þ Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
o Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Section 240.14a-12 |
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DATE: | April 11, 2006 | |
TIME: | 9:00 A.M., Akron Time | |
PLACE: | Offices Of The Company Goodyear Theater 1201 East Market Street Akron, Ohio |
ROBERT J. KEEGAN | |
CHAIRMAN OF THE BOARD, | |
CHIEF EXECUTIVE OFFICER | |
AND PRESIDENT |
Sincerely, | |
Robert J. Keegan | |
Chairman of the Board, | |
Chief Executive Officer | |
and President |
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1. | To elect five directors, three to serve as Class III directors each for a term of three years, and two directors to serve as Class II directors for a one year term (Proxy Item 1); and | |
2. | To consider and vote upon an amendment to Goodyear’s Code of Regulations to provide for the annual election of directors (Proxy Item 2); and | |
3. | To consider and vote upon an amendment to Goodyear’s Amended Articles of Incorporation to increase the authorized number of shares of Goodyear’s common stock, without par value, from 300,000,000 to 450,000,000 (Proxy Item 3); and | |
4. | To consider and vote upon a proposal to ratify the appointment of PricewaterhouseCoopers LLP as independent accountants for Goodyear for 2006 (Proxy Item 4); and | |
5. | To consider and vote upon a Shareholder Proposal (Proxy Item 5), if properly presented at the Annual Meeting; and | |
6. | To act upon such other matters and to transact such other business as may properly come before the meeting or any adjournments thereof. |
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Corporate | ||||||||||||||||||||||||
Responsibility and | ||||||||||||||||||||||||
Name of Director | Audit | Compensation | Compliance | Finance | Governance | Class | ||||||||||||||||||
Non-Employee Directors | ||||||||||||||||||||||||
James C. Boland | X | * | X | X | III | |||||||||||||||||||
John G. Breen | X | X | * | X | III | |||||||||||||||||||
Gary D. Forsee | X | X | X | I | ||||||||||||||||||||
William J. Hudson, Jr. | X | X | X | * | III | |||||||||||||||||||
Steven A. Minter | X | * | X | III | ||||||||||||||||||||
Denise M. Morrison | X | X | I | |||||||||||||||||||||
Rodney O’Neal | X | X | * | II | ||||||||||||||||||||
Shirley D. Peterson | X | X | X | II | ||||||||||||||||||||
Thomas H. Weidemeyer | X | X | I | |||||||||||||||||||||
Michael R. Wessel(1) | X | III | ||||||||||||||||||||||
Employee Director | ||||||||||||||||||||||||
Robert J. Keegan | II | |||||||||||||||||||||||
Number of Meetings in Fiscal 2005 | 7 | 4 | 2 | 4 | 9 |
3
4
5
6
Class III | |
James C. Boland | |
Steven A. Minter | |
Michael R. Wessel | |
Class II | |
John G. Breen | |
William J. Hudson, Jr. |
7
8
9
* | In the event that the proposal to amend Goodyear’s Code of Regulations to require the annual election of directors is approved by shareholders, the directors in Classes I and III have agreed to shorten their terms so that they expire at the 2007 Annual Meeting of Shareholders. |
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11
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RESOLVED, shareholders recommend that our Board of Directors take each step necessary for a simple majority vote to apply on each issue that can be subject to shareholder vote to the greatest extent possible. This proposal is focused on precluding voting requirements higher than approximately 51%. |
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• | Proposed amending our Code of Regulations to provide for the annual election of directors. | |
• | Effected an early termination of Goodyear’s “poison pill.” | |
• | Adopted a formal policy to address shareholder proposals that receive a majority of the votes cast. |
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• | Established the position of Lead Director (a definition of the responsibilities of the Lead Director can be found in the Corporate Governance Guidelines). | |
• | Implemented executive sessions of the non-management directors at all regularly scheduled board meetings. | |
• | Added five highly qualified directors to the Board, none of whom are current or former Goodyear employees. | |
• | Established a stock ownership requirement for senior officers. |
Shares of Common | Percent of Common | ||||||||
Name and Address | Stock Beneficially | Stock Outstanding | |||||||
of Beneficial Owner | Owned | Beneficially Owned | |||||||
Brandes Investment Partners, L.P. | |||||||||
11988 El Camino Real, Suite 500 | |||||||||
San Diego, California 92130 | 26,665,275 | (1) | 15.1 | % | |||||
