(07/2011) COOPER TIRE & RUBBER COMPANY SPECTRUM RETIREMENT PLAN SUMMARY PLAN DESCRIPTION

Transcription

1 (07/2011) COOPER TIRE & RUBBER COMPANY SPECTRUM RETIREMENT PLAN SUMMARY PLAN DESCRIPTION

2 PLAN HIGHLIGHTS (CL2009) Plan Highlights briefly describes the Plan. The rest of this booklet explains in greater detail how the Plan works. Cooper Tire & Rubber Company started the Cooper Tire & Rubber Company Salaried Employees Retirement Plan on January 1, The Plan was later renamed the Cooper Tire & Rubber Company Spectrum Retirement Plan. The Plan: Gives you a dependable source of income when you retire. Knowing how much you'll receive from the Plan makes planning for your retirement easier. Bases the ownership of your retirement benefit on your service. May provide a death benefit for your spouse or another person you name as beneficiary if you die before retirement. Is funded entirely by Cooper contributions. Offers several different ways to receive your benefits. You choose the right way for you. About This Booklet This booklet is the Summary Plan Description. It explains how the Plan currently works, when you qualify for benefits, and other information. The Plan is much more detailed and it governs your benefits. The term your earned benefit refers to the benefit earned by you under the Plan. The term your earned benefit applies to both the vested part of your earned benefit and the part of your earned benefit that is not vested. The term your vested benefit refers to the vested part of the earned benefit. Part 4 of this booklet explains vesting. Use of the term your earned benefit does not give you any rights to the earned benefit or any assets of the Plan other than those described in this booklet. If you have questions about the Plan, you may contact the Client Contact Center at (800) or your local Human Resources Representative. NOTE: The Plan Administrator has discretionary authority to determine eligibility for benefits and to use its discretionary authority to interpret the Plan. Benefits under the Plan will be paid only if the Plan Administrator decides, in its discretion, that the applicant for benefits is eligible for them. Any interpretation or determination made by the Plan Administrator pursuant to this discretionary authority will be final and binding upon all parties unless it is determined by a court that the interpretation or determination was arbitrary and capricious. 1

3 TABLE OF CONTENTS JOINING THE PLAN... PART 1 When You Join Changes in Your Participation YOUR EARNED BENEFIT... PART 2 Calculating Your Earned Benefit Law Limits Helpful Terms Who Provides Your Earned Benefit RETIREMENT BENEFITS... PART 3 At Normal Retirement Date At Early Retirement Date At Disability Retirement Date At Deferred Vested Retirement Date At Late Retirement Date Required Beginning Date Adjustments to Your Benefits BENEFITS FOR INACTIVE PARTICIPANTS... PART 4 Your Vested Benefit When Your Vested Benefit Starts Before Your Vesting Percentage Is 100% DEATH BENEFITS BEFORE RETIREMENT... PART 5 A Spouse's Benefit Single Sum Death Benefit HOW THE PLAN PAYS BENEFITS... PART 6 Choosing at Retirement Choosing Pre-retirement Death Benefits Forms to Choose Tax Considerations GRANDFATHERED BENEFITS... PART 7 Grandfathered Participants in Cooper Tire Plan before January 1, 2002 Grandfathered Participants in Cooper Standard Products Plan before January 1,

4 IMPORTANT INFORMATION FOR YOU... PART 8 Your Rights A Spouse's Rights Qualified Domestic Relations Order (QDRO) Direct Rollovers Top-heavy Plans Assigning Your Benefits Claiming Benefits Under the Plan Changing the Plan Stopping the Plan Our Plan and the Pension Benefit Guaranty Corporation (PBGC) Military Service FACTS ABOUT THE PLAN... PART 9 3

5 PART 1 JOINING THE PLAN When You Join On and after July 1, 2009, no employees (other than bargaining class employees at the Cedar Rapids warehouse location) may join or rejoin the Plan as an active participant. If you were an active participant on the day before that date, you ll remain an active participant until you become an inactive participant. You must continue to be an eligible employee to remain an active participant. Prior to that date, you joined the Plan as an active participant on the first day of the month on or after you met these requirements: You were an eligible employee. You had one year of entry service. This date is your entry date. You are an eligible employee unless you are any of the following: A bargaining class employee at the Cedar Rapids warehouse location and represented by a bargaining unit that has bargained with us in good faith on the subject of retirement benefits A nonresident alien with no U.S. income or all such income is exempt from U.S. income tax A leased employee Considered an independent contractor or an employee of an independent contractor who is later determined by the IRS to be an employee of ours A member of the Board of Directors acting solely in that capacity. Eligible employee includes any United States citizen who is employed by a foreign affiliate for which we have entered into an agreement with the Internal Revenue Service. If you are an acquired employee, you may be excluded from the Plan for a period of time, as determined by us and in accordance with requirements of the Internal Revenue Code. You are an acquired employee if we purchased the assets of a company (or any similar transaction), and you worked for that company before the purchase and were hired by us at the time we purchased such assets. This exclusion will only apply during the transition period (the period beginning on the date of the transaction and ending on the last day of the next Plan year following the date of the transaction) or an earlier date as required by law or as elected by us. If you are a full-time employee (your position with us normally requires a workweek of at least 40 hours), entry service means the sum of all of your periods of service. A period of service starts when you start working for us. It ends on the earlier of the date you stop working (you quit or are discharged) or the date you are absent from work one year. Any period of time of less than one year when either you are not working for us, or you are absent from work because of vacation or some other reason, will count as a period of service. 4

