COOPER TIRE & RUBBER COMPANY
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of
Cooper Tire & Rubber Company will be held at the Findlay Elks Club, Main
and East Hardin Streets, Findlay, Ohio on Tuesday, May 3, 1994, at 10:00
a.m. Eastern Daylight Time for the following purposes:
(1) To elect five (5) Directors of the Company.
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of Common Stock of record at the close of business on
March 7, 1994, are entitled to notice and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Stan C. Kaiman
Secretary
Findlay, Ohio
March 22, 1994
Kindly mark, date and sign the enclosed proxy and return it
promptly in the enclosed addressed envelope, which requires no postage.
If you are present and vote in person at the meeting, the proxy will not
be used.
1
<PAGE>
COOPER TIRE & RUBBER COMPANY
Lima & Western Avenues, Findlay, Ohio 45840
March 22, 1994
--------------------
PROXY STATEMENT
--------------------
GENERAL INFORMATION
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Cooper Tire &
Rubber Company (the "Company") to be used at the Annual Meeting of the
stockholders of the Company to be held on May 3, 1994, at the Findlay
Elks Club, Main and East Hardin Streets, Findlay, Ohio. If the enclosed
form of proxy is properly executed and returned, it will be voted in
accordance therewith. Abstentions and broker nonvotes are voted neither
"for" nor "against", but are counted in the determination of a quorum.
Any proxy may be revoked at any time, to the extent that it has not been
exercised, by written notice to the Company prior to the meeting, or by
execution of a new proxy or by voting by ballot at the meeting.
Only stockholders of record on March 7, 1994, will be entitled to
vote at the Annual Meeting, and each will be entitled to one vote for
each share so held. As of March 7, 1994, there were 83,613,472 shares
of the Company's Common Stock outstanding. Holders of a majority of the
stock of the Company issued and outstanding and entitled to vote must be
present or represented by proxy at the Annual Meeting to form a quorum
for the transaction of business thereat.
The only matter anticipated to be voted upon by stockholders at
the meeting is election of five (5) Directors (Agenda Item 1). The
affirmative vote of a plurality of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting is required for
election of each Director.
Agenda Item 1
ELECTION OF DIRECTORS
The Bylaws of the Company provide for the Board of Directors to be
divided into three classes as nearly equal in number as the total number
of Directors constituting the entire Board permits, with the term of
office of one class expiring each year. By vote of a majority, the
Board of Directors has the authority to fix the number of Directors
constituting the entire Board at not less than six (6) nor more than
twelve (12) individuals, and the number is currently set at eleven (11).
Four Directors are to be elected to the class having terms expiring this
year and shall serve for a three-year term expiring in 1997 and until
their respective successors are elected and qualified. One Director is
to be elected to fill a vacancy in the class having terms expiring at
the Annual Meeting in 1996.
Unless otherwise specified, the persons named as proxies in the
enclosed form of proxy intend to vote for the nominees hereinafter
indicated. Although the Board of Directors does not contemplate that
any such nominee shall be unavailable for election, if a vacancy in the
slate of nominees should be occasioned by death or other unexpected
occurrence, it is presently intended that the proxies shall be voted for
such other person as the Board of Directors may recommend.
All the nominees to be elected at the Annual Meeting, other than
Delmont A. Davis and Edsel D. Dunford, have been serving as Directors
and were elected by vote of the stockholders. Mr. Davis has been
serving since July 20, 1992, when he was elected by the Board of
(continued)
2
<PAGE>
Directors to a newly created directorship. Mr. Dunford, a nominee to
fill a vacancy created by the resignation of Ronald W. Skeddle, has not
been serving as a Director of the Company. A brief statement of the
background of each nominee and each Director who is not a nominee is set
forth on the following pages, including the period during which he has
served as a Director of the Company and the date of the expiration of
his term as a Director, according to information furnished to the
Company by him.
NOMINEES FOR DIRECTOR
DELMONT A. DAVIS President and Chief Executive Officer,
(PHOTOGRAPH) Ball Corporation
Mr. Davis, age 58, was elected President and Chief Executive
Officer of Ball Corporation in April 1991. He is a member of Ball's
Board of Directors and is Chairman of the Board of Ball-InCon Glass
Packaging Corp., a wholly owned subsidiary of Ball. Mr. Davis joined
Ball in 1969, was elected a Group Vice President in 1976, an Executive
Vice President in 1987 and President and Chief Operating Officer in
1989. Mr. Davis is a director of Trinova Corporation, the National
Association of Manufacturers, the National Food Processors Association
and the Can Manufacturers Institute; and a member of the University of
Colorado's Engineering Development Council. He is a graduate of the
University of Colorado with a B.S. degree in civil engineering and is a
registered professional engineer in several states.
Director Since 1992
Nominee for Term to Expire 1997
EDSEL D. DUNFORD President and Chief Operating Officer,
(PHOTOGRAPH) TRW, Inc.
Mr. Dunford, age 58, was elected President and Chief Operating
Officer of TRW, Inc. and named to its Board of Directors in 1991. Since
joining TRW in 1964, Mr. Dunford held a variety of technical and
management positions, including executive vice president and general
manager of TRW's space and defense businesses. He holds a B.S.E.E.
degree from the University of Washington and a master of engineering
degree from UCLA, and completed the Executive Program at Stanford
University. A member of a number of professional organizations, Mr.
Dunford is also a director of the U.S. Chamber of Commerce and serves as
Chairman of the Board of Councilors at the University of Southern
California.
