UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1999
Commission File No. 1-4329
Standard Products
Individual Retirement and Investment Trust Plan
COOPER TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 34-4297750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Lima and Western Avenues, Findlay, Ohio 45840
(Address of principal executive offices)
(Zip code)
(419) 423-1321
(Registrant's telephone number, including area code)
1
<PAGE>
Standard Products
Individual Retirement and Investment Trust Plan
ITEM 1. Not applicable.
ITEM 2. Not applicable.
ITEM 3. Not applicable.
ITEM 4. FINANCIAL STATEMENTS OF THE PLAN
The Financial Statements of the Standard Products Individual Retirement and
Investment Trust Plan for the fiscal year ended June 30, 1999, together with
the report of Ernst & Young LLP, independent auditors, are attached to this
Annual Report on Form 11-K. The Financial Statements and the notes thereto
are presented in lieu of the financial statements required by items 1, 2 and 3
of Form 11-K and were prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of 1974.
EXHIBITS:
(23) Consent of Independent Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this Annual Report to be signed by the
undersigned, thereunto duly authorized.
COOPER TIRE & RUBBER COMPANY
/s/ Richard N. Jacobson
--------------------------------
RICHARD N. JACOBSON
Assistant General Counsel
Assistant Secretary
Date: June 8, 2000
--------------
2
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Financial Statements and Schedules
Standard Products
Individual Retirement and Investment Trust Plan
June 30, 1999 and 1998
and Year Ended June 30, 1999
With Report of Independent Auditors
3
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Standard Products
Individual Retirement and Investment Trust Plan
Financial Statements and Schedules
June 30, 1999 and 1998
and Year Ended June 30, 1999
CONTENTS
Report of Independent Auditors 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
SCHEDULES
Line 27a - Schedule of Assets Held for Investment Purposes 9
Line 27d - Schedule of Reportable Transactions 10
4
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Report of Independent Auditors
Pension Committee
The Standard Products Company
Individual Retirement and Investment Trust Plan
We have audited the accompanying statements of net assets available for
benefits of the Standard Products Individual Retirement and Investment Trust
Plan as of June 30, 1999 and 1998 and the related statement of changes in net
assets available for benefits for the year ended June 30, 1999. These
financial statements are the responsibility of the Plan'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 audits 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 net assets available for benefits of the Plan as of
June 30, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended June 30, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of June 30, 1999, and
reportable transactions for the year then ended, are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
May 31, 2000
5
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<TABLE>
Standard Products
Individual Retirement and Investment Trust Plan
Statements of Net Assets Available for Benefits
<CAPTION>
June 30
1999 1998
----------- -----------
<S> <C> <C>
INVESTMENTS:
Standard Products Company Stock Fund $20,752,273 $17,698,036
Standard Products PAYSOP Fund 285,632 353,917
Vanguard Windsor II Fund 19,583,526 16,220,358
Vanguard 500 Index Fund 5,034,178 2,948,646
Vanguard Prime Money Market Fund 6,497,618 5,943,096
Vanguard STAR Fund 8,771,852 8,589,610
Vanguard Retirement Savings Trust 5,461,036 4,667,179
Participant Loans 2,802,041 2,380,580
---------- ----------
Total investments 69,188,156 58,801,422
---------- ----------
RECEIVABLES:
Employer's contributions 432,974 400,681
Participants' contributions 522,071 492,658
Interest and dividends 275,972 113,728
Loan repayments 116,607 86,656
---------- ----------
Total receivables 1,347,624 1,093,723
---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $70,535,780 $59,895,145
========== ==========
<FN>
See accompanying notes.
</TABLE>
6
<PAGE>
<TABLE>
Standard Products
Individual Retirement and Investment Trust Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended June 30, 1999
<S> <C>
ADDITIONS:
Contributions-
Employer's $ 2,267,363
Participants' 6,971,453
----------
Total contributions 9,238,816
----------
Net appreciation in fair value of investments 1,183,336
Interest and dividends 3,905,871
----------
Total additions 14,328,023
----------
DEDUCTIONS:
Benefit payments 5,528,859
Administrative expenses 201,849
----------
Total deductions 5,730,708
----------
NET INCREASE BEFORE TRANSFER 8,597,315
TRANSFER FROM OTHER PLAN 2,043,320
NET ASSETS AVAILABLE FOR BENEFITS AT BEGINNING OF YEAR 59,895,145
----------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $70,535,780
==========
<FN>
See accompanying notes.
