<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE GOODYEAR TIRE & RUBBER COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
(LOGO)DE
NOTICE OF
1996 ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
The Goodyear Tire & Rubber Company
1144 East Market Street
Akron, Ohio 44316-0001
<TABLE>
<S> <C>
DATE: Monday, April 15, 1996
TIME: 10:00 A.M., Akron Time
PLACE: Office Of The Company
Goodyear Theater
1201 East Market Street
Akron, Ohio
</TABLE>
YOUR VOTE IS IMPORTANT
------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE> 3
February 27, 1996
DEAR SHAREHOLDERS:
You are cordially invited to attend your Company's 1996 Annual Meeting of
Shareholders, which will be held at the Goodyear Theater, 1201 East Market
Street, Akron, Ohio, at 10:00 A.M., Akron Time, on Monday, April 15, 1996. We
hope you will be able to attend and participate. The Notice of 1996 Annual
Meeting of Shareholders and Proxy Statement follow. The 1995 Annual Report is
enclosed.
At the Annual Meeting, shareholders will elect four persons to serve as
directors; three to serve as Class I directors for three year terms and one to
serve as a Class III director for a one year term (Item 1 on your Proxy). Each
nominee is an incumbent. The Proxy Statement contains information regarding each
nominee for director and the seven continuing directors.
Your Board of Directors is presenting for action by the shareholders its
proposal that shareholders ratify the Board's appointment of Price Waterhouse
LLP as independent accountants for the Company for 1996 (Item 2 on your Proxy).
Your Board of Directors recommends that you vote for the ratification of the
appointment of Price Waterhouse LLP. One shareholder proposal will also be
considered (Item 3 on your Proxy). Your Board of Directors recommends that you
vote against the shareholder proposal.
If you plan to attend the Annual Meeting, please mark the indicated box on
the reverse side of your Proxy. You are cordially invited to join us for
refreshments from 9:00 to 9:45 A.M. in the Goodyear Gymnasium, which is adjacent
to the Theater. You do not need a ticket to attend the Annual Meeting or the
reception.
Whether or not you plan to attend, it is important that you complete, date,
sign and promptly return your Proxy. This will ensure that your shares will be
represented at the meeting. If you attend and decide to vote in person, you may
revoke your Proxy. Remember, your vote is important!
Sincerely,
<TABLE>
<S> <C>
STANLEY C. GAULT SAMIR F. GIBARA
Chairman of the Board President and
Chief Executive Officer
</TABLE>
<PAGE> 4
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
NOTICE OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS........................ I
PROXY STATEMENT
General Information.................................................... 1
Shares Voting....................................................... 1
Vote Required -- Cumulative Voting.................................. 1
Voting of Proxy -- Confidentiality.................................. 1
Revocability of Proxy............................................... 2
The Board of Directors and Its Committees.............................. 2
Audit Committee..................................................... 2
Compensation Committee.............................................. 2
Nominating Committee................................................ 3
Committee on Corporate Responsibility............................... 3
Election of Directors (Proxy Item 1)................................... 3
Ratification of Appointment of Independent Accountants (Proxy Item
2).................................................................. 7
Shareholder Proposal (Proxy Item 3).................................... 7
Statement of Board of Directors Opposing the Shareholder Proposal...... 8
Other Business......................................................... 9
Beneficial Ownership of Common Stock................................... 9
Executive Officer Compensation......................................... 11
Summary of Compensation............................................. 11
Option/SAR Grants in 1995........................................... 13
Option/SAR 1995 Exercises and Year-End Values....................... 14
Long Term Incentive Awards.......................................... 14
Other Plan Information.............................................. 15
Retirement Benefits................................................. 17
Employment and Stock Purchase Agreements............................ 18
Directors' Compensation............................................. 19
Other Matters....................................................... 20
Compensation Committee Report on Executive Compensation................ 20
Performance Graph...................................................... 24
Miscellaneous.......................................................... 25
Submission of Shareholder Proposals................................. 25
10-K Report......................................................... 25
Dividend Reinvestment Plan Shares................................... 25
Savings Plan Shares................................................. 25
Costs of Solicitation............................................... 25
</TABLE>
<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY
NOTICE OF THE
1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 15, 1996
TO THE SHAREHOLDERS:
The 1996 Annual Meeting of Shareholders of The Goodyear Tire & Rubber
Company (the "Company"), an Ohio corporation, will be held at the Goodyear
Theater (in the Company's Principal Office Complex), 1201 East Market Street,
Akron, Ohio, on Monday, April 15, 1996, at 10:00 A.M., Akron Time, for the
following purposes:
1. To elect four directors; three to serve as Class I directors, each for a
term of three years, and one to serve as a Class III director for a one
year term (Proxy Item 1);
2. To consider and vote upon a proposal to ratify the appointment of Price
Waterhouse LLP as independent accountants for the Company for 1996
(Proxy Item 2);
3. To consider and vote upon a Shareholder Proposal (Proxy Item 3); and
4. To act upon such other matters and to transact such other business as
may properly come before the meeting or any adjournments thereof.
The Board of Directors fixed the close of business on February 16, 1996 as
the record date for determining shareholders entitled to notice of, and to vote
at, the 1996 Annual Meeting. Only holders of record of the Common Stock of the
Company at the close of business February 16, 1996 will be entitled to vote at
the 1996 Annual Meeting and adjournments, if any, thereof.
By order of the Board of Directors:
February 27, 1996 James Boyazis, Secretary
- --------------------------------------------------------------------------------
Please complete and sign your proxy and return it promptly in the enclosed
envelope.
I
<PAGE> 6
PROXY STATEMENT
The Goodyear Tire & Rubber Company
------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Goodyear Tire & Rubber Company, an Ohio
corporation (the "Company"), to be voted at the Annual Meeting of Shareholders
to be held April 15, 1996, and at any adjournments thereof, for the purposes set
forth in the accompanying notice.
The principal executive offices of the Company are located at 1144 East Market
Street, Akron, Ohio 44316-0001. The Company's telephone number is 216-796-2121
(330-796-2121 beginning March 9, 1996).
The Company's Annual Report to Shareholders for the year ended December 31,
1995 is enclosed with this Proxy Statement. The Annual Report is not considered
part of the proxy solicitation materials. The approximate date on which this
Proxy Statement and the related form of Proxy are first being sent to
shareholders is February 28, 1996.
SHARES VOTING
Holders of shares of the Common Stock, without par value, of the Company (the
"Common Stock") at the close of business on February 16, 1996 are entitled to
notice of the Annual Meeting and to vote shares held on that date at the Annual
Meeting. As of the close of business February 16, 1996 (the "record date"),
there were 154,470,955 shares of Common Stock outstanding and entitled to vote
at the Annual Meeting. Each share of Common Stock is entitled to one vote.
VOTE REQUIRED -- CUMULATIVE VOTING
Except with respect to the election of directors, the affirmative vote of at
least a majority of the shares of Common Stock outstanding on the record date is
required for a resolution to be adopted.
In the election of directors, the three candidates for election as Class I
directors receiving the most votes will be elected and the candidate for
election as a Class III director receiving the most votes will be elected. In
the election of the three Class I directors, each shareholder has the right to
vote cumulatively for candidates whose names have been placed in nomination for
election as Class I directors prior to the voting. In voting cumulatively, a
shareholder may (a) give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of shares of Common Stock the
shareholder is entitled to vote, or (b) distribute his or her votes on the same
principle among two or more candidates as desired.
Abstentions, "withheld" votes and "broker non-votes" do not count for or
against a nominee for election as a director and have the same effect as votes
against the Board's proposal and the Shareholder Proposal.
VOTING OF PROXY -- CONFIDENTIALITY
The accompanying Proxy is designed to permit each shareholder of record at the
close of business on February 16, 1996 to vote on the election of directors and
on the resolutions described in this Proxy Statement. Three directors of the
Company, Messrs. Gault, Minter and Pytte, have been designated as proxies to
vote shares in accordance with the instructions on the Proxy.
Unless a shareholder requests that voting of the Proxy be withheld for any one
or more of the nominees for director, the Proxy will be voted for the four
nominees whose names are set forth at page 3. However, the proxies designated by
your Board of Directors may cumulatively vote each Proxy received if such action
is deemed by them to be appropriate, except to the extent authority to so
cumulate votes is expressly withheld as to any nominee for election as a Class I
director.
Your Board of Directors does not presently anticipate that any of the nominees
named will be unavailable for election. In the event an unexpected vacancy
occurs, the Proxies received may be voted for the election of a new nominee
designated by the Board of Directors.
Where a shareholder specifies a choice with respect to any other matter set
forth in this Proxy Statement, his or her shares will be voted (or withheld from
voting) in accordance with the instructions given. If no specific instructions
are given, shares will be voted in favor of the proposal by the Board of
Directors to ratify the appointment of Price Waterhouse LLP as independent
accountants for the Company for 1996 and against the adoption of the Shareholder
Proposal.
--1--
<PAGE> 7
The vote of each shareholder, whether by proxy or ballot, will be treated as
confidential, except (a) as may be required by law, (b) as may be necessary to
assert or defend claims for or against the Company, (c) in the case of a
contested election of director(s), or (d) at the express request of the
shareholder. The inspectors of election and persons processing proxy cards and
ballots and tabulating the vote will not be employees of the Company.
Representatives of First Chicago Trust Company of New York have been appointed
to serve as the inspectors of election for the 1996 Annual Meeting.
REVOCABILITY OF PROXY
A shareholder may revoke or revise any proxy given to the Board of Directors
by the execution of a later proxy or by giving notice to the Company in writing
or in open meeting. No revocation or revision of any proxy shall affect any vote
previously taken.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In accordance with the Ohio General Corporation Law and the Articles of
Incorporation and Code of Regulations of the Company, the Company is managed
under the direction of the Board of Directors by the chief executive officer and
other officers to whom authority has been delegated.
The Board is charged with specific responsibility with regard to the selection
and evaluation of management, the reporting of financial results to the
shareholders, and the consideration of other fundamental corporate matters,
including the declaration of dividends, the issuance of stock and significant
business transactions. The Board also regularly reviews the Company's operating
results and financial statements, approves capital expenditures and works with
senior management in planning the Company's business strategy and establishing
its long term and short term business objectives.
Historically, a majority of the members of the Board have been neither
officers nor employees of the Company. Nine of the eleven directors currently
serving are neither present nor past officers or employees of the Company or any
of its subsidiaries. Of the four nominees (each currently serving as a
director), three are neither present nor past officers or employees of the
Company or any of its subsidiaries.
The Board meets on a regularly scheduled basis at least nine times during the
year. The average attendance of all directors at the nine Board meetings held
during 1995 was 92%. The average attendance of all directors at all meetings of
the Board and its standing committees held during 1995 was 93%. During 1995,
each incumbent director attended at least 75% of all meetings of the Board and
the standing committees of the Board upon which he or she served, other than Mr.
Butler who attended 73% of such meetings.
The Board of Directors has four standing committees to assist it in the
discharge of its responsibilities. Their principal activities are set forth
below.
AUDIT COMMITTEE
Established in 1967, the Audit Committee is comprised of six directors who are
not present or past employees of the Company or any of its subsidiaries. Each
member of the Committee must be, in the opinion of the entire Board,
"independent." The Audit Committee held three formal meetings during 1995.
The Audit Committee reviews for the Board the activities of the Company's
internal auditors and its independent accountants to determine whether the
Company's organization, internal controls and policies are reasonably designed
to assure the adequacy of the Company's financial statements and records and to
provide for the safekeeping of the assets of the Company.
The Audit Committee annually considers the qualifications of the independent
accountants of the Company, makes recommendations to the Board as to their
selection, reviews the audit plan, approves services rendered or to be rendered
by the independent accountants and reviews the results of their audit for the
previous year. The Audit Committee reviews financial reports and monitors
compliance with the Company's ethics policies and accounting controls,
procedures and practices, receiving direct reports in this connection from the
Company's internal auditors and its independent accountants.
COMPENSATION COMMITTEE
Established in 1979, the Compensation Committee is comprised of all directors
who are not present or past employees of the Company or any of its subsidiaries.
The Compensation Committee held five formal meetings during 1995.
The Compensation Committee has primary responsibility for establishing and
administering the compensation programs of the Company for its executive
officers and other key personnel. The Compensation Committee consults with the
chief executive officer of the Company regarding executive compensation
policies, practices and plans, and
--2--
<PAGE> 8
undertakes such special studies regarding compensation as he or the Board may
request. The Compensation Committee also administers the 1989 Goodyear
Performance and Equity Incentive Plan, the Company's Performance Recognition
Plan, the Company's 1987 and 1982 Employees' Stock Option Plans, and the
Company's Deferred Compensation Plan For Executives.
NOMINATING COMMITTEE
The Nominating Committee, established in 1978, is comprised of the Chairman of
the Board and six directors who are not present or past employees of the Company
or any of its subsidiaries. The Nominating Committee held three formal meetings
during 1995.
The principal function of the Nominating Committee is to identify candidates
for election to the Board of Directors. The Nominating Committee has the primary
responsibility for evaluating, and for recommending to the Board, candidates for
Board membership. The Nominating Committee also follows the development of
members of senior management for possible future nomination to the Board.
