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. )
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the Registrant x
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a Party other than the Registrant o
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appropriate box:
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Statement
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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)
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of Filing Fee (Check the appropriate box):
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______________________________________________________________________________________
Titan
International, Inc.
2701
Spruce Street• Quincy,
Illinois 62301
___________________________________________________
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
Meeting
Date: May 14,
2009
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 14, 2009, 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:
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1)
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To
elect Erwin H. Billig and Anthony L. Soave 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 2009;
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 16, 2009. Only those stockholders whose names appear of record
at the Company’s close of
business on March 16, 2009, 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, 2008, 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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/s/
CHERI T. HOLLEY
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Quincy,
Illinois
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Cheri T. Holley
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March
30, 2009
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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. Billig and Mr. Soave 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 14, 2009
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 14, 2009, 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 30, 2009. Although the Company’s Annual Report to Stockholders
including Form 10-K for year ended December 31, 2008, 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 16, 2009, (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 16, 2009, there were 35,171,524 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 14, 2009, 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 16, 2009, 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. Billig and Mr. Soave as Directors,
ü Proposal
#2: 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. Billig and Mr. Soave 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. Billig and Mr. Soave
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
BNY
Mellon Shareowner Services
P.O. Box
358015
Pittsburgh,
PA 15252-8015
480
Washington Blvd.
Jersey
City, NJ 07310-1900
Stockholder
Information: (877) 237-6882
Web site:
www.bnymellon.com/shareowner/isd
Vote
Tabulation
Broadridge
Investor Communication Services 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 2009 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 Erwin H. Billig and Anthony
L. Soave as Class III Directors
The
Board of Directors recommends that stockholders vote FOR Erwin H. Billig
and Anthony L. Soave as Class III Director nominees standing for election to
serve until the 2012 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 Erwin H. Billig and Anthony L. Soave stand for election as Class III
directors to serve until the 2012 Annual Meeting. The Board has put forth the
slate of nominees consisting of Erwin H. Billig and Anthony L. Soave to stand
for election at the 2009 Annual Meeting. Mr. Billig and Mr. Soave 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.
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 82 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 69 years old, became a director of the
Company in 1994. Mr. Soave serves on the following committees: Audit,
Compensation 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 2009.
PricewaterhouseCoopers
LLP has served the Company as the independent registered public accounting firm
during the year ended December 31, 2008, and has been selected by the Audit
Committee to serve as the independent registered public accounting firm for the
present year of 2009. 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 2010 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 I Directors whose terms expire at the annual
meeting in 2010, are listed
below.
Maurice M. Taylor
Jr.
Mr.
Taylor, who is 64 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 65 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 is a member of the Advisory Board of Warwick
Business School.
Directors
continuing in office as Class II Directors whose terms expire at the annual
meeting in 2011, are listed below.
Richard
M. Cashin Jr.
Mr.
Cashin is managing partner of One Equity Partners LLC, which manages
multi-billion dollar 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 trustee for the Boys Club of New York, American University in
Cairo, Central Park Conservancy, Jazz at Lincoln Center, Brooklyn Museum, the
National Rowing Foundation (Chairman), and TOUCH
Foundation. Mr. Cashin, who is 55 years old, became a director of the
Company in 1994. Mr. Cashin serves on following
committees: Nominating/Corporate Governance (Chairman) and
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 recently launched
and is a partner in BOOMVOTE.COM, a social networking internet business. Mr.
Febbo, who is 69 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 managing 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 57 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.
