8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 29, 2014

Cooper Tire & Rubber Company

(Exact name of registrant as specified in its charter)

Delaware	001-04329	34-4297750
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

701 Lima Avenue, Findlay, Ohio	45840
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (419) 423-1321

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On January 29, 2014, Cooper Tire & Rubber Company ( “CTB”) entered into an agreement (the “CCT Agreement”) by and among CTB, Cooper Tire Investment Holding (Barbados) Ltd., a wholly owned subsidiary of CTB (“Cooper Barbados,” together with CTB, the “Company”), Chengshan Group Company Ltd. (“Chengshan”) and The Union of Cooper Chengshan (Shandong) Tire Company Co., Ltd. (the “Union”) regarding the Company’s joint venture, Cooper Chengshan (Shandong) Tire Company Ltd., in Rongcheng, China (“CCT”).

The CCT Agreement provides, among other things, that the Union and Chengshan will provide support to return CCT to normal operations, including the production of CTB branded products. This support also includes providing CTB with access to financial and operational data of CCT so that CTB may prepare and file its periodic reports as required under the federal securities laws. Finally, the parties agree to dismiss all pending proceedings and will not commence any new proceedings with regard to any events that have occurred since June 12, 2013 through January 29, 2014.

Cooper Barbados and Chengshan currently own 65% and 35% equity interests, respectively, in CCT. The CCT Agreement, among other matters, provides Chengshan with a limited contractual right to either (i) purchase Cooper Barbados’ equity interest in CCT for 65% of the Option Price (as defined below) or (ii) sell its equity interest in CCT to the Company for 35% of the Option Price. In the event Chengshan elects not to exercise its right to purchase Cooper Barbados’ equity interest or sell its interest in CCT to the Company, the Company has the right to purchase Chengshan’s equity interest in CCT for 35% of the Option Price. The “Option Price” under the CCT Agreement will be the greater of (i) the fair market value of CCT on a stand-alone basis, which value will not take into consideration the value of the trademarks and technologies licensed by the Company to CCT, as determined by an internationally recognized valuation firm (the “CCT valuation”) and (ii) $435 million, in either case to be paid in cash at closing. The CCT Agreement provides for a process to select such internationally recognized valuation firm. Pursuant to the CCT Agreement, Chengshan must notify the Company of its election to exercise, or not to exercise, either of its options within 45 days of the later of (i) the date the CCT valuation is delivered to the Company and Chengshan and (ii) the date the Company files its third quarter 2013 and full year 2013 financial statements with the Securities and Exchange Commission, together with any other periodic reports, including financial statements of such reports, that are required to be filed at that time (such later date, the “Option Commencement Date”).

If Chengshan does not exercise its options within 45 days after the Option Commencement Date, Chengshan’s options will expire and the Company will have the right to exercise its option to purchase Chengshan’s equity interest in CCT for a period of 90 days following the Option Commencement Date. If the CCT valuation is not provided on or before August 11, 2014, however, the options of both parties will terminate and be of no effect unless the Company, at its sole discretion, elects to extend the deadline for the CCT valuation. In the event neither Chengshan nor the Company exercises their respective options prior to their expiration, then Chengshan and the Company will discuss potential new ownership structures for CCT.

If CTB is unable to file its (i) Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 by March 3, 2014 or (ii) Annual Report on Form 10-K for year ended December 31, 2013 by March 14, 2014, including in each case any and all required financial statements, then neither the Company nor Chengshan will be able to exercise their rights with respect to the purchase and/or sale options described herein and such options will be null and void immediately, although the remaining provisions of the CCT Agreement will remain in full force and effect.

The CCT Agreement is separate and in addition to the purchase, sale, transfer, right of first refusal and other rights set forth in the existing joint venture agreement between the Company and Chengshan with respect to CCT.

Item 8.01. Other Events.

