UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No.
)
Filed
by
the Registrant x
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
o
Preliminary Proxy
Statement
o
Confidential, for Use
of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy
Statement
o
Definitive Additional
Materials
o
Soliciting Material
Pursuant to §240.14a-12
Titan
International, Inc.
(Name
of
Registrant as Specified In Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x No
fee
required.
o
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below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1)
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of each class of securities to which transaction
applies:
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2)
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number of securities to which transaction
applies:
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3)
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unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
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4)
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maximum aggregate value of
transaction.
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fee paid:
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part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
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identifythe
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for which the offsetting fee was paid previously. Identify the
previous filing by registration number,
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the Form or Schedule and the date of its filing.
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______________________________________________________________________________________
Titan
International, Inc.
2701
Spruce Street • Quincy,
Illinois
62301
___________________________________________________
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
Meeting
Date: May
15,
2008
To
Titan Stockholders:
The
Annual Meeting of Stockholders (the “Annual Meeting”) of Titan International,
Inc., an Illinois corporation (“Titan”
or the
“Company”),
to be held on Thursday, May 15, 2008, at 11:00 a.m. Eastern Time, at the
Ritz-Carlton, Dearborn, 300 Town Center Drive, Dearborn, Michigan, 48126, to
consider and act upon the following matters:
|
1)
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To
elect Richard M. Cashin, Jr., Albert J. Febbo and Mitchell I. Quain
as
directors to serve for three-year terms and until their successors
are
elected and qualified;
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2)
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To
ratify the selection of PricewaterhouseCoopers LLP as the independent
registered public accounting firm for 2008;
and
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3)
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To
transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements
thereof.
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Titan’s
board of directors has fixed the “record date” to be the close of business on
March 18, 2008. Only those stockholders whose names appear of record
at the Company’s close
of
business on March 18, 2008, as holders of
record
of Titan common stock, are entitled to receive notice of and to vote at the
Annual Meeting or any adjournments thereof. With this proxy
statement, a copy of Titan’s Annual Report including Form 10-K for year
ended December 31, 2007, is enclosed for your information.
All
stockholders are invited to attend the Annual Meeting. Stockholders
can help the Company avoid unnecessary costs and delay by completing and
promptly returning the enclosed proxy card. Alternatively, you may
authorize a proxy by using telephone or Internet
options as
instructed on the proxy card. If you vote by telephone or Internet,
you do
not need to mail back your proxy card. The presence, in person or by
properly executed proxy, of the majority of common stock outstanding on the
record date is necessary to constitute a quorum at the Annual
Meeting.
Meeting
Attendance: Please note that if you are attending the Annual
Meeting, proof of Titan common stock ownership as of the record date must be
presented, in addition to valid photo identification.
Please
Vote: Every
stockholder’s vote is important. Whether or not you intend to be
present at the Annual Meeting, please complete, sign, date and return the
enclosed proxy card in the enclosed return envelope, which
requires
no postage if mailed
in the United States. Telephone and Internet voting are also
offered.
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By
Order of the Board of Directors,
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|||
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/s/
CHERI T. HOLLEY
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Quincy,
Illinois
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Cheri
T. Holley
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March
28, 2008
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Secretary
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TABLE
OF CONTENTS
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Notice
of Annual Meeting of Stockholders
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Cover
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General
Matters
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1
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Voting
Procedures
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1
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Proposal
#1 – Election of Mr. Cashin, Mr. Febbo and Mr. Quain as
Directors
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4
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Proposal
#2 – Ratification of Independent Registered Public Accounting
Firm
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5
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Other
Business
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5
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Directors
Continuing in Office
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6
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Compensation
of Directors
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7
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Committees
and Meetings of the Board of Directors
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8
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Audit
and Other Fees
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9
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Report
of the Audit Committee
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10
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Compensation
Discussion and Analysis
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11
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Compensation
of Executive Officers
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15
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Report
of the Compensation Committee
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18
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Corporate
Governance
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19
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Report
of the Nominating/Corporate Governance Committee
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20
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Performance
Comparison Graph
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21
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Security
Ownership of Certain Beneficial Owners and Management
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22
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Section
16(a) Beneficial Ownership Reporting Compliance
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23
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Related
Party Transactions
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23
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Stockholder
Proposals
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23
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Householding
Information
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24
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Cost
of Proxy Solicitation
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24
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Table
of
Contents
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
TITAN
INTERNATIONAL, INC.
Meeting
Date: May 15, 2008
GENERAL
MATTERS
This
Proxy Statement is being furnished to the stockholders of Titan International,
Inc. (“Titan”
or the “Company”) in
connection with the solicitation of proxies on behalf of the Board of Directors of the
Company for
use at the Annual Meeting of Stockholders
(the “Annual
Meeting”) to be held on May 15, 2008, at the time and place and for the purposes
set forth in the accompanying Notice of Annual Meeting, and at any adjournment
or postponement of that meeting. This Proxy Statement and
accompanying form of proxy will be first mailed to stockholders on or about
March 28, 2008. Although the Company’s Annual Report to Stockholders
including Form 10-K for year ended December 31, 2007, is being mailed with
the
Proxy Statement, it is not part of the proxy soliciting material.
VOTING
PROCEDURES
Qualifications
to Vote
Holders
of shares of common stock of the Company (“Common Stock”) at
the close of business on March 18, 2008, (the “Record
Date”) will
be entitled to receive notice of and vote at the Annual Meeting.
Shares
Entitled to Vote
On
the
Record Date of March 18, 2008, there were 27,432,856 shares
of Titan’s Common
Stock outstanding which will be entitled to vote at the Annual
Meeting.
Votes
per Share
Holders
of Titan’s Common Stock (the “Common Stockholders”) are entitled to one vote per
share of Common Stock they held of record on the Record Date on each matter
that
may properly come before the Annual Meeting.
Time
and Place
The
Annual Meeting of Stockholders of Titan International, Inc., an Illinois
corporation, will be held on Thursday, May 15, 2008, at 11:00 a.m. Eastern
Time,
at the Ritz-Carlton, Dearborn, 300 Town Center Drive, Dearborn, Michigan,
48126.
Meeting
Attendance
Please
note that if you are attending the Annual Meeting, proof of Titan common stock
ownership as of the Record Date of March 18, 2008, must be presented, in
addition to valid photo identification.
Proposals
Requiring
Vote
To
consider and act upon the following matters:
ü Proposal
#1: Election of
Mr. Cashin, Mr. Febbo and Mr. Quain as Directors,
ü Proposal
#1: Ratification of
Independent Registered Public Accounting Firm of PricewaterhouseCoopers
LLP,
and
such
other business as may properly come before the Annual Meeting of Stockholders
or
any adjournments or postponements thereof.
1
Voting
by Proxy
Stockholders
are asked to complete and promptly return the enclosed proxy card by mail or
authorize a proxy by using telephone or Internet options as instructed on the
proxy card. If you vote by telephone or Internet, you do not need to mail back
your proxy card.
Recommendations
by Board of Directors
The
Board
of Directors unanimously recommend that you vote FOR all the
following
proposals:
Proposal
#1: Election of Mr. Cashin, Mr. Febbo and Mr. Quain as
Directors,
Proposal
#2: Ratification of Independent Registered Public Accounting Firm of
PricewaterhouseCoopers LLP.
Quorum
Common
Stockholders of record on the Record Date are entitled to cast their votes
in
person or by properly executed proxy at the Annual Meeting. The
presence, in person or by properly executed proxy, of the Common Stockholders
holding a majority of the Common Stock outstanding on the Record Date is
necessary to constitute a quorum at the Annual Meeting. Abstentions
and “broker non-votes” (in cases when a broker has delivered a proxy that does
not have authority to vote on the proposal in question) are counted as present
in determining whether or not there is a quorum. If a quorum is not
present at the time the Annual Meeting is convened, the Company may adjourn
or
postpone the Annual Meeting.
Procedures
All
Common Stock represented at the Annual Meeting by properly executed proxies
received prior to or at the Annual Meeting and not properly revoked will be
voted at the Annual Meeting in accordance with the instructions indicated in
such proxies. If no instructions are indicated, such proxies will be
voted FOR the
Proposal #1 and #2, and persons designated as proxies will vote with their
best
judgment on such other business as may properly come before the Annual
Meeting. The Board of Directors does not know of any matters that
will come before the Annual Meeting other than those described in the Notice
of
Annual Meeting attached to this Proxy Statement.
Vote
Required to Approve Proposals
Proposal
#1: The votes of
Common Stockholders holding a majority of the shares of Common Stock present
in
person or represented by proxy at the Annual Meeting is required for the
election of Mr. Cashin, Mr. Febbo and Mr.
Quain
as directors.
Proposal
#2: Ratification
of the independent registered public accounting firm PricewaterhouseCoopers
LLP,
requires the affirmative vote of the Common Stockholders holding a majority
of
the shares of Common Stock present in person or represented by proxy at the
Annual Meeting.
Abstentions
are counted in the number of shares present in person or represented by proxy
for purposes of determining whether a proposal has been approved, and so are
equivalent to votes against a proposal (other than the election of directors).