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 director
fee of $50,000 dollars. The Audit Committee Chairman receives an additional
$15,000 annual cash payment while each Chairman of the Compensation Committee
and the Nominating/Corporate Governance Committee receives an additional $10,000
annual cash payment for this position. The Financial Expert receives a $5,000
annual cash payment for this role. The Company pays each director, with the
exception of Mr. Taylor, a fee of $500 dollars 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. On March 1, 2008, the Board accepted
the retirement of long-time Board member Edward J. Campbell, who meritoriously
served Titan for 14 years. The Company’s directors are not subject to minimum
Titan common stock ownership requirements. However, at December 31, 2008, the
directors owned approximately 6.4% 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
|
Meeting
Fee
|
|
$50,000
|
$15,000
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$10,000
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$5,000
|
$500
|
DIRECTOR
COMPENSATION TABLE FOR 2008
|
Name of Director
|
Fees
Earned or Paid in Cash
|
Stock Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings
|
All
Other Compensation
|
Total
|
|||||||||||||||
|
J.
Michael A. Akers
|
$ | 52,000 | $ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ | 52,000 | ||||||||
|
Erwin
H. Billig (a)
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153,000 |
─
|
─
|
─
|
|
─
|
─
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153,000 | ||||||||||||||
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Edward
J. Campbell (b)
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1,000 |
─
|
─
|
─
|
─
|
─
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1,000 | |||||||||||||||
|
Richard
M. Cashin Jr.
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64,000 |
─
|
─
|
─
|
─
|
─
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64,000 | |||||||||||||||
|
Albert
J. Febbo
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72,000 |
─
|
─
|
─
|
─
|
─
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72,000 | |||||||||||||||
|
Mitchell
I. Quain
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72,000 |
─
|
─
|
─
|
─
|
─
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72,000 | |||||||||||||||
|
Anthony
L. Soave
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57,000 |
─
|
─
|
─
|
─
|
─
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57,000 | |||||||||||||||
|
Maurice
M. Taylor Jr. (c)
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─
|
─
|
─
|
─
|
─
|
─
|
─
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|||||||||||||||
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(a)
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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)
|
Mr.
Campbell retired March 1, 2008, after 14 years of service as a director of
the Company.
|
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(c)
|
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 current membership of each committee and the
number of meetings held by each committee during 2008:
|
Name of Director
|
Board of Directors
|
Audit
Committee
|
Compensation
Committee
|
Nominating/Corporate
Governance
Committee
|
|
J.
Michael A. Akers
|
X
|
─
|
─
|
─
|
|
Erwin
H.
Billig
|
X
|
─
|
─
|
─
|
|
Richard
M. Cashin Jr.
|
X
|
─
|
X
|
Chair
|
|
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
|
─
|
─
|
─
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|
2008
Meetings
|
6
|
5
|
2
|
1
|
|
X - denotes committee
member
|
Chair - denotes
committee Chairman
|
─
denotes not a
member
|
Board
of Directors
The Board
of Directors, which met six times in 2008, has established the following
committees of the Board:
Audit
Committee consisting of Messrs. Febbo, Quain and Soave;
Compensation
Committee consisting of Messrs. Cashin, Febbo, Quain and Soave;
Nominating/Corporate
Governance Committee consisting of Messrs. Cashin, 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.
Audit
Committee
The Audit
Committee, which met five times in 2008, 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. 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.
Compensation
Committee
The
Compensation Committee, which met two times in 2008, provides oversight of all
executive compensation and benefit 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 one time in 2008, 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, 2008. Fees paid to the independent registered public accounting
firm PricewaterhouseCoopers LLP included the following:
Audit
Fees For the years ended December 31, 2008 and 2007,
PricewaterhouseCoopers LLP billed the Company $939,000 and $910,000
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.
|
2008
|
2007
|
|||||||
|
Financial
statements and internal
controls
|
$ | 895,000 | $ | 870,000 | ||||
|
Statutory
audits of foreign
subsidiaries
|
44,000 | 40,000 | ||||||
| $ | 939,000 | $ | 910,000 | |||||
Audit Related
Fees For the years ended December 31, 2008 and 2007,
PricewaterhouseCoopers LLP billed the Company $262,000 and $172,000
respectively.