The Nominating Committee will consider candidates submitted by shareholders
for nomination to the Board and will make recommendations as to
each such candidate to the Board. Any shareholder desiring to submit a candidate
for consideration by the Nominating Committee should send the name of such
proposed candidate, together with such biographical data and background
information concerning the candidate as the shareholder may desire, to: The
Office of the Secretary, The Goodyear Tire & Rubber Company, Akron, Ohio
44316-0001.
COMMITTEE ON CORPORATE RESPONSIBILITY
The Committee on Corporate Responsibility was established in 1976 and is
currently comprised of six directors who are not present or past officers or
employees of the Company or any of its subsidiaries. During 1995, the Committee
held two formal meetings.
The principal functions of the Committee on Corporate Responsibility are to
periodically review the Company's policies relating to the manner in which the
Company conducts its business and its relationships with its shareholders,
employees and customers, as well as governmental agencies and the general
public, and to review the need for, and to develop, new policies relating to
such matters. The Committee is also responsible for establishing, with the
concurrence of the entire Board, methods for monitoring the implementation of,
and compliance with, policies adopted by the Company.
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY)
The Board of Directors is comprised of eleven directors and is classified into
three classes of directors. At each Annual Meeting directors of one of the
classes, on a rotating basis, are elected to three year terms, to serve as the
successors to the directors of the same class whose terms expire at that Annual
Meeting. Classes I and II are each comprised of four directors and Class III is
comprised of three directors. The current terms of the four Class I directors
will expire at the 1996 Annual Meeting. The current terms of the three Class III
directors and the four Class II Directors will expire at the 1997 and 1998
Annual Meetings, respectively. Effective at the 1996 Annual Meeting, Class I
will be comprised of three directors and Classes II and III will each be
comprised of four directors.
At the 1996 Annual Meeting three persons are to be elected to serve as Class I
directors, each to a three year term, and one person is to be elected to serve
as a Class III Director for a one year term. The Board of Directors has selected
the following nomi-
nees recommended by the Nominating Committee for election to the Board of
Directors:
As Class I Directors --
Samir F. Gibara
William J. Hudson, Jr.
William C. Turner
each to hold office for a three year term expiring at the 1999 Annual Meeting
and until his successor shall have been duly elected and qualified; and
As a Class III Director --
Gertrude G. Michelson
to hold office for a one year term expiring at the 1997 Annual Meeting and until
her successor shall have been duly elected and qualified.
Each nominee is an incumbent director whose term of office expires at the
Annual Meeting. The following page contains certain information concerning the
four nominees, which information was furnished by them.
--3--
<PAGE> 9
NOMINEES FOR DIRECTOR -- CLASS I, THREE YEAR TERMS EXPIRING IN 1999
- --------------------------------------------------------------------------------
SAMIR F. GIBARA
President and Chief Executive Officer.
Mr. Gibara joined the Company in 1966, serving in various managerial posts. Mr.
Gibara served as Chairman of the Board of a European subsidiary of the Company
from December 1, 1990 until September 30, 1992. Mr. Gibara was appointed a Vice
President of the Company on September 1, 1992. Mr. Gibara was elected Vice
President for Strategic Planning and Business Development and as the acting Vice
President of Finance and Chief Financial Officer of the Company on October 6,
1992. Mr. Gibara was elected Executive Vice President for North American Tire
Operations on May 3, 1994. Mr. Gibara was elected President and Chief Operating
Officer, and as a director, effective April 15, 1995. Mr. Gibara was elected
President and Chief Executive Officer effective January 1, 1996.
Age: 56
Director since: April 15, 1995
- --------------------------------------------------------------------------------
WILLIAM J. HUDSON, JR.
President and Chief Executive Officer and a Director of AMP Incorporated, a
manufacturer of electrical and electronic connectors and terminals and related
products and systems.
Mr. Hudson served in various managerial posts with AMP Incorporated prior to
being elected its Executive Vice President - International effective January 1,
1991. Mr. Hudson was elected President and Chief Executive Officer of AMP
Incorporated effective January 1, 1992. Mr. Hudson is also a director of
Carpenter Technology and a director of the National Association of
Manufacturers.
Member of Compensation Committee.
Age: 61
Director since: November 7, 1995
- --------------------------------------------------------------------------------
WILLIAM C. TURNER
Chairman of the Board and Chief Executive Officer of Argyle Atlantic
Corporation, a consulting firm to multinational corporations on international
strategy, investments and strategic alliances.
Mr. Turner has served as Chairman and Chief Executive Officer of Argyle Atlantic
Corporation since 1977. He is also a director of Rural/Metro Corporation and
Microtest, Inc. Mr. Turner is also Chairman of the International Advisory
Council of Avon Products, Inc., a member of the Board of Governors of the Lauder
Institute of Management and International Studies of the University of
Pennsylvania, a trustee and former Chairman of the Board of the American
Graduate School of International Management, and a trustee and Executive
Committee member of the United States Council for International Business.
Chairman of Nominating Committee and member of Audit, Compensation and Corporate
Responsibility Committees.
Age: 66
Director since: October 3, 1978
- --------------------------------------------------------------------------------
NOMINEE FOR DIRECTOR -- CLASS III, ONE YEAR TERM EXPIRING IN 1997
- --------------------------------------------------------------------------------
GERTRUDE G. MICHELSON
Retired. Formerly Senior Vice President -- External Affairs, R. H. Macy & Co.,
Inc., a national retail merchandising chain.
Mrs. Michelson joined R. H. Macy & Co., Inc. in 1947. After serving in various
posts, she was elected Senior Vice President-External Affairs of R. H. Macy &
Co., Inc., in November of 1980, which post she held until she retired effective
September 1, 1992. Mrs. Michelson served as a Senior Advisor to R. H. Macy & Co.
Inc. following retirement until December 31, 1994. She is also a director of
Federated Department Stores, Inc., The Chubb Corporation, General Electric
Company and The Stanley Works, a governor of the American Stock Exchange and a
trustee of RAND Corporation.
Chairwoman of Committee on Corporate Responsibility and member of Audit,
Compensation and Nominating Committees.
Age: 70
Director since: May 5, 1981
- --------------------------------------------------------------------------------
The following two pages contain certain information concerning the seven
directors whose terms of office continue after the 1996 Annual Meeting, which
information was provided by the continuing directors.
--4--
<PAGE> 10
CONTINUING DIRECTORS -- TERMS EXPIRING IN 1997
- --------------------------------------------------------------------------------
THOMAS H. CRUIKSHANK
Retired. Formerly Chairman of the Board and Chief Executive Officer of
Halliburton Company, a supplier of oil field equipment and services and
engineering and construction services.
Mr. Cruikshank joined Halliburton Company in 1969. He was elected its President
in November of 1981, its Chief Executive Officer in May of 1983 and its Chairman
of the Board and Chief Executive Officer in June of 1989. Mr. Cruikshank retired
as Chief Executive Officer of Halliburton Company on October 1, 1995 and as its
Chairman of the Board on January 2, 1996. Mr. Cruikshank is also a director of
The Williams Companies, Inc. and Central and Southwest Corporation.
Member of Audit, Compensation and Nominating Committees.
Age: 64
Director since: October 7, 1986
- --------------------------------------------------------------------------------
STEVEN A. MINTER
Executive Director and President of The Cleveland Foundation, a community trust
devoted to health, education, social services and civic and cultural affairs.
Mr. Minter has been the Executive Director and President of The Cleveland
Foundation, Cleveland, Ohio, since January 1, 1984. Mr. Minter served as
Associate Director and Program Officer of The Cleveland Foundation from 1975 to
1980 and from 1981 to 1983. Mr. Minter served as Undersecretary of the United
States Department of Education from May, 1980, until January, 1981. Mr. Minter
is also a director of Consolidated Natural Gas Company, KeyCorp and Rubbermaid
Incorporated, a trustee of The College of Wooster and Director of The Foundation
Center.
Member of Compensation, Corporate Responsibility and Nominating Committees.
Age: 57
Director since: February 12, 1985
- --------------------------------------------------------------------------------
AGNAR PYTTE
President of Case Western Reserve University.
Dr. Pytte was a research physicist at Princeton University and Professor of
Physics, Dean of Science and Dean of Graduate Studies at Dartmouth College prior
to becoming the Provost of Dartmouth College in 1982, a position he held until
July 1, 1987, when he was elected President of Case Western Reserve University.
Dr. Pytte is also a director of A. O. Smith Corporation and the Sherman
Fairchild Foundation Inc.
Member of Compensation, Corporate Responsibility and Nominating Committees.
Age: 63
Director since: January 5, 1988
--5--
<PAGE> 11
CONTINUING DIRECTORS -- TERMS EXPIRING IN 1998
- --------------------------------------------------------------------------------
JOHN G. BREEN
Chairman of the Board and Chief Executive Officer, The Sherwin-Williams Company,
a manufacturer of paints, coatings and related products.
Mr. Breen has served as the Chairman of the Board and Chief Executive Officer of
The Sherwin-Williams Company since April 1980. He is also a director of Mead
Corporation, National City Corporation and Parker-Hannifin Corporation.
Chairman of Compensation Committee and member of Audit and Nominating
Committees.
Age: 61
Director since: January 7, 1992
- --------------------------------------------------------------------------------
WILLIAM E. BUTLER
Retired. Formerly Chairman of the Board and Chief Executive Officer of Eaton
Corporation, a manufacturer of highly engineered products for the automotive,
industrial, commercial and military markets.
Mr. Butler served as the President and Chief Operating Officer of Eaton
Corporation from February of 1989 to September 4, 1991, when he was elected
President and Chief Executive Officer. Mr. Butler was elected Chairman of the
Board and Chief Executive Officer of Eaton Corporation in January of 1992,
serving in that capacity until he retired on December 31, 1995. Mr. Butler is
also a director of Bearings, Inc., Ferro Corporation, Pitney Bowes Inc. and Zurn
Industries, Inc.
Member of Audit, Compensation and Corporate Responsibility Committees.
Age: 64
Director since: February 8, 1995
- --------------------------------------------------------------------------------
STANLEY C. GAULT
Chairman of the Board.
Mr. Gault served as the Chairman of the Board and Chief Executive Officer of
Rubbermaid Incorporated from May 1, 1980 to May 1, 1991, when he retired. Mr.
Gault was elected Chairman of the Board and Chief Executive Officer of the
Company on June 4, 1991. Mr. Gault retired as Chief Executive Officer of the
Company effective December 31, 1995. He is currently the Chairman of the Board
and an employee of the Company. He is also a director of Rubbermaid
Incorporated, Avon Products, Inc., International Paper Company, PPG Industries,
Inc., The Timken Company and The New York Stock Exchange, Inc. Mr. Gault is also
a director of the National Association of Manufacturers and Chairman of the
Board of Trustees of The College of Wooster.
Member of Nominating Committee.
Age: 70
Director since: February 14, 1989
- --------------------------------------------------------------------------------
GEORGE H. SCHOFIELD
Retired. Formerly Chairman of the Board and Chief Executive Officer of Zurn
Industries, Inc., which designs, manufactures and markets power systems, water
controls and mechanical drives.
Mr. Schofield served as the Chairman of the Board and Chief Executive Officer of
Zurn Industries, Inc. from 1986 until October 17, 1994, when he retired as Chief
Executive Officer. He retired as Chairman of the Board of Zurn Industries, Inc.
on March 31, 1995. Mr. Schofield is also a director of National Fuel Gas
Company.
Chairman of Audit Committee and member of Compensation and Corporate
Responsibility Committees.
Age: 66
Director since: December 3, 1991
--6--
<PAGE> 12
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON THE PROXY)
Price Waterhouse LLP ("Price Waterhouse") served as the Company's independent
accountants for the year ended December 31, 1995. In addition to rendering audit
services during 1995, Price Waterhouse performed various non-audit services for
the Company and its subsidiaries. The Audit Committee approved these non-audit
services prior to their performance and has determined that the independence of
Price Waterhouse was not impaired. It is the Company's policy that, under
ordinary circumstances, Audit Committee approval will precede the performance of
non-audit services.
The Board of Directors, on the recommendation of the Audit Committee, has
appointed Price Waterhouse as independent accountants for the Company for the
year ending December 31, 1996. In making its recommendation, the Audit Committee
reviewed past audit results and the non-audit services performed during 1995 and
proposed to be performed during 1996.
In selecting Price Waterhouse, the Audit Committee and the Board of Directors
carefully considered their independence. Price Waterhouse have confirmed that
they are in compliance with all rules, standards and policies of the American
Institute of Certified Public Accountants and the Securities and Exchange
Commission governing auditor independence.
Representatives of Price Waterhouse will attend the Annual Meeting. They will
have the opportunity to make a statement, if they so desire, and have advised
the Company that they will be available to respond to appropriate questions of
shareholders.
The following resolution will be presented by your Board of Directors at the
Annual Meeting:
"Resolved, that the action of the Board of Directors in selecting
and appointing Price Waterhouse LLP as independent accountants for the
Company for the year ending December 31, 1996 be, and hereby is,
ratified."
In the event the appointment of Price Waterhouse is not ratified by the
shareholders, the adverse vote will be deemed to be an indication to the Board
of Directors that it should consider selecting other independent accountants for
1997.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
(PROXY ITEM 2).
