<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1998
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TITAN INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C>
ILLINOIS 36-3228472
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
2701 SPRUCE STREET
QUINCY, ILLINOIS 62301
(217) 228-6011
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CHERI T. HOLLEY, ESQUIRE
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
TITAN INTERNATIONAL, INC.
2701 SPRUCE STREET
QUINCY, ILLINOIS 62301
(217) 228-6011
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [ ]
If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration number of the earlier effective registration statement for the same
offering [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED SHARE(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 803,850 shares $13.93 $11,197,631 $3,303
share........................... 671,618 shares $13.28 $ 8,919,087 $2,632
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Total............................. 1,475,468 shares $20,116,718 $5,935
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</TABLE>
(1) This registration statement registers the issuance of: (i) 400,000 shares of
the Registrant's Common Stock pursuant to the Titan International, Inc. 1994
Non-Employee Director Stock Option Plan, and (ii) 1,075,468 shares of the
Registrant's Common Stock pursuant to the Titan International, Inc. 1993
Stock Incentive Plan. This registration statement also relates to such
indeterminate number of additional shares of Common Stock of Titan
International, Inc. as may be issuable as a result of stock splits, stock
dividends or additional similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee: (i)
pursuant to Rule 457(h) under the Securities Act of 1993, as amended, with
respect to 803,850 shares subject to outstanding options (at exercise prices
ranging from $11.11 to $18.00); and (ii) pursuant to Rule 457(c) with
respect to the remaining 671,618 shares being registered hereunder, based
upon the average of the high and low prices reported on the New York Stock
Exchange on August 13, 1998.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 18, 1998
PROSPECTUS
TITAN INTERNATIONAL, INC.
1,475,468 SHARES
OF
COMMON STOCK
This Prospectus relates to up to (i) 400,000 shares of Common Stock, no par
value per share (the "Common Stock"), of Titan International, Inc. (the
"Company") which may be issued by the Company upon the exercise of nonqualified
stock options (the "Director Options") initially granted to directors of the
Company (the "Director Participants") under the Company's 1994 Non-Employee
Director Stock Option Plan (the "Director Plan"), and (ii) 1,075,468 shares of
Common Stock of the Company which may be issued by the Company upon the exercise
of incentive stock options or nonqualified stock options (collectively, the
"Employee Options", and together with the Director Options, the "Options")
initially granted to certain employees (the "Employee Participants", and
together with the Director Participants, the "Plan Participants") under the
Company's 1993 Stock Incentive Plan (the "Employee Plan", and together with the
Director Plan, the "Plans"), which may be transferred by Plan Participants to
Eligible Transferees, as defined herein generally as a Plan Participant's
spouse, descendants and entities formed for their benefit, in each case, in
accordance with the Plans and the grant documents specifying the terms and
conditions of such Options.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTIVE PURCHASERS SHOULD CONSIDER THE RISKS SET FORTH UNDER "RISK
FACTORS" COMMENCING ON PAGE 2.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offer contained herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, any securities offered hereby in any jurisdiction in which
it is not lawful or to any person to whom it is not lawful to make any such
offer or solicitation. Neither the delivery of this Prospectus nor the sale made
hereunder shall, under any circumstances, create any implication that
information herein is correct as of any time subsequent to the date hereof.
The Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol TWI. On August 14, 1998, the closing sales price of the Common Stock,
as reported by the NYSE, was $13.50.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE> 3
RISK FACTORS
Prospective purchasers should carefully consider the risk factors set forth
below, as well as other information set forth in this Prospectus, prior to
making any investment in the common stock:
DEPENDENCE ON CYCLICAL INDUSTRIES
The Company's sales are dependent in substantial part on three major
industries, the agricultural equipment industry, the consumer products industry
(including recreational trailers, all-terrain vehicles ("ATVs") and grounds care
vehicles) and the earthmoving/construction equipment industry, representing 48%,
24% and 23% of the Company's net sales for the year ended December 31, 1996,
respectively, and 52%, 22% and 24% of the Company's net sales for the year ended
December 31, 1997, respectively.
From the late 1970's until 1993, sales of agricultural equipment in North
America declined significantly and sales of off-highway construction equipment,
recreational trailer and vehicle and turf and garden equipment in North America
were cyclical. Since the mid-1980's, the market for marine trailers also
declined substantially. Although these markets have improved in recent years,
the Company believes that the market for the sale by original equipment
manufacturers ("OEMs") of agricultural equipment which utilize the Company's
products will continue to be below historical averages for the foreseeable
future. Furthermore, based on the Company's already strong position in the North
American and European markets as a producer of wheels and rims for this
equipment, the Company believes that its opportunities for significant growth in
market share in this aspect of its business will be limited.
SUBSTANTIAL LEVERAGE
The Company increased the extent to which it is leveraged as a result of
its offering of $150 million of 8 3/4% Senior Subordinated Notes (the
"Subordinated Notes") in 1997. The Company used $145.7 million of proceeds from
the sale of the Subordinated Notes to repay outstanding long-term debt and for
the repurchase of five million shares of the Company's common stock at a cost of
$72.8 million. As of June 30, 1998, the Company's total indebtedness was
approximately $213.6 million, its stockholders' equity was approximately $261.3
million and the Company's total assets were approximately $655.7 million, of
which approximately $41.9 million were intangible assets. The Company believes,
based on current circumstances, that the Company's cash on hand and cash
equivalents of $20.1 million available on June 30, 1998, together with available
borrowings under its $200 million bank credit facility ("Bank Credit Facility")
will be sufficient to permit the Company to meet its operating expenses and to
service its debt requirements as they become due. At June 30, 1998, the Company
had $25 million debt outstanding under the Bank Credit Facility.
The degree to which the Company is currently leveraged could have important
consequences to the holders of the Company's securities and the capitalization
and future fiscal operations of the Company, including, but not limited to, the
following: (i) a substantial portion of the Company's cash flow from operations
will be required to be dedicated to debt service and will not be available to
the Company for its operations; (ii) the Company's ability to obtain additional
financing in the future for acquisitions, capital expenditures, working capital
or general corporate purposes could be limited; (iii) certain of the Company's
borrowings are at variable rates of interest, which could result in higher
interest expense in the event of increases in interest rates; (iv) the Company
may be substantially more leveraged than certain of its competitors, which may
place the Company at a relative competitive disadvantage and make the Company
more vulnerable to changing market conditions and regulations; and (v) the
Company's level of indebtedness could limit its flexibility in planning for, or
reacting to, changes in its business. The Company's ability to satisfy its
obligations will be dependent upon its future performance, which is subject to
general economic conditions and to financial, business and other factors beyond
the Company's control. If the Company is unable to service its indebtedness, it
will be forced to adopt an alternative strategy that may include actions such as
reducing or delaying capital expenditures, selling assets, restructuring or
refinancing its indebtedness or seeking additional equity capital. There can be
no assurance that any of these strategies could be effected on satisfactory
terms, if at all.
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<PAGE> 4
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS
The indenture relating to the Subordinated Notes (the "Indenture") contains
certain covenants limiting the incurrence of additional indebtedness, the
payment of dividends, the redemption of capital stock, the making of certain
investments, the issuance of capital stock of subsidiaries, the creation of
liens, the creation of dividend and other restrictions affecting subsidiaries,
the issuance of guarantees, transactions with affiliates, asset sales and
certain mergers and consolidations. However, these limitations are subject to a
number of important qualifications and exceptions. In addition, the Bank Credit
Facility contains restrictive covenants and requires the Company to maintain
specified financial ratios and satisfy certain financial tests. The Company's
ability to meet such financial ratios and tests may be affected by events beyond
its control, and there can be no assurance that the Company will meet such
tests. A breach of any of these covenants could result in an event of default
under the Bank Credit Facility. In an event of default under the Bank Credit
Facility, the lenders thereunder could elect to declare all amounts borrowed,
together with accrued interest, to be immediately due and payable and the
lenders under the Bank Credit Facility could terminate all commitments
thereunder. If any such indebtedness were to be accelerated, there can be no
assurance that the assets of the Company would be sufficient to repay in full
such indebtedness and the other indebtedness of the Company, including the
Subordinated Notes. In addition, a default under the Bank Credit Facility or the
instruments governing the Company's other indebtedness could constitute a
cross-default under the Indenture and any instruments governing the Company's
other indebtedness, and a default under the Indenture could constitute a
cross-default under the Bank Credit Facility and any instruments governing the
Company's other indebtedness. Such defaults may cause the shares of Common Stock
to have little or no value .
SENSITIVITY TO NORTH AMERICAN AND EUROPEAN ECONOMIES
Sales of a substantial portion of the Company's products in the
agricultural, consumer products and the off-highway construction markets are
directly related to the overall level of production of OEMs, which, in turn, is
sensitive to the overall strength of the North American and European economies,
including farm income and farm land values, consumer disposable income, interest
rates, levels of acreage planted and crop yields, international supply and
demand conditions for agricultural commodities and forestry products, weather
conditions, and other general agricultural, forestry, construction and mining
conditions. Significant adverse changes in the overall strength of these
economies or in these other factors would have a negative effect on the
Company's business.