6 Break in service means for a full-time employee, a period of service ends and you do not work another hour for us within one year. Federal law delays a break in service for your pregnancy, birth of your child, placement of a child with you by reason of your adoption of such child, or your caring for such child following such birth or placement. If you are a part-time employee (your position with us normally requires a workweek of less than 40 hours), you earn a year of entry service for each service period in which you have 1,000 or more hours of service. The year of service is earned on the last day of the service period. Service periods are one-year long. Your first one starts on the date you are hired and ends on the day before your first anniversary date. Following ones begin on January 1 and end on December 31, beginning with the January 1 following the date you are hired. An hour of service is each hour of paid working time. In addition, it includes up to 501 hours during any one period of paid non-working time, such as paid vacation. Your actual hours of service are not used. Instead, 190 hours of service will be credited for each month in which you have at least one actual hour of service. Break in service means for a part-time employee, a service period during which you have 500 or fewer hours of service. Federal law delays a break in service for your pregnancy, birth of your child, placement of a child with you by reason of your adoption of such child, or your caring for such child following such birth or placement. Your entry service before a period of breaks in service is not counted if your vesting percentage is zero and your consecutive breaks in service equal or are more than the greater of five years or your earlier entry service. Changes in Your Participation You become an inactive participant on: The date you are no longer an eligible employee. The date your period of service for benefit service ends if you are a full-time employee (see Part 2). The end of a service period used to determine benefit service (see Part 2) in which you have 500 or fewer hours of service if you are a part-time employee. You stop being a participant on: The date of your death. The date you get a single sum payment in place of all other benefits if your vesting percentage is 100% (see Part 4). If you become an inactive participant, you ll also stop being a participant on the earliest date on which you are not entitled to a vested benefit (see Part 4). 5

7 PART 2 YOUR EARNED BENEFIT As you work for us, you earn your retirement benefit. This earned benefit grows with your service and pay. Calculating Your Earned Benefit Your earned benefit is your account balance. This formula is used to calculate your earned benefit: Your account balance on and after January 1, 2002, is equal to the sum of (a), (b), and (c): (a) Your opening account balance, if any, as of January 1, (b) Your pay credit as of December 31 of each subsequent year. If you are an eligible employee (see Part 1) at any time during the year and you are (1) a full-time employee, or (2) a part-time employee and are credited with at least 1,000 hours of service during the year, your pay credit will be a percentage of your pay for that year. The percentage, shown in the following table, is determined on each January 1 and is based on the sum of your age and benefit service on each January 1: Sum of Age and Benefit Service Percentage Factor Up to % % % % Over % If you are a full-time employee and you stop working for us before December 31 of any year, your pay credit for that year will be credited to your account as of the last day of the calendar month in which you stopped working for us. If you are a part-time employee, you have completed 1,000 hours of service and you stop working for us before December 31 of any year, your pay credit for that year will be credited to your account as of the last day of the calendar month in which you stopped working for us. The amount credited to your account will be prorated based on the number of calendar months you worked divided by 12. On and after July 1, 2009, your pay credits were frozen unless you are a bargaining class employee at the Cedar Rapids warehouse location. No additional pay credits will be earned on and after that date. (c) Your interest credit. Your account balance will be credited with interest each year at a rate (not less than 4.5%) set by Federal guidelines for each year. The interest credit will be calculated by multiplying your account balance as of January 1 by the interest rate. The interest credit will be credited to your account balance on December 31 of that year. If you stop working for us before December 31 of any year, you ll be credited with a partial year of interest credit. Your interest credit will be adjusted to reflect any credited period which is less than 12-months long. 6

8 Your earned benefit will be increased should you die or become disabled (as defined in the Plan) while on military duty and you could have returned to work for us at the end of your military service. Your earned benefit won t be less than your earned benefit, if any, under the Plan on December 31, Your earned benefit may be converted to a monthly annuity benefit. The annuity benefit is equal to the actuarial value of your account balance with interest projected to your normal retirement age (see Part 3). Law Limits The law limits the amount of pay that may be used in any calendar year to determine benefits. The limit for 2011 is $245,000. This limit is subject to Internal Revenue Code changes. The law limits the annual benefit that may be paid to you in any year to the lesser of 100% of your average annual pay for the highest three consecutive years or a dollar amount. The dollar limit, which is subject to change each year for cost of living changes, is $195,000 in The limits are adjusted if: You have less than ten years of service or participation. You retire before age 62 or after age 65. The Plan s normal form of benefit provides a death benefit. Your earned benefit may not exceed this limit. Since your earned benefit is stated as a monthly benefit, 1/12th of the applicable limit applies. If you have questions about these limits, you may contact the Client Contact Center at (800) or your local Human Resources Representative. Helpful Terms Benefit service means the following: If you are a full-time employee (other than a bargaining class employee at the Cedar Rapids warehouse location), the sum of your periods of service credited before July 1, A period of service begins when you start working for us. It ends on the earlier of the date you stop working (you quit or are discharged) or the date you are absent from work one year. If you are a part-time employee (other than a bargaining class employee at the Cedar Rapids warehouse location), the sum of your years of service credited before July 1, You have one year for each service period ending on or before July 1, 2009, in which you have 1,000 or more hours of service. 7

