UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE STANDARD PRODUCTS COMPANY

Ohio

2401 South Gulley Road

Registrant’s telephone number, including area code: (313) 561-1100

Securities Registered Pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  [X]     No  [   ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [   ]

The aggregate market value of voting stock held by non-affiliates of the Registrant as of September 1, 1999 (based on the closing price of the Registrant’s Common Shares reported on the New York Stock Exchange Composite Tape on such date), was approximately $462.1 million.

The number of Common Shares, $1 par value outstanding as of September 1, 1999 was 16,088,048 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None

Item 1.  Business

     General and Industry Segments

      The Standard Products Company (the “Company”) was incorporated in the State of Ohio in 1927. Since that time, we have manufactured many different products for various industries and customers. Currently, we produce highly engineered polymer-based products for a multitude of customers in several industries around the world.

      Over the years, we have grown internally and through acquisitions, joint ventures, and partnerships. Key acquisitions included our automotive plastics business in 1967; Standard Products Limited, our subsidiary in the U.K., in 1972; Oliver Rubber Company in 1977; Holm Industries, Inc., our plastic sealing business for appliances, in 1989; Standard Products Industriel, our subsidiary in France in 1993; and OEM/ Miller in 1998.

      Our internal growth in recent years is due largely to the need to support our automotive customers all over the world. This need has resulted in building new facilities in Plymouth, England in 1991, Varginha, Brazil in 1996, Aguascalientes, Mexico in 1997 and Bielsko-Biala, Poland in 1999.

      We have also built an important relationship with Nishikawa Rubber Company of Hiroshima, Japan. Dating from 1970, our two companies have formed an alliance that has given us technological strength and a broadened customer base. The alliance has resulted, among other things, in the formation in 1986 of an equal partnership in the United States known as Nishikawa Standard Company (“NISCO”), and more recently, in 1997, in a joint venture in Mexico, in which the Company has a 70% equity interest, and Nishikawa has a 30% interest.

      In November 1998, management changed the reporting structure of the Company to create bottom line-oriented strategic business units, organized by product, customers, and geographic location. Each business unit now operates in a more decentralized environment than had previously been the case. The performance, strategic objectives and funding needs for capital spending and acquisitions of each business unit are reviewed periodically with a senior management group consisting of the Vice Chairman and Chief Executive Officer, the President and Chief Operating Officer and the Vice President, Finance and Chief Financial Officer.

      For reporting purposes, the various strategic business units have been aggregated into four operating segments. The three principal segments are Engineered Rubber Products, Engineered Plastic Products and Tread Rubber. A fourth segment, Other, covers certain miscellaneous activities. Revenues for this segment are insignificant to the Company as a whole. Financial information concerning each of these segments for the years ended June 30, 1999, 1998 and 1997 is included in Note 14 of the Consolidated Financial Statements found on page F-24. This note also contains financial information by major customer and geographic area.

Engineered Rubber Products Segment

      Products. This segment manufactures sealing and noise and vibration control products for original equipment automotive manufacturers (“OEMs”), and sealing products for heavy-duty truck applications and the original equipment replacement market. Typical subcategories of these products include:

      These products form the sealing and vibration control systems for vehicles. While each part has a specific purpose, as a group they act as a complete system. Designed to fill the gaps between a vehicle’s body and any openings, the complete sealing system minimizes wind noise and keeps out air, water, dust, noise and emissions, while enhancing a vehicle’s appearance. This segment’s engine and body mount products, which constitute a vehicle’s vibration control system, serve to reduce the harshness of the ride experienced by passengers.

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      Markets and Customers. There is a worldwide market for this segment’s products. The Company currently operates manufacturing facilities in the United States, England, Wales, France, Poland, Canada, Mexico and Brazil. This segment is highly dependent on the success of its OEM customers and on three customers in particular, Ford Motor Company, DaimlerChrysler AG and General Motors Corporation. The loss of one or more of these customers would likely have a material adverse effect on the financial results of the Company. The segment has other large customers, including Fiat and Renault. As we continue to expand our global position, we have reduced our dependence on a small number of customers. However, as the automotive OEM industry continues to consolidate, the likelihood of significantly broadening our customer base will be small.

      The economic climate in which this segment operates varies from country to country. While it is difficult to predict the future economic prosperity of a country or region, it is generally true that the level of auto production of a particular region correlates closely to the strength of the economy in that region. Currently, North America is in a prolonged steady economic growth pattern, which has led to very strong vehicle production. On the other hand, Brazil continues to struggle with recession, currency devaluation, high unemployment and weakened demand for vehicles. Europe falls somewhere in the middle of these scenarios. In addition to the impact of a strong economy on overall vehicle production, this segment’s results are also dependent upon the strength of the particular vehicle platforms for which it supplies systems.

      The increased globalization of the automotive industry is another factor that plays an important role in the financial success of this segment. While we view our extensive worldwide presence as a major asset in attracting new business and retaining existing customers, such a global presence requires the creation and financing of a significant buildup of capacity around the world, which can be expensive. Increased customer concentration resulting from globalization has also increased the pressures for continued price concessions.

      Sales and Distribution. Most of the parts and systems manufactured by this segment are sold as original equipment on cars and light trucks. Therefore, proximity to vehicle assembly plants can play a very important role in determining the location for supplier plants. This segment does not have a backlog of orders at any point in time. Instead, sales are based on purchase orders issued annually by OEMs for each part that we produce. The purchase orders are for all or a percentage of the customer’s estimated requirements and are binding, subject to annual vehicle production levels. Throughout the year, customers issue releases against those purchase orders, specifying quantities of the parts required. A similar purchase order system is used for prototype and production tooling. Recently, however, customers have been including the cost of tooling (prototype and production) in the production part price noted on purchase orders. We maintain sales and engineering staffs to work closely with the purchasing and engineering groups of our customers. These groups are responsible for the development of the various products we sell to our customers.

      While this segment’s business is not seasonal in the traditional sense, July, August and December are generally lower volume months. Customers typically perform model changeovers and have plant shutdowns during July, European operations are closed for vacations in August and assembly plants are usually closed for a period from shortly before Christmas until after New Year’s Day.

      This segment has used internally owned distribution centers throughout the United States to serve as shippers for its products to customers. Recently, we have begun to ship directly from our manufacturing facilities. It is expected that this trend will continue in the future. At this time, however, there has been no change in the number of distribution centers owned and operated by the Company.

      Competition. Each product line of this segment’s business is highly competitive. Although no single firm competes with the Company in all aspects of this business, major competitors in North America include Gencorp, Inc., Invensys (formerly BTR), Harvard Industries’ Kingston-Warren subsidiary, Cooper Tire & Rubber Company, and more recently, Draftex GmbH (Draftex), a subsidiary of London-based Laird Group Plc, which has built a large plant in the United States. In its international markets, the Company also competes with several manufacturers in Europe and South America which are large and have substantial resources. They include Draftex, Hutchinson, S.A., a subsidiary of Totalfina S.A., a large French petroleum company, and Invensys. There can be no assurance that competitors will not be able to take actions, including developing new technology or products, or offering prolonged reduced pricing, which could adversely affect the

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      The Company believes that it is one of the leading manufacturers of rubber window and door sealing products for the worldwide automotive industry. The noise and vibration control business remains a very fragmented business worldwide, and the Company believes it is among the ten largest competitors for these products.