State Street Bank and Trust Company, acting in various fiduciary capacities | |||||||||
225 Franklin Street | |||||||||
Boston, Massachusetts 02110 | 10,477,102 | (2) | 5.9 | % | |||||
Impala Asset Management LLC | |||||||||
134 Main Street | |||||||||
New Canaan, Connecticut 06840 | 9,853,400 | (3) | 5.6 | % | |||||
LSV Asset Management | |||||||||
1 N. Wacker Drive, Suite 4000 | |||||||||
Chicago, Illinois 60606 | 9,701,500 | (4) | 5.5 | % | |||||
Merrill Lynch & Co., Inc., on behalf of | |||||||||
Merrill Lynch Investment Managers | |||||||||
World Financial Center, North Tower | |||||||||
250 Vesey Street | |||||||||
New York, New York 10381 | 9,576,933 | (5) | 5.4 | % | |||||
Mellon Financial Corporation and related reporting persons | |||||||||
One Mellon Center | |||||||||
Pittsburgh, Pennsylvania 15258 | 8,883,179 | (6) | 5.0 | % |
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(1) | Shared dispositive power in respect of 26,665,275 shares and shared voting power in respect of 22,321,996 shares, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2006. | |
(2) | Sole voting and shared dispositive power in respect of 10,477,102 shares, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2006. | |
(3) | Shared voting and dispositive power in respect of 9,853,400 shares, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 6, 2006. | |
(4) | Sole dispositive power in respect of 9,528,200 shares and sole voting power in respect of 6,730,400 shares, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2006. | |
(5) | Shared voting and dispositive power in respect of 9,576,933 shares, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 7, 2006. Ownership of the shares is disclaimed pursuant to Section 13d-4 of the Securities Exchange Act of 1934. | |
(6) | Sole voting and shared voting power in respect of 3,203,464 and 66,900 shares, respectively, and sole dispositive and shared dispositive power in respect of 8,533,526 and 309,156 shares, respectively, as stated in a Schedule 13G filed with the Securities and Exchange Commission on February 15, 2006. |
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Beneficial Ownership at January 31, 2006 (1) | ||||||||||||||||||||
Shares of | ||||||||||||||||||||
Shares of | Common Stock | Shares of Common | ||||||||||||||||||
Common Stock | Held in Savings | Stock Subject to | Deferred Share | Percent of | ||||||||||||||||
Name | Owned Directly (2) | Plan (3) | Exercisable Options (4) | Equivalent Units | Class | |||||||||||||||
James C. Boland | 3,000 | -0- | -0- | 17,769 | (11) | * | ||||||||||||||
John G. Breen | 200 | (5) | -0- | -0- | 48,178 | (11) | * | |||||||||||||
Gary D. Forsee | 1,000 | -0- | -0- | 24,623 | (11) | * | ||||||||||||||
Joseph M. Gingo | 8,889 | (6) | 863 | 102,100 | 2,707 | * | ||||||||||||||
C. Thomas Harvie | 29,858 | 1,075 | 150,964 | -0- | * | |||||||||||||||
William J. Hudson, Jr | 5,000 | -0- | -0- | 36,849 | (11) | * | ||||||||||||||
Robert J. Keegan | 152,160 | (7) | 433 | 506,785 | -0- | * | ||||||||||||||
Richard J. Kramer | 38,000 | (8) | 209 | 73,101 | 455 | (12) | * | |||||||||||||
Steven A. Minter | 3,580 | -0- | -0- | 29,848 | (11) | * | ||||||||||||||
Denise M. Morrison | 1,100 | -0- | -0- | 3,740 | * | |||||||||||||||
Rodney O’Neal | -0- | -0- | -0- | 9,754 | (11) | * | ||||||||||||||
Shirley D. Peterson | -0- | -0- | -0- | 7,852 | (11) | * | ||||||||||||||
Jonathan D. Rich | 26,272 | (9) | 3,211 | 61,171 | -0- | * | ||||||||||||||
Thomas H. Weidemeyer | 1,000 | -0- | -0- | 5,054 | * | |||||||||||||||
Michael R. Wessel | -0- | -0- | -0- | -0- | * | |||||||||||||||
All directors, the Named Officers and all other executive officers as a group (30 persons) | 404,653 | (10) | 17,614 | 1,569,576 | 192,530 | 1.1 |
(1) | The number of shares indicated as beneficially owned by each of the directors and named executive officers, and the 1,991,843 shares of Common Stock indicated as beneficially owned by all directors and officers as a group, and the percentage of Common Stock outstanding beneficially owned by each person and the group, has been determined in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934. | |
(2) | Unless otherwise indicated in a subsequent note, each person named and each member of the group has sole voting and investment power with respect to the shares of Common Stock shown. | |
(3) | Shares held in trust under Goodyear’s Employee Savings Plan for Salaried Employees. | |