Broker non-votes will have no impact on the outcome of any of the matters to
be
considered at the Annual Meeting.
Revoking
a Proxy
Any
proxy
given pursuant to this solicitation may be revoked at any time before it is
voted. Common Stockholders may revoke a proxy at any time prior to its exercise
by filing with the Secretary of the Company a duly executed revocation and
proxy
bearing a later date or by voting in person by written ballot at the Annual
Meeting. Attendance at the Annual Meeting will not of itself constitute
revocation of a proxy. Any written notice revoking a proxy should be
sent to: Cheri T. Holley, Secretary of Titan International, Inc., 2701 Spruce
Street, Quincy, Illinois 62301.
2
Cost
of Proxy Solicitation
The
costs
of solicitation of proxies will be borne by the Company. It is
contemplated that brokerage houses, custodians, nominees and fiduciaries will
be
requested to forward the soliciting material to the beneficial owners of the
Company’s Common Stock held of record by such persons, and will be reimbursed by
the Company for reasonable expenses incurred therewith.
Company’s
Transfer Agent
Titan’s
transfer agent is LaSalle Bank, N.A., P.O. Box 3319, South Hackensack, NJ
07606-1919, their telephone number is (888) 606-3971.
Vote
Tabulation
The
Company’s stock transfer agent, LaSalle Bank, N.A. will judge the voting and be
responsible for determining whether or not a quorum is present and tabulate
votes cast by proxy or in person at the Annual Meeting.
Voting
Results
Titan
will announce preliminary voting results at the Annual Meeting and publish
final
results in our quarterly report on Form 10-Q for the second quarter of 2008
or
in an earlier filed Form 8-K.
Please
Vote
Every
stockholder’s vote is important. Whether or not you intend to be
present at the Annual Meeting, please complete, sign, date and return the
enclosed proxy card in the enclosed return envelope, which
requires
no postage if mailed
in the United States. Telephone and Internet voting are also
offered.
3
ü
PROPOSAL
#1 - Election of Richard M. Cashin Jr, Albert J. Febbo and
Mitchell
I. Quain as Class II Directors
The
Board of Directors recommends that stockholders vote FOR Richard
M.
Cashin, Jr., Albert J. Febbo and Mitchell I. Quain as Class II Director nominees
standing for election to serve until the 2011
Annual Meeting.
The
Company’s Bylaws provide for three classes of directors of approximately equal
numbers designated as Class I, Class II and Class III. Each
director is elected for a three-year term and the term of each Class expires
in
a different year. With the exception of the Vice Chairman (Mr.
Billig), Chief Executive Officer/Chairman (Mr. Taylor) and Mr. Akers, all
directors are independent as defined in the New York Stock Exchange listing
standards. The Nominating/Corporate Governance Committee recommended to the
Board of Directors that Richard M. Cashin Jr., Albert J. Febbo and Mitchell
I.
Quain stand for election as Class II directors to serve until the 2011 Annual
Meeting. The Board has put forth the slate of nominees consisting of Richard
M.
Cashin Jr., Albert J. Febbo and Mitchell I. Quain to stand for election at
the
2008 Annual Meeting. Mr. Cashin, Mr. Febbo and Mr. Quain are each current
directors of the Company. Each of the nominees has consented to serve as a
director if elected.
In
the
unexpected event that a nominee for director becomes unable to serve before
the
Annual Meeting, it is intended that shares represented by proxies which are
executed and returned will be voted for such substitute nominees as may be
appointed by the Company’s existing Board of Directors, as recommended by the
Nominating/Corporate Governance Committee. The following is a brief
description of the business experience of each nominee for at least the past
five years.
Richard
M. Cashin Jr.
Mr.
Cashin is managing partner of One Equity Partners LLC, which manages $4.5
billion of investments and commitments in direct private equity transactions
for
JP Morgan, where he is a member of the Executive Committee. Prior to
that time, Mr. Cashin was president of Citicorp Venture Capital, Ltd., where
he
was employed from 1980 to 2000. Mr. Cashin is also a director of
Quintiles Transnational and is a Trustee of Boys Club of New York, American
University in Cairo, National Rowing Foundation (Chairman), Central Park
Conservancy and Jazz at Lincoln Center. Mr. Cashin, who is 54 years
old, became a director of the Company in 1994. Mr. Cashin serves on the
Compensation Committee.
Albert
J. Febbo
Mr.
Febbo
retired from GE after 30 years; 18 years in sales and marketing leadership
roles
in GE’s U.S. and Europe plastics business, and 12 years as a corporate officer
leading the GE automotive and corporate marketing teams. He also
serves as director of Med Panel, Inc., headquartered in Cambridge,
Massachusetts. Mr. Febbo, who is 68 years old, became
a
director of the Company in 1993. Mr. Febbo serves on the following committees:
Audit (Chairman), Compensation and Nominating/Corporate Governance.
Mitchell
I. Quain
Mr.
Quain
is a senior director of ACI Capital Corp., a private equity
firm. Previously, Mr. Quain spent four years with ABN AMRO
Incorporated, most recently as Vice Chairman, and 22 years at Schroder &
Co., Inc. Mr. Quain serves as a director and board chairman of
MagneTek, Inc. and is a director of Hardinge, Inc., as well as a number of
private companies. He is also Chairman of the Board of Overseers of
the University of Pennsylvania’s School of Engineering and Applied Sciences and
serves on the University’s Board of Trustees and the executive committee of Penn
Medicine. Mr. Quain, who is 56 years old, became a director of the
Company in 1999. Mr. Quain meets the qualifications of a “financial expert” as
defined by the Securities and Exchange Commission and has accounting or related
management expertise as required by the New York Stock Exchange listing
standards. Mr. Quain serves on the following committees: Compensation
(Chairman), Audit and Nominating/Corporate Governance.
4
ü PROPOSAL
#2 - Ratification of Independent Registered
Public Accounting
Firm of PricewaterhouseCoopers LLP
The
Board of Directors recommends that stockholders vote FOR its selection
of
the independent registered public accounting firm, PricewaterhouseCoopers LLP,
to audit the consolidated financial statements of the Company and its
subsidiaries for 2008.
PricewaterhouseCoopers
LLP has served the Company as independent registered public accounting firm
during the year ended December 31, 2007, and has been selected by the Audit
Committee to serve as the independent registered public accounting firm for
the
present year of 2008. If stockholders fail to ratify the selection of
PricewaterhouseCoopers LLP, the Audit Committee will consider this fact when
selecting an independent registered public accounting firm for the 2009 audit
year. PricewaterhouseCoopers LLP has served the Company since
1983.
A
representative from PricewaterhouseCoopers LLP is expected to be present at
the
Annual Meeting and will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions of
stockholders in attendance.
OTHER
BUSINESS
The
Board
of Directors does not intend to present at the Annual Meeting any business
other
than the items stated in the “Notice of Annual Meeting of Stockholders” and does
not know of any matters to be brought before the Annual Meeting other than
those
referred to above. If, however, any other matters properly come
before the Annual Meeting requiring a stockholder vote, the persons designated
as proxies will vote on each such matter in accordance with their best
judgment.
5
DIRECTORS
CONTINUING IN OFFICE
Directors
continuing in office as Class III Directors whose terms expire at the annual
meeting in 2009, are listed below.
Erwin
H. Billig
Mr.
Billig is director and chairman of MSX International. From 1992 to
1999 he served as vice chairman of Masco Tech, Inc., and from 1986 to 1992
Mr.
Billig was president and chief operating officer of Masco Tech,
Inc. Mr. Billig is also a director of Titan Europe
Plc. Mr. Billig, who is 81 years old, is vice chairman of the board
of Titan and became a director of the Company in 1992.
Anthony
L. Soave
Mr.
Soave
is president, chief executive officer and founder of Soave Enterprises LLC,
a
Detroit-based holding company that owns and operates businesses in distribution,
environmental and metals recycling, as well as other diversified
industries. From 1974 to 1998 he served as president and chief
executive officer of Detroit-based City Management Corporation, which he
founded. Mr. Soave, who is 68 years old, became a director of the
Company in 1994. Mr. Soave serves on the following committees: Audit,
Compensation and Nominating/Corporate Governance.
Directors
continuing in office as Class I Directors whose terms expire at the annual
meeting in 2010, are listed
below.
Maurice
M. Taylor
Jr.
Mr.
Taylor, who is 63 years old, is chief executive officer and chairman of the
Company’s Board of Directors. Mr. Taylor has served as a director of Titan
International, Inc. since 1990, when Titan was acquired in a management-led
buyout by investors, including Mr. Taylor. Mr. Taylor is also a director and
chairman of Titan Europe Plc.
J.
Michael A. Akers
Mr.
Akers, who is 64 years old, is Chief Executive Officer of Titan Europe, Plc.,
a
publicly traded company on the AIM market in London, England. Mr. Akers
graduated as a mechanical engineer from the Engineering School of the University
of Wales in Cardiff and later received an MBA from the University of Warwick.