|
2008
|
2007
|
|||||||
|
Acquisitions,
debt offerings, and
merger
|
$ | 134,000 | $ | 85,000 | ||||
|
Employee
benefit plan
compliance
|
128,000 | 87,000 | ||||||
| $ | 262,000 | $ | 172,000 | |||||
Tax
Fees For the years ended December 31, 2008 and 2007,
PricewaterhouseCoopers LLP billed the Company $153,000 and $212,000
respectively.
|
2008
|
2007
|
|||||||
|
Tax
return preparation and
compliance
|
$ | 153,000 | $ | 125,000 | ||||
|
Foreign
tax preparation and
compliance
|
0 | 87,000 | ||||||
| $ | 153,000 | $ | 212,000 | |||||
In
addition to the fees detailed above, out-of-pocket and administrative fees paid
to PricewaterhouseCoopers LLP totaled $103,000 and $129,000 for the years ended
December 31, 2008 and 2007, 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 three
independent non-employee directors during 2008. 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. Quain met the
requirements of the NYSE as the “financial expert” 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 2008. 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, 2008, requirements. Mr. Febbo 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 five times in
2008.
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, 2008.
The
Committee has selected PricewaterhouseCoopers LLP (“PWC”) to serve as the
independent registered public accounting firm for the Company for 2009 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
|
|
|
Mitchell I.
Quain
|
|
|
Anthony L.
Soave
|
10
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
The
Company, for the third year in a row, is presenting Titan’s executive officer
compensation information in the new Securities and Exchange Commission (SEC)
format. The new format was required by revised executive compensation disclosure
rules adopted by the SEC 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. In 2008 Mr. Rodia announced his retirement, which became
effective on November 1, 2008. 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 (Retired)
|
|
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
Titan. 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
Initiatives In 2008, Titan began producing its new super giant
radial off-the-road (OTR) tire. Titan’s new 63-inch Big Daddy steel
belted radial tire measures approximately 13 feet tall and weighs in at
approximately 12,500 pounds. Titan designed a new multi-bead radial
design that is currently patent pending.
Company
Performance In appraising the CEO’s
performance during 2008, the Committee noted the Company continued to integrate
two major acquisitions regarding agricultural and OTR product
assets. In 2008, Titan exceeded a Company record-breaking $1 billion
in sales. The sales for the Company for 2008 were approximately $1,036 million,
an increase of approximately 24% from the 2007 sales of approximately $837
million.
Common Stock
Performance The Committee
recognized the improvement in the Company’s common stock performance during the
past five years, which increased from a stock price of $2.45 per common share at
December 31, 2003, to $8.25 per common share at December 31, 2008. The common
share price has been adjusted to reflect the five-for-four stock split that took
place in 2008. The Company’s stock price has risen approximately 237% 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 2008 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 2008 are listed under the “Summary Compensation Table.”
Stock Options
The
Committee during 2008 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 may grant stock options in the future to attract or
retain executive officers for the Company.
Stock Awards
The
Committee during 2008 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 had 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 previously expired in April 2010 (extended to April
2012), 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. In 2008, Mr. Rodia announced
his retirement effective November 2008. Mr. Rodia’s employment agreement, which
expired November 2008, provides no contractual obligation regarding retirement
and no health benefits.
CEO Employment
Agreement
With the
significant increase in the Company’s sales performance, five year common stock
performance, 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 formerly expired 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) each was
earned and paid in April 2006, 2007 and 2008, respectively.
CEO Employment Extension
Bonus In
2008, the CEO agreed, at the request of the Board of Directors, to a two year
extension of the CEO employment agreement, including an extension bonus of
$750,000, of which one half ($375,000) was earned and paid on the extension date
(October 2008) with the remaining one half ($375,000) to be earned and payable
in October 2009, one year from the extension date. The CEO employment agreement
expiration has been extended from April 2010 to April 2012.