(4) | Shares which may be acquired upon the exercise of options which are exercisable prior to May 11, 2006 under Goodyear’s 2002 Performance Plan (the “2002 Plan”), Goodyear’s 1997 Performance Incentive Plan (the “1997 Plan”) and the 1989 Goodyear Performance and Equity Incentive Plan (the “1989 Plan”). | |
(5) | Shares acquired by Mr. Breen pursuant to Goodyear’s 1994 Restricted Stock Award Plan for Non-employee Directors, which shares are subject to certain restrictions. | |
(6) | Includes 2,284 shares owned by his spouse. | |
(7) | Includes 13,000 shares owned by his spouse. | |
(8) | Includes 10,000 shares acquired under the 2002 Plan and a Restricted Stock Purchase Agreement, which shares are subject to the Company’s repurchase option and certain restrictions on transfer. | |
(9) | Includes 1,000 shares owned jointly by Mr. Rich and his spouse. |
(10) | Includes 371,038 shares owned of record and beneficially or owned beneficially through a nominee, and 33,615 shares held by or jointly with family members of certain directors and executive officers. | |
(11) | Deferred units, each equivalent to a hypothetical share of Common Stock, accrued to accounts of the director under Goodyear’s Outside Directors’ Equity Participation Plan, payable in cash following retirement from the Board of Directors. See “Directors’ Compensation” at page 6. | |
(12) | Units, each equivalent to a hypothetical share of Common Stock, deferred pursuant to performance awards earned under the 2002 Plan, 1997 Plan and the 1989 Plan and receivable in cash, shares of Common Stock, or any combination thereof, at the election of the executive officer. |
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Long Term Compensation | |||||||||||||||||||||||||||||||||
Awards | Payouts | ||||||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||||||||||
Other | Underlying | Long Term | All | ||||||||||||||||||||||||||||||
Annual | Restricted | Options/ | Incentive | Other | |||||||||||||||||||||||||||||
Compen- | Stock | SARs | Plan | Compen- | |||||||||||||||||||||||||||||
Bonus | sation | Award(s) | (Number | Payouts | sation | ||||||||||||||||||||||||||||
Salary | (Dollars) | (Dollars) | (Dollars) | of | (Dollars) | (Dollars) | |||||||||||||||||||||||||||
Name and Principal Position | Year | (Dollars) | (1) | (2) | (3) | Shares) | (4) | (5) | |||||||||||||||||||||||||
Robert J. Keegan | 2005 | $1,100,000 | $ | * | $ | 52,615 | — | 413,859 | $ | * | $ | — | |||||||||||||||||||||
Chairman of the Board, | 2004 | 1,050,000 | 2,600,000 | — | 261,548 | 472,113 | 1,000,000 | ||||||||||||||||||||||||||
Chief Executive Officer | 2003 | 1,000,000 | 509,200 | — | — | 200,000 | — | — | |||||||||||||||||||||||||
and President(6) | |||||||||||||||||||||||||||||||||
Richard J. Kramer | 2005 | 461,100 | * | — | 82,192 | * | — | ||||||||||||||||||||||||||
Executive Vice President and | 2004 | 378,750 | 587,704 | — | — | 47,861 | 78,686 | 500,000 | |||||||||||||||||||||||||
Chief Financial Officer(7) | 2003 | 300,000 | 50,496 | — | — | 41,600 | — | — | |||||||||||||||||||||||||
Jonathan D. Rich | 2005 | 445,200 | * | — | 54,598 | * | — | ||||||||||||||||||||||||||
President, North American | 2004 | 420,000 | 680,000 | — | — | 52,000 | 55,080 | 500,000 | |||||||||||||||||||||||||
Tire(8) | 2003 | 345,000 | 63,476 | — | — | 45,000 | — | — | |||||||||||||||||||||||||
C. Thomas Harvie | 2005 | 446,100 | * | — | — | 67,020 | * | — | |||||||||||||||||||||||||
Senior Vice President, | 2004 | 431,000 | 560,000 | — | — | 49,087 | 157,371 | 200,000 | |||||||||||||||||||||||||
General Counsel and | 2003 | 415,000 | 175,000 | — | — | 42,700 | — | — | |||||||||||||||||||||||||
Secretary | |||||||||||||||||||||||||||||||||
Joseph M. Gingo | 2005 | 376,000 | * | — | — | 24,894 | * | — | |||||||||||||||||||||||||
Executive Vice President | 2004 | 362,083 | 500,000 | — | — | 25,600 | 91,800 | 150,000 | |||||||||||||||||||||||||
Quality Systems and Chief | 2003 | 344,250 | 111,692 | — | — | 24,000 | — | — | |||||||||||||||||||||||||
Technical Officer(9) |
* | As of the date of the filing of the Preliminary Proxy Statement, bonus and long-term incentive plan payouts for the Named Officers had not yet been determined by the Compensation Committee. As a result, this information has been omitted from this Proxy Statement but will be included in the Definitive Proxy Statement. |
(1) | Represents amounts awarded under the Performance Recognition Plan. A portion of the award to Mr. Rich in 2005 was deferred pursuant to the Deferred Compensation Plan for Executives. Amounts deferred are included in the amounts shown on the table. Additional information regarding the amounts awarded to the Named Officers and other executive officers under the Performance Recognition Plan is contained in the Compensation Committee Report On Executive Compensation beginning at page [ ]. | |
