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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 27, 1999
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THE STANDARD PRODUCTS COMPANY
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(Exact name of registrant as specified in charter)
Ohio 1-2917 34-0549970
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2401 South Gulley Road, Dearborn, Michigan 48124
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (313) 561-1100
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On July 27, 1999 The Standard Products Company ("Standard") and Cooper
Tire & Rubber Company ("Cooper") entered into an Agreement and Plan of Merger
(the "Merger Agreement"). Pursuant to the Merger Agreement, if the mean between
the high and low sale price per share of share of Cooper common stock
("Cooper Shares") on the New York Stock Exchange on the closing date of the
transaction is equal to or greater than $18.00, Standard will merge into Cooper
in a transaction (the "Stock Election Merger") in which each of the issued and
outstanding common shares of Standard ("Standard Shares") will be converted
into the right to receive $36.50 in cash, Cooper Shares or a combination
thereof. The exchange ratio of Cooper Shares per Standard Share will be
determined based upon the average closing price of Cooper Shares for the 20
trading days ending 5 trading days prior to the closing date of the transaction
(that average price, the "Average Closing Price"). If that Average Closing
Price is between $20.00 and $24.80 per Cooper Share, the exchange ratio will be
determined by dividing $36.50 by the Average Closing Price. The exchange ratio
is subject to a collar arrangement, so that the exchange ratio will not fall
below 1.472 Cooper Shares per Standard Share, even if the Average Closing Price
is less than $20.00 per Cooper Share, and the exchange ratio will not rise
above 1.825 Cooper Shares per Standard Share, even if the Average Closing Price
is greater than $24.80 per Cooper Share. Holders of Standard Shares will be
offered the opportunity to elect to receive cash, Cooper Shares or a
combination thereof, subject to the requirement that the holders of
approximately 45% of the Standard Shares will be exchanged for Cooper Shares
and approximately 55% of the Standard Shares will be converted into cash.
Accordingly, if shareholders representing 55% or more of all Standard Shares
elect to receive cash, they will receive a portion of their consideration in
Cooper Shares. If shareholders representing more than 45% of the Standard
Shares elect to receive Cooper Shares, some will be required to accept some or
all of their consideration in cash. The Merger Agreement contains certain
allocation formulas to insure that this 45% stock/55% cash ratio is met.
Standard shareholders will have until at least the third day after the Average
Closing Price is determined to make their elections. The Stock Election Merger
is intended to constitute a reorganization pursuant to Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended. If the mean between the high and
low sale price per Cooper Share on the New York Stock Exchange on the closing
date of the transaction is less than $18.00, then a wholly owned subsidiary of
Cooper will merge into Standard in a transaction (the "Alternative Merger") in
which each issued and outstanding Standard Share will be converted into the
right to receive $36.50 in cash.
Consummation of the transactions contemplated by the Merger Agreement,
including either the Stock Election Merger or the Alternative Merger, is
subject to certain conditions, including the approval of Standard's
shareholders and the receipt of all required regulatory approvals.
As a condition to the execution of the Merger Agreement, James
S. Reid, Jr., the Chairman of the Board of Directors of Standard, and John D.
Drinko, a director of Standard, executed separate voting agreements
(collectively, the "Voting Agreements") pursuant to which they agreed to vote or
obtain the vote of an aggregate of 1,468,994 Standard Shares (approximately 9.1%
of the issued and outstanding Standard Shares) in favor of the transactions
contemplated by the Merger Agreement and against any competing transaction.
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Immediately prior to the execution of the Merger Agreement, Standard
and National City Bank ("NCB") entered into an amendment (the "Rights Agreement
Amendment") to the Shareholder Rights Agreement (the "Rights Agreement") dated
as of January 26, 1999 between Standard and NCB. The Rights Agreement Amendment
rendered the rights issued under the Rights Agreement inapplicable to the
Voting Agreements, the Merger Agreement and the transactions contemplated
thereby.