Mr. Akers had a career in automotive manufacturing first with British Leyland
where he managed a number of factories in the Land Rover Group, before becoming
director responsible for manufacturing of Triumph Cars in Coventry,
England.
Mr.
Akers
began organizing the start-up of Titan’s European Operations in 1990 and became
a member of the Company’s management team in 1995. Mr. Akers was appointed Vice
President of the Company in 1999 and served in that role until April 2004 when
Titan sold 70% of its European operations through a public offering on the
AIM
market in London, England. Mr. Akers led the IPO of Titan Europe Plc on the
London AIM market in 2004 and has subsequently organized the further fundraising
on the AIM market as part of the acquisition of ITM, one of the world’s largest
manufacturers of undercarriage tracks. Mr. Akers is a member of the Advisory
Board of Warwick Business School.
Edward
J. Campbell
Mr.
Campbell, now retired, was employed for 27 years by Tenneco. He spent
13 of those years as president of Newport News Shipbuilding Company and 14
years
at J.I. Case, three of those (1992-94) as president. Mr. Campbell, who is 80
years old, became a director of the Company in 1995. Mr. Campbell met the
qualifications of a “financial expert” as defined by the Securities and Exchange
Commission and has accounting or related management expertise as required by
the
New York Stock Exchange listing standards. Mr. Campbell served on the following
committees: Nominating/Corporate Governance (Chairman), Audit and
Compensation.
Note:
Mr.
Campbell, for personal reasons, regretfully resigned his position as director,
effective March 1, 2008.
6
COMPENSATION
OF DIRECTORS
The
Company can use the combination of cash and stock based incentive compensation
to attract and retain qualified directors to serve on the Board. In setting
director compensation, the Company considers the amount of time and skill level
required by the directors in fulfilling their duties to the
Company.
Each
Company director, with the exception of Mr. Taylor, receives an annual payment
of $50,000 as a director fee. In lieu of this annual payment, under the Titan
International, Inc. 2005 Equity Incentive Plan, each non-employee director
of
the Company may receive a non-discretionary grant of a stock option for 10,000
shares of the Company’s common stock at the conclusion of each annual meeting of
stockholders at which such director is elected, re-elected or continuing in
office. Such options will vest and become exercisable immediately and expire
10
years from the date of grant. Each eligible director in 2007 elected to receive
the annual cash payment of $50,000 as their annual director fee and, therefore,
received no stock options.
The
Audit
Committee Chairman receives an additional $15,000 annual payment while each
Chairman of the Compensation Committee and the Nominating/Corporate Governance
Committee receives an additional $10,000 annual payment for this position.
Each
Financial Expert receives a $5,000 annual payment for this role. The Company
pays each director, with the exception of Mr. Taylor, a fee of $500 for each
Board of Director (“Board”) or committee meeting attended. Titan also
reimburses out-of-pocket expenses related to the directors’ attendance at such
meetings.
The
Company pays Mr. Billig, the Vice Chairman of the Board, an annual fee of
$100,000 to carry out his responsibilities, which include significant
operational matters, as well as corporate development
initiatives. The Company does not have any other consulting contracts
or arrangements with any of its directors. The Company’s directors are not
subject to minimum Titan common stock ownership requirements. However, at
December 31, 2007, the directors owned approximately 8% of the Company’s common
stock.
|
Annual
Director
Fee
|
Audit
Committee
Chairman
Fee
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Other
Committee
Chairman
Fee
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Financial
Expert
Fee
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Meeting
Fee
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|
$50,000
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$15,000
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$10,000
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$5,000
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$500
|
DIRECTOR
COMPENSATION TABLE FOR 2007
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Name
of Director
|
Fees
Earned or Paid in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
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Change
in Pension Value and Nonqualified Deferred Compensation Earnings
|
All
Other Compensation
|
Total
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|||||||||||||||||||||
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J.
Michael A. Akers
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$ | 51,500 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 51,500 | ||||||||||||||
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Erwin
H. Billig (a)
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153,000 | – | – | – | – | – | 153,000 | |||||||||||||||||||||
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Edward
J Campbell
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73,500 | – | – | – | – | – | 73,500 | |||||||||||||||||||||
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Richard
M. Cashin Jr.
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53,500 | – | – | – | – | – | 53,500 | |||||||||||||||||||||
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Albert
J.
Febbo
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73,500 | – | – | – | – | – | 73,500 | |||||||||||||||||||||
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Mitchell
I.
Quain
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78,500 | – | – | – | – | – | 78,500 | |||||||||||||||||||||
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Anthony
L.
Soave
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58,500 | – | – | – | – | – | 58,500 | |||||||||||||||||||||
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Maurice
M. Taylor Jr. (b)
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– | – | – | – | – | – | – | |||||||||||||||||||||
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(a)
|
The
Company pays Mr. Billig, the Vice Chairman of the Board, an annual
fee of
$100,000 to carry out his responsibilities, which include significant
operational matters, as well as corporate development
initiatives.
|
|
(b)
|
See
Summary Compensation Table for disclosure related to Maurice M. Taylor
Jr.
who is also the Chief Executive Officer of the Company. Mr. Taylor
receives no director or meeting fees for his service on the
Board.
|
7
COMMITTEES
AND MEETINGS OF THE BOARD OF DIRECTORS
The
following table summarizes the membership of each committee and the number
of
meetings held by each committee during 2007:
|
Name
of Director
|
Board
of Directors
|
Audit
Committee
|
Compensation
Committee
|
Nominating/Corporate
Governance Committee
|
||||||||
|
J.
Michael A. Akers
|
X
|
─
|
─
|
─
|
||||||||
|
Erwin
H.
Billig
|
X
|
─
|
─
|
─
|
||||||||
|
Edward
J. Campbell
|
X
|
X
|
X
|
Chair
|
||||||||
|
Richard
M. Cashin Jr.
|
X
|
─
|
X
|
─
|
||||||||
|
Albert
J.
Febbo
|
X
|
Chair
|
X
|
X
|
||||||||
|
Mitchell
I. Quain
|
X
|
X
|
Chair
|
X
|
||||||||
|
Anthony
L. Soave
|
X
|
X
|
X
|
X
|
||||||||
|
Maurice
M. Taylor Jr.
|
Chair
|
─
|
─
|
─
|
||||||||
|
2007
Meetings
|
6
|
6
|
3
|
2
|
X
-
denotes committee
member Chair
- denotes committee
Chairman ─ denotes not a
member
Board
of Directors
The
Board
of Directors, which met six times in 2007, has established the following
committees of the Board:
Audit
Committee consisting of Messrs. Campbell, Febbo, Quain and Soave;
Compensation
Committee consisting of Messrs. Campbell, Cashin, Febbo, Quain and
Soave;
Nominating/Corporate
Governance Committee consisting of Messrs. Campbell, Febbo, Quain and
Soave.
The
Board
of Directors approves nominees for election as directors. All
directors attended 75% or more of the aggregate
number of meetings of the Board and applicable committees. The Board
and Committee meetings are presided over by their Chairman. If the Chairman
is
unavailable, the directors present appoint a temporary presiding chairman to
preside at the meeting. Mr. Campbell, for personal reasons,
regretfully resigned his position as director, effective March 1,
2008. Mr. Cashin was appointed chairman of the Nominating/Corporate
Governance Committee March 2008.
Audit
Committee
The
Audit
Committee, which met six times in 2007, retains the independent registered
public accounting firm to perform audit and non-audit services, reviews the
scope and results of such services, consults with the internal audit staff,
reviews with management and the independent registered public accounting firm
any recommendations of the auditors regarding changes and improvements in the
Company’s accounting procedures and controls and management’s response thereto,
and reports to the Board. The Audit Committee meets with the
independent registered public accounting firm with and without management
present. Mr. Campbell and Mr. Quain meet the qualifications of a “financial
expert” as defined by the Securities and Exchange Commission and have accounting
or related management expertise as required by the New York Stock Exchange
listing standards.
Compensation
Committee
The
Compensation Committee, which met three times in 2007, provides oversight of
all
executive compensation and benefits programs. The committee reviews and approves
corporate goals and makes recommendations accordingly to the Board regarding
the
salaries and all other forms of compensation of the Company’s executive
officers.
Governance
Committee
The
Nominating/Corporate Governance Committee met two times in 2007, and provides
guidance and assistance to the Board of Directors in discharging the duties
and
responsibilities related to corporate governance principles and practices of
the
Board and the Company. The committee is responsible for identifying, screening
and nominating candidates to serve as directors of the Company.
