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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Goodrich Corporation
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1. Elect eleven Directors to hold office until the next Annual Meeting of Shareholders and until their respective successors are elected and qualified. | |
2. Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year 2006. | |
3. Transact such other business as may properly come before the meeting. |
By Order of the Board of Directors | |
Sally L. Geib | |
Secretary |
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DIANE C. CREEL, age 57 — Director since December 22, 1997. Chairman, Chief Executive Officer and President, Ecovation, Inc.,a wastewater management systems company. Ms. Creel has a B.A. and M.A. from the University of South Carolina. Ms. Creel joined Ecovation, Inc. as Chairman, Chief Executive Officer and President in May 2003. Prior to joining Ecovation, Ms. Creel served as Chief Executive Officer and President of Earth Tech from January 1993 to May 2003, Chief Operating Officer from 1987 to 1993 and Vice President from 1984 to 1987. Ms. Creel was director of business development and communications for CH2M Hill from 1978 to 1984, manager of communications for Caudill Rowlett Scot, Houston, Texas from 1976 to 1978, and director of public relations for LBC&W, Architects-Engineers-Planners, Columbia, South Carolina from 1971 to 1976. Ms. Creel currently serves on the boards of directors of Foster Wheeler, Inc., Allegheny Technologies and the corporations and trusts which comprise the Fixed Income Fund of the American Funds Group of Capitol Management Corporation. | ||
GEORGE A. DAVIDSON, JR., age 67 — Director since April 15, 1991. Retired Chairman, Dominion Resources, Inc.,a natural gas and electric power holding company. Mr. Davidson is a graduate of the University of Pittsburgh with a degree in petroleum engineering. Effective January 2000, Dominion Resources and Consolidated Natural Gas Company merged. He has been associated with Consolidated Natural Gas since 1966. He became Vice Chairman of Consolidated Natural Gas in October 1985 and served in that position until January 1987, when he assumed the additional responsibility of Chief Operating Officer. In May 1987 Mr. Davidson became Chairman and Chief Executive Officer and served in that capacity until becoming Chairman of Dominion Resources, Inc. in January 2000. He retired from that position in August 2000. Mr. Davidson is a director of Dominion Resources, Inc. and PNC Financial Services Group, Inc. Mr. Davidson is a director and Chairman of the Pittsburgh Foundation, Past Chairman of the Board of The Pittsburgh Cultural Trust, Chairman Emeritus of the Pittsburgh Civic Light Opera Board and Past Chairman of the American Gas Association. Mr. Davidson is a trustee of the University of Pittsburgh, chairs the Board of Visitors of the Katz Graduate School of Business and is Vice Chair of the Board of Visitors of the School of Engineering, and serves on the board of the Sewickley Valley Hospital Foundation. | ||
HARRIS E. DELOACH, JR., age 61 — Director since April 17, 2001. Chairman, President and Chief Executive Officer, Sonoco Products Company,a worldwide, vertically integrated packaging company. Mr. DeLoach holds a bachelor of arts degree in business administration and a juris doctor degree from the University of South Carolina. Mr. DeLoach was named President and Chief Executive Officer of Sonoco Products Company in July 2000 and Chairman in April 2005. Previously, he was Senior Executive Vice President and Chief Operating Officer from 1999 to 2000, Executive Vice President from 1996 to 1999 and Group Vice President from 1993 to 1996. He joined Sonoco in 1985. Mr. DeLoach is a director of Sonoco Products Company. He also serves as Chairman of the Byerly Foundation, as Chairman of the University of South Carolina Business Partnership Foundation, as President of the Board of Directors of the South Carolina Governor’s School for Science and Mathematics Foundation, as Chairman of the Palmetto Business Forum and as Chair-Elect of the South Carolina Chamber of Commerce. |
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JAMES W. GRIFFITH, age 52 — Director since July 15, 2002. President and Chief Executive Officer, The Timken Company,an international manufacturer of highly engineered bearings, alloy and specialty steel and components. Mr. Griffith earned his B.S. in industrial engineering and his M.B.A. from Stanford University. He joined The Timken Company in 1984. From 1984 to 1999 he held a wide range of positions in several areas of the company, including international operations and strategic management. He was elected President and Chief Operating Officer in 1999 and President and Chief Executive Officer in July 2002. Mr. Griffith is a director of The Timken Company, is on the Executive Committee and Board of Directors of the National Association of Manufacturers and is a member of the Board of Trustees of Mount Union College. | ||
WILLIAM R. HOLLAND, age 67 — Director since July 12, 1999. Retired Chairman, United Dominion Industries,a diversified manufacturing company that was acquired by SPX Corporation in May 2001. Mr. Holland has bachelor of art and juris doctor degrees from the University of Denver. He joined United Dominion in 1973 as Vice President and General Counsel. He held various executive positions with United Dominion, including Chief Executive Officer from 1986 to 2000 and Chairman from 1987 to 2001. Mr. Holland is Chairman and a director of EnPro Industries, Inc. and a director of Lance Inc. He is a director of Cook & Boardman, Inc. and Crowder Construction Company, a director of the Carolinas Healthcare System Foundation, Charlotte, North Carolina, a corporate member of the Jupiter, Florida Medical Center and a member of the Advisory Board of the Walker School of Business, Appalachian State University, Boone, North Carolina. | ||