Copies of a press release issued by Standard announcing the transaction
and the Rights Agreement Amendment are attached hereto as exhibits and are
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
4a First Amendment to Rights Agreement
99a Press Release dated as of July 27, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE STANDARD PRODUCTS COMPANY
Date: August 2, 1999 By: /s/ Ronald L. Roudebush
Name: Ronald L. Roudebush
Title: Vice Chairman of the Board of Directors
and Chief Executive Officer
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EXHIBIT 4a
FIRST AMENDMENT TO
SHAREHOLDER RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO SHAREHOLDER RIGHTS AGREEMENT (this "Amendment")
dated as of July 27, 1999, is made between The Standard Products Company, an
Ohio corporation (the "Company"), and National City Bank, a national banking
association (the "Rights Agent"). Except as otherwise indicated, capitalized
terms used but not defined herein have the meanings ascribed to them in that
certain Shareholder Rights Agreement dated as of January 26, 1999 (the
"Agreement"), between the Company and the Rights Agent.
RECITALS:
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WHEREAS, the Company and the Rights Agent are parties to the Agreement;
WHEREAS, Cooper Tire & Rubber Company, a Delaware corporation
("Survivor"), CTB Acquisition Company, an Ohio corporation ("Merger Sub"), and
the Company propose to enter into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which, upon the satisfaction of the terms and conditions
contained therein: (i) the Company will be merged with and into Survivor, with
Survivor as the surviving corporation of that merger, or (ii) Merger Sub will
merge with and into the Company, with the Company as the surviving corporation
of that merger;
WHEREAS, Survivor proposes to enter into separate Stockholder Voting
Agreements (collectively, the "Voting Agreements") with each of James S. Reid,
Jr. and John D. Drinko pursuant to which Mr. Reid and Mr. Drinko will agree,
among other things, to vote certain Common Shares owned by them in favor of the
approval of the Merger Agreement and the transactions contemplated thereby;
WHEREAS, the Board of Directors of the Company has approved the Merger
Agreement, the Voting Agreements and the transactions contemplated thereby;
WHEREAS, in accordance with Section 27 of the Agreement, the Board of
Directors of the Company has determined that an amendment of the Agreement as
set forth herein is necessary and desirable in connection with the foregoing;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto agree as follows:
1. AMENDMENT OF SECTION 1(a). Section 1(a) of the Agreement is amended
to add the following sentence at the end thereof:
Notwithstanding anything in this Agreement to the contrary, none of
Survivor, Merger Sub, James S. Reid or John D. Drinko, nor any of their
respective Affiliates or Associates, shall be deemed to be an Acquiring
Person by virtue of (i) the approval, execution or delivery of the
Merger Agreement or either or both of the Voting Agreements, (ii) the
consummation of either the Stock Election Merger or the Alternative
Merger in accordance with the Merger Agreement, or (iii) the
implementation or consummation of any other transaction or transactions
contemplated by the Merger Agreement or either or both of the Voting
Agreements.
2. NEW SECTION 1(aa). Section 1 of the Agreement is amended to add the
following new Section 1(aa):
(aa)
(i) "Alternative Merger" shall have the meaning ascribed to it
in the Merger Agreement.
(ii) "Merger Agreement" shall mean that certain Agreement and
Plan of Merger dated as of July 27, 1999, among Survivor, Merger Sub
and the Company, as amended or supplemented from time to time.
(iii) "Merger Sub" shall mean CTB Acquisition Company, an Ohio
corporation.
(iv) "Stock Election Merger" shall have the meaning ascribed
to it in the Merger Agreement.
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(v) "Survivor" shall mean Cooper Tire & Rubber Company, a
Delaware corporation.
(vi) "Voting Agreements" shall mean the Stockholder Voting
Agreements dated as of July 26, 1999, between Survivor and each of
James S. Reid, Jr. and John D. Drinko, pursuant to which each of Mr.
Reid and Mr. Drinko agreed, among other things, to vote certain Common
Shares held by them in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated thereby.
3. AMENDMENT OF SECTION 1(w). Section 1(w) of the Agreement is amended
to add the following sentence at the end thereof:
Notwithstanding anything in this Agreement to the contrary, a Share
Acquisition Date shall not occur as a result of (i) the approval,
execution or delivery of the Merger Agreement or either or both of the
Voting Agreements, (ii) the consummation of either the Stock Election
Merger or the Alternative Merger in accordance with the Merger
Agreement, or (iii) the implementation or consummation of any other
transaction or transactions contemplated by the Merger Agreement or
either or both of the Voting Agreements.