SHAREHOLDER PROPOSAL
(ITEM 3 ON THE PROXY)
A shareholder has given notice that it intends to present the proposal set
forth below for action at the Annual Meeting. The name and address of, and the
number of shares of Common Stock held by, the shareholder proponent will be
furnished by the Company to any person, orally or in writing as requested,
promptly upon the receipt of any oral or written request therefor.
"WHEREAS WE BELIEVE:
Responsible implementation of a sound, credible environmental
policy increases long-term shareholder value by raising efficiency,
decreasing clean-up costs, reducing litigation, and enhancing public
image and product attractiveness;
Adherence to public standards for environmental performance gives
a company greater public credibility than following standards created
by industry alone. For maximum credibility and usefulness, such
standards should reflect what investors and other stakeholders want to
know about the environmental records of their companies;
Companies are increasingly being expected to do meaningful,
regular, comprehensive, and impartial environmental reports. These
help investors and the public to understand environmental progress and
problems. Uniform standards for environmental reports permit
comparisons of performance over time. They also attract new capital
from investors seeking investments which are environmentally
responsible and responsive and which minimize risk of environmental
liability.
WHEREAS:
The Coalition of Environmentally Responsible Economies (CERES) --
which comprises shareholders of this company, public interest
representatives, and environmental experts -- consulted with
corporations and produced comprehensive
--7--
<PAGE> 13
standards for both environmental performance and reporting. Over 90
companies, including Sun [Oil], General Motors, H.B. Fuller, and Polaroid
have endorsed the CERES Principles to demonstrate their commitment to
public environmental accountability. Fortune-500 endorsers say that the
benefits of working with CERES are public credibility, "value-added" to the
company's environmental initiatives, and advancement for the company's own
environmental program.
In endorsing the CERES Principles, a company commits to work
toward:
1. Protection of the biosphere
2. Sustainable use of natural resources
3. Waste reduction and disposal
4. Energy conservation
5. Risk reduction
6. Safe products and services
7. Environmental restoration
8. Informing the public
9. Management commitment
10. Audits and reports
[Full text of the CERES Principles and accompanying CERES Report
Form obtainable from CERES, 711 Atlantic Avenue, Boston, MA 02110,
tel: (617) 451-0927.]
RESOLVED: Shareholders request the Company to prepare a report
(at reasonable cost and omitting proprietary information) describing
company programs, progress, and future plans relative to the
environment and the CERES Principles, and using the standard CERES
Report Form as a guide."
The following statement was submitted in support of such resolution:
"Many investors support this resolution. Those sponsoring it have
portfolios totaling $75 billion. Others voting FOR it bring
shareholder votes to 20-30 percent at some companies. The number of
public pension funds and foundations supporting this resolution
increases every year. Their objectives are: standards for
environmental progress and disclosure, methods for measuring progress
toward these goals, and a format for public reporting of progress. We
believe this is comparable to the European Community regulation for
voluntary participation in verified and publicly-reported eco-
management and auditing, and fully compatible with ISO 14000
certification.
An annual environmental report in the format of the CERES report
would not duplicate -- but rather complement -- the Company's own
environmental reporting.
Shareholders are asked to vote FOR this resolution to ensure that
our Company's environmental policies and reports are publicly
scrutinized and adhere to standards upheld by management and
shareholders alike."
STATEMENT OF BOARD OF DIRECTORS
OPPOSING THE SHAREHOLDER PROPOSAL
Your Company is committed to the principle that it must conduct its operations
in an environmentally responsible, safe and efficient manner. In furtherance of
this principle, your Company has developed and is implementing policies and
practices designed to protect the environment, conserve natural resources and
energy, reduce the impact of air and water emissions on the environment and
reduce solid wastes. One focus of your Company's efforts is on developing and
implementing systems to foster continuous improvement in the Company's
environmental performance while at the same time maintaining or improving the
Company's competitive position in the global economy we live in today.
The environmental goals of your Company include the reduction of energy usage,
the reduction of air and water emissions and waste through process improvements,
and the improvement of manufacturing materials and methods to promote the
protection of the health and safety of our employees and customers and the
general public.
As a result of various initiatives, since 1988 your Company has reduced
releases of 17 chemicals targeted by the United States Environmental Protection
Agency ("USEPA") by more than 50%, exceeding the goals of this voluntary program
and earning the commendation of the USEPA and recognition in 1995 as an
"Environmental Leader." Other similar programs are underway. Your Company is
also a
--8--
<PAGE> 14
leading proponent of the use of scrap tires for fuel and an active participant
in the tire industry campaign to expand scrap tire management programs.
Your Company has endorsed the "International Chamber of Commerce's Business
Charter for Sustainable Development", a set of principles for environmental
management based on the idea that protection of the environment should be
achieved on a basis consistent with sustained economic growth. The ICC Business
Charter principles are generally consistent with the goals of the CERES
Principles. More than 1,000 companies around the world have endorsed the ICC
Business Charter, including 85 Fortune 500 companies.
Numerous reports are made by your Company to the USEPA and other governmental
agencies in the United States, most of which are available to the public. Air
and waste water emission reports are made annually to various local, state and
Federal agencies in the United States and to various governmental agencies in
many of the other countries in which subsidiaries of the Company conduct
manufacturing operations. Your Company also submits hazardous waste reports
periodically to various state and Federal agencies.
Your Board of Directors believes the shareholders and the environment will be
best served by focusing the Company's resources on implementing its programs and
policies rather than devoting its resources to completing yet another report in
a specific format.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THE ADOPTION
OF THE SHAREHOLDER PROPOSAL (PROXY ITEM 3).
The shareholder Proposal will be adopted only if it receives the affirmative
vote of at least a majority of the shares of Common Stock entitled to vote at
the Annual Meeting. Abstentions, "withheld" votes and "broker non-votes" will
not be counted as either "for" or "against" this proposal, but will have the
same effect as votes against the proposal.
OTHER BUSINESS
In addition to the matters described above, there will be an address by the
Chairman of the Board and a report on operations by the President and Chief
Executive Officer of the Company. A discussion period will follow during which
shareholders will have an opportunity to ask appropriate questions regarding the
Company and its operations.
The Board of Directors does not intend to bring
any other business before the Annual Meeting and is not aware of any other
business intended to be presented by any other person.
If any other matters properly come before the Annual Meeting, the persons
whose names appear in the enclosed Proxy intend to vote all Proxies received by
the Board of Directors in such manner as they, in their discretion, deem
appropriate.
BENEFICIAL OWNERSHIP OF COMMON STOCK
To the knowledge of the Company, no person, firm or group beneficially owned
(as defined in
Rule 13d-3 of the Securities Exchange Act of
1934) more than 5% of the shares of the Common Stock of the Company outstanding
on the record date, February 16, 1996; except that (i) FMR Corp, 82 Devonshire
Street, Boston, Massachusetts 02109, has advised that at February 15, 1996 it
held 7,824,434 shares, or approximately 5.1% of outstanding shares, of the
Common Stock, and (ii) The Northern Trust Company, 50 South LaSalle Street,
Chicago, Illinois, has reported that at the record date it held 8,949,901
shares, or approximately 5.8% of outstanding shares, of the Common Stock for
various beneficial owners, including 8,724,862 shares, or approximately 5.6%, of
the Common Stock of the Company as the Trustee of four Employee Savings Plans
sponsored by the Company.
As of February 16, 1996, each director and nominee, each person named in the
Summary Compensation Table on page 11, and all directors and officers as a
group, beneficially owned the number of shares of Common Stock set forth in the
Beneficial Ownership Table on the next page.
--9--
<PAGE> 15
BENEFICIAL OWNERSHIP TABLE
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AT FEBRUARY 16, 1996
------------------------------------------
PERCENT OF
SHARES COMMON
NAME OWNED(1)(2) STOCK(2)
------------------------------------------------ ----------- ----------
<S> <C> <C>
John G. Breen................................... 5,200(3)(4) *
William E. Butler............................... 400 *
Thomas H. Cruikshank............................ 800(4) *
Eugene R. Culler, Jr............................ 54,392(5)(6)(7)(8) .04%
Stanley C. Gault................................ 731,832(5)(6)(7)(9) .47%
Samir F. Gibara................................. 45,021(5)(6)(7) .03%
William J. Hudson, Jr........................... 1,000 *
Gertrude G. Michelson........................... 1,200(4) *
Steven A. Minter................................ 1,480(4) *
Agnar Pytte..................................... 1,200(4) *
George H. Schofield............................. 2,200(4) *
William J. Sharp................................ 109,807(5)(6)(7) .07%
Robert W. Tieken................................ 16,817(5)(6)(7) .01%
William C. Turner............................... 1,100(4) *
Hoyt M. Wells................................... 188,041(5)(6)(7)(10) .12%
All directors, the Named Officers and all other
officers as a group (29 persons).............. 1,520,757(5)(6)(7)(11) .98%
</TABLE>
NOTES TO BENEFICIAL OWNERSHIP TABLE:
(1) 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.
(2) The number of shares indicated as beneficially owned by each of the
directors and named executive officers, and by all directors and
officers as a group, and the percentage of all Common Stock beneficially
owned by each person and the group, has been computed in accordance with
Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934.
Asterisk indicates percentage of ownership is less than one hundredth of
one percent of all outstanding shares of Common Stock.
(3) Includes 5,000 shares jointly owned by Mr. Breen and his spouse.
(4) Includes 200 shares acquired pursuant to the Company's 1994 Restricted
Stock Award Plan for Non-employee Directors which are subject to certain
restrictions on transfer.
(5) Does not include shares contingently receivable in 1997, 1998 and 1999
pursuant to Performance Equity Grants made under the 1989 Goodyear
Performance and Equity Incentive Plan (the "1989 Plan").
(6) Includes shares which may be acquired upon the exercise of options which
are exercisable prior to April 18, 1996 under the 1989 Plan and
predecessor employee stock option plans of the Company as follows: Mr.
Culler, 35,225 shares; Mr. Gault, 605,000 shares; Mr. Gibara, 36,250
shares; Mr. Sharp, 103,100 shares; Mr. Tieken, 15,625 shares; Mr. Wells,
126,200 shares; and all other officers, 288,140 shares.
(7) Includes full shares held in trust under the Company's Employee Savings
Plan for Salaried Employees ("Savings Plan") at February 16, 1996.
(8) Includes 250 shares owned by Mr. Culler's spouse, as to which he
disclaims beneficial ownership.
(9) Includes 100,250 shares acquired by Mr. Gault pursuant to the terms of
an Employment Agreement, a Stock Purchase Agreement and the 1989 Plan,
which shares are subject to certain restrictions on transfer and the
Company's option to repurchase.
(10) Includes 200 shares owned by Mr. Wells' spouse, as to which he disclaims
beneficial ownership.
(11) Includes 164,849 shares owned of record and beneficially or owned
beneficially through a nominee, 27,018 shares held in the Savings Plan
Trust, 1,209,540 shares subject to options (exercisable prior to April
18, 1996) granted under the Company's stock option plans, 111,650 shares
subject to restrictions on transfer and the Company's option to
repurchase, and 7,700 shares held by or jointly with family members of
certain directors and officers.
--10--
<PAGE> 16
EXECUTIVE OFFICER COMPENSATION
SUMMARY OF COMPENSATION
The Summary Compensation Table below sets forth information in respect of the
compensation of the Chief Executive Officer of the Company during 1995 and the
persons who were, at December 31, 1995, the other four most highly compensated
executive officers of the Company, plus one executive officer of the Company who
retired during 1995 (the "Named Officers"), for services in all capacities to
the Company and its subsidiaries during 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------------
AWARDS
ANNUAL COMPENSATION ----------------------- PAYOUTS
--------------------------------------------------- SECURITIES --------------
OTHER UNDERLYING LONG TERM
ANNUAL RESTRICTED OPTIONS/ INCENTIVE
COMPEN- STOCK SARS PLAN
BONUS SATION AWARD(S) (NUMBER PAYOUTS
SALARY (DOLLARS) (DOLLARS) (DOLLARS) OF (DOLLARS)
NAME AND PRINCIPAL POSITION YEAR (DOLLARS) (1) (2) (3) SHARES)(4) (5)
- ------------------------------- ---- ---------- ---------- ------------ --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
STANLEY C. GAULT, 1995 $1,020,000(7) $1,155,000 $ 32,239 -0- 155,000 $1,348,125
Chairman of the Board and 1994 995,000(7) 1,162,500 32,004 -0- 150,000 1,014,375
Chief Executive Officer(8) 1993 935,000 1,018,973 31,560 -0- 150,000 -0-
SAMIR F. GIBARA, 1995 463,542 387,301 8,500 -0- 30,000 242,663
President and Chief Operating 1994 350,000 262,500 8,000 -0- 15,000 182,588
Officer(9) 1993 300,000 232,500 23,134 -0- 21,000 -0-
HOYT M. WELLS, 1995 707,500 241,644 127,000 -0- 40,000 597,691
Vice Chairman of the Board, 1994 725,000 750,000 8,000 -0- 40,000 578,194
President and Chief 1993 637,500 592,500 8,000 -0- 34,000 -0-
Operating Officer(10)
WILLIAM J. SHARP, 1995 370,000 253,750 8,500 -0- 12,400 283,106
Executive Vice President(11) 1994 350,000 240,000 8,000 -0- 12,400 213,019
1993 330,000 240,000 8,000 -0- 12,400 -0-
ROBERT W. TIEKEN, 1995 358,333 273,000 4,473 -0- 12,500 -0-
Executive Vice President(12) 1994 228,563 180,000 310,981 -0- 25,000 -0-
1993 -0- -0- -0- -0- -0- -0-
EUGENE R. CULLER, JR. 1995 303,802 123,107 317,788 -0- 9,000 134,813
Executive Vice President(13) 1994 288,750 182,700 279,303 -0- 4,500 101,438
1993 288,750 182,700 174,748 -0- 5,800 -0-
<CAPTION>
ALL
OTHER
COMPEN-
SATION
(DOLLARS)
NAME AND PRINCIPAL POSITION (6)
- ------------------------------- ------------
<S> <C><C>
STANLEY C. GAULT, $4,500
Chairman of the Board and 4,500
Chief Executive Officer(8) 4,497
SAMIR F. GIBARA, 4,500
President and Chief Operating 4,500
Officer(9) 4,497
HOYT M. WELLS, 4,500
Vice Chairman of the Board, 4,500
President and Chief 4,497
Operating Officer(10)
WILLIAM J. SHARP, 4,500
Executive Vice President(11) 4,500
4,497
ROBERT W. TIEKEN, 4,500
Executive Vice President(12) -0-
-0-
EUGENE R. CULLER, JR. -0-
Executive Vice President(13) -0-
-0-
</TABLE>
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Amounts awarded in respect of 1995, 1994 and 1993 and paid in February
of 1996, 1995 and 1994, respectively, pursuant to the Company's
Performance Recognition Plan for 1995, 1994 and 1993, respectively;
except that payment of the awards to Mr. Gault in respect of 1995 and
1994, and of the award to Mr. Wells in respect of 1994, was deferred
pursuant to the Company's Deferred Compensation Plan for Executives.