JOHN P. JUMPER, age 60 — Director since December 5, 2005. Retired Chief of Staff, United States Air Force.Mr. Jumper retired from the United States Air Force in 2005 after a distinguished 39-year military career. In his last position as Chief of Staff he served as the senior military officer in the Air Force leading more than 700,000 military, civilian, Air National Guard and Air Force Reserve men and women. In that position he administered annual budgets in excess of $100 billion. As Chief of Staff he was a member of the Joint Chiefs of Staff providing military advice to the Secretary of Defense, the National Security Council and the President. From 2000 — 2001 Mr. Jumper served as Commander, Air Combat Command. During the 1999 war in Kosovo and Serbia he commanded U.S. Air Forces in Europe and Allied Air Forces Central Europe. In earlier assignments he served on the Joint Staff and as Senior Military Assistant to Secretary of Defense Dick Cheney and Secretary Les Aspin. He also commanded an F-16 fighter squadron and two fighter wings, accumulating more than 5,000 flying hours including more than 1,400 combat hours in Vietnam and Iraq. Mr. Jumper holds a degree in electrical engineering from the Virginia Military Institute and an M.B.A. from Golden Gate University in San Francisco. He currently serves on the Board of Directors of Rolls-Royce North America Holdings, Inc. as well as on the non-profit Boards of the Air Force Association and the Air Force Village Charitable Foundation. |
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MARSHALL O. LARSEN, age 57 — Director since April 16, 2002. Chairman, President and Chief Executive Officer, Goodrich Corporation.Mr. Larsen received a B.S. in Engineering from the U.S. Military Academy and an M.S. in industrial management from the Krannert Graduate School of Management at Purdue University. He joined Goodrich in 1977 as an Operations Analyst. In 1981, he became Director of Planning and Analysis and subsequently Director of Product Marketing. In 1986, he became Assistant to the President and later served as General Manager of several divisions of Goodrich’s aerospace business. He was elected a Vice President of Goodrich and named a Group Vice President of Goodrich Aerospace in 1994 and was elected an Executive Vice President of Goodrich and President and Chief Operating Officer of Goodrich Aerospace in 1995. He was elected President and Chief Operating Officer of Goodrich in February 2002, Chief Executive Officer in April 2003 and Chairman in October 2003. Mr. Larsen is a member of the Board of Governors of the Aerospace Industries Association and the Business Roundtable and is a director of Lowe’s Companies, Inc. He is active in numerous community activities. | ||
DOUGLAS E. OLESEN, age 67 — Director since October 1, 1996. Retired President and Chief Executive Officer, Battelle Memorial Institute,a worldwide technology organization, working for government and industry. Dr. Olesen earned his B.S., M.S. and Ph.D. degrees in civil engineering at the University of Washington. In 1963 Dr. Olesen joined Boeing Aircraft Company as a Research Engineer and assisted in developing and testing closed life-support systems for long-term space missions. He joined Battelle Memorial Institute, Northwest Labs, in Richland, Washington in 1967 and served in a series of management positions. Dr. Olesen was named Vice President and Director of the Northwest Division in 1979. In 1984 he became Executive Vice President and Chief Operating Officer of the Battelle Memorial Institute in Columbus, Ohio. In 1987 he was elected President and Chief Executive Officer and in October 2001 he retired. He is a director of Zivena, Inc. | ||
ALFRED M. RANKIN, JR., age 64 — Director since April 18, 1988. Chairman, President and Chief Executive Officer, NACCO Industries, Inc.,an operating holding company with interests in the mining and marketing of lignite, manufacturing and marketing of forklift trucks, and the manufacturing and marketing of small household electric appliances. Mr. Rankin holds a bachelor of arts degree in economics from Yale University, and a juris doctor degree from the Yale Law School. He joined NACCO Industries in February 1989 as President and Chief Operating Officer and became President and Chief Executive Officer in May 1991. He assumed the additional title of Chairman in May 1994. Previously, Mr. Rankin served in a number of management positions with Eaton Corporation, with the most recent being Vice Chairman and Chief Operating Officer from April 1986 to February 1989. He is a director of NACCO Industries, Inc., NMHG Holding Co. and The Vanguard Group. He is a trustee of The Greater Cleveland Partnership, the Cleveland Museum of Art, the Musical Arts Association and University Hospitals of Cleveland. |
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JAMES R. WILSON, age 65 — Director since December 22, 1997. Retired Chairman of the Board, President and Chief Executive Officer, Cordant Technologies Inc.,a leading producer of solid propellant rocket motors, high performance fasteners used in commercial aircraft and industrial applications and components for aircraft and industrial gas turbine engines. Mr. Wilson holds a B.A. degree from the College of Wooster and an M.B.A. degree from Harvard University. Mr. Wilson assumed the position of Chairman of Cordant in October 1995 and the position of President and Chief Executive Officer in October 1993, and retired in June 2000. Mr. Wilson joined Cordant in July 1989 as Vice President and Chief Financial Officer and was named Executive Vice President in October 1992. He is also a director of Cooper Industries, Ltd. and serves as Chairman of the Board of Trustees of the College of Wooster, Wooster, Ohio. | ||