CEO Special Performance Cash
Award The CEO is entitled to a special performance cash award
at the end of the original four-year employment agreement (April 2010). If the
common stock price has increased above $15.24 per share (adjusted to reflect the
five-for-four stock split that took place in 2008), the difference above $15.24
per share, if any, shall be multiplied by one million two hundred fifty thousand
(also adjusted for the stock split) and paid to the CEO as he instructs over the
four years following the April 2010 date.
The Titan
stock price at December 31, 2008, was $8.25 and assuming the stock price
remained unchanged as of April 2010 (original expiration date of Mr. Taylor’s
employment agreement), Mr. Taylor would be entitled to no CEO special
performance cash award.
CEO Contractual
Obligations Under the CEO’s
employment agreement, the Company will provide a contractual obligation to Mr.
Taylor upon retirement 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, 2008, would be approximately $5.3
million.
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 held the position of Executive Vice President and Chief Operating Officer,
the agreement expired November 1, 2008; (ii) Mr. Hackamack, who holds the
position of Vice President of Finance and Treasurer, the agreement formerly
expiring 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
formerly expiring April 2010, and the agreement was filed as Exhibit 10.3 to the
Company’s Form 10-Q filed on July 28, 2006. In October, 2008, Mr. Hackamack and
Ms. Holley agreed to an employment agreement extension to April
2013.
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, did 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, 2008, for Mr. Hackamack would be approximately $2.7 million and
for Ms. Holley would be approximately $2.1 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, 2008. The CEO’s special performance cash award assumes the December
31, 2008, year end $8.25 share 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).
Mr. Rodia is not eligible for any potential payments on change of control as a
result of his retirement effective November 1, 2008.
The
potential payments in the event of a change in control as of December 31, 2008,
are as follows:
|
Description
|
M. Taylor
|
E. Rodia
|
K. Hackamack
|
C. Holley
|
||||||||||||
|
Cash
compensation
|
$ | 2,586,538 | $ | 0 | $ | 1,212,836 | $ | 1,212,836 | ||||||||
|
CEO
special performance cash award
|
0 | n/a | n/a | n/a | ||||||||||||
|
Contractual
obligations due in retirement/voluntary
termination
|
5,337,001 | n/a | 2,663,102 | 2,131,876 | ||||||||||||
|
Total
|
$ | 7,923,539 | $ | 0 | $ | 3,875,938 | $ | 3,344,712 | ||||||||
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. Mr. Rodia is not eligible for any potential payments as a result of
his retirement effective November 1, 2008.
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 | $ | 0 | $ | 21,152 | $ | 21,152 | ||||||||
|
CEO
special performance cash award
|
0 | n/a | n/a | n/a | ||||||||||||
|
Contractual
obligations due in retirement/voluntary
termination
|
5,337,001 | n/a | 2,663,102 | 2,131,876 | ||||||||||||
|
Total
|
$ | 5,423,539 | $ | 0 | $ | 2,684,254 | $ | 2,153,028 | ||||||||
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 2008,
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,
2008
|
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.