Nominee for Term to Expire 1996
IVAN W. GORR Chairman of the Board
(PHOTOGRAPH) and Chief Executive Officer
Mr. Gorr, age 64, was elected Chairman of the Board and Chief
Executive Officer of the Company in 1989. He joined the Company as
Corporate Controller in 1972, was named Vice President and Chief
Financial Officer in 1975, assumed the additional position of Treasurer
in 1976, was elected Executive Vice President in 1977 and President in
1982. Prior to joining the Company, Mr. Gorr was associated with the
accounting firm of Arthur Young & Company from 1953 to 1972, and is a
(continued)
3
<PAGE>
Certified Public Accountant. Mr. Gorr is a director of Amcast
Industrial Corporation, Arvin Industries, Inc., Fifth Third Bancorp, and
OHM Corporation. He is also a director of the University of Toledo
Foundation and has served as Chairman of the Board of Directors of the
U.S. Chamber of Commerce. Mr. Gorr served in the U.S. Army during the
Korean conflict and is a graduate of the University of Toledo with a
B.S. degree.
Director Since 1975
Nominee for Term to Expire 1997
JOSEPH M. MAGLIOCHETTI President,
(PHOTOGRAPH) North American Operations,
Dana Corporation
Mr. Magliochetti, age 52, was named President, North American
Operations for Dana Corporation in 1992. He joined Dana in 1966 and
served in a variety of sales, engineering, and management positions
before being appointed President of Dana Europe in 1980; in 1985 he
returned to the United States as Group Vice President, North American
Operations and was elected Automotive President, North American
Operations in 1990. Educated at the University of Illinois, Mr.
Magliochetti also completed the Hillsdale College Management Development
Program and the Harvard Advanced Management Program. He is a director
of Spicer S.A., a Dana Mexican affiliate and Hayes-Dana, a Dana
affiliate in Canada.
Director Since 1992
Nominee for Term to Expire 1997
PATRICK W. ROONEY President and Chief Operating Officer
(PHOTOGRAPH)
Mr. Rooney, age 58, was elected President and Chief Operating
Officer of the Company in 1991. He joined the Company in 1956, became
general sales manager of the Cooper brand division in 1965, Vice
President of the Tire Division in 1969, Vice President of the Company in
1987, and President of the Tire Division in 1990. A graduate of The
University of Findlay with a B.S. degree in Business Administration, Mr.
Rooney also completed the Harvard Advanced Management Program. He is a
director of the Ohio Bank and Alltrista Corporation and serves as a
Trustee of The University of Findlay.
Director Since 1990
Nominee for Term to Expire 1997
DIRECTORS WHO ARE NOT NOMINEES
JOHN FAHL Vice President
(PHOTOGRAPH)
Mr. Fahl, age 57, began his career with the Company in 1955,
holding various positions in technical, manufacturing, and
transportation before joining the purchasing department in 1962. He was
named Corporate Director of Purchasing in 1966 and was elected a Vice
President in 1978. He attended Denison University and is a graduate of
advanced management programs at Bowling Green State University and
Harvard University.
Director Since 1992
Expiration of Term 1996
(continued)
4
<PAGE>
DENNIS J. GORMLEY Chairman and Chief Executive Officer,
(PHOTOGRAPH) Federal-Mogul Corporation
Mr. Gormley, age 54, joined Federal-Mogul Corporation, a global
manufacturer and distributor of precision parts, in 1963. He held sales
management, corporate planning, and marketing positions before being
named Executive Vice President in 1975. He was elected President, Chief
Operating Officer, and a director in 1988, Chief Executive Officer in
1989, and Chairman in 1990. Federal-Mogul Corporation's principal
products are vehicular and industrial components. Mr. Gormley is a
graduate of Rennselaer Polytechnic Institute with a B.S.M.E. degree.
Director Since 1991
Expiration of Term 1996
WILLIAM D. MAROHN President and Chief Operating Officer,
(PHOTOGRAPH) Whirlpool Corporation
Mr. Marohn, age 53, joined Whirlpool Corporation in 1964 and
served in a variety of manufacturing and administrative positions. He
was first elected a Whirlpool officer in 1984 and was named Executive
Vice President in 1989 and President and Chief Operating Officer in
1992. He is a director of Whirlpool Corporation, Rubbermaid
Incorporated, and the National Association of Manufacturers. A graduate
of the University of Toledo with a B.S.M.E. degree, Mr. Marohn served in
the Air Force Medical Corps and was an officer in both the Ohio and
Michigan Air National Guard.
Director Since 1990
Expiration of Term 1995
ALLAN H. MELTZER University Professor of
(PHOTOGRAPH) Political Economy and Public Policy,
Carnegie-Mellon University
Dr. Meltzer, age 66, is a graduate of Duke University and received
M.A. and Ph.D. degrees from the University of California at Los Angeles.
His honors include: election to Phi Beta Kappa; Fulbright Scholar
(France); Social Science Research Fellow; Ford Faculty Research Fellow;
Ford Foundation Visiting Professor, University of Chicago; and
distinguished achievement award, UCLA. Dr. Meltzer is active in
numerous professional associations and is the author or approximately
200 books and papers published in professional journals. In addition to
his association with Carnegie-Mellon University since 1957, he has been
a visiting professor at Harvard University, Yugoslav Institute
(Belgrade), Austrian Institute (Vienna), Vargas Foundation (Rio de
Janeiro) and City University (London). He has been a consultant to
both the executive and legislative branches of the U.S. Government and
to foreign central banks and governments.
