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EXHIBIT 99c
THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
FINANCIAL STATEMENTS AS OF JUNE 30, 1998 AND 1997
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
INDEX TO FINANCIAL STATEMENTS
Report of Independent Public Accountants
Financial Statements-
Statement of Net Assets Available for Plan Benefits as of June 30, 1998
Statement of Net Assets Available for Plan Benefits as of June 30, 1997
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended June 30, 1998
Notes to Financial Statements
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of
June 30, 1998
Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended
June 30, 1998
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[ARTHUR ANDERSEN LETTERHEAD]
Report of Independent Public Accountants
To The Standard Products Company:
We have audited the accompanying statements of net assets available for plan
benefits of THE STANDARD PRODUCTS COMPANY COLLECTIVELY BARGAINED SAVINGS AND
RETIREMENT PLAN (LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY (the Plan) as
of June 30, 1998 and 1997, and the related statement of changes in net assets
available for plan benefits for the year ended June 30, 1998. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of June 30, 1998 and June 30, 1997, and the changes in net assets available for
plan benefits for the year ended June 30, 1998 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Detroit, Michigan
September 11, 1998.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF JUNE 30, 1998
Non-
Participant Directed Participant
------------------------------------------------ Directed
Common Short Investment ----------
Stock Equity Term Balanced Contract Common
Fund Fund Fund Fund Fund Stock Fund Total
------ ------- ------ ------ --------- ---------- ------
INVESTMENTS, at fair value (Note 2):
Standard Products Company Stock Fund $ 67 $ -- $ -- $ -- $ -- $ 4,228 $ 4,295
Vanguard/Windsor II -- 44,792 -- -- -- -- 44,792
Vanguard Money Market Reserves-Prime Portfolio -- -- 1,860 -- -- -- 1,860
Vanguard STAR Portfolio -- -- -- 2,494 -- -- 2,494
Vanguard Retirement Savings Trust -- -- -- -- 7,452 -- 7,452
------- ------- ------- ------- ------- ------- -------
Total investments 67 44,792 1,860 2,494 7,452 4,228 60,893
------- ------- ------- ------- ------- ------- -------
RECEIVABLES:
Employer's contributions
Employees' contributions
Interest and dividends -- -- -- -- -- 27 27
------- ------- ------- ------- ------- ------- -------
Total receivables 0 0 0 0 0 27 27
------- ------- ------- ------- ------- ------- -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 67 $44,792 $ 1,860 $ 2,494 $ 7,452 $ 4,255 $60,920
======= ======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of the financial statements.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF JUNE 30, 1997
Non-
Participant Directed Participant
---------------------------------------------------- Directed
Common Short Investment -----------
Stock Equity Term Balanced Contract Common
Fund Fund Fund Fund Fund Stock Fund Total
------- -------- ------- -------- --------- ----------- ------
INVESTMENTS, at fair value (Note 2):
Standard Products Company Stock Fund $ 57,470 $ -- $ -- $ -- $ -- $ 84,918 $142,388
Vanguard/Windsor II -- 180,641 -- -- -- -- 180,641
Vanguard Money Market Reserves-Prime Portfolio -- -- 50,774 -- -- -- 50,774
Vanguard STAR Portfolio -- -- -- 132,819 -- -- 132,819
Vanguard Retirement Savings Trust -- -- -- -- 318,715 -- 318,715
-------- -------- -------- -------- -------- -------- --------
Total investments 57,470 180,641 50,774 132,819 318,715 84,918 825,337
-------- -------- -------- -------- -------- -------- --------
RECEIVABLES:
Employer's contributions -- -- -- -- -- 480 480
Employees' contributions 501 1,009 232 466 1,532 -- 3,740
Interest and dividends 265 -- -- -- -- 387 652
-------- -------- -------- -------- -------- -------- --------
Total receivables 766 1,009 232 466 1,532 867 4,872
-------- -------- -------- -------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 58,236 $181,650 $ 51,006 $133,285 $320,247 $ 85,785 $830,209
======== ======== ======== ======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED JUNE 30, 1998
Participant Directed
--------------------------------------------------------------------
Common Short Investment
Stock Equity Term Balanced Contract
Fund Fund Fund Fund Fund
--------- --------- -------- --------- ------------
ADDITIONS:
Contributions-
Employer's $ -- $ -- $ -- $ -- $ --