|
2008
|
$ | 750,000 | $ | 625,000 | $ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ | 46,719 | $ | 1,421,719 | ||||||||||||||||
|
Chief
Executive Officer
|
2007
|
750,000 | 1,000,000 |
─
|
─
|
─
|
─
|
47,144 | 1,797,144 | ||||||||||||||||||||||||
|
and
Chairman (b)
|
2006
|
666,667 | 1,100,000 |
─
|
─
|
─
|
─
|
47,019 | 1,813,686 | ||||||||||||||||||||||||
|
Ernest
J. Rodia (c) Retired
|
2008
|
$ | 250,000 | $ | 0 | $ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ | 250,000 | ||||||||||||||||
|
Executive
Vice President and
|
2007
|
300,000 | 100,000 |
─
|
─
|
─
|
─
|
─
|
400,000 | ||||||||||||||||||||||||
|
Chief
Operating Officer
|
2006
|
300,000 | 75,000 |
─
|
─
|
─
|
─
|
─
|
375,000 | ||||||||||||||||||||||||
|
Kent
W. Hackamack
|
2008
|
$ | 275,000 | $ | 50,000 | $ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ | 16,028 | $ | 341,028 | ||||||||||||||||
|
Vice
President of Finance
|
2007
|
260,000 | 100,000 |
─
|
─
|
─
|
─
|
18,875 | 378,875 | ||||||||||||||||||||||||
|
and
Treasurer
|
2006
|
220,000 | 150,000 |
─
|
─
|
─
|
─
|
16,476 | 386,476 | ||||||||||||||||||||||||
|
Cheri
T. Holley
|
2008
|
$ | 275,000 | $ | 50,000 | $ |
─
|
$ |
─
|
$ |
─
|
$ |
─
|
$ | 19,315 | $ | 344,315 | ||||||||||||||||
|
Vice
President, Secretary
|
2007
|
260,000 | 100,000 |
─
|
─
|
─
|
─
|
18,875 | 378,875 | ||||||||||||||||||||||||
|
and
General Counsel (b)
|
2006
|
220,000 | 150,000 |
─
|
─
|
─
|
─
|
16,476 | 386,476 | ||||||||||||||||||||||||
|
(a)
|
All
other compensation represents unused vacation payouts and 401(k) matching
contributions as follows: Mr. Taylor, $43,269 in unused vacation and
$3,450 in 401(k) match; Mr. Hackamack, $15,865 in unused vacation and $163
in 401(k) match; and Ms. Holley, $15,865 in unused vacation and $3,450 in
401(k) match.
|
|
(b)
|
The
Chief Executive Officer and Secretary are brother and
sister.
|
|
(c)
|
Mr.
Rodia’s retirement was effective November 1,
2008.
|
GRANTS
OF PLAN-BASED AWARDS
The
Company had no 2008 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:
|
All
Other Option Awards:
|
Exercise
|
Grant
Date
|
|||||||||
|
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
Number
of Shares of Stock or
Units
|
Number
of Securities Underlying Options
|
Exercise
or Base Price of Option Awards
|
Fair
Value of Stock and Option Awards
|
|||
|
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, 2008, 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
|
# 125,000 |
─
|
─
|
$ | 6.40 |
1/29/2009
|
─
|
─
|
─
|
─
|
|||||
| # 94,768 |
─
|
─
|
$ | 10.68 |
6/24/2015
|
─
|
─
|
─
|
─
|
||||||
| # 94,768 |
─
|
─
|
$ | 13.74 |
12/16/2015
|
─
|
─
|
─
|
─
|
||||||
|
E.
Rodia
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
||||||
|
K.
Hackamack
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
||||||
|
C.
Holley
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
─
|
||||||
OPTION
EXERCISES AND STOCK VESTED
The
following table summarizes the option exercises during 2008 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
|
# 44,450 | $ | 376,936 |
─
|
─
|
|||||
|
E.
Rodia
|
─
|
─
|
─
|
─
|
||||||
|
K.
Hackamack
|
# 35,000 | $ | 777,175 |
─
|
─
|
|||||
|
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
|
Registrant
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
|
Stock
split
In June
2008, Titan’s Board of Directors approved a five-for-four stock split. Titan
executed a five-for-four stock split that became effective August 15, 2008, for
stockholders of record on July 31, 2008. The Company gave five shares
for every four shares held as of the record date. Stockholders
received one additional share for every four shares owned as of the record date
and received cash in lieu of fractional shares. All share and per
share data, except shares authorized, have been adjusted to reflect the effect
of the stock split for all periods presented.
17
REPORT
OF THE COMPENSATION COMMITTEE
The
Compensation Committee of the Board of Directors (the “Committee”) was composed
of four independent non-employee directors during 2008. 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 2008, 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 two times during 2008.
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, 2008, for filing with the Securities and Exchange
Commission.
|
Members
of the Compensation Committee:
|
|
|
Mitchell I. Quain,
Chairman
|
|
|
Richard M. Cashin
Jr.
|
|
|
Albert J.