A. THOMAS YOUNG, age 67 — Director since April 17, 1995. Retired Executive Vice President, Lockheed Martin Corporation,an aerospace and defense company. Mr. Young is a graduate of the University of Virginia with bachelor degrees in aeronautical engineering and mechanical engineering, and of the Massachusetts Institute of Technology with a master’s degree in management. Mr. Young was with the National Aeronautics and Space Administration from 1961 to 1982, serving in a number of management positions including Mission Director of the Project Viking Mars landing program and Director of the Goddard Space Flight Center. In 1982 he joined Martin Marietta as Vice President of Aerospace Research and Engineering, and later became Senior Vice President and President of Martin Marietta Electronics & Missiles Group and Executive Vice President. He became President and Chief Operating Officer in January 1990, Executive Vice President of Lockheed Martin Corporation in March 1995 and retired in July of that year. Mr. Young is a director of Science Applications Informational Corp. Mr. Young is also a Fellow of the American Astronautical Society, the American Institute of Aeronautics and Astronautics and the Royal Aeronautical Society and a member of the National Academy of Engineering. |
• | the name, age, and principal occupation or employment of each proposed nominee and a brief description of any arrangement or understanding between the nominee and others relating to why he or she was selected as a nominee, in addition to any other information required by the SEC’s proxy regulations; | |
• | the proposed nominee’s written consent to serve as a director if elected; |
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• | the name and address of the shareholder proposing the nominee as well as any other shareholders believed to be supporting such nominee; and | |
• | the number of shares of each class of Goodrich stock owned by such shareholders. |
2005 | 2004 | |||||||
(In millions) | ||||||||
Audit Fees | $ | 6.95 | $ | 5.70 | ||||
Audit-Related Fees | 0.24 | 0.28 | ||||||
Tax Fees | 0.00 | 0.19 | ||||||
All Other Fees | 0.02 | 0.06 | ||||||
Total Fees | $ | 7.21 | $ | 6.23 |
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Financial | ||||||||||||||||||||
Executive | Audit Review | Compensation | Committee on | Policy | ||||||||||||||||
Committee | Committee | Committee | Governance | Committee | ||||||||||||||||
Diane C. Creel | X | X | ||||||||||||||||||
George A. Davidson, Jr. | X | X | ||||||||||||||||||
Harris E. DeLoach, Jr. | X | Chair | X | |||||||||||||||||
James W. Griffith | X | X | ||||||||||||||||||
William R. Holland | X | Chair | ||||||||||||||||||
John P. Jumper | X | X | ||||||||||||||||||
Marshall O. Larsen | Chair | |||||||||||||||||||
Douglas E. Olesen | X | X | ||||||||||||||||||
Alfred M. Rankin, Jr. | X | X | Chair | |||||||||||||||||
James R. Wilson | Chair | X | ||||||||||||||||||
A. Thomas Young | X | X | ||||||||||||||||||
Number of Meetings in 2005 | 0 | 9 | 4 | 4 | 4 |
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• | Candidates should possess broad training and experience at the policy-making level in business, government, education, technology or philanthropy. | |
• | Candidates should possess expertise that is useful to us and complementary to the background and experience of other Board members, so that an optimum balance in Board membership can be achieved and maintained. | |
• | Candidates should be of the highest integrity, possess strength of character and the mature judgment essential to effective decision-making. | |
• | Candidates should be willing to devote the required amount of time to the work of the Board and one or more of its committees. Candidates should be willing to serve on the Board over a period of several years to allow for the development of sound knowledge of our company and its principal operations. | |
• | Candidates should be without any significant conflict of interest or legal impediment with regard to service on the Board. |
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Board and | Annual | |||||||||||||||
Committee | Phantom | |||||||||||||||
Annual | Meeting | Share | ||||||||||||||
Name | Retainer ($) | Fees ($) | Award ($) | Total ($) | ||||||||||||
Diane C. Creel | 50,000 | 21,000 | 60,000 | 131,000 | ||||||||||||
George A. Davidson, Jr. | 50,000 | 28,500 | 60,000 | 138,500 | ||||||||||||
Harris E. DeLoach, Jr. | 50,000 | 48,000 | 60,000 | 158,000 | ||||||||||||
James J. Glasser(1) | 16,667 | 6,000 | 60,000 | 82,667 | ||||||||||||
James W. Griffith | 50,000 | 31,500 | 60,000 | 141,500 | ||||||||||||
William R. Holland | 50,000 | 32,500 | 60,000 | 142,500 | ||||||||||||
John P. Jumper(2) | 4,167 | 1,500 | 0 | 5,667 | ||||||||||||
Douglas E. Olesen | 50,000 | 36,000 | 60,000 | 146,000 | ||||||||||||
Alfred M. Rankin, Jr. | 50,000 | 46,000 | 60,000 | 156,000 | ||||||||||||
James R. Wilson | 50,000 | 37,000 | 60,000 | 147,000 | ||||||||||||
A. Thomas Young | 50,000 | 27,000 | 60,000 | 137,000 |
(1) | Mr. Glasser retired from the Board of Directors on April 19, 2005. |
(2) | Mr. Jumper was elected to the Board of Directors on December 5, 2005. |
Annual Retainer and Meeting Fees |
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Outside Director Deferral Plan |
Outside Director Phantom Share Plan |
Directors’ Retirement Income Plan |
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Other |
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The Audit Review Committee | |
Harris E. DeLoach, Jr., Chair | |
James W. Griffith | |
John P. Jumper | |
Douglas E. Olesen | |
Alfred M. Rankin, Jr. | |
A. Thomas Young |
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• | A significant portion of pay will be dependent on the Company’s annual and long-term performance including growth in shareholder value. | |
• | Compensation will include stock-based programs in order to link shareholder and executive interests and to encourage stock ownership by executives. | |
• | The Company intends to provide total compensation commensurate with performance, with good performance resulting in superior compensation and poor performance resulting in below average compensation, compared to other companies. |
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Other | ||||||||||||||||
Executive | ||||||||||||||||
Officers | ||||||||||||||||
Chief | and | Business | ||||||||||||||
Executive | Company | General | Unit | |||||||||||||
Measures | Officer | Staff | Managers | Staff* | ||||||||||||
Company Adjusted EBIT | 42.5 | % | 40.0 | % | 20.0 | % | 10.0 | % | ||||||||
Company Free Cash Flow | 42.5 | % | 40.0 | % | 20.0 | % | 10.0 | % | ||||||||
