and the Subsidiary Guarantors had outstanding approximately $955.1
million of unsecured indebtedness and no subordinated indebtedness. In addition,
the Notes will be structurally subordinated to all of the liabilities of the
Issuer's Subsidiaries that are not Guarantors. As of September 30, 2000, the
Issuer's Subsidiaries that are not Guarantors had total liabilities of
approximately $438.3 million.

The payment of principal of and premium (if any) and interest on the Notes
will be effectively subordinated in right of payment to all secured indebtedness
of the Issuer, and the payment of the Guarantees will be effectively
subordinated in right of payment to all secured indebtedness of the Guarantors,
in each case to the extent of the value of the assets securing such
indebtedness. As of September 30, 2000, the Issuer had no secured indebtedness,
and the Guarantors had approximately $66.2 million of secured indebtedness.
Secured creditors of the Issuer and the Guarantors will have a claim on the
assets which secure the obligations of the Issuer or the Guarantors, as the case
may be, prior to any claims of holders of the Notes against such assets.

CERTAIN COVENANTS

The covenants summarized below will be applicable to the Notes.

Limitation on Liens

The Issuer has agreed that, so long as any of the Notes remain outstanding
under the Indenture, it will not, and it will not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or assume any mortgage,
encumbrance, lien, pledge or security interest of any

76
79

kind (any such mortgage, encumbrance, lien, pledge or security interest being
referred to as "Lien" or "Liens") upon or in

(1) any of its interests in any Principal Property, or

(2) any shares of capital stock or Indebtedness of any Restricted
Subsidiary,

whether that interest, capital stock or Indebtedness is now owned or hereafter
acquired, if that Lien secures or is intended to secure, directly or indirectly,
the payment of any indebtedness for borrowed money evidenced by notes, bonds,
debentures or other similar evidences of Indebtedness without making effective
provision, and the Issuer in that case will make or cause to be made effective
provision, whereby all of the Notes shall be secured by that Lien equally and
ratably with any other Indebtedness thereby secured.

The foregoing will not apply to any of the following:

(1) Liens on any Principal Property, shares of stock or Indebtedness
of any corporation existing at the time such corporation becomes a
Restricted Subsidiary;

(2) Liens on any Principal Property, shares of stock or Indebtedness
acquired, constructed or improved by the Issuer or any Restricted
Subsidiary after the date of the Indenture which are created or assumed
prior to or at the time of such acquisition, construction or improvement or
within 365 days after the acquisition, completion of construction or
improvement or commencement of commercial operation of such property, to
secure or provide for the payment of all or any part of the purchase price
or the cost of such construction or improvement thereof;

(3) Liens on any Principal Property, shares of stock or Indebtedness
existing at the time of acquisition thereof (including acquisition through
merger or consolidation);

(4) Liens on any Principal Property, shares of stock or Indebtedness
acquired from a corporation that is merged with or into the Issuer or a
Restricted Subsidiary;

(5) Liens on any Principal Property, shares of stock or Indebtedness
to secure Indebtedness to the Issuer or to a Restricted Subsidiary;

(6) Liens on any Principal Property, shares of stock or Indebtedness
in favor of any country or any political subdivision of any country, or any
department, agency or instrumentality of any country or political
subdivision of any country, to secure partial, progress, advance or other
payments, or to secure any Indebtedness incurred for the purpose of
financing all or any part of the cost of acquiring, constructing or
improving any Principal Property, shares of stock or Indebtedness subject
to such Liens, including Liens incurred in connection with pollution
control or industrial revenue bonds or similar types of financings;

(7) Liens existing as of the date of the Indenture;

(8) Liens securing Indebtedness in respect of interest rate agreement
obligations or currency agreement obligations entered into to protect
against fluctuations in interest rates or exchange rates and not for
speculative reasons; or

(9) any extension, renewal or replacement of any Liens referred to in
the foregoing clauses (1) to (8), inclusive, provided that the principal
amount of Indebtedness secured by the Lien shall not exceed the principal
amount secured at the time of such extension, renewal or replacement and
that such extension, renewal or replacement Lien shall be limited to the
Principal Property, shares of stock or Indebtedness which secured such Lien
(plus improvements on such property).

77
80

Notwithstanding the foregoing provisions, the Issuer or any Restricted
Subsidiary may, without equally and ratably securing the Notes, create or assume
Liens which would otherwise be subject to the foregoing restrictions if at the
time of such creation or assumption, and after giving effect thereto, Exempted
Indebtedness does not exceed 15% of Consolidated Assets determined as of a date
not more than 90 days prior thereto.

Limitation on Sale and Lease-Back Transactions

The Issuer has agreed that neither it nor any of its Restricted
Subsidiaries will enter into any lease covering any Principal Property owned as
of the date of the Indenture that is subsequently sold to any other Person in
connection with such lease unless the Issuer or such Restricted Subsidiary:

(1) would be entitled under the Indenture to incur Indebtedness
secured by a Lien on the Principal Property to be leased in an amount equal
to the Attributable Debt with respect to such transaction without equally
and ratably securing the Notes; or

(2) uses (within 365 days of the effective date of such transaction)
an amount equal to the proceeds from the sale of such Principal Property to
repay any Indebtedness of the Issuer or such Restricted Subsidiary that
matures (or may be extended so as to mature) more than one year after it
was incurred or assumed.

This covenant does not prevent the Issuer or any Restricted Subsidiary from
entering into any sale and lease-back transaction:

(i) involving a lease with a term of three years or less; or

(ii) that is entered into within 365 days after the later of the
acquisition, the completion of construction, or the commencement of
operation of such Principal Property.

Notwithstanding the foregoing provisions, the Issuer or any Restricted
Subsidiary may enter into sale and lease-back transactions if, at the time of
such entering into, and after giving effect thereto, Exempted Indebtedness does
not exceed 15% of Consolidated Assets determined as of a date not more than 90
days prior thereto.

CERTAIN DEFINITIONS

"Attributable Debt," when used in connection with a sale and lease-back
transaction, shall mean, as of any particular time, the lesser of:

(1) the fair value (as determined by the Board of Directors) of the
property subject to such arrangement; and

(2) the then-present value, discounted at a rate per annum equal to
the rate of interest implicit in the lease involved in such sale and
lease-back transaction, as determined in good faith by the Issuer, of the
obligations of a lessee for net rental payments during the remaining term
of any lease in respect of such property (including any period for which
such lease has been extended or may, at the option of the lessor, be
extended).

The term "net rental payments" under any lease for any period means the sum of
the rental payments required to be paid in such period by the lessee thereunder,
not including, however, any amounts required to be paid by such lessee (whether
or not designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments, water rates or similar charges required
to be paid by such lessee thereunder or any amounts required to be paid by such
lessee thereunder contingent upon the amount of sales, maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges.

78
81

"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon occurrence of a subsequent condition (other than a
condition that the holders of the Notes waive one or more provisions of the
Indenture).

"Board of Directors" means:

(1) with respect to a corporation, the board of directors of the
corporation;

(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and

(3) with respect to any other Person, the board or committee of such
Person serving a similar function.

"Consolidated Assets" means the Issuer's assets, determined in accordance
with GAAP and consolidated for financial reporting purposes in accordance with
GAAP, such assets to be valued at book value.

"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Issuer who:

(1) was a member of such Board of Directors on the date of the
Indenture; or

(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.

"Credit Agreement" means that certain Credit Agreement, dated on or about
July 25, 2000, by and among the Issuer, various direct and indirect wholly owned
Subsidiaries of the Issuer and Bank of America, N.A., as a lender and as
administrative agent, and The Chase Manhattan Bank, as a lender and as
syndication agent, and certain other lenders, providing for up to $1.15 billion
of aggregate borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.

"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
letters of credit), in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.

"Exempted Indebtedness" means, as of any particular time, the sum of:

(1) the aggregate principal amount of all then outstanding
Indebtedness for borrowed money of the Issuer and its Restricted
Subsidiaries incurred after the date of the Indenture, and secured by any
Lien other than those permitted under any of clauses (1) through (9) under
the heading "Certain Covenants -- Limitation on Liens" above; and

(2) all Attributable Debt pursuant to sale and leaseback transactions
incurred by the Issuer and its Restricted Subsidiaries after the date of
the Indenture, at that time outstanding other than that which is not
prohibited by or is permitted pursuant to clause (1) or (2) under the
heading "Certain Covenants -- Limitation on Sale and Lease-Back
Transactions" above.

79
82

"GAAP" means such accounting principles as are generally accepted in the
United States at the date of the Indenture.

"Indebtedness" of a Person means all obligations which would be treated as
liabilities upon a balance sheet of such Person prepared on a consolidated basis
in accordance with GAAP.

"Investment" by any Person means:

(1) all investments by such Person in any other Person in the form of
loans, advances or capital contributions,

(2) all guarantees of Indebtedness or other obligations of any other
Person by such Person,

(3) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, capital stock or other securities of any other
Person, and

(4) all other items that would be classified as investments,
including, without limitation, purchases outside the ordinary course of
business, on a balance sheet of such Person prepared in accordance with
GAAP.

"Notes" means the Issuer's 9.25% Senior Notes due 2010 issued under the
Indenture on July 25, 2000 and, when and if issued in exchange for those Notes
pursuant to the terms of the Registration Rights Agreement, the Issuer's 9.25%
Senior Notes due 2010.

"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.

"Principal Property" means the principal manufacturing facilities located
in the United States owned by the Issuer or a Subsidiary, except such as the
Board of Directors of the Issuer, in its good faith opinion, reasonably
determines is not significant to the business, financial condition and earnings
of the Issuer and its consolidated Subsidiaries taken as a whole, as evidenced
by a Board resolution.

"Restricted Subsidiary" means any consolidated Subsidiary that owns any
Principal Property.

"Significant Subsidiary" means any Subsidiary which has:

(1) Consolidated Assets or in which the Issuer and its other
Subsidiaries have Investments, equal to or greater than 5% of the
Consolidated Assets of the Issuer at the end of its most recently completed
fiscal year, or

(2) consolidated gross revenue equal to or greater than 5% of the
consolidated gross revenue of the Issuer for its most recently completed
fiscal year.

"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Issuer or by one or more
other Subsidiaries, or by the Issuer and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.

DEFEASANCE AND COVENANT DEFEASANCE

The Issuer may elect either:

(1) to defease and be discharged from any and all obligations with
respect to the Notes ("defeasance"); or

80
83

(2) to be released from its obligations with respect to the
restrictive covenants described herein under "Certain Covenants" with
respect to the Notes ("covenant defeasance").

In order to exercise either defeasance or covenant defeasance:

(a) the Issuer must deposit with the Trustee (or other qualifying
trustee), in trust, money and/or government obligations which through the
payment of principal and interest in accordance with their terms will
provide money in an amount sufficient, without reinvestment, to pay the
principal of and any premium or interest on such Notes to maturity or
redemption;

(b) the Issuer must deliver to the Trustee an opinion of counsel to
the effect that the holders of such Notes will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United States
Federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred. Such opinion of counsel, in the case of
defeasance under clause (1) above, must be accompanied by a ruling to that
effect received from or published by the Internal Revenue Service.

The Issuer may exercise its defeasance option with respect to such Notes
notwithstanding its prior exercise of its covenant defeasance option. If the
Issuer exercises its defeasance option, payment of such Notes may not be
accelerated because of an Event of Default. If the Issuer exercises its covenant
defeasance option, payment of such Notes may not be accelerated by reason of a
Default or an Event of Default with respect to the covenants to which such
covenant defeasance is applicable. However, if such acceleration were to occur
by reason of another Event of Default, the realizable value at the acceleration
date of the money and government obligations in the defeasance trust could be
less than the principal and interest then due on such Notes, since the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.

PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE

Payments in respect of the Notes will be made at the office or agency of
the Issuer maintained for that purpose as the Issuer may designate from time to
time and at the office of its Paying Agents. Payments in the principal amount of
the Notes will be made at the office of the Paying Agent in Luxembourg upon
surrender of the Notes. However, at the option of the Issuer, interest payments
on Notes may be made by check mailed to the address of the person entitled
thereto as specified in the Note Register. If a holder of Notes has given wire
transfer instructions to the Issuer and its paying agent prior to the applicable
record date for such payment, the Issuer will make payments with respect to the
Notes by wire transfer of funds to the account specified by such a holder.
Payment of any installment of interest will be made to the person in whose name
such Note is registered at the close of business on the regular record date for
such interest.

The Trustee will initially act as U.S. Paying Agent at its corporate trust
offices in the City of New York, State of New York. Deutsche Bank AG London will
initially act as principal Paying Agent at its corporate trust offices in the
City of London. Deutsche Bank Luxembourg S.A. will initially act as registrar
and as Luxembourg Paying Agent. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, a Paying
Agent and co-registrar in Luxembourg will be maintained. The Issuer may change
the Paying Agent or Registrar without prior notice to the Holders, and the
Issuer or any of its Subsidiaries may act as Paying Agent or Registrar;
provided, however, that for so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Issuer will
publish

81
84

notice of the change in the Paying Agent in Luxembourg in a daily newspaper with
general circulation in Luxembourg (which is expected to be the Luxemburger
Wort).

The Notes will be transferable or exchangeable at the agency of the Issuer
maintained for such purpose as designated by the Issuer from time to time. Notes
may be transferred or exchanged without service charge, other than any tax or
other governmental charge imposed in connection therewith.

CONSOLIDATION, MERGER OR SALE BY THE ISSUER

The Issuer shall not consolidate with or merge into any other corporation
or transfer or lease all or substantially all of its assets, unless:

(1) the corporation formed by such consolidation or into which the
Issuer is merged or the corporation which acquires its assets is organized
in the United States;

(2) the corporation formed by such consolidation or into which the
Issuer is merged or which acquires the Issuer's assets expressly assumes
all of the obligations of the Issuer under the Indenture;

(3) immediately after giving effect to such transaction, no Default or
Event of Default exists; and

(4) if, as a result of such transaction, properties or assets of the
Issuer would become subject to an encumbrance which would not be permitted
by the terms of the Notes, the Issuer or the successor corporation shall
take such steps as are necessary to secure such Notes equally and ratably
with all indebtedness secured thereunder.

Upon any such consolidation, merger, sale or lease, the successor corporation
formed by such consolidation, or into which the Issuer is merged or to which
such sale or lease is made, shall succeed to, and be substituted for the Issuer
under the Indenture.

EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT

If an Event of Default occurs with respect to the Notes and is continuing,
the Trustee or the holders of at least 25% in aggregate principal amount of all
of the outstanding Notes, by written notice to the Issuer (and to the Trustee,
if notice is given by such holders of Notes), may declare the principal of, and
accrued interest, if any, on all the Notes to be due and payable.

Events of Default with respect to the Notes are defined in the Indenture as
being:

(1) default for 30 days in payment of any interest on any Note when
due and payable;

(2) default in payment of principal, or premium, if any, at maturity
or on redemption or otherwise of any Notes when due;

(3) default for 60 days after notice to the Issuer by the Trustee, or
to the Issuer and the Trustee by the holders of at least 25% in aggregate
principal amount of the Notes then outstanding, in the performance of any
covenant with respect to the Notes;

(4) default with respect to other indebtedness of the Issuer for
borrowed money in an aggregate principal amount of at least $30.0 million,
which default shall constitute a failure to pay any portion of the
principal when due and payable after the expiration of an applicable grace
period with respect thereto or shall result in an acceleration thereof and
such acceleration is not rescinded or annulled or such debt shall not be
paid in full within 30 days after the written notice thereof to the Issuer
by the Trustee or to the Issuer and the Trustee by the holders of 25% in
aggregate principal amount of the Notes then outstanding, provided that
such Event of Default will be remedied, cured or waived if such default
under such other agreement is remedied, cured or waived;
82
85

(5) the entry of a final judgment or order against the Issuer or its
Subsidiaries in excess of $30.0 million individually or in the aggregate,
not covered by insurance, that is not paid, discharged or otherwise stayed,
by appeal or otherwise, within 60 days after the entry of such judgments or
orders;

(6) any Guarantee of the Notes by a Significant Subsidiary ceases to
be in full force and effect or any Guarantor that is a Significant
Subsidiary denies or disaffirms its obligations under its Guarantee of the
Notes, except, in each case, in connection with a release of a Guarantee in
accordance with the terms of the Indenture; and

(7) certain events of bankruptcy, insolvency or reorganization of the
Issuer or any Significant Subsidiary.

The Trustee will, within 90 days after the occurrence of a Default with
respect to the Notes, give to the holders of the Notes notice of all Defaults
known to it unless such Default shall have been cured or waived. However, the
Trustee may withhold the notice (except in the case of a Default in payment on
the Notes) if and so long as it determines in good faith that withholding such
notice is in the interests of the holders of the Notes. "Default" means any
event which is, or after notice or passage of time or both, would be, an Event
of Default.

The holders of a majority in aggregate principal amount of the Notes
affected may, subject to certain limited conditions, direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on such Trustee.

The Issuer will file annually with the Trustee a certificate as to the
Issuer's compliance with all conditions and covenants of such Indenture.

The holders of a majority in aggregate principal amount of Notes then
outstanding, by notice to the Trustee may waive, on behalf of the holders of all
Notes, any past Default or Event of Default and its consequences except (1) a
Default or Event of Default in the payment of the principal of or premium, if
any, or interest, if any, on any Note, or (2) an Event of Default resulting from
the breach of a covenant or provision of the Indenture which, pursuant to the
Indenture, cannot be amended or modified without the consent of the holder of
each outstanding Note.

MODIFICATION OF THE INDENTURE

The Indenture may be modified without the consent of the holders of any of
the Notes in order:

(1) to evidence the succession of another corporation to the Issuer
and the assumption of the covenants and obligations of the Issuer by a
successor to the Issuer;

(2) to add to the covenants of the Issuer or to surrender any right or
power of the Issuer;

(3) to add additional Events of Default with respect to the Notes;

(4) to secure the Notes;

(5) to evidence and provide for successor Trustees;

(6) if allowed without penalty under applicable laws and regulations,
to permit payment in respect of Notes in bearer form in the United States;

(7) to correct any defect or supplement any inconsistent provisions or
to make any other provisions with respect to matters or questions arising
under such Indenture, provided that such action does not adversely affect
the interests of the holders of Notes affected thereby;

83
86

(8) to cure any ambiguity or correct any mistake; or

(9) to add a Guarantor, or remove a Guarantor in respect of the Notes
which, in accordance with the terms of the Indenture, is no longer liable
on its Guarantee.

The Indenture also may be modified, with the consent of the holders of a
majority in aggregate principal amount of the outstanding Notes, except that,
without the consent of the holder of each Note affected thereby, no such
supplemental indenture may:

(1) change the time for payment of principal of or premium, if any, or
interest, if any, on any Note;

(2) reduce the principal of, or the rate of interest, or premium, if
any, on any Note, or change the manner in which the amount of any of the
foregoing is determined;

(3) reduce the amount of premium, if any, payable upon the redemption
of any Note;

(4) change the place of payment where, or the currency in which, any
Security or any premium or the interest thereon is payable;

(5) impair the right to institute suit for the enforcement of any
payment on or with respect to any Note;

(6) reduce the percentage in principal amount of the outstanding Notes
affected thereby, the consent of whose holders is required for modification
or amendment of such Indenture or for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults;

(7) change the obligation of the Issuer to maintain an office or
agency in the places and for the purposes specified in such Indenture;

(8) modify or change any provision of any Guarantee in a manner which
adversely affects the holders of the Notes; or

(9) modify the provisions relating to waiver of certain defaults or
any of the foregoing provisions.

NOTICES

Notice regarding the Notes will be mailed to Holders of Definitive
Registered Notes by first-class mail at their respective addresses as they
appear on the registration books for such Definitive Registered Notes, and, if
and so long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of such Stock Exchange shall so require, published in a daily newspaper
having general circulation in Luxembourg (which is expected to be the
Luxemburger Wort). If and for so long as any Notes are represented by one or
more Global Notes and ownership of Book-Entry Interest therein are shown on the
records of Euroclear, Clearstream, Luxembourg (each as defined herein) or any
successor clearing agency appointed by a Book-Entry Depositary at the request of
the Issuer, notices will also be delivered to each such clearing agency for
communication to the owners of such Book-Entry Interests. Notices given by
publication will be deemed given on the first date on which publication is made
and notices given by first-class mail, postage prepaid, will be deemed given
five calendar days after mailing.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

No director, officer, employee, incorporator or stockholder of Parent, the
Issuer or any Guarantor, as such, shall have any liability for any obligation of
the Issuer or the Guarantors under the Notes, the Indenture, the Guarantees, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each holder of Notes by accepting a Note waives

84
87

and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

THE TRUSTEE

The Trustee, initially United States Trust Company of New York, may resign
at any time and may be removed by the holders of the Notes of a majority in
principal amount of the then outstanding Notes by notification to the Trustee
and the Issuer in writing. The Issuer may remove the Trustee if (a) the Trustee
fails to comply with Section 310(b) of the Trust Indenture Act of 1939 as in
effect on the date of the Indenture after written request by the Issuer, (b) the
Trustee fails to comply with the eligibility qualifications set forth in the
Indenture, or (c) the Trustee becomes incapable of acting, is adjudged a
bankrupt or an insolvent or a receiver or public officer takes charge of the
Trustee or its property or affairs for the purpose of rehabilitation,
conservation or liquidation.

The Trustee may become the owner or pledgee of the Notes and, subject to
the terms of the Indenture, may otherwise deal with the Issuer, its affiliates
and subsidiaries.

The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceedings for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the same degree of care and skill as a prudent man in the
conduct of his own affairs. Subject to provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any holder of Notes, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.

GOVERNING LAW

The Notes and the Indenture will be governed by and construed in accordance
with the laws of the State of New York.

85
88

U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a general discussion of material United States federal
income tax consequences of the exchange offer. This discussion does not address
specific tax consequences that may be relevant to particular persons (including,
for example, pass-through entities (e.g., partnerships) or persons who hold the
Notes through pass-through entities, individuals who are U.S. expatriates,
financial institutions, broker-dealers, insurance companies, tax-exempt
organizations, dealers in securities or foreign currency, persons that have a
functional currency other than the U.S. dollar and persons in special
situations, such as those who hold Notes as part of a straddle, hedge,
conversion transaction, or other integrated investment. In addition, this
discussion does not address U.S. federal alternative minimum tax consequences,
and does not describe any tax consequences arising under U.S. federal gift and
estate or other federal tax laws or under the tax laws of any state, local or
foreign jurisdiction. This discussion is based upon the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury Department regulations promulgated
thereunder, and administrative and judicial interpretations thereof, all as of
the date hereof and all of which are subject to change, possibly on a
retroactive basis.

Kirkland & Ellis, our special counsel, has advised us that in its opinion,
the exchange of outstanding notes for exchange notes in the exchange offer will
not constitute a taxable event for the holders. As a result, (1) a holder should
not recognize taxable gain or loss as a result of exchanging notes for exchange
notes pursuant to the exchange offer, (2) the holding period of the exchange
notes should include the holding period of the notes exchanged therefor, and (3)
the adjusted tax basis of the exchange notes should be the same as the adjusted
tax basis of the notes exchanged therefor immediately before such exchange.

86
89

BOOK ENTRY; DELIVERY AND FORM

FORM OF NOTES

The Notes issued in connection with the exchange offer will be issued in
the form of bearer global notes. We will issue Notes in denominations of E1,000,
and integral multiples thereof. In no event will Definitive Registered Notes (as
defined below) in bearer form be issued.