8
AUDIT
AND OTHER FEES
The
Audit
Committee of the Board of Directors engaged the independent registered public
accounting firm PricewaterhouseCoopers LLP as independent accountants to audit
the Company’s consolidated financial statements for the fiscal year ending
December 31, 2007. Fees paid to the independent registered public accounting
firm PricewaterhouseCoopers LLP included the following:
Audit
Fees For the years ended December 31, 2007 and 2006,
PricewaterhouseCoopers LLP billed the Company $910,000 and $834,000
respectively, for professional services rendered for the audit of the Company’s
annual consolidated financial statements included in the Company’s Form 10-K,
including fees related to the audit of internal controls in connection with
the
Sarbanes-Oxley Act of 2002, reviews of the quarterly financial statements
included in the Company’s Form 10-Q reports and statutory audits of foreign
subsidiaries.
|
2007
|
2006
|
|||||||
|
Financial
statements and internal
controls
|
$ | 870,000 | $ | 800,000 | ||||
|
Statutory
audits of foreign
subsidiaries
|
40,000 | 34,000 | ||||||
| $ | 910,000 | $ | 834,000 | |||||
Audit
Related
Fees For the years ended December 31, 2007 and 2006,
PricewaterhouseCoopers LLP billed the Company $172,000 and $430,000
respectively.
|
2007
|
2006
|
|||||||
|
Acquisitions,
debt offerings, and
merger
|
$ | 85,000 | $ | 366,000 | ||||
|
Employee
benefit plan
compliance
|
87,000 | 64,000 | ||||||
| $ | 172,000 | $ | 430,000 | |||||
Tax
Fees For the years ended December 31, 2007 and 2006,
PricewaterhouseCoopers LLP billed the Company $212,000 and $126,000
respectively.
|
2007
|
2006
|
|||||||
|
Tax
return preparation and
compliance
|
$ | 125,000 | $ | 80,000 | ||||
|
Foreign
tax preparation and
compliance
|
87,000 | 46,000 | ||||||
| $ | 212,000 | $ | 126,000 | |||||
In
addition to the fees detailed above, out-of-pocket and administrative fees
paid
to PricewaterhouseCoopers LLP totaled $129,000 and $142,000 for the years ended
December 31, 2007 and 2006, respectively.
Audit
Committee
Pre-Approval All services provided by the independent
registered public accounting firm PricewaterhouseCoopers LLP have been
pre-approved by the Audit Committee as required by the Company’s
Audit
Charter.
9
REPORT
OF THE AUDIT COMMITTEE
The
Audit
Committee of the Board of Directors (the “Committee”) was composed of four
independent non-employee directors during 2007. The Board of
Directors (“Board”) has determined that the members of the Committee satisfy the
requirements of the New York Stock Exchange (“NYSE”) with respect to
independence, experience and financial literacy. Mr. Campbell and Mr.
Quain meet the requirements of the NYSE as Financial Experts of the
Committee. The Committee operates under a written charter adopted May
18, 2000, and amended January 20, 2004. This charter is available on
the Company’s website: www.titan-intl.com.
The
Committee has met quarterly with management, internal audit and the independent
registered public accounting firm, individually and together, to review and
approve the financial press releases, Form 10-Q and Form 10-K reports prior
to
their filing and release of earnings for 2007. The Committee has met
in executive sessions and makes reports to the Board. The Committee
has been active in the Sarbanes-Oxley 404 process and met as often as necessary
to ensure that the process is on-going and the Company meets the year end
December 31, 2007, requirements. Mr. Campbell has attended the
Company’s Sarbanes-Oxley 404 training and is a participant in the Company’s risk
assessment meetings. The Audit Committee met a total of six times in
2007.
The
Committee has completed an annual evaluation and in their opinion has met the
requirements of their charter, the New York Stock Exchange and the Securities
and Exchange Commission. The Committee has reviewed the Audit Committee Charter
and has found it complies with the requirements of the New York Stock Exchange.
The Audit Committee recommended that the Company’s audited financial statements
be included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007.
The
Committee has selected PricewaterhouseCoopers LLP (“PWC”) to serve as the
independent registered public accounting firm for the Company for 2008 with
stockholders approval. The Committee has discussed the issue of
independence with PWC and is satisfied that they have met the independence
requirement including receipt of the written disclosures and the letter from
PWC
as required by ISB No. 1 (Independence Standards Board Standard No.1, Independence Discussions
with Audit
Committees). The Committee has discussed with PWC the matters
required by SAS 61 (Codification of Statements on Auditing Standards, Communication with Audit
Committees).
The
Committee meets independently with
PWC to discuss the accounting principles applied by management and to discuss
the quality of the Company’s internal audit function. PWC reported to
the Committee that there were no unresolved matters with management to report.
The Committee has established procedures for the receipt, retention and
treatment of complaints relating to the Company. The members of the Audit
Committee are not professionally engaged in the practice of auditing or
accounting and are not experts in those fields, but make every effort to test
the veracity of facts and accounting principles applied by
management.
|
Members
of the Audit Committee:
|
|
|
Albert
J. Febbo,
Chairman
|
|
|
Edward
J.
Campbell
|
|
|
Mitchell
I.
Quain
|
|
|
Anthony
L.
Soave
|
10
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
For
the
second year, Titan’s executive officer compensation information is presented in
the new format. The new format was required by revised executive compensation
disclosure rules adopted by the Securities and Exchange Commission in August
2006. The new format includes the following Compensation Discussion and
Analysis.
Overview
The
Compensation Committee (“the Committee”) is empowered to review and approve the
annual compensation package for all of the Company’s executive officers, a total
of four individuals. The four executive officers are as follows:
|
Executive
officer position
|
Officer
name
|
|
Chairman
and Chief Executive Officer
|
Maurice
M. Taylor Jr.
|
|
Executive
Vice President and Chief Operating Officer
|
Ernie
J. Rodia
|
|
Vice
President of Finance and Treasurer
|
Kent
W. Hackamack
|
|
Vice
President, Secretary, and General Counsel
|
Cheri
T. Holley
|
Objective
The
objectives of the Company’s compensation program are to attract and retain
individuals with the necessary skills that are vital to the long-term success
of
the Company. To achieve these objectives the compensation program is designed
to
be fair and just to both the Company and the
individual. Consideration is given to the individual’s overall
responsibilities, qualifications, experience and job performance. None of these
items are weighted more than another.
The
Committee sets all compensation with regard to the CEO of the Company. For
the
other executive officers of Titan, the CEO provides his compensation
recommendation for these individuals to the Committee, who reviews and makes
any
changes as the Committee deems appropriate.
Company
Performance In appraising
the CEO’s
performance during 2007, the Committee noted the Company continued to integrate
two major acquisitions regarding off-highway tire assets that related to
Goodyear’s North American Farm tire assets and Continental Tire North America’s
off-the-road (OTR) tire assets. The net sales for the Company for 2007 were
approximately $837 million, an increase of approximately 23% from the 2006
net
sales of
approximately $679 million.
Common
Stock
Performance The Committee
recognized the continued improvement in the Company’s common stock performance
during the past five years, which increased from a stock price of $1.34 per
common share at December 31, 2002, to $31.26 per common share at December 31,
2007. The Company’s stock price has increased over 2,300% during this five-year
time period.
Compensation
Committee Charter
The
Committee has a charter to assist in carrying out their responsibilities. The
Committee reviews the charter and the guidelines contained therein on an annual
basis and makes any modifications as they deem necessary. The Compensation
Committee Charter is available on our website at
www.titan-intl.com.
Philosophy
The
Committee recognizes other companies may use different types of calculations
and
matrices to numerically decide what a compensation package should contain.
However, the Committee believes any package that uses such formulas and matrices
would not be a complete representation of how Titan is performing. Therefore,
the Committee will use their extensive business experience and judgment to
evaluate and determine the Company’s executive compensation
packages.
11
COMPENSATION
DISCUSSION AND ANALYSIS
(continued)
Using
this process the Committee can change or adjust the compensation package rather
than using exact and published formulas that would leave no room for
modification. If the Committee had used a formula driven compensation package,
it may have provided bonuses and stock options in prior years. Using the
Committee’s philosophy, no bonuses or stock options were awarded during certain
of those years.
The
Committee’s philosophy of evaluating the overall Company performance, not just
using numeric measurement criteria, allows the Committee greater flexibility
in
carrying out their duties. The Committee has the ability to adjust compensation
packages quickly and believes this flexibility is a necessity given the rapidly
changing global environment in which the Company operates. The Committee feels
it is in the best interest of the stockholders to retain the current executive
officers. The executive compensation packages approved by the
Committee using their business judgment are considered fair to the Company
and
the individuals, thus retaining the executive and their talent for the
Company.
Use
of Compensation
Consultants and Matrices The Committee
uses no
compensation consultants or any numeric matrix for their evaluation of such
compensation. Consideration is given to the individuals overall
responsibilities, qualifications, experience and job performance. None of these
items are weighted more than another.
Base
Salary
Base
salary is determined by evaluating the responsibilities of the executive
position held, the individuals past experience, current performance and
competitive marketplace conditions for executive talent. None of these items
are
weighted more than another. Salary levels are typically considered on an annual
basis and there is no set merit increases in any given year. Therefore, the
executive salary may not increase each year. The executive salaries approved
by
the Committee for 2007 are listed under the “Summary Compensation Table.”
Cash
Bonus
In
addition to a base salary, each executive officer is eligible for an annual
cash
bonus. The Committee has no set bonus amount and uses no pre-established plan
or
formula for determining the amount. The Committee will determine the CEO’s
bonus, if any, taking into account the CEO’s total compensation package along
with the Company’s performance related to financial and non-financial
information. The CEO provides his recommendations regarding the other executive
officer’s annual cash bonuses to the Committee, which then reviews and makes any
changes they may deem appropriate. The executive discretionary cash bonuses approved by the
Committee for 2007 are listed under the “Summary Compensation Table.”