RISKS OF FOREIGN OPERATIONS
The percentage of sales generated by foreign subsidiaries of the Company
has been increasing in recent years. For the fiscal years ended December 31,
1996 and December 31, 1997, the Company's net sales generated by sales of its
foreign subsidiaries were 21.6% and 22.4%, respectively. International
operations and exports to foreign markets are subject to a number of special
risks, including, but not limited to, risks with respect to currency exchange
rates, economic and political destabilization, other disruption of markets,
restrictive actions by foreign governments (such as restrictions on transfer of
funds, export duties and quotas, foreign customs and tariffs and unexpected
changes in regulatory environments), changes in foreign laws regarding trade and
investment, difficulty in obtaining distribution and support, nationalization,
the laws and policies of the United States affecting trade, foreign investment
and loans, and foreign tax laws. There can be no assurance that one or a
combination of these factors will not have a material adverse effect on the
Company's ability to increase or maintain its foreign sales or on its results of
operations.
In addition, the Company has significant manufacturing operations in
foreign countries and purchases a portion of its raw materials from foreign
suppliers. The production costs, profit margins and competitive position of the
Company are affected by the strength of the currencies in countries where it
manufactures or purchases goods relative to the strength of the currencies in
countries where its products are sold. The Company's results of operations and
financial position may be adversely affected by fluctuations in foreign
currencies and by translations of the financial statements of the Company's
foreign subsidiaries from local currencies into U.S. dollars.
3
<PAGE> 5
POTENTIAL ADVERSE EFFECT OF REGULATION AND GOVERNMENT POLICY
Domestic and foreign political developments and government regulations and
policies directly affect the agricultural, off-highway construction and consumer
products industries in the United States and abroad and indirectly affect the
wheel and tire markets for such industries. Regulations and policies relating to
the agricultural industry include those encouraging farm acreage reduction in
the United States and restricting deforestation techniques. Regulations and
policies relating to the off-highway construction industry include those
regarding the construction of roads, bridges and other items of infrastructure.
Regulations and policies relating to over-the-highway vehicles include standards
established by the U.S. Department of Transportation for tire endurance
standards and safety. The modification of existing laws, regulations or
policies, or the adoption of new laws, regulations or policies, could have an
adverse effect on the Company's business.
The Company is subject to various federal, state, local and foreign
environmental laws and regulations in the jurisdictions in which it operates.
The Company does not currently anticipate any material adverse effect on its
operations or financial condition as a result of its efforts to comply with, or
its liabilities under, environmental laws. In addition, the Company does not
currently anticipate any material capital expenditures for environmental control
facilities. Some risk of environmental liability is inherent in the Company's
business, including with respect to Company facilities which have been used for
industrial purposes for a period of decades, and there can be no assurance that
material environmental costs will not arise in the future. In particular, the
Company might incur capital, remediation and other costs to comply with
increasingly stringent environmental laws and enforcement policies. Although it
is difficult to predict future environmental costs, the Company does not
anticipate any material adverse effect on its operations, financial condition or
competitive position as a result of future costs of environmental compliance.
DEPENDENCE ON PRINCIPAL CUSTOMERS
The Company's ten largest customers accounted for approximately 45% of net
sales for the year ended December 31, 1997, compared to 42% for the year ended
December 31, 1996. The Company's largest customer, Deere & Company, accounted
for approximately 16% of the net sales for fiscal year 1997, compared to 13% for
fiscal year 1996. In the event that one of the Company's larger customers were
to reduce its purchases as a result of work stoppages or slow-downs, financial
difficulties, termination provisions, competitive pricing or other reasons, the
Company's business could be adversely affected. Although the Company has had
long-term relationships with its major customers and expects that it will be
able to negotiate extensions of its current arrangements, there can be no
assurance that it will be able to do so or that, if obtained, such arrangements
will be obtained on terms favorable to the Company. Any failure to obtain an
extension of an arrangement with a leading customer could have an adverse effect
on the Company.
DEPENDENCE ON EXISTING MANAGEMENT AND KEY PERSONNEL
The Company continued success and viability are dependent, to a certain
extent, upon its ability to attract and retain qualified personnel in all areas
of its businesses, especially management positions. In the event the Company is
unable to attract and retain qualified personnel, its businesses may be
adversely affected. Mr. Taylor, the Company's President and Chief Executive
Officer, has been instrumental in the development and implementation of the
Company's business strategy. The Company's Bank Credit Facility provides that if
Mr. Taylor ceases to serve as an executive officer or director of the Company
for more than 180 days, and if during that period the Company has not replaced
Mr. Taylor with a person reasonably acceptable to the Company's lenders, the
lenders may require the entire amount outstanding thereunder to be repaid. The
Company does not maintain key-person life insurance policies on any of its
executive officers. The loss or interruption of the continued full-time services
of any of the Company's executive officers, including Mr. Taylor, could have a
material adverse effect on the Company.
COMPETITION
The Company competes with several international and domestic competitors,
some of which are larger and have greater financial and marketing resources.
Major competitors in the wheel market include GKN
4
<PAGE> 6
Wheels, Ltd. and Topy Industry, Ltd, and major competitors in the tire markets
include Goodyear Tire & Rubber Co. and Bridgestone-Firestone. Based on current
industry revenue data, the Company is the third largest agricultural tire
manufacturer in North America. The Company competes primarily on the basis of
price, quality, customer service, design capability and delivery time. Its
ability to compete with international competitors may be adversely affected by
currency fluctuations. In addition, certain of the Company's OEM customers
could, under certain circumstances, elect to manufacture certain of the Company
products to meet their requirements or to otherwise compete with the Company.
There can be no assurance that the businesses of the Company will not be
adversely affected by increased competition in the markets in which it operates
or that the Company's competitors will not develop products that are more
effective or less expensive than the Company's products or which could render
certain of the Company's products less competitive. From time to time certain
competitors of the Company have reduced their prices in particular product
categories, which has caused the Company to reduce its prices. There can be no
assurance that in the future competitors of the Company will not further reduce
prices or that any such reductions would not have a material adverse effect on
the Company.
RISKS IN ACQUISITION STRATEGY
A key element of the Company's business strategy is to acquire businesses
and assets of businesses that are complementary to those of the Company. The
ability of the Company to successfully implement its acquisition strategy
depends upon a number of factors. To implement its strategy, the Company must
identify acquisition opportunities in the wheel and tire or related industries,
successfully negotiate, finance and consummate such acquisitions and comply with
applicable regulatory restrictions (including antitrust laws) in the United
States and abroad. In carrying out its acquisition strategy, the Company
attempts to minimize the risk of unexpected liabilities and contingencies
associated with acquired businesses through planning, investigation and
negotiation, but such unexpected liabilities may nevertheless accompany
acquisitions. There can be no assurance that the Company will be able to
identify suitable acquisition candidates at favorable acquisition prices or that
it will be able to finance and consummate any such acquisitions. In past
acquisitions, the Company has been successful in reducing product and
organization costs upon consummation and integration of the acquisitions.
However, there can be no assurance that the Company will be able to integrate
any new acquisitions successfully into its operations and achieve cost savings
from such integration.
EMPLOYEES
At December 31, 1997, the Company employed approximately 4,200 people in
the United States and Europe. Approximately 26% of the Company's employees in
the United States are covered by two collective bargaining agreements which will
expire before the year 2000. The majority of employees at the Company's foreign
facilities are represented by collective bargaining agreements which are renewed
from time to time depending on terms of the agreement and the laws of the
foreign jurisdiction. Since the expiration of their collective bargaining
agreement on April 30, 1998, approximately 600 employees at the Company's Des
Moines, Iowa facility have been on strike. During the quarter ended June 30,
1998, the strike adversely impacted the Company's income from operations by
approximately $6.0 million and net income by approximately $3.7 million.
Although the Company believes that its relations with its employees are
generally good, any extended continuation of the Des Moines, Iowa strike could
continue to have an adverse effect on the Company's financial condition and
results of operations.
5
<PAGE> 7
USE OF PROCEEDS
The amount of the proceeds to be received upon exercise of the transferable
Options to which this Prospectus relates will depend upon the exercise prices of
the Options and the extent to which they are exercised. The proceeds from the
sale of the Common Stock will be used for general corporate purposes. The
Company has agreed to pay the expenses of registration of the shares of Common
Stock, including certain legal and accounting fees.
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 with the
Securities and Exchange Commission (the "Commission") relating to the shares of
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement or the exhibits thereto,
certain portions of which have been omitted pursuant to the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the shares offered hereby.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Commission. Proxy statements concerning
the Company, reports and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
its offices at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices in New York (7 World Trade Center, Suite 1300,
New York, New York 10048) and Chicago (Northwestern Atrium Center, 500 W.
Madison St., Suite 1400, Chicago, Illinois 60661-2511). Copies of such material
can be obtained from the Commission's web site at "http://www.sec.gov" and at
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Company's Common Stock is quoted
on the New York Stock Exchange. Reports, proxy statements and other information
concerning the Company can be inspected at The New York Stock Exchange, 20 Broad
Street, New York, NY 10005.
The Company will furnish, without charge, to any person to whom a copy of
this Prospectus is delivered, upon such person's written or oral request, a copy
of any and all of the documents that have been incorporated by reference in the
Registration Statement and herein (not including exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Any such request should be directed to General Counsel, Titan
International, Inc., 2701 Spruce Street, Quincy, Illinois 62301, phone number:
(217) 228-6011.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated May 10, 1993, including any
amendments or reports filed for the purpose of updating such description.
(d) In addition, all documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering of the
Common Stock hereunder shall be deemed to be incorporated by reference
herein from their respective dates of filing.
6
<PAGE> 8
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein 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.