Notes will initially be represented by global notes in bearer form (the
"Global Notes"). The Global Notes will be deposited with Deutsche Bank
Luxembourg S.A., as the Book-Entry Depositary (the "Book-Entry Depositary")
under a deposit agreement relating to the Notes (the "Deposit Agreement"). The
Book-Entry Depositary will issue certificated depositary interests (the "CDIs")
to a common depositary (the "Common Depositary") for Euroclear System
("Euroclear") and Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg") or their nominees, and will record the CDIs in the books and
records of the Book-Entry Depositary in the name of the common depositary or its
nominee. Ownership of beneficial interests in the Global Notes deposited with
the Book-Entry Depositary (the "Book-Entry Interests") will be limited to
persons that have accounts with Euroclear or Clearstream, Luxembourg or persons
that may hold interests through such participants. Book-Entry Interests will be
shown on, and transfers thereof will be effected only through, records
maintained in book-entry form by Euroclear and Clearstream, Luxembourg and their
participants.

ISSUANCE OF DEFINITIVE REGISTERED NOTES

The Book-Entry Interests will not be held in definitive form. Instead,
Euroclear and/or Clearstream, Luxembourg will credit on their respective
book-entry registration and transfer systems a participant's account with the
interest beneficially owned by such participant. The laws of some jurisdictions,
including certain states of the United States, may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. The foregoing limitations may impair the ability to own, transfer or
pledge Book-Entry Interests. In addition, while the Notes are in global form,
holders of Book-Entry Interests will not be considered the owners or "Holders"
of Notes for any purpose.

Under the terms of the Deposit Agreement, owners of Book-Entry Interests
will receive Definitive Registered Notes:

(1) if either Euroclear or Clearstream, Luxembourg notifies the
Book-Entry Depositary and us that it is unwilling or unable to continue to
act as clearing agency and a successor clearing agency is not appointed by
us within 120 days;

(2) if the Book-Entry Depositary, Euroclear or Clearstream, Luxembourg
so request following an Event of Default under the Indenture;

(3) if the owner of a Book-Entry Interest requests such exchange in
writing delivered through either Euroclear or Clearstream, Luxembourg
(including following an Event of Default under the Indenture); or

(4) if the Book-Entry Depositary or the Common Depositary is at any
time unwilling or unable to continue as Book-Entry Depositary and a
successor is not appointed by us within 120 days.

In such an event, we will issue Notes in definitive registered form
("Definitive Registered Notes"), registered in the name or names and issued in
any approved denominations, requested by or on behalf of Euroclear and/or
Clearstream, Luxembourg, as applicable (in accordance with their respective
customary procedures and based upon directions received from participants
reflecting the beneficial ownership of Book-Entry Interests).

87
90

Upon the issuance of Definitive Registered Notes, Holders will be able to
transfer and exchange Definitive Registered Notes at the office of any paying
agent (including the paying agent in Luxembourg), provided that all transfers
and exchanges must be effected in accordance with the terms of the Indenture
and, among other things, be recorded in the register maintained by the Registrar
for such Definitive Registered Notes. In the case of a transfer in part of a
Definitive Registered Note, a new Definitive Registered Note in respect of the
balance of the principal amount of the Definitive Registered Note not
transferred will be delivered at the office of the relevant Paying Agent, as the
case may be, or (at the risk and, if mailed at the request of the transferor
otherwise than by ordinary uninsured mail, at the expense of the transferor)
sent by mail to the transferor.

To the extent permitted by law, the Issuer, the Trustee, the Paying Agent
(as defined herein), and the Registrar shall be entitled to treat the Holder of
any Notes as the absolute owner thereof.

We will not impose any fees or other charges in respect of the Notes or the
CDIs; however, holders of the Book-Entry Interests may incur fees normally
payable in respect of the maintenance and operation of accounts in Euroclear
and/or Clearstream, Luxembourg.

None of the Issuer, the Trustee, the Book-Entry Depositary, the Paying
Agents or the Registrar will have any responsibility or liability for any aspect
of the records relating to or payments made on account of Book-Entry Interests.

TRANSFER AND EXCHANGE

Pursuant to the Deposit Agreement, the Global Notes may be transferred only
to a successor of the Book-Entry Depositary.

Unless and until Book-Entry Interests are exchanged for Definitive
Registered Notes, the CDIs held by the Common Depositary may not be transferred
except as a whole to a nominee or a successor approved by us.

All transfers of Book-Entry Interests between participants in Euroclear or
participants in Clearstream, Luxembourg will be effected by Euroclear or
Clearstream, Luxembourg pursuant to customary procedures and subject to the
applicable rules and procedures established by Euroclear or Clearstream,
Luxembourg and their respective participants. See "Description of Book-Entry
System."

Book-Entry Interests in Global Notes may be exchanged by the holder thereof
for Definitive Registered Notes in denominations of E1,000 in principal amount,
and integral multiples thereof, upon receipt by a Registrar of instructions
relating thereto and any certificates and other documentation required by the
Indenture or the Deposit Agreement. It is expected that such instructions will
be based upon directions received by Euroclear or Clearstream, Luxembourg, as
applicable, from the participant that owns the relevant Book-Entry Interests.

Notes issued as Definitive Registered Notes may be transferred, in whole or
in part, in denominations of E1,000 in principal amount, or integral multiples
thereof to persons who take delivery thereof in the form of Definitive
Registered Notes or, if available, in the form of Book-Entry Interests in a
Global Note. The Definitive Registered Notes may be transferred in whole or part
upon the surrender of the Definitive Registered Notes to be transferred,
together with the completed and executed certificates and transfer documents, at
the specified office of the registrar or any transfer agent (which shall include
a transfer agent having its specified office in Luxembourg so long as any Notes
are listed on the Luxembourg Stock Exchange and the rules of the Luxembourg
Stock Exchange so require). In the case of a permitted transfer of only part of
a Definitive Registered Note, a new Definitive Registered Note in respect of the
balance not transferred will be issued to the transferor. Each new Definitive
Registered Note to be issued upon the transfer of a Definitive Registered Note
will, upon the effective receipt of such
88
91

completed assignment by the registrar or a transfer agent at its respective
specified office, be available for delivery at such specified office, or at the
request of the Holder requesting such transfer, will, within a reasonable period
of time of receipt of such completed assignment, be mailed at the risk of the
transferee entitled to the new Definitive Registered Note to such address as may
be specified in such completed transfer documents.

In connection with any such transfer, the Indenture will require the
transferor to, among other things, furnish appropriate endorsements and transfer
documents, to furnish certain certificates and to pay any taxes, duties and
governmental charges in connection with such transfer.

Definitive Registered Notes will be transferable and exchangeable at the
offices of the registrar or any transfer agent. No service change will be
imposed for any registration of transfer or exchange, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge imposed in connection therewith. Holders of Definitive Registered Notes
in Luxembourg will be able to effect transfers by delivery of the Definitive
Registered Notes to the Luxembourg Paying Agent with instructions for the
transfer of all or part thereof to the proposed transferee thereof.

Notwithstanding the foregoing, we are not required to register the transfer
of any Definitive Registered Notes:

(1) for a period of 15 calendar days prior to any date fixed for the
redemption of the Notes;

(2) for a period of 15 calendar days immediately prior to the date
fixed for selection of Notes to be redeemed in part;

(3) for a period of 15 calendar days prior to the record date with
respect to any interest payment date; or

(4) which the Holder has tendered (and not withdrawn) for repurchase
in connection with a Change of Control Offer.

Any such transfer will be made without charge to the Holder, other than any
taxes, duties and governmental charges payable in connection with such transfer.

DESCRIPTION OF BOOK-ENTRY SYSTEM

Description of Deposit Agreement

On the closing date, the Global Notes will be deposited with Deutsche Bank
Luxembourg S.A. as the Book-Entry Depositary under the Deposit Agreement. The
Book-Entry Depositary will issue the CDIs to the Common Depositary or its
nominee, and will record the CDIs in the books and records of the Book-Entry
Depositary in the name of the Common Depositary or its nominee.

Ownership

Ownership of Book-Entry Interests will be limited to participants and
indirect participants of Euroclear and/or Clearstream, Luxembourg. The
Book-Entry Interests will not be held in definitive form. Instead, Euroclear or
Clearstream, Luxembourg, as applicable, will credit on their respective
book-entry registration and transfer systems the participants' accounts with the
interests beneficially owned by such participants.

So long as the Book-Entry Depositary holds a Global Note, they will be
considered the sole holder of such Global Note for all purposes under the
Indenture. In addition, participants must rely on the procedures of Euroclear
and Clearstream, Luxembourg and indirect participants must rely on the
procedures of the participants through which they own Book-Entry Interests to
exercise any rights of Holders under the Indenture. See "Action by Owners of
Book-Entry Interests" below.

89
92

None of the Issuer, the Trustee, the Book-Entry Depositary, or any Paying
Agent will have any responsibility or liability for any aspect of the records
relating to any Book-Entry Interest.

Amendment and Termination of the Deposit Agreement

The Deposit Agreement may be amended or supplemented by us and the
Book-Entry Depositary without notice to or consent of the holder of the relevant
CDIs or any owner of Book-Entry Interests (a) to cure any ambiguity, defect or
inconsistency, provided that such amendment or supplement does not adversely
affect the rights of Euroclear, Clearstream, Luxembourg or any owner of
Book-Entry Interests, (b) to evidence the succession of another person to the
Issuer (when similar amendments with respect to the Indentures are being
executed) and the assumption by any such successor of the covenants of the
Issuer therein, (c) to evidence or provide for a successor Book-Entry
Depositary, (d) to make any amendment, change or supplement that does not
adversely affect the rights of Euroclear, Clearstream, Luxembourg or any owner
of Book-Entry Interests, (e) to add to the covenants of the Issuer, the
Book-Entry Depositary or Euroclear or Clearstream, Luxembourg, (f) to comply
with the U.S. federal securities and tax laws or (g) to evidence or provide for
a successor to Euroclear or Clearstream, Luxembourg. Except as set forth above,
no amendments that adversely affect Euroclear or Clearstream, Luxembourg,
respectively, may be made to the Deposit Agreement without the consent of
Euroclear or Clearstream, Luxembourg, as applicable. No amendment that adversely
affects the owners of Book-Entry Interests may be made to the Deposit Agreement
without the consent of the Trustee solely for the purpose of ensuring compliance
by the other parties thereto with such obligation. The Trustee will hold its
right to give any such consent in trust for, and will exercise such right only
having regard to the interests of, the owners of Book-Entry Interests. Save as
aforesaid, the terms of such trust or such right will be identical mutatis
mutandis, to the trust contained in the Indenture.

Upon issuance of Definitive Registered Notes in exchange for Book-Entry
Interests constituting the entire principal amount of Global Notes held pursuant
to the Deposit Agreement, such Deposit Agreement will terminate. The Deposit
Agreement may be terminated upon the resignation of the Book-Entry Depositary if
no successor has been appointed within 120 days as set forth under "Resignation
of Book-Entry Depositary, Euroclear or Clearstream, Luxembourg" below. Owners of
Book-Entry Interests are deemed to have notice of the Deposit Agreement and
shall be bound by all of its terms and conditions by acceptance of such
Book-Entry Interests.

Redemption of Global Notes

In the event any Global Note (or any portion thereof) is redeemed, the
Book-Entry Depositary will through Euroclear or Clearstream, Luxembourg, as
applicable, redeem an equal amount of the Book-Entry Interests in such Global
Note from the amount received by it in respect of the redemption of such Global
Note. The redemption price payable in connection with the redemption of such
Book-Entry Interests will be equal to the amount received by the Book-Entry
Depositary in connection with the redemption of such Global Note (or any portion
thereof). We understand that under existing practices of Euroclear and
Clearstream, Luxembourg, if fewer than all of the Notes are to be redeemed at
any time, Euroclear and Clearstream, Luxembourg will credit their respective
participants' accounts on a proportionate basis (with adjustments to prevent
fractions) or by lot or on such other basis as they deem fair and appropriate;
provided, however, that no holder will be permitted to elect a partial
redemption if such redemption would reduce the principal amount of Notes held by
such holder below E1,000.

Payments on Definitive Registered Notes

Principal of any Definitive Registered Note shall be payable at the office
of any Paying Agent (including the Paying Agent located in Luxembourg), upon
presentation of such Definitive Registered Note to such Paying Agent and
cancellation thereof. Interest on Definitive Registered

90
93

Notes may be paid by check mailed to the addresses of the Persons in whose names
such Definitive Registered Notes are registered on the Record Date immediately
prior to the date on which such payment is due as such addresses shall appear on
the register for such Definitive Registered Notes.

Payments on the Global Notes

Payments of any amounts owing in respect of the Global Notes will be made
through one or more paying agents (each, a "Paying Agent") appointed under the
Indenture to the Book-Entry Depositary, as the holder of the applicable Global
Notes. In addition, so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Issuer will maintain a
Paying Agent in Luxembourg (the "Luxembourg Paying Agent"). The obligations of
the Paying Agents will be governed by the terms of a paying agency agreement
among the Issuer and the Paying Agents, dated as of the Issue Date (the "Fiscal
and Paying Agency Agreement"). The Issuer will pay all amounts owing with
respect to the Global Notes to the applicable Paying Agent in euro.

Upon receipt of any amounts from a Paying Agent, the applicable Book-Entry
Depositary will pay all such amounts so received to Euroclear or Clearstream,
Luxembourg, as applicable, which will distribute such payments to its
participants in the form received.

Because the provisions of the Indenture treat the holders of the Global
Notes thereunder as the owner of the Notes represented thereby for the purpose
of receiving amounts owing in respect of such Notes, we have no responsibility
or liability for the payment of amounts owing to Euroclear or Clearstream,
Luxembourg, as applicable, or to owners of Book-Entry Interests in respect of
their respective interests in such Global Notes. Distributions with respect to
Book-Entry Interests owned through Euroclear or Clearstream, Luxembourg will be
credited to the cash accounts of Euroclear participants or Clearstream,
Luxembourg participants in accordance with the relevant system's rules and
procedures, to the extent received by its depositary.

None of the Issuer, the Trustee, the Book-Entry Depositary or any agent of
the Issuer, will have any responsibility or liability for any aspect of the
records relating to or payments made on account of Book-Entry Interests,
including elections to receive payments in non-U.S. currencies, or for
maintaining, supervising or reviewing any records relating to such Book-Entry
Interests.

Action by Owners of Book-Entry Interests

Promptly after receipt by the Book-Entry Depositary of notice of any
solicitation of consents or request for a waiver or other action by the Holders
of Notes, or of any offer to purchase or other action of the Issuer in respect
of the Global Notes, the Book-Entry Depositary will mail to Euroclear and
Clearstream, Luxembourg, as applicable, a notice containing:

(1) such information as is contained in the notice received by the
Book-Entry Depositary;

(2) a statement that at the close of business on a specified record
date, Euroclear and/or Clearstream, Luxembourg, as applicable, will be
entitled to instruct the Book-Entry Depositary as to the consent, waiver or
other action, if any, pertaining to the Global Notes; and

(3) a statement as to the manner in which such instructions may be
given.

In addition, the Book-Entry Depositary will forward to Euroclear and
Clearstream, Luxembourg or, based upon instructions received from Euroclear
and/or Clearstream, Luxembourg, to the owners of the Book-Entry Interests, all
material pertaining to such solicitation, request, offer or other action. Upon
the written request of Euroclear or Clearstream, Luxembourg, the Book-Entry
Depositary shall endeavor insofar as practicable to take such action regarding
the requested consent, waiver, offer or other action in respect of the relevant
Global Notes in accordance with
91
94

any instruments set forth in such request. Euroclear and/or Clearstream,
Luxembourg may grant proxies or otherwise authorize participants or indirect
participants to provide such instruction to the Book-Entry Depositary so that it
may exercise any rights of a Holder or take any other actions which a Holder is
entitled to take under the Indenture. Neither the Book-Entry Depositary nor
Euroclear or Clearstream, Luxembourg will exercise any discretion in the
granting of consents or waivers or the taking of any other action in respect of
the Global Notes.

Euroclear or Clearstream, Luxembourg, as the case may be, will take any
action permitted to be taken by a holder under the Indenture on behalf of a
Euroclear participant or Clearstream, Luxembourg participant only in accordance
with its relevant rules and procedures and subject to its depositary's ability
to effect such actions on its behalf. However, if there is an Event of Default
under the Notes, Euroclear and Clearstream, Luxembourg reserve the right to
exchange the Global Notes for Definitive Registered Notes, and to distribute
such Notes to its participants.

Action by Book-Entry Depositary Following a Default

Upon the occurrence of an Event of Default with respect to the Notes, or in
connection with any other right of a Holder of a Global Note under the
Indenture, if requested in writing by Euroclear or Clearstream, Luxembourg, the
Book-Entry Depositary will take any such action as shall be requested by such
notice, provided that the Book-Entry Depositary has been offered reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request by the owners of Book-Entry
Interests.

Charges of Book-Entry Depositary

We have agreed to pay all charges of the Book-Entry Depositary under the
Deposit Agreement. We have also agreed to indemnify the Book-Entry Depositary
against certain liabilities incurred by it under the Deposit Agreement.

Obligation of the Book-Entry Depositary

The Book-Entry Depositary will assume no obligation or liability under the
Deposit Agreement other than to use good faith and reasonable care in the
performance of its respective duties under such Agreement.

Resignation of Book-Entry Depositary, Euroclear or Clearstream, Luxembourg

The Book-Entry Depositary may resign at any time by written notice to us,
the Trustee and Euroclear and Clearstream, Luxembourg, as applicable, and such
resignation will become effective upon the appointment of a successor book-entry
depositary, in which case the Global Notes shall be delivered to such successor.
If no successor has been so appointed by us within 120 days, the Book-Entry
Depositary may request that we issue Definitive Registered Notes in exchange
therefor as described above.

If at any time Euroclear or Clearstream, Luxembourg are unwilling or unable
to continue as a depositary for the Global Notes and a successor depositary is
not appointed by us within 120 days, we will issue Definitive Registered Notes
in exchange therefor.

Transfers

Book-Entry Interests may be transferred and exchanged for Definitive
Registered Notes only as described under "Issuance of Definitive Registered
Notes" and "Transfer and Exchange" and only in accordance with the relevant
rules and procedures of Euroclear and Clearstream, Luxembourg, as applicable.

Book-Entry Interests may be transferred and exchanged for other Book-Entry
Interests only as described under "Global Clearance and Settlement Under
Book-Entry System."
92
95

Global Clearance and Settlement Under Book-Entry System

Initial Settlement. Initial settlement for the Notes will be made in euro.
Book-Entry Interests owned through Euroclear or Clearstream, Luxembourg accounts
will follow the settlement procedures applicable to conventional eurobonds in
registered form. Book-Entry Interests will be credited to the securities custody
accounts of Euroclear and Clearstream, Luxembourg holders on the business day
following the settlement date against payment for value on the settlement date.

Secondary Market Trading. The Book-Entry Interests will trade through
participants of Euroclear or Clearstream, Luxembourg, and will settle in
same-day funds.

Since the purchase determines the place of delivery, it is important to
establish at the time of trading of any Book-Entry Interests where both the
purchaser's and seller's accounts are located to ensure that settlement can be
made on the desired value date.

Any interest in one of the Global Notes that is transferred to a person who
takes delivery in the form of an interest in any other Global Note will, upon
transfer, cease to be represented by such other Global Note and, accordingly,
will thereafter be subject to all transfer restrictions and other procedures
applicable to interests in such other Global Note for as long as it remains such
an interest. Transfers of Notes will be limited to transfers of book-entry
interests within Euroclear and Clearstream, Luxembourg.

INFORMATION CONCERNING EUROCLEAR AND CLEARSTREAM, LUXEMBOURG

We understand as follows with respect to Euroclear and Clearstream,
Luxembourg:

Euroclear and Clearstream, Luxembourg each hold securities for their
customers and facilitate the clearance and settlement of securities transactions
by electronic book-entry transfer between their respective account holders.
Euroclear and Clearstream, Luxembourg provide various services including
safekeeping, administration, clearance and settlement of internationally traded
securities lending and borrowing. Euroclear and Clearstream, Luxembourg also
deal with domestic securities markets in several countries through established
depositary and custodial relationships. Euroclear and Clearstream, Luxembourg
have established an electronic bridge between their two systems across which
their respective participants may settle trades with each other.

Euroclear and Clearstream, Luxembourg customers are world-wide financial
institutions including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to Euroclear and
Clearstream, Luxembourg is available to other institutions that clear through or
maintain a custodian relationship with an account holder of either system.

93
96

PLAN OF DISTRIBUTION

Each participating broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a participating broker-dealer in connection with resales of exchange notes
received in exchange for outstanding notes where such outstanding notes were
acquired as a result of market-making activities or other trading activities. We
have agreed that for a period of 180 days after the expiration date, we will
make this prospectus, as amended or supplemented, available to any participating
broker-dealer for use in connection with any such resale.

We will not receive any proceeds from any sales of the exchange notes by
participating broker dealers. Exchange notes received by participating
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the exchange notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such participating broker-dealer and/or the purchasers of
any such exchange notes. Any participating broker-dealer that resells the
exchange notes that were received by it for its own account pursuant to the
exchange offer and any broker or dealer that participates in a distribution of
such exchange notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of exchange notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a participating broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.

For a period of 180 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any participating broker-dealer that requests such documents in
the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer (including the expenses of one counsel for the holders of the
outstanding notes) other than commissions or concessions of any broker-dealers
and will indemnify the holders of the outstanding notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

Prior to the exchange offer, there has not been any public market for the
outstanding notes. The outstanding notes have not been registered under the
Securities Act and will be subject to restrictions on transferability to the
extent that they are not exchanged for exchange notes by holders who are
entitled to participate in this exchange offer. The holders of outstanding
notes, other than any holder that is our affiliate within the meaning of Rule
405 under the Securities Act, who are not eligible to participate in the
exchange offer are entitled to certain registration rights, and we are required
to file a shelf registration statement with respect to the outstanding notes.
The exchange notes will constitute a new issue of securities with no established
trading market. We intend to list the exchange notes on the Luxembourg Stock
Exchange. We do not intend to list the exchange notes on any other securities
exchange or to seek the admission thereof to trading in the National Association
of Securities Dealers Automated Quotation System. In addition, such market
making activity will be subject to the limits imposed by the Securities Act and
the Exchange Act and may be limited during the exchange offer and the pendency
of the shelf registration statement. Accordingly, no assurance can be given that
an active public or other market will develop for the exchange notes or as to
the liquidity of the trading market for the exchange notes. If a trading market
does not develop or is not maintained, holders of the exchange notes may
experience difficulty in reselling the exchange notes or may be unable to
94
97

sell them at all. If a market for the exchange notes develops, any such market
may be discontinued at any time.

LEGAL MATTERS

The validity of the exchange notes and the guarantees and other legal
matters, including the tax-free nature of the exchange, will be passed upon on
our behalf by Kirkland & Ellis, a partnership that includes professional
corporations, Chicago, Illinois.