Business Unit Adjusted EBIT | 20.0 | % | 30.0 | % | ||||||||||||
Business Unit Operating Cash Flow | 20.0 | % | 30.0 | % | ||||||||||||
Individual and Team Goals | 15.0 | % | 20.0 | % | 20.0 | % | 20.0 | % |
* | Several business units use a weighting formula which varies somewhat from the weighting formula set forth in the table above. |
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1. For the Company’s senior management, the long-term incentive value opportunity is divided such that 40% is in restricted stock units, 30% in stock options and 30% in performance units. Restricted stock units are granted annually as long as the Company achieves an Adjusted ROIC at or above a target level for the previous year. Restricted stock units, once granted, vest at the rate of 50% after three years, 25% after four years and the balance after five years from the date of grant. If a participant’s employment with the Company terminates prior to vesting for any reason other than death or disability or at a time when the participant is not eligible for retirement under our pension plans, the unvested restricted stock units will be forfeited. | |
2. For the Company’s management level below senior management, the long-term incentive value opportunity is divided such that 70% is in restricted stock units and 30% is in stock options. The condition for granting restricted stock units and the vesting and forfeiture terms of the restricted stock units are the same as those applicable to restricted stock units issued to senior management. | |
3. Certain other key employees who had previously received grants of stock options generally receive only restricted stock units as their long-term incentive compensation. Grants of restricted stock units to participants who do not receive a grant of stock options will not be subject to the Adjusted ROIC condition, but will be subject to the same terms regarding vesting and forfeiture. |
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Performance Units |
Stock Options |
Restricted Stock Units |
Restricted Stock |
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The Compensation Committee | |
James R. Wilson, Chair | |
Diane C. Creel | |
George A. Davidson, Jr. | |
James W. Griffith |
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Amount and | ||||||||
Nature | ||||||||
of Beneficial | Percent of | |||||||
Name of Beneficial Owner | Ownership(1)(2)(3) | Class(4) | ||||||
John J. Carmola | 125,570 | * | ||||||
Diane C. Creel | 7,030 | * | ||||||
George A. Davidson, Jr. | 11,571 | * | ||||||
Harris E. DeLoach, Jr. | 17,046 | * | ||||||
Cynthia M. Egnotovich | 104,648 | * | ||||||
James W. Griffith | 2,713 | * | ||||||
John J. Grisik | 254,204 | * | ||||||
William R. Holland | 10,747 | * | ||||||
John P. Jumper | 0 | * | ||||||
Marshall O. Larsen | 680,188 | * | ||||||
Terrence G. Linnert | 241,276 | * | ||||||
Douglas E. Olesen | 14,865 | * | ||||||
Alfred M. Rankin, Jr. | 9,788 | * | ||||||
James R. Wilson | 23,336 | * | ||||||
A. Thomas Young | 21,659 | * | ||||||
Directors and executive officers as a Group (20) | 1,904,741 | 1.5 | % |
* | Less than 1%. |
(1) | Includes the approximate number of shares of Common Stock credited to the individuals’ accounts in the Company’s Employees’ Savings Plan or similar plans of the Company’s subsidiaries. Includes shares not presently owned by the executive officers but which are subject to stock options exercisable within 60 days as follows: Mr. Carmola, 99,224 shares; Ms. Egnotovich, 67,886 shares: Mr. Grisik, 200,270 shares; Mr. Larsen, 609,901 shares; Mr. Linnert, 209,193 shares; and all executive officers as a group, 1,462,181 shares. Also includes shares of restricted stock as to which the executive officers have sole voting but no investment power as follows: Mr. Carmola, 15,000 shares; Ms. Egnotovich, 15,000 shares; and Mr. Grisik, 15,000 shares; and all executive officers as a group, 45,000 shares. All ownership is direct. |
(2) | Excludes restricted stock units as to which the executive officers have no voting or investment power as follows: Mr. Carmola, 29,225 units; Ms. Egnotovich, 28,275 units; Mr. Grisik, 34,450 units; Mr. Larsen, 106,150 units; Mr. Linnert, 33,350 units; and all executive officers as a group, 303,450 units. |
(3) | Each person has sole voting and investment power with respect to Common Stock beneficially owned by such person, except as described in note (1) above, except that Mr. Larsen has shared voting and investment power with respect to 13,900 shares and all Directors and executive officers as a group have shared voting and investment power with respect to 14,856 shares. |
(4) | Applicable percentage ownership is based on 123,408,839 shares of Common Stock outstanding at January 31, 2006 (excluding 14,000,000 shares held by a wholly owned subsidiary). |
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Name and Address of Beneficial Owner | Amount | Percent of Class(1) | |||||||
AXA and related companies(2) | 12,418,960 | 10.1 | % | ||||||
25, avenue Matignon | |||||||||
75008 Paris, France | |||||||||
Wellington Management Company, LLP(3) | 10,493,227 | 8.5 | % | ||||||
75 State Street | |||||||||
Boston, Massachusetts 02109 | |||||||||
Vanguard Windsor Funds(4) | 6,196,835 | 5.0 | % | ||||||
100 Vanguard Blvd. | |||||||||
Malvern, Pennsylvania 19355 |
(1) | Applicable percentage ownership is based on 123,408,839 shares of Common Stock outstanding at January 31, 2006 (excluding 14,000,000 shares held by a wholly owned subsidiary). |
(2) | This information is based on a Schedule 13G/ A filed with the SEC on February 10, 2006 by AXA, AXA Financial, Inc., 1290 Avenue of the Americas, New York, NY 10104, and the Mutuelles AXA as a group as follows: AXA Assurances I.A.R.D. Mutuelle and AXA Assurances Vie Mutuelle, 26, rue Drouot, 75009 Paris, France; and AXA Courtage Assurance Mutuelle, 26, rue Drouot, 75009 Paris, France. The above described persons reported voting and dispositive power as of January 31, 2006 as follows: (a) AXA, AXA Financial, Inc. and the Mutuelles AXA as a group each reported no voting or dispositive power; (b) Alliance Capital Management L.P., a subsidiary of AXA Financial, Inc., reported sole voting power as to 7,239,487 shares, shared voting power as to 1,052,033 shares, sole dispositive power as to 12,401,732 shares and shared dispositive power as to 15,066 shares; and (c) AXA Equitable Life Assurance Company, a subsidiary of AXA Financial, Inc., reported sole dispositive power as to 2,162 shares. |