Employees' 144 2,353 777 521 1,094
--------- --------- --------- --------- ---------
Total contributions 144 2,353 777 521 1,094
--------- --------- --------- --------- ---------
Net unrealized appreciation in fair value of investments 165 6,822 -- 197 --
Realized gains 2,942 10,665 -- 7,204 --
Interest and dividends 53 6,381 686 1,541 4,747
--------- --------- --------- --------- ---------
Total additions 3,304 26,221 1,463 9,463 5,841
--------- --------- --------- --------- ---------
DEDUCTIONS -
Benefit payments 61,473 163,079 50,609 140,254 318,636
--------- --------- --------- --------- ---------
Total deductions 61,473 163,079 50,609 140,254 318,636
--------- --------- --------- --------- ---------
NET DECREASE (58,169) (136,858) (49,146) (130,791) (312,795)
NET ASSETS AT BEGINNING OF YEAR 58,236 181,650 51,006 133,285 320,247
--------- --------- --------- --------- ---------
NET ASSETS AT END OF YEAR $ 67 $ 44,792 $ 1,860 $ 2,494 $ 7,452
========= ========= ========= ========= =========
Non-
Participant
Directed
----------
Common
Stock Fund Total
--------- -------
ADDITIONS:
Contributions-
Employer's $ 647 $ 647
Employees' -- 4,889
--------- ---------
Total contributions 647 5,536
--------- ---------
Net unrealized appreciation in fair value of investments 247 7,431
Realized gains 7,412 28,223
Interest and dividends 273 13,681
--------- ---------
Total additions 8,579 54,871
--------- ---------
DEDUCTIONS -
Benefit payments 90,109 824,160
--------- ---------
Total deductions 90,109 824,160
--------- ---------
NET DECREASE (81,530) (769,289)
NET ASSETS AT BEGINNING OF YEAR 85,785 830,209
--------- ---------
NET ASSETS AT END OF YEAR $ 4,255 $ 60,920
========= =========
The accompanying notes are an integral part of the financial statements.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) SUMMARY OF PLAN
General
The Standard Products Company Collectively Bargained Savings and
Retirement Plan (Lexington Division) UAW Local 1681 Lexington,
KY (the Plan) is a defined contribution plan covering all
employees who have one year of service and are covered by the
collective bargaining agreement between UAW Local 1681 (the
Union) and The Standard Products Company (the Company). The
Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974.
Administration
The Plan is administered by The Standard Products Collectively
Bargained Savings and Retirement Plan Committee. The Plan has a
trust agreement with the Vanguard Fiduciary Trust Company (the
Trustee) to act as trustee and recordkeeper of the Plan's
assets.
Contributions
Each year, participants may contribute up to 10 percent of their
pretax compensation. The Company contributes 20 percent of the
first 4 percent of base compensation that the participant
contributes to the Plan. All employer matching contributions
are invested in the Company Common Stock Fund.
Participant Accounts
Each participant's account is credited with the participant's
contributions, their allocation of the Company's contributions
and the earnings of their investment funds.
Vesting
The participants are immediately vested in their contributions and
the Company's contributions plus actual earnings thereon.
Investment Options
Upon enrollment in the Plan, a participant may direct employee
contributions in 10 percent increments to any of six investment
options.
Company Common Stock Fund - This fund invests in the Standard
Products Company Stock Fund.
Equity Fund - This fund invests in the Vanguard/Windsor II Fund
which consists of investments in a diversified group of
out-of-favor stocks of large-capitalization companies.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
NOTES TO FINANCIAL STATEMENTS
(Continued)
Index Fund - This fund invests in the Vanguard Index Trust-500
Portfolio which consists of investments in all of the 500 stocks
that make up the Standard & Poor's 500 Composite Stock Price
Index.
Short Term Investment Fund - This fund invests in the Vanguard
Money Market Reserves-Prime Portfolio which consists of
investments in short-term, high-quality money market
instruments.
Balanced Fund - This fund invests in the Vanguard STAR Portfolio
which consists of investments in nine Vanguard funds: six stock
funds, two bond funds, and one money market fund.
Investment Contract Fund - This fund invests in the Vanguard
Retirement Savings Trust which consists of investment contracts
backed by financial institutions or by high-quality bonds and
bond mutual funds owned by the Trust. Prior to April 30, 1997,
this fund was known as the Vanguard Investment Contract Trust.