Director Since 1983
Expiration of Term 1995
J. ALEC REINHARDT Executive Vice President
(PHOTOGRAPH) and Chief Financial Officer
Mr. Reinhardt, age 52, was elected Executive Vice President of the
Company in 1991, having served as Chief Financial Officer since 1983 and
as Vice President since 1982. He served as Secretary from 1977 to 1986
(continued)
5
<PAGE>
and as General Counsel from 1976 to 1983. Prior to joining the Company
in 1976, he had been Secretary and Assistant General Counsel of White
Motor Corporation. Mr. Reinhardt is a graduate of the University of
Cincinnati with a B.S.E.E. degree and has earned M.B.A. and J.D. degrees
from the Ohio State University. He is a director of the Fifth Third
Bank of Northwestern Ohio, N.A.
Director Since 1983
Expiration of Term 1995
LEON F. WINBIGLER Retired (Former Chairman of the Board
(PHOTOGRAPH) and Chief Executive Officer,
Mercantile Stores Company, Inc.)
Mr. Winbigler, age 68, retired in 1989 as Chairman of the Board
and Chief Executive Officer of a merchandising organization, Mercantile
Stores Company, Inc. Prior to this responsibility, he served as
President of the Lion Stores in Toledo, Ohio from 1962 to 1974, and
President of the MacDougall Southwick Company of Seattle, Washington
from 1956 to 1962. Mr. Winbigler is a graduate of the University of
Missouri. He is a director of BonTon Stores Inc., and a member of the
Advisory Board of Liberty Mutual Insurance Co.
Director Since 1973
Expiration of Term 1996
Note: The beneficial ownership of the Directors and nominees in the
Common Stock of the Company is shown in the table at pages 16 and 17 of
this proxy statement.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
On October 21, 1992, the Securities and Exchange Commission (the
"SEC") adopted amendments to the executive compensation disclosure
requirements applicable to proxy statements. The amendments are
intended to make compensation disclosure clearer, more concise, and more
useful to stockholders. The disclosure which follows is presented in
compliance with those amendments.
--------------------------------
Audit and Compensation Committee
Report on Executive Compensation
--------------------------------
This report is submitted by all members of the Audit and
Compensation Committee (the "Committee"), for inclusion in this proxy
statement, to explain the Committee's policies applicable to the 1993
compensation reported for the Company's executive officers.
The compensation of the Company's executive officers has three
components - (a) cash remuneration in the form of salaries and annual
incentive bonuses directly related to financial performance measures,
(b) long-term incentive opportunities in the form of stock options, and
(c) other benefits typically offered to employees by major corporations.
The Committee has responsibilities for the first two components. It
recommends to the Board of Directors the cash remuneration for the
Company's executive officers and grants options, without further action
by the Board of Directors, under the Company's stock-based compensation
plans. The third component is discussed briefly below under the heading
"Other Compensation Plans".
(continued)
6
<PAGE>
Salaries and Bonuses
Salaries and incentive bonuses paid to the Company's executive
officers for 1993 were based upon a program which has been followed each
year since 1973. Prior to the start of a fiscal year, average
compensation levels are determined for the executive officer positions
based upon published compensation data and independent surveys relating
to similar size firms, as well as the relative executive officers'
contributions to Company performance. Company goals defining minimum,
average and excellent performance are established considering
operational plans, competitive industry information, and prevailing
economic conditions.
Base salaries for the Chief Executive Officer and the other
executive officers are then set at levels lower than the average
compensation levels. For results at or below minimum performance, the
executive officers' salaries would be as much as 30% below average
compensation levels, and no incentive bonuses would be earned. For
results between the minimum performance goal and the excellent
performance goal, incentive bonuses would be paid on a graduated scale
in addition to base salaries. For excellent performance goal
attainment, the executive officers' cash remuneration, including base
salaries and incentive bonuses, may be as much as 30% above average
compensation levels; additional incentive bonuses are earned for
exceptional performance above the excellent performance goal.
Thus, executive officers have a significant portion of their cash
remuneration at risk in the event of results below the average
performance goal. Beginning with results above the minimum performance
goal, incentive bonuses increase cash remuneration such that at the
average performance goal, executive officers' cash remuneration reaches
the average compensation levels determined earlier. Greater than
average cash remuneration is earned only as results increase further,
toward or beyond the excellent performance goal.
Performance measurement, for purposes of the program, is return on
stockholders' equity ("ROE") for officers with primarily corporate
responsibilities and return on assets managed ("ROAM") for officers with
primarily operational responsibilities. ROE is calculated by dividing
the total net income for the year by the total stockholders' equity at
the beginning of the year. ROAM is calculated by dividing pretax income
before interest, net of state and local income taxes, by an average of
controlled assets. ROAM, like ROE, is a measurement of employees'
success in utilizing resources but, unlike ROE, focuses on specific
assets.
Thus, for any fiscal year the incentive bonus for each executive
officer results from measured performance under a formula-driven program
determined in advance of that fiscal year, rather than from a subjective
evaluation of performance made during or after that fiscal year. The
program applies to all executive officers, including the Chief Executive
Officer.
The specifics of the program for total cash remuneration,
including salaries and incentive bonuses, for executive officers for
1993 was established in late 1992, along with ROE and ROAM performance
goals applicable to the program for 1993. Incentive bonuses were based
upon the Company's performance for 1993, as measured by the ROE and ROAM
performance attained for the year. ROE for fiscal year 1993 was 21.7%
which exceeded the excellent performance goal. In accordance with the
program explained above, the Chief Executive Officer's cash remuneration
for the fiscal year was 46.7% above the average compensation level
determined for that position.