(3) | This information is based on a Schedule 13G filed with the SEC on February 14, 2006 by Wellington Management Company, LLP, in which it reported shared voting power as of December 30, 2005 as to 4,449,300 shares and shared dispositive power as to 10,493,227 shares. |
(4) | This information is based on a Schedule 13G filed with the SEC on February 13, 2006 by Vanguard Windsor Funds, in which it reported sole voting power as of December 31, 2005 as to 6,196,835 shares. |
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Long Term Compensation | |||||||||||||||||||||||||||||||||
Annual Compensation | Awards | Payout | |||||||||||||||||||||||||||||||
Restricted | Securities | ||||||||||||||||||||||||||||||||
Other Annual | Stock | Underlying | LTIP | All Other | |||||||||||||||||||||||||||||
Salary | Bonus | Compensation | Awards | Options/ | Payout | Compensation | |||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(1) | ($)(2) | SARs(#) | ($)(3) | ($)(4) | |||||||||||||||||||||||||
Marshall O. Larsen | 2005 | 900,000 | 1,660,500 | 73,231 | 1,143,100 | 80,000 | 372,197 | 75,707 | |||||||||||||||||||||||||
Chairman, President and | 2004 | 825,000 | 1,625,000 | 132,838 | 1,217,893 | 82,950 | 101,399 | 42,498 | |||||||||||||||||||||||||
Chief Executive Officer | 2003 | 742,846 | 592,176 | 101,114 | –0– | 200,000 | 115,622 | 47,117 | |||||||||||||||||||||||||
John J. Grisik | 2005 | 460,000 | 532,220 | 77,942 | 373,520 | 26,100 | 165,603 | 29,919 | |||||||||||||||||||||||||
Vice President and | 2004 | 440,000 | 537,680 | 70,584 | 408,168 | 27,750 | 36,465 | 17,990 | |||||||||||||||||||||||||
Segment President, | 2003 | 410,000 | 160,000 | 55,390 | 218,700 | 40,000 | 22,975 | 61,985 | |||||||||||||||||||||||||
Electronic Systems | |||||||||||||||||||||||||||||||||
Terrence G. Linnert | 2005 | 450,000 | 544,050 | 56,285 | 354,200 | 25,000 | 181,999 | 29,796 | |||||||||||||||||||||||||
Executive Vice President, | 2004 | 440,000 | 543,400 | 59,456 | 408,168 | 27,750 | 50,700 | 20,244 | |||||||||||||||||||||||||
Administration, and | 2003 | 430,000 | 234,920 | 68,527 | –0– | 43,000 | 57,655 | 63,344 | |||||||||||||||||||||||||
General Counsel | |||||||||||||||||||||||||||||||||
John J. Carmola | 2005 | 410,000 | 482,365 | 75,068 | 317,170 | 22,200 | 154,126 | 26,346 | |||||||||||||||||||||||||
Vice President and | 2004 | 370,000 | 468,975 | 66,183 | 293,319 | 20,000 | 33,938 | 16,928 | |||||||||||||||||||||||||
Segment President, | 2003 | 345,000 | 194,548 | 51,931 | 218,700 | 34,000 | 12,724 | 24,788 | |||||||||||||||||||||||||
Airframe Systems | |||||||||||||||||||||||||||||||||
Cynthia M. Egnotovich | 2005 | 390,000 | 451,230 | 51,299 | 286,580 | 20,000 | 67,225 | 24,880 | |||||||||||||||||||||||||
Vice President and | 2004 | 360,000 | 439,920 | 46,092 | 293,319 | 20,000 | 12,306 | 17,990 | |||||||||||||||||||||||||
Segment President, | 2003 | 315,000 | 166,697 | 100,593 | 218,700 | 31,000 | 8,483 | 21,898 | |||||||||||||||||||||||||
Engine Systems |
(1) | Represents (i) perquisites and (ii) amounts reimbursed for payment of taxes relating to perquisites. The dollar value of the perquisites provided to the named executive officers was determined on the basis of the aggregate incremental cost to us of providing the perquisites. Perquisites provided to the named executive officers include an automobile allowance, automobile and umbrella liability insurance, financial counseling and tax preparation, club memberships, annual physical examinations for the executive and spouse, cellular telephone service, long-distance telephone service for the executive and family, and, in certain cases, home security systems and use of the Company’s aircraft for personal use. Amounts reimbursed for payment of taxes represents an amount paid by us to the named executive officer equal to 100% of the amounts paid by us on behalf of the executive with respect to the automobile allowance, umbrella liability insurance, financial counseling and tax preparation, club initiation fees and certain life insurance programs. |
Amounts | ||||||||||||||||
Reimbursed | Total Other | |||||||||||||||
For Payment | Annual | |||||||||||||||
Perquisites | of Taxes | Compensation | ||||||||||||||
Name | Year | ($) | ($) | ($) | ||||||||||||
Marshall O. Larsen | 2005 | 39,179 | 34,052 | 73,231 | ||||||||||||
2004 | 98,583 | 34,255 | 132,838 | |||||||||||||
2003 | 66,768 | 34,346 | 101,114 | |||||||||||||
John J. Grisik | 2005 | 41,714 | 36,228 | 77,942 | ||||||||||||
2004 | 39,150 | 31,434 | 70,584 | |||||||||||||
2003 | 28,354 | 27,036 | 55,390 | |||||||||||||
Terrence G. Linnert | 2005 | 32,144 | 24,141 | 56,285 | ||||||||||||
2004 | 35,501 | 23,955 | 59,456 | |||||||||||||
2003 | 43,797 | 24,730 | 68,527 | |||||||||||||
John J. Carmola | 2005 | 40,966 | 34,102 | 75,068 | ||||||||||||
2004 | 35,310 | 30,873 | 66,183 | |||||||||||||
2003 | 32,596 | 19,335 | 51,931 | |||||||||||||
Cynthia M. Egnotovich | 2005 | 27,722 | 23,577 | 51,299 | ||||||||||||
2004 | 24,681 | 21,411 | 46,092 | |||||||||||||
2003 | 60,529 | 40,064 | 100,593 |
The 2005 amount reported for perquisites includes: (a) for Mr. Larsen, $17,488 for an automobile allowance and $10,013 for club dues; (b) for Mr. Grisik, $18,562 for an automobile allowance and $17,857 for financial counseling and tax preparation; (c) for Mr. Linnert, $20,080 for an automobile allowance; (d) for Mr. Carmola, $19,841 for an |
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automobile allowance and $12,700 for financial counseling and tax preparation; and (e) for Ms. Egnotovich, $17,516 for an automobile allowance. | |