(2) Amounts shown represent the cost to the Company of tax and financial
planning assistance provided by third parties; plus, in respect of Mr.
Gault, the cost of his use of a Company car and driver during 1995, 1994
and 1993; in respect of Mr. Gibara, reimbursements for moving expenses,
relocation allowances and tax reimbursement payments in 1993; in respect
of Mr. Wells, payment of $118,500 for vacation earned (but not taken) in
1995 and 1994; in respect of Mr. Tieken, payment of $298,621 in
relocation and related expenses, including the reimbursement of taxes,
in 1994; and, in respect of Mr. Culler, payment of $161,870, $266,515
and $284,770 in 1993, 1994 and 1995, respectively, as reimbursement of
Canadian taxes in excess of normalized United States taxes and $15,586
for relocation allowances in 1995.
(3) No restricted stock was awarded or issued by the Company to any Named
Officer during 1995, 1994 or 1993. On August 9, 1991, Mr. Gault
purchased, pursuant to the terms of an employment agreement and a
related purchase agreement and under the 1989 Plan, 100,250 shares
(after giving effect to the 2-for-1 stock split on May 4, 1993) of the
Common Stock of the Company for $.05 per share, which shares are
restricted and not transferable through December 31, 1996. The Company
has the option to purchase all or any part of the 100,250 shares for
$.05 per share through December 31, 1996 if Mr. Gault's employment
terminates prior to that date for any reason other than his death,
disability or
--11--
<PAGE> 17
incapacity or his termination by the Company without cause. Dividends
are paid on all said 100,250 restricted shares of the Common Stock. The
total value of all of the 100,250 restricted shares of the Common Stock
(net of the purchase price) was $4,543,831.25 at December 31, 1995,
based on the December 29, 1995 closing price on the New York Stock
Exchange Composite Transactions Tape of $45.375 per share. No other
shares of restricted stock have been awarded or issued to the Named
Officers of the Company.
(4) The number of shares has been adjusted, as necessary, to give effect to
the 2-for-1 split of the Common Stock distributed on May 4, 1993.
(5) The payouts indicated in respect of 1995 relate to amounts distributed
in February of 1996 pursuant to Performance Equity Grants awarded in
1993 pursuant to the 1989 Plan in respect of the three year performance
period ended December 31, 1995. Under the 1993 Performance Equity
Grants, participants received a specified number of Performance Units
("1993 Performance Units") payable 50% in shares of the Common Stock of
the Company and 50% in cash if aggregate earnings per share of Common
Stock (adjusted to eliminate the effects of accounting changes in 1993)
during the performance period were at least $9.15. Since the aggregate
earnings per share of the Common Stock of the Company during the
performance period were in excess of $10.15, each participant also
received a supplemental cash amount equal to 50% of the value of the
1993 Performance Units. The 1993 Performance Units were valued based on
the fair market value of the Common Stock of the Company at December 29,
1995, which was $44.9375 per share, the average of the high and low sale
prices of the Common Stock on that date as reported on the New York
Stock Exchange Composite Transactions Tape. Similarly, payouts indicated
in respect of 1994 related to amounts distributed in February of 1995
pursuant to Performance Equity Grants awarded in 1992 in respect of the
three year performance period ended December 31, 1994. Under the 1992
Performance Equity Grants, participants received a specified number of
1992 Performance Units payable 70% in shares of the Common Stock of the
Company and 30% in cash. As a result of the attainment of cumulative
earnings per share of Common Stock during the performance period in
excess of $7.55, each 1992 Performance Unit received a supplemental cash
amount equal to 50% of the value of the 1992 Performance Units. The 1992
Performance Units were valued at the fair market value of the Common
Stock at December 30, 1994, which was $33.8125 per share, the average of
the high and low sale prices of the Common Stock on that date as
reported on the New York Stock Exchange Composite Transactions Tape.
(6) All Other Compensation consists of amounts contributed during or accrued
in respect of 1995, 1994 and 1993 as matching contributions by the
Company for the Named Officers under the Savings Plan. See "Savings
Plan" at page 16.
(7) The Company deferred payment of $90,600 of Mr. Gault's 1995 salary and
$40,000 of his 1994 salary until the calendar year following his
retirement. The amounts shown as Salary in the Table include the
deferred amounts.
(8) Mr. Gault retired as Chief Executive Officer of the Company effective
December 31, 1995.
(9) Mr. Gibara was elected President and Chief Executive Officer effective
January 1, 1996. Mr. Gibara served as the President and Chief Operating
Officer of the Company from April 15, 1995 to December 31, 1995. He
served as a Vice President of the Company from October 6, 1992 through
May 2, 1994 and as an Executive Vice President of the Company from May
3, 1994 to April 15, 1995.
(10) Mr. Wells was elected Vice Chairman of the Board, President and Chief
Operating Officer on January 4, 1994, serving in those capacities until
he retired on April 15, 1995. Mr. Wells was President and Chief Operating
Officer from April 1, 1991 through January 3, 1994.
(11) Mr. Sharp was elected President, Global Support Operations effective
January 1, 1996.
(12) Mr. Tieken joined the Company on May 3, 1994, on which date he was
elected an Executive Vice President and the Chief Financial Officer of
the Company.
(13) Mr. Culler was elected an Executive Vice President of the Company
effective April 15, 1995. Mr. Culler was President of Goodyear Canada
Inc. from October 1, 1991 to April 15, 1995.
--12--
<PAGE> 18
OPTION/SAR GRANTS IN 1995
The Option/SAR Grants Table below shows all
grants of stock options and stock appreciation
rights ("SARs") during 1995 to the Named
Officers.
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
-------------------------------------------------- REALIZABLE VALUE
% OF AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS/ EXERCISE STOCK PRICE
UNDERLYING SARS OR APPRECIATION FOR
OPTIONS/SARS GRANTED BASE PRICE OPTION TERM
GRANTED TO (DOLLARS (DOLLARS)(4)
(NUMBER OF EMPLOYEES PER EXPIRATION ------------------------
NAME SHARES)(1) IN 1995 SHARE)(3) DATE 5%(5) 10%(5)
- -------------------------- ------------ --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stanley C. Gault 155,000 8.95% $34.75 1-3-05 $3,386,750 $8,583,900
Samir F. Gibara 15,000 0.87 34.75 1-3-05 327,750 830,700
15,000(2) 0.87 42.50 6-5-05 400,950 1,015,950
Hoyt M. Wells 40,000 2.31 34.75 1-3-05 874,000 2,215,200
William J. Sharp 12,400 0.72 34.75 1-3-05 270,940 686,712
Robert W. Tieken 12,500 0.72 34.75 1-3-05 273,125 692,250
Eugene R. Culler, Jr. 4,500 0.26 34.75 1-3-05 98,325 249,210
4,500(2) 0.26 42.50 6-5-05 120,285 304,785
</TABLE>
NOTES TO OPTION/SAR GRANTS TABLE:
(1) Except as specified in Note (2) below, all grants were made on January
4, 1995, when Incentive Stock Options and Non-qualified Stock Options in
respect of 1,699,825 shares of Common Stock were granted to 805 persons,
including the Named Officers. In the case of each Named Officer,
Incentive Stock Options were granted in respect of 2,800 shares. No SARs
were granted to the Named Officers during 1995. 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. Each Incentive Stock Option and
each Non-qualified Stock Option granted is exercisable in respect of 25%
of the shares covered thereby beginning January 4, 1996, in respect of
50% of the shares covered thereby beginning January 4, 1997, in respect
of 75% of the shares covered thereby beginning January 4, 1998, and are
fully exercisable beginning January 4, 1999. Each unexercised Stock
Option terminates automatically if the optionee ceases to be an employee
of the Company or one of its subsidiaries for any reason, except that
(a) upon the Retirement or Disability (as such terms are defined in the
1989 Plan) of the optionee more than six months after the date of the
grant thereof, such Stock Option shall become immediately exercisable
and remain exercisable for three years following the Retirement of the
optionee and until the expiration date indicated in the Option/SAR
Grants Table in the event of a Disability, and (b) in the event of the
death of the optionee more than six months after the grant thereof, the
Stock Option shall be exercisable up to one year after the date of death
of the optionee by the person or persons to whom the rights passed by
his or her will or according to the laws of descent and distribution.
Upon any exercise of a Non-qualified Stock Option, the Company will be
entitled to a tax deduction equal to the excess of the market value of
the acquired shares over the exercise price of the Stock Option.
(2) The shares indicated relate to Non-qualified Stock Options granted on
June 6, 1995 at an exercise price equal to the fair market value of the
Common Stock on June 6, 1995. The Stock Options are exercisable in
respect of 25% of the shares granted beginning June 6, 1996, in respect
of 50% of the shares granted beginning June 6, 1997, in respect of 75%
of the shares granted beginning June 6, 1998, and are fully exercisable
beginning June 6, 1999. In all other respects the Stock Options contain
the same terms and conditions as the Stock Options granted on January 4,
1995, as described in Note (1) above.
(3) In respect of each Stock Option granted during 1995, the holder may,
subject to certain conditions, pay the exercise price by delivery of
owned shares of Common Stock (valued at the market value on
--13--
<PAGE> 19
the date of exercise) and/or may satisfy withholding tax obligations by
delivering owned shares of Common Stock or by using shares of Common
Stock acquired upon the exercise of the Stock Option.
(4) The dollar amounts under these columns are the result of 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.
(5) In order to realize the potential values set forth in the 5% and 10%
columns of the Option/SAR Grants Table in respect of the January 4, 1995
grants at the $34.75 exercise price, the per share price of the Common
Stock would be $56.60 and $90.13, respectively. In order to realize the
potential value set forth in the 5% and 10% columns in respect of the
June 6, 1995 grants at the $42.50 exercise price, the per share price of
the Common Stock would be $69.23 and $110.23, respectively.
OPTION/SAR 1995 EXERCISES AND YEAR-END VALUES
The Option/SAR Exercises and Year-End Values Table below sets forth certain
information regarding options and SARs exercised by the Named Officers in 1995
and the value of options/SARs held by the Named Officers at December 31, 1995,
valued at $45.375 per share, the closing price of the Common Stock on the New
York Stock Exchange Composite Transactions Tape on December 29, 1995.
OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND
DECEMBER 31, 1995 OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
ACQUIRED DECEMBER 31, 1995 AT DECEMBER 31, 1995
ON EXERCISE VALUE (NUMBER OF SHARES)(1) (DOLLARS)(2)
(NUMBER OF REALIZED ----------------------------- -----------------------------
NAME SHARES)(1) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanley C. Gault 552,000 $12,995,000 605,000 -- $6,240,625 --
Samir F. Gibara -- -- 37,500(3) 37,500 428,437 $ 210,937
Hoyt M. Wells 34,000 567,375 129,000 -- 1,027,125 --
William J. Sharp 6,000 147,375 93,800 18,600 1,971,525 138,725
Robert W. Tieken -- -- 12,500 25,000 76,562 209,375
Eugene R. Culler, Jr. 10,000 244,375 42,650(4) 11,250 713,231 63,281
</TABLE>
NOTES TO OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE:
(1) Except as indicated at Note 3, all shares acquired and all exercisable
and unexercised shares are options to acquire Common Stock.
(2) Based on the closing price of the Common Stock of the Company on the New
York Stock Exchange Composite Transactions Tape on December 29, 1995,
which price was $45.375.
(3) Mr. Gibara's exercisable Options/SARs include 10,000 shares subject to
SARs exercisable for cash.