THE COMPANY
Titan International, Inc. (the "Company") is a leading global manufacturer
of steel wheels and tires for off-highway vehicles used in the agricultural,
consumer products (including recreational trailers, ATVs and ground care
vehicles), earthmoving/construction and military markets. The Company generally
manufactures both the wheels and tires for these vehicles and increasingly
provides the value-added services of assembling the completed system. The
Company offers a broad range of over 25,000 different products that are
manufactured in relatively short production runs and must meet OEM
specifications. In addition to its North American facilities, the Company has
established manufacturing facilities in the following four European markets:
France, Germany, Italy, and the United Kingdom.
The Company's major OEM customers include Deere & Company ("Deere"), Case
Corporation, New Holland North America Inc., and Caterpillar Inc. in the
agricultural and off-highway construction markets and Deere, Bayliner Marine
Corporation, and Polaris Industries, Inc. in the consumer products markets. In
addition, the Company continues to expand its sales of wheels and tires to the
after-market, where product demand tends to be less cyclical than in the OEM
market. The Company distributes its tire products in the after-market through a
network of more than 1,500 independent distributors and 12 of its own
distribution centers. This distribution network enables the Company to service
markets not otherwise accessible through its traditional marketing channels.
The Company was incorporated in Illinois and its principal executive
offices are located at 2701 Spruce Street, Quincy, Illinois 62301, and its
telephone number is (217) 228-6011.
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<PAGE> 9
PLAN OF DISTRIBUTION AND DESCRIPTION OF THE PLANS
The shares of Common Stock of the Company covered by this Prospectus are
being offered by the Company to Eligible Transferees of transferable Options
granted to the officers and certain other key employees of the Company pursuant
to the Company's 1993 Stock Incentive Plan and 1994 Non-Employee Directors Stock
Option Plan. Both of the Plans are described below.
A copy of each of the Plans is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The following summary of
certain provisions of the Plans does not purport to be complete and is subject
to, and qualified in its entirety by reference to, all of the provisions of the
Plans, including the definitions of certain terms contained therein.
The Plans are not qualified under Section 401 of the Internal Revenue Code
of 1986, as amended (the "Code"), or subject to any provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The purpose of the Director Plan is to promote the interests of the Company
and its stockholders by using investment interests in the Company to attract and
retain highly qualified independent directors. The Director Options awarded
pursuant to the Director Plan are intended to constitute non-qualified stock
options. The Director Plan, as adopted, provided for the grant of options to
purchase a total of 400,000 shares of the Company's Common Stock, subject to
adjustment in the event of certain changes in the outstanding Common Stock of
the Company such as stock splits or stock dividends. Shares issued pursuant to
the Director Plan may either be newly issued shares or treasury shares. As of
June 30, 1998, Director Options for 198,000 shares were outstanding, and 202,000
shares of Common Stock remained available for issuance pursuant to future
Director Options to be granted under the Director Plan.
The Director Plan provides for automatic grants of a Director Option to
purchase 9,000 shares of the Company's Common Stock to be made to each duly
elected or appointed member of the Company's Board of Directors on (i) the date
he or she becomes an Eligible Director (the "Grant Date") and (ii) each
anniversary of the Grant Date thereof. The exercise price of the shares of
Common Stock covered by each Director Option may not be less than the fair
market value (as defined in the Director Plan) of the Common Stock on the Grant
Date. All Director Options granted under the Director Plan vest and become
exercisable on the Grant Date. Director Options may be exercised by delivering
written notice to the Company's principal executive office prior to the
expiration date, and upon delivery of such notice, the full exercise price, plus
applicable state or federal withholding taxes, must be paid pursuant to the
terms of the Director Plan. Director Options expire on the tenth anniversary of
the Grant Date.
The Director Plan is administered by the Board of Directors of the Company.
No amendments to the Director Plan that would: (i) increase the number of shares
subject to the Director Plan; (ii) increase the number of shares for which an
option or options may be granted under the Director Plan; (iii) change the class
of persons eligible to receive options under the Director Plan; (iv) provide for
the grant of options having an exercise price per option share less than the
exercise price specified in the Director Plan; or (v) extend the final date upon
which options may be granted under the Director Plan, may be made unless
approved by the Company's shareholders. Further, the Board of Directors do not
have the authority or discretion (matters specifically governed by the
provisions of the Director Plan) to: (i) select persons eligible to receive
Director Options; (ii) determine the number of shares covered by Director
Options; (iii) establish the timing of grants under the Director Plan; or (iv)
establish the exercise price or vesting provisions of Director Options.
1993 STOCK INCENTIVE PLAN
The purpose of the Employee Plan is to promote the interests of the Company
and its shareholders by encouraging Employee Participants to acquire a
proprietary interest in the Company through the grant of Employee Options, the
award of restricted stock (the "Restricted Stock Awards") and the grant of
8
<PAGE> 10
performance awards (the "Performance Awards", and together with the Employee
Options and the Restricted Stock Awards, the "Awards"). The Employee Plan, as
adopted, provided for the grant of Awards for a total 1,125,000 shares of Common
Stock, subject to adjustment in the event of certain changes in the outstanding
Common Stock of the Company such as stock splits or stock dividends. Shares
issued under the Plan may be either newly issued shares or treasury shares. As
of June 30, 1998, Awards for 605,850 shares of Common Stock were outstanding,
and 469,618 shares of Common Stock remained available for issuance pursuant to
future Awards to be granted under the Employee Plan.
The Employee Plan is administered by a committee of two or more
non-employee members of the Company's Board of Directors (the "Committee"). The
Committee has the discretion to interpret, prescribe and amend the rules and
regulations relating to the Employee Plan, and make all other determinations
necessary or advisable for its administration, to select the Employee
Participants and make decisions concerning the timing, pricing, vesting, and
other restrictions of any Award under the Employee Plan, and to amend or
terminate the Employee Plan at any time, subject to shareholder approval in
certain instances, and to delegate to one or more officers or managers of the
Company, or a committee of such officers of managers, its authority and duties,
subject to the terms and limitations determined by the Committee, under the
Employee Plan (as defined in the Employee Plan).
The Committee is authorized to grant Awards as forms of compensation
pursuant to the following terms of the Employee Plan:
Employee Options. The Committee is authorized to grant options to Employee
Participants for such number of shares of Common Stock and upon such other terms
(as defined in the Employee Plan) as it may designate. The Committee may
designate any option granted as an incentive stock option ("ISO"), a
nonqualified stock option ("NSO"), or the Committee may designate a portion of
an option as an ISO or a NSO. The date on which an option is granted is the date
of the Committee's authorization of the option (the "Grant Date").
Any option intended to constitute an ISO must comply with the following
requirements in addition to the other requirements of the Employee Plan: (i) an
ISO expires on the tenth anniversary of the Grant Date; (ii) the exercise price
per share for each ISO granted must be equal to the Fair Market Value per share
of Common Stock on the Grant Date (provided that no ISO is granted to any
Employee Participant who owns (within the meaning of the Internal Revenue Code)
stock of the Company, or any parent or subsidiary, possessing more than 10% of
the total combined voting power of all classes of stock of the Company, parent
or subsidiary unless, at the Grant Date of an option to such Employee
Participant), and the exercise price for the option is at least 110% of the Fair
Market Value of the shares subject to option and the option, by its terms, is
not exercisable more than five years after the Grant Date; and (iii) the
aggregate Fair Market Value of the underlying Common Stock at the time of grant
as to which ISOs under the Employee Plan may first be exercised by an Employee
Participant in any calendar year shall not exceed $100,000 (to the extent that
an option intended to constitute an ISO does exceed the $100,000 limitation, the
portion of the option that exceeds such limitation shall be deemed to constitute
a NSO).
The exercise price per share of a NSO shall not be less than 85% of the
Fair Market Value of the Common Stock on the Grant Date. A NSO is exercisable
for a term not to exceed ten years, or such lesser period as the Committee shall
determine.
Restricted Stock Awards. The stock available for awards of restricted stock
under the Employee Plan is the Common Stock (and it may be either authorized and
unissued shares or treasury held by the Company). The period of time during
which awards of restricted stock are subject to restrictions imposed by the
Committee (pursuant to the Employee Plan) may differ among Employee Participants
and may have different expiration dates with respect to portions of shares
covered by the same award. Subject to the terms of the Employee Plan, awards of
restricted stock contain the restrictions as the Committee may impose
(including, without limitation, limitations on the right to vote restricted
stock, the right to receive any dividend or other right or property, or the
right to sell, pledge, assign, or otherwise transfer the restricted stock), and
which
9
<PAGE> 11
restrictions may lapse separately or in combination at certain time or times, in
installments or otherwise. Unless the Committee determines otherwise, any shares
distributed with respect to restricted stock or which an Employee Participant is
otherwise entitled to receive by reason of the restricted stock, is subject to a
90-day restriction on transfer after receipt of stock certificates for such
shares. All Employee Participants (subject to the aforementioned restrictions
and the provisions of the Employee Plan) have all of the rights of a stockholder
with respect to shares of restricted stock.
Performance Awards. A performance award granted under the Employee Plan may
be denominated or payable in cash, shares of Common Stock (including, without
limitation, the award of restricted stock), the grant of Employee Options, other
securities, or other property, and confers on the holder thereof rights valued
as determined by the Committee and payable to, or exercisable by, the holder of
the performance award (in whole or in part) upon the achievement of a
performance goal and during the performance period established by the Committee.
Subject to the terms of the Employee Plan, the performance goals to be achieved
during any performance period, the amount of any performance award granted, the
amount of any payment or transfer to be made pursuant to any performance award
and other terms and conditions are determined by the Committee.