On January 31, 2014, CTB issued a press release (the “Press Release”) regarding the entry into the CCT Agreement and posted a slide presentation regarding the CCT Agreement (the “Slide Presentation”) on its corporate website. Copies of the Press Release and the Slide Presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference into this Item 8.01.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release announcing the entry into the CCT Agreement, dated January 31, 2014.
99.2	Slide Presentation Regarding the CCT Agreement.

-3-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COOPER TIRE & RUBBER COMPANY
By:	/s/ Jack Jay McCracken
	Name:	Jack Jay McCracken
	Title:	Assistant Secretary

Dated: January 31, 2014

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release announcing the entry into the CCT Agreement, dated January 31, 2014.
99.2	Slide Presentation Regarding the CCT Agreement.

EX-99.1

Exhibit 99.1

NEWS

Cooper Tire Reaches Agreement with Chengshan Group

and CCT Labor Union on Path Forward for CCT Joint Venture

Agreement establishes process for determining future ownership of CCT beginning with independent

valuation; positions Cooper to resume regular financial reporting

FINDLAY, Ohio, USA – January 31, 2014 –Cooper Tire & Rubber Company (NYSE: CTB) today announced it has signed an agreement with Chengshan Group Company Ltd. and the CCT labor union establishing a path forward for the Cooper Chengshan (Shandong) Tire Company Ltd. (CCT) joint venture.

The agreement establishes a process for determining the future ownership of CCT, which begins with engaging an independent valuation firm to determine the fair market value of CCT. Once a valuation is established, Chengshan will have the first option to either purchase Cooper’s 65 percent interest or to sell its 35 percent interest to Cooper, making CCT a wholly-owned subsidiary of Cooper. If Chengshan determines not to exercise either of these options, Cooper has the right under the agreement to purchase Chengshan’s 35 percent interest. The options are conditioned on Cooper reporting its financial results within a specified timeframe. In the event that neither party elects to purchase the others’ interest, the agreement allows for continuation of the joint venture as currently structured.

The agreement further stipulates that should Chengshan purchase Cooper’s stake in the joint venture, Cooper will continue to have offtake rights with CCT agreeing to produce Cooper brand products, including Truck and Bus Radial (TBR) tires, for a minimum of three years.

The agreement also confirms that, with the support of the labor union and Chengshan, normal operations will be sustained at CCT including the production of Cooper brand products and access to financial and operational data that will allow Cooper to resume regular financial reporting.

“With this agreement, Cooper gains certainty regarding sustained normal operations at CCT as well as a defined process for determining the long-term ownership of the joint venture based on a fair market value,” said Cooper Chairman, Chief Executive Officer and President Roy Armes.

“If Cooper sells its interest in CCT to Chengshan, the commercial offtake rights secure a future supply of product for our customers. Cooper will also have added flexibility to enter into acquisitions, new offtake relationships, or possible greenfield development of additional production capacity anywhere around the world to support the expansion of our TBR business. If Cooper buys Chengshan’s minority interest in CCT, we will have the certainty of a wholly-owned asset with an experienced team in place that will continue our China growth strategy,” Armes added.

“In either scenario, China is a core growth market for Cooper and we will continue to rely on the existing sales and marketing organization and technology team we have in China, as well as our CKT manufacturing operation located outside of Shanghai in Kunshan. This wholly-owned facility has continued to grow and evolve into a world-class operation with ample capacity for further expansion,” Armes said.

“Overall, this agreement puts Cooper in a solid position to aggressively pursue our strategic plan, which is focused on driving stockholder value as its overarching goal. Cooper now has a clear path to resume regular financial reporting, and as the long-term ownership of CCT is determined, we will continue to address our capital deployment options to deliver maximum value for our stockholders,” Armes concluded.

Cooper Management Webcast for Investors Today at 9 a.m. EST

Cooper management will hold a webcast regarding the agreement at 9 a.m. EST today, January 31. The webcast may be accessed at http://www.media-server.com/m/p/yp9skj78 or at the company’s investor relations website at http://coopertire.com/investors.aspx. Beginning approximately two hours after the webcast, an archive of the webcast will be available at both urls for 30 days.