</TABLE>
7
<PAGE>
Standard Products
Individual Retirement and Investment Trust Plan
Notes to Financial Statements
June 30, 1999 and 1998
and Year Ended June 30, 1999
(1) DESCRIPTION OF PLAN
The following description of The Standard Products Individual Retirement and
Investment Trust Plan (the Plan) provides only general information.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution plan covering all salaried and non-union
hourly employees of The Standard Products Company (the Company) and its
wholly-owned subsidiaries Oliver Rubber Company, Holm Industries, Inc., and
Westborn Warehouse, Inc. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Pursuant to an acquisition by Holm Industries, Inc., a wholly owned subsidiary
of the Company, participants of the OEM/Miller Corporation Savings Plan became
participants of this Plan. During the 1999 Plan year, assets totaling
approximately $2,040,000, including participant loans of approximately
$105,000 were transferred from the OEM/Miller Corporation Savings Plan to this
Plan.
Contributions
Each year, participants may contribute up to 15 percent of their pretax
compensation. The Company contributes 75 percent of the first 2 percent and 25
percent of the next 3 percent (up to 5 percent) of base compensation that the
participant contributes to the Plan. All employer matching contributions are
invested in the Standard Products Company Common Stock Fund.
The Company may make a special employer contribution on behalf of each
eligible non-union hourly employee, whether or not they are depositing
participants. For the Plan years ended June 30, 1999 and 1998, respectively,
the special employer contributions were $250,400 and $237,259. All special
employer contributions are invested in the Vanguard Prime Money Market Fund.
Some employer contributions in the form of Company common stock are held in a
Payroll Stock Ownership Plan (PAYSOP). Contributions are no longer made to
the PAYSOP by the employer due to changes in tax legislation.
Upon enrollment, a participant may direct their contributions to any of the
Plan's investment fund options.
Participant Accounts
Individual accounts are maintained for each participant in the Plan. Each
participant's account is credited with the participant's contributions, their
allocation of the Company's contributions and Plan earnings.
<continued>
8
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Vesting
The participants are immediately vested in both their contributions and the
Company's contributions plus actual earnings thereon.
Participant Loans
Participants may borrow the lesser of 100 percent of their participant elected
contributions account or 50 percent of the vested value of their entire
account. In no event should the maximum loan exceed $50,000. The interest
rate is established based on the prime rate. Interest rates as of June 30,
1999 range from 8.25 percent to 9.25 percent. The loan repayment schedule can
be no longer than 54 months. Principal and interest is paid ratably through
payroll deductions.
Payment of Benefits
In the event of retirement, death, termination, permanent disability or other
separation from service, participants shall be entitled to receive an amount
equal to the value of the vested value of their account. Payment of benefits
may be taken in a lump sum cash distribution or in various annuity options.
Termination of the Plan
Although it has not expressed any intent to do so, the Company has the right,
under the Plan, to terminate the Plan subject to the provisions of ERISA.
Upon termination of the Plan, participants become fully vested in the total
value of their account.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
Investment Valuation and Recognition
The accompanying statements of net assets available for benefits reflect the
Plan's investments at fair value which equals the quoted market price on the
last business day of the Plan year. The shares of registered investment
companies are valued at quoted market prices which represent the net asset
value of shares held by the Plan at year-end. The participant loans are valued
at their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recognized when earned. Dividends are recorded on the ex-
dividend date.
Administrative Expenses
All costs and expenses incurred in administering the Plan are charged to the
Plan, unless otherwise paid by the Company.
<continued>
9
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Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform to the current year's presentation.
(3) INVESTMENTS
During 1999, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by
quoted market prices as follows:
<TABLE>
<CAPTION>
Net Realized
and Unrealized
Appreciation
in Fair
Value of
Investments
-----------
<S> <C>
Common Stock $ 109,180
Shares of Registered Investment Companies 1,074,156
---------
$1,183,336
=========
</TABLE>
(4) NON PARTICIPANT-DIRECTED INVESTMENTS
The Standard Products Company Stock Fund, Standard Products PAYSOP Fund, and
Vanguard Prime Money Market Fund are non participant-directed investments.
Information about the significant components of changes in net assets related
to the non participant-directed investments for the year ended June 30, 1999
is as follows:
Contributions $2,267,363
Dividends 534,052
Net appreciation in fair value of investment 15,013
Benefit payment (699,099)
Other deductions (37,565)
Transfers to other funds (710,774)
(5) FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue Service
dated February 7, 1997, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the Code) and, therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its qualification. The Plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
<continued>
10
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(6) RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the Trustee,
and, therefore, these transactions qualify as party-in-interest transactions.