Stock
Options
The
Committee during 2007 granted no stock options to
the executive officers. The Committee determined that cash awards and incentives
are currently in the best interest of the Company and our stockholders. The
Committee currently does not anticipate utilizing stock options at this time;
however, the Committee, in the future, may grant stock options to attract or
retain executive officers for the Company.
Stock
Awards
The
Committee during 2007 granted no stock awards to
the executive officers. The Committee determined that cash awards and incentives
are currently in the best interest of the Company and our stockholders. The
Committee currently does not anticipate utilizing stock awards at this
time.
Nonqualified
Deferred
Compensation
The
Company does not have a nonqualified deferred compensation plan. The Committee
currently does not anticipate establishing such a plan.
12
COMPENSATION
DISCUSSION AND ANALYSIS
(continued)
Employment
Agreements
The
Company has outstanding employment agreements with each of the four executive
officers of the Company selected by the Board of Directors. These agreements
provide that the individuals will not receive any separation benefits if they
voluntarily leave the Company. In the event the Company proceeds with
commencement of steps to affect a Change of Control (defined generally as an
acquisition of 20% or more of the outstanding voting shares) these agreements
allow for the executive to elect the Change of Control provision.
In
the
event of a termination of the individual’s employment within 60 days after the
Change of Control, the executive is entitled to receive for the remaining term
of the agreement, which expires in April 2010, their compensation, contractual
obligation regarding retirement, continuation of health, and other fringe
benefits. Mr. Taylor, Mr. Hackamack and Ms. Holley are each a party to such
an
agreement. Mr. Rodia’s employment agreement, which expires in November 2008,
provides no contractual obligation regarding retirement and no health
benefits.
CEO
Employment
Agreement
With
the
substantial increase in the Company’s sales performance, significantly higher
common stock value, and the required assistance needed for future acquisition
strategies, the Committee wanted to ensure the continued services of the CEO.
After negotiations, a four-year employment agreement for the current CEO was
agreed to during April 2006, which expires in April 2010. This employment
agreement was filed as Exhibit 10.1 to the Company’s Form 10-Q filed on July 28,
2006.
CEO
Employment Agreement
Signing Bonus The CEO agreement
included a signing bonus of $750,000, of which, one third ($250,000) was earned
and due on the agreement date, another one third ($250,000) was earned and
paid
April 2007, and the final one third ($250,000) will be earned and payable April
2008, two years from the agreement date.
CEO
Special Performance Cash
Award The CEO is entitled to a special performance cash award
at the end of the four-year employment agreement (April 2010). If the common
stock price has increased above $19.05 per share (the agreement
date’s average stock price), the difference above $19.05 per share, if any,
shall be multiplied by one million and paid to the CEO as he instructs over
the
four years following the April 2010 employment agreement
expiration.
The
Titan
stock price at December 31, 2007, was $31.26 and assuming the stock price
remained unchanged as of April 1, 2010 (expiration date of Mr. Taylor’s
employment agreement), Mr. Taylor would be entitled to approximately $12.2
million paid over the four year period following the April 1, 2010,
date.
CEO
Contractual
Obligations Under the
CEO’s
employment agreement, the Company will provide a contractual obligation to
Mr.
Taylor upon his expected retirement in April 2010 per the employment agreement.
The amount of the contractual obligation, if any, to be paid out will be at
such
time the CEO elects his contractual rights regarding retirement under his
employment agreement. If or when the contractual obligation were to become
applicable, the calculated value at December 31, 2007, would be approximately
$4.0 million, assuming the CEO retires at the end of his agreement and receives
monthly payments for an estimated 15-year period.
Other
Executive Officers Employment
Agreements
The
Committee also wanted to ensure the continued services of the other current
executive officers and therefore has employment agreements with; (i) Mr. Rodia,
who holds the position of Executive Vice President and Chief Operating Officer,
the agreement expires November 2008 and the agreement was filed as Exhibit
10.8
to the Company’s Form 10-K filed on February 24, 2006; (ii) Mr. Hackamack, who
holds the position of Vice President of Finance and Treasurer, the agreement
expires April 2010, and the agreement was filed as Exhibit 10.2 to the Company’s
Form 10-Q filed on July 28, 2006; and (iii) Ms. Holley, who holds the position
of Vice President, Secretary and General Counsel, the agreement expires April
2010, and the agreement was filed as Exhibit 10.3 to the Company’s Form 10-Q
filed on July 28, 2006.
13
COMPENSATION
DISCUSSION AND ANALYSIS
(continued)
Other
Executive Officers
Contractual Obligations The employment
agreement of Mr. Rodia, the Executive Vice President and Chief Operating
Officer, does not provide for any contractual obligations regarding retirement.
Under the other executive officers’ employment agreements, the Company will
provide for contractual obligations to Mr. Hackamack and Ms. Holley that are
due
upon retirement. The amount of the contractual obligation, if any, to be paid
out will be at such time that Mr. Hackamack and Ms. Holley elect their
contractual rights regarding retirement under their employment agreement. If,
or
when, the contractual obligation were to become applicable, the calculated
value
at December 31, 2007, assuming they retire at their respective retirement dates
and each receive monthly payments for an estimated 15-year period, the
contractual obligation for Mr. Hackamack would be approximately $0.8 million
and
for Ms. Holley would be approximately $1.3 million.
Potential
Payments on Change of Control
The
following amounts reflect the amount of compensation to each of the named
executive officers of the Company in the event of a change of control as of
December 31, 2007. The CEO’s special performance cash awards assumes the
December 31, 2007, year end $31.26 stock price. The final amounts to
be paid out can only be determined at the time of such a change of control
and
the individual elects their contractual rights under their respective employment
agreements. The Company’s executive officers would receive cash compensation and
contractual obligations per the respective agreements for the (i) Chairman
and
Chief Executive Officer (M. Taylor); (ii) Executive Vice President and Chief
Operating Officer (E. Rodia); (iii) Vice President of Finance and Treasurer
(K.
Hackamack); and (iv) Vice President, Secretary and General Counsel (C.
Holley).
The
potential payments in the event of a change in control as of December 31, 2007,
are as follows:
|
Description
|
M.
Taylor
|
E.
Rodia
|
K.
Hackamack
|
C.
Holley
|
||||||||||||
|
Cash
compensation
|
$ | 1,836,538 | $ | 298,076 | $ | 626,676 | $ | 626,676 | ||||||||
|
CEO
special performance cash award
|
12,210,000 | n/a | n/a | n/a | ||||||||||||
|
Contractual
obligations due in retirement/voluntary
termination
|
3,993,717 | n/a | 842,667 | 1,259,046 | ||||||||||||
|
Total
|
$ | 18,040,255 | $ | 298,076 | $ | 1,469,343 | $ | 1,885,722 | ||||||||
n/a
= not
applicable
Retirement
or Voluntary Termination
of Employment
If
an
executive officer retires or voluntarily terminates their employment with the
Company without a change of control, they would receive compensation payments
for any unused vacation. The CEO and certain Vice Presidents would be entitled
to their contractual payments upon electing retirement if that event becomes
applicable.
The
payments due on retirement or voluntary termination of employment are as
follows:
|
Description
|
M.
Taylor
|
E.
Rodia
|
K.
Hackamack
|
C.
Holley
|
||||||||||||
|
Cash
compensation
|
$ | 86,538 | $ | 23,076 | $ | 20,000 | $ | 20,000 | ||||||||
|
CEO
special performance cash award
|
0 | n/a | n/a | n/a | ||||||||||||
|
Contractual
obligations due in retirement/voluntary
termination
|
3,993,717 | n/a | 842,667 | 1,259,046 | ||||||||||||
|
Total
|
$ | 4,080,255 | $ | 23,076 | $ | 862,667 | $ | 1,279,046 | ||||||||
n/a
= not
applicable
Conclusion
The
Committee has reviewed the executive officer compensation packages of
the: (i) Chairman and Chief Executive Officer, (ii) Executive Vice
President and Chief Operating Officer, (iii) Vice President of Finance and
Treasurer, and (iv) Vice President, Secretary, and General Counsel. Based on
this review, the Committee finds these compensation packages, in the aggregate,
to be fair and reasonable to the Company.
14
COMPENSATION
OF EXECUTIVE
OFFICERS
The
following tables will summarize the compensation for all of the Company’s
executive officers, a total of four individuals, as follows: (i)
Chairman and Chief Executive Officer (M. Taylor), (ii) Executive Vice President
and Chief Operating Officer (E. Rodia), (iii) Vice President of Finance and
Treasurer (K. Hackamack), and (iv) Vice President, Secretary and General Counsel
(C. Holley).