      Although each customer may emphasize a different component as its primary criteria, the automotive industry has historically evaluated its suppliers in three areas of customer service: quality, cost and time. Time in this sense relates to on-time delivery, time to bring new products to market and manufacturing cycle time. The Company also believes that engineering and design capabilities now play a greater role in the competitive process. Management believes the Company’s investment in engineering and design capabilities is a requirement to obtaining future business. The Company has historically met its customers’ requirements in these areas.

     Raw Materials

      The principal materials used by this segment are synthetic rubber, rubber chemicals, carbon black, flock fibers, adhesives, coil steel and aluminum and coating materials. The majority of these materials are purchased on the open market from domestic suppliers. In some locations, principally Brazil, Mexico and Poland, local suppliers that can meet the quality and delivery standards required to be a supplier to the Company may not be available. In those instances, materials may be imported until qualified suppliers can be found. While the worldwide supply of certain products (carbon black and EPDM (Ethylene Propylene Diene Monomer)) has been tight at various times during the past year, we believe that adequate supplies of raw materials will continue to be available from qualified sources.

     Working Capital

      The Engineered Rubber Products segment typically maintains a strong working capital position that provides adequate cash flow. Accounts receivable are promptly paid and inventories turn over rapidly. The Company entered into an agreement in 1995 to sell $50,000,000 of accounts receivable (See Note 3 to the Consolidated Financial Statements found on page F-18). During fiscal 1998, this agreement was extended until November 1, 2000. The Company maintains sufficient credit under borrowing arrangements to meet the Company’s cash requirements.

Engineered Plastic Products Segment

      Products. The Engineered Plastic Products segment manufactures various products for the automotive, appliance and construction industries. The common component of all of the products is that they are made from plastic resin. These products are used on refrigerators, garage doors, dishwashers, washing machines, air conditioners, automobiles and window and door openings in the construction industry. Typical products include:

      These products form, among other things, protection systems for door panels of automobiles, sealing systems for refrigerators and dishwashers, drain hoses for washing machines, protective systems for electrical wiring, and sealing systems for houses and offices.

      Markets and Customers. Customers for this segment include appliance manufacturers such as General Electric, Whirlpool and Frigidaire; auto manufacturers such as General Motors, Ford and DaimlerChrysler; and home products manufacturers such as The Stanley Works. While there is a worldwide market for these products, the Company has manufacturing facilities only in the United States, Mexico and India. It does not

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      Sales and Distribution. Products manufactured by this segment are sold as original equipment on automobiles, refrigerators, freezers, washing machines, dishwashers and homes. Proximity to automotive and appliance assembly plants is important to customers of this segment. Currently, this is primarily a North American business. Distance from assembly plants is especially important to the appliance portion of this business, due to the difficulty in shipping thin-walled gaskets without damage or excessive cost. International expansion would most likely require the building of a facility or the acquisition of a company. This segment does not have a backlog of orders at any point in time. It operates in the same manner as the Engineered Rubber Products segment in this regard. Tooling costs in the automotive side of this segment can be large, but are generally reimbursed by customers in the form of either lump sum payments or inclusion in the piece price. The automotive products of this segment are affected by the same seasonality as is described for the products of the Engineered Rubber Products segment. The appliance portion of this segment is not affected by seasonality.

      Competition. This segment is the largest supplier of extruded plastic gaskets and profiles to the North American refrigeration and freezer market. It is also a major supplier to the North American automotive industry. Principal competitors include: Ilpea S.p.A., Decoma, a subsidiary of Magna International, Guardian Industries, Textron and Rehau. Ilpea is an Italian company that until this year produced gaskets primarily for the European refrigerator market, where it has a strong market presence, and did not have operations in the United States. In 1998, however, Ilpea purchased Gencorp’s gasket business in the United States and now competes in the U.S. market.

      Competition in this segment depends upon being the low cost producer. While many of the parts produced by this segment have significant operating and/or cosmetic features that are integral to the performance of the end product, the relative cost of these components is small compared to the total cost of a refrigerator or automobile. In addition, advancement in materials can quickly render current product offerings obsolete.

     Raw Materials

      The principal materials used by this segment are PVC (polyvinyl chloride), TPU (thermal plastic urethane), TPE (thermal plastic elastomer), magnetic strip, and various paints and coatings. In recent years there has been a proliferation of engineered polymers. Currently, supply for some of these materials is outstripping demand, resulting in excellent buying opportunities for this segment. Magnetic strip is the only major raw material for which there are a limited number of qualified suppliers. We believe that adequate supplies of raw materials will continue to be available from qualified sources.

     Working Capital

      The Engineered Plastic Products segment typically maintains a strong working capital position. Inventories turn regularly and accounts receivable are with major corporations with strong credit histories. This segment also participates in the Company’s agreement to sell receivables (See Note 3 to the Consolidated Financial Statements found on page F-18). The Company maintains sufficient credit under borrowing arrangements to meet any cash requirements that cannot be met by the segment’s own cash flow.

Tread Rubber Segment

      Products. The Company’s wholly owned subsidiary, Oliver Rubber Company (“Oliver”), manufactures and markets precure and moldcure tread rubber, bonding gum, cement, repair materials and equipment for the tire retreading industry. Oliver also supplies custom mixed rubber to the Company for use by its Engineered Rubber Products segment and to NISCO for the manufacture of door seals for automotive original equipment. Oliver also custom mixes rubber compounds for selected customers throughout the United States.

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      Oliver supplies both precure and moldcure tread rubber. Precure tread rubber is shipped to a retreader fully cured and with a specially designed tread imprinted. The retreader bonds the precure tread to a tire casing using a combination of bonding material, heat and pressure to complete the retreading process. Moldcure tread rubber is applied by a retread dealer to the tire casing. A pressure mold is then used to cure the rubber and imprint the tread design.

      Markets. Oliver serves the trucking industry in North America through a licensed dealer network for precure retreading and through dealers who sell retreaded tires using the moldcure processes. Oliver also serves markets in other areas of the world, such as Central America and the Middle East, through export sales. Truck mileage, and therefore demand for tread rubber, correlates with general economic conditions of the market served. Oliver also supplies moldcure tread rubber for off-the-road construction equipment.

      Sales and Distribution. In North America, tread rubber products are marketed by Oliver’s sales force to retread dealers, some of which are licensed by Oliver. Licensed dealers use Oliver’s patented precure system and market tread rubber under the name Tuff-Cure. This segment does not have a backlog of orders at any point in time. This segment is also not significantly affected by seasonality.

      Competition. The tread rubber industry is very competitive, with more than ten suppliers, of which at least three are significant. Competition is based upon the price and quality of the products and services supplied. While exact market share information is not available, it is estimated that based on pounds shipped, the largest supplier of precure tread rubber is Bandag, Incorporated. Unlike Bandag, Oliver sells both precure and moldcure tread rubber. Management believes Oliver is currently one of the largest suppliers of moldcure rubber in North America and is the second largest supplier of tread rubber. Other significant competitors include Goodyear Tire and Rubber Company and Michelin North America, Inc.

     Raw Materials

      The principal materials used by this segment include synthetic rubber, rubber chemicals, natural rubber, cement, and bonding gum. The Company believes that there are adequate supplies of raw materials available from reliable sources to support the operations of this segment.