(2) | The amount reported for Mr. Keegan in 2005 includes $37,194 for home security system installation and monitoring expenses. | |
(3) | No restricted stock was awarded or issued by the Company to any Named Officer during 2005, 2004 or 2003. On August 6, 2002, Mr. Kramer purchased 10,000 shares of Common Stock for a purchase price of $.01 per share that were subject to transfer and other restrictions and to Goodyear’s option to repurchase under specified circumstances through August 6, 2005. The market value of the shares at the date of grant was $15.55, and Mr. Kramer received all dividends paid on the Common Stock. Although the three-year period during which the shares were restricted from transfer lapsed on August 6, 2005, restrictions on the transfer of the shares will remain in effect until such time as the Company determines it is able to deduct the value of the shares under Section 162(m) of the Internal Revenue Code. |
(4) | The payouts for 2004 relate to performance equity units granted on December 3, 2001 and August 6, 2002. Amounts earned were determined by the extent to which the performance goals related to the units were achieved during the three year performance period ended December 31, 2004. Payouts were made 50% in |
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cash and 50% in shares of Common Stock. The performance measure for 50% of each unit was based on Goodyear’s average annual return on invested capital and the other 50% was based on Goodyear’s total shareholder return relative to a peer group consisting of the firms included in the S&P Auto Parts & Equipment Index. Payouts ranging from 0% to 150% of the units granted could have been earned. Amounts earned were determined based on Goodyear’s average annual total shareholder return (potential payouts ranged from 30% of the units if the total shareholder return equaled or exceeded the 30th percentile of the peer group to 75% of the units if Goodyear’s total shareholder return during the relevant performance period equaled or exceeded the 75th percentile of the peer group) and its return on the invested capital (with potential payouts ranging from 35% of the units if a 7.6% average annual return were achieved to 75% of the units if a 13.6% average annual return were achieved) during the performance period. As a result of the achievement of the target levels during the performance period, each participant earned 89.64% of the units granted. The value of each unit, $14.63, was based on the average of the high and low sale price of the Common Stock on December 31, 2004. | |
(5) | All Other Compensation for each Named Officer in 2004 consists of the guaranteed payout related to grants to the Named Officers under the Executive Performance Plan (the “EP Plan”). This payout will only be made if the Named Officer remains an employee of Goodyear through December 31, 2006. For additional information on the administration of the EP Plan please refer to page 21. |
(6) | Mr. Keegan became a Goodyear employee on October 1, 2000 and served as President and Chief Operating Officer from October 3, 2000 until he was elected the President and Chief Executive Officer effective January 1, 2003. Mr. Keegan became Chairman of the Board effective June 30, 2003. |
(7) | Mr. Kramer has served as Executive Vice President and Chief Financial Officer since June of 2004. He previously served as Vice President-Corporate Finance from March 2000 to July 2002, Vice President, Finance-North American Tire from July 2002 to August 2003 and Senior Vice President, Strategic Planning and Restructuring from September 2003 to June 2004. |
(8) | Mr. Rich has served as President of North American Tire since December of 2002. He previously served as President of Chemical Products. |
(9) | Mr. Gingo has served as Executive Vice President, Quality Systems and Chief Technology Officer since June 2003. He previously served as Senior Vice President, Technology and Global Products Planning, from July 1999 to June 2003. |
Individual Grants | ||||||||||||||||||||||||
Potential Realizable Value | ||||||||||||||||||||||||
Number of Securities | % of Total | at Assumed Annual Rates of | ||||||||||||||||||||||
Underlying | Options/ | Exercise | Stock Price Appreciation for | |||||||||||||||||||||
Options/SARs | SARs | or | Option Term | |||||||||||||||||||||
Granted | Granted to | Base Price | (Dollars)(3) | |||||||||||||||||||||
(Number of | Employees | (Dollars per | Expiration | |||||||||||||||||||||