EXPERTS

The consolidated financial statements of Tower Automotive as of December
31, 1998 and 1999 and for each of the three years in the period ended December
31, 1999 included in this prospectus were audited by Arthur Andersen LLP,
independent public accountants, as set forth on its reports included herein.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange
Act of 1934, and, in accordance therewith, will file reports and other
information with the SEC. The reports and other information filed by us with the
SEC in accordance with the Exchange Act may be inspected and copied at the
public reference facilities maintained by the SEC at room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following regional
offices of the SEC: Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material or part thereof may also be
obtained by mail from the Public Reference Section of the SEC, 450 Fifth Street,
Washington, D.C. 20549 (telephone no. 1-800-SEC-0330) at prescribed rates or
accessed electronically by means of the SEC's home page on the Internet at
http://www.sec.gov.

We have agreed that, whether or not we are required to do so by the rules
and regulations of the SEC, for so long as any of the notes remain outstanding,
we will furnish to the holders of the notes and file with the SEC (unless the
SEC will not accept the filing) copies of the financial and other information
that would be contained in the annual reports and quarterly reports that we
would be required to file with the SEC if we were subject to the periodic
reporting requirements of the Exchange Act. We will also make such reports
available at the office of our Luxembourg Paying Agent, to prospective
purchasers of the notes and the registered notes, as applicable, and to
securities analysts and broker-dealers upon their request. In addition, we have
agreed to furnish to holders of the notes, and prospective purchasers of the
notes, upon their request to us or the Luxembourg Paying Agent, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as we have exchanged the notes for securities identical in all
material respects to the notes and which have been registered under the
Securities Act or the shelf registration statement relating to the notes has
been declared effective by the SEC.

INCORPORATION OF DOCUMENTS BY REFERENCE

The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede the

95
98

information in this prospectus. Accordingly, we incorporate by reference the
following documents filed by us:

1. Annual Report on Form 10-K for the fiscal year ended December 31, 1999;

2. Current Report on Form 8-K filed with the SEC on February 16, 2000;

3. Current Report on Form 8-K filed with the SEC on April 24, 2000;

4. Current Report on Form 8-K filed with the SEC on July 25, 2000;

5. Current Report on Form 8-K filed with the SEC on August 1, 2000;

6. Current Report on Form 8-K filed with the SEC on October 2, 2000;

7. Current Report on Form 8-K filed with the SEC on October 23, 2000;

8. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2000;

9. Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000; and

10. Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 2000.

In addition, all reports and other documents we subsequently filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act on or after
the date of this prospectus shall be deemed to be incorporated by reference in
this prospectus and to be part of this prospectus from the date of the filing of
such reports and documents. Any statement contained in this prospectus or in a
document incorporated or deemed to be incorporated in this prospectus by
reference shall be deemed to be modified or superseded for the purpose of this
prospectus to the extent that a statement contained in any subsequently filed
document which is or is deemed to be incorporated by reference in this
prospectus modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.

You may obtain, without charge, a copy of any of the documents incorporated
by reference in this prospectus, other than exhibits to those documents that are
not specifically incorporated by reference into those documents, by writing or
telephoning Tower Automotive, Inc., 4508 IDS Center, Minneapolis, Minnesota
55402, Attention: Investor Relations (612) 342-2310.

GENERAL LISTING INFORMATION

LISTING

Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the legal notice relating
to the issue of the Notes and the certified certificates or articles of
incorporation of the Issuer and the Guarantors will be deposited with the
Greffier en Chef Du Tribunal d'Arrondissement de et a Luxembourg and the
Luxembourg Paying Agent, where copies may be obtained upon request. Notice of
any optional redemption, change of control or any change in the rate of interest
payable on the Notes will be published in a Luxembourg newspaper of general
circulation (which is expected to be the Luxembourg Wort).

So long as any of the Notes remain outstanding and listed on the Luxembourg
Stock Exchange, copies of our audited consolidated annual financial statements
and unaudited interim consolidated financial statements will be made available
and copies of the Indenture will be available for inspection at the office of
the registrar, paying and transfer agent in Luxembourg. We will make available
in Luxembourg any separate financial information about us made publicly
available in the United States or elsewhere.

So long as any of the Notes are listed on the Luxembourg Stock Exchange, we
will maintain a paying, transfer and exchange agent in Luxembourg.

96
99

CLEARING INFORMATION

The Notes sold pursuant to Regulation S and the Notes sold pursuant to Rule
144A have been accepted for clearance by Clearstream, Luxembourg and Euroclear
under common codes 011446094 and 011446116, respectively. The ISIN number for
the Notes sold pursuant to Regulation S is XS0114460941 and the ISIN number for
the Notes sold pursuant to Rule 144A is XS0114461162.

LEGAL INFORMATION

The creation and issuance of the Notes has been authorized by a resolution
of the board of directors of the Issuer dated July 18, 2000. The creation and
issuance of the Parent Guarantee was authorized by the written consent of the
board of directors of Parent on July 18, 2000, and the creation and issuance of
the Subsidiary Guarantees was authorized by the written consents of the
respective boards of directors of the Guarantors on July 18, 2000.

Except as disclosed in this prospectus (1) there has been no material
adverse change in the financial position of the Issuer and the Guarantors since
December 31, 1999 and (2) neither the Issuer nor the Guarantor are involved in
any litigation or arbitration proceedings relating to claims or amounts which
are material in the context of the issue of the Notes and Guarantees, and, so
far as they are aware, no such litigation or arbitration is pending or
threatened.

DOCUMENTS

For so long as the Notes are listed on the Luxembourg Stock Exchange and
the rules of such exchange so require, copies of the following documents may be
inspected and obtained at the specified office of the Paying Agent in
Luxembourg:

- Articles of Incorporation and By-laws of the Issuer;

- the Purchase Agreement and Exchange and Registration Rights Agreement
relating to the Notes; and

- the Indenture relating to the Notes (which includes the form of the
Notes).

In addition, copies of our most recent consolidated financial statements,
and any interim quarterly financial statements published by us, will be
available at the specified office of the Paying Agent in Luxembourg for so long
as the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require. We publish only consolidated financial statements.

INFORMATION ABOUT THE ISSUER AND THE GUARANTORS

THE ISSUER

R.J. Tower Corporation was incorporated on August 22, 1955 in the State of
Michigan. Pursuant to Article II of its articles of incorporation, the Issuer is
a general commercial company. The authorized and issued capital stock of the
Issuer consists of 30,000 shares of common stock, all of which are fully paid
and held by Parent. The directors of the Issuer are Dugald K. Campbell, Scott D.
Rued and Anthony A. Barone. While Parent prepares annual consolidated reports
and interim reports, both of which are available from the Listing Agent in
Luxembourg, the Issuer does not prepare separate financials. Accordingly,
neither annual nor interim reports for the Issuer are available.

97
100

PARENT GUARANTOR

Tower Automotive Inc. was incorporated on March 17, 1993 in the State of
Delaware. Pursuant to Article III of its certificate of incorporation, Parent is
a general commercial company. The issued and outstanding capital stock of Parent
consists of 47,445,675 shares of common stock (as of June 30, 2000), all of
which are fully paid. Parent has no material debts other than those disclosed
herein. Parent has $258.8 million of Trust Preferred Securities and $200.0
million of 5.0% convertible subordinated notes, each of which are convertible
into shares of its common stock. The directors of Parent are set forth in this
prospectus. Parent prepares audited consolidated annual reports and interim
reports. The audited consolidated annual reports and interim reports of Parent
will be available from the Listing Agent in Luxembourg.

THE SUBSIDIARY GUARANTORS

The following entities are subsidiary Guarantors of the Notes as of the
date the Notes will be listed with the Luxembourg Stock Exchange and operate the
businesses described elsewhere in this prospectus. In the event that additional
subsidiaries of the Issuer become Guarantors, the Issuer will file an prospectus
supplement with the Luxembourg Stock Exchange and file an appropriate notice
with a newspaper of general circulation in Luxembourg.

Tower Automotive Products Company, Inc. ("TAPC") was incorporated on
January 23, 1997 in the State of Delaware. Pursuant to Article II of its
certificate of incorporation, TAPC is a general commercial company. The Issuer
holds all of the authorized and issued capital stock of TAPC, all of which is
fully paid. TAPC has no material debts other than those disclosed herein. The
directors of TAPC are Dugald K. Campbell and Anthony A. Barone. While Parent
prepares audited consolidated annual reports, TAPC does not prepare separate
financials. Accordingly, neither annual nor interim reports for TAPC are
available. The audited consolidated annual reports of Parent will be available
from the Listing Agent in Luxembourg.

R.J. Tower Corporation ("RJTK") was incorporated on March 29, 1994 in the
Commonwealth of Kentucky. Pursuant to Article III of its certificate of
incorporation, RJTK is a general commercial company. The Issuer holds all of the
authorized and issued capital stock of RJTK, all of which is fully paid. RJTK
has no material debts other than those disclosed herein. The directors of RJTK
are Dugald K. Campbell and Anthony A. Barone. While Parent prepares audited
consolidated annual reports, RJTK does not prepare separate financials.
Accordingly, neither annual nor interim reports for RJTK are available. The
audited consolidated reports of Parent will be available from the Listing Agent
in Luxembourg.

Kalamazoo Stamping and Die Company ("KSDC") was incorporated on April 26,
1937 in the State of Michigan. Pursuant to Article II of its articles of
incorporation, KSDC is a general commercial company. The Issuer holds all of the
authorized and issued capital stock of KSDC, all of which is fully paid. KSDC
has no material debts other than those disclosed herein. The directors of KSDC
are Dugald K. Campbell and Anthony A. Barone. While Parent prepares audited
consolidated annual reports, KSDC does not prepare separate financials.
Accordingly, neither annual nor interim reports for KSDC are available. The
audited consolidated reports of Parent will be available from the Listing Agent
in Luxembourg.

Trylon Corporation ("Trylon") was incorporated on October 16, 1970 in the
State of Michigan. Pursuant to Article II of its articles of incorporation,
Trylon is a general commercial company. The Issuer holds all of the authorized
and issued capital stock of Trylon, all of which is fully paid. Trylon has no
material debts other than those disclosed herein. The directors of Trylon are
Dugald K. Campbell and Anthony A. Barone. While Parent prepares audited
consolidated annual reports, Trylon does not prepare separate financials.
Accordingly, neither annual nor interim reports for Trylon are available. The
audited consolidated reports of Parent will be available from the Listing Agent
in Luxembourg.

98
101

Active Products Corporation ("AP") was incorporated on February 11, 1998 in
the State of Indiana. Pursuant to Article III of its certificate of
incorporation, AP is a general commercial company. The Issuer holds all of the
authorized and issued capital stock of AP, all of which is fully paid. AP has no
material debts other than those disclosed herein. The directors of AP are Dugald
K. Campbell and Anthony A. Barone. While Parent prepares audited consolidated
annual reports, AP does not prepare separate financials. Accordingly, neither
annual nor interim reports for AP are available. The audited consolidated
reports of Parent will be available from the Listing Agent in Luxembourg.

Tower Automotive Services and Technology, Inc. ("TAST") was incorporated on
December 4, 1998 in the State of Delaware. Pursuant to Article II of its
certificate of incorporation, TAST is a general commercial company. The Issuer
holds all of the authorized and issued capital stock of TAST, all of which is
fully paid. TAST has no material debts other than those disclosed herein. The
directors of TAST are Dugald K. Campbell and Anthony A. Barone. While Parent
prepares audited consolidated annual reports, TAST does not prepare separate
financials. Accordingly, neither annual nor interim reports for TAST are
available. The audited consolidated annual reports of Parent will be available
from the Listing Agent in Luxembourg.

Tower Automotive International, Inc. ("TAII") was incorporated on March 22,
1999 in the State of Delaware. Pursuant to Article II of its certificate of
incorporation, TAII is a general commercial company. The Issuer holds all of the
authorized and issued capital stock of TAII, all of which is fully paid. TAII
has no material debts other than those disclosed herein. The directors of TAII
are Dugald K. Campbell and Anthony A. Barone. While Parent prepares audited
consolidated annual reports, TAII does not prepare separate financials.
Accordingly, neither annual nor interim reports for TAII are available. The
audited consolidated annual reports of Parent will be available from the Listing
Agent in Luxembourg.

Tower Automotive International Holdings, Inc. ("TAIH") was incorporated on
December 10, 1999 in the State of Michigan. Pursuant to Article II of its
articles of incorporation, TAIH is a general commercial company. The Issuer
holds all of the authorized and issued capital stock of TAIH, all of which is
fully paid. TAIH has no material debts other than those disclosed herein. The
directors of TAIH are Dugald K. Campbell and Anthony A. Barone. While Parent
prepares audited consolidated annual reports, TAIH does not prepare separate
financials. Accordingly, neither annual nor interim reports for TAIH are
available. The audited consolidated annual reports of TAIH will be available
from the Listing Agent in Luxembourg.

Tower Automotive International Funding, Inc. ("TAIF") was incorporated on
January 28, 2000 in the State of Michigan. Pursuant to Article II of its
certificate of incorporation, TAIF is a general commercial company. TAII holds
all of the authorized and issued capital stock of TAIF, all of which is fully
paid. TAIF has no material debts other than those disclosed herein. The
directors of TAIF are Dugald K. Campbell and Anthony A. Barone. While Parent
prepares audited consolidated annual reports, TAIF does not prepare separate
financials. Accordingly, neither annual nor interim reports for TAIF are
available. The audited consolidated annual reports of Parent will be available
from the Listing Agent in Luxembourg.

Algoods USA, Inc. ("AUI") was incorporated on April 15, 1996 in the
Commonwealth of Kentucky. Pursuant to Article II of its certificate of
incorporation, AUI is a general commercial company. The Issuer holds all of the
authorized and issued capital stock of AUI, all of which is fully paid. AUI has
no material debts other than those disclosed herein. The directors of AUI are
Dugald K. Campbell and Anthony A. Barone. While Parent prepares audited
consolidated annual reports, AUI does not prepare separate financials.
Accordingly, neither annual nor interim reports for AUI are available. The
audited consolidated annual reports of Parent will be available from the Listing
Agent in Luxembourg.

99
102

RECENT INVESTMENTS BY ISSUER

OWNERSHIP
EQUITY INVESTMENT DATE AMOUNT LOCATION PERCENTAGE METHOD OF FINANCING
----------------- ----- ------------- ---------------------------- ---------- ------------------------

Yorozu Corporation.......... 9/00 $ 38 million Japan, United States, 17% Borrowings under senior
Thailand, Mexico credit facility and
note payable to seller
Algoods Inc................. 5/00 $ 33 million Canada 100% Borrowings under senior
credit facility
Dr. Meleghy GmbH & Co.
KG Werkzeugbau und
Presswerk, Bergisch
Gladbach.................. 1/00 $ 108 million Germany, Poland, Hungary 100% Borrowings under senior
credit facility
J.L. French Automotive
Castings, Inc............. 10/99/ $ 41 million United States, United 12% Borrowings under senior
5/00 Kingdom, Spain, Mexico credit facility
Active Tool & Manufacturing
Co., Inc. and Active
Products Corporation...... 7/99 $ 315 million United States 100% Borrowings under senior
credit facility
Seojin Industrial Company
Limited................... 9/99/ $ 40 million South Korea 66% Borrowings under senior
10/00 credit facility
IMAR s.r.l. and OSLAMT
S.p.A..................... 7/98 $ 65 million Italy 100% Borrowings under senior
credit facility
Metalurgica Caterina S.A.... 3/98/ $ 86 million Brazil 100% Borrowings under senior
7/00 credit facility
Metalsa S. de R.L........... 10/97 $ 137 million Mexico 40% Borrowings under senior
credit facility
Societa Industria Meccanica
e Stampaggio S.p.A........ 5/97 $ 54 million Italy 100% Borrowings under senior
credit facility
Automotive Products
Company................... 3/97 $ 700 million United States, China, Japan, 100% Borrowings under senior
South America credit facility
MascoTech Stamping
Technologies, Inc......... 5/96 $ 105 million United States 100% Borrowings under senior
credit facility
Trylon Corporation.......... 1/96 $ 25 million United States 100% Borrowings under senior
credit facility

100
103

INDEX TO FINANCIAL STATEMENTS

PAGE

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
Report of Independent Public Accountants.................. F-2
Consolidated Balance Sheets as of December 31, 1999 and
1998................................................... F-3
Consolidated Statements of Operations for the Years Ended
December 31, 1999, 1998 and 1997....................... F-4
Consolidated Statements of Stockholders' Investment for
the Years Ended December 31, 1999, 1998 and 1997....... F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997....................... F-6
Notes to Consolidated Financial Statements................ F-7
Condensed Consolidated Balance Sheets as of September 30,
2000 (unaudited) and December 31, 1999................. F-38
Condensed Consolidated Statements of Operations for the
Three Months Ended September 30, 2000 and 1999
(unaudited)............................................ F-39
Condensed Consolidated Statements of Operations for the
Nine Months Ended September 30, 2000 and 1999
(unaudited)............................................ F-40
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2000 and 1999
(unaudited)............................................ F-41
Notes to Condensed Consolidated Financial Statements
(unaudited)............................................ F-42

F-1
104

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Tower Automotive, Inc.:

We have audited the accompanying consolidated balance sheets of Tower
Automotive, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of operations,
stockholders' investment and cash flows for each of the three years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tower Automotive, Inc. and
Subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with accounting principles generally accepted in
the United States.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,
January 25, 2000 (except with respect to the matters discussed in Note 12 and
14, as to which the date is July 25, 2000)

F-2
105

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

DECEMBER 31,
-----------------------
1999 1998
---------- ----------

ASSETS

Current Assets:
Cash and cash equivalents................................. $ 3,617 $ 3,434
Accounts receivable....................................... 353,351 239,888
Inventories............................................... 110,897 76,913
Prepaid tooling and other................................. 90,191 115,859
---------- ----------
Total current assets.............................. 558,056 436,094
---------- ----------
Property, Plant and Equipment, net.......................... 1,075,861 821,873
Restricted Cash............................................. -- 2,677
Investments in Joint Ventures............................... 290,705 209,625
Goodwill, net of accumulated amortization of $33,079 and
$20,308................................................... 585,109 421,700
Other Assets, net of accumulated amortization of $10,155 and
$7,123.................................................... 42,819 44,198
---------- ----------
$2,552,550 $1,936,167
========== ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of long-term debt and capital lease
obligations............................................ $ 13,876 $ 18,191
Accounts payable.......................................... 276,673 214,194
Accrued liabilities....................................... 140,567 96,773
---------- ----------
Total current liabilities......................... 431,116 329,158
---------- ----------
Long-Term Debt, net of current maturities................... 699,678 316,579
Obligations Under Capital Leases, net of current
maturities................................................ 21,543 25,770
Convertible Subordinated Notes.............................. 200,000 200,000
Deferred Income Taxes....................................... 50,736 20,376
Other Noncurrent Liabilities................................ 163,592 178,738
---------- ----------
Total noncurrent liabilities...................... 1,135,549 741,463
---------- ----------
Commitments and Contingencies (Notes 3, 5 and 10)
Mandatorily Redeemable Trust Convertible Preferred
Securities................................................ 258,750 258,750
Stockholders' Investment:
Preferred stock, par value $1; 5,000,000 shares
authorized; no shares issued or outstanding............ -- --
Common stock, par value $.01; 200,000,000 shares
authorized; 46,879,454 and 46,281,880 shares issued and
outstanding............................................ 469 463
Additional paid-in capital................................ 437,210 426,471
Retained earnings......................................... 294,522 177,434
Warrants to acquire common stock.......................... 2,000 2,000
Deferred Income Stock Plan................................ (4,484) --
Accumulated other comprehensive income -- cumulative
translation adjustment................................. (2,582) 428
---------- ----------
Total stockholders' investment.................... 727,135 606,796
---------- ----------
$2,552,550 $1,936,167
========== ==========

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
106

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

YEARS ENDED DECEMBER 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------

Revenues........................................... $2,170,003 $1,836,479 $1,235,829
Cost of sales...................................... 1,823,103 1,562,167 1,058,720
---------- ---------- ----------
Gross profit..................................... 346,900 274,312 177,109
Selling, general and administrative expenses....... 105,950 85,169 57,869
Amortization expense............................... 15,803 13,472 9,537
---------- ---------- ----------
Operating income................................. 225,147 175,671 109,703
Interest expense................................... 39,491 42,506 36,651
Interest income.................................... (1,510) (2,188) (7,689)
---------- ---------- ----------
Income before provision for income taxes, equity
in earnings of joint ventures and minority
interest...................................... 187,166 135,353 80,741
Provision for income taxes......................... 74,866 54,143 32,290
---------- ---------- ----------
Income before equity in earnings of joint
ventures and minority interest................ 112,300 81,210 48,451
Equity in earnings of joint ventures............... 15,268 12,708 227
Minority interest -- dividends on trust preferred
securities, net.................................. (10,480) (5,878) --
---------- ---------- ----------
Income before extraordinary item................. 117,088 88,040 48,678
Extraordinary loss on early extinguishment of debt,
net.............................................. -- -- 2,434
---------- ---------- ----------
Net income....................................... $ 117,088 $ 88,040 $ 46,244
========== ========== ==========
Basic earnings per share (Note 3):
Income before extraordinary loss................. $ 2.50 $ 1.91 $ 1.20
Extraordinary loss............................... -- -- (.06)
---------- ---------- ----------
Net income............................... $ 2.50 $ 1.91 $ 1.14
========== ========== ==========
Diluted earnings per share (Note 3):
Income before extraordinary loss................. $ 2.10 $ 1.68 $ 1.14
Extraordinary loss............................... -- -- (.05)
---------- ---------- ----------
Net income............................... $ 2.10 $ 1.68 $ 1.09
========== ========== ==========

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
107

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

WARRANTS TO DEFERRED ACCUMULATED
COMMON STOCK ADDITIONAL ACQUIRE INCOME OTHER TOTAL
------------------- PAID-IN RETAINED COMMON STOCK COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK PLAN INCOME INVESTMENT
---------- ------ ---------- -------- ----------- -------- ------------- -------------

BALANCE, DECEMBER 31,
1996..................... 28,567,586 $286 $136,441 $ 43,150 $2,000 $ -- $ -- $181,877
Conversion of Edgewood
notes.................... 225,502 2 682 -- -- -- -- 684
Exercise of options........ 52,600 1 234 -- -- -- -- 235
Sales of stock under
Employee Stock Discount
Purchase Plan............ 129,802 1 1,575 -- -- -- -- 1,576
Collection of common stock
subscriptions
receivable............... -- -- 78 -- -- -- -- 78
Public offering of common
stock, net............... 17,000,000 170 284,393 -- -- -- -- 284,563
Net income................. -- -- -- 46,244 -- -- --
Other comprehensive
income -- foreign
currency translation
adjustment............... -- -- -- -- -- -- 22
Total comprehensive
income................... 46,266
---------- ---- -------- -------- ------ ------- ------- --------
BALANCE, DECEMBER 31,
1997..................... 45,975,490 460 423,403 89,394 2,000 -- 22 515,279
Conversion of Edgewood
notes.................... 62,000 1 188 -- -- -- -- 189
Exercise of options........ 112,300 1 467 -- -- -- -- 468
Sales of stock under
Employee Stock Discount
Purchase Plan............ 132,090 1 2,344 -- -- -- -- 2,345
Collection of common stock
subscriptions
receivable............... -- -- 69 -- -- -- -- 69
Net income................. -- -- -- 88,040 -- -- --
Other comprehensive
income -- foreign........ -- -- --
currency translation
adjustment............. -- -- -- -- -- -- 406
Total comprehensive
income................... 88,446
---------- ---- -------- -------- ------ ------- ------- --------
BALANCE, DECEMBER 31,
1998..................... 46,281,880 463 426,471 177,434 2,000 -- 428 606,796
Conversion of Edgewood
notes.................... 250,000 3 755 -- -- -- -- 758
Exercise of options........ 125,000 1 996 -- -- -- -- 997
Sales of stock under
Employee Stock Discount
Purchase Plan............ 222,574 2 3,579 -- -- -- -- 3,581
Deferred Income Stock
Plan..................... -- -- 4,484 -- -- (4,484) -- --
Non-employee options
grant.................... -- -- 897 -- -- -- -- 897
Collection of common stock
subscriptions
receivable............... -- -- 28 -- -- -- -- 28
Net income................. -- -- -- 117,088 -- -- --
Other comprehensive
income -- foreign
currency translation
adjustment............... -- -- -- -- -- -- (3,010)
Total comprehensive
income................... 114,078
---------- ---- -------- -------- ------ ------- ------- --------
BALANCE, DECEMBER 31,
1999..................... 46,879,454 $469 $437,210 $294,522 $2,000 $(4,484) $(2,582) $727,135
========== ==== ======== ======== ====== ======= ======= ========