9 The following service is not counted: Service before October 27, 1999, if you are an hourly-paid non-bargaining employee who was an employee of The Standard Products Company or any of its then wholly-owned subsidiaries before that date and you did not participate in the Cooper Tire Plan or the Standard Products Plan as of December 31, Service before January 28, 2000, if you were an employee of Fabex, Inc., Formrite Corporation, or any of their then wholly-owned subsidiaries before such date and you did not participate in the Plan on December Service when you are not an eligible employee (see Part 1). Service before a period of breaks in service if your vesting percentage is zero (see Part 4) and your consecutive breaks in service equal or are more than the greater of five years (one year before January 1, 1985) or your earlier benefit service. Unless you are a bargaining class employee at the Cedar Rapids warehouse location, your benefit service was frozen as of July 1, Only service before that date is counted. Break in service means for a full-time employee, a period of service ends and you do not work another hour for us within one year. Break in service means for a part-time employee, you have 500 or fewer hours of service in a service period. Hour of service for a part-time employee, means each hour of paid working time. In addition, we will count up to 501 hours during any one period of paid non-working time, such as paid vacation. Your actual hours of service are not used. Instead, 190 hours of service will be credited for each month in which you have at least one actual hour of service. Pay for any pay year is your total pay for such year including your elective contributions to any of our plans and excluding any contributions we make to a deferred compensation plan income attributable to stock options director fees sales awards relocation bonuses signing bonuses lump-sum severance payments suggestion system awards tuition reimbursements payments on the exercise of stock appreciation rights or in lieu of the exercise of stock options imputed income (such as, but not limited to, group term life insurance coverage that is reportable taxable income benefits accruing or payable under nonqualified plans expatriate income other amounts that are either excludable or deductible from income for federal income tax purposes, or that represent payments according to a program of benefits or deferred compensation whether or not such program is qualified under the Internal Revenue Code 8

10 Elective contributions are salary reduction amounts contributed by an employer at an employee s election to a 401(k) plan, cafeteria plan, simplified employee pension plan, qualified transportation fringe benefit plan, or tax sheltered annuity. Unless you are a bargaining class employee at the Cedar Rapids warehouse location, your pay was frozen as of July 1, All or any part of a pay year ending after that date is excluded. Pay year means a one-year period ending on December 31. Service period means a one-year period ending on December 31. Who Provides Your Earned Benefit Your earned benefit is provided entirely by Cooper contributions to the Plan. Contributions are actuarially determined. The contributions are invested and accumulate to provide benefits under the Plan. Benefits provided by Plan funds are for the exclusive benefit of participants and their beneficiaries. 9

11 PART 3 RETIREMENT BENEFITS The Plan is designed to provide a retirement income for you. The amount you receive each month when you retire is based on your earned benefit. At Normal Retirement Date Your retirement benefit begins on your normal retirement date if you have an earned benefit (see Part 2) and you stop working for us. Normal retirement date means the earliest first day of the month on or after the date you reach age 65. However, if you were age 60 or older when you entered the Plan, you normal retirement age is your age on the date five years after the date you entered the Plan. Your normal retirement age won't be older than your age on the date you complete five years of vesting service (see Part 4). At Early Retirement Date If you choose to retire early, your earned benefit will be less than the amount you could have earned by working until your normal retirement date. You receive your earned benefit reduced by 0.6% for each month or part of a month up to 36 months and 0.4% for each month or part of a month for each additional month up to 84 months your early retirement date is before your normal retirement date. You receive your earned benefit without reduction on your early retirement date if you are a pilot and, as required by Corporate Policy C01-3 (Aircraft Usage, Flight Crew Member Training and Development) your employment is terminated due to having reached age 60, but after the earlier of the date five years after you entered the Plan or the date you complete five years of vesting service. Early retirement date means the first day of any month you choose that is on or after the later of the date you stop working for us or the date you reach early retirement age. Your early retirement age is your age on the earliest of: The date you reach age 62 and you have ten years of vesting service. The date you reach age 55 and have 15 years of vesting service. The date you reach 60 if you are a pilot and, as required by Corporate Policy C01-3 (Aircraft Usage, Flight Crew Member Training and Development) your employment is terminated due to having reached age 60, but after the earlier of the date five years after you entered the Plan or the date you complete five years of vesting service. 10