Name | Shares)(1) | in 2005 | Share)(2) | Date | 5% | 10% | ||||||||||||||||||
Robert J. Keegan | 250,000 | 12.32 | % | $ | 17.15 | 12/6/2015 | $ | 2,697,500 | $ | 6,832,500 | ||||||||||||||
33,134 | * | 1.63 | % | 13.62 | 12/2/2013 | 215,371 | 516,228 | |||||||||||||||||
25,103 | * | 1.24 | % | 13.62 | 12/3/2012 | 139,071 | 324,331 | |||||||||||||||||
48,941 | * | 2.41 | % | 17.18 | 12/9/2014 | 463,471 | 1,141,794 | |||||||||||||||||
32,559 | * | 1.60 | % | 17.18 | 12/2/2013 | 266,984 | 639,784 | |||||||||||||||||
24,122 | * | 1.19 | % | 17.18 | 12/3/2012 | 168,613 | 393,189 |
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Individual Grants | ||||||||||||||||||||||||
Potential Realizable Value | ||||||||||||||||||||||||
Number of Securities | % of Total | at Assumed Annual Rates of | ||||||||||||||||||||||
Underlying | Options/ | Exercise | Stock Price Appreciation for | |||||||||||||||||||||
Options/SARs | SARs | or | Option Term | |||||||||||||||||||||
Granted | Granted to | Base Price | (Dollars)(3) | |||||||||||||||||||||
(Number of | Employees | (Dollars per | Expiration | |||||||||||||||||||||
Name | Shares)(1) | in 2005 | Share)(2) | Date | 5% | 10% | ||||||||||||||||||
Richard J. Kramer | 52,000 | 2.56 | % | $ | 17.15 | 12/6/2015 | 561,080 | 1,421,160 | ||||||||||||||||
2,668 | * | 0.13 | % | 13.83 | 12/3/2012 | 15,021 | 35,004 | |||||||||||||||||
6,822 | * | 0.34 | % | 13.83 | 12/2/2013 | 45,025 | 107,924 | |||||||||||||||||
8,961 | * | 0.44 | % | 17.35 | 12/9/2014 | 85,757 | 211,121 | |||||||||||||||||
6,117 | * | 0.30 | % | 17.35 | 12/2/2013 | 50,649 | 121,361 | |||||||||||||||||
3,253 | * | 0.16 | % | 17.35 | 8/6/2012 | 22,966 | 53,544 | |||||||||||||||||
2,371 | * | 0.12 | % | 17.35 | 12/3/2012 | 16,739 | 39,027 | |||||||||||||||||
Jonathan D. Rich | 44,000 | 2.17 | % | 17.15 | 12/6/2015 | 474,760 | 1,202,520 | |||||||||||||||||
3,775 | * | 0.19 | % | 13.36 | 12/2/2013 | 24,085 | 57,682 | |||||||||||||||||
6,823 | * | 0.34 | % | 17.35 | 12/2/2013 | 56,494 | 135,368 | |||||||||||||||||
C. Thomas Harvie | 37,000 | 1.82 | % | 17.15 | 12/6/2015 | 399,230 | 1,011,210 | |||||||||||||||||
7,127 | * | 0.35 | % | 13.36 | 12/2/2013 | 45,470 | 108,901 | |||||||||||||||||
10,117 | * | 0.50 | % | 17.35 | 12/3/2012 | 71,426 | 166,526 | |||||||||||||||||
6,497 | * | 0.32 | % | 17.35 | 12/9/2014 | 62,176 | 153,069 | |||||||||||||||||
6,279 | * | 0.31 | % | 17.35 | 12/2/2013 | 51,990 | 124,575 | |||||||||||||||||
Joseph M. Gingo | 21,000 | 1.03 | % | 17.15 | 12/6/2015 | 226,590 | 573,930 | |||||||||||||||||
3,894 | * | 0.19 | % | 14.12 | 12/2/2013 | 26,246 | 62,888 |
* | Reinvestment option.See description of reinvestment options in footnote 1 below. |
(1) | On December 6, 2005, stock options in respect of an aggregate of 1,605,936 shares of Common Stock were granted to 836 persons, including the Named Officers. All shares in the table above are the subject of non-qualified stock options. Each stock option will vest at the rate of 25% per annum. Each unexercised stock option terminates automatically if the optionee ceases to be an employee of Goodyear or one of its subsidiaries for any reason, except that (a) upon retirement or disability of the optionee more than six months after the grant date, the stock option will become immediately exercisable and remain exercisable until its expiration date, and (b) in the event of the death of the optionee more than six months after the grant thereof, each stock option will become exercisable and remain exercisable for up to three years after the date of death of the optionee. Each option also includes the right to the automatic grant of a new option (a “reinvestment option”) for that number of shares tendered in the exercise of the original stock option. The reinvestment option will be granted on, and will have an exercise price equal to the fair market value of the Common Stock on the date of the exercise of the original stock option and will be subject to the same terms and conditions as the original stock option except for the exercise price and the reinvestment option feature. The following reinvestment options were granted during 2005: Mr. Keegan, three grants of 33,134, 25,103, and 25,103 shares on March 22, 2005, and three grants of 48,941, 32,559, and 24,122 shares on December 13, 2005; Mr. Kramer, 2,668 shares on March 18, 2005, 6,822 shares on March 28, 2005, and four grants of 8,961, 6,117, 3,253 and 2,371 shares on December 20, 2005; Mr. Rich, 3,775 shares on March 30, 2005, and 6,823 shares on December 20, 2005; Mr. Harvie, 7,127 shares on March 30, 2005, and three grants of 10,117, 6,497, and 6,279 shares on December 20, 2005; Mr. Gingo, 3,894 shares on May 20, 2005. |