(continued) 7
<PAGE>
Average compensation levels for the executive officers for 1993
were based upon published data compiled by an independent firm,
including data for companies of a size comparable to the Company. Later
in this proxy statement there appears a performance graph including an
Auto Parts Index. The companies involved in the published data and in
the Auto Parts Index were not identical, although both may include some
of the same companies' data.
The Committee believes the program structure explained above has
consistently provided a fair and appropriate relationship between
Company performance and the cash remuneration of its executive officers.
For that reason, the Committee authorized the continuation of the
program structure for fiscal years 1993 and 1994.
Stock Options
Stock options are awarded to the Company's key employees,
including executive officers, in accordance with plans approved by the
stockholders. The plans currently in effect are the 1981 Incentive
Stock Option Plan and the 1986 Incentive Stock Option Plan. These plans
were amended in 1988 to allow the granting of nonqualified stock options
as well as incentive stock options; nonqualified stock options are not
intended to qualify for the tax treatment applicable to incentive stock
options within the meaning of Section 422A(b) of the Internal Revenue
Code of 1986, as amended. The exercise price of all stock options is
equal to the market value of the stock on the date of grant.
Conceptually, stock option grants are made in amounts related to
the participants' cash remuneration, with the relationship increasing
with the responsibility levels of the positions involved. The more
responsible the position, the greater the number of option grant shares
and thus the greater the significance to the participants' total
compensation.
More specifically, the number of shares involved in a particular
executive officer's stock option grant is derived by dividing a fixed
percentage of that executive officer's average compensation by the fair
market value of the Company's stock at or near the grant date. The
fixed percentage of average compensation involved in this calculation
for grants during 1993 and during the five preceding years was 50% for
the Chairman of the Board and Chief Executive Officer, 45% for the
President, 35% for the Executive Vice President, and 25% for each of the
other two executive officers identified in the Summary Compensation
Table presented later in this proxy statement. Thus, as with incentive
bonuses, the number of shares involved in stock option grants to
executive officers is in each case the result of a formula for each
position involved and not subjective criteria relating to the particular
incumbent.
In awarding stock options to the Company's key employees,
including the executive officers, consideration is given to the number
of option shares already outstanding. No stock option grants are made
which would cause the total number of outstanding option shares
exercisable for the first time during any year, or exercisable at any
time, to exceed specified percentages of the outstanding Common Stock of
the Company.
It is the opinion of the Committee that stock option grants
constitute an additional tie between the Company's performance and
executive compensation and also promote the common long-term interests
of the Company's executive officers and its stockholders.
(continued)
8
<PAGE>
Other Compensation Plans
The Company has adopted for many of its employees various benefit
plans in which the executive officers are permitted to participate,
subject to any legal limitations on the amounts that may be contributed
or the benefits that may be payable under the plans. The Committee
notes that one of the most important of these benefits plans is the
Thrift and Profit Sharing Plan, which includes a Company matching
contribution in Company stock dependent upon the profit level of the
Company.
Additional details concerning the compensation of the Company's
executive officers are contained in the tables provided in this proxy
statement.
Submitted by the Audit and Compensation Committee of the Company's
Board of Directors:
Dennis J. Gormley
Joseph M. Magliochetti
Allan H. Meltzer
Leon F. Winbigler, Chairman
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ending December
31, 1991, 1992, and 1993, the cash compensation paid by the Company as
well as certain other compensation paid or accrued for those years, to
the Chief Executive Officer and the four most highly compensated
executive officers of the Company other than the Chief Executive
Officer.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long-Term All Other
Compensation Compensation Compensation *
-------------- ------------ ------------
Number of
securities
underlying
Name and stock option
Principal Position Year Salary Bonus awards
- -------------------- ---- ------ ----- --------------
<S> <C> <C> <C> <C> <C>
Ivan W. Gorr 1993 $389,780 $427,086 11,100 $49,024
Chairman of the Board 1992 371,268# 462,565 10,600 49,742
and Chief Executive 1991 343,721 374,779 16,200 -
Officer
Patrick W. Rooney 1993 284,049 311,236 7,300 35,520
President 1992 247,049# 307,779 6,400 32,392
1991 197,600 211,713 6,600 -
J. Alec Reinhardt 1993 239,718 262,662 4,800 29,952
Executive Vice 1992 208,500# 259,744 4,200 27,830
President 1991 181,261 197,639 6,000 -
(continued)
9
<PAGE>
William S. Klein 1993 216,290 152,676 2,300 20,916
Vice President 1992 204,048 144,033 2,000 21,876
1991 187,200 132,141 4,000 -
John Fahl 1993 185,386 158,566 2,300 18,461
Vice President 1992 185,386 157,523 2,000 26,532
1991 168,533 121,591 4,000 -
<FN>
(*) Includes only amounts paid or accrued for the fiscal years ending
December 31, 1993 and December 31, 1992, consisting of Company matching
contributions to the Thrift and Profit Sharing Plan, or allocations to
the Nonqualified Supplementary Benefit Plan which provides benefits
otherwise denied participants because of Internal Revenue Code
limitations on qualified benefits.
(#) Includes one $50 per diem fee formerly paid to executive officers
serving as Directors, for attendance at a Board meeting.