Febbo
|
|
|
Anthony L.
Soave
|
18
CORPORATE
GOVERNANCE
Independence
The Board
of Directors (“Board”) has determined that four of the Company’s seven directors
are independent under the rules of the New York Stock Exchange during 2008. The
independent directors are: 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 2010 Annual Meeting must be delivered to Titan
at the address set forth below, not later than November 30, 2009. 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 2008. 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 Erwin H. Billig and Anthony L. Soave
stand for re-election as Class III 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. Febbo has attended the Company’s Sarbanes-Oxley 404 training
and is a participant in the Company’s risk assessment meetings. The Committee
met one time in 2008.
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:
|
|
|
Richard M. Cashin Jr.,
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, 2008, of a $100
investment made on December 31, 2003, 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,
|
||||||||||||||||||||||||
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
|||||||||||||||||||
|
Titan
International, Inc.
|
$ | 100.00 | $ | 494.59 | $ | 565.78 | $ | 661.61 | $ | 1,027.09 | $ | 339.22 | ||||||||||||
|
S&P
600 Const. & Farm Machinery Index
|
100.00 | 134.03 | 170.38 | 229.76 | 289.55 | 182.43 | ||||||||||||||||||
|
S&P
500 Index
|
100.00 | 110.88 | 116.33 | 134.70 | 142.10 | 89.53 | ||||||||||||||||||
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, 2008, 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
|
||||||
|
Next
Century Growth Investors,
LLC
5500
Wayzata Blvd., Suite 1275
Minneapolis,
MN 55416
|
3,039,376 | (b) | 8.7 | % | ||||
|
Neuberger
Berman
Inc.
605
Third Avenue
New
York, NY 10158
|
2,843,347 | (b) | 8.1 | % | ||||
|
Keeley
Asset Management
Corp.
401
South LaSalle Street
Chicago,
IL 60605
|
1,965,000 | (b) | 5.6 | % | ||||
|
Dawson
Herman Capital Management
Inc
354
Pequot Avenue
Southport,
CT 06890
|
1,917,940 | (b) | 5.5 | % | ||||
|
FMR
LLC
82
Devonshire Street
Boston,
MA 02109
|
1,750,362 | (b) | 5.0 | % | ||||
|
Named Executive Officers &
Directors
|
||||||||
|
Anthony
L.
Soave
|
894,375 | 2.5 | % | |||||
|
Maurice
M. Taylor
Jr.
|
655,151 | (c) | 1.9 | % | ||||
|
Richard
M. Cashin
Jr.
|
456,786 | 1.3 | % | |||||
|
Mitchell
I.
Quain
|
193,500 | * | ||||||
|
Erwin
H.
Billig
|
53,750 | * | ||||||
|
Albert
J.
Febbo
|
23,750 | * | ||||||
|
Kent
W.
Hackamack
|
1,250 | * | ||||||
|
J.
Michael A.
Akers
|
0 | * | ||||||
|
Cheri
T.
Holley
|
0 | * | ||||||
|
All
named executive officers & directors as a group (nine
persons)
|
2,278,562 | 6.4 | % | |||||
|
___________________________
* 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, 2008, as
follows: Mr. Taylor, 314,536 shares; Mr. Soave, 57,500 shares;
Mr. Quain, 57,500 shares; Mr. Cashin, 46,250 shares; Mr. Billig, 33,750
shares; Mr. Febbo, 1,250 shares; all named executive officers and
directors as a group, 510,786
shares.
|
|
(b)
|
Based
on information contained in a Schedule 13G filed with the Securities and
Exchange Commission.
|
|
(c)
|
Includes
135,595 shares held jointly by Mr. Taylor and his wife as to which they
share voting and dispositive power. Also includes 205,020
shares held by Mr. Taylor as to which he has sole 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 2008. To the Company’s
knowledge, based solely on its review of the copies of such reports required to
be furnished to the Company during 2008, 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 2008,
2007 and 2006, sales of Titan product to these companies were approximately $6.2
million, $5.1 million and $6.4 million, respectively. On other sales
referred to Titan from these manufacturing representative companies, commissions
were approximately $2.0 million, $1.8 million and $2.0 million during 2008, 2007
and 2006, 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 both December 31, 2008 and 2007, Titan had trade
receivables of approximately $0.2 million due from these companies.