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
108

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

YEARS ENDED DECEMBER 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------

OPERATING ACTIVITIES:
Net income......................................... $ 117,088 $ 88,040 $ 46,244
Adjustments required to reconcile net income to net
cash provided by operating activities --
Depreciation and amortization................... 111,611 87,372 47,966
Deferred income tax provision................... 45,528 37,847 24,980
Extraordinary loss on extinguishment of debt.... -- -- 2,434
Change in other operating items:
Accounts receivable........................... (73,903) (5,808) (32,620)
Inventories................................... (9,340) (728) 13,052
Prepaid tooling and other..................... 52,270 (36,509) (8,122)
Accounts payable and accrued liabilities...... 40,491 71,017 31,765
Other assets and liabilities.................. (56,474) (20,133) (24,795)
----------- ----------- -----------
Net cash provided by operating
activities............................... 227,271 221,098 100,904
----------- ----------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net.......................... (197,315) (185,138) (117,379)
Acquisitions, net of cash acquired................. (320,662) (61,939) (765,063)
Acquisition of joint venture interests and other... (83,862) (62,437) (127,438)
Net proceeds from sale of Hinge Business........... -- 36,888 --
Change in restricted cash.......................... 2,677 5,225 2,931
----------- ----------- -----------
Net cash used for investing activities..... (599,162) (267,401) (1,006,949)
----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings........................... 2,208,667 1,245,165 1,122,044
Repayments of debt................................. (1,841,229) (1,448,430) (733,191)
Net proceeds from issuance of common stock......... 4,636 2,883 285,457
Net proceeds from issuance of convertible debt..... -- -- 194,892
Net proceeds from issuance of preferred
securities...................................... -- 249,713 --
Cash portion of extraordinary loss on
extinguishment of debt.......................... -- -- (3,010)
Other, net......................................... -- 406 257
----------- ----------- -----------
Net cash provided by financing
activities............................... 372,074 49,737 866,449
----------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS.............. 183 3,434 (39,596)
CASH AND CASH EQUIVALENTS, beginning of
period............................................. 3,434 -- 39,596
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period............. $ 3,617 $ 3,434 $ --
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for --
Interest, net of amounts capitalized............ $ 36,023 $ 41,390 $ 25,394
=========== =========== ===========
Income taxes.................................... $ 17,136 $ 4,420 $ 10,661
=========== =========== ===========
NON CASH FINANCING ACTIVITIES:
Notes payable converted to common stock............ $ 755 $ 188 $ 682
=========== =========== ===========
Non-employee options grant......................... $ 897 $ -- $ --
=========== =========== ===========
Deferred Income Stock Plan......................... $ 4,484 $ -- $ --
=========== =========== ===========

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
109

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Tower Automotive, Inc. and subsidiaries (the "Company") produces a broad
range of assemblies and modules for vehicle body structures and suspension
systems for the global automotive industry. The Company has facilities in the
United States, Canada, Italy and Japan, in China through its joint venture
investment in China (see Note 2), in Brazil through its joint venture investment
in Caterina (see Note 5), in Mexico through its joint venture investment in
Metalsa (see Note 5), and in Korea through its joint venture investment in
Seojin (see Note 5).

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Tower Automotive, Inc. and its wholly-owned subsidiaries. All material
intercompany accounts and transactions have been eliminated in consolidation.

As part of the acquisition of Automotive Products Company ("APC") (see Note
5), the Company acquired a 60 percent joint venture interest to produce certain
parts in China. This investment is accounted for using the equity method since
all significant business decisions require the approval of 80 percent of the
joint venture partners. The remaining 40 percent of the joint venture is owned
by unrelated third parties. The Company's investments in Metalsa, Caterina, and
Seojin are also accounted for using the equity method.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with an
original maturity of three months or less. Cash equivalents are stated at cost
which approximates fair value.

Inventories

Inventories are valued at the lower of first-in, first-out ("FIFO") cost or
market.

Inventories consisted of the following (in thousands):

DECEMBER 31,
------------------
1999 1998
-------- -------

Raw materials............................................... $ 47,231 $26,787
Work-in-process............................................. 34,143 27,734
Finished goods.............................................. 29,523 22,392
-------- -------
$110,897 $76,913
======== =======

Customer Tooling and Other Design Costs

Customer tooling represents costs incurred by the Company in the
development of new tooling used in the manufacture of the Company's products.
Once customer approval is obtained for the manufacture of a new product, the
Company is reimbursed by its customers for the cost of certain of the tooling,
at which time the tooling becomes the property of the customers.

In addition, the Company has certain other tooling and design costs related
to previously proven product designs which are reimbursed by the Company's
customers as the related product is sold through an incremental increase in each
product's unit selling price. Such costs are capitalized and amortized using the
unit of production method over the life of the related product. Amounts
capitalized and included in other assets were $8.7 million at December 31,

F-7
110
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1999 and $5.6 million at December 31, 1998. If the Company forecasts that the
amount of capitalized tooling and design costs exceeds the amount to be realized
through the sale of product, a loss is recognized currently.

Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

DECEMBER 31,
----------------------
1999 1998
---------- ---------

Land....................................................... $ 6,932 $ 5,872
Buildings and improvements................................. 212,508 144,797
Machinery and equipment.................................... 927,335 656,189
Construction in progress................................... 160,959 151,080
---------- ---------
1,307,734 957,938
Less-Accumulated depreciation.............................. (231,873) (136,065)
---------- ---------
Net property, plant and equipment.......................... $1,075,861 $ 821,873
========== =========

Property, plant and equipment acquired in the acquisitions discussed in
Note 5 was recorded at its fair value, determined based on appraisals, as of the
respective acquisition dates. Additions to property, plant and equipment
following the acquisitions are stated at cost. For financial reporting purposes,
depreciation and amortization are provided using the straight-line method over
the following estimated useful lives:

Buildings and improvements......................... 15 to 40 years
Machinery and equipment............................ 3 to 20 years

Accelerated depreciation methods are used for tax reporting purposes.

Interest is capitalized during the construction of major facilities and is
amortized over their estimated useful lives. Interest of $6.9 million was
capitalized during the year ended December 31, 1999, $3.7 million was
capitalized during the year ended December 31, 1998, and $3.4 million during the
year ended December 31, 1997.

Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the related item
are capitalized and depreciated. The cost and accumulated depreciation of
property, plant and equipment retired or otherwise disposed of are removed from
the related accounts, and any residual values after considering proceeds are
charged or credited to income.

Other Assets

Goodwill represents the excess of the purchase price over the fair value of
the net assets acquired and is being amortized on a straight-line basis over 40
years. Debt issue costs are amortized on a straight-line basis over the term of
the related obligations.

The Company periodically evaluates whether events and circumstances have
occurred which may affect the estimated useful life or the recoverability of the
remaining balance of its goodwill and other long-lived assets. If such events or
circumstances were to indicate that the carrying amount of these assets were not
recoverable, the Company would estimate the future cash flows expected to result
from the use of the assets and their eventual disposition. If the sum of the

F-8
111
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

expected future cash flows (undiscounted and without interest charges) were less
than the carrying amount of goodwill, the Company would recognize an impairment
loss.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and revolving credit facilities approximates fair value because
of the short maturity of these instruments. The carrying amount of the Company's
long-term debt approximates fair value because of the variability of the
interest cost associated with these instruments. The fair value of the Company's
Convertible Subordinate Notes and Preferred Securities, based on Portal market
quote activity as of year end, approximated carrying value.

During 1997, the Company entered into interest rate swap contracts to hedge
against interest rate exposures on certain floating-rate indebtedness. These
contracts, which were to expire in November 2002, had the effect of converting
the floating-rate interest related to a notional amount of $300 million of
borrowings outstanding under the revolving credit facility into a fixed-rate of
approximately 6.75 percent. The interest rate swap contract was executed to
balance the Company's fixed-rate and floating-rate debt portfolios. During June
of 1999, the Company terminated its position in the interest rate swap contracts
resulting in a gain of $0.5 million.

During the fourth quarter of 1997, the Company entered into an interest
rate contract in a notional amount of $75 million in anticipation of financing
that did not materialize. Accordingly, the Company adjusted the interest rate
contract to market as of December 31, 1998 and 1997. The write-down to fair
value of approximately $6.4 million and $2.0 million, respectively, was recorded
as expense in the accompanying consolidated statements of operations. During the
first quarter of 1999, the Company settled the $75 million contract with a cash
payment of approximately $7.0 million.

Revenue Recognition and Sales Commitments

The Company recognizes revenue as its products are shipped to its
customers. The Company enters into agreements to produce products for its
customers at the beginning of a given vehicle's life. Once such agreements are
entered into by the Company, fulfillment of the customers' purchasing
requirements is the obligation of the Company for the entire production life of
the vehicle, with terms of three to ten years and the Company has no provisions
to terminate such contracts. In certain instances, the Company may be committed
under existing agreements to supply product to its customers at selling prices
which are not sufficient to cover the direct cost to produce such product. In
such situations, the Company records a liability for the estimated future amount
of such losses. Such losses are recognized at the time that the loss is probable
and reasonably estimable and is recorded at the minimum amount necessary to
fulfill the Company's obligations to it customers. Losses are discounted at 4
percent and are estimated based upon information available at the time of the
estimate, including future production volume estimates, length of the program
and selling price and production cost information.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax assets and liabilities are determined
based on the difference between the financial statement and tax bases of assets
and liabilities using currently enacted tax rates.

F-9
112
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Comprehensive Income

Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income," which established standards for reporting
and display of comprehensive income and its components. Comprehensive income
reflects the change in equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. For the
Company, comprehensive income represents net income adjusted for foreign
currency translation adjustments. The Company has chosen to disclose
comprehensive income in the consolidated statements of stockholders' investment
and prior years have been restated.

Segment Reporting

During 1998, the Company adopted SFAS No. 131, "Disclosure About Segments
of an Enterprise and Related Information." SFAS No. 131 supersedes SFAS No. 14
replacing the "industry segment" approach with the "management" approach. The
management approach designates the internal organization that is used by
management for making operating decisions and assessing performance as the
source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect results of operations or financial
position but did affect the disclosure of segment information (see Note 8).

Stock Options

The Company accounts for stock options under the provisions of Accounting
Principles Board opinion ("APB") No. 25, under which no compensation expense is
recognized when the stock options are granted to employees. The pro forma
effects had the Company followed the provisions of SFAS No. 123 are included in
Note 3. The Company may also grant stock options to outside consultants and
directors. The fair value of these option grants are expensed as of the grant
date based on the Black-Scholes valuation model.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. The actual results could differ from those estimates.

Foreign Currency Translation

Assets and liabilities of the Company's foreign operations are translated
into U.S. dollars using the year-end rates of exchange. Results of operations
are translated at average rates prevailing throughout the period. Translation
gains or losses are accumulated as a separate component of accumulated other
comprehensive income in the accompanying consolidated statements of
stockholders' investment.

Recently Issued Accounting Pronouncements

SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 137, becomes effective for the years
beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting
standards requiring that every derivative instrument,

F-10
113
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

including certain derivative instruments embedded in other contracts, be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge criteria are met. Special
accounting for qualifying hedges allows a derivative's gains or losses to offset
related results on the hedged item in the income statement and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. The Company has not yet quantified
the impact of adopting SFAS No. 133 and 137, and has not yet determined the
timing of adoption.

In April 1998, the Financial Accounting Standards Board issued Statement of
Position (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities." SOP
98-5 requires the expensing of start-up activities as incurred, versus
capitalizing and expensing them over a period of time. The Company's adoption of
SOP 98-5 during the first quarter of 1999 did not materially affect the
consolidated results of operations or the financial position of the Company.

3. STOCKHOLDERS' INVESTMENT

Stock Split

On May 19, 1998, the Company's Board of Directors approved a two-for-one
stock split, which was effected as a stock dividend. On July 15, 1998,
stockholders were issued one additional share of common stock for each share of
common stock held on the record date of June 30, 1998. All references to the
number of common shares and per share amounts have been adjusted to reflect the
stock split on a retroactive basis.

Public Offerings of Common Stock

During 1997, the Company issued 17,000,000 shares of Common Stock in a
public offering at an offering price of $17.50 per share (the "Offering"). Net
proceeds to the Company, after underwriting discounts and offering expenses,
were approximately $285 million. Proceeds from the Offering were used by the
Company to partially fund the acquisition of APC.

Earnings Per Share

Basic earnings per share were computed by dividing net income by the
weighted average number of common shares outstanding during the year. Diluted
earnings per share were determined on the assumptions: (i) the Edgewood notes
were converted at the beginning of the respective periods, (ii) the Convertible
Subordinated Notes were converted upon issuance on July 29, 1997, (iii) the
Preferred Securities (as defined in Note 4) were converted upon issuance

F-11
114
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

on June 9, 1998, and (iv) the Deferred Income Stock Plan (see below) share
purchase were issued on March 31, 1999 (in thousands, except per share data):

YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
-------- -------- -------

Net income............................................. $117,088 $ 88,040 $46,244
Interest expense on Edgewood notes, net of tax......... 33 60 104
Interest expense on Convertible Subordinated Notes, net
of tax............................................... 6,508 6,508 2,834
Dividends on Preferred Securities, net of tax.......... 10,480 5,878 --
-------- -------- -------
Net income applicable to common stockholders --
diluted.............................................. $134,109 $100,486 $49,182
======== ======== =======
Weighted average number of common shares
outstanding.......................................... 46,751 46,204 40,720
Dilutive effect of outstanding stock options and
warrants after application of the treasury stock
method............................................... 560 504 498
Dilutive effect of Edgewood notes, assuming
conversion........................................... 326 547 764
Dilutive effect of Deferred Income Stock Plan, assuming
conversion........................................... 183 -- --
Dilutive effect of Convertible Subordinated Notes,
assuming conversion.................................. 7,729 7,729 3,220
Dilutive effect of Preferred Securities, assuming
conversion........................................... 8,425 4,727 --
-------- -------- -------
Diluted shares outstanding............................. 63,974 59,711 45,202
======== ======== =======
Basic earnings per share............................... $ 2.50 $ 1.91 $ 1.14
======== ======== =======
Diluted earnings per share............................. $ 2.10 $ 1.68 $ 1.09
======== ======== =======

Stock Option Plan

The Company sponsors the 1994 Key Employee Stock Option Plan (the "Stock
Option Plan"), under which any person who is a full-time, salaried employee of
the Company (excluding non-management directors) is eligible to participate in
the Stock Option Plan (an "Employee Participant"). A committee of the board of
directors selects the Employee Participants and determines the terms and
conditions of the options. The Stock Option Plan provides for the issuance of
options up to 3,000,000 shares of Common Stock at exercise prices equal to the
stock market price on the date of grant to Employee Participants, subject to
certain adjustments

F-12
115
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reflecting changes in the Company's capitalization. Information regarding the
Stock Option Plan is as follows:

WEIGHTED
WEIGHTED AVERAGE FAIR
SHARES AVERAGE VALUE OF EXERCISABLE
UNDER EXERCISE EXERCISE OPTIONS AT END OF
OPTION PRICE PRICE GRANTED YEAR
--------- ----------- -------- ------------ -----------

Outstanding, Dec. 31,
1996.................. 496,500 $ 4.00-7.56 $ 6.02 $ 4.76 55,250
Granted............... 382,500 18.94 18.94
Granted............... 8,000 20.50 20.50
Exercised............. (52,600) 4.00-7.56 5.10
Forfeited............. (30,250) 4.00-18.94 8.56
--------- ----------- ------
Outstanding, Dec. 31,
1997.................. 804,150 4.00-20.50 12.19 13.35 138,650
Granted............... 666,000 22.97 22.97
Granted............... 8,000 22.88 22.88
Granted............... 20,000 25.75 25.75
Granted............... 491,000 17.123 17.13
Exercised............. (112,300) 4.00-18.94 5.96
Forfeited............. (23,500) 4.00-22.97 18.93
--------- ----------- ------
Outstanding, Dec. 31,
1998.................. 1,853,350 4.00-25.75 17.89 10.43 252,100
Granted............... 795,500 19.25 19.25
Exercised............. (125,000) 4.00-18.94 8.54
Forfeited............. (81,000) 7.56-22.97 20.05
--------- ----------- ------
Outstanding, Dec. 31,
1999.................. 2,442,850 $4.00-25.75 $13.07 $ 9.51 552,475
========= =========== ======

The weighted average exercise price of options exercisable at end of year
was $16.48 at December 31, 1999, $11.27 at December 31, 1998 and $5.48 at
December 31, 1997.

All options granted in the stock option plan have a contractual life of 10
years from the date of grant.

In March 1999, the Company's board of directors adopted and shareholders
approved the Tower Automotive Inc. Long Term Incentive Plan ("Incentive Plan").
The Incentive Plan is designed to promote the long term success of the Company
through stock based compensation by aligning the interests of participants with
those of its stockholders. Eligible participants under the Incentive Plan
include key company colleagues, directors, and outside consultants. Awards under
the Incentive Plan may include stock options, stock appreciation rights,
performance shares, and other stock based awards. The Incentive Plan provides
for the issuance of up to 3,000,000 shares of common stock. A committee of the
board of directors is responsible for

F-13
116
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

administration, participant selection, and determination of terms and conditions
of the Incentive Plan. Information regarding of terms and conditions of the
Incentive Plan is as follows:

WEIGHTED
WEIGHTED AVERAGE FAIR
SHARES AVERAGE VALUE OF EXERCISABLE
UNDER EXERCISE OPTIONS AT END OF
OPTION EXERCISE PRICE PRICE GRANTED YEAR
------- -------------- -------- ------------ -----------

Granted.............. 405,000 $ 19.25 $19.25
Granted.............. 121,490 26.81 26.81
------- ------------ ------
Outstanding at Dec.
31, 1999........... 526,490 $19.25-26.81 $20.99 $9.08 --
======= ============ ======

Options granted in 1999 have a remaining contractual life of 5 to 10 years.
No options issued under the Incentive Plan were exercisable as of December 31,
1999.

Independent Director Stock Option Plan

In February 1996, the Company's board of directors approved the Tower
Automotive, Inc. Independent Director Stock Option Plan (the "Director Option
Plan") that provides for the issuance of options to Independent Directors, as
defined, to acquire up to 200,000 shares of the Company's Common Stock, subject
to certain adjustments reflecting changes in the Company's capitalization. The
option exercise price must be at least equal to the fair value of the Common
Stock at the time the option is issued. Vesting is determined by the board of
directors at the date of grant and in no event can be less than six months from
the date of grant. Information regarding the Director Option Plan is as follows:

WEIGHTED WEIGHTED
SHARES AVERAGE AVERAGE FAIR EXERCISABLE
UNDER EXERCISE EXERCISE VALUE OF AT END OF
OPTION PRICE PRICE OPTIONS GRANTED YEAR
------- ----------- -------- --------------- -----------

Outstanding, Dec. 31,
1996............... 45,000 $ 7.56 $ 7.56 $4.26 --
Granted............ 60,000 18.94 18.94
------- ----------- ------
Outstanding, Dec. 31,
1997............... 105,000 7.56-18.94 14.06 7.77 15,000
Granted............ 18,000 22.97 22.97
------- ----------- ------
Outstanding, Dec. 31,
1998............... 123,000 7.56-22.97 15.37 8.38 49,800
Granted............ 40,000 19.25 19.25
------- ----------- ------
Outstanding, Dec. 31,
1999............... 163,000 $7.56-22.97 $16.32 $8.70 90,600
======= =========== ======

The weighted average exercise price of options exercisable under the
Director Option Plan was $13.56 at December 31, 1999, $12.09 at December 31,
1998 and $7.56 at December 31, 1997.

Employee Stock Purchase Plan

The Company also sponsors an employee stock discount purchase plan which
provides for the sale of up to 1,000,000 shares of the Company's Common Stock at
discounted purchase

F-14
117
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

prices, subject to certain limitations. The cost per share under this plan is 85
percent of the market value of the Company's Common Stock at the date of
purchase, as defined. During the year ended December 31, 1999, 222,574 shares of
Common Stock were issued to employees pursuant to this plan, 132,090 shares of
Common Stock were issued during the year ended December 31, 1998, and 129,802
shares of Common Stock were issued during the year ended December 31, 1997. The
weighted average fair value of shares sold in 1999, 1998 and 1997 were $16.09,
$17.76, and $12.10, respectively.

Deferred Income Stock Plan

During 1999, the Company established the Tower Automotive, Inc. Key
Leadership Deferred Income Stock Purchase Plan (the "Deferred Income Stock
Plan"), which allows certain colleagues to defer receipt of all or a portion of
their annual cash bonus. The Company makes a matching contribution of one-third
of the colleague's deferral. The Company's matching contribution vests on the
first day of the third plan year following the date of the colleague's deferral.
In accordance with the terms of the plan, the colleague's deferral and Company's
matching contribution have been placed in a "Rabbi" trust, which invests solely
in the Company's Common Stock. This trust arrangement offers the colleague a
degree of assurance for ultimate payment of benefits without causing
constructive receipt for income tax purposes. Distributions to the colleague
from the trust can only be made in the form of the Company's Common Stock. The
assets in the trust remain subject to the claims of creditors of the Company and
are not the property of the colleague; therefore, they are included as a
separate component of stockholders' investment under the caption Deferred Income
Stock Plan.

Stock-Based Compensation Plans

As discussed above, the Company has three stock option plans: the Stock
Option Plan, the Long Term Incentive Plan and the Independent Director Stock
Option Plan. Additionally the Company has two stock purchase plans: the Employee
Stock Purchase Plan and the Deferred Income Stock Plan. The Company has elected
to continue to account for these plans under APB No. 25, under which no
compensation cost has been recognized for employee groups eligible for the
plans. Had compensation cost for these plans been determined as required under
SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's pro forma
net income and pro forma earnings per share would have been as follows (in
thousands):

YEARS ENDED DECEMBER 31,
----------------------------
1999 1998 1997
-------- ------- -------

Net income
As Reported........................................ $117,088 $88,040 $46,244
Pro Forma.......................................... 109,003 86,787 45,722
Basic earnings per share
As Reported........................................ $ 2.50 $ 1.91 $ 1.14
Pro Forma.......................................... 2.33 1.88 1.12
Diluted earnings per share
As Reported........................................ $ 2.10 $ 1.68 $ 1.09
Pro Forma.......................................... 1.97 1.66 1.08

The effect of the stock issued under the Employee Stock Purchase Plan was
not material for 1999, 1998 and 1997.