     Working Capital

      The Tread Rubber segment sells to many small independent customers. Accounts receivable and the extension of credit must be monitored closely to reduce the risk of losses in collection. Inventories include a supply of finished goods on hand to fill customer orders from stock. Working capital requires careful management but has generally been sufficient to fund operating needs.

Engineering and Development

      Although the Company operates in mature industries, it continues to spend significant amounts for engineering and development of new products, processes and applications. These amounts are disclosed in the Consolidated Statements of Income found on page F-11 included herein. Product development is an essential part of the market strength of the Company. The Company’s sales and product development personnel work directly with the engineering and styling departments of its major customers in the development of new products. In recent years, the Company’s involvement with its automotive customers has begun at the earlier model design stage, and the Company has assumed an increasing share of engineering and design capability and responsibility. The Company’s main sales and product development group is located in Dearborn, Michigan, close to the purchasing and engineering groups of its largest customers. The Company also has significant product development facilities at Stratford, Ontario, Huntingdon, England and Bezons, France.

Patents and Licenses

      The Company holds numerous patents covering various manufacturing processes and products for each of its operating segments. We have licensed certain of the patents. We also have a license agreement with Nishikawa for sales, marketing and engineering services on certain products sold by the Company. Under this

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Employees

      As of June 30, 1999, the Company employed the following number of people by segment:

      Approximately 7,800 of these employees are hourly employees. Employee relations at the Company’s plants generally have been good. Approximately 45% of the Company’s employees were represented by labor unions as of June 30, 1999.

Environmental Matters

      The Company believes that it is in substantial compliance with federal, state and local provisions regulating the discharge of materials into the environment or otherwise relating to the protection of the environment. The Company maintains personnel whose function is to monitor compliance with environmental protection regulations.

      At its Gaylord, Michigan plant, the Company is correcting a previously defined condition of groundwater located under its plant by injecting such water to underground depths well below and separate from the drinking water aquifer. To the extent necessary, permits for all corrective activities have been obtained from the Michigan Department of Environmental Quality and the United States Environmental Protection Agency. Chemicals in addition to those previously defined have also been identified in the groundwater. The Company continues to investigate whether the source of the additional chemicals is on-site or off-site.

      The Company was designated as a potentially responsible party in connection with several disposal sites. Settlements with payment of an immaterial amount have been obtained for all sites, except for sites located in Zionsville, Indiana, Kansas City, Kansas, Jamestown, North Carolina, Toledo, Ohio and Richmond, California. The Company was an insignificant contributor at these sites and believes that these matters will be resolved without a material adverse affect on liquidity, capital resources or the consolidated financial condition of the Company.

      The Company was notified by the State of New York that the property occupied by its Schenectady plant, which ceased operations in 1997, is being investigated concerning possible contamination resulting from the operations of the previous property owner. In 1998, the Company entered into an agreement with the New York State Department of Environmental Conservation (NYSDEC) to conduct further investigations and, if necessary, remedial activities at the site. The Company has met the obligations of its agreement with the NYSDEC and has identified a source of contamination that apparently existed prior to the Company owning the property. The Company has now taken steps which have resolved this matter at minimal cost.

      The Company has certain ongoing environmental activities at a divested facility in Port Clinton, Ohio. The Company ceased manufacturing at the site in 1992 and most buildings have been demolished. As part of its closure activities the Company has investigated the soil and groundwater on the property for purposes of determining compliance with applicable environmental standards. The Company has identified the presence of certain materials related to its manufacturing operations and is presently seeking the acknowledgement of the State of Ohio under Ohio’s Voluntary Action Program that applicable commercial standards have been met with respect to the cleanup of the site. The Company anticipates some negotiation with the current owner of the

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      Where appropriate, the Company has accrued for the above mentioned items. See Note 1 of the Consolidated Financial Statements “Environmental Compliance and Remediation” found on page F-17. Management believes, on the basis of presently available information, that resolution of these matters will not materially affect liquidity, capital resources or the consolidated financial condition of the Company.

Foreign Operations

      The Company conducts its operations through several different legal entities throughout the world. The most significant changes made to this structure in the last five years have been the formation of Standard Products Industria E Comercio Ltda in Brazil; the formation of Standard Products de Mexico S.A. de C.V. and the subsequent 30% investment in this entity by Nishikawa; the formation of Standard Products Polska sp. z o.o. in Poland; and increased ownership to 100% of Admiral Heintz, Inc. in the United States and 51% of Holm KK Extrusions Pvt. Ltd. in India. Both of these entities are now consolidated in the Standard Products group.

      The Company also has minority equity interests in and licensing arrangements with firms in Japan, Korea, Mexico and other countries throughout the world.

      The Company’s United States export sales in the aggregate for the fiscal years ended June 30, 1999, 1998 and 1997, were $94,133,000, $99,889,000 and $111,017,000, respectively, of which a substantial portion is represented by sales to automotive OEMs in Canada.

      Our experience has been that our foreign businesses in Canada and Western Europe do not present materially different risks or problems from those encountered in our United States businesses. Those risks generally involve meeting customers’ expectations as to the timely delivery of parts which meet their specifications. The automotive business is directly affected by the annual new vehicle production of its customers, which is generally the by-product of the economic conditions in the countries in which our customers market their vehicles, and the popularity of the vehicles made by our customers versus those made by other OEMs.

      The Company expects that the risks of conducting business in the Brazilian, Mexican and Polish automotive original equipment markets will be greater than the North American and Western European automotive markets. The Company must deal with several new issues, including but not limited to, more stringent governmental regulation, currency instability, potential high interest and inflation rates, and the general economic instability associated with emerging markets.

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Item 2. Properties

      The Company operates the following properties for the Engineered Rubber Products segment:

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      The Company operates the following properties for the Engineered Plastic Products segment:

      The Company operates the following properties for the Tread Rubber segment:

      The Company operates the following properties that are included in the segment titled Other:

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(2)  Land and buildings held for sale.

      The Company believes that all of its properties, machinery and equipment are in good operating condition and suitable and adequate for the business of the Company as presently conducted. The use of the Company’s Engineered Rubber Products facilities varies with the production of passenger cars and light trucks in various countries. The use of the Tread Rubber facilities varies with demand for tread rubber product. Capacities of each facility are adequate to meet current demands. The Company believes capacity is presently adequate to meet the demands of each segment’s business.

Item 3.  Legal Proceedings

      The Company was not a party to any pending legal proceedings other than ordinary routine litigation incidental to its business.

Item 4.  Submission of Matters to a Vote of Security Holders

      None.

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Item 5.  Market for Registrant’s Common Equity and Related Shareholder Matters

      On September 1, 1999, the Company had 16,088,048 shares of its Common Shares $1 par value outstanding, which were owned by 845 shareholders of record.

      During 1999 and 1998, the Company paid quarterly cash dividends on its Common Shares of $0.71 and $0.68 per share, respectively. Information concerning long-term debt, including restrictions and provisions relating to distributions and cash dividends on the Company’s Common Shares, appears on Note 7 of the Consolidated Financial Statements on page F-19 of this report.

      The Company’s Common Shares are traded on the New York Stock Exchange under the symbol SPD. Market data is shown in the following table:

Item 6.  Selected Financial Data

      The information required by this Item is on page F-1 included herein.