</TABLE>
Stock Option Grants
The following table contains information concerning the grant of
stock options under the Company's 1986 Incentive Stock Option Plan to
the five named executive officers of the Company during the 1993 fiscal
year. In addition, in accordance with SEC rules, a valuation is
assigned to each reported option as of the grant date. In assessing
these values it should be kept in mind that no matter what theoretical
value is placed on a stock option on the date of grant, its ultimate
value will be determined only by the market value of the Company's stock
at a future date.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Grant Date
Individual Grants Value
-------------------------------------------- ----------
Number of Percent of
securities total options Grant
underlying granted to Exercise date
options employees in price Expiration present
Name granted* fiscal year per share date# value+
- -------------- ---------- ------------ --------- --------- -------
<S> <C> <C> <C> <C> <C>
Ivan W. Gorr 11,100 13.1% $25.00 July 18, 2003 $76,796
Patrick W. Rooney 7,300 8.6 25.00 July 18, 2003 98,948
J. Alec Reinhardt 4,800 5.7 25.00 July 18, 2003 71,220
William S. Klein 2,300 2.7 25.00 July 18, 2003 30,810
John Fahl 2,300 2.7 25.00 July 18, 2003 32,682
<FN>
(*) The options become exercisable for 50% of the shares on the first
anniversary of the date of grant and for the balance on the second
anniversary of the date of grant.
(#) Subject to earlier expiration if the executive officer ceases to
be an employee of the Company, with specified periods for exercise after
termination provided in the event of termination without cause,
retirement, or death.
(+) Calculated using the Black-Scholes option pricing model.
Assumptions used in calculating the reported values include (a) an
expected volatility based on the monthly change for the five-year period
January 1, 1989 through December 31, 1993, (b) a risk-free rate of
return of 6.5%, (c) a dividend yield reflected in the stock price
volatility, and (d) a time of exercise at the latest permissible date.
No adjustments were made for non-transferability or forfeiture.
</TABLE> 10
<PAGE>
Option Exercises and Holdings
The following table sets forth information, with respect to the
named executive officers, concerning the exercise of options during the
1993 fiscal year and unexercised options held as of the end of the
fiscal 1993 year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Value of
securities underlying unexercised in-the-
unexercised options at money options# at
Shares fiscal year-end fiscal year-end
acquired ---------------------- --------------------
on Value Exercis- Unexercis- Exercis- Unexercis-
Name exercise realized* able able able able
- ---- -------- -------- ------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
I. W. Gorr 13,500 $238,578 84,800 16,400 $1,243,641 $ -
P. W. Rooney - - 17,200 10,500 181,478 -
J. A. Reinhardt 16,400 289,650 2,100 6,900 - -
W. S. Klein - - 3,000 3,300 19,500 -
J. Fahl 4,800 123,975 5,000 3,300 39,000 -
<FN>
(*) In accordance with SEC rules, this value is based upon the average
of the high and low market prices on the New York Stock Exchange on the
date of exercise less the exercise price. Whether any actual profits
will be realized will depend upon whether the shares acquired are sold
and the amount received upon any such sale.
(#) In accordance with SEC rules, this value is based upon the average
of the high and low market prices on the New York Stock Exchange on the
last trading day of the fiscal year, which was $24.9375, less the
exercise price. Whether any actual profits will be realized will depend
upon whether the shares acquired are sold and the amount received upon
any such sale.
</TABLE>
Pension Plans
The following table shows the estimated annual pension benefits
payable to a covered participant at normal retirement age under the
Company's Salaried Employees' Retirement Plan, a qualified defined
benefit pension plan, as well as under the Company's Nonqualified
Supplementary Benefit Plan, which provides benefits that would otherwise
be denied participants by reason of certain Internal Revenue Code
limitations on qualified plan benefits.
(continued)
11
<PAGE>
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years Of Service
--------------------------------------------------------------
Remuneration 20 25 30 35 40 45 50
- ------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$300,000 $ 90,000 $112,500 $135,000 $157,500 $180,000 $202,500 $225,000
350,000 105,000 131,250 157,500 183,750 210,000 236,250 262,500
400,000 120,000 150,000 180,000 210,000 240,000 270,000 300,000
450,000 135,000 168,750 202,500 236,250 270,000 303,750 337,500
500,000 150,000 187,500 225,000 262,500 300,000 337,500 375,000
550,000 165,000 206,250 247,500 288,750 330,000 371,250 412,500
600,000 180,000 225,000 270,000 315,000 360,000 405,000 450,000
650,000 195,000 243,750 292,500 341,250 390,000 438,750 487,500
700,000 210,000 262,500 315,000 367,500 420,000 472,500 525,000
750,000 225,000 281,250 337,500 393,750 450,000 506,250 562,500
800,000 240,000 300,000 360,000 420,000 480,000 540,000 600,000
850,000 255,000 318,750 382,500 446,250 510,000 573,750 637,500
900,000 270,000 337,500 405,000 472,500 540,000 607,500 675,000
950,000 285,000 356,250 427,500 498,750 570,000 641,250 712,500
</TABLE>
Remuneration in the table above is the average of a participant's
annual compensation, as reported in the Summary Compensation Table,
during the highest five out of the last ten years of employment.
Benefits shown reflect estimated straight-life annuity payments assuming
normal retirement at age 65; the benefits are not subject to deduction
for Social Security or other offset amounts.
The credited years of service at normal retirement for each of the
executive officers named in the Summary Compensation Table will be as
follows: Ivan W. Gorr - 23.4; Patrick W. Rooney - 43.3; J. Alec
Reinhardt - 31.3; William S. Klein - 33.3; and John Fahl - 47.2.