Payment of Benefits
In the event of retirement, death, termination, permanent
disability or other separation from service, participants shall
be entitled to receive an amount equal to the value of the
vested interest in their accounts. Payment of benefits may be
taken in a lump sum cash distribution or in various annuity
options.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements are prepared on the accrual
basis of accounting.
Investments
The accompanying statements of net assets available for plan
benefits reflect the Plan's investments at their fair market
values as of June 30, 1998 and 1997. Net change in realized and
unrealized appreciation and depreciation of investments is
reflected as an adjustment of the Plan's equity balance in the
accompanying statement of changes in net assets available for
plan benefits. A summary of the Plan's investments at June 30,
1998, is presented in Schedule I.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recognized when earned. Dividends are
recorded on the ex-dividend date.
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THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
NOTES TO FINANCIAL STATEMENTS
(Continued)
Administrative Expenses
The Company pays the administrative expenses of the Plan,
including any expenses and fees of the Trustee.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(3) FEDERAL INCOME TAXES
The Internal Revenue Service (IRS) has determined and informed the
Company by a letter dated February 7, 1997, that the Plan and
related trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable
requirements of the IRC.
(4) RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the
trustee. There have been no known prohibited transactions with a
party-in-interest.
(5) PLAN TERMINATION
Effective February 15, 1997 the Company entered into a termination
agreement with the Union to cease operations at the Lexington
division. The plant was closed in August, 1997. Following the
plant closing, the Company intends to terminate the Plan, and
upon receipt of the IRS' determination that the Plan remains
qualified upon termination, the Company will distribute all
remaining account balances to those participants who have not
previously received distribution of their account balances.
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SCHEDULE I
THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
EIN: 34-0549970 - PLAN: 015
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF JUNE 30, 1998
Shares/
Par Value Description Cost Market
--------- ----------- ---- ------
285 *Standard Products Company Stock Fund $ 3,151 $ 4,295
1,371 *Vanguard/Windsor II 30,228 44,792
1,860 *Vanguard Money Market Reserves-Prime Portfolio 1,860 1,860
133 *Vanguard STAR Portfolio 2,089 2,494
7,452 *Vanguard Retirement Savings Trust 7,452 7,452
------- -------
Total $44,780 $60,893
======= =======
*Represents a party-in-interest
The accompanying notes are an integral part of this schedule.
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SCHEDULE II
THE STANDARD PRODUCTS COMPANY
COLLECTIVELY BARGAINED SAVINGS AND RETIREMENT PLAN
(LEXINGTON DIVISION) UAW LOCAL 1681 LEXINGTON, KY
EIN: 34-0549970 - PLAN: 015
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1998
During the year ended June 30, 1998, the Plan had the following "reportable
transactions", as defined, involving an amount in excess of 5% of the net
assets available for plan benefits at the beginning of the year, July 1,
1997:
Shares/ Purchase Cost/ Historical Gain
Par Value Description Sale Proceeds Cost (Loss)
--------- ----------- -------------- ---------- ------
*Standard Products Company Stock Fund-
10,384 Sales $151,582 $109,113 $42,469
192 Purchases 2,723 2,723 N/A
*Vanguard/Windsor II-
5,522 Sales 163,079 122,165 40,914
341 Purchases 9,744 9,744 N/A
*Vanguard STAR Portfolio-
7,676 Sales 140,254 119,118 21,136
144 Purchases 2,527 2,527 N/A
*Vanguard Retirement Savings Trust-
318,636 Sales 318,636 318,636 -
7,373 Purchases 7,373 7,373 N/A
*Vanguard Money Market Reserves Prime
Portfolio-
50,609 Sales 50,609 50,609 -
1,695 Purchases 1,695 1,695 N/A
Individual Transactions
-----------------------
*Standard Products Company Stock
Fund 8/18/97 -
3,455 Sales 48,442 35,656 12,786
*Vanguard Retirement Savings
Trust 7/14/97 -
61,588 Sales 61,588 61,588 -
*Vanguard Retirement Savings
Trust 8/18/97 -
94,320 Sales 94,320 94,320 -
*Represents a party-in-interest
The accompanying notes are an integral part of this schedule.
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