SUMMARY
COMPENSATION TABLE
The
2007
and 2006 compensation for all four of the Company’s named executive officers was
as follows:
|
Name
and Principal Position as of December 31,
2007
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation Earnings
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings
|
All
Other (a)
Compensation
|
Total
|
||||||||||||||||||||||||
|
Maurice
M. Taylor Jr.
|
2007
|
$ | 750,000 | $ | 1,000,000 | $ | – | $ | – | $ | – | $ | – | $ | 47,144 | $ | 1,797,144 | ||||||||||||||||
|
Chief
Executive Officer
|
2006
|
666,667 | 1,100,000 | – | – | – | – | 47,019 | 1,813,686 | ||||||||||||||||||||||||
|
and
Chairman (b)
|
|||||||||||||||||||||||||||||||||
|
Ernest
J. Rodia
|
2007
|
$ | 300,000 | $ | 100,000 | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 400,000 | ||||||||||||||||
|
Executive
Vice President and
|
2006
|
300,000 | 75,000 | – | – | – | – | – | 375,000 | ||||||||||||||||||||||||
|
Chief
Operating Officer
|
|||||||||||||||||||||||||||||||||
|
Kent
W. Hackamack
|
2007
|
$ | 260,000 | $ | 100,000 | $ | – | $ | – | $ | – | $ | – | $ | 18,875 | $ | 378,875 | ||||||||||||||||
|
Vice
President of Finance
|
2006
|
220,000 | 150,000 | – | – | – | – | 16,476 | 386,476 | ||||||||||||||||||||||||
|
and
Treasurer
|
|||||||||||||||||||||||||||||||||
|
Cheri
T. Holley
|
2007
|
$ | 260,000 | $ | 100,000 | $ | – | $ | – | $ | – | $ | – | $ | 18,875 | $ | 378,875 | ||||||||||||||||
|
Vice
President, Secretary
|
2006
|
220,000 | 150,000 | – | – | – | – | 16,476 | 386,476 | ||||||||||||||||||||||||
|
and
General Counsel (b)
|
|||||||||||||||||||||||||||||||||
|
(a)
|
All
other compensation represents unused vacation payouts and 401(k)
matching
contributions as follows: Mr. Taylor, $43,269 in unused vacation
and
$3,875 in 401(k) match; Mr. Hackamack, $15,000 in unused vacation
and
$3,875 in 401(k) match; and Ms. Holley, $15,000 in unused vacation
and
$3,875 in 401(k) match.
|
|
(b)
|
The
Chief Executive Officer and Secretary are brother and
sister.
|
GRANTS
OF PLAN-BASED AWARDS
The
Company had no 2007 grants of plan-based awards for any of the four named
executive officers:
|
Estimated
Future Payouts Under Non-Equity Incentive
Plan Awards
|
Estimated
Future Payouts Under Equity Incentive
Plan Awards
|
All
Other Stock Awards:
Number
of Shares of Stock or
Units
|
All
Other Option Awards:
Number
of Securities Underlying Options
|
Exerciseor
Base Price of Option Awards
|
Grant
Date Fair Valueof
Stock and Option Awards
|
|||||||||
|
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
|||||||
|
M.
Taylor
|
n/a
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
|||
|
E.
Rodia
|
n/a
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
|||
|
K.
Hackamack
|
n/a
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
|||
|
C.
Holley
|
n/a
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
|||
n/a
= not
applicable
15
OUTSTANDING
EQUITY AWARDS AT YEAR-END
The
outstanding equity awards at year-end December 31, 2007, for all
four of
the named executive officers:
|
Option
Awards
|
Stock
Awards
|
||||||||||||||
|
Name
|
Number
of Securities Underlying Unexercised Options Exercisable
|
Number
of Securities Underlying Unexercised Options Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying
Unexercised Unearned Options
|
Option
Exercise Price
|
Option
Expiration Date
|
Number
of Shares or Units of Stock that have not Vested
|
Market
Value of Shares or Units of Stock that have not Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights that have not Vested
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights that have not Vested
|
||||||
|
M.
Taylor
|
# 44,450 |
─
|
─
|
$ | 18.00 |
1/30/2008
|
─
|
─
|
─
|
─
|
|||||
| # 100,000 |
─
|
─
|
$ | 8.00 |
1/29/2009
|
─
|
─
|
─
|
─
|
||||||
| # 75,815 |
─
|
─
|
$ | 13.35 |
6/24/2015
|
─
|
─
|
─
|
─
|
||||||
| # 75,815 |
─
|
─
|
$ | 17.18 |
12/16/2015
|
─
|
─
|
─
|
─
|
||||||
|
E.
Rodia
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
||||||
|
K.
Hackamack
|
# 35,000 |
─
|
─
|
$ | 17.18 |
12/16/2015
|
─
|
─
|
─
|
─
|
|||||
|
C.
Holley
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
||||||
OPTION
EXERCISES AND STOCK VESTED
The
following table summarizes the option exercises during 2007 for all four of
the
named executive officers:
|
Option
Awards
|
Stock
Awards
|
|||||||||
|
Name
|
Number
of Shares Acquired on
Exercise
|
Value
Realized on Exercise
|
Number
of Shares Acquired on
Vesting
|
Value
Realized on
Vesting
|
||||||
|
M.
Taylor
|
# 47,060 | $ | 436,011 |
─
|
─
|
|||||
|
E.
Rodia
|
─
|
─
|
─
|
─
|
||||||
|
K.
Hackamack
|
# 50,780 | $ | 786,866 |
─
|
─
|
|||||
|
C.
Holley
|
─
|
─
|
─
|
─
|
||||||
16
PENSION
BENEFITS
The
table
illustrates the Company had no pension plan for any of the four named executive
officers. However, the CEO and certain Vice Presidents have contractual
agreements that have certain payments due upon retirement or voluntary
termination per their respective employment agreements, if that event were
to
become applicable (see Compensation and Discussion Analysis).
|
Name
|
Plan
Name
|
Number
of Years Credited
Service
|
Present
Value of Accumulated
Benefit
|
Payments
During Last Fiscal
Year
|
|||||||||
|
M.
Taylor
|
n/a
|
─
|
$ | – | $ | – | |||||||
|
E.
Rodia
|
n/a
|
─
|
– | – | |||||||||
|
K.
Hackamack
|
n/a
|
─
|
– | – | |||||||||
|
C.
Holley
|
n/a
|
─
|
– | – | |||||||||
|
|
n/a
= not applicable
|
NONQUALIFIED
DEFERRED COMPENSATION
The
Company had no nonqualified deferred compensation for any of the four named
executive officers:
|
Name
|
Executive
Contributions in Last
FY
|
Registrants
Contributions in Last
FY
|
Aggregate
Earnings in Last FY
|
Aggregate
Withdrawals/ Distributions
|
Aggregate
Balance in Last FYE
|
|||||||||||||||
|
M.
Taylor
|
$ | n/a | $ | – | $ | – | $ | – | $ | – | ||||||||||
|
E.
Rodia
|
n/a | – | – | – | – | |||||||||||||||
|
K.
Hackamack
|
n/a | – | – | – | – | |||||||||||||||
|
C.
Holley
|
n/a | – | – | – | – | |||||||||||||||
|
|
n/a
= not applicable
|
17
REPORT
OF THE COMPENSATION COMMITTEE
The
Compensation Committee of the Board of Directors (the “Committee”) was composed
of five independent non-employee directors during 2007. The Board of
Directors (“Board”) has determined that the members of the Committee are
independent. The Committee provides oversight of all executive
compensation and benefit programs. The Committee operates under a
written charter adopted January 20, 2004, which is posted on the Company’s
website: www.titan-intl.com.
The
philosophy of the Committee as it relates to executive compensation is that
the
Chief Executive Officer (“CEO”) and other executive officers should be
compensated at competitive levels sufficient to attract, motivate and retain
talented executives who are capable of leading the Company in achieving its
business objectives in an industry facing increasing competition and
change.
Annual
compensation for the Company’s executive officers consists of base salary and
bonus compensation. Salary levels of the Company executives are
reviewed and are normally adjusted annually, and any bonuses are normally
awarded annually. In determining appropriate salaries, the Committee
considers: (i) the CEO’s recommendations as to compensation for all
other executive officers; (ii) the scope of responsibility, experience, time
and
position and individual performance of each executive officer, including the
CEO; and (iii) compensation levels of other executives based on the committee’s
own business experience and judgment. The Committee’s analysis is a
subjective process, which utilizes no specific weights or formulas of the
aforementioned factors in determining executives’ base salaries and the
Committee uses no compensation consultants.
The
Committee considers bonus compensation to be the primary motivational method
for
encouraging and rewarding outstanding individual performance, especially for
the
Company’s executive officers, and overall performance of the
Company. Bonuses are based primarily upon: (i) performance
of the Company; (ii) performance of the individual; and (iii)
recommendation of the CEO. The purpose of awarding bonuses is to
provide a special incentive to maximize individual performance and the overall
performance of the Company. There
are
employment contracts for the executive officers, which are also
considered.
In
determining the total compensation package for the CEO for 2007, the Committee
considered all of the factors discussed above. Additionally, the
Committee considered the Company’s performance, the success of the Company’s
facilities in meeting their objectives, the extent and timing of the additions
to the Company during the year, the quality and efficiency of the Company’s
staff, and certain other factors relating to the Company’s
performance.