F-15
118
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: Risk free interest rates of 4.54 percent in 1999, 4.81 percent to
5.75 percent in 1998, and 6.39 percent in 1997; expected life of seven years for
1999, 1998 and 1997; expected volatility of 40 percent in 1999, 37 percent to 40
percent in 1998, and 67 percent in 1997; expected dividends of zero.

Other Common Stock Equivalents

In connection with the acquisition of Edgewood Tool and Manufacturing
Company ("Edgewood") in May 1994, the Company issued options to acquire 205,968
shares of Common Stock at an exercise price of $3.28 per share. These options
are fully exercisable through 2004. As of December 31, 1999, all of these
options were exercisable.

In connection with the acquisition of MSTI in May 1996, the Company issued
warrants to MascoTech to acquire 400,000 shares of Common Stock at an exercise
price of $9 per share. The warrants expire in 2006.

In addition, the Company has Convertible Subordinated Notes outstanding as
discussed in Note 6, and Convertible Preferred Securities as discussed in Note
4.

Dividends

The Company has not declared or paid any cash dividends in the past. As
discussed in Note 6, the Company's debt agreements restrict the amount of
dividends the Company can declare or pay. As of December 31, 1999, under the
most restrictive debt covenants, the Company could not have paid any cash
dividends.

4. MANDATORILY REDEEMABLE TRUST CONVERTIBLE PREFERRED SECURITIES

On June 9, 1998, Tower Automotive Capital Trust (the "Issuer"), a wholly
owned statutory business trust of the Company, completed the offering of $258.8
million of its 6 3/4 percent Trust Convertible Preferred Securities ("Preferred
Securities"), resulting in net proceeds of approximately $249.7 million. The
Preferred Securities are redeemable, in whole or in part, on or after June 30,
2001 and all Preferred Securities must be redeemed no later than June 30, 2018.
The Preferred Securities are convertible, at the option of the holder, into
common stock of the Company at a rate of 1.6280 shares of common stock for each
Preferred Security, which is equivalent to a conversion price of $30.713 per
share. The net proceeds of the offering were used to repay outstanding
indebtedness. Minority interest reflected in the accompanying consolidated
statements of operations represents dividends on the Preferred Securities at a
rate of 6 3/4 percent, net of income tax benefits at the Company's incremental
tax rate of 40 percent.

No separate financial statements of the Issuer have been included herein.
The Company does not consider that such financial statements would be material
to holders of Preferred Securities because (i) all of the voting securities of
the Issuer are owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, (ii) the Issuer has no independent operations
and exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of the Issuer and investing the proceeds
thereof in 6 3/4 percent Convertible Subordinated Debentures due June 30, 2018
issued by the Company and (iii) the obligations of the Issuer under the
Preferred Securities are fully and unconditionally guaranteed by the Company.

F-16
119
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. ACQUISITIONS, INVESTMENT IN JOINT VENTURES AND DIVESTITURE

On July 29, 1999, the Company acquired all of the outstanding stock of
Active Tool Corporation and Active Products Corporation (collectively, "Active")
for total approximate consideration of $315 million. Active, which has five
facilities, designs and produces a variety of large unexposed structural
stampings, exposed surface panels, and modules to the North American automotive
industry. Active's main customers include DaimlerChrysler, Ford, General Motors,
and Saturn. Products offered by Active include body sides, pickup box sides,
fenders, floor pan assemblies, door panels, pillars, and heat shields. The
acquisition of Active enhances the Company's ability to manufacture large and
complex structures, as well as exposed surface panels. The acquisition was
financed under the Company's revolving credit facility.

Effective July 1, 1998, the Company acquired IMAR, s.r.l. ("IMAR") and
OSLAMT S.p.A. ("OSLAMT"). IMAR designs and manufactures structural parts and
assemblies from two facilities in Italy, primarily for Fiat. OSLAMT designs and
manufactures tools and assemblies for the automotive market from its facility in
Turin, Italy. The purchase price consisted of approximately $32.5 million in
cash plus the assumption of approximately $17 million of indebtedness, and an
additional $15 million for achieving certain operating targets subsequent to the
acquisition.

On May 9, 1997, the Company acquired all of the outstanding common stock of
Societa Industria Meccanica e Stampaggio S.p.A. ("SIMES"). SIMES designs and
manufactures structural metal components from two facilities in Italy,
principally for Fiat. The purchase price, which consisted of $50.7 million in
cash, was financed with borrowings under the Company's revolving credit
facility. The Company also paid an additional $3 million for meeting certain
operating performance targets subsequent to the acquisition.

On April 18, 1997, the Company acquired and assumed substantially all of
the assets and liabilities of APC, a division of A.O. Smith Corporation. The
aggregate purchase price consisted of approximately $700 million in cash and was
financed with the proceeds from the Offering and borrowings under the new credit
facility (see Note 6). APC designs and manufactures frames, frame components,
engine cradles, suspension components and modules for the North American
automotive and heavy truck industries.

These acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at fair value as of the dates of the acquisitions. The assets and
liabilities of Active have been recorded based upon preliminary estimates of
fair value as of the dates of acquisition. The Company does not believe the
final allocations of the purchase price will be materially different than the
preliminary allocations. The excess of the purchase price over the fair value of
the assets acquired and liabilities assumed has been recorded as goodwill.
Results of operations for these acquisitions have been included in the
accompanying consolidated financial statements since the dates of acquisition.

In conjunction with its acquisitions, the Company has established reserves
for certain costs associated with facility shutdown and consolidation activities
and for general and payroll related costs primarily for planned employee
termination activities. As of December 31, 1998, approximately $21.1 million and
$3.6 million were recorded for facility shutdown and payroll related costs,
respectively. Additional reserves of $5.4 million related to facility shutdown
costs and $8.7 million for payroll related costs were recorded for the year
ended December 31, 1999. Costs incurred and charged to such reserves amounted to
$2.5 million for facility shutdown costs and $5.2 million for payroll related
termination costs during the year ended December 31, 1999.

F-17
120
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Additionally, as a result of revisions to acquisitions' restructuring plans,
$10.2 million of facility related costs and $0.7 million of payroll related
costs were reversed against goodwill in 1999. At December 31, 1999, liabilities
for approximately $13.8 million for costs associated with facility shutdown and
consolidation and $6.4 million of costs for planned employee termination
activities remained. The timing of facility shutdown and consolidation
activities has been adjusted to reflect customer concerns with supply
interruption. These reserves have been utilized as originally intended and
management believes the liabilities recorded for shutdown and consolidation
activities are adequate but not excessive as of December 31, 1999.

On October 29, 1999, the Company invested $21 million for new shares
representing a 49 percent equity interest in Seojin Industrial Company Limited
("Seojin"). Seojin is a supplier of frames, modules and structural components to
the Korean automotive industry. Total consideration for the equity interest was
financed under the Company's revolving credit facility. In addition, the Company
advanced $19 million to Seojin in exchange for variable rate convertible bonds
(the "Bonds") due October 30, 2009. The Bonds are unsecured and rank equally
with all other present and future obligations of Seojin. Interest on the Bonds
is payable annually beginning October 30, 2000 and each October 30 thereafter
until maturity. The Company has the right to convert the Bonds into common stock
of Seojin any time on or after October 30, 2000. The conversion rate is based
upon a predetermined formula that would increase the Company's equity interest
to approximately 66 percent.

On October 14, 1999, the Company loaned $30.0 million to J. L. French
Automotive Castings, Inc., ("J.L. French") in exchange for a convertible
subordinated promissory note due October 14, 2009. The note bears interest at
7.5 percent annually with interest payable on the last day of each calendar
quarter beginning December 31, 1999. The Company can convert, at its option, any
portion of the outstanding principal of the note into Class A Common Stock of
J.L. French at a preset agreed upon conversion price.

On March 11, 1998, the Company acquired a 40 percent equity interest in
Metalurgica Caterina S.A. ("Caterina"), a supplier of structural stampings and
assemblies to the Brazilian automotive market. In addition, the Company has the
right to acquire the remaining 60 percent of the equity of Caterina for $66.0
million. This right continues until 90 days after December 31, 1999, at which
time, Caterina may exercise a call option to repurchase Tower Automotive's 40
percent equity investment for $26.4 million. The call option remains in effect
until March 31, 2001. The Company paid approximately $48 million for its initial
equity interest which was financed with borrowings under the Company's revolving
credit facility. This investment added Volkswagen and Mercedes-Benz as new
customers in Brazil.

On October 9, 1997, the Company became a 40 percent partner in Metalsa S.
de R.L. ("Metalsa") with Promotora de Empresas Zano, S.A. de C.V. ("Proeza").
Metalsa is the largest supplier of vehicle frames and structures in Mexico. In
addition, the parties have entered into a technology sharing arrangement that
will enable both companies to utilize the latest available product and process
technology. Metalsa is headquartered in Monterrey, Mexico and has manufacturing
facilities in Monterrey and San Luis Potosi, Mexico. Metalsa's customers include
Chrysler, General Motors, Ford, Nissan and Mercedes-Benz. In connection with
this agreement, the Company paid $120 million to Proeza, with an additional
amount of up to $45 million payable based upon future net earnings of Metalsa.
Based upon Metalsa's 1998 net earnings, the Company paid Proeza approximately
$9.0 million in additional consideration in the second quarter of 1999. Based
upon Metalsa's 1999 net earnings, the Company paid approximately $7.9 million of
additional consideration during the first quarter of 2000. The investment in
Metalsa was financed with proceeds from borrowings under the Company's revolving
credit facility.

F-18
121
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Summarized unaudited financial information for Metalsa and Caterina from
the dates of their respective investment are as follows:

DECEMBER 31,
-------------------
1999 1998
-------- --------

Condensed Statements of Earnings
Revenues.................................................... $271,804 $269,280
Operating income............................................ 56,733 60,047
-------- --------
Net income.................................................. $ 29,301 $ 28,972
======== ========
Condensed Balance Sheets
Current assets.............................................. $ 88,329 $ 91,519
Noncurrent assets........................................... 158,933 126,336
-------- --------
$247,262 $217,855
======== ========
Current liabilities......................................... $ 52,345 $ 45,562
Noncurrent liabilities...................................... 58,537 50,057
Stockholders' investment.................................... 136,380 122,236
-------- --------
$247,262 $217,855
======== ========

On August 31, 1998, the Company sold its hinge business (the "Hinge
Business") to Dura Automotive Systems, Inc. for net proceeds of approximately
$36.9 million which approximated the book value of the net assets sold. The net
proceeds were used to repay outstanding indebtedness under the revolving credit
facility. The results of operations of the Hinge Business are not significant to
the operating results of the Company as a whole and have, therefore, been
excluded from the pro forma adjustments.

The accompanying unaudited consolidated pro forma results of operations for
the year ended December 31, 1999 give effect to the following as if they were
completed at the beginning of the year (i) the acquisition of Active, (ii) the
investment in Seojin, and (iii) the $325 million term loan add on facility (Note
6). The accompanying unaudited consolidated pro forma results of operations for
the year ended December 31, 1998 give effect to the transactions described above
and the following as if they had been completed at the beginning of the year,
plus: (i) the acquisitions of IMAR and OSLAMT; (ii) the investment in Caterina;
and (iii) the issuance of the Preferred Securities. The unaudited pro forma
financial information does not purport to represent what the Company's results
of operations would actually have been if such transactions in fact had occurred
at such date or to project the Company's results of future operations (in
thousands, except per share data):

PRO FORMA FOR THE YEARS
ENDED DECEMBER 31,
-----------------------
1999 1998
---------- ----------

Revenues................................................... $2,363,925 $1,867,543
Net income................................................. 126,039 84,582
Basic earnings per share................................... 2.69 1.83
Diluted earnings per share................................. 2.24 1.60

F-19
122
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. LONG-TERM DEBT:

Long-term debt consisted of the following (in thousands):

DECEMBER 31,
-------------------
1999 1998
-------- --------

Revolving credit facility, due April 2003, interest at prime
or LIBOR plus a margin ranging from 17 to 50 basis points
(6.7 percent at December 31, 1999 and 5.785 percent at
December 31, 1998)........................................ $245,700 $190,000
Revolving credit facility, due April 2003, foreign currency
annex (3.80 percent at December 31, 1999 and 3.711 percent
at December 31, 1998)..................................... 75,979 67,563
Term credit facility, due in eight equal repayments
beginning September 2002 to June 2004. Interest at LIBOR
or preference rate plus margin from 0 to 200 basis points
(7.13 percent at December 31, 1999)....................... 324,210 --
Industrial development revenue bonds, due in lump sum
payments in June 2024 and March 2025, interest payable
monthly at a rate adjusted Weekly by the bond remarketing
agent (6.55 percent at December 31, 1999 and 5.58 percent
at December 31, 1998)..................................... 43,765 43,765
Convertible Edgewood notes, due May 2003, interest at 5.75
percent Payable quarterly................................. 878 1,636
Italian stand alone borrowings, due on demand, interest set
at borrowing (4.47 percent at December 31, 1998).......... -- 10,889
Other....................................................... 11,644 16,412
-------- --------
702,176 330,265
Less -- Current maturities.................................. (2,498) (13,686)
-------- --------
$699,678 $316,579
======== ========

Future maturities of long-term debt as of December 31, 1999 are as follows
(in thousands):

2000..................................................... $ 2,498
2001..................................................... --
2002..................................................... 81,053
2003..................................................... 484,662
2004..................................................... 81,053
Thereafter............................................... 52,910
--------
$702,176
========

The Company has a Credit Agreement, as defined, which includes a revolving
credit facility that provides for borrowings of up to $750 million on an
unsecured basis with a letter of credit sublimit of $75 million. In addition,
under the terms of the revolving credit facility, the equivalent of up to $85
million in borrowings can be denominated in foreign currency. As of December 31,
1999, approximately $76 million of the outstanding borrowings are denominated in
Italian lira. The amount available under the revolving credit facility reduces
to $675 million in April 2000,

F-20
123
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$600 million in April 2001 and $500 million in April 2002. The Credit Agreement
has a final maturity of April 2003. Interest on the credit facility is at the
prime rate or LIBOR plus a margin ranging from 17 to 50 basis points depending
upon the ratio of the consolidated indebtedness of the Company to its total
capitalization. The weighted average interest rate for such borrowings was 6.0
percent for the year ended December 31, 1999.

On August 23, 1999, the Company amended and restated its Credit Agreement
to include a term loan add on facility of $325 million. The weighted average
interest rate for the term loan facility was 7.4 percent for the twelve months
ending December 31, 1999. The proceeds from the term facility were used to repay
outstanding indebtedness under the revolving facility incurred in connection
with the acquisition of Active on July 29, 1999.

The Credit Agreement requires the Company to meet certain financial tests,
including but not limited to a minimum interest coverage, maximum debt/capital,
maximum leverage and maximum senior leverage ratio.

The Credit Agreement also contains certain negative covenants that
restrict, among other things, the ability of the Company to: (i) incur any liens
and other encumbrances; (ii) sell, assign, lease or transfer assets; (iii)
consolidate or merge with another person; (iv) make loan or make any investment
in any person; (v) incur any additional indebtedness; (vi) engage in
transactions with affiliates; (vii) incur any contingent obligations; (viii)
enter into any joint venture; (ix) enter into any obligations for the payment of
rent for any property under a lease or agreement to lease; declare or make any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of its capital stock, or
purchase, redeem or otherwise acquire or retire for value any subordinated
indebtedness or any shares of its capital stock; (x) engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any employee benefit plan qualified under ERISA which has resulted or could
reasonably be expected to result in liability in an aggregate amount in excess
of 10 percent of the Company's tangible net worth; and (xi) engage in any
material line of business substantially different from their existing lines of
business. As of December 31, 1999 and 1998, the Company was in compliance with
all debt covenants.

In July 1997, the Company completed the offering of $200 million of
Convertible Subordinated Notes (the "Notes"). The Notes bear interest at 5
percent, are unsecured, due on August 1, 2004 and are convertible into Common
Stock at a conversion price of $25.88 per share. The Company may make optional
redemptions of the Notes after August 1, 2000 at amounts ranging from 102.857
percent to 100.714 percent of face value. In the event of a change in control
(as defined) the holders of the Notes may require the Company to redeem the
Notes at face value plus accrued interest. Proceeds from the Notes were used to
repay outstanding indebtedness under the revolving credit facility.

In 1994 and 1995, the Company issued $25.0 million and $20.0 million,
respectively, of industrial development revenue bonds related to the
construction and equipping of a manufacturing facility in Bardstown, Kentucky.
The bonds are collateralized by letters of credit. The undisbursed proceeds from
these bonds are invested in treasury securities and reflected as restricted cash
in the accompanying consolidated balance sheets. As of December 31, 1999, there
remained no undisbursed proceeds from these bonds.

F-21
124
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES:

The income tax provision consisted of the following (in thousands):

YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
------- ------- -------

Currently payable..................................... $29,338 $16,296 $ 7,310
Deferred income tax provision......................... 45,528 37,847 24,980
------- ------- -------
Total....................................... $74,866 $54,143 $32,290
======= ======= =======

The deferred income tax provision consisted of the following (in
thousands):

YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
------- ------- -------

Depreciation lives and methods........................ $53,463 $41,305 $24,893
Accrued compensation costs............................ 902 74 (1,539)
Other reserves and accruals........................... (8,837) (3,532) 1,626
------- ------- -------
Net deferred income tax provision........... $45,528 $37,847 $24,980
======= ======= =======

A reconciliation of income taxes computed at the statutory rates to the
reported income tax provision is as follows (in thousands):

YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
------- ------- -------

Taxes at federal statutory rates...................... $65,508 $47,438 $28,339
State income taxes, net of federal benefit............ 4,940 3,692 2,227
Effect of permanent differences, primarily goodwill
amortization........................................ 4,418 3,013 1,724
------- ------- -------
Provision for income taxes.................. $74,866 $54,143 $32,290
======= ======= =======

A summary of deferred income tax assets (liabilities) is as follows (in
thousands):

DECEMBER 31,
---------------------
1999 1998
--------- ---------

Current deferred tax assets:
Accrued compensation costs................................ $ 4,709 $ 7,927
Inventory valuation adjustments........................... 2,120 2,971
Other reserves and accruals not currently deductible for
tax purposes........................................... 12,424 3,140
--------- ---------
Net current deferred tax assets................... $ 19,253 $ 14,038
========= =========
Noncurrent deferred tax assets (liabilities):
Depreciation lives and methods............................ $(145,366) $(100,984)
Postretirement benefit obligations........................ 42,153 39,429
Other reserves and accruals not currently deductible for
tax purposes........................................... 52,477 41,179
--------- ---------
Net noncurrent deferred tax liabilities........... $ (50,736) $ (20,376)
========= =========

F-22
125
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has an alternative minimum tax ("AMT") credit carryforward of
approximately $24 million which can be used to offset regular income taxes
payable in future years. The AMT credit has an indefinite carryforward period.

The Company has not recorded deferred income taxes applicable to
undistributed earnings of its foreign joint venture operations as all such
earnings are deemed to be indefinitely reinvested in those operations. If the
earnings of such joint ventures were not indefinitely reinvested, a deferred
liability would have been required which would not have been material as of
December 31, 1999 or 1998. Undistributed amounts, if remitted in the future, may
not result in additional U.S. income taxes because of the use of available
foreign tax credits at that time.

8. GEOGRAPHIC AND PRODUCT LINE INFORMATION

The Company adopted SFAS No. 131 in 1998. The Company produces a broad
range of assemblies and modules for vehicle body structures and suspension
systems for the global automotive industry and operates in a single reportable
business segment, automotive products. However, because of the similar economic
characteristics of the operations, including the nature of products, production
processes and customers, those operations have been aggregated for segment
reporting purposes.

The following is a summary of revenues and long-lived assets by geographic
location (in thousands):

YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------
1999 1998 1997
----------------------- ----------------------- -----------------------
LONG-LIVED LONG-LIVED LONG-LIVED
REVENUES ASSETS REVENUES ASSETS REVENUES ASSETS
---------- ---------- ---------- ---------- ---------- ----------

North America........ $2,042,998 $1,034,745 $1,752,149 $785,720 $1,194,196 $693,896
Other foreign
countries.......... 127,005 58,082 84,330 47,356 41,633 20,203
---------- ---------- ---------- -------- ---------- --------
$2,170,003 $1,092,827 $1,836,479 $833,076 $1,235,829 $714,099
========== ========== ========== ======== ========== ========

Revenues are attributed to geographic locations based on the location of
specific production.

The following is a summary of the approximate composition by product
category of the Company's revenues:

YEARS ENDED DECEMBER 31,
------------------------------------
1999 1998 1997
---------- ---------- ----------

Structural components........................ $1,605,040 $1,520,498 $1,080,599
Suspension components........................ 244,433 179,935 133,229
Modular assemblies........................... 208,700 136,046 22,001
Class A surfaces............................. 111,830 -- --
---------- ---------- ----------
$2,170,003 $1,836,479 $1,235,829
========== ========== ==========

F-23
126
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company sells its products directly to automotive manufacturers.
Following is a summary of customers that accounted for more than 10 percent of
consolidated revenues in any of the three years in the period ended December 31,
1999:

1999 1998 1997
---- ---- ----

Ford........................................................ 38% 40% 48%
DaimlerChrysler............................................. 29 27 19
General Motors.............................................. 10 10 13

Receivables from these customers represented 65 percent of total accounts
receivable at December 31, 1999 and 60 percent of total accounts receivable at
December 31, 1998.

9. EMPLOYEE BENEFIT PLANS:

The Company sponsors various pension and other postretirement benefit plans
for its employees. The Company has adopted SFAS No. 132 -- Employers'
Disclosures about Pensions and Other Postretirement Benefits (SFAS No. 132).
SFAS No. 132 is intended to standardize certain footnote disclosure requirements
for pensions and other retirement benefits.

Retirement Plans:

The Company contributes to a union sponsored multi-employer pension plan
providing defined benefits to certain Michigan hourly employees. Contributions
to the pension plan are based on rates set forth in the Company's union
contracts. The expense related to this plan was $0.8 million for the year ended
December 31, 1999, $0.7 million for the year ended December 31, 1998 and $0.8
million for the year ended December 31, 1997. The plan was substantially fully
funded as of the latest valuation date.

Beginning in 1999, the Company also contributes to a union sponsored
multiemployer pension plan providing defined benefits for certain hourly
employees of the Milwaukee facility. Expense relating to this plan was $1.3
million for the year ended December 31, 1999. Expense is determined based on
contractual rates with the union.

The Company also maintains a qualified profit sharing retirement plan and
401(k) employee savings plan covering certain salaried and hourly employees. The
expense related to these plans was $9.7 million during 1999, $5.1 million during
1998 and $4.3 million during 1997.

The Company sponsors a 401(k) employee savings plan covering certain union
employees. The Company matches a portion of the employee contributions made to
this plan. The expense under this plan in each of the three years in the period
ended December 31, 1999 was not material.