(4) Mr. Culler's exercisable Options/SARs include 800 shares subject to SARs
exercisable for cash.
LONG TERM INCENTIVE AWARDS
The 1989 Goodyear Performance and Equity Incentive Plan (the "1989 Plan"),
adopted on December 6, 1988 and approved by shareholders on April 10, 1989,
empowers the Committee to grant Awards from time to time until December 31,
1998, which Awards may be Incentive, Non-qualified or Deferred Compensation
Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Unit
Grants, Performance Equity or Performance Unit Grants,
any other Stock-Based Awards authorized by the Committee, or any combination of
any or all of such Awards, whether in tandem with each other or otherwise, to
officers and other key employees of the Company and its subsidiaries.
The Long Term Incentive Plan Awards Table on page 15 sets forth the long term
incentive grants in 1995 to the Named Officers, all of which were Performance
Equity Grants under the 1989 Plan.
--14--
<PAGE> 20
LONG TERM INCENTIVE PLAN AWARDS TABLE
LONG TERM INCENTIVE PLANS -- AWARDS IN 1995
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
NUMBER OF SHARES, PRICE-BASED PLANS(3)
UNITS OR -------------------------------------------------
OTHER RIGHTS THRESHOLD TARGET MAXIMUM
(EXPRESSED IN PERFORMANCE (EXPRESSED IN (EXPRESSED IN (EXPRESSED IN
NUMBER OF OR OTHER NUMBER OF NUMBER OF NUMBER OF
SHARES OF PERIOD UNTIL SHARES OF SHARES OF SHARES OF
COMMON STOCK) MATURATION OR COMMON COMMON COMMON
NAME (1) PAYOUT(2) STOCK)(4) STOCK)(5) STOCK)(6)
- -------------------------------------- ------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Stanley C. Gault 20,800 1/1/95 to 12/31/97 16,640 20,800 31,200
Samir F. Gibara 10,000 1/1/95 to 12/31/97 8,000 10,000 15,000
Hoyt M. Wells 15,000 1/1/95 to 12/31/97 12,000 15,000 22,500
William J. Sharp 4,200 1/1/95 to 12/31/97 3,360 4,200 6,300
Robert W. Tieken 4,100 1/1/95 to 12/31/97 3,280 4,100 6,150
Eugene R. Culler, Jr. 3,000 1/1/95 to 12/31/97 2,400 3,000 4,500
</TABLE>
NOTES TO LONG TERM INCENTIVE PLAN AWARDS TABLE:
(1) On December 6, 1994, the Committee granted Performance Equity Grant
units ("Performance Units") under the 1989 Plan to the Named Officers
and 28 other key executives of the Company. Additional Performance Units
were granted on June 6, 1995 to four persons, including two Named
Officers. The number of Performance Units paid will be determined by and
contingent upon the extent to which the performance goals are achieved.
Each Performance Unit earned will be paid 50% in shares of Common Stock
and 50% in cash in February of 1998 (unless deferred). The performance
goals are specified levels of aggregate earnings per share of the Common
Stock during the three year period of January 1, 1995 through December
31, 1997 (the "Performance Period").
(2) A participant must be an employee at the end of the Performance Period
to receive the proceeds of the Performance Units; except that if such
participant dies, retires or becomes disabled prior to the end of the
Performance Period, any Performance Units earned will be prorated based
on the portion of the Performance Period he or she was an employee.
(3) Various payouts, ranging from 80% to 150% of the Performance Units, may
be paid based on the aggregate earnings per share of Common Stock during
the Performance Period. Under the 1989 Plan, the Committee may eliminate
the effect of accounting changes and extraordinary events in determining
the aggregate earnings per share of Common Stock during a Performance
Period. The amount ultimately realized by a Named Officer or other
grantee will depend on the aggregate earnings per share of Common Stock
during the Performance Period and on the value of the Common Stock at
the end of the Performance Period.
(4) The aggregate earnings per share of Common Stock during the Performance
Period must be at least $12.15 before any distribution may be made. If
aggregate earnings are at least $12.15 during the Performance Period, at
least 80% of the Performance Units will be distributed.
(5) If the aggregate earnings per share of Common Stock are $12.90 to $13.14
during the Performance Period, 100% of the Performance Units will be
distributed.
(6) If the aggregate earnings per share of Common Stock are $14.15 or more
during the Performance Period, 150% of the Performance Units will be
distributed.
OTHER PLAN INFORMATION
STOCK OPTIONS AND APPRECIATION RIGHTS
The 1989 Plan provides, among other things, for the granting of Incentive
Stock Options, Non-qualified Stock Options, SARs and other Awards in respect of
up to approximately 21,500,000 shares of the Common Stock. The 1989 Plan will
expire on December 31, 1998, except with respect to Stock Options, SARs and
other Awards then outstanding. At February 16, 1996, there were outstanding
Stock Options granted under the 1989 Plan in respect of 7,428,328 shares
(including Stock Options with tandem Change in Control SARs in respect of 31,000
shares and tandem SARs in respect of 775,112 shares) and independent SARs in
respect of 91,771 shares.
PERFORMANCE EQUITY GRANTS IN 1996
Performance Equity Grant units ("Performance Units") were granted by the
Committee on January 9, 1996 to 28 key employees, including each
--15--
<PAGE> 21
officer of the Company, with respect to a three year performance period ending
December 31, 1998 (the "Performance Period"). The number of Performance Units
(each equivalent in value to one share of Common Stock) which may be earned at
the end of the Performance Period will be determined by and contingent upon the
extent to which the performance goals are achieved. The number of Performance
Units actually earned may be adjusted between zero and 150% of the number of
Performance Units initially granted, depending on the level of achievement of
the performance goals. All Performance Units earned will be paid 50% in shares
of Common Stock of the Company and 50% in cash in February of 1999 (unless the
payment is deferred by the Committee or a participant elects to defer payment).
Performance goals are based on the aggregate earnings per share of Goodyear
Common Stock for the Performance Period. The earnings per share must total at
least $12.25 during the three years of the Performance Period for any
distribution to be made, and $13.00 for 100% payment of the Performance Units to
be made. If the aggregate earnings per share are $14.25 or more for the
Performance Period, 150% of the Performance Units will be paid. Performance
Units were awarded to Named Officers as follows: Mr. Gault, 18,000; Mr. Gibara,
18,200; Mr. Sharp, 7,000; Mr. Tieken, 4,100; and Mr. Culler, 3,300.
PERFORMANCE RECOGNITION PLAN
On January 9, 1996, the Board of Directors of the Company adopted the
Performance Recognition Plan (the "Performance Plan"). Approximately 901 key
employees, including all executive officers of the Company, will participate in
Plan Year 1996. The Committee determined the participants and established their
respective target bonuses. Thereafter the Committee reviewed and approved the
performance criteria and goals established for each participant. The target
bonus of each participant is subject to adjustment between zero and 150%,
depending upon the level of achievement measured relative to the performance
criteria and goals established by the Committee in respect of such participant.
The Performance Plan establishes specific goals for earnings before interest and
taxes ("EBIT") and cash flow for the Company or an operating unit, as the case
may be, in respect of the participant. Payment of awards under the Performance
Plan will be made in February of 1997, except to the extent deferred by the
Committee or an eligible participant pursuant to the Company's Deferred
Compensation Plan for Executives, contingent upon the level of achievement of
the EBIT and cash flow goals and upon the Committee's determination that payment
would be appropriate. Awards, if any, will be paid in cash. Target bonuses under
the Performance Plan have been established for calendar year 1996 as follows:
Mr. Gault, $825,000; Mr. Gibara, $537,842; Mr. Sharp, $243,647; Mr. Tieken,
$210,000; Mr. Culler, $155,000; and all participants (901 persons) as a group,
$16,784,784.
SAVINGS PLAN
The Company sponsors the Employee Savings Plan for Salaried Employees (the
"Savings Plan"). An eligible employee (any full-time salaried employee with at
least six months of service) may contribute 1% to 16% of his or her compensation
to the Savings Plan, subject to an annual contribution ceiling ($9,500 in 1996).
Such contributions to the Savings Plan are not included in the current taxable
income of the employee pursuant to Section 401(k) of the Internal Revenue Code
of 1986, as amended (the "Code"). Employee contributions are, at the direction
of the participant, invested by the Savings Plan Trustee in the following eight
funds: The Stable Value Fund, the S&P 500 Index Stock Equity Fund, the Large
Capitalization Stock Equity Fund, the Small Capitalization Stock Equity Fund,
the International Stock Equity Fund, the Conservative Asset Allocation Fund, the
Moderate Asset Allocation Fund and the Aggressive Asset Allocation Fund.
During 1996, the Company is matching each dollar contributed by a
participating employee (up to a maximum of the lesser of 6% of such
participant's compensation during 1996 or $9,000) with 50 cents. The level of
the Company's matching contributions in future years will be determined annually
by the Company's Board of Directors. Company contributions are made in cash and
are invested by the Savings Plan Trustee in shares of Common Stock and held in
the Goodyear Stock Fund of the Plan. Participants who are age 52 or older may
transfer all or any whole percentage of their employer match funds from the
Goodyear Stock Fund to any one or more of the eight Funds listed above.
SEVERANCE PLAN
The Goodyear Employee Severance Plan (the "Severance Plan") was adopted by the
Company on February 14, 1989 pursuant to the authorization of the Board of
Directors and upon the recommendation of the Compensation Committee. The
Severance Plan provides that, if the employment of an eligible employee is
involuntarily terminated (as defined in the Severance Plan) within two years
following a Change in Control, such employee is entitled to receive severance
pay, either in a lump sum or, at the employee's election, on a regular salary
payroll interval basis, in an amount equal to the sum of (a) two weeks' pay for
each full year of service with the Company and its subsidiaries completed by
such employee and (b) one month's pay for each
--16--
<PAGE> 22
$12,000 of such employee's total annual com-
pensation (which includes such employee's base salary rate in effect at the date
of termination, plus all bonus, profit sharing and incentive compensation paid
to such employee during the twelve months prior to his or her separation);
provided, that such severance pay shall not exceed two times the total annual
compensation of such employee. In addition, each such person shall receive
medical benefits and basic life insurance coverage on the same basis as in
effect prior to his or her separation for a period of weeks equal to the number
of weeks of severance pay. Any full-time salaried employee of the Company or any
of its domestic subsidiaries having at least one year of service and
participating in the Retirement Plan is eligible for benefits under the
Severance Plan. Under the Severance Plan, a Change in Control is deemed to occur
upon the acquisition of 35% or more of the Common Stock by any "Acquiring
Person" or any change in the composition of the Board of Directors of the
Company with the effect that a majority of the directors are not "continuing
directors."
If it is assumed that the Named Officers had been involuntarily terminated as
of December 31, 1995 following within two years of a Change in Control, the
amount of severance pay due under the Severance Plan to the Named Officers in
such event would have been: Mr. Gault, $4,365,000; Mr. Gibara, $1,525,000; Mr.
Sharp, $1,220,000; Mr. Tieken, $1,090,000; and Mr. Culler, $985,400.
DEFERRED COMPENSATION PLAN
The Company's Deferred Compensation Plan for Executives was adopted by the
Board of Directors of the Company upon the recommendation and approval of the
Compensation Committee on and effective as of October 4, 1994. Pursuant to the
Deferred Compensation Plan, an eligible employee may elect to defer all or a
portion of his or her Performance Plan award and/or all or a portion of his or
her annual salary in excess of $150,000 by making a timely deferral election.
The deferral period options are five years, the year following retirement or in
five to fifteen annual installments commencing the year following retirement. In
addition, any cash compensation earned by any officer of the Company which, if
paid as and when due, would not be deductible by the Company for Federal Income
Tax purposes by reason of the limitations of Section 162(m) of the Code shall
automatically be deferred under the Deferred Compensation Plan. Amounts deferred
earn amounts equivalent to the returns on one or more of five reference funds,
as selected by the participant.
RETIREMENT BENEFITS
The Company maintains a Retirement Plan
for Salaried Employees (the "Retirement Plan"), a defined benefit plan qualified
under the Code, in which most salaried employees (other than employees assigned
to retail store locations) of the Company, including all officers, are eligible
to participate. The Retirement Plan permits any eligible employee to make
monthly optional contributions at an annual rate equal to 2% of his or her
annual earnings in excess of Social Security covered compensation ($27,576 in
1996), up to a maximum 1996 contribution of $2,448.48. Recent amendments to the
Code limit the maximum amount of earnings that may be used in calculating
benefits under the Retirement Plan, which limit is $150,000 for 1996. In 1994,
the Company established a non-qualified, unfunded Excess Benefits Plan which
provides additional benefits to a select group of highly compensated employees.
The Excess Benefits Plan will pay benefits equal to the difference between the
monthly amount paid under the Retirement Plan and the monthly amount which would
have been paid under the Retirement Plan if calculated without the Code
limitation on compensation ($150,000 in 1996) in respect of which benefits may
be calculated. The Company also maintains a Supplementary Pension Plan (the
"Supplementary Plan"), a non-qualified, unfunded plan which provides additional
retirement benefits to all officers of the Company and certain other key
employees. Participants in the Supplementary Plan do not participate in the
Excess Benefits Plan. The Retirement Plan and the Supplementary Plan (the
"Pension Plans") provide pension benefits to participants who have at least 30
years of service or have at least ten years of service and have attained the age
of 55. Benefits payable to a participant who retires between ages 55 and 62 are
subject to a reduction of 4.8% for each full year of retirement before age 62.