Employment Agreements
The Company entered into employment agreements with Ivan W. Gorr
and J. Alec Reinhardt, each effective January 1, 1987, and with Patrick
W. Rooney, effective January 1, 1991. The agreements provide for the
payment of an annual base salary and for participation in certain
employee benefit plans. The current base salaries payable to Messrs.
Gorr, Reinhardt, and Rooney under the agreements are $409,268, $251,704,
and $298,251, respectively, which amounts are reviewed annually and may
be increased but not decreased. In addition, these executive officers
receive cash bonuses as described earlier in this proxy statement. The
initial term of each agreement is four (4) years, with the term being
automatically extended for one year each January 1 unless either the
Company or the executive officer gives prior written notice of its or
his desire not to extend the term. In no event will the term extend
beyond the end of the year in which the executive officer's 65th
birthday occurs.
The agreements restrict these executive officers from competition
with the Company, unless the prior written consent of the Board of
Directors is received, and prohibit disclosure of confidential
information. In addition, the agreements provide that in the event of
termination of employment by the Company without Cause or by the
executive officer for Good Reason the executive officer is entitled to
receive severance benefits for the remainder of the term equal to his
(continued) 12
<PAGE>
average annual compensation during the five years prior to the year in
which such termination occurs. In the event that any payment of such
severance benefits would, under the Internal Revenue Code of 1986, as
amended, trigger the imposition of an excise tax on, and the loss of a
deduction to the Company or its successors for, all or any part of the
payments, such payments shall be reduced until no such excise tax is
imposed or deduction lost.
The agreements also provide (i) continuation of Company-sponsored
life, accident and health insurance benefits for the remainder of the
term, (ii) a lump sum payment equal to the actuarial equivalent of the
difference between (a) the benefits which would have accrued under the
Salaried Employees' Retirement Plan or the Nonqualified Supplementary
Benefit Plan, based on full vesting and additional service credit, and
(b) the amount of the benefits actually accrued at the date of
termination, (iii) a lump sum cash payment equal to the difference
between the exercise price of stock options held by the executive
officer and the fair market value of the stock subject to such options
at the time of termination, and (iv) any legal expenses and fees
incurred as a result of his termination of employment. "Cause" under
the agreements generally includes the willful failure of the executive
officer to substantially perform his duties or the commission of a
felony or his engaging in some type of willful misconduct which is
materially injurious to the Company. "Good Reason" generally includes
any reduction in salary, benefits, an alteration of the executive
officer's responsibilities or status, relocation of the Company, and
failure of any successor of the Company or its business to assume the
employment agreements.
Compensation of Directors
The Company pays each Director who is not a Company officer an
annual retainer of $12,000 together with a $2,000 per diem fee for
attendance at Board meetings and at Committee meetings not held on the
same day as a Board meeting. Directors who are Company Officers receive
no additional compensation for serving as Directors. Board meetings
were held on five days during 1993.
At the Annual Meeting in 1991, stockholders approved the 1991
Stock Option Plan for Non-Employee Directors. Only Directors who are
not present or former employees of the Company or any of its
subsidiaries ("Non-Employee Directors") may participate in this Plan;
Directors who are present employees of the Company are eligible for
participation in the Company's Incentive Stock Option Plans.
The maximum number of shares of the Company's Common Stock which
may be issued pursuant to options granted under the Plan is currently
100,000 shares, subject to adjustment for subsequent stock splits, stock
dividends, or other specified events. The number of option shares
granted to a Non-Employee Director each year is determined pursuant to a
formula which provides that the dollar value of the option grant will be
equal to a fixed percentage of each Non-Employee Director's total
compensation paid by the Company for the previous fiscal year, which
percentage is based upon the Company's return on equity for such
previous fiscal year.
The exercise price for each option is equal to the fair market
value of a share of Common Stock on the grant date, calculated by
averaging the high and low sale prices of the Common Stock on the New
York Stock Exchange on that date. The maximum number of option shares
which may be awarded to a Non-Employee Director in any year is currently
(continued) 13
<PAGE>
1,000. All options granted pursuant to the Plan are unexercised, except
that an option for 236 shares was exercised during 1993. The current
number of unexercised shares for each Director is indicated in the table
on pages 16 and 17 of this proxy statement.
Five-Year Stockholder Return Comparison
The SEC requires that the Company include in its proxy statement a
line graph presentation comparing cumulative, five-year stockholder
returns on an indexed basis with the Standard & Poors ("S&P") 500 Stock
Index and either a published industry or line-of-business index or an
index of peer companies selected by the Company. The Company has chosen
the S&P Auto Parts After Market Index as the most appropriate of the
nationally recognized industry standards. The particular stocks in each
index are selected by S&P, and each index includes the Company's stock.
The following chart assumes three hypothetical $100 investments on
January 1, 1988, and shows the cumulative values at the end of each
succeeding year resulting from appreciation or depreciation in the stock
market price, assuming dividend reinvestment.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX
AND S&P AUTO PARTS AFTER MARKET INDEX
(Graph having a $0 - $600 range on the vertical axis and the dates
indicated below on the horizontal axis. Three lines appear on the
graph, each having data points as indicated below, the first row of
dollar amounts representing an investment in Cooper Tire & Rubber
Company, the second row representing an investment in the S&P 500 Index,
and the third row representing an investment in the S&P Auto Parts After
Market Index.)