(2) | The exercise price of each stock option is equal to 100% of the per share fair market value of the Common Stock on the date granted. The option exercise price and/or withholding tax obligations may be paid by delivery of shares of Common Stock valued at the market value on the date of exercise. |
(3) | The dollar amounts shown reflect calculations at the 5% and 10% rates set by the Securities and Exchange Commission and, therefore, are not intended to forecast possible future appreciation, if any, of the price of the Common Stock. No economic benefit to the optionees is possible without an increase in price of the Common Stock, which will benefit all shareholders commensurately. |
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Number of Securities | ||||||||||||||||||||||||
Underlying | ||||||||||||||||||||||||
Unexercised | Value of Unexercised | |||||||||||||||||||||||
Shares | Options/SARs at | In-the-Money Options/SARs | ||||||||||||||||||||||
Acquired | December 31, 2005 | at December 31, 2005 | ||||||||||||||||||||||
on Exercise | Value | (Number of Shares) | (Dollars)(2) | |||||||||||||||||||||
(Number of | Realized | |||||||||||||||||||||||
Name | Shares) | (Dollars)(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Robert J. Keegan | 228,250 | $ | 1,641,726 | 448,548 | 723,609 | $ | 184,706 | $ | 2,530,786 | |||||||||||||||
Richard J. Kramer | 43,050 | 290,961 | 63,611 | 143,242 | 23,484 | 288,603 | ||||||||||||||||||
Jonathan D. Rich | 17,254 | 159,298 | 57,396 | 122,348 | 295,370 | 511,085 | ||||||||||||||||||
C. Thomas Harvie | 45,350 | 371,476 | 154,837 | 128,620 | 44,415 | 495,127 | ||||||||||||||||||
Joseph M. Gingo | 6,000 | 43,860 | 107,700 | 60,594 | 221,836 | 279,772 |
(1) | In accordance with the Company’s 2002 Performance Plan, the Named Officers delivered previously owned shares in payment of the exercise price with respect to each option exercised in 2005. | |
(2) | Determined using $17.38 per share, the closing price of the Common Stock on December 30, 2005, as reported on the New York Stock Exchange Composite Transactions tape. |
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5 Year Average | Estimated annual benefits upon retirement for years of service indicated. | |||||||||||||||||||||||||
Annual | ||||||||||||||||||||||||||
Remuneration | 10 Years | 15 Years | 20 Years | 25 Years | 30 Years | 35 Years | ||||||||||||||||||||
$ | 250,000 | $ | 50,180 | $ | 68,637 | $ | 86,709 | $ | 98,663 | $ | 110,571 | $ | 118,113 | |||||||||||||
500,000 | 105,180 | 143,637 | 181,709 | 206,163 | 230,571 | 245,613 | ||||||||||||||||||||
750,000 | 160,180 | 218,637 | 276,709 | 313,663 | 350,571 | 373,113 | ||||||||||||||||||||
1,000,000 | 215,180 | 293,637 | 371,709 | 421,163 | 470,571 | 500,613 | ||||||||||||||||||||
1,250,000 | 270,180 | 368,637 | 466,709 | 528,663 | 590,571 | 628,113 | ||||||||||||||||||||
1,500,000 | 325,180 | 443,637 | 561,709 | 636,163 | 710,571 | 755,613 | ||||||||||||||||||||
1,750,000 | 380,180 | 518,637 | 656,709 | 743,663 | 830,571 | 883,113 | ||||||||||||||||||||
2,000,000 | 435,180 | 593,637 | 751,709 | 851,163 | 950,571 | 1,010,613 | ||||||||||||||||||||
2,500,000 | 545,180 | 743,637 | 941,709 | 1,066,163 | 1,190,571 | 1,265,613 | ||||||||||||||||||||
3,000,000 | 655,180 | 893,637 | 1,131,709 | 1,281,163 | 1,430,571 | 1,520,613 | ||||||||||||||||||||
3,500,000 | 765,180 | 1,043,637 | 1,321,709 | 1,496,163 | 1,670,571 | 1,775,613 | ||||||||||||||||||||
4,000,000 | 875,180 | 1,193,637 | 1,511,709 | 1,711,163 | 1,910,571 | 2,030,613 |
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(in thousands) | 2005 | 2004 | ||||||
Audit Fees and Expenses(1) | $ | 16,095 | $ | $20,041 | ||||
Audit-Related Fees and Expenses(2) | 3,870 | 1,934 | ||||||
Tax Fees and Expenses(3) | 1,866 | 1,368 | ||||||
All Other Fees and Expenses(4) | 250 | 1,925 | ||||||
Total | $ | 22,081 | $ | $25,268 |
(1) | Audit fees and expenses represents fees and expenses for professional services provided in connection with the audit of our financial statements and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings. Audit Fees and Expenses includes fees and expenses for professional services provided in connection with the assessment of our internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | Audit-related fees and expenses consists primarily of accounting consultations, employee benefit plan audits and services related to business acquisitions and divestitures. |