Prior to retirement, a participant may elect to receive, subject to approval of
the Committee, a lump sum settlement of the benefits payable under the
Supplementary Plan.
The Pension Plan Table on the next page shows estimated annual benefits
payable at selected earnings levels under the Retirement Plan, as supplemented
by the Supplementary Plan, assuming retirement on July 1, 1996 at age 65 after
selected periods of service.
The pension benefit amounts shown in the Pension Plan Table include the
maximum benefits obtainable under the formula for the optional contributory
portion of the Retirement Plan and under the Supplementary Plan and assume
payments are made on a five year certain and life
--17--
<PAGE> 23
<TABLE>
<CAPTION>
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT JULY 1, 1996, WITH YEARS OF SERVICE INDICATED.
--------------------------------------------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS 45 YEARS
- ------------ -------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 71,406 $ 90,790 $ 103,501 $ 116,212 $ 124,475 $ 132,738 $ 141,001
500,000 152,278 194,122 222,548 250,974 265,982 280,990 295,997
750,000 234,778 299,122 342,548 385,974 408,482 430,990 453,496
1,000,000 317,278 404,122 462,548 520,974 550,982 580,990 610,995
1,250,000 399,778 509,122 582,548 655,974 693,482 730,990 768,494
1,500,000 482,278 614,122 702,548 790,974 835,982 880,990 925,993
1,750,000 564,778 719,122 822,548 925,974 978,482 1,030,990 1,083,492
2,000,000 647,278 824,122 942,548 1,060,974 1,120,982 1,180,990 1,240,990
2,250,000 729,778 929,122 1,062,548 1,195,974 1,263,482 1,330,990 1,398,489
2,500,000 812,278 1,034,122 1,182,548 1,330,974 1,405,982 1,480,990 1,555,988
</TABLE>
annuity basis (and not under any of the various survivor options or the lump sum
option) and are not subject to any deduction for social security or any other
offsets. Pension benefits are based on the participant's highest average monthly
earnings, consisting of salary and cash payments under the Performance
Recognition Plan (and prior annual incentive plans) for any period of 60
consecutive months within the 120 months immediately preceding his or her
retirement (assuming full participation in the contributory feature of the
Retirement Plan), with monthly benefits ranging from as low as 21% of such
earnings in the case of a participant who retires after 10 years of service to
as high as 63% of such earnings in the case of a participant who retires after
45 years of service. Earnings covered by the Pension Plans are substantially
equivalent to the sum of the amounts set forth under the "Salary" and "Bonus"
columns of the Summary Compensation Table in respect of each of the Named
Officers, except Mr. Gault who does not participate in the contributory feature
of the Retirement Plan or in the Supplementary Plan. Mr. Gault will not be
entitled to benefits under the Retirement Plan until he has five years of
service, in which event his annual benefit is estimated to be approximately $300
for each year of service. The years of credited service under the Plans for each
of the Named Officers are: Mr. Gault, 4 years; Mr. Wells, retired with 44 years;
Mr. Sharp, 31 years; Mr. Gibara, 29 years; Mr. Tieken, 3 years; and Mr. Culler,
34 years.
EMPLOYMENT AND STOCK PURCHASE AGREEMENTS
Mr. Gault and the Company entered into an Employment Agreement (as amended,
the "Employment Agreement") and a Stock Purchase Agreement (as amended, the
"Purchase Agreement"), each dated August 6, 1991. The Employment Agreement, as
amended by action of the Board of Directors pursuant to the recommendation of
the Compensation Committee, provided for the employment of Mr. Gault as Chairman
of the Board and Chief Executive Officer through December 31, 1995. The
Employment Agreement expired on December 31, 1995.
In accordance with the Employment Agreement and actions taken by the
Compensation Committee, Mr. Gault's 1995 salary remained at the annual rate of
$1,020,000 established effective June 1, 1994 and his Performance Recognition
Plan participation target was set at $825,000, which amount was subject to
increase to $1,237,500 or to reduction to $510,000, depending on the extent to
which the EBIT, SAG reduction and cash flow goals for the Company were attained.
Mr. Gault was awarded a payout of $1,155,000 under the Performance Recognition
Plan for 1995, which amount was deferred pursuant to the Company's Deferred
Compensation Plan for Executives.
Mr. Gault is an employee of the Company and the Chairman of its Board of
Directors. The Compensation Committee has determined that he will receive a
salary at an annual rate of $1,020,000 during 1996. He will also participate in
the Performance Recognition Plan for 1996 on substantially the same basis as he
participated in the Plan in 1995.
Under the terms of the Employment Agreement, the Purchase Agreement and the
1989 Plan, Mr. Gault, in lieu of retirement benefits, was granted the right to
purchase, and he purchased, 100,250 shares (after giving effect to the
two-for-one stock split on May 4, 1993) of the Common Stock for $.05 per share,
which shares are restricted stock and, as such, may not be transferred by Mr.
Gault until after December 31, 1996 and are subject to a repurchase option
whereby the Company may repurchase all or any portion of such shares at $.05 per
share through December 31, 1996 if Mr. Gault ceases to be em-
--18--
<PAGE> 24
ployed by the Company for any reason other than by reason of death, disability
or incapacity or his termination by the Company without cause, in which event
the Company's option to repurchase the 100,250 shares will terminate. If the
Company repurchases all or a portion of the 100,250 shares, under certain
circumstances the Company would be required to pay to Mr. Gault up to $50,000
for each month of service prior to the termination of his employment.
On January 9, 1996, pursuant to the 1989 Plan Mr. Gault was granted an
Incentive Stock Option in respect of 2,100 shares of Common Stock and a
Non-qualified Stock Option in respect of 47,900 shares of Common Stock. These
Stock Options become exercisable in 25% increments on January 9 of each of the
next four years, except that they become fully exercisable in the event Mr.
Gault retires at any time subsequent to July 9, 1996. Mr. Gault was granted
Stock Options pursuant to the 1989 Plan in respect of 155,000 shares of Common
Stock on January 4, 1995, which became exercisable on July 5, 1995. The Stock
Options were granted to Mr. Gault at 100% of the fair market value of the Common
Stock on the date of grant.
Mr. Gault also has the use of a Company car and driver and a Company apartment
in Akron, Ohio.
DIRECTORS' COMPENSATION
Directors of the Company who are not serving as officers or employees of, or
consultants to, the Company or any of its subsidiaries receive, as compensation
for their services to the Company as a director, $7,000 per calendar quarter,
plus $1,300 for each Board meeting attended and for each committee meeting
attended. Travel and lodging expenses incurred by such directors in attending
Board and committee meetings are paid by the Company. A director who is also an
officer or an employee of, or a consultant to, the Company or any of its
subsidiaries does not receive additional compensation for his or her services as
a director.
On February 2, 1996, the Compensation Committee recommended and the Board of
Directors adopted the Outside Directors' Equity Participation Plan (the
"Directors' Equity Plan") for directors who are not current or former employees
of the Company or a subsidiary. The Directors' Equity Plan replaces the
Retirement Plan for Outside Directors, which was terminated on February 2, 1996
except with respect to former directors currently receiving benefits ($20,000
per year until death, with a $100,000 minimum payout) thereunder. Under the
Directors' Equity Plan, on April 1, 1996 and on the first business day of each
calendar quarter thereafter each eligible director who has been a director for
the entire preceding calendar quarter will have $2,000 accrued to his or her
Plan account, which amount will be converted into units equivalent in value to
shares of Common Stock ("share equivalents") at the fair market value of the
Common Stock on the accrual date. In addition, each eligible director on
February 2, 1996 was awarded a special accrual to his or her Plan Account in
accordance with a formula designed to reflect prior service and result in an
estimated Plan account value at age 70 commensurate with the value of the
terminated plan. The share equivalents in each participant's Plan account will
be deemed to receive dividends at the same rate as the Common Stock, which
dividends will also be converted into share equivalents in the same manner. A
director is entitled to benefits under the Directors' Equity Plan after leaving
the Board of Directors unless the Board of Directors elects to deny or reduce
benefits, except that benefits may not be denied or reduced if prior to leaving
the Board of Directors the participant either (i) attained the age of 70 with at
least five years of Board service or (ii) attained the age of 65 with at least
ten years of Board service. The share equivalents will be converted to a dollar
value at the price of the Company's Common Stock on the later of the first day
of the seventh month following the month during which the participant ceases to
be a director or the first business day of the year next following the year
during which the participant ceased to be a director. Such amount will be paid
in ten annual installments or, at the discretion of the Compensation Committee,
in a lump sum or in fewer than 10 installments beginning on the tenth day
following the aforesaid conversion from share equivalents to a dollar value. The
amount in the director's Plan account will earn interest from the date converted
to a dollar value until paid at a rate one percent higher than the prevailing
yield on United States Treasury securities having a ten year maturity on the
conversion date. The Directors' Equity Plan also permits each participant to
annually elect to have 25%, 50%, 75% or 100% or his or her retainer and meeting
fees deferred and converted into share equivalents on substantially the same
basis. The Board of Directors believes the Directors' Equity Plan will further
align the interests of directors with the interests of shareholders by making
part of each director's compensation dependent on the value and appreciation
over time of the Common Stock.
The Company established a directors' Charitable Award Program funded by
Company purchased and owned life insurance policies on the lives of pairs of
directors. The Company will donate $1 million per director to one or more
qualifying charitable organizations recommended by the paired directors after
both of the paired directors are deceased. Assuming
--19--
<PAGE> 25
current tax laws remain in effect, the Company will recover the cost of the
program over time with the proceeds of the insurance policies purchased.
Individual directors will derive no financial benefit from the program, as the
related charitable contributions will accrue to the Company.
OTHER MATTERS
Section 16(a) of the Exchange Act requires the Company's directors and
officers to file reports of ownership and changes in ownership in the Company's
equity securities with the Securities and Exchange Commission, the New York
Stock Exchange and the Company. Based solely on a review of the copies of Forms
3, 4 and 5 received by the Company, or on written representations from certain
directors and officers that no updating Section 16(a) forms were required to be
filed by them, the Company believes that no director or officer of the Company
filed a late report or failed to file a required report under Section 16(a) of
the Exchange Act during or in respect of the year ended December 31, 1995,
except that Mr. E. R. Culler, Jr., an Executive Vice President of the Company,
filed an amendment to his Form 3, and to one Form 4, to correct an
administrative error in the initial reporting of his holdings of Common Stock,
and Mr. R. P. Adante, a Vice President of the Company, amended Form 4 filings
made in 1991, 1992, 1993 and 1994 to report shares of Common Stock acquired
during the period through the reinvestment of dividends pursuant to the Goodyear
Dividend Reinvestment and Stock Purchase Plan which were not previously reported
due to administrative error. To the knowledge of the Company, no person owned
10% or more of any class of the Company's equity securities registered under the
Exchange Act during 1995.
Mrs. Gertrude G. Michelson, a director of the Company, was a director of, and
served as a Senior Advisor to, R. H. Macy & Co., Inc. from September 1, 1992 to
December 31, 1994. Mrs. Michelson retired as the Senior Vice President --
External Affairs of R. H. Macy & Co., Inc. effective September 1, 1992. On
January 27, 1992, R. H. Macy & Co., Inc. commenced a case seeking reorganization
under the Federal Bankruptcy Code and emerged from bankruptcy on December 19,
1994. Mrs. Michelson is a director of Federated Department Stores, Inc., which
acquired R. H. Macy & Co., Inc.
During 1995, the Company and its subsidiaries in the ordinary course of their
business and at competitive prices and terms made sales to or purchases from, or
engaged in other transactions with, corporations of which certain of the
Company's non-employee directors are executive officers. The Company does not
consider the amounts involved in such transactions or the transactions
themselves to be material to its business and believes such amounts and
transactions were not material in relation to the business of such other
corporations or the interests of the directors concerned.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE POLICIES AND PRACTICES
The Board of Directors of the Company (the "Board") has delegated to the
Compensation Committee of the Board (the "Committee") primary responsibility for
establishing and administering the compensation programs of the Company for its
executive officers and other key personnel. In perfor-ming its duties, the
Committee meets with the Chief Executive Officer to review compensation policy
and specific levels of compensation paid to the executive officers and other key
personnel, administers the Company's annual, intermediate term and long term
compensation plans for its executive officers and certain other key personnel
and reports and makes recommendations to the Board regarding executive
compensation policies and programs. Each director who is not a former or current
officer or employee of the Company or any of its subsidiaries is a member of the
Committee. Members of the Committee are not eligible to participate in any of
the Company's compensation programs for its executive officers and other key
personnel.