12 At Disability Retirement Date If you choose to retire on your disability retirement date, your earned benefit will be less than the amount you could have earned by working until normal retirement date. You receive your earned benefit reduced by any disability payments you receive under any state or federal law (other than Social Security). However, no reduction applies if you are receiving a pension due to military service. If your disability benefit payments continue through the first day of the month before your normal retirement date, your earned benefit as of your normal retirement date (before any reductions described above) will be reduced by 1%. Disability benefit payments continue through the first day of the month before the earlier of the date you die or the date you are no longer disabled. Disability retirement date means the first day of any month you choose that is on or after the later of: The date you are an active participant in the Plan and become totally disabled. The date you have ten years of vesting service (see Part 4). You are totally disabled if, as a result of bodily injury or disease, you are prevented from being physically or mentally able to satisfy your job requirements and you have been disabled for five consecutive months (the five-month continuation requirement may be waived if you have a terminal illness). Also, your disability, in the opinion of a physician designated by the Plan Administrator, must result from an unavoidable cause and must be presumed to be permanent and continue for the remainder of your life. Your disability will be deemed to have resulted from an unavoidable cause unless it resulted from the following: your participation in a felonious enterprise, drunkenness or use of narcotics not prescribed by a qualified physician for treatment of a condition, or intentional self-inflicted injury or intentional self-induced sickness At Deferred Vested Retirement Date If you terminate employment after you have earned five years of vesting service (see Part 4) but before your normal retirement date, you may begin receiving a deferred vested retirement benefit beginning on the first day of any month on or after your date of termination. The benefit will be equal to the actuarial equivalent of your base benefit taking into account any early commencement before your normal retirement date. 11

13 At Late Retirement Date Late retirement date means, if you continue working for us after your normal retirement date, the earliest first day of the month on or after the date you stop working for us. You may choose to start benefits on your late retirement date. When you retire late, your earned benefit as of the later of (i) your normal retirement date or (ii) January 1, 2007, is actuarially increased because payments begin at an older age and are expected to continue for a shorter time. The actuarial increase is based on the assumed interest rate and mortality specified in the Plan. Your income won't be less than your earned benefit as of your late retirement date. If you retire after age 70 1/2 your benefit will be increased to take into account the period between the April 1 following the calendar year in which you reach age 70 1/2 and the date your retirement benefits begin. Required Beginning Date Under the law you must begin receiving benefits by your required beginning date. Your required beginning date is the April 1 following the later of the calendar year in which you reach age 70 1/2 or the calendar year in which you stop working for us. Adjustments to Your Benefits The amount you receive will be adjusted if your retirement benefit is not paid under the normal form of benefit. Normal form of benefit means a form that pays you monthly income for life and pays no benefits after your death. Part 6 explains the other forms you may choose. If you have questions about these adjustments, you may contact the Client Contact Center at (800) or your local Human Resources Representative. 12

14 PART 4 BENEFITS FOR INACTIVE PARTICIPANTS Your Vested Benefit Each year as you work for us, you earn a right to a benefit if you stop working for us before retirement. This benefit is called your vested benefit. Your vested benefit is equal to: (1) your earned benefit multiplied by (2) your vesting percentage If you become an inactive participant because you are no longer an eligible employee (see Part 1), but you are still working for us, your service after you become an inactive participant is used to figure your vesting percentage but not your earned benefit. Your vesting percentage will be 100% if you are working for us: On or after the date you reach normal retirement age (see Part 3). Before that date, the following schedule determines your vesting percentage: Before January 1, 2008: Years of Vesting Service Vesting Percentage Less than 5 0% 5 or more 100% On and after January 1, 2008: Years of Vesting Service Vesting Percentage Less than 3 0% 3 or more 100% Vesting service means the following: If you are a full-time employee, the sum of your periods of service. A period of service begins when you start working for us. It ends on the earlier of the date you stop working (you quit or are discharged) or the date you are absent from work one year. If you are a part-time employee, the sum of your years of service. You have one year for each service period in which you have 1,000 or more hours of service. 13

15 A service period is a one-year period ending on December 31. An hour of service is each hour of paid working time. In addition, it includes up to 501 hours during any one period of paid non-working time, such as paid vacation. Your actual hours of service are not used. Instead, 190 hours of service will be credited for each month in which you have at least one actual hour of service. The following service is not counted: Service before October 27, 1999, if you are an hourly-paid non-bargaining employee who was an employee of The Standard Products Company or any of its then wholly-owned subsidiaries before that date and you did not participate in the Cooper Tire Plan or the Standard Products Plan as of December 31, Service before January 28, 2000, if you were an employee of Fabex, Inc., Formrite Corporation, or any of their then wholly-owned subsidiaries before such date and you did not participate in the Plan on December 31, Service before a period of breaks in service if your vesting percentage is zero and your consecutive breaks in service equal or are more than the greater of five years (one year before January 1, 1985) or your earlier vesting service. Break in service if you are a full-time employee means a period of service ends and you do not work another hour for us within one year. Break in service if you are a part-time employee means you have 500 or fewer hours of service in a service period. Federal law delays a break in service for your pregnancy, birth of your child, placement of a child with you by reason of your adoption of such child, or your caring for such child following such birth or placement. When Your Vested Benefit Starts If you become an inactive participant, you will start receiving your vested benefit on your retirement date. Part 3 explains when you may retire and how your vested benefit is adjusted if you retire early or late. The amount you receive will be adjusted if your retirement benefit is not paid under the normal form of benefit. Normal form of benefit means a form that pays you monthly income for life and pays no benefits after your death. Part 6 explains other forms of benefit you may choose when you retire. You may choose to get your vested account balance in a single sum within one year of the date you stop working for us provided you are not eligible to early retire. If you are eligible to early retire you can elect to early retire and elect a single sum payment as the form of distribution. You must make this choice within 180 days of the date payment is to be made. The single sum benefit equals your vested account balance. Your vested account balance is determined by multiplying your account balance by your vesting percentage. 14