The purchase price for shares of Common Stock to be acquired upon exercise
of an Award granted under the Employee Plan is to be paid in full at the time of
exercise. No Awards may be granted under the Employee Plan after the tenth
anniversary of the date of the adoption of the Employee Plan. In the event of a
change in the control (as defined in the Employee Plan), and unless otherwise
determined by the Committee, all of the terms, limitations, and restrictions and
limitations in effect will immediately lapse, and all of the outstanding Awards
will automatically become fully vested.
TRANSFERABILITY OF OPTIONS AND AWARDS
The Board of Directors amended both Plans effective May 21, 1998 to provide
that Options and Awards granted under the Plans may be transferred, in whole or
in part, to one or more transferees and exercised by any transferee, subject to
certain conditions. Options granted under the Director Plan, and any Awards
(including Options) granted under the Employee Plan may be transferred (subject
to the prior approval of the Committee in the case of the Employee Plan) to any
transferee if: (a) the transfer is made without consideration and (b) the
transferee is either (i) a member of the Plan Participant's immediate family
(see definition of Eligible Transferee below), (ii) an entity which is qualified
as a tax-exempt entity under Section 501(c)(3) of the Internal Revenue Code, as
amended, or (iii) a member of any other class or category of transferees that
may be designated by the administrator of the respective Plan. No transfer of an
Option or Award is effective unless the administrator of the respective Plan is
notified of the terms and conditions of the transfer and the administrator
determines that the transfer complies with the requirements for transfers of
Options or Awards under the Plan (and the option or award document) and the
transferee agrees to the terms and conditions of such Option or Award. The
Employee Plan also provides that any ISO granted pursuant to an option document
which is amended to permit transfers during the lifetime of the Plan Participant
shall, upon the effectiveness of such amendment, be treated thereafter as a NSO.
Upon transfer to a transferee, the Option or Award will continue to be
governed by and subject to the terms and limitations of the Plan under which it
was granted and the relevant grant agreement, and the transferee is entitled to
the same rights, and is subject to the same restrictions and obligations, as the
Plan Participant thereunder, as if the grant had originally been made to the
transferee. Accordingly, the rights of the transferee are subject to the terms
and limitations of the original grant to the Plan Participant, including
provisions relating to the Option's or Award's expiration date, exercisability,
exercise price, termination and forfeiture. For information regarding the terms
of a particular Option or Award grant, transferees may contact General Counsel,
Titan International, Inc., 2701 Spruce Street, Quincy, Illinois, 62301
(telephone no: (217) 228-6011).
10
<PAGE> 12
DEFINITION OF ELIGIBLE TRANSFEREES
For purposes of this Prospectus, the term "Eligible Transferee" is defined
as the Plan Participant's child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including by adoption, any
trusts all beneficiaries of which are any of such persons and any partnerships
and corporations all partners and shareholders of which are any of such persons.
This Prospectus covers only the issuance of shares of Common Stock upon the
exercise of Options that are transferred to Eligible Transferees in accordance
with the requirements set forth under "Transferability of Options and Awards"
above. This Prospectus does not cover the issuance of Common Stock pursuant to
any Award other than Options and does not cover the issuance of Common Stock
upon the exercise of an Option held by any transferee other than an Eligible
Transferee.
11
<PAGE> 13
FEDERAL INCOME TAX CONSEQUENCES
None of the Options issuable under the Plan qualify for special tax
treatment under Section 422 of the Code.
Prior to making or accepting a transfer of a Nonqualified Stock Option
("NSO"), a Participant or Eligible Transferee should consult with his or her
personal tax advisors concerning the possible Federal and state gift, estate,
inheritance, and generation skipping tax consequences of such a transfer, as
well as state and local income tax consequences which are not addressed herein.
Although the general consequences of the transfer of the options for gift and
estate tax purposes is beyond the scope of this discussion, it is noted that on
April 13, 1998, the Internal Revenue Service ("IRS") released Revenue Ruling
98-21 in which it set forth the IRS' position on when the transfer of an NSO
will be treated as a completed gift, and the time for the valuation of the gift.
The IRS' position is that the gift is made at the later of (i) the time of the
transfer of the option, or (ii) when the exercise of the option is no longer
conditioned on the employee's performance of services (time of vesting). The
value of the option, and thus the value of the gift for gift and estate tax
purposes, would be determined at the time of vesting, even if the option is
transferred to the Eligible Transferee prior to that time. Thus, under the IRS'
position, the gift and estate tax consequences of a transfer of non-vested NSOs
would not be known until the date of vesting of the option.
The discussion of federal income tax consequences for the Participant and
the Eligible Transferees set forth below assumes that the transfer of a NSO
during a Participant's lifetime is made by way of gift and no consideration is
received therefor. In general, a Participant who transfers a NSO by way of gift
to an immediate family member will not recognize income at the time of the
transfer. Instead, the Participant will recognize ordinary compensation income
in an amount equal to the excess of the fair market value of the shares
purchased (which will not necessarily be equal to the price at which such shares
are sold, even if sold on the same day as exercise) over the exercise price at
the time the Eligible Transferee exercises the NSO (special rules may apply to
Participants subject to potential liability under Section 16(b) of the Exchange
Act, which may defer the recognition of compensation income). Moreover, such
income will be subject to payment and withholding of income and FICA taxes.
Participants may satisfy the withholding obligation by writing a check to the
Company or by another method, such as share withholding, if permitted by the
Company. Subject to certain limitations, the Company will generally be entitled
to claim a Federal income tax deduction at such time and in the same amount that
the Participant realizes ordinary income. In the event that the Eligible
Transferee exercises the NSO after the death of the Participant, any such
ordinary income will be recognized by the Eligible Transferee.
An Eligible Transferee generally will not recognize income at the time of
the transfer of the NSO since a gift is specifically excluded from gross income.
As described in the preceding paragraph, the Participant and not the Eligible
Transferee recognizes income on the exercise of the NSO if the Participant is
alive at the date the NSO is exercised. In the event that the Eligible
Transferee exercises the NSO after the death of the Participant, any such
ordinary income will be recognized by the Eligible Transferee. Such income
recognized by the Eligible Transferee will not be subject to withholding of
income tax but will be subject to withholding of FICA tax unless such income is
recognized after the calendar year of the Participant's death. An Eligible
Transferee who chooses to exercise a NSO in whole or in part by delivery, if
permitted by the Company, of other Common Stock already owned by the Eligible
Transferee should consult with tax counsel concerning the tax consequences of
such a transaction.
If shares acquired upon exercise of a NSO are later sold or exchanged, then
the difference between the sales price and the Eligible Transferee's tax basis
for the shares will generally be taxable as long-term or short-term capital gain
or loss (if the stock is a capital asset of the taxpayer) depending upon whether
the stock has been held for more than one year after the exercise date. If the
NSO is exercised by the Eligible Transferee for cash while the Participant is
alive, the tax basis for the shares in the hands of the Eligible Transferee
would be the exercise price for the NSO plus the amount of the income recognized
by the Participant transferor at the time of exercise. Long term capital gains
recognized by individuals are generally subject to a maximum federal income tax
rate of 20% if the asset is held for more than 18 months, and 28% if the asset
is held for more than one year but for 18 months or less. If the NSO is
exercised for cash by the Eligible Transferee after the
12
<PAGE> 14
Participant's death, the tax basis for the shares would be the exercise price
for the NSO plus the amount of income recognized upon exercise by the Eligible
Transferee. Different basis rules will apply if the Eligible Transferee
delivered Common Stock in payment of all or a portion of the exercise price of
the NSO.
RESALE RESTRICTIONS
Under the Securities Act of 1933, any Participant under the Plan or any
Eligible Transferee who is an "affiliate" of the Company (generally presumed to
include directors, executive officers and beneficial owners of 10% of the
Company's Common Stock) may not resell shares of Common Stock unless such sale
is registered or made pursuant to the provisions of Rule 144. The resale of
shares acquired upon the exercise of the Options granted under the Plan is not
registered pursuant to the registration statement filed with the Commission
relating to the shares offered hereby. Sales pursuant to Rule 144 are subject to
certain volume limitations. Any person who is an "affiliate" of the Company
should seek legal counsel regarding the resale of such shares.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
the Company by Cheri T. Holley, Esq., General Counsel of the Company. As of the
date of this Prospectus, Ms. Holley does not own any shares of Common Stock, but
does own options to purchase 15,060 shares of Common Stock.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Titan International, Inc. for the
year ended December 31, 1997 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
13
<PAGE> 15
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY TO ANY PERSON IN
ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors.......................... 2
Use of Proceeds....................... 6
Available Information................. 6
Incorporation of Certain Documents by
Reference........................... 6
The Company........................... 7
Plan of Distribution and Description
of the Plans........................ 8
Federal Income Tax Consequences....... 12
Resale Restrictions................... 13
Legal Matters......................... 13
Experts............................... 13
</TABLE>
------------------------------------------------------
------------------------------------------------------
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------------------------------------------------------
TITAN INTERNATIONAL, INC.
-----------------------------
PROSPECTUS
-----------------------------
, 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of estimated expenses to be paid by
the Company in connection with the issuance and sale of the Common Stock being
registered.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 5,935*
Accounting fees and expenses................................ $ 3,000**
Printing Fees............................................... $ 1,500
Legal fees and expenses..................................... $20,000**
Miscellaneous............................................... $ 4,565**
-------
Total.................................................. $35,000**
</TABLE>
- -------------------------
* Actual
** Estimated for the 12-month period commencing August 1, 1998.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated under the laws of the State of Illinois.