The Committee annually reviews the compensation of the Company's executive
officers and other key personnel to determine whether (a) the Company is
competitive and can attract and retain qualified and experienced executive
officers and other key personnel, and (b) the executive officers and other key
personnel employed by the Company are appropriately motivated to seek to attain
short term and intermediate term corporate and business unit performance goals
approved by the Committee and to manage the Company for sustained long term
growth. The Company's compensation programs are designed to retain and motivate
its executive officers and other key personnel and align their interests with
the interests of the shareholders by providing its executive officers and other
key personnel compensation in the form of: (1) competitive salaries; (2) annual
cash bonuses pursuant to the Company's Performance Recognition Plan (the
"Performance Plan") based on operating performance measured against specific
goals for earnings before interest and taxes ("EBIT"), sales, administrative and
general expense ("SAG") reductions
--20--
<PAGE> 26
and cash flow; (3) intermediate term compensation in the form of the Common
Stock of the Company and cash pursuant to Performance Equity Grants, made
pursuant to the 1989 Goodyear Performance and Equity Incentive Plan (the "1989
Plan") and having three year performance periods, where payout is dependent on
the Company achieving designated levels of cumulative earnings per share during
the performance period; and (4) long term compensation in the form of stock
options granted under the 1989 Plan at the fair market value of the Company's
Common Stock on the date of grant. Other elements of compensation, such as
retirement, health and life insurance benefits, are also considered by the
Committee in its evaluation of the compensation package provided to the
Company's executive officers. The Company's executive compensation programs are
designed so that a substantial percentage of each executive officer's
compensation is dependent upon corporate performance and appreciation in the
value of the Company's Common Stock.
Section 162(m) of the Internal Revenue Code (the "Code") provides that
compensation paid to a public company's chief executive officer and its four
other highest paid executive officers in tax years 1994 and thereafter in excess
of $1 million is not deductible unless such compensation is paid only upon the
achievement of objective performance goals where certain procedural requirements
have been satisfied. Alternatively, such compensation may be deferred until the
executive officer is no longer a covered person under Section 162(m) of the
Code. The Committee has adopted a policy of conforming to the requirements of
Section 162(m) of the Code and the regulations promulgated thereunder. Any
compensation which would be subject to the Section 162(m) limitation has been or
will be automatically deferred until the payment of such compensation would be
deductible by the Company. However, the Committee recognizes that there may be
instances in the future where it would be in the best interest of the Company
and its shareholders to pay compensation which would not be deductible by reason
of Section 162(m) of the Code.
COMPENSATION OF EXECUTIVE OFFICERS
The Committee met with the Chief Executive Officer to receive his
recommendations regarding 1995 adjustments to the salary and Performance Plan
participation guidelines for each executive officer position and certain other
key positions. The guidelines for each position were based primarily on market
data from six generally available surveys of the salary and annual bonus
practices of other companies. Each of the surveys included compensation data
compiled from at least 100 companies, with one survey using data compiled from
more than 1,000 companies. The Committee generally seeks to establish salary and
annual performance plan guidelines at levels that approximate the median (the
50th percentile) of such kinds of compensation paid by companies included in
said surveys. The median survey compensation for each position was determined
utilizing regression analysis based on revenues. The results of the surveys were
weighted to emphasize manufacturing companies, especially producers of
nondurable goods. In addition to the individual position data surveys, nine
other general surveys indicating past, present and projected salary structures
and increases for executive positions were reviewed.
The compensation levels indicated by the aforesaid surveys were the principal
basis used by the Committee for establishing the combined salary and annual
Performance Plan compensation for the executive officers. The Committee also
considered the Chief Executive Officer's recommendations based in substantial
part on the aforesaid guidelines as well as on certain subjective factors,
namely the Chief Executive Officers's evaluation of the performance of each
executive officer, the performance of the Company and general economic and
competitive conditions.
In 1995, salaries of the executive officers named in the Summary Compensation
Table (the "Named Officers") were an average of 6.6% higher than the median
indicated by the guidelines and 10.0% higher than in 1994. The aggregate
salaries paid to all executive officers during 1995, which included promotional
and merit increases, were 8.3% higher than in 1994. Salaries averaged
approximately 58% of total annual cash compensation paid to executive officers,
and 53% of total annual cash compensation paid to the Named Officers, in respect
of 1995.
Pursuant to the Performance Plan for 1995, the Committee established, based on
the recommendations of the Chief Executive Officer, the target amount of the
bonus for each executive officer and reviewed and adopted performance goals.
Compensation paid under the Performance Plan for 1995 was based on the EBIT, SAG
reductions and cash flow performance of the entire Company and of the operating
unit to which the executive officer is assigned, or, as in the case of certain
officers of the Company, including Messrs. Gault, Wells and Tieken, based solely
on the EBIT, SAG reductions and cash flow performance of the entire Company.
Depending on the extent to which applicable EBIT, SAG reduction and cash flow
goals were achieved, payouts could have ranged from zero to 150% of the target
amounts. The target annual incentive compensation levels (assuming payout at
100% of target) for 1995 represented approximately 31% of total 1995 annual cash
(salary and Performance
--21--
<PAGE> 27
Plan) compensation, which was substantially the same proportion as the median
level established by the aforesaid surveys. EBIT, SAG reduction and cash flow
goals for 1995 were exceeded by the Company and most operating units. Payouts
for 1995 averaged approximately 121% of the target levels for the various
operating units and were 140% of the target level for the Company. The
Performance Plan payments represented an average of approximately 42% of the
total 1995 annual cash compensation of the Company's executive officers and 47%
of annual cash compensation of the Named Officers.
A significant portion of the total compensation package of each executive
officer is contingent upon the performance of the Company over the intermediate
term, where performance is measured by the Company's cumulative net income per
share or another appropriate standard. Accordingly, Performance Equity Grants
have been awarded annually since 1992 to executive officers (and certain other
key employees) of the Company pursuant to the 1989 Plan. The Committee, after
consultation with and based on the recommendations of the Chief Executive
Officer, establishes the terms and conditions of all grants (including the
performance criteria, the target levels for payout and the aggregate amount of
grants), selects the persons to whom grants are made and fixes the size of each
such person's grant.
Performance Equity Grants for 1995 were granted by the Committee under the
1989 Plan to all executive officers and certain other key employees of the
Company on December 6, 1994, each based on guidelines established using the
median of medium and long term compensation awards by 33 manufacturing companies
(having median annual sales of approximately $14.0 billion) included in a 1994
survey acquired by the Company. The Performance Equity Grants were granted in
respect of substantially the same number of units as were granted in respect of
1994. Performance Equity Grants are designed to comprise approximately 50% of
target medium and long term compensation. Payouts in respect of the Performance
Equity Grants may range from zero to 150% of the target amounts, depending on
the cumulative net income per share of the Common Stock of the Company during
the three year performance period ending December 31, 1997, which must equal or
exceed $12.15 per share of Common Stock for any payout to be made. If total net
income per share during the performance period is $14.15 or more, 150% of the
targeted amount may be paid.
The Committee grants stock options to officers and other key employees of the
Company pursuant to the 1989 Plan. The Committee believes that annual grants of
stock options provide an additional long term incentive for key personnel to
remain with the Company and improve future Company performance and confirm the
mutuality of interests shared by the Company's management and its other
shareholders with compensation dependent upon the appreciation of the Company's
Common Stock. All options are granted at a per share exercise price equal to the
market value of the Common Stock of the Company on the date of grant. The
Committee obtains and reviews surveys of the option granting practices of other
manufacturing companies of a similar size in order to determine if the Company's
grants are competitive in size and terms and conditions. The Committee believes
that options should be granted once each year, and that, under ordinary
circumstances, each year each executive officer should be granted options in
respect of shares having approximately the same dollar value, determined using
the standard growth methodology applied in the aforesaid survey of 33
manufacturing companies used by the Company for determining competitive
Performance Equity Grant levels, and subject to variation to reflect changes in
the responsibility or performance of the executive officers or changes in the
performance or circumstances of the Company. Accordingly, options have been
granted to all executive officers and other key employees annually, ordinarily
at the beginning of each year. Within the guideline ranges established using the
aforesaid survey, the size of individual stock option grants were determined
primarily on the basis of the responsibilities of each executive officer in the
Company. Recent Company performance, prior grants and the prior performance of
the executive officers were also considered in determining the size of
individual grants.
On January 4, 1995, stock options in respect of 1,699,825 shares were granted
at $34.75 per share (the fair market value of the Common Stock of the Company on
that day) to 805 key employees (including all executive officers), which options
expire on January 4, 2005. In addition, stock options in respect of 31,900
shares were granted in June and July of 1995 at an exercise price of $42.50 (in
each case at or in excess of the fair market value on the date of grant) to
seven key employees, including three executive officers, which options expire in
2005.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Gault, the Chairman of the Board and Chief Executive Officer of the
Company during 1995, entered into a three year employment agreement approved by
the Committee when he was elected to the office in June of 1991. In May of 1994,
the Company, by action of the Board of Directors taken
--22--
<PAGE> 28
pursuant to the recommendation of the Compensation Committee, amended the
employment agreement with Mr. Gault to extend the term of Mr. Gault's employment
through December 31, 1995, when he retired as Chief Executive Officer. Under the
employment agreement, Mr. Gault was entitled to receive an annual salary of at
least $840,000 a year, which was increased by the Committee to an annual rate of
$900,000 per year effective June 1, 1992, an annual rate of $960,000 effective
June 1, 1993, and an annual rate of $1,020,000 effective June 1, 1994, in
recognition of his outstanding performance in leading the Company's continued
improvement in operating results and financial condition. The improvements
realized during 1994 were reflected by, among other things, a 5.5% increase in
sales and a 16% increase in the Company's income before extraordinary items and
the cumulative effect of accounting changes. In accordance with the Committee's
policy, Mr. Gault's cash compensation in respect of 1995 which would be subject
to the limitation on deductibility for Federal Income Tax purposes under Section
162(m) of the Code was automatically deferred until at least January of 1997.
Under the amended employment agreement, Mr. Gault was entitled to receive at
least $510,000 (50% of his salary) of annual incentive compensation in 1995,
whether under the Performance Plan or otherwise. The Committee, in view of the
performance of Mr. Gault in 1994, as reflected by the substantial improvements
in the Company's operating results and financial condition, determined that Mr.
Gault's compensation arrangement should provide upside potential in the event of
continued improvements in the Company's performance during 1995. Accordingly,
under the Performance Plan Mr. Gault was granted at the beginning of 1995 a
target annual incentive compensation level for 1995 in excess of the minimum
required by the employment agreement, and he earned an amount equivalent to 226%
of the minimum amount required by the employment agreement and 140% of the
target amount. Payment of the 1995 award earned was deferred pursuant to the
Company's Deferred Compensation Plan for Executives.
Applying the same guidelines used in respect of other executive officers, on
December 6, 1994, Mr. Gault was granted, as incentive compensation contingent
upon the earnings performance of the Company, a Performance Equity Grant for the
three year performance period ending on December 31, 1997.
Pursuant to the terms of the employment agreement, Mr. Gault was granted, as
long term incentive compensation, stock options under the 1989 Plan in respect
of an aggregate of 1,302,000 shares through December 31, 1994. The Committee
determined that it would be appropriate to continue to provide similar long term
incentive compensation for 1995. On January 4, 1995, Mr Gault was granted a
Non-qualified Stock Option under the 1989 Plan in respect of 152,200 shares of
the Company's Common Stock and an Incentive Stock Option under the 1989 Plan in
respect of 2,800 shares of the Company's Common Stock. Each stock option was
granted at the fair market value of the Common Stock on the date of grant.
February 2, 1996
THE COMPENSATION COMMITTEE
John G. Breen, Chairman
<TABLE>
<S> <C>
William E. Butler Steven A. Minter
Thomas H. Cruikshank Agnar Pytte
William J. Hudson, Jr. George H. Schofield
Gertrude G. Michelson William C. Turner
</TABLE>
--23--
<PAGE> 29
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total shareholder returns
of the Common Stock of the Company ("Goodyear Common"), the Standard & Poor's
500 Composite Stock Index (the "S&P 500") and the Dow Jones Auto Parts &
Equipment-All Index (the "Dow Auto Parts") at each December 31 during the period
beginning December 31, 1990 and ending December 31, 1995. The graph assumes the
investment of $100 on December 31, 1990 in Goodyear Common Stock, in the S&P 500
and in the Dow Auto Parts. Total shareholder return was calculated on the basis
that in each case all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
GOODYEAR COMMON, S & P 500 AND DOW AUTO PARTS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD GOODYEAR DOW AUTO
(FISCAL YEAR COVERED) COMMON S & P 500 PARTS
<S> <C> <C> <C>
1990 100 100 100
1991 287 130 148
1992 370 140 192
1993 503 155 238
1994 377 157 203
1995 521 215 252
</TABLE>
--24--
<PAGE> 30
MISCELLANEOUS
SUBMISSION OF SHAREHOLDER PROPOSALS
If a shareholder desires to have a proposal included in the Proxy Statement
and Proxy of the Board of Directors for the 1997 Annual Meeting of Shareholders,
such proposal shall conform to the applicable proxy rules of the Securities and
Exchange Commission concerning the submission and content of proposals and must
be received by the close of business on October 30, 1996 at the executive
offices of the Company, 1144 East Market Street, Akron, Ohio 44316-0001,
Attention: Office of the Secretary.
10-K REPORT
Interested shareholders may obtain a copy of the Company's Annual Report for
1995 (on Form 10-K) to the Securities and Exchange Commission, including all
financial statements, schedules and exhibits, without charge by writing to:
Investor Relations
The Goodyear Tire & Rubber Company
1144 East Market Street
Akron, Ohio 44316-0001
or by a telephone call to: 216-796-3457 (330-796-3457 beginning March 9, 1996);
or to 515-263-6408.