The Company's UAW Retirement Income Plan covers substantially all union
employees at its Kalamazoo and Bluffton facilities. The Company's Tower
Automotive Pension Plan covers substantially all of the employees at its APC
facilities. The Company's Tower Automotive UAW Local 1560 Retirement Income
Plan, Tower Automotive Sebewaing Industries, Inc. Local 111 AIW-AFL-CIO, Tower
Automotive Active and Affiliates Employees Retirement Income Plan, and the Tower
Automotive United Paperworkers International Union Local 7628, covers
substantially all of the employees at its Active facilities. The Tower
Automotive UAW Local 1560 Retirement Income Plan and the Tower Automotive Active
and Affiliates Plan was merged with the Tower Automotive Pension Plan at
December 31,1999. Benefits under the plans are based on years of services.
Contributions by the Company are intended to provide not only for benefits
attributed to

F-24
127
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

service to date, but also for those benefits expected to be earned in the
future. The Company's funding policy is to contribute annually the amounts
sufficient to meet the higher of the minimum funding requirements set forth in
the Employee Retirement Income Security Act of 1974 or the minimum funding
requirements under the Company's union contracts.

The following tables provide a reconciliation of the changes in the benefit
obligations and fair value of assets for the defined benefit pension plans (in
thousands):

Reconciliation of fair value of plan assets

1999 1998
------- ------

Fair value of plan assets at the beginning of the year...... $ 9,096 $3,502
Actual return on plan assets................................ 3,571 1,143
Acquisitions................................................ 41,837 --
Employer contributions...................................... 15,487 4,712
Benefits paid............................................... (1,725) (261)
------- ------
Fair value of plan assets at the end of the
year............................................ $68,266 $9,096
======= ======

Change in Benefit Obligations

1999 1998
------- -------

Benefit obligations at the beginning of the year............ $37,794 $ 8,376
Service cost................................................ 11,350 6,899
Interest cost............................................... 4,702 1,065
Plan amendments............................................. 7,141 18,786
Actuarial (gains) losses.................................... (7,647) 2,928
Acquisitions................................................ 47,667 --
Benefits paid............................................... (1,725) (261)
------- -------
Benefit obligations at the end of the year........ $99,282 $37,793
======= =======

Funded Status Reconciliation

1999 1998
-------- --------

Funded status............................................... $(31,016) $(28,697)
Unrecognized transition asset............................... (129) (160)
Unrecognized prior service cost............................. 24,584 19,345
Unrecognized actuarial (gains) losses....................... (6,579) 1,861
-------- --------
Net amount recognized............................. $(13,140) $ (7,651)
======== ========

Amounts recognized in the balance sheet as of each year end

1999 1998
-------- --------

Prepaid benefit cost........................................ $ 125 $ 264
Accrued benefit liability................................... (30,093) (26,585)
Intangible asset............................................ 16,828 18,670
-------- --------
Net amount recognized............................. $(13,140) $ (7,651)
======== ========

The Tower Automotive Pension Plan was the only pension plan with an
accumulated benefit obligation in excess of plan assets. The plan's accumulated
benefit obligation was $61.2 million at December 31, 1999 and $31.5 million at
December 31, 1998. The fair value of the assets was

F-25
128
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$41.3 million at December 31, 1999 and $4.9 million at December 31, 1998. The
Plan was amended effective October 21, 1998 to reflect certain benefit level
changes negotiated in connection with the Smith Steel Workers Union contract.
The effect of the change on the pension benefit obligation is an increase of
$18.7 million of unrecognized prior service cost. The unrecognized prior service
cost will be amortized into expense over the remaining working lifetime of the
participants affected.

Benefits for certain of the employees covered by the Tower Automotive
Pension Plan were frozen as of July 1, 1999. The frozen benefits were accounted
for as a curtailment under the provisions of FAS 88, which resulted in a
remeasurement of net periodic benefit cost for the period ending December 31,
1999.

The following table provides the components of net periodic benefit cost
for the plans for the years ended December 31, 1999, 1998 and 1997 (in
thousands):

1999 1998 1997
------- ------ ------

Service cost............................................ $11,350 $6,899 $4,757
Interest cost........................................... 4,702 1,065 250
Expected return on plan assets.......................... (2,980) (263) (237)
Amortization of transition asset........................ (31) (31) (31)
Amortization of prior-service cost...................... 1,902 393 69
Amortization of net (gains) losses...................... 202 (1) (2)
------- ------ ------
Net periodic benefit cost..................... $15,145 $8,062 $4,806
======= ====== ======

The assumptions used in the measurement of the Company's benefit obligation
are as follows:

1999 1998
---- ----

Weighted-average assumptions of each year end:
Discount rate............................................. 8.1% 7.0%
Expected return on plan assets............................ 9.5% 8.0%
Rate of compensation increase............................. 4.5% 4.5%

Postretirement Plans

The Company provides certain medical insurance benefits for retired
employees. Certain employees of the Company are eligible for these benefits if
they remain employed until age 55 or 59 and fulfill other eligibility
requirements specified by the plans. Certain retirees between the ages of 55 and
62 must contribute 100 percent of the group rate for active employees. No
contributions are required for retirees 62 or older. Benefits are continued for
dependents of eligible retiree participants after the death of the retiree.

F-26
129
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables provide a reconciliation of the changes in the benefit
obligations and fair value of assets for the retiree medical plans, (in
thousands):

Reconciliation of fair value of plan assets

1999 1998
------- -------

Fair value of plan assets at the beginning of the year...... $ -- $ --
Employer contributions...................................... 9,834 7,564
Benefits paid............................................... (9,834) (7,564)
------- -------
Fair value of plan assets at the end of the
year............................................ $ -- $ --
======= =======

Change in Benefit Obligations

1999 1998
-------- --------

Benefit obligations at the beginning of the year............ $104,735 $ 95,466
Service cost................................................ 1,511 1,609
Interest cost............................................... 8,023 6,963
Actuarial losses............................................ 6,703 8,261
Acquisitions................................................ 6,212 --
Benefits paid............................................... (9,834) (7,564)
-------- --------
Benefit obligations at the end of the year........ $117,351 $104,735
======== ========

Funded Status Reconciliation

1999 1998
--------- ---------

Funded status............................................... $(117,351) $(104,735)
Unrecognized actuarial losses............................... 12,287 6,110
--------- ---------
Net amount recognized............................. $(105,064) $ (98,625)
========= =========

Amounts recognized in the balance sheet as of each year end

1999 1998
--------- --------

Accrued benefit liability................................... $(105,064) $(98,625)
========= ========

The following table provides the components of net periodic benefit cost
for the plans for years ended December 31, 1999, 1998 and 1997 (in thousands):

1999 1998 1997
------- ------ ------

Service cost............................................ $ 1,511 $1,609 $1,178
Interest cost........................................... 8,023 6,963 4,876
Amortization of net (gain) loss......................... 477 (81) (132)
------- ------ ------
Net periodic benefit cost............................... $10,011 $8,491 $5,922
======= ====== ======

The discount rate used to measure the Company's post retirement medical
benefit obligation was 8.1 percent in 1999 and 7.0 percent in 1998.

For measurement purposes, an 8.0 percent annual rate of increase in per
capita cost of covered health care benefits was assumed for 1999. The rate was
assumed to decrease gradually to 5.5 percent for 2005 and remain at that level
thereafter.

F-27
130
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Assumed health care cost trend rates have a significant effect on the
amounts reported for the post retirement medical plans. A one percent change in
assumed health care costs trend rates would have the following effects:

1% 1%
INCREASE DECREASE
-------- --------

Effect on total service and interest cost components........ $ 371 $ (304)
====== =======
Effect on the accumulated benefit obligation................ $4,389 $(3,854)
====== =======

10. COMMITMENTS

Leases

The Company leases office and manufacturing space and certain equipment
under lease agreements which require it to pay maintenance, insurance, taxes and
other expenses in addition to annual rentals. Future annual rental commitments
at December 31, 1999 under these leases are as follows (in thousands):

YEAR OPERATING CAPITAL
---- --------- -------

2000........................................................ $14,040 $12,240
2001........................................................ 13,795 8,025
2002........................................................ 12,372 8,291
2003........................................................ 6,699 9,124
2004........................................................ 10,922 --
Thereafter.................................................. 41,439 --
------- -------
Total minimum lease payments................................ $99,267 37,680
=======
Less-amount representing interest........................... 4,759
-------
Present value of minimum lease Payments..................... $32,921
=======

Total rent expense for all operating leases totaled $15.0 million, $19.0
million and $20.7 million in 1999, 1998 and 1997, respectively.

Rent commitments associated with acquired facilities which will not be
utilized by the Company have been excluded from the above amounts and were
provided for in the recording of the related acquisition, as discussed in Note
5.

Litigation

The Company is party to certain claims arising in the ordinary course of
business. In the opinion of management, based upon the advice of legal counsel,
the outcomes of such claims are not expected to be material to the Company's
financial position and statements of operations.

11. RELATED PARTY TRANSACTIONS

The Company has made payments to Hidden Creek Industries, an affiliate of
the Company, for certain acquisition related and other management services
totaling $3.1 million during 1999, $2.9 million during 1998 and $3.3 million
during 1997.

F-28
131
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. EVENT SUBSEQUENT TO YEAR-END (UNAUDITED)

During the first quarter of 2000, the Company acquired all of the
outstanding shares of Dr. Meleghy GmbH & Co. KG Werkzeugbau und Presswerk,
Bergisch Gladbach ("Dr. Meleghy") for approximately $86.4 million. Dr. Meleghy
designs and produces structural stampings, assemblies, exposed surface panels
and modules to the European automotive industry. Dr. Meleghy also designs and
manufactures tools and dies for use in their production and for the external
market. Dr. Meleghy operates three facilities in Germany and one facility in
both Hungary and Poland. Dr. Meleghy's main customers include DaimlerChrysler,
Audi, Volkswagen, Ford, Opel, and BMW. Products offered by Dr. Meleghy include
body side panels, floor pans assemblies, and miscellaneous structural stampings.
The Company may pay an additional $38 million if certain operating targets are
met. The acquisition was financed under the Company's revolving credit facility.

On July 25, 2000, the Company issued Euro-denominated senior unsecured
notes in the amount of 150 million. The notes bear interest at a rate of 9.25%,
payable semi-annually. The notes rank equally with all of the Company's other
unsecured and unsubordinated debt. The proceeds of this offering will be used to
repay existing indebtedness. The net proceeds after issuance costs were used to
repay a portion of the Company's existing Euro-denominated indebtedness under
its existing credit facility. The notes mature on August 1, 2010.

On July 25, 2000, the Company replaced its existing $675 million credit
agreement with a new six-year $1.15 billion senior unsecured credit agreement.
The new credit agreement includes a non-amortizing revolving facility of $825
million along with an amortizing term loan of $325 million. The new facility
also includes a multi-currency borrowing feature that allows the Company to
borrow up to $500 million in certain freely tradeable offshore currencies, and
letter of credit sublimits of $100 million. Interest on the new credit facility
is at the prime rate or the Eurodollar rate plus a margin ranging from 0 to 200
basis points depending on the ratio of the consolidated funded debt of the
Company to its total EBITDA. The new credit agreement has a final maturity of
2006.

13. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a condensed summary of quarterly results of operations for
1999 and 1998. The sum of the per share amounts for the quarters do not equal
the total for the years due to the effects of rounding (in thousands except per
share amounts):

BASIC DILUTED
GROSS OPERATING NET EARNINGS EARNINGS
REVENUES PROFIT INCOME INCOME PER SHARE PER SHARE
---------- -------- --------- -------- --------- ---------

1999:
First.............. $ 498,572 $ 79,447 $ 53,577 $ 28,076 $0.60 $0.51
Second............. 530,680 87,029 58,704 32,628 0.69 0.58
Third.............. 536,152 82,301 48,468 23,741 0.50 0.44
Fourth............. 604,599 98,123 64,398 32,643 0.70 0.58
---------- -------- -------- -------- ----- -----
$2,170,003 $346,900 $225,147 $117,088 $2.50 $2.10
========== ======== ======== ======== ===== =====
1998:
First.............. $ 457,129 $ 63,189 $ 38,785 $ 18,820 $0.41 $0.37
Second............. 465,874 70,854 46,720 23,746 0.51 0.46
Third.............. 444,851 66,989 39,525 18,266 0.40 0.36
Fourth............. 468,625 73,280 50,641 27,208 0.59 0.50
---------- -------- -------- -------- ----- -----
$1,836,479 $274,312 $175,671 $ 88,040 $1.91 $1.68
========== ======== ======== ======== ===== =====

F-29
132
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS

The following consolidating financial information presents balance sheet,
statement of operations and cash flow information related to the Company's
business. Each Guarantor, as defined, is a direct or indirect wholly owned
subsidiary of the Company and has fully and unconditionally guaranteed the 9.25%
senior unsecured notes issued by R. J. Tower Corporation, on a joint and several
basis. Tower Automotive, Inc. (the Parent Company) has also fully and
unconditionally guaranteed the notes and is reflected as a Guarantor in the
consolidating financial information. The Non-Guarantors are the Company's
foreign subsidiaries. Separate financial statements and other disclosures
concerning the Guarantors have not been presented because management believes
that such information is not material to investors.

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues........................... $ 47,951 $1,126,484 $61,394 $ -- $1,235,829
Cost of sales...................... 36,616 966,255 55,849 -- 1,058,720
-------- ---------- ------- -------- ----------
Gross profit..................... 11,335 160,229 5,545 -- 177,109
Selling, general and administrative
expenses......................... 3,946 51,795 2,128 -- 57,869
Amortization expense............... 1,662 7,402 473 -- 9,537
-------- ---------- ------- -------- ----------
Operating income................. 5,727 101,032 2,944 -- 109,703
Interest expense, net.............. 23,702 2,775 2,485 -- 28,962
-------- ---------- ------- -------- ----------
Income before provision for
income taxes.................. (17,975) 98,257 459 -- 80,741
Provision for income taxes......... (7,190) 39,296 184 -- 32,290
-------- ---------- ------- -------- ----------
Income before equity in earnings
of joint ventures and minority
interest...................... (10,785) 58,961 275 -- 48,451
Equity in earnings of joint
ventures and subsidiaries........ 59,463 -- -- (59,236) 227
Minority interest -- dividends on
trust preferred, net............. -- -- -- -- --
-------- ---------- ------- -------- ----------
Income before extraordinary
item.......................... 48,678 58,961 275 (59,236) 48,678
Extraordinary loss on early
extinguishment of debt, net...... 2,434 -- -- -- 2,434
-------- ---------- ------- -------- ----------
Net income....................... $ 46,244 $ 58,961 $ 275 $(59,236) $ 46,244
======== ========== ======= ======== ==========

F-30
133

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

OPERATING ACTIVITIES:
Net income....................... $ 46,244 $ 58,961 $ 275 $(59,236) $ 46,244
Adjustments required to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation and
amortization................ 4,556 41,748 1,662 -- 47,966
Deferred income tax
provision................... 24,980 -- -- -- 24,980
Extraordinary loss on
extinguishment of debt...... 2,434 -- -- -- 2,434
Changes in other operating
items....................... (419,795) 393,966 5,109 -- (20,720)
---------- --------- -------- -------- -----------
Net cash provided by (used
in) operating
activities................ (341,581) 494,675 7,046 (59,236) 100,904
---------- --------- -------- -------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net........ (42,754) (68,479) (6,146) -- (117,379)
Acquisitions and other, net...... (289,101) (617,651) (44,985) 59,236 (892,501)
Change in restricted cash........ 2,931 -- -- -- 2,931
---------- --------- -------- -------- -----------
Net cash provided by (used
in) investing
activities................ (328,924) (686,130) (51,131) 59,236 (1,006,949)
---------- --------- -------- -------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings......... 1,064,348 -- 57,696 -- 1,122,044
Repayments of debt............... (722,741) (4,152) (6,298) -- (733,191)
Net proceeds from the issuance of
common stock................... 285,457 -- -- -- 285,457
Net proceeds from the issuance of
convertible debt, net.......... -- 194,892 -- -- 194,892
Cash portion of extraordinary
loss on extinguishment of
debt........................... (3,010) -- -- -- (3,010)
Other, net....................... 235 -- 22 -- 257
---------- --------- -------- -------- -----------
Net cash provided by
financing activities...... 624,289 190,740 51,420 -- 866,449
---------- --------- -------- -------- -----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS.................... (46,216) (715) 7,335 -- (39,596)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD............ 38,862 734 -- -- 39,596
---------- --------- -------- -------- -----------
CASH AND CASH EQUIVALENTS, END OF
PERIOD......................... $ (7,354) $ 19 $ 7,335 $ -- $ --
========== ========= ======== ======== ===========

F-31
134

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING BALANCE SHEETS AT DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

ASSETS
Current assets:
Cash and cash equivalents......... $ 685 $ (77) $ 2,826 $ -- $ 3,434
Accounts receivable, net.......... 12,979 173,493 53,416 -- 239,888
Inventories, net.................. 3,813 63,397 9,703 -- 76,913
Prepaid tooling and other......... 22,072 78,424 15,363 -- 115,859
--------- ---------- -------- --------- ----------
Total current assets......... 39,549 315,237 81,308 -- 436,094
--------- ---------- -------- --------- ----------
Property, plant and equipment,
net............................... 22,627 753,740 45,506 -- 821,873
Investments in joint ventures....... 209,625 -- -- -- 209,625
Investment in subsidiaries.......... 292,641 -- -- (292,641) --
Goodwill and other assets, net...... 29,240 405,794 33,541 -- 468,575
--------- ---------- -------- --------- ----------
$ 593,682 $1,474,771 $160,355 $(292,641) $1,936,167
========= ========== ======== ========= ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations..................... $ 11 $ 16,115 $ 2,065 $ -- $ 18,191
Accounts payable.................. 19,568 139,367 55,259 -- 214,194
Accrued liabilities............... (39,672) 127,584 8,861 -- 96,773
--------- ---------- -------- --------- ----------
Total current liabilities.... (20,093) 283,066 66,185 -- 329,158
--------- ---------- -------- --------- ----------
Long-term debt, net of current
maturities........................ 191,665 34,630 90,284 -- 316,579
Obligations under capital leases,
net of current maturities......... -- 25,770 -- -- 25,770
Convertible subordinated notes...... -- 200,000 -- -- 200,000
Due to/(from) affiliates............ (208,821) 226,745 (17,924) -- --
Deferred income taxes............... 15,298 -- 5,078 -- 20,376
Other noncurrent liabilities........ 9,265 164,807 4,666 -- 178,738
--------- ---------- -------- --------- ----------
Total noncurrent
liabilities................ 7,407 651,952 82,104 -- 741,463
--------- ---------- -------- --------- ----------
Mandatorily redeemable trust
convertible preferred
securities........................ -- 258,750 -- -- 258,750
Stockholders' investment............ 606,368 281,003 11,638 (292,641) 606,368
Accumulated other comprehensive
income (loss) -- cumulative
translation adjustment............ -- -- 428 -- 428
--------- ---------- -------- --------- ----------
Total stockholders'
investment................. 606,368 281,003 12,066 (292,641) 606,796
--------- ---------- -------- --------- ----------
$ 593,682 $1,474,771 $160,355 $(292,641) $1,936,167
========= ========== ======== ========= ==========

F-32
135

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues............................ $ 65,060 $1,554,094 $217,325 $ -- $1,836,479
Cost of sales....................... 45,976 1,313,110 203,081 -- 1,562,167
-------- ---------- -------- -------- ----------
Gross profit...................... 19,084 240,984 14,244 -- 274,312
Selling, general and administrative
expenses.......................... 14,133 67,112 3,924 -- 85,169
Amortization expense................ 3,155 9,543 774 -- 13,472
-------- ---------- -------- -------- ----------
Operating income.................. 1,796 164,329 9,546 -- 175,671
Interest expense, net............... 27,936 8,295 4,087 -- 40,318
-------- ---------- -------- -------- ----------
Income before provision for income
taxes.......................... (26,140) 156,034 5,459 -- 135,353
Provision for income taxes.......... (10,456) 62,415 2,184 -- 54,143
-------- ---------- -------- -------- ----------
Income before equity in earnings
of joint ventures and minority
interest....................... (15,684) 93,619 3,275 -- 81,210
Equity in earnings of joint ventures
and subsidiaries.................. 103,724 -- -- (91,016) 12,708
Minority interest -- dividends on
trust preferred, net.............. -- (5,878) -- -- (5,878)
-------- ---------- -------- -------- ----------
Income before extraordinary
item........................... 88,040 87,741 3,275 (91,016) 88,040
Extraordinary loss on early
extinguishment of debt, net....... -- -- -- -- --
-------- ---------- -------- -------- ----------
Net income........................ $ 88,040 $ 87,741 $ 3,275 $(91,016) $ 88,040
======== ========== ======== ======== ==========

F-33
136

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

OPERATING ACTIVITIES:
Net income...................... $ 88,040 $ 87,741 $ 3,275 $(91,016) $ 88,040
Adjustments required to
reconcile net income to net
cash provided by (used in)
operating activities:
Depreciation and
amortization............... 5,400 77,052 4,920 -- 87,372
Deferred income tax
provision.................. 32,769 -- 5,078 -- 37,847
Changes in other operating
items...................... 225,933 (203,803) (14,291) -- 7,839
----------- --------- -------- -------- -----------
Net cash provided by (used
in) operating
activities............... 352,142 (39,010) (1,018) (91,016) 221,098
----------- --------- -------- -------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net....... 29,317 (210,578) (3,877) -- (185,138)
Acquisitions and other, net..... (159,192) (30,284) (25,916) 91,016 (124,376)
Net proceeds from the sale of
Hinge Business................ -- 36,888 -- -- 36,888
Change in restricted cash....... 5,225 -- -- -- 5,225
----------- --------- -------- -------- -----------
Net cash provided by (used
in) investing
activities............... (124,650) (203,974) (29,793) 91,016 (267,401)
----------- --------- -------- -------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings........ 1,184,500 36 60,629 -- 1,245,165
Repayments of debt.............. (1,406,836) (6,861) (34,733) -- (1,448,430)
Net proceeds from the issuance
of common stock............... 2,883 -- -- -- 2,883
Net proceeds from the issuance
of preferred securities,
net........................... -- 249,713 -- -- 249,713
Other, net...................... -- -- 406 -- 406
----------- --------- -------- -------- -----------
Net cash provided by (used
in) financing
activities............... (219,453) 242,888 26,302 -- 49,737
----------- --------- -------- -------- -----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS................... 8,039 (96) (4,509) -- 3,434
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD........... (7,354) 19 7,335 -- --
----------- --------- -------- -------- -----------
CASH AND CASH EQUIVALENTS, END
OF PERIOD..................... $ 685 $ (77) $ 2,826 $ -- $ 3,434
=========== ========= ======== ======== ===========

F-34
137

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING BALANCE SHEETS AT DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