-more-

Cooper/Chengshan/CCT Labor Union Agreement—2

About Cooper Tire & Rubber Company

Cooper Tire & Rubber Company is the parent company of a global family of companies that specialize in the design, manufacture, marketing, and sales of passenger car and light truck tires. Cooper has joint ventures, affiliates and subsidiaries that also specialize in medium truck, motorcycle and racing tires. Cooper’s headquarters is in Findlay, Ohio, with manufacturing, sales, distribution, technical and design facilities within its family of companies located in 11 countries around the world. For more information on Cooper Tire, visit www.coopertire.com, www.facebook.com/coopertire or www.twitter.com/coopertire.

Cooper Media Contact:

Anne Roman

+1 419-429-7189

alroman@coopertire.com

Cooper Investor Contact:

+1 419-424-4165

investorrelations@coopertire.com

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not based on historical facts but instead reflect Cooper’s expectations, estimates or projections concerning future results or events. These statements generally can be identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “project,” “may,” “could,” “intend,” “intent,” “belief,” “estimate,” “plan,” “likely,” “will,” “should” or similar words or phrases. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results, performance or achievements to differ materially from those expressed or indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved.

The forward-looking statements included in this document are only made as of the date of this document and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: volatility in raw material and energy prices, including those of rubber, steel, petroleum based products and natural gas and the unavailability of such raw materials or energy sources; the failure of Cooper’s suppliers to timely deliver products in accordance with contract specifications; changes in economic and business conditions in the world; failure to implement information technologies or related systems, including failure by Cooper to successfully implement an ERP system; increased competitive activity including actions by larger competitors or lower-cost producers; the failure to achieve expected sales levels; changes in Cooper’s customer relationships, including loss of particular business for competitive or other reasons; litigation brought against Cooper, including products liability claims, which could result in material damages against Cooper; changes to tariffs or the imposition of new tariffs or trade restrictions; changes in pension expense and/or funding resulting from investment performance of Cooper’s pension plan assets and changes in discount rate, salary increase rate, and expected return on plan assets assumptions, or changes to related accounting regulations; government regulatory and legislative initiatives including environmental and healthcare matters; volatility in the capital and financial markets or changes to the credit markets and/or access to those markets; changes in interest or foreign exchange rates; an adverse change in Cooper’s credit ratings, which could increase borrowing costs and/or hamper access to the credit markets; the risks associated with doing business outside of the United States; the failure to develop technologies, processes or products needed to support consumer demand; technology advancements; the inability to recover the costs to develop and test new products or processes; the impact of labor problems, including labor disruptions at Cooper or at one or more of its large customers or suppliers; failure to attract or retain key personnel; consolidation among competitors or customers; inaccurate assumptions used in developing Cooper’s strategic plan or operating plans or the inability or failure to successfully implement such plans; failure to successfully integrate acquisitions into operations or their related financings may impact liquidity and capital resources; the impact of labor disruptions and changes in Cooper’s relationship with, or ownership interests in, joint-venture partners; the ability to sustain operations at the Cooper Chengshan (Shandong) Tire Company Ltd. joint venture (“CCT”), including obtaining financial and other operational data of CCT; the inability to obtain and maintain price increases to offset higher production or material costs; inability to adequately protect Cooper’s intellectual property rights; inability to use deferred tax assets; the ultimate outcome of legal actions brought by Cooper against wholly-owned subsidiaries of Apollo Tyres Ltd.; and other factors that are set forth in management’s discussion and analysis of Cooper’s most recently filed reports with the SEC. This list of factors is illustrative, but by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

###

EX-99.2

Cooper Tire, Chengshan Group and

CCT Labor Union Reach Agreement

Establishing Path Forward for CCT

Joint Venture

January 31, 2014

1

Exhibit 99.2

Safe Harbor

This presentation contains strategic goals and other forward-

looking statements related to future financial results and business

operations for Cooper Tire & Rubber Company. 