The 2004 amount reported for perquisites includes: (a) for Mr. Larsen, $62,958 for personal use of corporate aircraft; (b) for Mr. Linnert, $17,595 for an automobile allowance and $9,215 for club dues; and (c) for Messrs. Grisik and Carmola and Ms. Egnotovich, $18,089, $19,628 and $17,027, respectively, for an automobile allowance. | |
The 2003 amount reported for perquisites includes: (a) for Mr. Larsen, $28,201 for personal use of corporate aircraft and $16,710 for an automobile allowance; (b) for Mr. Linnert, $16,172 for an automobile allowance and $11,634 for club dues; (c) for Messrs. Grisik and Carmola, $16,130 and $16,985, respectively, for an automobile allowance; and (d) for Ms. Egnotovich, $36,444 for club initiation fees and dues. |
(2) | The 2005 amount for the named executive officers represents the value as of the date of grant of restricted stock unit awards granted on January 3, 2005 which vest 50% after three years, 75% after four years and 100% after five years. The 2004 amount for the named executive officers represents the value as of the date of grant of restricted stock unit awards granted on February 17, 2004 which vest 50% after three years, 75% after four years and 100% after five years. The 2003 amount for Messrs. Grisik and Carmola and Ms. Egnotovich represents the value as of the date of grant of special restricted stock awards granted on April 15, 2003 with a three-year vesting period. |
(3) | LTIP payouts for 2005 represent the cash received or fair market value of the performance units deferred in connection with the payout of the 2002-2004 Long-Term Incentive Plan. LTIP payouts for 2004 represent the cash received or fair market value of the performance units deferred in connection with the payout of the 2001-2003 Long-Term Incentive Plan. LTIP payouts for 2003 represent the fair market value of the Common Stock issued in connection with the payout of the 2000-2002 Long-Term Incentive Plan. |
(4) | The 2005 and 2004 amounts represent the matching contributions by the Company on behalf of the named individuals to the Company’s defined contribution plans. |
Individual Grants | ||||||||||||||||||||
Number of | ||||||||||||||||||||
Securities | % of Total | |||||||||||||||||||
Underlying | Options/SARs | Grant Date | ||||||||||||||||||
Options/SARs | Granted to | Exercise or | Present | |||||||||||||||||
Granted | Employees in | Base Price | Expiration | Value | ||||||||||||||||
Grant Name | (# of Shares) | Fiscal Year | ($/Sh) | Date | ($) (1) | |||||||||||||||
Mr. Larsen | 80,000 | 11.17 | 32.43 | 1/02/15 | 938,400 | |||||||||||||||
Mr. Grisik | 26,100 | 3.65 | 32.43 | 1/02/15 | 306,153 | |||||||||||||||
Mr. Linnert | 25,000 | 3.49 | 32.43 | 1/02/15 | 293,250 | |||||||||||||||
Mr. Carmola | 22,200 | 3.10 | 32.43 | 1/02/15 | 260,406 | |||||||||||||||
Ms. Egnotovich | 20,000 | 2.79 | 32.43 | 1/02/15 | 234,600 | |||||||||||||||
All Optionees | 716,000 | 100.00 | 32.43 | 1/02/15 | 8,398,680 |
(1) | The estimated value of the stock options has been developed solely for purposes of comparative disclosure in accordance with the rules and regulations of the SEC and is consistent with the assumptions we used for Statement of Financial Accounting Standards 123(R) reporting during 2005. The estimated value has been determined by application of the Black-Scholes option-pricing model, based upon the terms of the option grants and our stock price performance history as of the date of the grant. The key assumptions are as follows: risk-free interest rate — 4.0%; dividend yield — 2.6%; volatility factor — 40.6%; and weighted average expected life of the options — 7.0 years. The above estimates do not reflect any adjustments for risk of forfeiture or restrictions on transferability. The assumptions used in the valuation are based upon experience, and are not a forecast of future stock price or volatility, or of future dividend policy. |
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Number of | ||||||||||||||||
Securities | ||||||||||||||||
Underlying | ||||||||||||||||
Unexercised | Value of Unexercised | |||||||||||||||
Options/SARs | In-the-Money | |||||||||||||||
at FY-End | Options/SARs | |||||||||||||||
(# of Shares) | at FY-End($)(1) | |||||||||||||||
Shares Acquired | ||||||||||||||||
on Exercise | Value Realized | Exercisable/ | Exercisable/ | |||||||||||||
Name | (#) | ($) | Unexercisable | Unexercisable | ||||||||||||
Mr. Larsen | 58,429 | 654,947 | 582,251 / 108,634 | 8,498,182 / 1,046,927 | ||||||||||||
Mr. Grisik | 13,782 | 160,115 | 191,020 / 35,900 | 2,395,525 / 346,403 | ||||||||||||
Mr. Linnert | 17,670 | 467,813 | 199,943 / 35,167 | 2,243,146 / 340,048 | ||||||||||||
Mr. Carmola | 60,264 | 1,145,600 | 92,558 / 28,134 | 854,317 / 269,256 | ||||||||||||
Ms. Egnotovich | 34,655 | 672,145 | 61,220 / 26,668 | 652,710 / 256,546 |
(1) | Based on a closing price per share of $41.10 on December 30, 2005. |
Performance | Estimated Future Payouts Under | |||||||||||||||||||
Number of | or Other | Non-Stock Price-Based Plans(1) | ||||||||||||||||||
Shares, Units | Period Until | |||||||||||||||||||
or Other Rights | Maturation or | Threshold | Target | Maximum | ||||||||||||||||
Name | (#) | Payout | # Shares | # Shares | # Shares | |||||||||||||||
Mr. Larsen | 26,500 | 3 years | -0- | 26,500 | 53,000 | |||||||||||||||
Mr. Grisik | 8,700 | 3 years | -0- | 8,700 | 17,400 | |||||||||||||||
Mr. Linnert | 8,250 | 3 years | -0- | 8,250 | 16,500 | |||||||||||||||
Mr. Carmola | 7,400 | 3 years | -0- | 7,400 | 14,800 | |||||||||||||||
Ms. Egnotovich | 6,750 | 3 years | -0- | 6,750 | 13,500 |
(1) | This table describes the 2005-2007 performance unit awards made in 2005 pursuant to the 2001 Equity Compensation Plan. Payouts on these awards will be based on the Company’s Relative Total Shareholder Return and Return on Invested Capital over the 2005-2007 performance period. At the end of the performance period, each participant will earn a cash payout only if the threshold performance standard is exceeded. The cash payout to be received will range from 0% to 200% of the value of the total performance unit account (including performance units credited through dividend equivalents), based on the level of performance against the financial objectives. |