Item 7.  Management’s Discussion and Analysis of Results of Operations and Financial Condition

      The information required by this Item is on pages F-2 through F-9 included herein.

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk

      The information required by this item is found in Note 8 of the Consolidated Financial Statements which appears on page F-19 included herein.

Item 8.  Financial Statements and Supplementary Data

      Financial statements and supplementary data are as set forth in the “Index to Consolidated Financial Statements, Supporting Schedules and Supplemental Data” on page 38 included herein.

Item 9.  Disagreements on Accounting and Financial Disclosure

      None.

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Item 10.  Directors and Executive Officers of the Registrant

      The Executive Officers of the Company are elected annually to serve for one-year terms or until their successors are elected and qualified. The Executive Officers listed below were last elected on October 20, 1998, except for Mr. Burnside, who was elected on December 8, 1998 and Mr. Batey, who was elected on June 29, 1999. The business experience, principal occupations and employment during the last five years of the individuals holding the office are indicated in the table below.

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      In accordance with the Company’s Amended Code of Regulations, the Board of Directors has fixed the number of directors at fourteen, divided into two classes of five and one class of four.

      The following information is furnished with respect to each director.

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      Each of the above directors has had the principal occupation indicated for at least five years, except Messrs. Doddridge, Brandon and Roudebush. Mr. Doddridge served as Vice Chairman and Chief Executive Officer of Magna International, Inc. from November 1992 to November 1994. Mr. Brandon served as Chairman, President, and Chief Executive Officer of National City Corporation until on September 30, 1995. Mr. Roudebush was part owner and an officer of Milford Dodge, Inc. in Milford, Ohio, an automobile dealership, from August 1995 through May 1997. Prior to that, he had been employed from 1991 though November 1994 as President, Rockwell Automotive, the operating unit of Rockwell International Corporation that included all of Rockwell’s worldwide automotive business.

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      Mr. Brandon is a director of RPM, Inc. Mr. Doddridge is a director of Detroit Diesel Corporation. Mr. Moll is a director of Shiloh Industries, Inc. and Sherwin-Williams Company. Mr. Rankin is a director of The B.F. Goodrich Company and The Vanguard Group. Mr. Riedel is a director of Belden Inc., Factory Mutual International, Inc. and Gardner Denver, Inc., of which he is the former Chairman. Mr. Roudebush is a director of Simpson Industries, Inc. Mr. Zampetis is a director of Shiloh Industries, Inc.

      During the fiscal year ended June 30, 1999, the Board of Directors held 10 meetings and appointed an Audit Committee, a Finance Committee and a Compensation Committee. The Board of Directors does not have a Nominating Committee. With the exception of Messrs. Perkins and Myers, each member of the Board of Directors attended at least 75% of the meetings of the Board of Directors and of the committees on which he served.

      The Audit Committee of the Board of Directors of the Company, of which Mr. Brandon is Chairman and Messrs. Baillie, Doddridge, Moll, Myers, Rankin, Sigel and Thompson are members, held three meetings and consulted informally on other occasions during the last fiscal year. The Audit Committee recommends annually to the Board of Directors the independent public accountants for the Company, reviews with the independent public accountants the arrangements for and scope of the audits to be conducted by them and the results of those audits, and reviews various financial and accounting matters affecting the Company.

      The Compensation Committee of the Board of Directors of the Company, of which Mr. Riedel is Chairman and Messrs. Brandon, Moll, Myers and Perkins are members, held five meetings and consulted informally on other occasions during the last fiscal year. The Compensation Committee periodically reviews and determines the compensation, including fringe benefits and incentive compensation, of officers and management personnel of the Company and administers the Company’s restricted stock plan and stock option plans. The Compensation Committee also determines the officers and key employees of the Company who participate in the plans and the stock options and restricted stock awards to be granted. In addition, the Compensation Committee established stock ownership guidelines for executive officers and directors of the Company.

      The Finance Committee, of which Mr. Drinko is Chairman, Mr. Thompson is Vice Chairman, and Messrs. Perkins, Reid, Riedel, Roudebush, and Zampetis are members, held two meetings and consulted informally during the last fiscal year. The Finance Committee administers the investments of the Company’s retirement funds and renders advice and counsel to management on financial matters affecting the Company.

      Director’s Compensation. Each director who is not an officer of the Company or a subsidiary of the Company is compensated at the rate of $23,000 per year. Each director also receives $1,000 for attendance at each meeting of the Board of Directors and for each meeting of any committee not held in conjunction with a meeting of the Board of Directors. Committee Chairmen receive an additional $1,000 per year.

      Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers, and owners of more than 10% of the Company’s Common Shares, to file with the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange initial reports of ownership and reports of changes in ownership of Common Shares and other equity securities of the Company. Executive officers, directors and owners of more than 10% of the Common Shares are required by SEC regulations to furnish the Company with copies of all forms they file pursuant to Section 16(a).

      To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended June 30, 1999, all Section 16(a) filing requirements applicable to its executive officers, directors and greater-than-10% beneficial owners have been met, except that Mr. Sigel failed to file a Form 5 with respect to an acquisition by gift of Common Shares in February 1999. A corrective Form 5 is being prepared and will be filed in September 1999.

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Item 11.  Executive Compensation

      The following information is set forth with respect to the Company’s Chief Executive Officer and the Company’s four other most highly compensated executive officers for fiscal year 1999.