4. AMENDMENT OF SECTION 1. Section 1 of the Agreement is amended to add
the following new paragraph at the end thereof:
Notwithstanding anything in this Agreement to the contrary,
none of Survivor, Merger Sub, James S. Reid, Jr. or John D. Drinko, nor
any of their respective Affiliates or Associates nor any of their
permitted assignees or transferees shall be deemed an Acquiring Person
and none of a Distribution Date, a Share Acquisition Date, a Section
11(a)(ii) Event or any event of the type described in Section 13(a)
shall be deemed to occur or have occurred, and that the Rights will not
become separable, distributable, unredeemeable or exercisable, in each
such case, by reason or as a result of the approval, execution or
delivery of the Merger Agreement or either or both of the Voting
Agreements, the consummation of either the Stock Election Merger or the
Alternative Merger or the implementation or consummation of any of the
other transaction or transactions contemplated by the Merger Agreement
or either or both of the Voting Agreements.
5. AMENDMENT OF SECTION 3(a). Section 3(a) of the Agreement is amended
to add the following sentence at the end thereof:
Notwithstanding anything in this Agreement to the contrary, a
Distribution Date shall not occur as a result of (i) the approval,
execution or delivery of the Merger Agreement or either or both of the
Voting Agreements, (ii) the consummation of either the Stock Election
Merger or the Alternative Merger in accordance with the Merger
Agreement, or (iii) the implementation or consummation of any other
transaction or transactions contemplated by the Merger Agreement or
either or both of the Voting Agreements.
6. AMENDMENT OF SECTION 7(a). Section 7(a) of the Agreement is amended
and restated in its entirety as follows:
(a) Subject to Section 7(e), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of
the Rights Agent designated for such purpose, together with payment of
the aggregate Exercise Price for the total number of one
one-thousandths of a Preferred Share (or other securities, cash or
other assets, as the case may be) for which the surrendered Rights are
then exercised, at or prior to the earlier of (i) the Close of Business
on January 26, 2009 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed in accordance with Section 23, (iii) the
time at which such Rights are exchanged in accordance with Section 24,
or (iv) immediately prior to Effective Time (as defined in the Merger
Agreement) of the Stock Election Merger or the Effective Time (as
defined in the Merger Agreement) of the Alternative Merger (the earlier
of (i), (ii), (iii) or (iv), the "Expiration Date").
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Except as set forth in Section 7(e) and notwithstanding any other
provision (except Section 7(e)) of this Agreement, any Person who prior
to the Distribution Date becomes a record holder of Common Shares may
exercise all of the rights of a registered holder of a Right
Certificate with respect to the Rights associated with such Common
Shares in accordance with the provisions of this Agreement, as of the
date such Person becomes a record holder of Common Shares.
7. AMENDMENT OF SECTION 11(a)(ii). Section 11(a)(ii) of the Agreement
is amended to add the following sentence at the end thereof:
Notwithstanding anything in this Agreement to the contrary, none of (i)
the approval, execution or delivery of the Merger Agreement or either
or both of the Voting Agreements, (ii) the consummation of either the
Stock Election Merger or the Alternative Merger in accordance with the
Merger Agreement, or (iii) the implementation or consummation of any
other transaction or transactions contemplated by the Merger Agreement
or either or both of the Voting Agreements, shall cause a Section
11(a)(ii) Event to occur or otherwise cause the Rights to be adjusted
or to become exercisable in accordance with, or cause any other action
to be taken or obligation to arise, pursuant to this Section 11(a)(ii)
or any other provision of this Agreement.
8. AMENDMENT OF SECTION 13(a). Section 13(a) of the Agreement is
amended to add the following sentence at the end thereof:
Notwithstanding anything in this Agreement to the contrary, none of (i)
the approval, execution or delivery of the Merger Agreement or either
or both of the Voting Agreements, (ii) the consummation of either the
Stock Election Merger or the Alternative Merger in accordance with the
Merger Agreement, or (iii) the implementation or consummation of any
other transaction or transactions contemplated by the Merger Agreement
or either or both of the Voting Agreements, shall be deemed to be an
event of the type described in this Section 13(a), nor shall any such
occurrence cause the Rights to be adjusted or to become exercisable in
accordance with, or cause any other action to be take or obligation to
arise pursuant to, this Section 13 or any other provision of this
Agreement.