(3) | Tax fees and expenses consists primarily of expatriate tax services, assistance in the preparation of international tax returns and consultations on various tax matters worldwide. |
(4) | All other fees and expenses principally includes forensic accounting investigative services. |
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James C. Boland, Chairman | ||
John G. Breen | Gary D. Forsee | |
William J. Hudson, Jr. | Shirley D. Peterson |
26
James C. Boland | Gary D. Forsee | |
William J. Hudson, Jr. | Denise M. Morrison |
27
December 31, | 2000 | 2001 | 2001 | 2003 | 2004 | 2005 | ||||||||||||||||||
GOODYEAR COMMON STOCK | 100.00 | 107.97 | 32.00 | 36.93 | 68.89 | 81.67 | ||||||||||||||||||
S&P 500 | 100.00 | 88.12 | 68.64 | 88.33 | 97.94 | 102.75 | ||||||||||||||||||
DOW AUTO PARTS | 100.00 | 130.81 | 117.95 | 167.75 | 176.93 | 149.10 |
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By Order of the Board of Directors | |
C. Thomas Harvie, Secretary |
30
(1) | A Director will not be independent if, within the preceding three years: (i) the Director was employed by Goodyear; (ii) an immediate family member of the Director was employed by Goodyear as an executive officer; (iii) the Director, or an immediate family member of the Director, received more than $100,000 in direct compensation in any twelve month period from Goodyear, other than director and committee fees and pension or other forms of deferred compensation for prior service; (iv) the Director or an immediate family member of the Director was (but is no longer) a partner or employee of Goodyear’s present or former independent auditor and personally worked on Goodyear’s audit; or (v) a Goodyear executive officer was on the compensation committee of the board of directors of a company that concurrently employed the Goodyear Director or employed an immediate family member of the Director as an officer. Additionally, a Director will not be independent if the Director or an immediate family member is a current partner of Goodyear’s independent auditors, if the Director has an immediate family member who is a current employee of Goodyear’s independent auditors and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practices, or if the Director is a current employee of Goodyear’s independent auditors. | |
(2) | The following commercial relationships will not be considered to be material relationships that would impair a Director’s independence: if, within the preceding three years, a Goodyear Director was an executive officer or employee, or his or her immediate family member was an executive officer, of another company that made payments to, or received payments from, Goodyear for property or services in an amount which, in any single fiscal year, was less than the greater of $1 million, or two percent of such other company’s consolidated gross revenues. | |
(3) | If, within the preceding three years, a Goodyear Director served as an executive officer of a charitable organization, and Goodyear’s charitable contributions to the organization, in any single fiscal year, were more than the greater of $1 million, or two percent of such organization’s total annual receipts, then such relationship: (i) will be disclosed in the Company’s proxy statement; and (ii) will be evaluated by the Board of Directors in order to determine whether or not the Director should be considered independent. Such determination will be made by the Directors who satisfy the independence guidelines set forth in (1) and (2) above. |
“executive officer” means the company president, any vice-president in charge of a principal business unit, division or function (such as sales, administration or finance) or any other person who performs similar policy-making functions for the company; and | ||
“immediate family member” means any of the person’s spouse, parents, children, siblings, mothers- and fathers-in law, sons- anddaughters-in-law, and brothers- andsisters-in-law and anyone who shares the person’s home. |
A-1
B-1
C-1
C/O COMPUTERSHARE TRUST COMPANY, N.A.
BOX 8020
EDISON, NJ 08818-8020
VOTE BY INTERNET — www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 10, 2006. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by The Goodyear Tire & Rubber Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
VOTE BY TELEPHONE — 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 10, 2006. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to The Goodyear Tire & Rubber Company, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
If you vote via the Internet or by phone,
please do not mail your card.