Summary Compensation Table

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(6)	Mr. Roudebush commenced employment with the Company on July 1, 1997, and became its Chief Executive Officer on July 24, 1997.
(7)	Mr. Roudebush was awarded 50,000 restricted Common Shares upon joining the Company. Pursuant to an amendment to Mr. Roudebush’s restricted stock agreement, effective beginning in fiscal year 1999, made in connection with changes to the Company’s Officers Incentive Compensation Plan, up to 18,750 of the awarded Common Shares can be earned in each of fiscal years 1999, 2000, and 2001, based upon the percentage of bonus earned during each such fiscal year, but in no event can the aggregate number of shares earned over that three-year period exceed 37,500. Awarded Common Shares earned by Mr. Roudebush are subject to forfeiture until the end of the third fiscal year following the fiscal year in which such awarded Common Shares are earned, except that in the event of a “change in control” of the Company, as defined in the restricted stock plan pursuant to which the restricted Common Shares were awarded to Mr.  Roudebush, all restricted Common Shares awarded to Mr.  Roudebush will immediately vest. In the event of Mr. Roudebush’s death, all earned but unvested awarded Common Shares and one-half of awarded but unearned Common Shares will vest in his designated beneficiary. Mr. Roudebush earned 11,636 of the awarded Common Shares in fiscal year 1998 and 7,646 in fiscal year 1999. Those shares will vest on the last day of fiscal year 2002. Based on the last reported sale price of the Company’s Common Shares on the New York Stock Exchange on June 30, 1999, the Common Shares earned by Mr.  Roudebush in fiscal years 1998 and 1999 had a fair market value of $494,101. Dividends are paid only with respect to the awarded Common Shares that have been earned. (See footnote 3 above for a description of the impact of the Company’s proposed merger with Cooper Tire & Rubber Company on the restricted stock awarded to Mr. Roudebush.)
(8)	Mr. Zampetis was awarded 125,000 restricted Common Shares (adjusted to reflect a 5-for-4 stock split of the Company’s Common Shares effected in the form of a stock dividend paid on June  3, 1993 to shareholders of record on May 20, 1993) in fiscal 1992. Under the terms of the award, up to 12,500 of the awarded Common Shares may be earned in each of ten consecutive fiscal years beginning in fiscal 1992, based on the percentage of bonus earned during such fiscal year. Pursuant to an amendment to Mr. Zampetis’ restricted stock agreement effective beginning in fiscal year 1999 made in connection with the changes to the Company’s Officers Incentive Compensation Plan, Mr. Zampetis can earn up to 18,750 of the awarded Common Shares in each of fiscal years 1999, 2000, and 2001, based upon the percentage of bonus earned during each such fiscal year, but in no event can the aggregate number of shares earned over that three-year period exceed 37,500. Awarded Common Shares earned by Mr. Zampetis are subject to forfeiture until the end of the third fiscal year following the fiscal year in which such awarded Common Shares are earned, except that if his employment is terminated by the Company without “cause” or if he terminates his employment for “good reason,” as defined in his employment agreement (see “Certain Employment and Other Agreements” on page  20) or if his employment is not continued beyond August 31, 1999 (which date has been amended to be the closing date of the merger between the Company and Cooper Tire & Rubber Company), all Common Shares then earned by him which are subject to forfeiture will become immediately vested. In addition, he will continue to be eligible to earn additional Common Shares, which will not be subject to forfeiture, during any period when his base salary is continued after his employment ends. Mr. Zampetis earned 12,500 of the awarded Common Shares in fiscal year 1997, 11,636 in fiscal year 1998, and 7,646 in fiscal year 1999. 6,591 shares earned by Mr. Zampetis in fiscal year 1996 vested on June 30, 1999. The shares earned in fiscal years 1997, 1998, and 1999 will vest on the last day of fiscal years 2000, 2001 and 2002, respectively. In the event of Mr. Zampetis’ death, all earned but unvested awarded Common Shares and one-half of awarded but unearned Common Shares will vest in his designated beneficiary. Based on the last reported sale price of the Company’s Common Shares on the New York Stock Exchange on June 30, 1999, the total Common Shares earned during the past three years under the 1992 award had a fair market value of $814,414. Dividends are paid only with respect to the awarded Common Shares that have been earned. (See footnote 3 above for a description of the impact of the Company’s proposed merger with Cooper Tire & Rubber Company on the restricted stock awarded to Mr. Zampetis.)
(9)	Mr. Keys was awarded 50,000 restricted Common Shares in fiscal 1995. Under the terms of the award, up to 5,000 of the awarded Common Shares may be earned in each of ten consecutive fiscal years

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beginning in fiscal 1995, based on the percentage of bonus earned during such fiscal year. Awarded Common Shares earned by Mr. Keys are subject to forfeiture until the end of the third fiscal year following the fiscal year in which such awarded Common Shares are earned. Mr. Keys earned 5,000 of the awarded Common Shares in fiscal year 1997, 4,654 in fiscal year 1998, and 3,706 in fiscal year 1999. These shares will vest on the last day of fiscal years 2000, 2001 and 2002, respectively. In the event of Mr. Keys’ death, all earned but unvested awarded Common Shares and one-half of awarded but unearned Common Shares will vest in his designated beneficiary. Based on the last reported sale price of the Company’s Common Shares on the New York Stock Exchange on June 30, 1999, the total Common Shares earned during the past three years under the 1995 award had a fair market value of $342,350. Dividends are paid only with respect to the awarded Common Shares that have been earned. (See footnote 3 above for a description of the impact of the Company’s proposed merger with Cooper Tire & Rubber Company on the restricted stock awarded to Mr. Keys.)

Option Grants in Last Fiscal Year

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Aggregated Option Exercises In Last Fiscal Year

Certain Employment and Other Agreements

      Ronald L. Roudebush became employed by the Company on July 1, 1997, and was elected by the Board of Directors as a member of the Board and Vice Chairman and Chief Executive Officer, effective July 24, 1997. He has entered into a two-year “evergreen” employment agreement with the Company, expiring on June 30, 2007. Under the Agreement, Mr. Roudebush received an initial base salary of $500,000 per year, and became entitled to participate in all executive and employee benefit plans of the Company, including the Officers Incentive Compensation Plan. In the event of his termination without “cause,” or upon his resignation for “good reason” or within six months after a “change in control,” Mr. Roudebush will be entitled to a lump sum equal to two years of base salary and bonus payments, and a continuation of benefits during the two-year period. Upon a change in control of the Company, all nonvested stock options granted to Mr. Roudebush in fiscal 1998 will immediately become vested and to the extent not then exercisable, will become exercisable upon his termination or, in certain cases, resignation. See also footnotes 3 and 7 under “Executive Compensation — Summary Compensation Table” regarding the award of restricted stock made to Mr. Roudebush under his agreement. Mr. Roudebush has also executed a non-compete agreement with the Company. Consummation of the transactions contemplated by the Agreement and Plan of Merger by and among the Company, CTB Acquisition Company and Cooper Tire & Rubber Company will constitute a “change in control,” as defined in Mr. Roudebush’s agreement.

      The Company also entered into an employment agreement with Theodore K. Zampetis on September 1, 1997, pursuant to which he continues to serve as President and Chief Operating Officer. The agreement provided an incentive for Mr. Zampetis to remain in his present position at least through August 31, 1999, by providing for his base salary to continue after August 31, 1999 for one month for each year of service if he serves through that date and then elects not to continue his employment. Mr. Zampetis had 27 years of service for this purpose as of June 30, 1999. On August 17, 1999, Mr. Zampetis elected not to continue his employment beyond the closing date of the proposed merger between the Company and Cooper Tire & Rubber Company. He has agreed, however, to remain employed in his present position through that date. Upon the termination of his employment, he will be entitled to continuation of his base salary for 27 months, the continuation of certain benefits for one year, and pension accrual for 27 additional months. See also footnotes 3 and 8 under “Executive Compensation — Summary Compensation Table” regarding the restricted stock agreement entered into between the Company and Mr. Zampetis and certain amendments thereto with respect to the award of restricted stock made to him in fiscal 1992.

      Change in Control Agreements. The Company has entered into change in control agreements with the named executive officers other than Messrs. Roudebush and Zampetis. In general, the executive will be entitled to receive certain payments if a change in control of the Company occurs and the executive is terminated for any reason other than death or disability or for cause or resigns for “good reason” within two years after the change in control. An executive would have “good reason” to resign if he is assigned duties materially and adversely inconsistent with his duties prior to the change in control or if there is an adverse change in his title or responsibilities, a reduction in his base compensation, a failure by the Company or a

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Pension Plan and Supplemental Plans

      Salaried employees of the Company with one year of full-time service are eligible to participate in The Standard Products Company Salaried Employees’ Pension Plan (the “Pension Plan”) and The Standard Products Company Supplemental Salaried Employees’ Pension Plan (the “Supplemental Plan”).