16 Instead of a single sum, Federal law requires that you also be given the option to choose to receive an immediate monthly income benefit. The amount of monthly income under the normal form of benefit will be your vested annuity benefit (see Part 2) as of your normal retirement date actuarially reduced. The actuarial reduction is based on the assumed rate of interest and mortality specified in the Plan. If you choose an optional form of benefit other than the normal form, your monthly income will be adjusted for the optional form of benefit chosen. You need to tell us your current address when you wish payments to begin. Federal law may require you to have your spouse's consent for payments to begin and the form of payment you choose to elect. See A Spouse s Rights in Part 8. Before Your Vesting Percentage Is 100% You forfeit (lose the right to) your earned benefit if you stop working for us when your vesting percentage is zero. We will restore this forfeited amount if you come back to work as an eligible employee (see Part 1) before the end of the first period of five consecutive one-year breaks in service beginning after you stop working for us. 15

17 PART 5 DEATH BENEFITS BEFORE RETIREMENT The primary purpose of the Plan is to provide income for you during your retirement years. However, if you die before you retire, a death benefit may be payable to your spouse or beneficiary. A Spouse's Benefit A death benefit is paid to your spouse if these requirements are met: You die before retirement benefits start. You are married. Your vesting percentage is greater than zero (see Part 4). Spouse means the person to whom you are married on the date of your death. If there is an eligible spouse, your spouse may receive the single sum death benefit described below, or a single life annuity for the life of your spouse. The annuity is the actuarial equivalent of your account balance on the last day of the month in which you die. Your spouse may choose to begin receiving this benefit on the first day of any month after your death, but no later than the first day of the month after you would have attained your normal retirement age. If your spouse chooses to begin benefits on a date earlier than your normal retirement age, as defined in the plan, the benefit will be actuarially reduced. If your spouse chooses to begin benefits on a date that is later than your normal retirement age, the benefit will be actuarially increased. However, benefits must begin by the date you would have been age 70 1/2. The surviving spouse's benefit won't be less than the monthly income that can be provided by the single sum death benefit described below. If your spouse dies before benefits start, the single sum death benefit will be paid to your spouse's beneficiary. If the value of the spouse's death benefit is $5,000 or less, such value will be paid to your spouse in a single sum in place of the monthly income. Single Sum Death Benefit A single sum death benefit is payable when you die. It equals your vested account balance. Your vested account balance as of the date you die is determined by multiplying your account balance by your vesting percentage on such date. If a spouse's benefit is payable, the single sum death benefit described in this section is used to provide the spouse's benefit. The spouse must elect to receive this benefit on or before the one-year anniversary of the last day of the month in which you died. If a spouse s benefit is not payable, the single sum death benefit is payable to your beneficiary. No interest credits (see Part 2) are credited to your account balance after the one-year anniversary of the last day of the month in which you died. 16

18 You and your spouse may choose not to have the single sum death benefit used to provide a minimum spouse's benefit. If you make this choice, the single sum death benefit will be paid to your beneficiary. The spouse's benefit will be reduced by the amount of benefit the single sum death benefit could have provided. See A Spouse s Rights in Part 8. 17

19 PART 6 HOW THE PLAN PAYS BENEFITS You make an important choice when you decide how to receive your retirement benefit. Things to consider include the money you will need every month, any death benefits you want to provide, and your tax situation. If the value of your retirement benefit is more than $5,000, you may choose to have your retirement benefit paid under any of the optional forms available under the Plan. Your tax advisor can help you make your choice. The amount of the payments will depend on the amount of your retirement benefit, your age, and the optional form chosen. If the option provides a monthly income for the life of someone who survives you, the amount of the payments will also depend on the age of your survivor. If the value of your retirement benefit is $5,000 or less, such value will be paid to you in a single sum. There is no choice to be made. Federal law requires the Plan to automatically roll the value of your retirement benefit to an IRA in a direct rollover (see Part 8) if: such value is more than $1,000, and you have not reached normal retirement age (see Part 3), and you do not elect to have such value paid to you in a single sum or rolled to another retirement plan or an IRA of your choice in a direct rollover For more information regarding the designated IRA for automatic rollovers see Part 9. Choosing at Retirement If the value of your retirement benefit is more than $5,000, you may choose from the forms of benefit described in Forms to Choose below. Your choice must be made within 180 days of the date benefits begin. Federal rules may limit the forms available to you. You may need your spouse s consent to choose a form of benefit. See A Spouse s Rights in Part 8. You may change or cancel your choice at any time before benefits start. If you don't choose a form or your spouse revokes consent (if consent is needed), your retirement benefits are paid as follows: If you are married, retirement benefits are paid to you monthly for life. After your death, 50% of your monthly benefit is paid to your spouse for as long as your spouse lives. If you are single, retirement benefits are paid to you monthly for life. No benefits are payable after your death. Once benefits begin, the form of payment cannot be changed. Choosing Pre-retirement Death Benefits You may name your beneficiary for any single sum death benefit. You may also choose to have the single sum benefit paid in another form. You may change or cancel a choice at any time by notifying the Plan Administrator in writing. 18