Section 8.75 of the Illinois Business Corporation Act of 1983, as amended (the
"IBCA") and Article Eleven of the registrant's By-Laws provide for
indemnification of the Company's directors and officers and certain other
persons, and Article Five of the registrant's Articles of Incorporation provides
for a limitation of director liability. Under Section 8.75 of the IBCA,
directors and officers of the Company may be indemnified by the Company against
all expenses incurred in connection with actions (including, under certain
circumstances, derivative actions) brought against such director or officer by
reason of his or her status as a representative of the Company, or by reason of
the fact that such director or officer serves or served as a representative of
another entity at the Company's request, so long as the director or officer
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Company.
As permitted under Section 8.75 of the IBCA, the Company's By-Laws provide
that the Company shall indemnify directors and officers against all expenses
incurred in connection with actions (including derivative actions) brought
against such director or officer by reason of the fact that he or she is or was
a director or officer of the Company, or by reason of the fact that such
director or officer serves or served as an employee or agent of any entity at
the Company's request, unless the act or failure to act on the part of the
director or officer giving rise to the claim for indemnification is determined
by a court in a final, binding adjudication to have constituted willful
misconduct or recklessness.
The Company's Articles of Incorporation limit the liability of a director
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided, however, that the Articles do not
eliminate or limit director liability for any breach of the director's duty of
loyalty to the Corporation or its stockholders, for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
under Section 8.65 of the IBCA (relating to unlawful distributions), or for any
transaction from which the director derived an improper personal benefit.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
4.1 Titan International, Inc. 1993 Stock Incentive Plan
Titan International, Inc. 1994 Non-Employee Director Stock
4.2 Option Plan
5 Opinion of Cheri T. Holley, Esquire
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Cheri T. Holley, Esquire (contained in Exhibit 5)
24 Power of Attorney (included on Signature Pages)
</TABLE>
II-1
<PAGE> 17
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions discussed in Item 15 of this
Registration Statement, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement: (i) to include any prospectus required by Section
10(a)(3) of the Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement (notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement); and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that clauses
(i) and (ii) above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement; (2) that, for the purpose of
determining any liability under the Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and (3) to remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Quincy, Illinois, on August 14, 1998.
TITAN INTERNATIONAL, INC.
By: /s/ MAURICE M. TAYLOR
------------------------------------
Maurice M. Taylor, Jr.
President and Chief Executive
Officer
(the principal executive officer)
By: /s/ KENT W. HACKAMACK
------------------------------------
Kent W. Hackamack
Vice President of Finance and
Treasurer
(the principal financial officer
and principal accounting officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kent W. Hackamack and each or any of them,
his true and lawful attorney-in-fact and agents, with full power of substitution
and resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, or any registration statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on August 14, 1998 by the following
persons in the capacities indicated.
/s/ MAURICE M. TAYLOR
--------------------------------------
Maurice M. Taylor, Jr.
President, Chief Executive Officer,
and Director
(the principal executive officer)
/s/ ERWIN H. BILLING
--------------------------------------
Erwin H. Billing, Director
/s/ RICHARD M. CASHIN, JR.
--------------------------------------
Richard M. Cashin, Jr., Director
/s/ EDWARD J. CAMPBELL
--------------------------------------
Edward J. Campbell, Director
/s/ ALBERT J. FEBBO
--------------------------------------
Albert J. Febbo, Director
/s/ ANTHONY L. SOAVE
--------------------------------------
Anthony L. Soave, Director
II-3
<PAGE> 19
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
4.1 Titan International, Inc. 1993 Stock Incentive Plan
4.2 Titan International, Inc. 1994 Non-Employee Director Stock
Option Plan
5 Opinion of Cheri T. Holley, Esquire
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Cheri T. Holley, Esquire (contained in Exhibit 5)
24 Power of Attorney (included on Signature Pages)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
TITAN INTERNATIONAL, INC.
1993 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the Plan is to promote the best interests
of the Company and its shareholders by encouraging participants to
acquire a proprietary interest in the Company through the grant of options, the
award of restricted stock, and the grant of performance awards, thus
identifying their interests with those of shareholders and giving participants
a greater personal interest in the success of the Company in order to create
additional incentive for participants to make greater efforts on behalf of the
Company.
2. Administration.
a. This Plan shall be administered by the Committee in
accordance with Rule 16b-3 of the Exchange Act. The selection of participants
in the Plan and decisions concerning the timing, pricing, vesting, other
restrictions, and amount of any grant of options, any award of restricted
stock, and any grant of performance awards under the Plan shall be made by the
Committee. Except as provided in Section 12 of the Plan, the Committee shall
interpret the Plan, prescribe, amend, and rescind rules and regulations
relating to the Plan, and make all other determinations necessary or advisable
for its administration. The decision of the Committee on any question
concerning the interpretation of the Plan or any option granted under the Plan
shall be final and binding upon all participants.
b. The Committee may delegate to one or more officers or
managers of the Company, or a committee of such officers of managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant options, award restricted stock, or grant performance
awards to, or to cancel, modify, waive rights with respect to, alter,
discontinue or terminate options, restricted stock, or performance awards held
by participants who are not officers or directors of the Company for purposes
of Section 16 of the Exchange Act.
3. Participants. Participants in the Plan shall be such key Employees
as the Committee may select from time to time. The Committee may grant
options, award restricted stock, or grant performance awards to an
individual upon the condition that the individual become an Employee, provided
that the option shall be deemed to be granted, the restricted stock shall be
deemed to be awarded, and the performance award granted, as the case may be,
only on the date the individual becomes an Employee.
4. Stock. The stock available for grants of options, awards of
restricted stock, and grants of performance awards under the Plan shall be the
Common Stock, and may be either authorized and unissued shares or
treasury shares held by the Company. The total amount of Common Stock on which
options may be granted, restricted stock may be awarded, and performance awards
may be granted under the Plan shall not exceed 1,125,000 shares, subject to
adjustment in accordance with Section 12. Shares subject to any unexercised
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<PAGE> 2
portion of a terminated, canceled, expired or forfeited option granted under
the Plan, restricted stock awarded under the Plan, or performance award granted
under the Plan may again be subjected to grants or awards under the Plan.
5. Grant of Options.
a. General. Subject to the limitations set forth in the Plan,
the Committee from time to time may grant options to such participants and for
such number of shares of Common Stock and upon such other terms (including,
without limitation, the exercise price and the times at which the option may be
exercised and any applicable vesting requirements) as it shall designate. Each
option shall be evidenced by a stock option agreement in such form and
containing such provisions as the Committee shall deem appropriate, provided
that such terms shall not be inconsistent with the Plan. The Committee may
designate any option granted as either an Incentive Stock Option or a
Nonqualified Stock Option, or the Committee may designate a portion of an
option as an Incentive Stock Option or a Nonqualified Stock Option. Any
participant may hold more than one option under the Plan and any other stock
option plan of the Company. The date on which an option is granted shall be
the date of the Committee's authorization of the option or such later date as
shall be determined by the Committee at the time the option is authorized.
b. Incentive Stock Options. Any option intended to constitute
an Incentive Stock Option shall comply with the following requirements in
addition to the other requirements of the Plan:
(1) The exercise price per share for each Incentive Stock
Option granted under the Plan shall be equal to the Fair Market Value per share
of Common Stock on the date the option is granted; provided that no Incentive
Stock Option shall be granted to any participant who owns (within the meaning
of Section 424(d) of the Code) stock of the Company, or any Parent or
Subsidiary, possessing more than 10% of the total combined voting power of all
classes of stock of such Company, Parent or Subsidiary unless, at the date of
grant of an option to such participant, the exercise price for the option is a
least 110% of the Fair Market Value of the shares subject to option and the
option, by its terms, is not exercisable more than five years after the date of
grant;
(2) The aggregate Fair Market Value of the underlying
Common Stock at the time of grant as to which Incentive Stock Options under the
Plan (or a plan of a Subsidiary) may first be exercised by a participant in any
calendar year shall not exceed $100,000 (to the extent that an option intended
to constitute an Incentive Stock Option shall exceed the $100,000 limitation,
the portion of the option that exceeds such limitation shall be deemed to
constitute a Nonqualified Stock Option); and
(3) An incentive Stock Option shall not be exercisable
after the tenth anniversary of the date of grant or such lesser period as the
Committee may specify from time to time.
c. Nonqualified Stock Options. A Nonqualified Stock Option
shall be exercisable for a term not to exceed 10 years, or such lesser period
as the Committee shall determine. The exercise price per share of a
Nonqualified Stock Option shall not be less than 85% of the Fair Market
Value of the Common Stock on the date the option is granted.
6. Award of Restricted Stock.
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a. General. Subject to the limitations set forth in the Plan,
the Committee from time to time may award restricted stock to such participants
and for such number of shares and upon such other terms and restrictions
(including, without limitation, any applicable restriction periods described in
subsection (b) below) as it shall designate. Each award of restricted stock
shall be evidenced by a restricted stock agreement in such form and containing
such provisions as the Committee shall deem appropriate, provided that such
terms shall not be inconsistent with the Plan.
b. Restrictions. The period of time during which awards of
restricted stock are subject to restrictions imposed by the Committee pursuant
to the Plan may differ among participants and may have different expiration
dates with respect to portions of shares covered by the same award. Subject to
the terms of the Plan, awards of restricted stock shall have such restrictions
as the Committee may impose (including, without limitation, limitations on the
right to vote restricted stock, the right to receive any dividend or other
right or property, or the right to sell, pledge, assign, or otherwise transfer
the restricted stock), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise. Unless the
Committee shall otherwise determine, any shares distributed with respect to
restricted stock or which a participant is otherwise entitled to receive by
reason of such shares shall be subject to a 90 day restriction on transfer
after receipt of stock certificates relative to same and to such other
restrictions contained in the applicable restricted stock agreement. Subject
to the aforementioned restrictions and the provisions of the Plan, participants
shall have all of the rights of a stockholder with respect to shares of
restricted stock.
c. Legend. Each certificate representing shares of restricted
stock awarded hereunder shall bear a legend in such form as shall be deemed
appropriate by the Committee to evidence the restrictions applicable thereto.