Your vote is important. Please vote immediately.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | GOODY1 | KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THE GOODYEAR TIRE & RUBBER COMPANY | ||||||||||||
The Board of Directors Recommends a Vote FOR Election of All Nominees and FOR Items 2, 3 and 4, and AGAINST Item 5. | ||||||||||||
Vote on Directors | ||||||||||||
ITEM 1. | Election of Directors | |||||||||||
NOMINEES: | Class III Directors — Each to serve a 3 year term 01) James C. Boland, 02) Steven A. Minter, 03) Michael R. Wessel Class II Directors —Each to serve a remaining year of a three year term 04) John G. Breen, 05) William J. Hudson, Jr. | |||||||||||
Vote on Proposals | For | Against | Abstain | |||||||||
ITEM 2. | Proposal to amend Goodyear’s Code of Regulations to provide for annual election of Directors. | o | o | o | ||||||||
ITEM 3. | Proposal to amend Goodyear’s Amended Articles of Incorporation to increase the number of authorized shares. | o | o | o | ||||||||
Please sign name exactly as it appears above. Each joint owner should sign. Please indicate title if you are signing as executor, administrator, trustee, custodian, guardian or corporate officer. | ||||||||||||
YES | NO | |||||||||||
Please indicate if you plan to attend this meeting | o | o | ||||||||||
For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee, mark “For All Except” and write the nominee’s name on the line below. | |||||||||
o | o | o | ||||||||||
For | Against | Abstain | ||||||||||
ITEM 4. | Ratification of appointment of PricewaterhouseCoopers LLP as Independent Accountants. | o | o | o | ||||||||
ITEM 5. | Shareholder proposal - re: simple majority vote. | o | o | o | ||||||||
The undersigned hereby acknowledges receipt of Notice of 2006 Annual Meeting of Shareholders and Proxy Statement. |
Signature (PLEASE SIGN WITHIN BOX) Date | Signature (Joint Owners) Date |
9:00 a.m.
Goodyear Theater
1201East Market Street
Akron, Ohio
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
C/O COMPUTERSHARE TRUST COMPANY, N.A.
BOX 8020
EDISON, NJ 08818-8020
VOTE BY INTERNET — www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 10, 2006. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by The Goodyear Tire & Rubber Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
VOTE BY TELEPHONE — 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 10, 2006. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to The Goodyear Tire & Rubber Company, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
If you vote via the Internet or by phone,
please do not mail your card.
Your vote is important. Please vote immediately.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | GOODY3 | KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THE GOODYEAR TIRE & RUBBER COMPANY | ||||||||||||
The Board of Directors Recommends a Vote FOR Election of All Nominees and FOR Items 2, 3 and 4, and AGAINST Item 5 | ||||||||||||
Vote on Directors | ||||||||||||
ITEM 1. | Election of Directors | |||||||||||
NOMINEES: | Class III Directors — Each to serve a 3 year term 01) James C. Boland, 02) Steven A. Minter, 03) Michael R. Wessel Class II Directors — Each to serve remaining year of a three year term 04) John G. Breen, 05) William J. Hudson, Jr. | |||||||||||
Vote on Proposals | For | Against | Abstain | |||||||||
ITEM 2. | Proposal to amend Goodyear’s Code of Regulations to provide for the annual election of Directors. | o | o | o | ||||||||
ITEM 3. | Proposal to amend Goodyear’s Amended Articles of Incorporation to increase the number of authorized shares. | o | o | o | ||||||||
For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee, mark “For All Except” and write the nominee’s name on the line below. | |||||||||
o | o | o | ||||||||||
For | Against | Abstain | ||||||||||
ITEM 4. | Ratification of appointment of PricewaterhouseCoopers LLP as Independent Accountants. | o | o | o | ||||||||
ITEM 5. | Shareholder proposal - re: simple majority vote. | o | o | o | ||||||||
Authorization: I acknowledge receipt of the Notice of 2006 Annual Meeting and Proxy Statement. I hereby instruct the trustee to vote by proxy, in the form solicited by the Board of Directors, the number of full shares in this Plan account(s) as specified above, or, if not specified above, as recommended by the Board of Directors.
YES | NO | |||||||||
Please indicate if you plan to attend this meeting | o | o | ||||||||
Signature [PLEASE SIGN WITHIN BOX] Date | Signature (Joint Owners) Date |
9:00 a.m.
Goodyear Theater
1201East Market Street
Akron, Ohio
THE GOODYEAR TIRE & RUBBER COMPANY EMPLOYEE SAVINGS AND OTHER PLANS
Solicited on Behalf of the Board of Directors
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.