There have been no known prohibited transactions with a party-in-interest.
(7) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
according to the financial statements to the Form 5500:
<TABLE>
<CAPTION>
June 30
1999 1998
----------- -----------
<S> <C> <C>
Net assets available for benefits per the
financial statements $70,535,780 $59,895,145
Amounts allocated to withdrawing participants (813,551) (381,036)
---------- ----------
Net assets available for benefits per the Form 5500 $69,722,229 $59,514,109
========== ==========
</TABLE>
The following is a reconciliation of benefits paid to participants according
to the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
June 30, 1999
-------------
<S> <C>
Benefits paid to participants per the financial
statements $5,528,859
Add- Amounts allocated to withdrawing participants
at June 30, 1999 813,551
Less- Amounts allocated to withdrawing participants
at June 30, 1998 (381,036)
---------
Benefits paid to participants per the Form 5500 $5,961,374
=========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
June 30 but not yet paid as of that date.
(8) SUBSEQUENT EVENTS
On October 27, 1999, all of the outstanding common stock shares of Standard
Products were acquired by Cooper Tire & Rubber Company (Cooper) for $36.50 per
share and Standard Products became a wholly-owned subsidiary of Cooper. The
Plan has not been terminated and it is the Company's intention to continue
operating the Plan as described in the Plan document.
11
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<TABLE>
Standard Products
Individual Retirement and Investment Trust Plan
EIN: 34-0549970 - Plan: 011
Line 27a - Schedule of Assets Held for Investment Purposes
As of June 30, 1999
<CAPTION>
Shares/ Current
Par Value Description Cost Value
--------- ----------- ----------- -----------
<S> <C> <C> <C>
1,512,556 *Standard Products Company Stock Fund $17,593,184 $20,752,274
20,623 *Standard Products PAYSOP Fund 178,708 285,632
596,331 *Vanguard Windsor II Fund 14,782,074 19,583,526
39,692 *Vanguard 500 Index Fund 4,073,250 5,034,177
6,497,618 *Vanguard Prime Money Market Fund 6,497,618 6,497,618
459,500 *Vanguard STAR Fund 7,243,702 8,771,852
5,461,036 *Vanguard Retirement Savings Trust 5,461,036 5,461,036
*Participant Loans, interest rates
N/A ranging from 8.25% to 9.25% - 2,802,041
---------- ----------
Total $55,829,572 $69,188,156
========== ==========
<FN>
*Represents a party-in-interest
</TABLE>
12
<PAGE>
<TABLE>
Standard Products
Individual Retirement and Investment Trust Plan
EIN: 34-0549970 - Plan: 011
Line 27d - Schedule of Reportable Transactions
For the Year Ended June 30, 1999
During the year ended June 30, 1999, the Plan had the following "reportable
transactions", as defined, involving an amount in excess of 5% of the net
assets available for plan benefits at the beginning of the year, July 1, 1998:
<CAPTION>
Sale Proceeds/ Historical
Description Purchase Cost Cost Gain
----------- ------------- ----------- --------
<S> <C> <C> <C>
Category (iii) Series of transactions in excess of 5%:
Standard Products Company
Stock Fund
Sales $3,877,008 $3,588,078 $288,930
Purchases 6,784,112 6,784,112 N/A
Vanguard Windsor II Fund
Sales 3,892,479 3,139,457 753,022
Purchases 6,933,541 6,933,541 N/A
Vanguard Prime Money Market Fund
Sales 1,987,421 1,987,421 -
Purchases 2,541,860 2,541,860 N/A
Vanguard STAR Fund
Sales 2,235,763 1,935,261 300,502
Purchases 2,277,067 2,277,067 N/A
Vanguard Retirement Savings
Trust
Sales 1,676,495 1,676,495 -
Purchases 2,470,351 2,470,351 N/A
Vanguard Index Trust-
500 Portfolio
Sales 1,509,614 1,373,170 136,444
Purchases 2,984,032 2,984,032 N/A
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
13
<PAGE>
Exhibit (23)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-01923) pertaining to The Standard Products Individual
Retirement and Investment Trust Plan (the Plan) of our report dated May 31,
2000, with respect to the Plan's financial statements and schedules included
in this Annual Report (Form 11-K) for the year ended June 30, 1999.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Toledo, Ohio
June 8, 2000
14