The
Committee discussed director compensation and made suggestions to the Board.
The
Committee has completed an annual evaluation and in their opinion has met the
requirements of their charter. The Committee has reviewed the
Compensation Committee Charter and has found it complies with requirements
of
the New York Stock Exchange. The Committee makes a report to the
Board when appropriate and met three times during 2007.
The
Compensation Committee of the Company has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K
with management. Based on such review and discussions, the Committee
recommended that the Compensation Discussion and Analysis be included in this
Proxy Statement and in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2007, for filing with the Securities and Exchange
Commission.
|
Members
of the Compensation Committee:
|
|
|
Mitchell
I. Quain,
Chairman
|
|
|
Edward
J.
Campbell
|
|
|
Richard
M. Cashin
Jr.
|
|
|
Albert
J.
Febbo
|
|
|
Anthony
L.
Soave
|
18
CORPORATE
GOVERNANCE
Independence
The
Board
of Directors (“Board”) has determined that five of the Company’s eight directors
are independent under the rules of the New York Stock Exchange during 2007.
The
independent directors are: Edward J. Campbell, Richard M. Cashin Jr., Albert
J.
Febbo, Mitchell I. Quain and Anthony L. Soave. The three directors
who are not independent are Erwin H. Billig, Vice Chairman of the Board, Maurice
M. Taylor Jr., Chief Executive Officer and Chairman of the Board, and J. Michael
A. Akers, Chief Executive Officer of Titan Europe Plc. Each of the directors
serving on the Audit Committee, the Compensation Committee and the
Nominating/Corporate Governance Committee are independent under the standards
of
the New York Stock Exchange.
Meetings
of Non-Employee Directors
When
the
non-employee directors of the Board or respective committees meet in executive
session without management, and their chairman is unavailable for the executive
session, a temporary chair is selected from among the directors present to
preside at the executive session.
Charters
The
Company has adopted Charters for its Audit, Compensation and
Nominating/Corporate Governance Committees. These Charters are published on
the
Company’s website: www.titan-intl.com. The Company
will provide without charge a copy of the Charters to any stockholder upon
written request to the Corporate Secretary, Titan International, Inc., 2701
Spruce Street, Quincy, IL 62301.
Corporate
Governance and Business Conduct Policies
The
Company’s Corporate Governance Policy and Business Conduct Policy are published
on the Company’s website: www.titan-intl.com.
The Company will provide,
without charge, a copy of the Policies to any stockholder upon written request
to the Corporate Secretary, Titan International, Inc., 2701 Spruce Street,
Quincy, IL 62301.
Communication
with the Board of Directors
Correspondence
for any member of Titan’s Board of Directors must be sent in writing to his
attention: c/o
Corporate Secretary, Titan International, Inc., 2701 Spruce Street, Quincy,
IL
62301. Any written communication will be forwarded to the Board for its
consideration.
Director
Nomination Process
The
Nominating/Corporate Governance Committee and other members of the Board
identify candidates for consideration by the Nominating/Corporate Governance
Committee. An executive search firm may also be utilized to identify qualified
candidates for consideration. The Nominating/Corporate Governance Committee
evaluates candidates based on the qualifications for director described in
its
charter. These qualifications include, among other things, integrity, business
experience, stature in their field of endeavor, diversity of perspective,
ability to reach thoughtful, independent and logical judgments on difficult
and
complex issues, and whether the candidate meets the independence standards
of
the Securities and Exchange Commission and the New York Stock Exchange. The
Nominating/Corporate Governance Committee then presents qualified candidates
to
the full Board of Directors for consideration and selection.
The
Nominating/Corporate Governance Committee will consider nominees for election
to
the Board that are recommended by stockholders, applying the same criteria
for
candidates as discussed above, provided that a description of the nominees’
qualifications for the directorship, experience and background, a written
consent by a nominee to act as such, and other information specified in the
Bylaws, accompany the stockholder’s recommendation. Any stockholder nominations
for election as directors at the 2009 Annual Meeting must be delivered to Titan
at the address set forth below, not later than December 1, 2008. All nominations
must be sent to the Nominating/Corporate Governance Committee, c/o Corporate
Secretary, Titan International, Inc., 2701 Spruce Street, Quincy, IL
62301.
Director
Attendance at Annual Meetings
The
Company does not require its directors to attend the Annual Meeting of
Stockholders. However, the directors make every attempt to attend this
meeting.
19
REPORT
OF THE NOMINATING/CORPORATE GOVERNANCE COMMITTEE
The
Nominating/Corporate Governance Committee of the Board of Directors (the
“Committee”) was composed of four independent non-employee directors and
provides guidance to the Board of Directors (“Board”) regarding corporate
governance guidelines during 2007. In addition, the Committee
develops criteria, identifies, screens and nominates candidates for election
to
the Board giving attention to the composition of the Board and its
committees. The Committee operates under a written charter adopted
January 20, 2004, and this charter is available on the Company’s website:
www.titan-intl.com.
The
Committee recommended to the Board that Richard M. Cashin Jr., Albert J. Febbo
and Mitchell I. Quain stand for re-election as Class II directors based on
approved criteria.
The
Committee has accomplished the following per their charter: (i)
oversight of the development and recommendation of a set of corporate governance
guidelines; (ii) oversight of the evaluation of the Board and management; (iii)
evaluation of the Committee and its success in meeting the requirements of
the
Charter; (iv)
review and assurance of the adequacy of the Nominating/Corporate Governance
Committee Charter; and (v) presentation of reports to the Board when
appropriate. Mr. Campbell has attended the Company’s Sarbanes-Oxley 404 training
and is a participant in the Company’s risk assessment meetings. The Committee
met two times in 2007.
The
Committee has given particular attention to corporate governance compliance
issues established by the Securities and Exchange Commission and the New York
Stock Exchange. The Company has posted its corporate governance
guidelines on the Company’s website.
|
Members
of the Nominating/Corporate Governance Committee:
|
|
|
Edward
J. Campbell,
Chairman
|
|
|
Albert
J.
Febbo
|
|
|
Mitchell
I.
Quain
|
|
|
Anthony
L.
Soave
|
20
PERFORMANCE
COMPARISON GRAPH
The
following performance graph compares cumulative total return for the Company’s
common stockholders over the past five years against the cumulative total return
of the Standard & Poor’s 500 Stock Index, and against the Standard &
Poor’s 600 Construction and Farm Machinery and Heavy Trucks
Index. The graph depicts the value on December 31, 2007, of a $100
investment made on December 31, 2002, in Company common stock and each of the
other two indices, with all dividends reinvested. The Company’s
common stock is currently traded on the New York Stock Exchange under the symbol
of TWI.
|
Fiscal
Year Ended December 31,
|
||||||||||||||||||||||||
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
|||||||||||||||||||
|
Titan
International, Inc.
|
$ | 100.00 | $ | 231.54 | $ | 1,145.15 | $ | 1,309.98 | $ | 1,531.87 | $ | 2,378.08 | ||||||||||||
|
S&P
600 Const. & Farm Machinery Index
|
100.00 | 168.58 | 225.95 | 287.22 | 387.32 | 488.11 | ||||||||||||||||||
|
S&P
500 Index
|
100.00 | 128.68 | 142.69 | 149.70 | 173.34 | 182.86 | ||||||||||||||||||
21
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of
the
Company’s common stock as of December 31, 2007, by (i) each person
who
is known by the Company to own beneficially more than 5% of the Company’s common
stock, (ii) each director and nominee for director, (iii) each of the named
executive officers, and (iv) all directors and executive officers as a
group.
|
Shares
Beneficially Owned
|
||||||||
|
Name
and Address of Beneficial
Owner
|
Number
(a)
|
Percent
|
||||||
|
Dawson
Herman Capital Management Inc.
354
Pequot Avenue
Southport,
CT 06890
|
2,923,800 | (b) | 10.7 | % | ||||
|
Luxor
Capital Group, LP
767
Fifth Avenue, 19th
Floor
New
York, NY 10153
|
1,886,331 | (c) | 6.9 | % | ||||
|
Cheyne
Capital Management (UK) LLP
Stornoway
House, 13 Cleveland Row,
London,
England SW1A 3DH
|
1,500,000 | (c) | 5.5 | % | ||||
|
Named
Executive Officers &
Directors
|
||||||||
|
Maurice
M. Taylor Jr.
|
778,466 | (d) | 2.8 | % | ||||
|
Anthony
L. Soave
|
715,500 | 2.6 | % | |||||
|
Richard
M. Cashin Jr.
|
365,429 | 1.3 | % | |||||
|
Mitchell
I. Quain
|
154,800 | * | ||||||
|
Edward
J. Campbell
|
77,250 | * | ||||||
|
Albert
J. Febbo
|
46,000 | * | ||||||
|
Kent
W. Hackamack
|
45,000 | * | ||||||
|
Erwin
H. Billig
|
43,000 | * | ||||||
|
Ernest
J. Rodia
|
250 | * | ||||||
|
J.