      The Pension Plan provides for normal retirement benefits based on the highest average monthly compensation for 60 consecutive months within the last 120 months prior to retirement (final average compensation). The basic formula is 1  1/15% times final average compensation (up to but not exceeding Social Security-covered compensation), plus 1 2/3% of the amount (if any) of final average compensation in excess of Social Security-covered compensation, all multiplied by the participant’s years of pension service under the Plan (up to a maximum of 30 years). Employees who were hired prior to July 1, 1976, may have their normal retirement benefit calculated under an alternative formula as follows: final average compensation multiplied by a percentage equal to the sum of (i) 21.25%, plus (ii) 0.75% for each year of pension service up to a maximum of 25 years (that is, a maximum of 40%). In addition, the Plan provides that the minimum normal retirement benefit shall in all events be no less than $13 multiplied by a participant’s years of pension service. Certain of these benefit formulas were adopted effective July 1, 1989, to comply with the Tax Reform Act of 1986. Notwithstanding any new benefit formulas, each participant is entitled to a benefit no less than his or her accrued benefit as of June 30, 1989. Participants may elect that retirement benefits be paid in the form of a life annuity, a ten-year or five-year sum certain annuity, or various joint and surviving spouse options; the Plan’s normal retirement benefit amount is payable monthly, based on a single-life annuity with five years certain.

      Compensation covered under the Pension Plan includes (i) base salary, (ii) bonuses, (iii) payments for overtime, (iv) salary deferred under the Company’s Individual Retirement and Investment Trust Plan, and (v) the taxable value of restricted Common Shares that vest in a particular year. Extraordinary payments, Company contributions to the Company’s Individual Retirement and Investment Trust Plan, and salary deferred under the Supplemental 401(k) and Salary and Bonus Deferral Plans are not included in compensation. Additionally, the collective value of the taxable amount of vested restricted Common Shares and bonuses received in any plan year in excess of 50% of base salary in that plan year is not included in compensation.

      The Supplemental Plan is a nonqualified plan which provides a supplemental benefit for eligible salaried employees under terms and conditions similar to those under the Pension Plan. The supplemental benefit is equal to the excess of (i) the benefit that would have been payable to the employee under the Pension Plan without regard to certain compensation, annual retirement income and benefit limitations imposed by federal law over (ii) the benefit payable to the employee under the Pension Plan.

      The table below shows estimated annual benefits payable (assuming payments made in the normal retirement form, and not under any of the various survivor forms of benefit payments) under the Pension Plan

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Annual Benefits Upon Retirement in 1999 Plan Year with Years of Service Indicated

      As of June 30, 1999, the credited years of service for retirement purposes were as follows: Mr. Roudebush — 2; Mr. Zampetis — 26; Mr. Keys — 27; Mr. Mack — 10; and Mr. Sheley — 4.

      Two non-qualified deferred compensation plans, the Supplemental 401(k) Plan and the Salary and Bonus Deferral Plan, became effective on January 1, 1998. Under the Supplemental 401(k) Plan, management and executive-level employees of the Company, including the named executive officers, are permitted to defer compensation that could have been deferred under the Company’s 401(k) plan but for the limitations placed on “highly-compensated” employees under the Internal Revenue Code, and but for the dollar limit that can be contributed annually to such a plan under Section 402(g) of the Internal Revenue Code. The Salary and Bonus Deferral Plan permits additional amounts of compensation to be deferred by the same individuals, regardless of any limitation placed on their ability to contribute to the 401(k) plan. Under both plans, participants will receive a Company match on their contributions, provided that the aggregate match under those plans and the Company’s 401(k) plan will in no event exceed the maximum match payable under the terms of the 401(k) plan, if there were no government limits on the percentage of salary that can be contributed to the 401(k) plan.

      Under both plans, compensation deferred by eligible participants will be credited to an unfunded account established for each participant. No funds will be set aside to satisfy the obligation owed under the plans. Amounts deferred will be credited with interest at the Moody’s Long-Term Baa Corporate Bond Index rate, which approximates the Company’s long-term borrowing rate. Participants will receive payment of the amounts owed to them from the general assets of the Company. Those amounts will generally not be payable until after the participant terminates employment. In the event of a change in control of the Company, as such term is defined in the plans, cash equal to the amounts credited to the accounts of participants will be funded in a “rabbi trust,” which will exist solely to pay benefits to participants, except that such funds will be available to creditors of the Company in the event of the insolvency of the Company.

Compensation Committee Interlocks And Insider Participation

      Messrs. Brandon, Moll, Myers, Perkins and Riedel are the members of the Company’s Compensation Committee. There are no Compensation Committee interlocks.

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Performance Graph

      Set forth below is a line graph comparing the cumulative total return of a hypothetical investment in the Company’s Common Shares with the cumulative total return of a hypothetical investment in each of the Standard & Poor’s Composite — 500 Index and the Dow Jones Auto Parts Index based on the respective market price of each such investment at the end of each of the Company’s fiscal years shown below, assuming in each case an initial investment of $100 on July 1, 1994, and reinvestment of dividends.

Compensation Committee Report

      The Company’s executive compensation program is administered by the Compensation Committee of the Board of Directors, which has responsibility for reviewing all aspects of the compensation program for the executive officers of the Company. The Compensation Committee is comprised of the five directors listed at the end of this report, none of whom is an employee of the Company.

      The Committee’s primary objective with respect to executive compensation is to establish programs that attract and retain key executives and align their compensation with the financial and stock market performance of the Company and, in the case of executives who are the heads of business units or subsidiaries of the Company, with the financial performance of those business units or subsidiaries. As such, the Committee has established management incentive compensation programs to provide annual cash bonuses based upon the financial performance of the Company, and where appropriate, its business units and subsidiaries, relative to performance targets established by or under the auspices of the Committee. In keeping with the Committee’s belief that aligning the interests of management with those of the shareholders through stock-based incentives is important to the creation of shareholder value, the Committee has also established stock option and restricted stock plans as an important part of the Company’s executive compensation program.

      The primary components of the Company’s executive compensation program are: (1) base salaries, (2) annual cash incentive opportunities, and (3) long-term incentive opportunities in the form of stock-based awards. Each of these components is discussed below.

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      Base Salaries. Base salaries for each of the Company’s executive officers are generally reviewed every 12 to 14 months by the Committee. In deciding upon the appropriate level of base salary, the Committee uses commercially available compensation surveys to determine market pay levels for similar positions in similarly sized automotive parts and selected general manufacturing companies. The Committee’s objective is to use such survey data to establish a midpoint for each position that is at approximately the 50th percentile of base pay for such position among such comparable companies, and to compensate each executive in an amount that is within a range from approximately 20% above to approximately 20% below the midpoint established for the position. The actual base salary within the range will be based upon a variety of factors, including experience, performance, skill level, and internal equity.

      With respect to the 4.5% increase in base salary authorized for Mr. Roudebush on August 24, 1998, the Committee reviewed Mr. Roudebush’s achievements in his first year as Chief Executive Officer of the Company, as well as the compensation paid to chief executive officers of comparable companies, as shown in relevant survey data.