7. Performance Awards. The Committee is authorized to grant
performance awards to participants. Subject to the terms of the Plan, a
performance award granted under the Plan (a) may be denominated or payable in
cash, shares of Common Stock (including, without limitation, the award of
restricted stock described in Section 6), the grant of options described in
Section 5, other securities, or other property, and (b) shall confer on the
holder thereof rights valued as determined by the Committee and payable to, or
exercisable by, the holder of the performance award, in whole or in part, upon
the achievement of such performance goals during such performance periods as
the Committee shall establish. Subject to the terms of the Plan, the
performance goals to be achieved during any performance period, the amount
of any performance award granted, the amount of any payment or transfer to be
made pursuant to any performance award and other terms and conditions shall be
determined by the Committee.
8. Payment for Shares. The purchase price for shares of Common Stock
to be acquired upon exercise of an option granted hereunder shall be paid in
full, at the time of exercise, in any of the following ways:
a. In cash;
b. By certified check, bank draft or money order;
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c. If the Committee so approves at the time of exercise, by
tendering to the Company shares of Common Stock then owned by the participant,
duly endorsed for transfer or with duly executed stock power attached, which
shares shall be valued at their Fair Market Value as of the date of such
exercise and payment; or
d. If the Committee so approves at the time of exercise (the
time of grant in the case of Incentive Stock Options), by delivery to the
Company of a properly executed exercise notice, acceptable to the Company,
together with irrevocable instructions to the participant's broker to deliver
to the Company a sufficient amount of cash to pay the exercise price and any
applicable income and employment withholding taxes, in accordance with a
written agreement between the Company and the brokerage firm ("Cashless
Exercise") if, at the time of exercise, the Company has entered into such an
agreement.
9. Withholding Taxes.
a. The Company shall have the right to withhold from a
participant's compensation or require a participant to remit sufficient funds
to satisfy applicable withholding for income and employment taxes upon the
exercise of an option or lapse of restrictions with respect to an award of
restricted stock or a grant or a performance award. If the Committee so
approved at the time of such exercise or lapse of restrictions, (i) a
participant may make an election, notice of which shall be in writing and
promptly delivered to the Committee, to tender previously-acquired shares of
Common Stock of have shares of Common Stock withheld from the exercise of an
option, award of restricted stock, or grant of a performance award, as the case
may be, provided that the shares have an aggregate Fair Market Value on the
date of such exercise or lapse of restrictions sufficient to satisfy in whole
or in part the applicable withholding taxes, or (ii) the Cashless Exercise
procedure described in Section 8 may be utilized to satisfy the withholding
requirement related to such exercise or lapse of restrictions.
10. Restrictions on Transferability. Except as provided herein, no
option, restricted stock or performance award (or any rights or
obligations related thereto) granted under this Plan shall be transferable
otherwise than by will or the laws of descent and distribution and, during the
lifetime of the participant, shall be exercisable only by him or for his
benefit by his attorney-in-fact or guardian. The Committee may, in its
discretion, at or after the time of grant of an option, restricted stock or a
performance award, provide that options, restricted stock or performance awards
granted to or held by a participant may be transferred, in whole or in part, to
one or more transferees and exercised by any such transferee, subject to the
following conditions: (a) such transfer must be without consideration and (b)
the transferee must be either (i) a member of such optionee's Immediate Family
or (ii) an entity which is qualified as a tax-exempt entity under Section
501(c)(3) of the Internal Revenue Code, as amended. In addition, the Committee
may, in its discretion, at or after the time of grant of an option, restricted
stock or a performance award, provide that the option may be transferred, in
whole or in part, to any other class or category of transferees. Any Incentive
Stock Option granted pursuant to an option document which is amended to permit
transfers during the lifetime of the participant shall, upon the effectiveness
of such amendment, be treated thereafter as a Nonqualified Stock Option. No
transfer of an option, restricted stock or performance award shall be effective
unless the Committee is notified of the terms and conditions of the transfer
and the Committee determines that the transfer complies with the requirements
for transfers of options, restricted stock and performance awards under the
Plan and the option document and the transferee agrees to the terms and
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conditions of such option, restricted stock or performance award. Any person
to whom an option, restricted stock or performance award has been transferred
may exercise any option, restricted stock or performance award only in
accordance with the provisions of the Plan, the Securities Act of 1933, or
any other applicable law.
11. Termination of Employment.
a. Options. Unless otherwise determined by the Committee or
provided in the stock option agreement relating to a particular grant of an
option:
(1) If, prior to the date that such option shall first
become exercisable, the participant's Employment shall be terminated, with or
without cause, or by the act, death, Disability, or retirement of the
participant, the participant's right to exercise the option shall terminate and
all rights thereunder shall cease; and
(2) If, on or after the date that such option shall first
become exercisable, a participant's Employment shall be terminated for any
reason other than death or Disability, the participant shall have the right,
prior to the earlier of (A) the expiration of the option or (B) three months
after such termination of Employment, to exercise the option to the extent that
it was exercisable and is unexercised on the date of such termination of
Employment, subject to any other limitation on the exercise of the option in
effect at the date of exercise; and
(3) If, on or after the date that such option shall have
become exercisable, the participant shall die or become Disabled while an
Employee or while such option remains exercisable, the participant or the
executor or administrator of the estate of the participant (as the case may
be), or the person or persons to whom the option shall have been transferred by
will or by the laws of descent and distribution, shall have the right, prior to
the earlier of (A) the expiration of the option or (B) one year from the date
of the participant's death or termination due to such Disability to exercise
the option to the extent that it was exercisable and unexercised on the date of
death, subject to any other limitation on exercise in effect at the date of
exercise.
b. Restricted Stock. Unless otherwise determined by the
Committee or provided in the restricted stock agreement relating to a particular
award of restricted stock:
(1) If the employment of a participant terminates for any
reason, other than the participant's death or Disability or retirement on or
after normal retirement date, all shares of restricted stock theretofore
awarded to the participant which are still subject to restrictions shall upon
such termination of employment be forfeited and transferred back to the
Company. Notwithstanding the foregoing or subsection (3) below, if a
participant continues to hold an award of restricted stock following
termination of the employment, including retirement, the shares of restricted
stock which remain subject to restrictions shall nonetheless be forfeited and
transferred back to the Company if the Committee at any time thereafter
determines that the participant has engaged in any activity detrimental to the
interests of the Company or any Parent or Subsidiary.
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(2) If a participant ceases to be employed or retained by
reason of death or Disability or if following retirement a participant
continues to have rights under an award of restricted stock and thereafter
dies, the restrictions contained in the award shall lapse with respect to such
restricted stock.
(3) If an employee ceases to be employed by reason of
retirement on or after normal retirement date, the restrictions contained in
the award of restricted stock shall continue to lapse in the same manner as
though employment had not terminated.
c. Performance Award. The termination of employment of the
recipient of a performance award shall have such affect on the particular
performance award as shall be determined from time to time by the Committee or
as shall be provided in a performance award agreement relating to such
performance award.
The transfer of an Employee from one corporation to another among the Company,
any Parent and any Subsidiary, or a leave of absence with the written consent
of the Company, shall not constitute a termination of Employment for purposes
of the Plan.
12. Adjustments.
a. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any
or all of (i) the number and type of shares of Common Stock which thereafter
may be made the subject of options, restricted stock, or performance awards,
(ii) the number and type of shares of Common Stock subject to outstanding
options, restricted stock, or performance awards, and (iii) the exercise
price with respect to any option or performance awards, or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
option, restricted stock, or performance award; provided, however, in each
case, that with respect to Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422 of the Code or any successor provision thereto; and provided
further, however, that the number of shares of Common Stock subject to any
option, restricted stock award, or performance award shall always be a whole
number.
b. In the event of a Change of Control, unless otherwise
determined by the Committee, all outstanding options under the Plan immediately
shall become exercisable in full, regardless of any installment provision
applicable to such option, and the remaining restriction period on any
restricted stock awarded under the Plan immediately shall lapse; provided,
however, that to the extent that the acceleration of a grant or an award is
deemed to constitute a "golden parachute payment" under Section 280G of the
Code and such payment, when aggregated with other golden parachute payments to
the participant results in any "excess golden parachute payment" under Section
280G of the Code, any accelerated payment under this Section 12 shall be
reduced to the highest permissible amount that shall not subject the
participant to an excess golden parachute excise tax under
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Section 4999 of the Code and shall entitle the Company to retain its full
compensation tax deduction for the payment.
13. Rights Prior to Issuance of Shares. No participant shall have any
rights as a shareholder with respect to any shares covered by an option grant,
a restricted stock award, or a performance award until the issuance of a stock
certificate to the participant for such shares. No adjustment shall be
made for dividends or other rights with respect to such shares for which the
record date is prior to the date such certificate is issued.
14. Termination and Amendment.
a. The Board may terminate the Plan, or the granting of options,
the awarding of restricted stock, and the granting of performance awards under
the Plan, at any time. No options shall be granted, no restricted stock shall
be awarded, and no performance awards shall be granted under the Plan after the
tenth (10th) anniversary of the date of the adoption of this Plan by the Board
or the approval of this Plan by the shareholders, whichever is earlier.