20 If you name a beneficiary but do not choose a form of payment, your beneficiary may choose the form. Your spouse may choose to have the spouse's benefit described in Part 5 paid in another form. If the value of the spouse's benefit is $5,000 or less, such value will be paid to your spouse in a single sum. There is no choice to be made. The optional forms of death benefit are a single sum payment and any of the annuity options that are available to you at retirement other than a monthly income that continues for the life of a survivor upon death. Because of Federal rules regarding when death benefits must begin and how death benefits can be paid, your spouse or beneficiary should contact the Client Contact Center at (800) or the local Human Resources Representative to determine what options are available and when elections must be made. Any choice of the form of payment by your spouse or beneficiary must be made before benefits begin. Forms to Choose Certain forms may not be available to you if the Plan s funding percentage is below a certain amount. The Plan Administrator will let you now if any certain forms are not available when it s time to choose your retirement benefits. The Plan offers the following optional forms of benefit: Annuity Options A Single Life Annuity. A monthly benefit to you for life. No benefits are payable after your death. A Single Life Annuity with a Certain Period of 5 Years. A monthly benefit to you for life. If you die before the end of 5 years, payments continue to your beneficiary until that 5-year period ends. If both you and your beneficiary die before the end of the 5-year period, the balance of these payments will go to the estate of the last to die. 50% or 75% Survivorship. A monthly benefit to you for life. You choose a percentage (50% or 75%) of your monthly income to continue for the lifetime of your spouse. 50% Survivorship with a Certain Period of 5 Years. A monthly benefit to you for life. If you die before the end of 5 years, payments continue to your spouse. At the end of the 5-year period, 50% of your monthly income will continue for the lifetime of your spouse. If both you and your spouse die before the end of the 5-year period, the balance of these payments will go to the estate of the last to die. Other Options A single sum payment. You must elect this form within one year of the date you stop working for Cooper. Once benefit payments begin, the form of payment cannot be changed. 19

21 Tax Considerations Benefits you receive are normally subject to income taxes. You may be able to postpone or reduce the taxes that would otherwise be due. In addition, benefits you receive before age 59 1/2 may be subject to a 10% penalty tax. Additional information can be found in the Special Tax Notice form. 20

22 PART 7 GRANDFATHERED BENEFITS Grandfathered Participants in Cooper Tire Plan before January 1, 2002 If the provisions described in this Part 7 are different from the provisions described in the other parts of this booklet, these provisions will apply instead, but only if you were a participant in the Cooper Tire Plan before January 1, 2002, who was at least age 40 and had 15 or more years of service as of December 31, C1 - YOUR EARNED BENEFIT Calculating Your Earned Benefit This formula is used to calculate your earned benefit: The greater of: (1) 1.5% of your average monthly pay multiplied by your benefit service (2) $20.00 multiplied by your benefit service If you have 30 or more years of vesting service (see part 4) when you retire and you are immediately eligible for either a reduced or unreduced benefit under Social Security, your earned benefit at retirement date plus your primary insurance amount from Social Security won t be more than 90% of your average monthly pay. If you have less than 30 years of vesting service when you retire and you are immediately eligible for either a reduced or unreduced benefit under Social Security, the 90% limit referred to above is reduced by 1/30 for each complete year and month your vesting service is less than 30 years. On and after July 1, 2009, your earned benefit is frozen and no additional benefit will be earned. Helpful Terms Average monthly pay is the average of your monthly pay for the five pay years out of the ten latest pay years which give the highest average. As of July 1, 2009, your average monthly pay was frozen. All or any part of a pay year ending after July 1, 2009 is excluded. Pay years in which you stop working for us on a date other than December 31 are excluded. Pay years in which you have not earned an hour of service are excluded. Monthly pay for any pay year is 1/12th of your total pay for such year including signing bonuses and lump-sum severance payments. 21