      Annual Cash Incentives. All executive officers of the Company are eligible to participate in the Officers Incentive Compensation Plan and receive annual cash bonus awards based on a percentage of base salary. For fiscal year 1999, the maximum bonus attainable for each executive officer was 75% of base salary. This was achievable if the performance of the Company (and any business unit or subsidiary of the Company, where applicable) reached 116 2/3% of the performance target established by the Committee for the Company and the business unit. Each year, the Compensation Committee sets a target goal for maximum bonus awards based on the Company’s earnings per Common Share. The target for fiscal year 1999 was $2.82 per Common Share. This forms the basis for the calculation of the entire bonus of those executives whose bonuses are tied solely to the performance of the Company. Executives who are the heads of business units or subsidiaries have 60% of their bonuses tied to the earnings per share performance of the Company, and 40% calculated in accordance with their success in meeting certain business unit performance targets established each year by the Chief Executive Officer. Actual bonus awards paid are proportional to the percentage of the target goal actually attained. Had the earnings per share target been reached, the bonus paid to each executive officer whose bonus is based solely on total corporate performance would have been 50% of base salary. Since earnings per Common Share for fiscal 1999, excluding two one-time charges that were excluded by the Committee from the bonus calculation, were $2.09, the bonus award for fiscal 1999 to the executive officers of the Company, including Mr. Roudebush, whose bonuses were tied solely to the earnings per share performance was equal to 30.58% of base salary.

      Bonuses for fiscal year 1999 were calculated in accordance with changes to the bonus plan approved by the Committee, effective July 1, 1998. Bonuses for all executive officers who are not the heads of subsidiaries or separate business units of the Company will continue to be based upon a targeted level of earnings per Common Share established each year by the Committee, and will continue to equal 50% of base salary if the earnings per Common Share target is exactly met. However, no bonus will be payable unless the Company’s actual earnings per Common Share reach at least 50% of the targeted level. A bonus equal to 25% of base salary will be payable if 50% of the earnings per Common Share target is reached. That percentage increases by 1 1/2% for each percentage point increase in earnings per Common Share relative to the target. If the earnings per Common Share target is exceeded, however, the executive will be entitled to a bonus of between 50% and 75% of base salary, depending upon the extent to which the earnings per Common Share target is exceeded. The maximum bonus of 75% of base salary will be paid if the Company’s actual earnings per Common Share equals or exceeds 116 2/3% of the earnings per Common Share target. In addition, the Committee has specifically reserved the ability to reduce an executive’s bonus if it determines that specific performance factors so warrant.

      For executive officers who are also the heads of separate business units or subsidiaries of the Company, 60% of the bonus will be attributable to the performance of the Company, under the formula set out above, and 40% will be based upon the performance of the business unit versus a budgeted performance target established each year for that unit, using the same formula used to determine the portion of bonus which is attributable to the Company’s performance. Payment for business unit performance which exceeds the

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      In setting the earnings per share target for a particular fiscal year, the Committee reviews in detail management’s budget for the year, and the components and assumptions for the Company’s business used in preparing the budget, and establishes a target which provides a substantial challenge to the Company’s executive officers to improve the operating performance of the Company, and thus enhance long-term shareholder value.

      Long-Term Stock Incentives. The Company provides long-term stock incentives to its executive officers and key employees through grants of options to purchase the Company’s Common Shares and, in the case of a select group of senior executives, awards of restricted Common Shares. Plans providing for these stock-based incentives have been approved by the Company’s shareholders. The decision as to who will be awarded restricted Common Shares, the number to be awarded, and the terms of the awards is within the sole discretion of the Committee. The awards made under the plans have provided for Common Shares to be earned in annual installments over a period of years, with the amount actually earned each year generally determined under the same percentage formula used to determine the bonus paid for corporate performance under the Officers Incentive Compensation Plan. The awards provide that shares earned under them are subject to forfeiture if the executive receiving them does not remain employed for some period of time (generally three years) after the shares are earned. Awards under the plans have been made to Messrs. Roudebush, Zampetis, Keys, Gerard Mesnel, Executive Vice President — Advanced Technology Worldwide, and Brian J. Batey, Vice President and President, Standard Products Europe. A description of the awards made to Messrs. Roudebush, Zampetis and Keys is set forth in “Executive Compensation — Summary Compensation Table” on page 17.

      The Company’s stock option plans permit the Committee, in its sole discretion, to grant stock option awards to key management employees of the Company, upon terms and conditions, which provide an incentive for those employees to remain employed by the Company and benefit from long-term increases in the Company’s stock price. Options are granted under the plan at exercise prices at least equal to the fair market value of underlying Common Shares on the date of grant, and generally become exercisable in installments over a period of approximately three years. Under stock option grant guidelines adopted by the Committee in June 1998, executives at particular job grade levels can expect to be considered annually for the grant of a number of options which is within a range established for each grade level. The amounts actually awarded to a particular executive within the parameters of the guidelines will be based in significant part on that executive’s personal performance during the year. The Committee retains discretion to grant more or fewer options to a particular executive if it determines that doing so is appropriate. Stock options granted during the last fiscal year to Mr. Roudebush and the other named executive officers are set forth in “Table  — Option Grants in Last Fiscal Year” on page 19.

      Mr. Roudebush was granted an option to purchase 200,000 Common Shares and was awarded 50,000 restricted Common Shares upon the commencement of his employment with the Company. The Committee felt that a significant component of Mr. Roudebush’s compensation should be tied to improvements in the value of the Company’s Common Shares, since taking steps to substantially increase shareholder value is a key measurement of Mr. Roudebush’s performance. Coupled with the stock ownership requirement applicable to Mr. Roudebush (see “Executive Stock Ownership Guidelines” below), the Committee believes that Mr. Roudebush has a stake in the share performance of the Company, which is sufficient to closely align his interests with those of the Company’s shareholders. Further discussion regarding the terms of Mr. Roudebush’s employment are set forth under “Certain Employment and Other Agreements” on page 20.

      Executive Stock Ownership Guidelines. In June 1998, the Compensation Committee adopted stock ownership guidelines applicable to all executive officers of the Company. The Committee determined that members of senior management who are in a position to affect shareholder value should accumulate and retain a certain ownership interest in the Company’s Common Shares. The Committee believes that such a requirement will increase the focus of all executives on the enhancement of shareholder value, and will provide them with a direct interest in continuing improvements in the price of the Company’s Common Shares.

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      Under the guidelines, executives in the following positions will be expected to own Common Shares in the following amounts:

      All current executive officers are expected to meet the ownership guidelines by July 1, 2003. All future executive officers will have five years from the date on which they commence employment to meet them. While no absolute requirement has been imposed as to what level of ownership executives shall be expected to meet at particular points in time before they must satisfy the requirements, the Committee will monitor the progress being made by each executive from time to time, and will expect that demonstrable progress toward meeting the guidelines will be made. The Committee may consider an executive’s personal financial circumstances in determining whether an executive has made a reasonable effort to comply with the guidelines. Restricted Common Shares earned under the Company’s restricted stock plans and Common Shares held in the Company’s Individual Retirement and Investment Trust Plan will be included in determining whether the ownership guidelines have been met by a particular executive. Unexercised stock options will not be included.

      Policy on Deductibility of Compensation. It is the Company’s policy that all compensation paid to its executive officers be deductible for federal income tax purposes, and that the Company will take such steps with respect to performance-based compensation plans as are necessary to ensure the deductibility of all compensation under Section 162(m) of the Internal Revenue Code.