Termination of the Plan shall not affect the rights of the holders of any
options, restricted stock, or performance awards previously granted.
b. The Board may amend or modify the Plan at any time and from
time to time. No amendment or modification shall increase the amount of Common
Stock as to which options may be granted, restricted stock may be awarded, or
performance awards may be granted (except as permitted under Section 12),
materially increase the benefits accruing to participants under the Plan, or
materially modify the provisions relating to the eligibility of Employees to
whom options may be granted, restricted stock may be awarded, or performance
awards may be granted without the approval of the Company's shareholders,
unless permitted under Rule 16b-3 under the Exchange Act without shareholder
approval. No amendment, modification, or termination of the Plan shall in any
manner affect any option granted, restricted stock awarded or performance award
granted under the Plan without the consent of the participant holding same.
15. Approval of Plan. The Plan shall be subject to the approval of the
holders of at least a majority of the shares of Common Stock of the
Company present and entitled to vote at a meeting of shareholders of the
Company held within twelve (12) months after adoption of the Plan by the Board.
No option granted, restricted stock awarded or performance award granted under
the Plan may be exercised in whole or in part until the Plan has been approved
by shareholders within such 12-month period, the Plan and any options granted,
restricted stock awarded, or performance awards granted hereunder shall become
void and of no effect.
16. Effect on Employment. Neither the adoption of the Plan nor the
granting of any option, the awarding of any restricted stock or the
granting of any performance award pursuant to it shall be deemed to create any
right in any individual to be retained as an Employee.
17. Compliance with Securities, Tax and Other Laws. Notwithstanding
anything contained herein to the contrary, the Company's obligation to
sell and deliver Common Stock pursuant to the exercise of an option or to
deliver Common Stock pursuant to an award of restricted stock or a grant of a
performance award is subject to such compliance with federal and state laws,
rules
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and regulations applying to the authorization, issuance or sale of securities
or such other laws or regulations as the Company deems necessary or advisable.
As a condition to the delivery of any Common Stock pursuant to the exercise of
an option, award of restricted stock or grant of a performance award, the
Company may require a participant, or any person acquiring the rights with
respect to such option, restricted stock or performance award, to make any
representation or warranty that the Company deems to be necessary under any
applicable securities, tax, or other law or regulation.
18. Certain Definitions.
The "Board" means the Board of Directors of the Company.
A "Change in Control" shall mean (i) consummation of any merger or
consolidation with respect to which the Company or any Parent is a constituent
corporation (other than a transaction for the purpose of changing the Company's
corporate domicile) any liquidation or dissolution of the Company or any sale
of all or substantially all of the Company's assets, or (ii) a change in the
identity of a majority of the members of the Company's Board of Directors
within any twelve-month period, which change or changes are not recommended by
the incumbent directors immediately prior to any such change or changes [,
(iii) if any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), or group of persons acting in concert, other than the Company, a
Parent, a Subsidiary or an employee benefit plan or employee benefit plan trust
maintained by the Company, a Parent or a Subsidiary, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 of the Exchange Act, except that
a person also shall be deemed the beneficial owner of all securities which such
person may have a right to acquire, whether or not such right is presently
exercisable), directly or indirectly, of securities of the Company representing
fifty (50%) or more of the combined voting power of the Company's then
outstanding securities ordinarily having the right to vote in the election of
directors].
The "Code" is the Internal Revenue Code of 1986, as amended.
The "Committee" is a committee of two or more directors of the Company,
each of whom is a Non-Employee Director.
The "Common Stock" is the common stock of the Company.
The "Company" is Titan Wheel International, Inc., an Illinois corporation.
"Disabled" or "Disability" means permanently disabled as defined in Section
22(e)(3) of the Code.
"Employee" means an individual with an "employment relationship" with the
Company, or any Parent or Subsidiary, as defined in Regulation 1.421-7(h)
promulgated under the Code, and shall include, without limitation, employees
who are directors of the Company, or any Parent or Subsidiary.
"Employment" means the state of being an Employee.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Fair Market Value" shall mean the average of the high and low sales
prices, or the average of the closing bid and asked prices, as the case may be,
per share of the Common Stock reported in the Wall Street Journal for the last
preceding day on which the Common Stock was traded prior to the date with
respect to which the fair market value is to be determined, as determined by the
Committee in its sole discretion, provided that, with respect to any options
granted prior to the initial public offering of the Common Stock, "Fair Market
Value" shall mean the initial public offering price per share.
"Immediate Family" means a participant's child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including by
adoption, any trusts all beneficiaries of which are any of such persons and any
partnerships and corporations all partners and shareholders of which are any of
such persons.
An "Incentive Stock Option" is an option intended to meet the
requirements of Section 422 of the Code.
"Non-Employee Director" shall have the same meaning as defined in
Rule 16b-3 promulgated under the Exchange Act.
A "Nonqualified Stock Option" is an option granted under the Plan
other than an Incentive Stock Option.
"Parent" means any "parent corporation" of the Company as defined in
Section 424(e) of the Code.
The "Plan" is the 1993 Stock Incentive Plan.
"Subsidiary" means any "subsidiary corporation" of the Company as
defined in Section 424(f) of the Code.
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EXHIBIT 4.2
TITAN INTERNATIONAL, INC.
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1 Adoption. The Non-Employee Director Stock Option Plan (the
"Plan") of Titan Wheel International, Inc. (the "Company") became effective
upon its adoption by the Company's Board of Directors on March 31, 1994, but
no options may be exercised hereunder until the Plan has been approved by the
Company's stockholders.
1.2 Purpose. The Plan is designed to promote the interests of the
Company and its stockholders by using investment interests in the Company to
attract and retain highly qualified independent directors.
1.3 Administration. The Plan shall be administered by the Company
which, subject to the express provisions of the Plan, shall have the power to
construe the Plan and any agreements defining the rights and obligations of the
Company and option recipients, to resolve all questions arising thereunder, to
adopt and amend such rules and regulations for the administration thereof as it
may deem desirable, and otherwise to carry out the terms of the Plan and such
agreements. The interpretation and construction by the administrator of any
provisions of the Plan or of any option granted under the Plan shall be final.
Notwithstanding the foregoing, the administrator shall have no authority or
discretion as to the selection of persons eligible to receive options granted
under the Plan, the number of shares covered by options granted under the
Plan, the timing of such grants, or the exercise price or vesting provisions
of options granted under the Plan, which matters are specifically governed by
the provisions of the Plan.
1.4 Eligible Directors. A person shall be eligible to receive
grants of options under this Plan (an "Eligible Director") if, at the time of
the option's grant, he or she is a duly elected or appointed member of the
Company's Board of Directors, but is not and has not since the beginning of the
Company's most recently completed fiscal year been an employee of the Company
or any of its affiliates and is not otherwise eligible for selection as a
person to whom stock may be allocated or to whom stock options or stock
appreciation rights may be granted (except for non-discretionary grants)
pursuant to any plan of the Company or any of its affiliates entitling
participants therein to acquire stock, stock options, or stock appreciation
rights of the Company of any or its affiliates.
1.5 Shares of Common Stock Subject to the Plan and Grant Limit. The
shares that may be issued upon exercise of options granted under the Plan shall
be authorized and unissued shares of the Company's Common Stock or previously
issued shares of the Company's Common Stock reacquired by the Company. The
aggregate number of shares that may be issued upon exercise of options granted
under the Plan shall not exceed 225,000 shares of Common Stock, subject to
adjustment in accordance with Article III.
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1.6 Amendment of the Plan. The Company's Board of Directors may,
insofar as permitted by law, from time to time suspend or discontinue the Plan
or revise or amend it in any respect whatsoever that would not compromise the
ability of Eligible Directors to serve as disinterested administrators of the
Company's other employee benefit plans under section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
promulgated thereunder, except that no such amendment shall alter or impair or
diminish any rights or obligations under any option theretofore granted under
the Plan without the consent of the person to whom such option was granted. In
addition, if an amendment to the Plan would increase the number of shares
subject to the Plan (as adjusted under Article III), increase the number of
shares for which an option or options may be granted to any optionee (as
adjusted under Article III), change the class of persons eligible to receive
options under the Plan, provide for the grant of options having an exercise
price per option share less than the exercise price specified in the Plan,
extend the final date upon which options may be granted under the Plan, or
otherwise materially increase the benefits accruing to participants in a manner
not specifically contemplated herein or affect the Plan's compliance with Rule
16b-3 under the Exchange Act, the amendment shall be approved by the Company's
stockholders to the extent required to comply with Rule 16b-3 under the
Exchange Act. Under no circumstances may the provisions of the Plan that
provide for the amounts, price, and timing of options grants be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code, ERISA, or the rules thereunder. Subject to the foregoing, the
administrator may amend the Plan to comply with or take advantage of changes in
the rules promulgated by the Securities and Exchange Commission or its staff
under Section 16 of the Exchange Act.
1.7 Term of Plan. Options may be granted under the Plan until the
tenth anniversary of the effective date of the Plan, whereupon the Plan shall
terminate. No options may be granted during any suspension of this Plan or
after its termination. Notwithstanding the foregoing, each option properly
granted under the Plan shall remain in effect until such option has been
exercised or terminated in accordance with its terms and the terms of the Plan.