Actual results may differ materially from the goals and from current

management forecasts and projections as a result of factors over

which the Company may have limited or no control.  Information

on certain of these risk factors and additional information on

forward-looking statements are included in the Company’s reports

on file with the Securities and Exchange Commission and are set

forth at the end of this presentation.

Note

This

presentation

provides

an

overview

of

certain

details

of

the

agreement between Cooper Tire, Chengshan Group and the CCT

Union announced today, January 31, 2014. For additional details,

please refer to the Form 8-K filed by Cooper Tire & Rubber

Company today, January 31, 2014.

2

China to remain a core growth market

for Cooper

China tire market expected to grow by 60% over next five years and be

largest market globally *

Cooper has an established and growing market position in China

–

Participate in Passenger Car Radial (PCR) tire market and in Truck and Bus Radial (TBR) tire

market

–

PCR served by both Cooper and Cooper Chengshan Tire (CCT) brands; TBR served by CCT

brands in China

–

Largely replacement focused, with growing Original Equipment (OE) partnerships

–

Cooper distribution (focused on Cooper brand tires) has more than 5,000 points of sale in China,

up 72% from 2012

Cooper has proven manufacturing capabilities in China

–

Cooper owns 100% of Cooper Kunshan Tire (CKT) PCR operations with a current capacity of 5M

tires annually

•

Production shifting from export to domestic sales, with additional sourcing shifting to CKT in 2014

•

Option to increase capacity to 8M tires using existing buildings, and can double that to 16M at the current

site which was designed to integrate another building

–

Cooper owns 65% of CCT Joint Venture (JV) with Chengshan Group

•

PCR and TBR manufacturing. Annual capacity of 10M tires

•

Cooper provides technical and design capabilities

•

Global TBR lines under Cooper’s Roadmaster brand receiving strong reception in the U.S.

* 2013 LMC Data

3

Path forward for the CCT JV has been defined

Cooper

options*

Execute put option:

Sell 35% stake to Cooper

Chengshan

options*

Do not execute either option

Execute call option:

Buy Chengshan's 35% stake

Chengshan

full ownership

of CCT

Cooper full

ownership of

CCT

Execute call option:

Buy Cooper's 65% stake

JV continues

under current

ownership

arrangement

45 days from option

commencement date

46 –

90 days from option

commencement date

Do not execute option

Outcomes

Fair market

valuation

completed by

independent firm

Targeted to be

completed 60

days after firm

selection or

Cooper's 2013

financial filings**

Option price

will be based on

the greater of

$435M or

the value

of CCT as

determined by

independent

valuation firm

Valuation

period

Option commencement date at

completion of valuation

Option period with target completion dates

4

**Agreement allows for 90 additional days to complete.

3

2

1

*The options are conditioned on Cooper reporting its financial results within the timeframe described in the Form 8-K  filed January 31, 2014.

Scenario 1:

Chengshan takes full ownership

of CCT

•

Cooper supply secured through CCT offtake rights for at least three

years

•

Cooper does not participate in sales through CCT distribution,

focuses on continuing to grow PCR sales through Cooper channels,

while continuing to shift PCR production to (and growing) CKT

•

Cooper continues to participate TBR through offtake rights

•

Cooper sells its 65% stake in the CCT joint venture

•

Cooper receives $283M or more for its stake based on independent

valuation

•

Continue to expand CKT operations to support domestic China

sales

•

Leverage cash injection to accelerate pursuit of new TBR sourcing

options and invest in distribution growth in China

•

Continue to evaluate new sources of supply for growing China

market including possible acquisition opportunities

5

Outcome

Short-term

Impact

Long-term China

strategy

Scenario 2:

Cooper takes full ownership

of CCT

•

Solidifies global TBR supply and China TBR distribution

•

Cooper's balance sheet is well positioned to finance purchase of

Chengshan's share of CCT

•

Production and distribution at CKT to continue and grow

•

Continue to expand CKT operations to support domestic China

sales

•

Use as a catalyst to accelerate Cooper's China growth plans

•

Accelerate development of global TBR business

•

Continue to evaluate new sources of supply for growing China

market including possible acquisition opportunities

•

Cooper owns 100% of CCT

•

Cooper pays $152M or more to acquire Chengshan's stake based

on independent valuation

6

Outcome

Short-term

Impact

Long-term China

strategy

Planned communications

Agreement Announced

Q3 2013 Results

Q4 & FY 2013

Results

Investor Event

7

Today

Early March

Mid to Late March

April/May

Risks

8

This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not based on

historical facts but instead reflect Cooper’s expectations, estimates or projections concerning future results or events. These statements generally can be

identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “project,” “may,” “could,” “intend,” “intent,” “belief,”

“estimate,” “plan,” “likely,” “will,” “should” or similar words or phrases. These statements are not guarantees of performance and are inherently subject to

known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results, performance or achievements to

differ materially from those expressed or indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be

achieved. 

The forward-looking statements included in this presentation are only made as of the date of this presentation and we disclaim any obligation to publicly

update any forward-looking statement to reflect subsequent events or circumstances. 

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including,

without limitation: volatility in raw material and energy prices, including those of rubber, steel, petroleum based products and natural gas and the

unavailability of such raw materials or energy sources; the failure of Cooper’s suppliers to timely deliver products in accordance with contract specifications;

changes in economic and business conditions in the world; failure to implement information technologies or related systems, including failure by Cooper to

successfully implement an ERP system; increased competitive activity including actions by larger competitors or lower-cost producers; the failure to achieve

expected sales levels; changes in Cooper’s customer relationships, including loss of particular business for competitive or other reasons; litigation brought

against Cooper, including products liability claims, which could result in material damages against Cooper; changes to tariffs or the imposition of new tariffs

or trade restrictions; changes in pension expense and/or funding resulting from investment performance of Cooper’s pension plan assets and changes in

discount rate, salary increase rate, and expected return on plan assets assumptions, or changes to related accounting regulations; government regulatory

and legislative initiatives including environmental and healthcare matters; volatility in the capital and financial markets or changes to the credit markets

and/or access to those markets; changes in interest or foreign exchange rates; an adverse change in Cooper’s credit ratings, which could increase borrowing

costs and/or hamper access to the credit markets; the risks associated with doing business outside of the United States; the failure to develop technologies,

processes or products needed to support consumer demand; technology advancements; the inability to recover the costs to develop and test new products

or processes; the impact of labor problems, including labor disruptions at Cooper or at one or more of its large customers or suppliers; failure to attract or

retain key personnel; consolidation among competitors or customers; inaccurate assumptions used in developing Cooper’s strategic plan or operating plans

or the inability or failure to successfully implement such plans; failure to successfully integrate acquisitions into operations or their related financings may

impact liquidity and capital resources; the impact of labor disruptions and changes in Cooper’s relationship with, or ownership interests in, joint-venture

partners; the ability to sustain operations at the Cooper Chengshan (Shandong) Tire Company Ltd. joint venture (“CCT”), including obtaining financial and

other operational data of CCT; the inability to obtain and maintain price increases to offset higher production or material costs; inability to adequately

protect Cooper’s intellectual property rights; inability to use deferred tax assets; the ultimate outcome of legal actions brought by Cooper against wholly-

owned subsidiaries of Apollo Tyres Ltd.; and other factors that are set forth in management’s discussion and analysis of Cooper’s most recently filed reports

with the SEC. This list of factors is illustrative, but by no means exhaustive. All forward-looking statements should be evaluated with the understanding of

their inherent uncertainty.