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$100.00 $136.41 $146.10 $438.72 $588.62 $435.87
100.00 131.69 127.60 166.47 179.15 197.21
100.00 107.20 79.05 145.03 182.40 212.01
</TABLE>
As illustrated, the $100 investment in Company stock increased
over the five years to $435.87, more than $200.00 greater than the
increases of either the S&P 500 group or the S&P Auto Parts After Market
group.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During 1993 the Company's Board of Directors held five Board
meetings, seven meetings of the Board's Audit and Compensation Committee
and two meetings of the Board's Nominating Committee. Each Director
attended more than 75% of the aggregate number of meetings of the Board
of Directors and meetings of Committees on which such Director served
during the past fiscal year.
The Company's Audit and Compensation Committee consists of Messrs.
Gormley, Magliochetti, Meltzer and Winbigler. The functions of this
Committee include recommending the engaging and discharging of the
(continued) 14
<PAGE>
Company's independent auditors, directing and supervising special
investigations, reviewing with the independent auditors the plan for and
results of the audit engagement, reviewing the scope and results of the
Company's procedures for internal auditing, approving professional
services provided by the independent auditors, reviewing the
independence of the independent auditors, considering the range of audit
and non-audit fees, and reviewing the adequacy of the Company's system
of internal accounting controls. In addition, the Committee recommends
the remuneration arrangements for the Company's officers, the adoption
of a compensation plan in which officers are eligible to participate,
and the granting of options or other benefits under any such plan.
The Nominating Committee, composed of Messrs. Davis, Gorr, Marohn
and Winbigler, conducts the search for, evaluation of, and proposal to
the Board for nomination of qualified, competent and worthy candidates.
The Nominating Committee will consider candidates proposed by
stockholders of this Company or other parties. Such a recommendation
must be in writing, accompanied by a description of the proposed
nominee's qualifications and other relevant biographical information,
and an indication of the consent of the proposed nominee to serve. The
recommendation should be addressed to the Nominating Committee of the
Board of Directors, Attention: Secretary, Cooper Tire & Rubber Company,
Findlay, Ohio 45840.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young has been the Company's independent auditors for a
number of years and will continue in that capacity during 1994. Ernst &
Young has advised the Company that neither the firm nor any of its
members or associates has any direct or indirect financial interest in
the Company or any of its affiliates. During 1993, Ernst & Young
rendered audit and related services to the Company, including an audit
of the Company's annual financial statements and reviews of quarterly
reports. There is no understanding or agreement between the Company and
its independent auditors that places a limit on audit fees since the
Company pays only for services actually rendered and at what it believes
are customary rates.
A representative of Ernst & Young will be present at the Annual
Meeting of Stockholders and will be available to respond to appropriate
questions and to make a statement if he desires to do so. Professional
services rendered by the Company's independent auditors are reviewed by
the Audit and Compensation Committee both as to the advisability and
scope of the service, and also to consider whether such service would
affect the continuing independence of the Company's independent
auditors.
BENEFICIAL OWNERSHIP OF SHARES
The information which follows is furnished as of March 7, 1994, to
indicate those persons known by the Company to be holders of record of,
or who may be the beneficial owners of, more than 5% of any class of the
Company's voting securities.
(continued)
15
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership Of Class
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock National City Bank* 9,230,954 shs# 11.0%
P.O. Box 5756
Cleveland, OH 44101
Common Stock J. P. Morgan & Co.
Incorporated+ 7,449,333 shs 8.9%
60 Wall Street
New York, NY 10260
<FN>
(*) Trustee for the Company's Thrift and Profit Sharing Plan and the
Pre-Tax Savings Plans at the Auburn, Bowling Green, Findlay, El Dorado,
and Texarkana Plants.
(#) National City Bank, in its fiduciary capacity as Trustee of each
Plan, has no investment powers and will vote the shares held in such
Plan in accordance with the written instructions from the respective
Plan participants. However, if no such instructions are received by the
close of business two (2) days prior to the meeting date, the provisions
of each Plan direct the Trustee to vote such participant's shares in the
same manner in which the Trustee was directed to vote the majority of
the shares of the other participants who gave directions as to voting.
(+) According to a filing on Schedule 13G with the Securities and
Exchange Commission dated December 31, 1993, J. P. Morgan & Co.
Incorporated, a holding company, and its subsidiaries acquired the
indicated shares in the ordinary course of business and not for the
purpose of changing or influencing the control of the Company. The
nature of the beneficial ownership consists of sole power to vote with
respect to 4,317,043 shares; shared power to vote with respect to 3,800
shares; sole power to dispose with respect to 7,444,833 shares; and
shared power to dispose with respect to 4,500 shares.
</TABLE>
The information which follows is furnished as of March 7, 1994, to
indicate ownership by all executive officers and Directors of the
Company, as a group, and each Director or nominee, individually, of each
class of the Company's voting securities. Unless otherwise indicated,
the nature of the beneficial ownership consisted of sole voting and
investment power.