Michael A. Akers
|
0 | * | ||||||
|
Cheri
T. Holley
|
0 | * | ||||||
|
All
named executive officers & directors as a group (eleven
persons)
|
2,225,695 | 8.0 | % | |||||
|
___________________________
*
Less than one percent.
|
||||||||
|
(a)
|
Except
for voting powers held jointly with a person’s spouse, represents sole
voting and investment power unless otherwise
indicated. Includes unissued shares subject to options
exercisable within 60 days after December 31, 2007, as
follows: Mr. Taylor, 296,080 shares; Mr. Campbell, 55,000
shares; Mr. Soave, 55,000 shares; Mr. Quain, 46,000 shares; Mr. Cashin,
37,000 shares; Mr. Febbo, 37,000 shares; Mr. Billig, 36,000 shares;
Mr.
Hackamack, 35,000 shares; all named executive officers and directors
as a
group, 597,080 shares.
|
|
(b)
|
Based
on information contained in a Schedule 13F filed with the Securities
and
Exchange Commission.
|
|
(c)
|
Based
on information contained in a Schedule 13G filed with the Securities
and
Exchange Commission.
|
|
(d)
|
Includes
268,370 shares held jointly by Mr. Taylor and his wife as to which
they
share voting and dispositive power. Also includes 164,016 shares
held by
Mr. Taylor as to which he has sole voting and dispositive power.
Also
includes 50,000 shares held by the Maurice and Michelle Taylor Foundation
(which is a charitable/educational foundation) that has voting and
dispositive power.
|
22
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under
the
securities laws of the United States, the directors and executive officers
of
the Company and the persons who own more than 10% of the Company’s common stock
are required to report their initial ownership of the Company’s common stock and
any subsequent changes in that ownership to the Securities and Exchange
Commission and to the New York Stock Exchange. Specific due dates for
these reports have been established, and the Company is required to disclose
in
this proxy statement any late filings during 2007. To the Company’s
knowledge, based solely on its review of the copies of such reports required
to
be furnished to the Company during 2007, all of these reports were believed
to
be timely filed.
RELATED
PARTY TRANSACTIONS
The
Company sells products and pays commissions to companies controlled by persons
related to the Chief Executive Officer of the Company. During 2007,
2006 and 2005, sales of Titan product to these companies were approximately
$5.1
million, $6.4 million and $6.5 million, respectively. On other sales
referred to Titan from these manufacturing representative companies, commissions
were approximately $1.8 million, $2.0 million and $1.6 million during 2007,
2006
and 2005, respectively. These sales and commissions were made in the
ordinary course of business and were made on terms no less favorable to Titan
than comparable sales and commissions to unaffiliated third
parties. At December 31, 2007 and 2006, Titan had trade receivables
of approximately $0.2 million and $0.6 million due from these companies,
respectively.
STOCKHOLDER
PROPOSALS
Any
proposal to be presented at the 2009 Annual Meeting of Stockholders must be
received at the principal executive offices of the Company no later than
December 1, 2008, in order to be considered for inclusion in the Company’s proxy
statement and form of proxy relating to such Annual Meeting of
Stockholders. Any such proposals must comply in all respects with the
rules and regulations of the Securities and Exchange Commission relating to
stockholder proposals, and it is suggested that proponents of any proposals
submit such proposals to the Company sufficiently in advance of the deadline
by
Certified Mail-Return Receipt Requested.
If
a
stockholder intends to present a proposal at the Company’s 2009 Annual Meeting
of Stockholders without the inclusion of such proposal in the Company’s proxy
material and written notice of such proposal is not received by the Company
on
or before February 12, 2009, proxies solicited by the Board of Directors for
the
2009 Annual Meeting of Stockholders will confer discretionary authority to
vote
on such proposal if presented at the meeting. Stockholders’ proposals
should be sent to: Cheri T. Holley, Secretary of Titan International, Inc.,
2701
Spruce Street, Quincy, IL 62301. The Company reserves the right to
reject, rule out of order, or take other appropriate action with respect to
any
proposal that does not comply with these and other applicable
requirements.
23
HOUSEHOLDING
INFORMATION
Pursuant
to rules of the Securities and Exchange Commission, services that deliver
Company communications to stockholders that hold their stock through a bank,
broker or other holder of record, may deliver a single copy of the Company’s
2007 Annual Report to Stockholders including Form 10-K and Proxy Statement
to
multiple stockholders sharing the same address. Upon written request,
Titan will promptly deliver a separate copy of the 2007 Annual Report including
Form 10-K and/or Proxy Statement to any stockholder at a shared address.
Stockholders may notify Titan of their requests by writing to Titan
International, Inc., attention Investor Relations, 2701 Spruce Street, Quincy,
IL 62301.
COST
OF PROXY SOLICITATION
The
costs
of solicitation of proxies will be borne by the Company. In addition
to the use of the mail, proxies may be solicited personally or by telephone,
facsimile or electronic mail, by directors, officers or regular employees of
the
Company, without additional compensation. It is contemplated that
brokerage houses, custodians, nominees and fiduciaries will be requested to
forward the soliciting material to the beneficial owners of the Company’s Common
Stock held of record by such persons, and will be reimbursed by the Company
for
reasonable expenses incurred therewith.
|
By
Order of the Board of Directors,
|
||
|
/s/
CHERI T. HOLLEY
|
||
|
Quincy,
Illinois
|
Cheri
T.
Holley
|
|
|
March
28, 2008
|
Secretary
|
24
Titan
International, Inc.
2701
Spruce Street ·
Quincy,
IL 62301
www.titan-intl.com
|
This
proxy will be voted as directed or, if no direction is indicated,
will be
voted FOR Proposals 1 and 2.
|
Please
Mark
Here
for
Address
Change
or
Comments
|
o
|
||||||||||||||||
|
SEE
REVERSE SIDE
|
||||||||||||||||||
|
The
Board of Directors recommends a vote FOR Proposals 1 and
2.
|
||||||||||||||||||
|
1.
|
Election
of Directors
|
FOR
o
|
WITHHOLD
o
|
2.
|
Ratification
of Independent
Registered Public Accounting Firm— To ratify the selection of
independent registered public accounting firm, PricewaterhouseCoopers
LLP,
to audit the consolidated financial statements of the Company
and its
subsidiaries for 2008.
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
||||||||||
|
Nominees:
01
Richard M. Cashin,
Jr.
02
Albert J.
Febbo
03
Mitchell I.
Quain
|
||||||||||||||||||
|
Withheld
for the nominees you list
below: (Write that nominee’s
name in the space provided
below.)
|
||||||||||||||||||
|
Note:
Please note that if you are attending the Annual Meeting, proof
of Titan
common stock ownership as of the record date must be presented,
in
addition to valid photo identification.
|
||||||||||||||||||
|
Signature
|
Signature
|
Date
|
,
2008
|
|||||||||||||||
|
(This
proxy must be signed exactly
as the name appears hereon. If acting as attorney, executor,
or trustee,
or in corporate or representative capacity, please sign name
and
title.)
|
||||||||||||||||||
|
Ù
FOLD AND DETACH
HERE Ù
|
WE
ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
BOTH
ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet
and telephone voting is
available through 11:59 PM Eastern Time
the
day prior to annual meeting
day.
Your
Internet or telephone vote authorizes the named proxies to vote your shares
in
the same manner
as
if you marked, signed and returned your proxy card.
|
INTERNET
http://www.proxyvoting.com/twi
Use
the Internet to vote your proxy.
Have
your proxy card in hand
when
you access the web site.
|
OR
|
TELEPHONE
1-866-540-5760
Use
any touch-tone telephone to
vote
your proxy. Have your proxy
card
in hand when you call.
|
If
you
vote your proxy by Internet or by telephone, you do NOT need to mail back
your
proxy card.
To
vote
by mail, mark, sign and date your proxy card and return it in the enclosed
postage-paid envelope.
|
Choose
MLinkSM
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PROXY
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PROXY
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TITAN
INTERNATIONAL, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING
THURSDAY,
MAY 15, 2008, 11:00 A.M. EASTERN TIME
AT
THE RITZ-CARLTON, DEARBORN
300
TOWN CENTER DRIVE
DEARBORN,
MICHIGAN
48126
The
undersigned hereby constitutes and appoints Maurice M. Taylor Jr., Cheri
T.
Holley, and each of them, attorneys with full power of substitution, with
the
powers the undersigned would possess if personally present, to vote all
shares
of Common Stock of the undersigned in TITAN INTERNATIONAL, INC., at the
Annual
Meeting of Stockholders to be held on Thursday, May 15, 2008, and at any
adjournments thereof and on all matters properly coming before the
meeting.
This
proxy will be voted as directed or, if no direction is indicated, will
be voted
FOR Proposals 1 and 2.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY
IN THE ENVELOPE PROVIDED.
(Continued
and to be signed on reverse side)
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Address
Change/Comments
(Mark
the corresponding box on the reverse side)
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Ù
FOLD AND DETACH
HERE Ù
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YOUR
VOTE IS IMPORTANT.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY
IN THE ENVELOPE PROVIDED.