DIVIDEND REINVESTMENT PLAN SHARES
First Chicago Trust Company of New York will vote any shares that it holds as
custodian for the account of a shareholder participating in the Goodyear
Dividend Reinvestment and Stock Purchase Plan in accordance with the Proxy
returned by the participant to the Company in respect of the shares of Common
Stock such participant holds of record. Shares of Common Stock in respect of
which a Proxy or other written instruction is not received will not be voted.
SAVINGS PLAN SHARES
A separate "Confidential Voting Instructions" card is being sent to each
employee or former employee of the Company participating in one or more of the
Employee Savings Plans in which shares of Common Stock are held in a Savings
Plan trust for the account of such participant. Shares of Common Stock held in a
Savings Plan trust will be voted by the Plan trustee as instructed by Plan
participants. Shares held in a Savings Plan trust for which voting instructions
are not received will be voted by the Plan trustee in the same proportion as it
votes shares for which voting instructions were received from participants in
that Savings Plan.
COSTS OF SOLICITATION
The costs of solicitation of proxies will be borne by the Company. The Company
has retained Beacon Hill Partners, Inc., 90 Broad Street, New York, New York
10004, to assist the Company in the distribution of the proxy materials and the
solicitation of proxies for an estimated fee of $12,500 plus reimbursement of
reasonable out-of-pocket expenses. Beacon Hill Partners, Inc. may solicit
proxies from shareholders by mail, telephone, telex, telegram or personal call
or visit. In addition, officers or other employees of the Company may, without
additional compensation therefor, solicit proxies in person or by telephone.
February 27, 1996
By Order of the Board of Directors
JAMES BOYAZIS, Secretary
--25--
<PAGE> 31
(LOGO)DE
700-862-928-646
<PAGE> 32
[GOODYEAR LOGO]
THE GOODYEAR TIRE & RUBBER COMPANY
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
P
R SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O
X The undersigned, a holder (or designated proxy) of shares of the Common
Y Stock of The Goodyear Tire & Rubber Company, hereby appoints STANLEY C.
GAULT, STEVEN A. MINTER, and AGNAR PYTTE, and each or any of them, the
proxies or proxy of the undersigned, with full power of substitution, to
represent the undersigned, and to vote all of the shares of Common Stock that
the undersigned is entitled to vote, at the Annual Meeting of Shareholders of
the Company to be held at its offices in Akron, Ohio, on Monday, April 15,
1996, at 10:00 A.M., Akron time, and at any and all adjournments thereof;
to vote for the election of four Directors of the Company, and with the power
to vote said shares FOR the ratification of appointment of Independent
Accountants, AGAINST the Shareholder Proposal and upon all other matters
as may properly come before the meeting or any adjournment thereof.
This Proxy is given and is to be construed according to the laws of the
State of Ohio.
UNLESS OTHERWISE SPECIFIED ON THE REVERSE SIDE, THE PROXY WILL BE
VOTED: FOR ELECTION OF THE FOUR NOMINEES FOR DIRECTOR NAMED ON THE REVERSE
SIDE, WITH DISCRETIONARY AUTHORITY TO CUMULATE VOTES WITH RESPECT TO THE
THREE NOMINEES FOR CLASS I DIRECTOR (ITEM 1 ON THE REVERSE SIDE), FOR
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS (ITEM 2 ON THE
REVERSE SIDE) AND AGAINST THE SHAREHOLDER PROPOSAL (ITEM 3 ON THE REVERSE
SIDE).
IF YOU PLAN TO ATTEND THE 1996 ANNUAL MEETING, PLEASE MARK THE BOX
INDICATED ON THE REVERSE SIDE.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
ANNUAL MEETING OF SHAREHOLDERS
THE GOODYEAR TIRE & RUBBER COMPANY
APRIL 15, 1996
10:00 A.M.
OFFICE OF THE COMPANY
GOODYEAR THEATER
1201 EAST MARKET STREET
AKRON, OHIO
Refreshments will be served from 9:00 to 9:45 a.m. in the Goodyear
Gymnasium, which is adjacent to the Theater in Goodyear Hall.
WE INVITE YOU TO JOIN US.
YOUR VOTE IS IMPORTANT
======================
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 33
X Please mark your
votes in blue or
black ink as in this
example.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF NOTICE OF 1996 ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT.
The Board of Directors Recommends a Vote FOR Election of All Nominees, FOR Item
2 and AGAINST Item 3.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ITEM 1. ELECTION OF DIRECTORS. NOMINEES:
Class I Directors-Each Class III Director-To FOR AGAINST ABSTAIN
to serve a 3-year term: serve a 1-year term: ITEM 2. Ratification of / / / / / /
WITHHOLD Samir F. Gibara appointment of Price
FOR ALL AUTHORITY William J. Hudson Jr. Gertrude G. Michelson Waterhouse LLP as
NOMINEES AS TO ALL William C. Turner Independent Accountants.
NOMINEES ------------------------------------------------
ITEM 3. Shareholder / / / / / /
Proposal requesting
(To withhold authority to vote for any individual nominee write that nominee's an Environmental Report.
name on the space provided below.)
I plan to attend the Annual / /
- ----------------------------------------------------------------------------- Meeting of Shareholders.
___________________________________
PLEASE SIGN NAME EXACTLY AS IT APPEARS ABOVE. EACH JOINT OWNER SHOULD SIGN. SIGNATURE DATE
PLEASE INDICATE TITLE IF YOU ARE SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE, ___________________________________
CUSTODIAN, GUARDIAN OR CORPORATE OFFICER. SIGNATURE DATE
FOLD AND DETACH HERE
</TABLE>
[MAP]
Directions for the most direct route to Goodyear are provided below:
MOTORISTS NORTH OF AKRON
- ------------------------
Route 8 South to I-76 East. Exit I-76 East at Exit 24 Arlington Street/Kelly
Avenue. Follow directions for Kelly Avenue. Left on Kelly one block to traffic
light. Right on Third Avenue to traffic light. Left on Martha to traffic light.
Left on East Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS SOUTH OF AKRON
- ------------------------
I-77 North to I-76 East. Exit 24 Arlington Street/Kelly Avenue. Follow
directions for Kelly Avenue. Left on Kelly one block to traffic light. Right on
Third Avenue to traffic light. Left on Martha to traffic light. Left on East
Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS EAST OF AKRON
- -----------------------
I-76 West to Exit 25 Martha Avenue. Right on Martha to East Market Street. Left
on East Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS WEST OF AKRON
- -----------------------
I-76 East. Exit 24 Arlington Street/Kelly Avenue. Follow directions for Kelly
Avenue. Left on Kelly one block to traffic light. Right on Third Avenue to
traffic light. Left on Martha to traffic light. Left on East Market to Goodyear
and Shareholder Parking Lot on right.
NOTE: 45MPH SPEED LIMIT STRICTLY ENFORCED IN CONSTRUCTION AREA!
***I-76 TIPS***
- -Turn car radio to 530 or 1610 AM for traffic information in a 14-mile radius of
the central interchange. Signs along the roadside will indicate which radio
station covers the direction you're driving.
- -Look for changeable message signs with advice to drivers. The signs provide
advance warning of problems.
- -Call 76-AKRON (216) 762-5766 A traffic hot-line provides complete traffic
information. Hot-line callers can also order free a more detailed alternate
route map to keep in the car.
<PAGE> 34
CONFIDENTIAL VOTING INSTRUCTIONS - 1996 ANNUAL MEETING
THE GOODYEAR TIRE & RUBBER COMPANY EMPLOYEE SAVINGS PLANS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF GOODYEAR
The proxy soliciting materials furnished by the Board of Directors of The
Goodyear Tire & Rubber Company in connection with the Annual Meeting of
Shareholders to be held on Monday, April 15, 1996 are delivered herewith.
Under each Employee Savings Plan in which you participate ("Plan") you have
the right to give written instructions to the Trustee for such Plan to vote as
you specify the number of full shares of Common Stock of The Goodyear Tire &
Rubber Company representing your proportionate interest in each such Plan on
February 16, 1996.
If you wish to have such shares voted by the Trustee, please sign the
authorization on the reverse side of this card and return it in the
accompanying envelope. If you do not give instructions by marking, signing and
returning this Confidential Voting Instructions Card in the envelope provided,
shares of the Common Stock held for your account in each Plan will be voted by
the Trustee in the same proportion as it votes shares for which Confidential
Voting Instructions are received by the Trustee from other participants in
that Plan.
I hereby instruct the Trustee to vote (or cause to be voted) all shares of
Common Stock of The Goodyear Tire & Rubber Company credited to my account under
each Plan at February 16, 1996 at the Annual Meeting of Shareholders to be held
on April 15, 1996, and at any adjournment thereof, as indicated on the reverse
side hereof or, if not so indicated, as recommended by the Board of Directors.
UNLESS INSTRUCTIONS ARE GIVEN ON THE REVERSE SIDE, THE TRUSTEE WILL VOTE FOR
THE ELECTION OF THE FOUR NOMINEES FOR DIRECTOR (WITH DISCRETIONARY AUTHORITY
TO CUMULATE VOTES), FOR ITEM 2 AND AGAINST ITEM 3.
IF YOU PLAN TO ATTEND THE 1996 ANNUAL MEETING, PLEASE MARK THE BOX
INDICATED ON THE REVERSE SIDE.
THIS CONFIDENTIAL VOTING INSTRUCTIONS CARD IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
ANNUAL MEETING OF SHAREHOLDERS
THE GOODYEAR TIRE & RUBBER COMPANY
APRIL 15, 1996
10:00 A.M.
OFFICE OF THE COMPANY
GOODYEAR THEATER
1201 EAST MARKET STREET
AKRON, OHIO
Refreshments will be served from 9:00 to 9:45 a.m. in the Goodyear
Gymnasium, which is adjacent to the Theater in Goodyear Hall.
WE INVITE YOU TO JOIN US.
YOUR VOTE IS IMPORTANT
======================
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 35
X Please mark your
votes in blue or
black ink as in this
example.
The Board of Directors Recommends a Vote FOR Election of All Nominees, FOR Item
2 and AGAINST Item 3.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
ITEM 1. ELECTION OF DIRECTORS. NOMINEES:
Class I Directors-Each Class III Director-To FOR AGAINST ABSTAIN
to serve a 3-year term: serve a 1-year term: ITEM 2. Ratification of / / / / / /
WITHHOLD Samir F. Gibara appointment of Price
FOR ALL AUTHORITY William J. Hudson Jr. Gertrude G. Michelson Waterhouse LLP as
NOMINEES AS TO ALL William C. Turner Independent Accountants.
NOMINEES ------------------------------------------------
ITEM 3. Shareholder / / / / / /
Proposal requesting
(To withhold authority to vote for any individual nominee write that an Environmental Report.
nominee's name on the space provided below.)
I plan to attend the Annual / /
- ----------------------------------------------------------------------------- Meeting of Shareholders.
___________________________________
AUTHORIZATION: I ACKNOWLEDGE RECEIPT OF THE NOTICE OF 1996 ANNUAL MEETING AND SIGNATURE DATE
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 MY PLAN SIGNATURE DATE
ACCOUNT(S) AS SPECIFIED ABOVE, OR, IF NOT SPECIFIED ABOVE, AS RECOMMENDED BY
THE BOARD OF DIRECTORS.
FOLD AND DETACH HERE
</TABLE>
[MAP]
Directions for the most direct route to Goodyear are provided below:
MOTORISTS NORTH OF AKRON
- ------------------------
Route 8 South to I-76 East. Exit I-76 East at Exit 24 Arlington Street/Kelly
Avenue. Follow directions for Kelly Avenue. Left on Kelly one block to traffic
light. Right on Third Avenue to traffic light. Left on Martha to traffic light.
Left on East Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS SOUTH OF AKRON
- ------------------------
I-77 North to I-76 East. Exit 24 Arlington Street/Kelly Avenue. Follow
directions for Kelly Avenue. Left on Kelly one block to traffic light. Right on
Third Avenue to traffic light. Left on Martha to traffic light. Left on East
Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS EAST OF AKRON
- -----------------------
I-76 West to Exit 25 Martha Avenue. Right on Martha to East Market Street. Left
on East Market to Goodyear and Shareholder Parking Lot on right.
MOTORISTS WEST OF AKRON
- -----------------------
I-76 East. Exit 24 Arlington Street/Kelly Avenue. Follow directions for Kelly
Avenue. Left on Kelly one block to traffic light. Right on Third Avenue to
traffic light. Left on Martha to traffic light. Left on East Market to Goodyear
and Shareholder Parking Lot on right.
NOTE: 45MPH SPEED LIMIT STRICTLY ENFORCED IN CONSTRUCTION AREA!
***I-76 TIPS***
- -Turn car radio to 530 or 1610 AM for traffic information in a 14-mile radius of
the central interchange. Signs along the roadside will indicate which radio
station covers the direction you're driving.
- -Look for changeable message signs with advice to drivers. The signs provide
advance warning of problems.
- -Call 76-AKRON (216) 762-5766 A traffic hot-line provides complete traffic
information. Hot-line callers can also order free a more detailed alternate
route map to keep in the car.