23 C2 RETIREMENT BENEFITS At Early Retirement Date If you choose to retire early, your earned benefit will be less than the amount you could have earned by working until normal retirement date. You receive your earned benefit reduced by.4% for each month or part of a month your early retirement date is before the date you reach age 62. You receive your earned benefit without reduction if your early retirement date is on or after you meet one of the following requirements: the date you reach age 62 and have ten years of vesting service the date you reach age 55 and have 30 years of vesting service you are a pilot and, as required by Corporate Policy CO1-3, your employment is terminated because you have reached age 60, but after the earlier of (i) the date five years after you entered the Plan or (ii) the date you have five years of vesting service Early retirement date means the first day of any month you choose that is on or after the later of the date you stop working for us or the date you reach early retirement age. Your early retirement age is your age on the later of: The date you reach age 55. The date you have 15 years of vesting service. C3 BENEFITS FOR INACTIVE PARTICIPANTS When Your Vested Benefit Starts If you become an inactive participant, you will start receiving your vested benefit on your retirement date. Part 3 Retirement Benefits explains when you may retire and how your vested benefit is adjusted if you retire early. C4 DEATH BENEFITS BEFORE RETIREMENT A Spouse s Benefit A death benefit will be paid to your spouse if these requirements are met: You die before retirement benefits start. You were married for the full year before your death. Your vesting percentage is greater than zero (see Part 4). 22

24 The death benefit equals the survivor s benefit under a 50% survivor form. The benefit is payable to your spouse as of the earliest date you could have retired on or after the date of your death. This will be your normal retirement date if you die before your normal retirement date and would not have reached early retirement age (see Part 3) before that date. If you were still working for us on the date of your death, the earliest date you could have retired will be determined as if you had stopped working for us on the date of your death and survived to retire. This date will be the earliest first day of the month on or after the date of your death if you die on or after your normal retirement date or you had reached early retirement age on the date of your death. The amount of the benefit is based on your vested benefit when you die. If you are not working for us then, it is based on your vested benefit when you stopped working for us. If the earliest date you could have retired is before your normal retirement date, your vested benefit is adjusted for early retirement as explained in Part 3. Your vested benefit is also adjusted for the 50% survivor form. One-half of this reduced amount is payable to your spouse monthly for life. (If you re eligible to retire and have elected a survivorship form for your spouse with a different percentage, that survivorship form will be used to determine the death benefit payable to your spouse if you die before your normal retirement date. Your election must be a valid election and the survivorship form you have elected must be as valuable as the survivor form that would otherwise be used and have a survivorship percentage of at least 50%.) There is no single sum death benefit payable under this Part 7. C5 HOW THE PLAN PAYS BENEFITS Forms to Choose Under this Part 7, the Plan offers the following forms of benefit: Annuity Options A Single Life Annuity. A monthly benefit to you for life. No benefits are payable after your death. A Single Life Annuity with a Certain Period of 5 Years. A monthly benefit to you for life. If you die before the end of 5 years, payments continue to your beneficiary until that 5-year period ends. 50% or 75% Survivorship. A monthly benefit to you for life. You choose a percentage (50% or 75%) of your monthly income to continue for the lifetime of your spouse. 50% Survivorship with a Certain Period of 5 Years. A monthly income to you for life. If you die before the end of 5 years, payments continue to your spouse. At the end of the 5-year period, 50% of your monthly income will continue for the lifetime of your spouse. Other Options A single sum payment is payable on or after you reach normal retirement age. Once benefit payments begin, the form of payment cannot be changed. If you are married and you don t choose a survivorship form of benefit or your spouse revokes consent (if consent is needed), your retirement benefits are paid to you monthly for life. After your 23

25 death 50% of your monthly benefit is paid to your spouse for as long as your spouse lives. This is the automatic form of benefit. However, if your benefits are being paid under the automatic form and you die before you are married for one year prior to your death, no benefit is payable to your spouse. 24

26 Grandfathered Participants in Standard Products Plan before January 1, 2002 If the provisions described in this Part 7 are different from the provisions described in the other parts of this booklet, these provisions will apply instead, but only if you were a participant in the Standard Products Plan before January 1, 2002, who was at least age 40 and had 15 or more years of service as of December 31, S1 - YOUR EARNED BENEFIT Calculating Your Earned Benefit This formula is used to calculate your earned benefit if you were an employee on June 30, 1976: The greatest of: (1) The percentage of your average monthly pay based on your years of benefit service at retirement in the table below multiplied by your earned benefit percentage: BENEFIT SERVICE AT RETIREMENT PERCENTAGE OF AVERAGE MONTHLY PAY 25 or more 40.00% 24 but less than % 23 but less than % 22 but less than % 21 but less than % 20 but less than % 19 but less than % 18 but less than % 17 but less than % 16 but less than % 15 but less than % 14 but less than % 13 but less than % 12 but less than % 11 but less than % 10 but less than % 9 but less than % 8 but less than % 7 but less than % 6 but less than % 5 but less than % 4 but less than % 3 but less than % 2 but less than % 1 but less than % (2) 1 1/15% of your average monthly pay not over your Social Security base plus 1 2/3% of your average monthly pay over your Social Security base multiplied by your benefit service but not more than 30 years (3) $30.00 multiplied by your benefit service 25