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
- -------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Common Stock All executive officers 1,599,634 shs* 1.9%
and Directors as a group
Common Stock John Fahl 86,873 shs# **
Common Stock Delmont A. Davis 100 shs **
Common Stock Edsel D. Dunford - -
Common Stock Dennis J. Gormley 120 shs# **
Common Stock Ivan W. Gorr 591,044 shs# **
Common Stock Joseph M. Magliochetti 200 shs **
Common Stock William D. Marohn 680 shs# **
Common Stock Allan H. Meltzer 7,960 shs#+ **
Common Stock J. Alec Reinhardt 285,414 shs# **
Common Stock Patrick W. Rooney 238,474 shs# **
Common Stock Leon F. Winbigler 20,760 shs# **
<FN>
**Less than 1%
(continued) 16
<PAGE>
(*) Includes 101,480 shares obtainable on exercise of stock options
within 60 days following March 7, 1994, which options have not been
exercised. The nature of the beneficial ownership consists of 992,641
shares subject to sole voting and investment power, and 6,400 shares
subject to shared voting and investment power. Of the shares shown as
beneficially owned, 499,113 or .6% of the shares outstanding, are shares
held in the Company's Thrift and Profit Sharing Plan for the account of
the various officers and Directors.
(#) Includes shares obtainable on exercise of stock options within 60
days following March 7, 1994, which options have not been exercised, as
follows: John Fahl - 5,000; Dennis J. Gormley - 120; Ivan W. Gorr -
54,296; William D. Marohn - 444; Allan H. Meltzer - 1,560; J. Alec
Reinhardt - 2,100; Patrick W. Rooney - 17,200; and Leon F. Winbigler -
1,560.
(+) Includes 6,400 shares subject to shared voting and investment
power.
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers, and persons who own more
than ten percent of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission and the
New York Stock Exchange initial reports of ownership and reports of
changes in ownership of Common Stock of the Company.
To the Company's knowledge, based upon the reports filed and
written representations that no other reports were required, during the
fiscal year ended December 31, 1993, all Section 16(a) filing
requirements applicable to its Directors and executive officers were
complied with, except two filings were late - an SEC Form 4 filed by
Julien A. Faisant containing two transactions not reported on a timely
basis and an SEC Form 4 filed by Leon F. Winbigler, containing one such
transaction.
STOCKHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING
Any stockholder who intends to present a proposal at the 1995
Annual Meeting and who wishes to have the proposal included in the
Company's proxy statement and form of proxy for that meeting must
deliver the proposal to the Secretary of the Company not later than
November 23, 1994.
SOLICITATION AND OTHER MATTERS
The Board of Directors is not aware of any other matters which may
come before the meeting. However, if any other matters properly come
before the meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy in accordance with their
judgment on such matters.
The cost of soliciting proxies will be borne by the Company. In
addition to the solicitation by use of the mails, the Company has
retained Georgeson & Co., New York, New York, to aid in the solicitation
of proxies, at an anticipated cost of approximately $7,000, plus
expenses. The Company will also reimburse brokers and other persons for
their reasonable expenses in forwarding proxy material to the beneficial
owners of the Company's stock. Solicitations may be made by telephone,
<continued> 17
<PAGE>
telegram or by personal calls, and it is anticipated that such
solicitation will consist primarily of requests to brokerage houses,
custodians, nominees and fiduciaries to forward soliciting material to
the beneficial owners of shares held of record by such persons. If
necessary, officers and other employees of the Company may, by
telephone, telegram or personal interview, request the return of
proxies.
Please mark, execute and return the accompanying proxy so that
your shares may be voted at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Stan C. Kaiman, Secretary
March 22, 1994
IMPORTANT: All stockholders are earnestly requested to mark,
date, sign and mail promptly the enclosed proxy
for which an envelope is provided.
18
<PAGE>
(LOGO)
COOPER TIRE & RUBBER COMPANY
NOTICE
of Annual Meeting of Stockholders
and Proxy Statement
May 3, 1994
IMPORTANT:
All stockholders are earnestly requested to mark, date,
sign and mail promptly the enclosed proxy for which
an envelope is provided.
19
<PAGE>
(LOGO) PROXY
-----
COOPER TIRE & RUBBER COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints I. W. Gorr, S. C. Kaiman, and P. W.
Rooney and each of them, Proxies with full power of substitution to
attend the Annual Meeting of Stockholders of Cooper Tire & Rubber
Company to be held at the Findlay Elks Club, Main and East Hardin
Streets, Findlay, Ohio, on May 3, 1994, and any adjournment thereof, and
thereat to vote all shares of Common Stock registered in the name of the
undersigned at the close of business on March 7, 1994, upon the matters
set forth in the notice of said meeting and on the reverse side hereof.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
Election of Directors, Nominees:
D.A.Davis E.D.Dunford I.W.Gorr J.M.Magliochetti P.W.Rooney
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, SHARES REPRESENTED
HEREBY WILL BE VOTED. IF A CHOICE IS SPECIFIED, THE SHARES WILL BE VOTED
ACCORDINGLY. IF NO INSTRUCTIONS ARE GIVEN AS TO ANY PROPOSAL, THEY WILL BE
VOTED FOR SUCH PROPOSAL, INCLUDING ELECTION OF OFFICERS.
(Continued, and to be signed, on reverse side)
- -----------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
(X) Please mark your votes SHARES IN YOUR NAME
as in this example.
1. Election of Directors CHANGE OF ADDRESS
(see reverse) Please indicate change of address
FOR WITHHELD and check box below:
( ) ( )
For, except vote withheld from ----------------------------------
the following nominee(s):
----------------------------------
- -------------------------------
----------------------------------
----------------------------------
Change of Address ( )
Signature(s)------------------------------------- Date---------------
Signature(s)------------------------------------- Date---------------
Please date and sign exactly as name appears hereon. If any shares are
held by joint tenants, both should sign. When signing as attorney, as
executor, administrator or custodian, please give full title as such.
If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.
20