ASSETS
Current assets:
Cash and cash equivalents.......... $ 2,312 $ 484 $ 821 $ -- $ 3,617
Accounts receivable, net........... 8,279 280,543 64,529 -- 353,351
Inventories, net................... 2,580 99,454 8,863 -- 110,897
Prepaid tooling and other.......... 21,539 53,877 14,775 -- 90,191
--------- ---------- -------- --------- ----------
Total current assets.......... 34,710 434,358 88,988 -- 558,056
--------- ---------- -------- --------- ----------
Property, plant and equipment, net... 24,426 1,001,033 50,402 -- 1,075,861
Investments in joint ventures........ 260,705 30,000 -- -- 290,705
Investment in subsidiaries........... 415,247 -- -- (415,247) --
Goodwill and other assets, net....... 25,469 551,406 51,053 -- 627,928
--------- ---------- -------- --------- ----------
$ 760,557 $2,016,797 $190,443 $(415,247) $2,552,550
========= ========== ======== ========= ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations...................... $ 11 $ 12,098 $ 1,767 -- $ 13,876
Accounts payable................... 7,889 198,281 70,503 -- 276,673
Accrued liabilities................ (45,601) 177,782 8,386 -- 140,567
--------- ---------- -------- --------- ----------
Total current liabilities..... (37,701) 388,161 80,656 -- 431,116
--------- ---------- -------- --------- ----------
Long-term debt, net of current
maturities......................... 553,513 42,881 103,284 -- 699,678
Obligations under capital leases, net
of current maturities.............. -- 21,543 -- -- 21,543
Convertible subordinated notes....... -- 200,000 -- -- 200,000
Due to/(from) affiliates............. (531,960) 554,153 (22,193) -- --
Deferred income taxes................ 48,189 -- 2,547 -- 50,736
Other noncurrent liabilities......... 534 153,528 9,530 -- 163,592
--------- ---------- -------- --------- ----------
Total noncurrent
liabilities................. 70,276 972,105 93,168 -- 1,135,549
--------- ---------- -------- --------- ----------
Mandatorily redeemable trust
convertible preferred securities... -- 258,750 -- -- 258,750
Stockholders' investment............. 729,717 397,781 17,466 (415,247) 729,717
Accumulated other comprehensive
income (loss) -- cumulative
translation adjustment............. (1,735) -- (847) -- (2,582)
--------- ---------- -------- --------- ----------
Total stockholders'
investment.................. 727,982 397,781 16,619 (415,247) 727,135
--------- ---------- -------- --------- ----------
$ 760,557 $2,016,797 $190,443 $(415,247) $2,552,550
========= ========== ======== ========= ==========

F-35
138

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues............................ $ 79,265 $1,814,273 $276,465 $ -- $2,170,003
Cost of sales....................... 74,401 1,492,879 255,823 1,823,103
-------- ---------- -------- --------- ----------
Gross profit...................... 4,864 321,394 20,642 -- 346,900
Selling, general and administrative
expenses.......................... 6,398 93,370 6,182 -- 105,950
Amortization expense................ 3,075 11,335 1,393 -- 15,803
-------- ---------- -------- --------- ----------
Operating income (loss)........... (4,609) 216,689 13,067 -- 225,147
Interest expense, net............... 30,115 4,512 3,354 -- 37,981
-------- ---------- -------- --------- ----------
Income (loss) before provision for
income taxes................... (34,724) 212,177 9,713 -- 187,166
Provision (benefit) for income
taxes............................. (13,890) 84,871 3,885 -- 74,866
-------- ---------- -------- --------- ----------
Income (loss) before equity in
earnings of joint ventures and
minority interest.............. (20,834) 127,306 5,828 -- 112,300
Equity in earnings of joint ventures
and subsidiaries.................. 137,922 -- -- (122,654) 15,268
Minority interest -- dividends on
trust preferred, net.............. -- (10,480) -- -- (10,480)
-------- ---------- -------- --------- ----------
Net income........................ $117,088 $ 116,826 $ 5,828 $(122,654) $ 117,088
======== ========== ======== ========= ==========

F-36
139

14. GUARANTOR/NON-GUARANTOR FINANCIAL STATEMENTS -- (CONTINUED)
TOWER AUTOMOTIVE, INC.

CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

OPERATING ACTIVITIES:
Net income......................... $ 117,088 $ 116,826 $ 5,828 $(122,654) $ 117,088
Adjustments required to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation and amortization.... 6,614 97,917 7,080 -- 111,611
Deferred income tax provision.... 34,894 13,208 (2,574) -- 45,528
Changes in other operating
items.......................... (346,604) 297,991 1,657 -- (46,956)
----------- --------- -------- --------- -----------
Net cash provided by (used in)
operating activities........ (188,008) 525,942 11,991 (122,654) 227,271
----------- --------- -------- --------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net.......... (5,338) (192,835) 858 -- (197,315)
Acquisitions and other, net........ (174,943) (331,760) (20,475) 122,654 (404,524)
Change in restricted cash.......... 2,677 -- -- -- 2,677
----------- --------- -------- --------- -----------
Net cash used in investing
activities.................. (177,604) (524,595) (19,617) 122,654 (599,162)
----------- --------- -------- --------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings........... 2,168,000 6,632 34,035 -- 2,208,667
Repayments of debt................. (1,805,397) (7,418) (28,414) -- (1,841,229)
Net proceeds from the issuance of
common stock..................... 4,636 -- -- -- 4,636
----------- --------- -------- --------- -----------
Net cash provided by (used for)
financing activities........ 367,239 (786) 5,621 -- 372,074
----------- --------- -------- --------- -----------
NET CHANGE IN CASH AND CASH
EQUIVALENTS...................... 1,627 561 (2,005) -- 183
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD.............. 685 (77) 2,826 -- 3,434
----------- --------- -------- --------- -----------
CASH AND CASH EQUIVALENTS, END OF
PERIOD........................... $ 2,312 $ 484 $ 821 $ -- $ 3,617
=========== ========= ======== ========= ===========

F-37
140

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)

SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)

ASSETS

Current assets:
Cash and cash equivalents................................. $ 1,404 $ 3,617
Accounts receivable, net.................................. 347,272 353,351
Inventories, net.......................................... 116,506 110,897
Prepaid tooling and other................................. 107,353 90,191
---------- ----------
Total current assets.............................. 572,535 558,056
---------- ----------
Property, plant and equipment, net.......................... 1,213,065 1,075,861
Investments in joint ventures............................... 309,081 290,705
Goodwill and other assets, net.............................. 814,945 627,928
---------- ----------
$2,909,626 $2,552,550
========== ==========

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:
Current maturities of long-term debt and capital lease
obligations............................................ $ 20,660 $ 13,876
Accounts payable.......................................... 235,110 276,673
Accrued liabilities....................................... 129,396 140,567
---------- ----------
Total current liabilities......................... 385,166 431,116
---------- ----------
Long-term debt, net of current maturities................... 975,405 699,678
Obligations under capital leases, net of current
maturities................................................ 17,437 21,543
Convertible subordinated notes.............................. 200,000 200,000
Deferred income taxes....................................... 67,525 50,736
Other noncurrent liabilities................................ 180,325 163,592
---------- ----------
Total noncurrent liabilities...................... 1,440,692 1,135,549
---------- ----------
Mandatorily redeemable trust convertible preferred
securities................................................ 258,750 258,750
---------- ----------
Stockholders' investment:
Preferred stock........................................... -- --
Common stock.............................................. 475 469
Additional paid-in capital................................ 452,403 437,210
Retained earnings......................................... 377,903 294,522
Warrants to acquire common stock.......................... -- 2,000
Deferred income stock plan................................ (8,942) (4,484)
Accumulated other comprehensive income
(loss) -- cumulative translation adjustment............ 3,179 (2,582)
---------- ----------
Total stockholders' investment.................... 825,018 727,135
---------- ----------
$2,909,626 $2,552,550
========== ==========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

F-38
141

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS -- UNAUDITED)

THREE MONTHS ENDED
SEPTEMBER 30,
----------------------
2000 1999
-------- --------

Revenues.................................................... $536,210 $536,152
Cost of sales............................................... 471,482 453,851
-------- --------
Gross profit.............................................. 64,728 82,301
Selling, general and administrative expenses................ 31,535 29,382
Amortization expense........................................ 5,576 4,451
-------- --------
Operating income.......................................... 27,617 48,468
Interest expense, net....................................... 16,405 10,642
-------- --------
Income before provision for income taxes.................. 11,212 37,826
Provision for income taxes.................................. 4,484 15,130
-------- --------
Income before equity in earnings of joint ventures and
minority interest...................................... 6,728 22,696
Equity in earnings of joint ventures........................ 5,844 3,664
Minority interest -- dividends on trust preferred, net...... (2,619) (2,619)
-------- --------
Income before extraordinary item.......................... 9,953 23,741
Extraordinary loss on early extinguishments of debt, net.... 2,988 --
-------- --------
Net income................................................ $ 6,965 $ 23,741
======== ========
Basic earnings per share (Note 3):
Income before extraordinary loss.......................... $ 0.21 $ 0.50
Extraordinary loss........................................ (0.06) --
-------- --------
Net income............................................. $ 0.15 $ 0.50
======== ========
Diluted earnings per share (Note 3):
Income before extraordinary loss.......................... $ 0.21 $ 0.44
Extraordinary loss........................................ (0.06) --
-------- --------
Net income............................................. $ 0.15 $ 0.44
======== ========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

F-39
142

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS -- UNAUDITED)

NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2000 1999
---------- ----------

Revenues.................................................... $1,902,594 $1,565,404
Cost of sales............................................... 1,611,773 1,316,627
---------- ----------
Gross profit.............................................. 290,821 248,777
Selling, general and administrative expenses................ 99,622 76,386
Amortization expense........................................ 15,793 11,642
---------- ----------
Operating income.......................................... 175,406 160,749
Interest expense, net....................................... 43,136 25,171
---------- ----------
Income before provision for income taxes.................. 132,270 135,578
Provision for income taxes.................................. 52,908 54,231
---------- ----------
Income before equity in earnings of joint ventures and
minority interest...................................... 79,362 81,347
Equity in earnings of joint ventures........................ 14,864 10,959
Minority interest -- dividends on trust preferred, net...... (7,857) (7,861)
---------- ----------
Income before extraordinary item.......................... 86,369 84,445
Extraordinary loss on early extinguishments of debt, net.... 2,988 --
---------- ----------
Net income................................................ $ 83,381 $ 84,445
========== ==========
Basic earnings per share (Note 3):
Income before extraordinary item.......................... $ 1.81 $ 1.80
Extraordinary loss........................................ (0.06) --
---------- ----------
Net income............................................. $ 1.75 $ 1.80
========== ==========
Diluted earnings per share (Note 3):
Income before extraordinary item.......................... $ 1.54 $ 1.52
Extraordinary loss........................................ (0.05) --
---------- ----------
Net income............................................. $ 1.49 $ 1.52
========== ==========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

F-40
143

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS -- UNAUDITED)

NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
2000 1999
----------- -----------

OPERATING ACTIVITIES:
Net income................................................ $ 83,381 $ 84,445
Adjustments to reconcile net income to net cash provided
by operating activities --
Depreciation and amortization........................ 112,790 80,665
Deferred income tax provision........................ 14,516 --
Extraordinary loss on extinguishments of debt........ 2,988 --
Changes in other operating items..................... (76,457) (65,395)
----------- -----------
Net cash provided by operating activities............ 137,218 99,715
----------- -----------
INVESTING ACTIVITIES:
Acquisitions and investment in joint venture.............. (232,651) (331,767)
Capital expenditures, net................................. (157,547) (160,299)
Change in restricted cash................................. -- 2,677
----------- -----------
Net cash used in investing activities................ (390,198) (489,389)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings.................................. 2,729,055 1,647,118
Repayment of debt......................................... (2,484,282) (1,269,190)
Proceeds from issuance of stock........................... 5,994 9,379
----------- -----------
Net cash provided by financing activities............ 250,767 387,307
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS..................... (2,213) (2,367)
CASH AND CASH EQUIVALENTS:
Beginning of period....................................... 3,617 3,434
----------- -----------
End of period............................................. $ 1,404 $ 1,067
=========== ===========
NON-CASH FINANCING ACTIVITIES:
Deferred Income Stock Plan................................ $ 4,458 $ 4,484
=========== ===========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

F-41
144

TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. The accompanying condensed consolidated financial statements have been
prepared by Tower Automotive, Inc. (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. The
information furnished in the condensed consolidated financial statements
includes normal recurring adjustments and reflects all adjustments which are, in
the opinion of management, necessary for a fair presentation of such financial
statements. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
condensed consolidated financial statements be read in conjunction with the
audited financial statements and the notes thereto included in the Company's
1999 Annual Report Form and 10-K for the year ended December 31, 1999.

Revenues and operating results for the three and nine months ended
September 30, 2000 are not necessarily indicative of the results to be expected
for the full year.

2. Inventories consisted of the following (in thousands):

SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------

Raw materials............................................ $ 42,621 $ 47,231
Work in process.......................................... 42,042 34,143
Finished goods........................................... 31,843 29,523
-------- --------
$116,506 $110,897
======== ========

3. Basic earnings per share were computed by dividing net income by the
weighted average number of common shares outstanding during the respective
quarters. Diluted earnings per share would be determined on the assumptions: (i)
the Edgewood notes were converted at the beginning of the respective periods,
(ii) the Convertible Subordinated Notes were converted at the beginning of the
respective periods, and (iii) the Preferred Securities were converted at the
beginning of the respective periods (in thousands, except per share data);
however, the convertible subordinated notes and preferred securities were not
included in the computation of diluted earnings per share for the three months
ended September 30, 2000, as their inclusion would have had an anti-dilutive
effect on earnings per share.

F-42
145
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
2000 1999 2000 1999
------- ------- ------- -------

Net income...................................... $ 6,965 $23,741 $83,381 $84,445
Interest expense on Edgewood notes, net of
tax........................................... 7 9 23 28
Interest expense on Convertible Subordinated
Notes, net of tax............................. -- 1,627 4,879 4,881
Dividends on Preferred Securities, net of tax... -- 2,619 7,857 7,861
------- ------- ------- -------
Net income applicable to common stockholders --
diluted....................................... $ 6,972 $27,996 $96,140 $97,215
======= ======= ======= =======
Weighted average number of common shares
outstanding................................... 47,986 47,081 47,649 46,871
Dilutive effect of outstanding stock options and
warrants after application of the treasury
stock
method........................................ 136 569 193 647
Dilutive effect of Edgewood notes, assuming
conversion.................................... 289 296 289 339
Dilutive effect of Convertible Subordinated
Notes,
assuming conversion........................... -- 7,728 7,728 7,728
Dilutive effect of Preferred Securities,
assuming
conversion.................................... -- 8,425 8,425 8,425
------- ------- ------- -------
Diluted shares outstanding...................... 48,411 64,099 64,284 64,010
======= ======= ======= =======
Basic earnings per share........................ $ 0.15 $ 0.50 $ 1.75 $ 1.80
======= ======= ======= =======
Diluted earnings per share...................... $ 0.15 $ 0.44 $ 1.49 $ 1.52
======= ======= ======= =======

4. Long-term debt consisted of the following (in thousands):

SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------

Revolving credit facility................................... $427,938 $321,679
Term credit facility........................................ 325,000 324,210
Euro bonds.................................................. 132,555 --
Industrial development revenue bonds........................ 43,765 43,765
Edgewood notes.............................................. 878 878
Other....................................................... 60,993 11,644
-------- --------
991,129 702,176
Less-current maturities..................................... (15,724) (2,498)
-------- --------
Total long-term debt................................... $975,405 $699,678
======== ========

On July 25, 2000, the Company replaced its existing $675 million revolving
credit agreement and its $325 million term loan with a new six-year $1.15
billion senior unsecured credit agreement. The new credit agreement includes a
non-amortizing revolving facility of $825 million along with an amortizing term
loan of $325 million. The new facility also includes a multi-currency borrowing
feature that allows the Company to borrow up to $500 million in certain freely
tradeable offshore currencies, and letter of credit sublimits of $100 million.
As of September 30, 2000, approximately $8.7 million of the outstanding
borrowings are denominated in Japanese yen and $52.1 million of the outstanding
borrowings are denominated in Euro. Interest on the new

F-43
146
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

credit facility is at the financial institution's reference rate, LIBOR, or the
Eurodollar rate plus a margin ranging from 0 to 200 basis points depending on
the ratio of the consolidated funded debt for restricted subsidiaries of the
Company to its total EBITDA. The weighted average interest rate for such
borrowings was 6.95% for the nine months ended September 30, 2000. The new
credit agreement has a final maturity of 2006. As a result of the debt
replacement, the Company recorded an extraordinary loss, net of tax, of $3.0
million during the third quarter of 2000.

The Credit Agreement requires the Company to meet certain financial tests,
including but not limited to a minimum interest coverage and maximum leverage
ratio. As of September 30, 2000, the Company was in compliance with all debt
covenants.

On July 25, 2000, the Company issued Euro-denominated senior unsecured
notes in the amount of 9.25%, payable semi-annually. The notes rank equally with
all of the Company's other unsecured and unsubordinated debt. The net proceeds
after issuance costs were used to repay a portion of the Company's existing
Euro-denominated indebtedness under its existing credit facility. The notes
mature on August 1, 2010.

For the periods presented through July 24, 2000, the Company's Credit
Agreement included a revolving credit facility that provided for borrowings of
up to $750 million on an unsecured basis with a letter of credit sublimit of $75
million. In addition, under the terms of the revolving credit facility, the
equivalent of up to $85 million in borrowings could be denominated in Italian
lira. The amount available under the revolving credit facility reduced to $675
million in April 2000, $600 million in April 2001 and $500 million in April
2002. The Credit Agreement had a final maturity of April 2003. Interest on the
credit facility was at the prime rate or LIBOR plus a margin ranging from 17 to
50 basis points depending upon the ratio of the consolidated indebtedness of the
Company to its total capitalization.

On August 23, 1999, the Company amended and restated its Credit Agreement
to include a term loan add on facility of $325 million. The term loan facility
would have matured in eight equal repayments beginning September 2002 with final
maturity in June 2004. Interest on the term loan facility was at the prime rate
or LIBOR plus a margin ranging from 25 to 175 basis points depending on the
Company's ratio of consolidated indebtedness to its total capitalization. The
proceeds from the term facility were used to repay outstanding indebtedness
under the revolving facility incurred in connection with the acquisition of
Active in July 1999.

During September 2000, the Company entered into an interest rate swap
contract to hedge against interest rate exposure on approximately $160 million
of its floating rate indebtedness. The contracts have the effect of converting
the floating rate interest to a fixed rate of approximately 6.9%, plus any
applicable margin required under the revolving credit facility. The interest
rate swap contract was executed to balance the Company's fixed-rate and
floating-rate debt portfolios.

5. On July 29, 1999, the Company acquired all of the outstanding stock of
Active Tool and Manufacturing Company, Inc. and its affiliate Active Products
Corporation (collectively, "Active") for total consideration of approximately
$315 million. Active, which has five facilities, is a leading designer and
producer of large structural stampings and assemblies including Class A exposed
metal surfaces to the North American automotive industry. Active's principle
customers include DaimlerChrysler, Ford, General Motors, and Saturn. Products
offered by Active include body sides, pickup box sides, fenders, floor pan
assemblies, door panels, pillars, and heat shields. The acquisition of Active
enhances the Company's ability to manufacture large and complex

F-44
147
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

structures, as well as exposed surface panels. The acquisition was financed with
proceeds from the Company's revolving credit facility.

Effective January 1, 2000, the Company acquired all of the outstanding
shares of Dr. Meleghy GmbH & Co. KG Werkzeugbau und Presswerk, Bergisch Gladbach
("Dr. Meleghy") for approximately $86.4 million. Dr. Meleghy designs and
produces structural stampings, assemblies, exposed surface panels and modules to
the European automotive industry. Dr. Meleghy also designs and manufactures
tools and dies for use in their production and for the external market. Dr.
Meleghy operates three facilities in Germany and one facility in both Hungary
and Poland. Dr. Meleghy's main customers include DaimlerChrysler, Audi,
Volkswagen, Ford, Opel and BMW. Products offered by Dr. Meleghy include body
side panels, floor pan assemblies and miscellaneous structural stampings. The
Company may pay an additional $38 million if certain operating targets are met.
The acquisition was financed with proceeds from the Company's revolving credit
facility.

On May 3, 2000, the Company acquired all of the outstanding common stock of
Algoods, Inc. ("Algoods") for total consideration of approximately $33 million.
Algoods manufactures aluminum heat shields and impact discs for the North
American automotive industry from aluminum mini-mill and manufacturing
operations located in Toronto, Canada. Its primary customer is DaimlerChrysler.
The acquisition of Algoods represents a significant investment in processing
technology for lightweight materials which complements the Company's existing
heat shield capabilities and provides opportunities for application in other
lightweight vehicle structural products. The acquisition was funded with
proceeds from the Company's revolving credit facility.

On July 6, 2000, the Company acquired the remaining 60% equity interest in
Metalurgica Caterina S.A. ("Caterina") for approximately $42 million. Caterina
is a supplier of structural stampings and assemblies to the Brazilian automotive
market, including Volkswagen and Mercedes-Benz. The acquisition was funded with
proceeds from the Company's revolving credit facility.

These acquisitions discussed above have been accounted for using the
purchase method of accounting and, accordingly, the assets acquired and
liabilities assumed have been recorded at the fair value as of the date of the
acquisitions. The assets and liabilities of Dr. Meleghy, Algoods, and Caterina
have been recorded based on preliminary estimates of fair value as of the date
of the acquisition. The excess of the purchase price over the fair value of the
assets acquired and liabilities assumed has been recorded as goodwill. The
Company is further evaluating the fair value of certain assets acquired and
liabilities assumed in connection with the Dr. Meleghy, Algoods, and Caterina
acquisitions and as a result, will likely result in adjustments to the
preliminary allocation of the purchase price.

In conjunction with acquisitions made, reserves have been established for
certain costs associated with facility shutdown and consolidation activities and
for general and payroll related costs primarily for planned employee termination
activities. As of December 31, 1999, approximately $13.8 million and $6.4
million were recorded for facility shutdown and payroll related costs,
respectively. Cost incurred and charged to such reserves amounted to $4.9 for
facility shutdown costs and $3.1 million for payroll related termination costs
for the nine months ended September 30, 2000. Additional acquisition reserves of
$1.0 million related to facility costs were recorded for the nine months ended
September 30, 2000. At September 30, 2000, liabilities for approximately $9.9
million for costs associated with facility shutdown and consolidation activities
and $3.3 million of general and payroll related and costs primarily for planned
employee termination activities remained. The timing of facility shutdown and
consolidation activities has been adjusted to reflect customer concerns with
supply interruption. These reserves have been
F-45
148
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

utilized as originally intended and management believes the liabilities recorded
for shutdown and consolidation activities are adequate but not excessive as of
September 30, 2000.

6. On October 14, 1999, the Company loaned $30.0 million to J.L. French
Automotive Castings, Inc. ("J.L. French") in exchange for a convertible
subordinated promissory note due October 14, 2009. The note bears interest at
7.5% annually with interest payable on the last day of each calendar quarter
beginning December 31, 1999. The Company can convert, at its option, any portion
of the outstanding principal of the note into Class A Common Stock of J.L.
French at a preset agreed upon conversion price. On May 24, 2000, the Company
made an additional investment of $11.0 million in exchange for a 3.4% equity
interest in J.L. French.