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Defined Benefit Pension Plans |
Final | Years of Credited Service | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Earnings | 5 | 10 | 15 | 20 | 30 | 40 | ||||||||||||||||||
250,000 | $ | 18,847 | $ | 37,694 | $ | 56,540 | $ | 75,387 | $ | 113,081 | $ | 146,303 | ||||||||||||
300,000 | $ | 22,847 | $ | 45,694 | $ | 68,540 | $ | 91,387 | $ | 137,081 | $ | 177,178 | ||||||||||||
350,000 | $ | 26,847 | $ | 53,694 | $ | 80,540 | $ | 107,387 | $ | 161,081 | $ | 208,053 | ||||||||||||
400,000 | $ | 30,847 | $ | 61,694 | $ | 92,540 | $ | 123,387 | $ | 185,081 | $ | 238,928 | ||||||||||||
450,000 | $ | 34,847 | $ | 69,694 | $ | 104,540 | $ | 139,387 | $ | 209,081 | $ | 269,803 | ||||||||||||
500,000 | $ | 38,847 | $ | 77,694 | $ | 116,540 | $ | 155,387 | $ | 233,081 | $ | 306,078 | ||||||||||||
600,000 | $ | 46,847 | $ | 93,694 | $ | 140,540 | $ | 187,387 | $ | 281,081 | $ | 362,428 | ||||||||||||
700,000 | $ | 54,847 | $ | 109,694 | $ | 164,540 | $ | 219,387 | $ | 329,081 | $ | 424,178 | ||||||||||||
800,000 | $ | 62,847 | $ | 125,694 | $ | 188,540 | $ | 251,387 | $ | 377,081 | $ | 485,928 | ||||||||||||
900,000 | $ | 70,847 | $ | 141,694 | $ | 212,540 | $ | 283,387 | $ | 425,081 | $ | 547,678 | ||||||||||||
1,000,000 | $ | 78,847 | $ | 157,694 | $ | 236,540 | $ | 315,387 | $ | 473,081 | $ | 609,428 | ||||||||||||
1,100,000 | $ | 86,847 | $ | 173,694 | $ | 260,540 | $ | 347,387 | $ | 521,081 | $ | 671,178 | ||||||||||||
1,200,000 | $ | 94,847 | $ | 189,694 | $ | 284,540 | $ | 379,387 | $ | 569,081 | $ | 732,928 | ||||||||||||
1,300,000 | $ | 102,847 | $ | 205,694 | $ | 308,540 | $ | 411,387 | $ | 617,081 | $ | 794,678 | ||||||||||||
1,400,000 | $ | 110,847 | $ | 221,694 | $ | 332,540 | $ | 443,387 | $ | 665,081 | $ | 856,428 | ||||||||||||
1,500,000 | $ | 118,847 | $ | 237,694 | $ | 356,540 | $ | 475,387 | $ | 713,081 | $ | 918,178 | ||||||||||||
1,600,000 | $ | 126,847 | $ | 253,694 | $ | 380,540 | $ | 507,387 | $ | 761,081 | $ | 979,928 | ||||||||||||
1,700,000 | $ | 134,847 | $ | 269,694 | $ | 404,540 | $ | 539,387 | $ | 809,081 | $ | 1,041,678 | ||||||||||||
1,800,000 | $ | 142,847 | $ | 285,694 | $ | 428,540 | $ | 571,387 | $ | 857,081 | $ | 1,103,428 |
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(1) | FAE includes salary, certain incentive payments including annual cash bonuses and certain restricted stock awards in lieu of cash bonuses, but excludes awards under long-term incentive programs and the Company match in the Company savings plans. As of December 31, 2005, FAE for Messrs. Larsen, Grisik, Linnert and Carmola and Ms. Egnotovich were as follows: Mr. Larsen, $1,459,751; Mr. Grisik, $720,101; Mr. Linnert, $694,449; Mr. Carmola, $639,822; and Ms. Egnotovich, $536,662. |
(2) | In computing the pension amounts shown, it was assumed that an employee would retire at age 65 and elect to receive a five year certain and continuous annuity under the pension plan and that the employee would not elect any of the available “survivor options,” which would result in a lower annual pension. Pensions are not subject to any deduction for Social Security or any other offset amounts. |
(3) | As of December 31, 2005, Messrs. Larsen, Grisik, Linnert and Carmola and Ms. Egnotovich had the following credited years of service under the pension plan (including, where appropriate, up to the 4 additional years): Mr. Larsen, 28.4624 years; Mr. Grisik, 14.043 years; Mr. Linnert, 8.1611 years; Mr. Carmola, 9.6532 years; and Ms. Egnotovich, 21.2382 years. |
Supplemental Executive Retirement Plan |
401(k) Savings Plans |
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• | a lump sum cash payment equal to one-twelfth of the individual’s annualized base salary in effect immediately prior to termination, multiplied by the number of months in such individual’s Payment Period. As used in the Agreement, “Payment Period” means 36 months in the case of Messrs. Larsen, Grisik, Linnert and Carmola and Ms. Egnotovich and four other individuals and 24 months in the case of the other five individuals; | |
• | a lump sum cash payment equal to one-twelfth of the greater of the individual’s most recent annual bonus or the individual’s “target incentive amount” under our management incentive program, multiplied by a factor equal to the number of months in the individual’s Payment Period; | |
• | an accelerated payout of outstanding performance unit awards; | |
• | continuation of all health and welfare benefit plans and programs and all fringe benefit programs, perquisites and similar arrangements during the Payment Period; | |
• | a cash payment equal to the sum of the number of stock options in the last annual grant of stock options by us to the individual, multiplied by the number of years in the Payment Period, multiplied by the calculated market value of our Common Stock on the |
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date of the stock option grant, multiplied by a factor used by us in valuing fully vested stock options with a10-year life in our most recent Annual Report on Form 10-K for options held by senior executives pursuant to the Black-Scholes method of valuing stock options, or, if such valuation was not made in the Form 10-K, then under the Black-Scholes method assuming options would be outstanding for 10 years; and | ||
• | in addition to the benefits to which the individual is entitled under the retirement plans or programs in which he or she participates, a lump sum cash payment at retirement in an amount equal to the actuarial equivalent of the retirement pension to which the individual would have been entitled under the terms of such retirement plans or programs had the individual accumulated additional years of continuous service under such plans equal in length to the Payment Period. |
Largest Aggregate | |||||||||
Amount Outstanding | |||||||||
At Any Time | Principal Balance at | ||||||||
Name | During 2005 ($) | February 28, 2006 ($) | |||||||
Stephen R. Huggins | 716,768 | 0 | |||||||
Terrence G. Linnert | 270,208 | 0 | |||||||
Two former officers | 3,430,000 | 0 | |||||||
Total | 4,416,976 | 0 | |||||||