9. AMENDMENT OF SECTION 30. Section 30 of the Agreement is amended to
add the following sentence at the end thereof:
Nothing in this Agreement shall be construed to give any holder of
Rights or any other Person any legal or equitable rights, remedies or
claims under this Agreement by virtue of (i) the execution and delivery
of the Merger Agreement or either or both of the Voting Agreements,
(ii) the consummation of either the Stock Election Merger or the
Alternative Merger in accordance with the Merger Agreement, or (iii)
the implementation or consummation of any other transaction or
transactions contemplated by the Merger Agreement or either or both of
the Voting Agreements.
10. FULL FORCE AND EFFECT. Except as expressly provided in this
Amendment, the Agreement shall continue in full force and effect in accordance
with the provisions thereof and, unless expressly stated otherwise herein, the
terms of the Agreement shall govern this Amendment.
11. EFFECTIVE DATE. This Amendment shall be effective as of the date
first set forth above and from and after that date all references to the
Agreement shall be deemed to refer to the Agreement as amended by this
Amendment.
12. GOVERNING LAW. This Amendment shall be considered to be a contract
made under the laws of the State of Ohio and for all purposes will be governed
by and construed in accordance with the laws of that State applicable to
contracts to be made and to be performed entirely within Ohio.
13. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Amendment.
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IN WITNESS WHEREOF, this Amendment has been executed in one or more
counterparts by or on behalf of each of the parties hereto as of the date first
above written.
THE STANDARD PRODUCTS COMPANY,
an Ohio corporation
By: /s/ James S. Reid
Name: James S. Reid
Title: Chairman of the Board of Directors
NATIONAL CITY BANK, a national
banking association, as Rights Agent
By: /s/ David B. Davis
Name: David B. Davis
Title: Vice President
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EXHIBIT 99a
FOR IMMEDIATE RELEASE CONTACT: Donald R. Sheley, Jr.
The Standard Products Co.
(313) 791-2336
STANDARD PRODUCTS ANNOUNCES AGREEMENT
TO BE ACQUIRED BY COOPER TIRE & RUBBER
DEARBORN, MICHIGAN, JULY 27, 1999 - The Standard Products Company (NYSE: SPD)
today announced that it has signed a definitive merger agreement to be acquired
by Cooper Tire & Rubber (NYSE: CTB). The combination will make Cooper North
America's largest manufacturer of automotive sealing systems, a core product in
its engineered products group, and will also significantly expand the company's
global presence, a key element in its strategic growth plan. On a combined
basis, the company expects to generate approximately $3.2 billion in annual
revenues in its first full year of operation, of which approximately half will
come from tire operations and half from engineered products. Management expects
to realize significant synergies and anticipates the transaction will be
accretive to earnings within the year 2000 and fully accretive in 2001 and
beyond.
Standard Products is one of the world's leading suppliers of sealing, plastic
trim and vibration control systems for the worldwide automotive original
equipment industry. This automotive business accounted for approximately 70% of
Standard Products' total 1998 revenues of $1.1 billion. In addition, Standard
Products' Holm Industries Inc. is the largest supplier of seals for home and
commercial refrigerators in North America, and Oliver Rubber Company is a
leading manufacturer of tread rubber and equipment for the truck retread
industry.
BASIC TERMS AND CONDITIONS
The Standard Products outstanding shares will be valued at $36.50 per share or
approximately $584.4 million. In addition, Cooper will assume Standard Products'
outstanding debt which was approximately $173 million at June 30, 1999.
Initially, the purchase will be funded through an expansion of Cooper's bank
facilities and commercial paper program. Following the close of the transaction,
Cooper anticipates refinancing a portion of this debt in the public term
markets.
Under the agreement, Standard Products' stock will be exchanged for $36.50 in
cash or the equivalent value of Cooper stock, subject to a collar arrangement.
The exchange ratio will be determined based on the average closing price of
Cooper stock for the 20 trading days ending 5 days prior to the transaction's
closing date. Under the formula, if the price of Cooper stock rises, the
exchange ratio will be reduced, but not below 1.472 Cooper shares for each
Standard Products share. Further, if the price of Cooper stock falls, the
exchange ratio will increase, but not above 1.825 Cooper shares for each
Standard Products share.
(more)
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The agreement calls for holders of approximately 45% of Standard Products'
outstanding shares to receive stock and 55% to receive cash, resulting in a
tax-free transaction to those Standard Products' shareholders who receive Cooper
stock. If, however, the average of the high and low price of Cooper shares on
the closing date falls below $18, the entire purchase price will be paid in cash
at $36.50 per Standard Products share.