7. On October 29, 1999, the Company invested $21 million for new shares
representing a 49% equity interest in Seojin Industrial Company Limited
("Seojin"). Seojin is a supplier of frames, modules and structural components to
the Korean automotive industry. The equity interest was financed with proceeds
from the Company's revolving credit facility. In addition, the Company advanced
$19 million to Seojin in exchange for variable rate convertible bonds
denominated in Korean Won (the "Bonds") due October 30, 2009. The Bonds are
unsecured and rank equally with all other present and future obligations of
Seojin. The Bonds currently bear interest at 6% per annum. Interest on the Bonds
is payable annually beginning October 30, 2000 and each October 30 thereafter
until maturity. The Company has the right to convert the Bonds into common stock
of Seojin any time on or after October 30, 2000. The conversion rate is based
upon a predetermined formula that would increase the Company's equity interest
to approximately 66%. On October 31, 2000, the Company exercised its right to
convert the Bonds into 17% of the common stock of Seojin. Based upon the formula
for conversion of the Seojin variable rate bonds, the Company paid $1.2 million
for the additional equity interest.

8. On September 20, 2000, the Company loaned $20.0 million to Seojin. The
loan bears interest at the three month LIBOR rate plus a margin of 400 basis
points and is payable on the last day of the quarter beginning December 31,
2000. At September 30, 2000, the interest rate on the loan was 10.7%. The
principal is due to be repaid on September 21, 2001. The loan is guaranteed by
the personal assets of the Company's partner in the Seojin joint venture.

9. On September 21, 2000, the Company acquired a 17 percent equity interest
in Yorozu Corporation ("Yorozu"), a supplier of suspension modules and
structural parts to the Asian and North American automotive markets, from Nissan
Motor Co. Ltd. ("Nissan"). Yorozu is based in Japan and is publicly traded on
the first tier of the Tokyo Stock Exchange. Its principal customers include
Nissan, Auto Alliance, General Motors, Ford, and Honda. The Company will pay
Nissan approximately $38 million over the next two and a half years to acquire
the 17 percent interest. In addition, the Company will have the opportunity to
increase its holdings in Yorozu through the purchase of additional Yorozu
shares.

10. The Company is a 40% partner in Metalsa S. de R.L. ("Metalsa") with
Promotora de Empresas Zano, S.A. de C.V. ("Proeza"). The partnership agreement
provides additional amounts of up to $45 million payable based upon net earnings
of Metalsa during 1998, 1999, and 2000. Based upon Metalsa's 1998 net earnings,
the Company paid Proeza approximately $9.0 million in additional consideration
during the second quarter of 1999. Based upon Metalsa's 1999 net earnings, the
Company paid Proeza approximately $7.9 million in additional consideration
during the first quarter of 2000.

F-46
149
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. Supplemental cash flow information (in thousands):

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
2000 1999 2000 1999
------- ------- ------- -------

Cash paid for -- Interest.................... $19,232 $11,447 $51,505 $25,438
Income taxes................................. $ 1,128 $ 2,100 $17,345 $12,356

12. The following presents comprehensive income, defined as changes in the
stockholders' investment of the Company, for the three and nine month periods
ended September 30, 2000 and 1999 (in thousands):

THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
------------------ ------------------
2000 1999 2000 1999
------- ------- ------- -------

Net income................................... $ 6,965 $23,741 $83,381 $84,445
Change in cumulative translation
adjustment................................. 6,511 333 5,761 (686)
------- ------- ------- -------
Comprehensive income......................... $13,476 $24,074 $89,142 $83,759
======= ======= ======= =======

13. In connection with the Company's acquisition of MascoTech Stamping
Technologies, Inc. in June 1996, the Company issued warrants to acquire 400,000
shares of the Company's Common Stock at an exercise price of $9 per share to
MascoTech, Inc. ("MascoTech"). On May 5, 2000, MascoTech exercised all of the
warrants outstanding under this agreement.

14. SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" as amended by SFAS No. 137, becomes effective for the years
beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting
standards requiring that every derivative instrument, including certain
derivative instruments embedded in other contracts, be recorded in the balance
sheet as either an asset or liability measured at its fair value. SFAS No. 133
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allow a derivative's gains or losses to offset related results
on the hedged item in the income statement and requires that a company must
formally document, designate and assess the effectiveness of transactions that
receive hedge accounting. The Company is currently analyzing and quantifying the
impact of adopting SFAS No. 133 and 137, and believes the impact will not be
material to the financial statements.

15. On October 2, 2000, the Company signed a definitive agreement to sell
its Roanoke, Virginia heavy truck rail manufacturing business to its joint
venture partner, Metalsa S. de R.L. for $55 million plus an earnout of up to $30
million based on achieving certain profit levels over the next three years. The
transaction is expected to close by the end of December 2000.

Additionally, on October 2, 2000, the Company's board of directors approved
a comprehensive operational realignment plan, which is intended to improve the
Company's long-term competitive position and lower its cost structure. The plan
includes phasing out the heavy truck rail manufacturing in Milwaukee, Wisconsin;
reducing stamping capacity by closing the Kalamazoo, Michigan facility; and
consolidating related support activities across the enterprise. The Company
plans to record a charge to operations of approximately $140 million in the
fourth quarter of 2000, which reflects the estimated qualifying "exit costs" to
be incurred over the next 12 months under the plan. Certain of the estimates
used for the severance and outplacement costs are subject to collective
bargaining discussions and thus these costs will qualify as "exit costs" upon
completion of these negotiations.
F-47
150
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The charge will include costs associated with asset impairments, severance
and outplacement costs related to employee terminations, and loss contract
provisions. These activities are anticipated to result in a reduction of more
than 800 employees. The charges do not cover certain aspects of the plan,
including movement of equipment and employee relocation and training. These
costs will be recognized in future periods as incurred.

The asset impairments consist of long-lived assets, including fixed assets,
manufacturing equipment, and land, from facilities the Company intends to
dispose of or discontinue. For assets that will be disposed of currently, the
Company measured impairment based on estimated proceeds on the sale of the
facilities and equipment. For assets that will be held and used in the future,
the Company prepared a forecast of expected undiscounted cash flows to determine
whether asset impairment existed, and we used fair values to measure the
required writedowns.

16. On May 26, 2000, the Company announced that its board of directors
approved the purchase of up to $100 million of its common stock, if authorized
by the executive committee of the board. The shares may be purchased in the open
market at prevailing prices and at times and amounts to be determined by the
board's executive committee as market conditions and the Company's capital
position warrant. During October 2000 and through November 10, 2000,
approximately 2.6 million shares, at a total cost of approximately $25.1 million
have been purchased. These shares will be placed in treasury and may
subsequently be reissued for general corporate purposes.

17. The following consolidating financial information presents balance
sheet, statement of operations and cash flow information related to the
Company's business. Each Guarantor, as defined, is a direct or indirect
wholly-owned subsidiary of the Company and has fully and unconditionally
guaranteed the 9.25% senior unsecured notes issued by R.J. Tower Corporation, on
a joint and several basis. Tower Automotive, Inc. (the parent company) has also
fully and unconditionally guaranteed the notes and is reflected as a Guarantor
in the consolidating financial information. The Non-Guarantors are the Company's
foreign subsidiaries. Separate financial statements and other disclosures
concerning the Guarantors have not been presented because management believes
that such information is not material to investors.

F-48
151

TOWER AUTOMOTIVE, INC.
CONSOLIDATING BALANCE SHEETS AT SEPTEMBER 30, 2000
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

ASSETS
Current assets:
Cash and cash equivalents........ $ (9,423) $ 2,301 $ 8,526 $ -- $ 1,404
Accounts receivable, net......... 17,138 235,715 94,419 -- 347,272
Inventories, net................. 2,130 83,254 31,122 -- 116,506
Prepaid tooling and other........ 18,105 74,964 14,284 -- 107,353
--------- ---------- -------- --------- ----------
Total current assets........ 27,950 396,234 148,351 -- 572,535
--------- ---------- -------- --------- ----------
Property, plant and equipment,
net.............................. 24,845 1,071,824 116,396 -- 1,213,065
Investments in joint ventures...... 277,195 31,886 -- -- 309,081
Investment in subsidiaries......... 519,160 -- -- (519,160) --
Goodwill and other assets, net..... 36,382 558,726 219,837 -- 814,945
--------- ---------- -------- --------- ----------
$ 885,532 $2,058,670 $484,584 $(519,160) $2,909,626
========= ========== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
Current maturities of long-term
debt and capital lease
obligations................... $ 2,411 $ 4,936 $ 13,313 $ -- $ 20,660
Accounts payable................. (4,748) 168,476 71,382 -- 235,110
Accrued liabilities.............. (19,205) 118,385 30,216 -- 129,396
--------- ---------- -------- --------- ----------
Total current liabilities... (21,542) 291,797 114,911 -- 385,166
--------- ---------- -------- --------- ----------
Long-term debt, net of current
maturities....................... 886,380 44,787 44,238 -- 975,405
Obligations under capital leases,
net of current maturities........ -- 17,437 -- -- 17,347
Convertible subordinated notes..... -- 200,000 -- -- 200,000
Due to/(from) affiliates........... (890,293) 632,885 257,408 -- --
Deferred income taxes.............. 62,856 -- 4,669 -- 67,525
Other noncurrent liabilities....... 26,149 137,124 17,052 -- 180,325
--------- ---------- -------- --------- ----------
Total noncurrent
liabilities.............. 85,092 1,032,233 323,367 -- 1,440,692
--------- ---------- -------- --------- ----------
Manditorily redeemable trust
convertible preferred
securities....................... -- 258,750 -- -- 258,750
Stockholders' investment........... 821,839 475,890 43,270 (519,160) 821,839
Accumulated other comprehensive
income (loss) -- cumulative
translation adjustment........... 143 -- 3,036 -- 3,179
--------- ---------- -------- --------- ----------
Total stockholders'
investment............... 821,982 475,890 46,306 (519,160) 825,018
--------- ---------- -------- --------- ----------
$ 885,532 $2,058,670 $484,584 $(519,160) $2,909,626
========= ========== ======== ========= ==========

F-49
152

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2000
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

Revenues............................ $ 17,538 $414,218 $104,454 $ -- $ 536,210
Cost of sales....................... 6,159 371,108 94,215 -- 471,482
--------- -------- -------- -------- ---------
Gross profit...................... 11,379 43,110 10,239 -- 64,728
Selling, general and administrative
expenses.......................... 336 26,406 4,793 -- 31,535
Amortization expense................ 794 3,544 1,238 -- 5,576
--------- -------- -------- -------- ---------
Operating income.................. 10,249 13,160 4,208 -- 27,617
Interest expense, net............... 17,482 (2,313) 1,236 -- 16,405
--------- -------- -------- -------- ---------
Income before provision for income
taxes.......................... (7,233) 15,473 2,972 -- 11,212
Provision for income taxes.......... (2,893) 6,189 1,188 -- 4,484
--------- -------- -------- -------- ---------
Income before equity in earnings
of joint ventures and minority
interest....................... (4,340) 9,284 1,784 -- 6,728
Equity in earnings of joint ventures
and subsidiaries.................. 14,293 -- -- (8,449) 5,844
Minority interest -- dividends on
trust preferred, net.............. -- (2,619) -- -- (2,619)
--------- -------- -------- -------- ---------
Income before extraordinary
item......................... 9,953 6,665 1,784 (8,449) 9,953
Extraordinary loss on early
extinguishments of debt, net...... 2,988 -- -- -- 2,988
--------- -------- -------- -------- ---------
Net income..................... $ 6,965 $ 6,665 $ 1,784 $ (8,449) $ 6,965
========= ======== ======== ======== =========

F-50
153

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues........................... $ 59,884 $1,501,294 $341,416 $ -- $1,902,594
Cost of sales...................... 38,216 1,268,815 304,742 -- 1,611,773
-------- ---------- -------- -------- ----------
Gross profit..................... 21,668 232,479 36,674 -- 290,821
Selling, general and administrative
expenses......................... 5,676 80,491 13,455 -- 99,622
Amortization expense............... 2,392 10,630 2,771 -- 15,793
-------- ---------- -------- -------- ----------
Operating income................. 13,600 141,358 20,448 -- 175,406
Interest expense, net.............. 40,221 (1,919) 4,834 -- 43,136
-------- ---------- -------- -------- ----------
Income before provision for
income taxes.................. (26,621) 143,277 15,614 -- 132,270
Provision for income taxes......... (10,648) 57,311 6,245 -- 52,908
-------- ---------- -------- -------- ----------
Income before equity in earnings of
joint ventures and minority
interest......................... (15,973) 85,966 9,369 -- 79,362
Equity in earnings of joint
ventures and subsidiaries........ 102,342 -- -- (87,478) 14,864
Minority interest -- dividends on
trust preferred, net............. -- (7,857) -- -- (7,857)
-------- ---------- -------- -------- ----------
Income before extraordinary
item.......................... 86,369 78,109 9,369 (87,478) 86,369
Extraordinary loss on early
extinguishments of debt, net..... 2,988 -- -- -- 2,988
-------- ---------- -------- -------- ----------
Net income......................... $ 83,381 $ 78,109 $ 9,369 $(87,478) $ 83,381
======== ========== ======== ======== ==========

F-51
154

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

OPERATING ACTIVITIES:
Net income....................... $ 83,381 $ 78,109 $ 9,369 $(87,478) $ 83,381
Adjustments required to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation and
amortization................ 5,252 94,187 13,351 -- 112,790
Deferred income tax
provision................... 14,667 -- (151) -- 14,516
Extraordinary loss on
extinguishments of debt..... 2,988 -- -- -- 2,988
Changes in other operating
items....................... (313,651) 13,231 223,963 -- (76,457)
----------- -------- --------- -------- -----------
Net cash provided by (used
in) operating
activities................ (207,363) 185,527 246,532 (87,478) 137,218
----------- -------- --------- -------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net........ (3,279) (154,348) 80 -- (157,547)
Acquisitions and other, net...... (142,354) (20,000) (157,775) 87,478 (232,651)
----------- -------- --------- -------- -----------
Net cash used in investing
activities................ (145,633) (174,348) (157,695) 87,478 (390,198)
=========== ======== ========= ======== ===========
FINANCING ACTIVITIES:
Proceeds from borrowings......... 2,684,777 21 44,257 -- 2,729,055
Repayments of debt............... (2,349,510) (9,383) (125,389) -- (2,484,282)
Net proceeds from the issuance of
common stock................... 5,994 -- -- -- 5,994
----------- -------- --------- -------- -----------
Net cash provided by (used
for) financing
activities................ 341,261 (9,362) (81,132) -- 250,767
=========== ======== ========= ======== ===========
NET CHANGE IN CASH AND CASH
EQUIVALENTS.................... (11,735) 1,817 7,705 -- (2,213)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD............ 2,312 484 821 -- 3,617
----------- -------- --------- -------- -----------
CASH AND CASH EQUIVALENTS, END OF
PERIOD......................... $ (9,423) $ 2,301 $ 8,526 $ -- $ 1,404
=========== ======== ========= ======== ===========

F-52
155

TOWER AUTOMOTIVE, INC.
CONSOLIDATING BALANCE SHEETS AT DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations...................... $ 11 $ 12,098 $ 1,767 $ -- $ 13,876
Accounts payable................... 7,889 198,281 70,503 -- 276,673
Accrued liabilities................ (45,601) 177,782 8,386 -- 140,567
--------- ---------- -------- --------- ----------
Total current liabilities..... (37,701) 388,161 80,656 -- 431,116
--------- ---------- -------- --------- ----------
Long-term debt, net of current
maturities......................... 553,513 42,881 103,284 -- 699,678
Obligations under capital leases, net
of current maturities.............. -- 21,543 -- -- 21,543
Convertible subordinated notes....... -- 200,000 -- -- 200,000
Due to/(from) affiliates............. (531,960) 554,153 (22,193) -- --
Deferred income taxes................ 48,189 -- 2,547 -- 50,736
Other noncurrent liabilities......... 534 153,528 9,530 -- 163,592
--------- ---------- -------- --------- ----------
Total noncurrent
liabilities................. 70,276 972,105 93,168 -- 1,135,549
--------- ---------- -------- --------- ----------
Manditorily redeemable trust
convertible preferred securities... -- 258,750 -- -- 258,750
Stockholders' investment............. 729,717 397,781 17,466 (415,247) 729,717
Accumulated other comprehensive
income (loss) -- cumulative
translation adjustment............. (1,735) -- (847) -- (2,582)
--------- ---------- -------- --------- ----------
Total stockholders'
investment.................. 727,982 397,781 16,619 (415,247) 727,135
--------- ---------- -------- --------- ----------
$ 760,557 $2,016,797 $190,443 $(415,247) $2,552,550
========= ========== ======== ========= ==========

F-53
156

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1999
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues........................... $ 18,592 $ 461,377 $ 56,183 $ -- $ 536,152
Cost of sales...................... 18,278 382,189 53,384 -- 453,851
-------- ---------- -------- -------- ----------
Gross profit..................... 314 79,188 2,799 -- 82,301
Selling, general and administrative
expenses......................... 2,162 25,920 1,300 -- 29,382
Amortization expense............... 1,161 2,924 366 -- 4,451
-------- ---------- -------- -------- ----------
Operating income................. (3,009) 50,344 1,133 -- 48,468
Interest expense, net.............. 8,572 1,262 808 -- 10,642
-------- ---------- -------- -------- ----------
Income before provision for
income taxes.................. (11,581) 49,082 325 -- 37,826
Provision for income taxes......... (4,633) 19,633 130 -- 15,130
-------- ---------- -------- -------- ----------
Income before equity in earnings
of joint ventures and minority
interest...................... (6,948) 29,449 195 -- 22,696
Equity in earnings of joint
ventures and subsidiaries........ 30,689 -- -- (27,025) 3,664
Minority interest -- dividends on
trust preferred, net............. -- (2,619) -- -- (2,619)
-------- ---------- -------- -------- ----------
Income before extraordinary
item.......................... 23,741 26,830 195 (27,025) 23,741
Extraordinary loss on early
extinguishments of debt, net..... -- -- -- -- --
-------- ---------- -------- -------- ----------
Net income....................... $ 23,741 $ 26,830 $ 195 $(27,025) $ 23,741
======== ========== ======== ======== ==========

F-54
157

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues........................... $ 62,099 $1,305,431 $197,874 $ -- $1,565,404
Cost of sales...................... 56,494 1,077,530 182,603 -- 1,316,627
-------- ---------- -------- -------- ----------
Gross profit..................... 5,605 227,901 15,271 -- 248,777
Selling, general and administrative
expenses......................... 2,254 69,968 4,164 -- 76,386
Amortization expense............... 2,644 7,980 1,018 -- 11,642
-------- ---------- -------- -------- ----------
Operating income................. 707 149,953 10,089 -- 160,749
Interest expense, net.............. 18,980 3,831 2,360 -- 25,171
-------- ---------- -------- -------- ----------
Income before provision for
income taxes.................. (18,273) 146,122 7,729 -- 135,578
Provision for income taxes......... (7,310) 58,450 3,091 -- 54,231
-------- ---------- -------- -------- ----------
Income before equity in earnings
of joint ventures and minority
interest...................... (10,963) 87,672 4,638 -- 81,347
Equity in earnings of joint
ventures and subsidiaries........ 95,408 -- -- (84,449) 10,959
Minority interest -- dividends on
trust preferred, net............. -- (7,861) -- -- (7,861)
-------- ---------- -------- -------- ----------
Income before extraordinary
item.......................... 84,445 79,811 4,638 (84,449) 84,445
Extraordinary loss on early
extinguishments of debt, net..... -- -- -- -- --
-------- ---------- -------- -------- ----------
Net income....................... $ 84,445 $ 79,811 $ 4,638 $(84,449) $ 84,445
======== ========== ======== ======== ==========

F-55
158

TOWER AUTOMOTIVE, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1999
(AMOUNTS IN THOUSANDS -- UNAUDITED)

R.J. TOWER GUARANTOR NON-GUARANTOR
CORPORATION COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
----------- --------- ------------- ------------ ------------

OPERATING ACTIVITIES:
Net income........................ $ 84,445 $ 79,811 $ 4,638 $(84,449) $ 84,445
Adjustments required to reconcile
net income to net cash provided
by (used in) operating
activities:
Depreciation and amortization... 5,158 70,557 4,950 -- 80,665
Deferred income tax provision... 50 2,061 (2,111) -- --
Changes in other operating
items........................ (355,210) 298,511 (8,696) -- (65,395)
----------- --------- -------- -------- -----------
Net cash provided by (used
in) operating activities... (265,557) 450,940 (1,219) (84,449) 99,715
----------- --------- -------- -------- -----------
INVESTING ACTIVITIES:
Capital expenditures, net......... (3,708) (146,926) (9,665) -- (160,299)
Acquisitions and other, net....... (95,318) (319,373) (1,525) 84,449 (331,767)
Change in restricted cash......... 2,677 -- -- -- 2,677
----------- --------- -------- -------- -----------
Net cash used in investing
activities................. (96,349) (466,299) (11,190) 84,449 (489,389)
=========== ========= ======== ======== ===========
FINANCING ACTIVITIES:
Proceeds from borrowings.......... 1,600,100 -- 47,018 -- 1,647,118
Repayments of debt................ (1,236,866) (4,160) (28,164) -- (1,269,190)
Net proceeds from the issuance of
common stock.................... 9,379 -- -- -- 9,379
----------- --------- -------- -------- -----------
Net cash provided by (used
for) financing
activities................. 372,613 (4,160) 18,854 -- 387,307
=========== ========= ======== ======== ===========
NET CHANGE IN CASH AND CASH
EQUIVALENTS..................... 10,707 (19,519) 6,445 -- (2,367)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD............. 685 (77) 2,826 -- 3,434
----------- --------- -------- -------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD................... $ 11,392 $ (19,596) $ 9,271 $ -- $ 1,067
=========== ========= ======== ======== ===========

F-56
159

ISSUER

R.J. TOWER CORPORATION
5211 CASCADE ROAD, SUITE 300
GRAND RAPIDS, MICHIGAN 49546

LEGAL ADVISOR TO THE ISSUER

KIRKLAND & ELLIS
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601

AUDITORS TO THE ISSUER

ARTHUR ANDERSEN LLP
45 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402

INITIAL PURCHASERS

CHASE MANHATTAN INTERNATIONAL LIMITED
BANK OF AMERICA INTERNATIONAL LIMITED
ABN AMRO INCORPORATED
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
FIRST CHICAGO LIMITED
SCOTIA CAPITAL (USA) INC.

U.S. LEGAL ADVISOR TO THE INITIAL PURCHASERS

GARDNER, CARTON & DOUGLAS
QUAKER TOWER-SUITE 3400
321 NORTH CLARK STREET
CHICAGO, ILLINOIS 60610

TRUSTEE AND U.S. PAYING AGENT

UNITED STATES TRUST COMPANY OF NEW YORK
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036-1532

FISCAL AND PRINCIPAL PAYING AGENT AND EXCHANGE AGENT

DEUTSCHE BANK AG LONDON

WINCHESTER HOUSE, 1 GREAT WINCHESTER STREET
LONDON EC2N 2DB
ENGLAND

LUXEMBOURG PAYING AGENT, LISTING AGENT, REGISTRAR,
EXCHANGE AGENT AND BOOK-ENTRY DEPOSITARY

DEUTSCHE BANK LUXEMBOURG S.A.
2 BOULEVARD KONRAD ADENAUER

L-1115 LUXEMBOURG

160

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

E150,000,000

[TOWER AUTOMATIVE LOGO]

R.J. TOWER CORPORATION

EXCHANGE OFFER

E150,000,000 9.25% SENIOR NOTES DUE 2010
FOR ANY AND ALL OUTSTANDING
9.25% SENIOR NOTES DUE 2010

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

PROSPECTUS
------------------------

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