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Base | |||||||||||||||||||||||||||||||
Period | |||||||||||||||||||||||||||||||
Company/Index | Dec00 | Dec01 | Dec02 | Dec03 | Dec04 | Dec05 | |||||||||||||||||||||||||
GOODRICH CORP | 100 | 75.67 | 56.45 | 95.09 | 107.26 | 137.71 | |||||||||||||||||||||||||
S&P 500 INDEX | 100 | 88.11 | 68.64 | 88.33 | 97.94 | 102.75 | |||||||||||||||||||||||||
S&P 500 AEROSPACE & DEFENSE | 100 | 82.27 | 78.04 | 96.06 | 111.43 | 129.18 | |||||||||||||||||||||||||
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• | for each matter, a brief description thereof and the reasons for conducting such business at the annual meeting; | |
• | the name and address of the shareholder proposing such business as well as any other shareholders believed to be supporting such proposal; | |
• | the number of shares of each class of Goodrich stock owned by such shareholders; and | |
• | any material interest of such shareholders in such proposal. |
By Order of the Board of Directors | |
Sally L. Geib | |
Secretary |
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A-1
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A-2
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March 10, 2006
To our Shareholders:
The Annual Meeting of Shareholders will be held at Goodrich’s headquarters, Four Coliseum Centre, 2730 West Tyvola Road, Charlotte, North Carolina on Tuesday, April 25, 2006, at 10:00 A.M.
If you have chosen to view our proxy statements and annual reports over the Internet instead of receiving paper copies in the mail, you can access our proxy statement and 2005 annual report electronically at our website, www.goodrich.com.
The proxy statement contains information regarding the meeting, the nominees for election to the Board of Directors and the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year 2006. The voting results from the Annual Meeting of Shareholders will be posted on our website, www.goodrich.com on April 26.
It is important that your shares be represented at this meeting. Even if you plan to attend, we encourage you to promptly sign, date and return your proxy in the enclosed postage-paid envelope.
Sincerely,
/s/ Marshall O. Larsen
Marshall O. Larsen
Chairman, President and
Chief Executive Officer
GOODRICH CORPORATION
P R O X Y
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby authorizes Marshall O. Larsen and Sally L. Geib, or either of them, with full power of substitution, to represent the undersigned and to vote all Common Stock of GOODRICH CORPORATION which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of the Company to be held on April 25, 2006, and at any adjournment thereof, as indicated and in their discretion upon other matters as may properly come before the meeting.
You are encouraged to specify your choice by marking the appropriate boxes. SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. The Proxies cannot vote your shares unless you sign and return this card. The Board of Directors recommends a vote FOR Proposals 1 and 2.
This card also constitutes your voting instructions for any and all shares held of record by The Bank of New York for your account in the Company’s Dividend Reinvestment Plan, and will be considered to be voting instructions to the plan trustees with respect to shares held in accounts under the Goodrich Corporation Employees’ Savings Plan and the Goodrich Corporation Savings Plan for Rohr Employees.
Please sign on the reverse side of this card and return it promptly in the enclosed return envelope to The Bank of New York, Proxy Department, New York, NY 10203.
If you agree to access our Annual Report and Proxy Statement electronically in the future, please mark this box. o | GOODRICH CORPORATION P.O. BOX 11054 NEW YORK, N.Y. 10203-0054 |
(Continued, and to be signed and dated, on reverse side.)
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Two New Ways to Vote Your Proxy VOTE BY TELEPHONE OR INTERNET 24 Hours a Day – 7 Days a Week It’s Fast and Convenient | ||
INTERNET | TELEPHONE | ||||||||||
https://www.proxyvotenow.com/grc | 1-888-216-1364 | ||||||||||
• | Go to the website address listed above. | • | Use any touch-tone telephone. | • | Mark, sign and date your proxy card. | ||||||
• | Have your proxy card ready. | OR | • | Have your proxy card ready. | OR | • | Detach your proxy card. | ||||
• | Follow the simple instructions that appear on your computer screen. | • | Follow the simple recorded instructions. | • | Return your proxy card in the postage-paid envelope provided. |
Your telephone or internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned the proxy card. If you have submitted your proxy by telephone or the internet there is no need for you to mail back your proxy | |
1-888-216-1364 CALL TOLL-FREE TO VOTE |
Sign, Date and Return this Voting Instruction Card Promptly Using the Enclosed Envelope | x Votes MUST be indicated (x) in Black or Blue ink |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 and 2.
1. ELECTION OF DIRECTORS
FOR ALL | o | WITHHOLD FOR ALL | o | EXCEPTIONS | o | To include any comments, please mark this box. | o | |||||||
To change your address, please mark this box. | o | |||||||||||||
01 – Diane C. Creel, 02 – George A. Davidson, Jr., 03 – Harris E. DeLoach, Jr., 04 – James W. Griffith, 05 – William R. Holland, 06 – John P. Jumper, 07 – Marshall O. Larsen, 08 – Douglas E. Olesen, 09 – Alfred M. Rankin, Jr., 10 – James R. Wilson and 11 – A. Thomas Young. INSTRUCTION: To withhold authority to vote for any individual nominee, mark the “Exceptions” box and write that nominee’s name on the space provided below. | THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2. | |||||||||||||
*EXCEPTIONS | ||||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||
2. | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year 2006. | o | o | o |
S C A N L I N E | |||||
Please sign exactly as name appears hereon. Joint owners should each sign. When signing as an attorney, executor, administrator, trustee or guardian, please give full title as such. |
Date | Share Owner sign here | Co-Owner sign here | ||||||