STOCKHOLDER
PROPOSALS
Any
proposal to be presented at the 2010 Annual Meeting of Stockholders must be
received at the principal executive offices of the Company no later than
November 30, 2009, 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 2010 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 15, 2010, proxies solicited by the Board of Directors for the
2010 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
2008 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 2008 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
30, 2009
|
Secretary
|
24
Titan
International, Inc.
2701
Spruce Street · Quincy,
IL 62301
www.titan-intl.com
TITAN INTERNATIONAL,
INC.
2701 SPRUCE SREET
QUINCY,
IL 62301
|
VOTE
BY INTERNET - www.proxyvote.com
|
|
Use
the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before
the cut-off date or meeting date. Have your proxy card in hand when you
access the web site and follow the instructions to obtain your records and
to create an electronic voting instruction form.
|
|
Electronic
Delivery of Future PROXY MATERIALS
|
|
If
you would like to reduce the costs incurred by our company in mailing
proxy materials, you can consent to receiving all future proxy statements,
proxy cards and annual reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please follow the instructions above
to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future
years.
|
|
VOTE
BY PHONE - 1-800-690-6903
|
|
Use
any touch-tone telephone to transmit your voting instructions up until
11:59 P.M.
Eastern Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you call and then follow the
instructions.
|
|
VOTE
BY MAIL
|
|
Mark,
sign and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY
11717.
|
|
TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS:
|
|
|
KEEP
THIS PORTION FOR YOUR
RECORDS
|
|
|
|
DETACH
AND RETURN THIS PORTION ONLY
|
|
THIS
PROXY CARD IS VALID
ONLY WHEN SIGNED AND
DATED.
|
|
|
For
All
|
Withhold
All
|
For
All
Except
|
To
withhold authority to vote for any individual nominee(s), mark “For All
Except” and write the number(s) of the nominee(s) on the line
below.
|
||
|
The
Board of Directors recommends that you
vote
“For” the following.
|
|||||
|
1.
Election of Directors
|
□
|
□
|
□
|
||
|
Nominees
|
|||||
|
01
Erwin H Billig
|
02
Anthony L. Soave
|
||||
|
The
Board of Directors recommends you vote FOR the following
proposal(s).
|
For
|
Against
|
Abstain
|
|
2 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 2009.
|
□
|
□
|
□
|
|
Such
other business as may properly come before the meeting or any adjournment
thereof.
|
Please
sign exactly as your name(s) appear(s) hereon. When signing as
attorney, executor, administrator, or other fiduciary, please give full title as
such. Joint owners should each sign personally. All
holders must sign. If a corporation or partnership, please sign in
full corporate or partnership name, by authorized officer.
|
Yes
|
No
|
|||||
|
HOUSEHOLDING
ELECTION – Please indicate if you consent to receive certain future
investor communications in a single package per household.
|
□
|
□
|
||||
|
Signature
[PLEASE SIGN WITHIN BOX]
|
Date
|
Signature
(Joint Owners)
|
Date
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Important Notice Regarding the Availability of Proxy Materials: The Annual Report,
Notice & Proxy Statement is/are available at
www.proxyvote.com .
TITAN
INTERNATIONAL, INC.
This
proxy is solicited by the Board of Directors for the
Annual Meeting
of Stockholders to be held on
Thursday, May
14, 2009, 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 14, 2009, 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.
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.
Continued
and to be signed on reverse side.