BENEFITS OF THE COMBINED COMPANY
"This acquisition is a tremendous opportunity and exactly what we planned with
our Cooper 21 strategy which we have been formulating over the past two years,"
commented Patrick W. Rooney, Cooper Chairman and CEO. "Our Cooper 21 plan calls
for our company to be a global player in both our tire and our engineered
products operations," said Thomas A Dattilo, Cooper's President and COO. "The
combined company will create the market leader in North and South America for
automotive sealing systems, as well as one of the leading manufacturers in
Europe. Standard Products' global footprint of 38 plants and five technical
centers in nine countries represents the very best opportunity to achieve this
objective while maximizing future returns to shareholders, and also benefiting
our customers worldwide," Dattilo concluded.
Standard Products Vice Chairman and CEO, Ronald L. Roudebush, who will be
joining Cooper's board of directors, echoed Cooper management's comments by
saying, "With our leading market positions, breadth of customers and global
footprint, in addition to strong technological capabilities, this is a match
which should be positive for customers, employees and stockholders. Together, we
will be a stronger competitor in the automotive arena where scale, size and
technical depth are increasingly critical for success."
OTHER FACTORS
The transaction has been approved by the board of directors of each company, and
is subject to the satisfaction of customary closing conditions, including
requirements of the Hart-Scott-Rodino Act and approval of the Standard Products
shareholders. Two of the largest individual shareholders of Standard Products
stock have executed agreements to vote their shares in favor of the merger. The
proration provisions of the agreement will assure the approximately 45/55
stock/cash ratio. Completion of the purchase is expected to take place during
the fourth quarter.
COMPANY DESCRIPTIONS
The Standard Products Company, with 38 plants in nine countries, manufactures
sealing, trim and vibration control systems for the automotive original
equipment industry in North America, Europe and South America. Subsidiary
companies produce rubber and plastic sealing components for the refrigeration
industry in North America and tread rubber and equipment for the truck tire
retreading industry. Standard Products, with corporate headquarters in Dearborn,
Michigan, employs more than 10,000 worldwide. For more information on Standard
Products, visit their web site at: www.standardproducts.com.
Founded in 1914, Cooper Tire & Rubber Company is headquartered in Findlay, Ohio
and specializes in the manufacture and marketing of rubber products for
consumers. Products include
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automobile and truck tires, inner tubes, vibration control products, hoses and
hose assemblies and automotive sealing systems. Cooper, with 10,700 employees,
is the seventh largest tire manufacturer worldwide and is a recognized leader in
the replacement tire market as a low-cost, high-quality producer. As an original
equipment supplier of engineered products to vehicle manufacturers, Cooper's
expertise in design, quality, delivery and technological innovation is well
respected throughout the world. For more information, visit the Cooper web site
at: www.coopertire.com.
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 regarding expectations for
future financial performance, including with respect to the proposed merger,
which involve uncertainty and risk. It is possible the company's future
financial performance and the results of the proposed merger may differ from
expectations due to a variety of factors including, but not limited to: changes
in economic and business conditions in the world, increased competitive
activity, achieving sales levels to fulfill revenue expectations, consolidation
among its competitors and customers, technology advancements, unexpected costs
and charges, fluctuations in raw material and energy prices, changes in interest
and foreign exchange rates, regulatory and other approvals, the cyclical nature
of the automotive industry, risks associated with integrating the operations of
Standard Products and the failure to achieve synergies or savings anticipated in
the merger, failure to satisfy the closing conditions of the pending merger and
the failure to complete the merger, and other unanticipated events and
conditions.
It is not possible to foresee or identify such factors. Any forward-looking
statements in this report are based on certain assumptions and analysis made by
the company in light of its experience and perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Prospective investors are cautioned that
any such statements are not a guarantee of future performance and actual results
or developments may differ materially from those projected. The company makes no
commitment to update any forward-looking statement included herein, or to
disclose any facts, events or circumstances that may affect the accuracy of any
forward-looking statement.
This release is neither an offer to sell nor a solicitation of an offer to buy
Cooper Tire & Rubber Company securities, nor a solicitation of a proxy. Any such
offer or solicitation will only be made in compliance with applicable securities
laws.
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