1.8 Restrictions. All options granted under the Plan shall be
subject to the requirement that, if at any time the Company shall determine,
in its discretion, that the listing, registration or qualification of the
shares subject to options granted under the Plan upon any securities exchange
or under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such an option or the issuance, if any, or purchase of
shares in connection therewith, such option may not be exercised as a whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company. Unless the shares of stock to be issued upon exercise of an
option granted under the Plan have been effectively registered under the
Securities Act of 1933 as now in force or hereafter amended, the Company shall
be under no obligation to issue any shares of stock covered by an option unless
the person who exercises such option, as a whole or in part, shall give a
written representation and undertaking to the Company satisfactory in form and
scope to counsel to the Company and upon which, in the opinion of such counsel,
the Company may reasonably rely, that he or she is acquiring the shares of
stock issued to him or her pursuant to such exercise of the option for his or
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares of stock, and that he or
she will make no transfer of the same except in compliance with any rules and
regulations in force at the time of such transfer under the Securities Act of
1933, the Plan, or any other applicable law, and that if shares of stock are
issued without such registration, a legend to this effect may be endorsed upon
the certificates representing the securities so issued.
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1.9 Restrictions on Transferability. No option granted under Plan
shall be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the optionee, shall be exercisable
only by him or for his benefit by his attorney-in-fact or guardian; provided,
however, that the Company may, in its discretion, at the time of grant of an
option, provide that options granted to or held by an optionee may be
transferred, in whole or in part, to one or more transferees and exercised by
any such transferee; provided further that (i) any such transfer is without
consideration and (ii) each transferee is a member of such optionee's immediate
family (defined as the optionee's spouse and lineal descendants, any trust all
beneficiaries of which are any of such persons and any partnership all partners
of which are any of such persons); and provided further that the Company may,
in its discretion, at the time of grant of an option, provide that the option
may be transferred, in whole or in part, to any other class or category of
transferees. No transfer of an option shall be effective unless the Company is
notified of the terms and conditions of the transfer and the Company determines
that the transfer complies with the requirements for transfers of options under
the Plan and the option document. Any person to whom an option has been
transferred may exercise any options only in accordance with the provisions of
the Securities Act of 1933, the Plan, or any other applicable law.
1.10 Withholding Taxes. Whenever shares of stock are to be issued
upon exercise of an option granted under the Plan, the administrator shall have
the right to require the optionee to remit to the Company an amount sufficient
to satisfy any federal, state and local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares. The
administrator may, in the exercise of its discretion, allow satisfaction of tax
withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable upon exercise of an
option.
1.11 Definition of "Fair Market Value". For purposes of the Plan,
the term "fair market value," when used in reference to the value of a share
of stock shall be: (a) if the stock is listed on an established stock exchange
or exchanges, the mean between the highest and lowest sale prices of the stock
quoted in the Transactions Index of each such exchange as averaged with such
mean price as reported on any and all other exchanges, as published in "The
Wall Street Journal" and determined by the Company, or, if no sale price was
quoted in any such Index for such date, then as of the next preceding date on
which such a sale price was quoted (subject to adjustment as and if necessary
and appropriate to set an exercise price not less than 100% of the fair market
value of the stock on the date an option is granted) or, (b) if the stock is
not then listed on an exchange, the average of the closing bid and asked prices
per share for the stock in the over-the-counter market as quoted on NASDAQ on
such date; or, (c) if the stock is not then listed on an exchange or quoted
on NASDAQ, an amount determined in good faith by the administrator.
1.12 Rights as a Shareholder. An optionee or a permitted transferee
of an option shall have no rights as a shareholder with respect to any shares
issuable or issued upon exercise of the option until the date of the receipt
by the Company of all amounts payable in connection with exercise of the
option, including the exercise price and any amounts required by the Company
pursuant to Section 1.10.
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ARTICLE II
STOCK OPTIONS
2.1 Grants of Options. Each Eligible Director shall, upon first
becoming an Eligible Director, receive a grant of an option to purchase 3,000
shares of the Company's Common Stock at an exercise price per share equal to
the fair market value of the Company's Common Stock on the date of grant,
subject to adjustment as set forth in Article III. In addition, on each
anniversary of the grant date, each Eligible Director shall be granted an
additional option to purchase 3,000 shares of the Company's Common Stock on
such date of grant, also subject to adjustment as set forth in Article III.
2.2 Exercise Price. The option exercise price shall be payable upon
the exercise of an option in legal tender of the United States or such other
consideration as the administrator may deem acceptable, including without
limitation, stock of the Company (delivered by or on behalf of the person
exercising the option or retained by the Company from the stock otherwise
issuable upon exercise and valued at fair market value as of the exercise
date), provided, however, that the administrator may, in the exercise of its
discretion, (i) allow exercise of an option in the broker-assisted or similar
transaction in which the exercise price is not received by the Company until
immediately after exercise, and/or (ii) allow the Company to loan the exercise
price to the person entitled to exercise the option, if the exercise will be
followed by an immediate sale of some or all of the underlying shares and a
portion of the sales proceeds is dedicated to full payment of the exercise
price. Upon proper exercise, the Company shall deliver to the person entitled to
exercise the option or his or her designee a certificate or certificates for
the shares of stock to which the option pertains.
2.3 Vesting and Exercise. All options granted under the Plan shall
vest and become exercisable immediately.
2.4 Option Agreements. Each option granted under the Plan shall be
evidenced by an option agreement duly executed on behalf of the Company and by
the Eligible Director to whom such option is granted stating the number of
shares of stock issuable upon exercise of the option, the exercise price, the
time during which the option is exercisable, and the times at which the options
vest and become exercisable. Such option agreements may but need not be
identical and shall comply with and be subject to the terms and conditions of
the Plan, a copy of which shall be provided to each option recipient and
incorporated by reference into each option agreement. Any option agreement may
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the administrator.
2.5 Term of Options and Effect of Termination. Notwithstanding any
other provision of the Plan, no options shall be exercisable after the
expiration of 10 years from the effective date of their grant. In the event
that any outstanding option under the Plan expires by reason of lapse of time
or is otherwise terminated without exercise for any reason, then shares of
Common Stock subject to any such option that have not been issued upon
expiration or termination of the option shall again become available in the
pool of shares of Common Stock for which options shall may be granted under the
Plan. In the event that the holder of any options granted under the Plan shall
cease to be a director of the Company, (i) all options granted under the Plan
to such holder shall be exercisable for a period of 90 days after that date
(or, if sooner, until the expiration of the option according to its terms), and
shall then terminate. In the event of the death of an optionee while such
optionee is a director of the
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Company or within the period after termination of such status during which he
or she is permitted to exercise an option, such option may be exercised by any
person or persons designated by the optionee on a Beneficiary Designation Form
adopted by the administrator for such purpose or, if there is no effective
Beneficiary Designation Form on file with the Company, by the executors or
administrators of the optionee's estate or by any person or persons who shall
have acquired the option directly from the optionee by his or her will or the
applicable laws of descent and distribution.
ARTICLE III
RECAPITALIZATIONS AND REORGANIZATIONS
3.1 Anti-dilution Adjustments. If the outstanding shares of Common
Stock of the Company are increased, decreased or exchanged for a different
number or kind of shares or other securities, or if additional shares or new or
different shares or other securities are distributed in respect of such shares
of Common Stock (or any stock or securities received with respect to such
Common Stock), through merger, consolidation, sale or exchange of all or
substantially all of the properties of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spinoff or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such Common Stock),
or (B) if the value of the outstanding shares of Common Stock of the Company is
reduced by reason of an extraordinary cash dividend, an appropriate and
proportionate adjustment may be made in (x) the maximum number and kind of
shares subject to the Plan, (y) the number and king of shares subject to then
outstanding options, and (z) the price for each share or other unit of any
other securities subject to then outstanding options. No fractional interests
will be issued under the Plan resulting from any such adjustments.
3.2 Determination by the Company. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments
shall be made by the administrator, whose determination in that respect shall
be final, binding and conclusive. The grant of an option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all of any part of its business or assets.
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EXHIBIT 5
August 18, 1997
Titan International, Inc.
2701 Spruce Street
Quincy, Illinois 62301
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (the "Registration
Statement") filed by Titan International, Inc., an Illinois corporation (the
"Company"), with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
promulgated thereunder (the "Rules") on or about the date hereof, I have been
requested to render my opinion as to the legality of the shares of Common Stock,
no par value (the "Common Stock"), of the Company to be registered thereunder.
In connection with this opinion, I have examined (i) an original, photocopy or
conformed copy of the Registration Statement, (ii) an original, photocopy or
conformed copy of the Company's 1994 Non-Employee Director Stock Option Plan and
1993 Stock Incentive Plan, (iii) the Restated Certificate of Incorporation and
the By-laws of the Company, each as amended to date, and (iv) records of certain
of the Company's corporate proceedings relating, among other things, to the
proposed issuance and sale of the Common Stock. In addition, I have made such
other examinations of law and fact as I have considered necessary in order to
form a basis for the opinion hereinafter expressed. In my examination of
documents, I have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as photostatic, reproduced or conformed copies,
the authenticity of all such latter documents and the legal capacity of all
individuals who have executed any of the documents. As to certain matters of
fact, I have relied on representations, statements or certificates of officers
of the Company.
Based on the foregoing, I am of the opinion that when issued and duly
authorized, and when issued and delivered by the Company and paid for upon
exercise of options granted under the Plans, the Common Stock issued upon any
such exercise will be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the heading "Legal Matters" in the
Prospectus. In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required by the Act or the Rules.
Very truly yours,
Cheri T. Holley, Esquire
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 18, 1998 appearing on page F-1 of Titan International, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
St. Louis, Missouri
August 18, 1998