27 This formula is used to calculate your earned benefit if you were first employed July 1, 1976 and later: The greater of: (1) 1 1/15% of your average monthly pay not over your Social Security base plus 1 2/3% of your average monthly pay over your Social Security base multiplied by your benefit service but not more than 30 years (2) $30.00 multiplied by your benefit service Your earned benefit will be reduced by any benefits paid to you or on your behalf under any plan of a foreign subsidiary or affiliate or any other plan to which we contribute that is based on the same period of benefit service under this Plan any monthly annuity to which you are or were entitled under Group Policy No. GP 186 effective December 1, 1944 any benefit payable to you under any unemployment compensation law, workmen s compensation law or occupational disease law of the United States, except for fixed statutory payments for loss of any bodily member With respect to (1) or (2) on the prior page, if you were ever a participant in another plan of ours, your earned benefit may be increased if total service taken into account under all plans of ours will be more than 35 years. If you have questions about these adjustments, you may contact the Client Contact Center at (800) or your local Human Resources Representative. On and after July 1, 2009, your earned benefit is frozen and no additional benefit will be earned. Helpful Terms Average monthly pay is 1/60th of the total of your monthly pay for the 60 highest consecutive calendar months out of the last 120 calendar months ending on your termination date. As of July 1, 2009, your average monthly pay was frozen. Benefit service means the sum of the following: The greater of (1) or (2): (1) The sum of the service you earned for each service period ending on or after July 1, 1976 according to the following schedule: Hours of Service in a Service Period Benefit Service 1,750 or more 1.0 year 1,601 but les than 1, ,451 but less than 1,

28 1,301 but less than 1, ,151 but less than 1, ,000 but less than 1,151.5 Less than 1, For any service period your earn 1,000 or more hours of service and you are an eligible employee (see Part 1) and in some other capacity, you will receive a partial year of benefit service based on the ratio (not more than 1) of your hours of service as an eligible employee to 1,750. If you are employed for only part of a service period, you will receive a partial year of benefit service based on your actual hours of service divided by 1,750. (2) Benefit service for a full-time employee. Your service with us before July 1, 1976, determined under the provisions of the Plan on the day before that date. The following service is not counted: Service before July 1, 1994 for an employee of Oliver Rubber Company. (This service will not be excluded in determining if you ve met the service requirement for early retirement date or disability benefits.) Service before January 26, 1993 for an employee of The 5 Rubber Corporation. Service before May 1, 1989 for an employee of Holm Industries, Inc. Service before August 1, 1992 for an employee of Jarrow Products, Inc. Service before September 1, 1990 for an employee of Pantasote, Inc. Service when you are not an eligible employee (see Part 1) Service before a period of breaks in service if your vesting percentage is zero (see Part 4) and your consecutive breaks in service equal or are more than the greater of five years (one year before January 1, 1985) or your earlier benefit service. As of July 1, 2009, your benefit service is frozen. Only service before that date is counted. Break in service means you have 500 or fewer hours of service in a service period. Earned benefit percentage is the percentage of the benefit you have earned. It equals your benefit service divided by the benefit service you expect to have a normal retirement age (see Part 3). The percentage won t be more than 100%. Hour of service means each hour of paid working time. In addition, we will count up to 501 hours during any one period of paid non-working time, such as paid vacation. Your actual hours of service are not used. Instead, 190 hours of service will be credited for each month in which you have at least one actual hour of service. Monthly pay for any calendar month is your total pay for such month. 27

29 Service period means a one-year period ending on December 31. Social Security base means 1/12th of the average of the Social Security taxable wage bases that have applied for the 35-year period ending on the last day of the calendar year in which you reach Social Security retirement age. You reach Social Security retirement age on (i) your 65th birthday, if you were born before January 1, 1938; (ii) your 66th birthday, if you were born after December 31, 1937 and before January 1, 1955; and (iii) your 67th birthday, if you were born after December 31, The taxable wage base for 2011 is $106,800. In calculating your Social Security base for any Plan year, the taxable wage base in effect for the current and any later Plan year is assumed to be the same as the taxable wage base in effect at the beginning of the Plan year in which the calculation is being made. Your Social Security base for any Plan year before the 35-year period is the taxable wage base in effect at the beginning of that Plan year. Your Social Security base for any Plan year after the 35-year period is your Social Security base determined for the Plan year in which the 35-year period ends. The average varies based on your age. The younger you are, the higher the average. If you have questions about the current amount, you may contact the Client Contact Center at (800) or your local Human Resources Representative. S2 RETIREMENT BENEFITS At Early Retirement Date If you choose to retire early, your earned benefit will be less than the amount you could have earned by working until normal retirement date. You receive your earned benefit actuarially reduced because payments begin at a younger age and are expected to continue longer. The actuarial reduction is based on the assumed interest rate and mortality specified in the Plan. If your early retirement date is on or after you reach age 62, your benefit at early retirement will not be less than $10 multiplied by your full years of benefit service as defined in this Part 7. Early retirement date means the first day of any month you choose that is on or after the later of the date you stop working for us or the date you reach early retirement age. Your early retirement age is your age on the later of: The date you reach age 55. The date you have ten years of benefit service. S3 BENEFITS FOR INACTIVE PARTICIPANTS Your Vested Benefit Vesting service means the sum of the following: 28