	Alan E. Riedel, Chairman
	Edward B. Brandon
	Curtis E. Moll
	Malcolm R. Myers
	Leigh H. Perkins

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners

      The following table sets forth certain information with respect to persons known to management to be the beneficial owners as of June 30, 1999, of more than five percent of the Company’s Common Shares:

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	shares held by The Standard Products Foundation, of which Mr. Reid is President and a trustee. The number of shares shown above does not include shares owned by Mr. Reid’s children or grandchildren, and 205,157 shares held by a trust as to which Mr. Reid is an income beneficiary and John D. Drinko, a member of the Board of Directors, is trust advisor, which shares are included in the number of shares reported by Mr.  Drinko.
(3)	The information contained herein is based upon a Schedule 13G filing made by National City Corp. (“NCC”) for the period ended December 31, 1998. According to its Schedule 13G filing, NCC has sole dispositive power over 2,300 shares, shared dispositive power over 425,728 shares, and sole voting power over all 948,274 shares held by it.
(4)	The information contained herein is based upon a Schedule 13G filing made by Dimensional Fund Advisors, Inc. for the period ended December 31, 1998. According to its Schedule 13G filing, Dimensional Fund Advisors, Inc. has sole disposition and voting power over all of the shares held by it.

Security Ownership of Directors and Executive Officers

      The following table sets forth certain information with respect to the beneficial ownership of Common Shares of the Company as of June 30, 1999, by (a) the Company’s; (b) the Company’s Chief Executive Officer and the other four most highly compensated executive officers named in the Summary Compensation Table; and (c) the Company’s executive officers and directors as a group. Except as otherwise described in the notes below or in footnotes 2 and 3 to “Security Ownership of Certain Beneficial Owners” above, the following beneficial owners have sole voting power and sole dispositive power with respect to all Common Shares set forth opposite their names.

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	above does not include 76,450 shares held by a charitable lead trust in which Mr. Drinko and Mr. Sigel are co-trustees; 78,125 shares owned by Cloyes Gear & Products, Inc. of which Mr.  Drinko and Mr. Myers are directors; 3,000 shares owned by a foundation of which Mr. Drinko and Mr. Myers are trustees; and 29,752 shares owned by a foundation of which Mr. Drinko and Mr.  Perkins are trustees.
(3)	Comprised of 18,838 shares owned by Mr. Sigel; 182,446 shares owned by his wife, Sally C. Reid; 29,527 shares held in custodial accounts for Mr. Sigel’s minor children; and 80,700 shares owned by a charitable lead trust of which Mr. Sigel and Mr. Drinko are co-trustees. In addition, Mr.  Sigel is a trustee of The Standard Products Foundation, which owns 243,931 shares, which shares are included in the number of shares reported by Mr. Reid, and are not included in the number reported by Mr. Sigel. Mr. Sigel is the son-in-law of Mr. Reid, Chairman of the Board of Directors of the Company.
(4)	Comprised of 131,473 shares owned by Mr. Perkins; 88,147 shares owned by his wife, Romi Perkins, who has voting and dispositive power over such shares; 29,752  shares owned by a foundation of which he and Mr. Drinko are trustees; and 27,500 shares owned by a foundation of which Mr. Perkins is a co-trustee, and over which shares Mr. Perkins has shared dispositive power.
(5)	Comprised of 104,234 shares owned by Mr. Zampetis (which amount includes 31,782 restricted shares earned in fiscal 1997, 1998, and 1999 which will vest upon the termination of Mr. Zampetis’ employment with the Company, which will occur upon completion of the proposed merger of the Company into Cooper Tire  & Rubber Company); 24,833 shares owned by his wife, Ann J. Zampetis; 1,037 shares held for his account under the Company’s Employee Stock Purchase Plan; 12,672 shares held for his account under the Company’s Individual Retirement and Investment Trust Plan; and 20,000 shares which Mr. Zampetis has the right to acquire pursuant to stock options currently exercisable or exercisable within 60 days.
(6)	Represents less than one percent.
(7)	Comprised of 6,000 shares owned by Mr. Myers; 78,125 shares owned by Cloyes Gear & Products, Inc., in which shares Mr. Myers shares voting and dispositive power; and 3,000 shares owned by a foundation of which Mr. Myers and Mr. Drinko are trustees, and with respect to which Mr. Myers shares voting and dispositive power.
(8)	Comprised of 34,282 shares owned by Mr. Roudebush (which amount includes 19,282 restricted shares earned in fiscal years 1998 and 1999, but subject to forfeiture); 317  shares held for Mr. Roudebush’s account under the Company’s Employee Stock Purchase Plan; 1,132 shares held for his account under the Company’s Individual Retirement and Investment Trust Plan; and 100,000 shares which Mr.  Roudebush has the right to acquire pursuant to stock options currently exercisable or exercisable within 60 days.
(9)	Comprised of 210 shares owned by his wife, Sara Moll; 45,725 shares owned by the pension fund of MTD Products, Inc.; and 6,250 shares owned by a charitable foundation of which he is a trustee.

(10)	In addition, Mr. Brandon is a trustee of The Standard Products Foundation, which owned 243,931 shares as of June 30, 1999, which shares are included in the number of shares reported by Mr. Reid.
(11)	Comprised of 40,172 shares owned by Mr. Keys (which amount includes 13,360  restricted shares earned in fiscal 1997, 1998, and 1999 but subject to forfeiture); 2,709 shares held for Mr. Keys in his account under the Company’s Individual Retirement and Investment Trust Plan; and 17,630 shares which Mr. Keys has the right to acquire pursuant to stock options currently exercisable or exercisable within 60 days.
(12)	Comprised of 8,471 shares owned by Mr. Mack; 1,313 shares held for Mr. Mack in his account under the Company’s Individual Retirement and Investment Trust Plan; and 8,400  shares which Mr. Mack has the right to acquire pursuant to stock options currently exercisable or exercisable within 60 days.
(13)	Comprised of 9,500 shares owned by Mr. Sheley; 704 shares held by Mr.  Sheley’s account under the Company’s Employee Stock Purchase Plan; 281 shares held for his account under the Company’s Individual Retirement and Investment Trust Plan; and 12,400 shares which Mr. Sheley has the right to acquire pursuant to stock options currently exercisable or exercisable within 60  days.

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Item 13.  Certain Relationships and Related Transactions

      Edward B. Brandon, a director of the Company, is a director and the retired Chairman, President and Chief Executive Officer of National City Corporation. The Company has a $225,000,000 revolving credit agreement with National City Bank, Cleveland, Ohio (“National City”), a wholly owned subsidiary of National City Corporation, and six other banks, until September 30, 2002. National City has a 22.2% participation in such credit agreement. The Company borrowed from National City during the 1999 fiscal year on a short-term uncommitted line of credit at prevailing market rates.

      John D. Drinko, a director of the Company, is senior advisor to the policy committee of Baker & Hostetler LLP, which law firm acts as principal outside counsel for the Company.

      Also see Certain Employment and Other Agreements, above.

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Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

      (a)(1)  Financial Statements:

	See Index to Consolidated Financial Statements, Supporting Schedules and Supplemental Data on page 38 included herein.

      (a)(2)  Financial Statement Schedule:

	See Index to Consolidated Financial Statements, Supporting Schedules and Supplemental Data on page 38 included herein.

      (a)(3)  Exhibits:

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