<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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: ...........................................................
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<PAGE> 2
[GOODYEAR LOGO]
NOTICE OF
1998 ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
THE GOODYEAR TIRE & RUBBER COMPANY
1144 East Market Street
Akron, Ohio 44316-0001
DATE: Monday, April 6, 1998
TIME: 10:00 A.M., Akron Time
PLACE: Offices Of The Company
Goodyear Theater
1201 East Market Street
Akron, Ohio
YOUR VOTE IS IMPORTANT
======================
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 3
The Goodyear Tire & Rubber Company
Akron, Ohio 44316-0001
SAMIR G. GIBARA
CHAIRMAN OF THE BOARD
CHIEF EXECUTIVE OFFICER AND PRESIDENT February 26, 1998
Dear Shareholders:
You are cordially invited to attend your Company's 1998 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 6, 1998. We
hope you will be able to attend and participate. The Notice of 1998 Annual
Meeting of Shareholders and Proxy Statement follow. The 1997 Annual Report is
enclosed.
At the Annual Meeting, shareholders will elect three persons to serve as
directors for three year terms. Each nominee is an incumbent. The Proxy
Statement contains information regarding each nominee for director and the eight
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 1998 (Item 2 on your Proxy).
Your Board of Directors recommends that you vote for the ratification of the
appointment of Price Waterhouse LLP.
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,
/s/ SAMIR G. GIBARA
SAMIR G. GIBARA
Chairman of the Board,
Chief Executive Officer and President
<PAGE> 4
CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
NOTICE OF THE 1998 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
Other Business 7
Beneficial Ownership of Common Stock 7
Executive Officer Compensation 9
Summary of Compensation 9
Option/SAR Grants in 1997 11
Option/SAR 1997 Exercises and Year-End Values 12
Long Term Incentive Awards 12
Other Plan Information 14
Retirement Benefits 15
Directors' Compensation 16
Other Matters 17
Section 16(a) Beneficial Ownership Reporting Compliance 17
Compensation Committee Report on Executive Compensation 18
Performance Graph 22
Miscellaneous 23
Submission of Shareholder Proposals 23
10-K Report 23
Savings Plan Shares 23
Costs of Solicitation 23
</TABLE>
<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY
NOTICE OF THE
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 6, 1998
To The Shareholders:
The 1998 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 6, 1998, at 10:00 A.M., Akron Time, for the
following purposes:
1. To elect three directors, each to serve for a term of three years
(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
1998 (Proxy Item 2); and
3. 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 17, 1998 as
the record date for determining shareholders entitled to notice of, and to vote
at, the 1998 Annual Meeting. Only holders of record of the Common Stock of the
Company at the close of business February 17, 1998 will be entitled to vote at
the 1998 Annual Meeting and adjournments, if any, thereof.
By order of the Board of Directors:
/s/ James Boyazis
February 26, 1998 James Boyazis, Secretary
- -------------------------------------------------------------------------------
Please complete, date and sign your proxy and return
it promptly in the enclosed envelope.
<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 6, 1998 (the "Annual Meeting"), 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
330-796-2121.
The Company's Annual Report to Shareholders for the year ended December 31,
1997 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 March 2, 1998.
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 17, 1998 (the "record
date") are entitled to notice of the Annual Meeting and to vote shares held on
the record date at the Annual Meeting. As of the close of business on the record
date, there were 156,817,956 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 receiving the most votes
will be elected. Each shareholder has the right to vote cumulatively for
candidates whose names have been placed in nomination 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.
VOTING OF PROXY -- CONFIDENTIALITY
The accompanying Proxy is designed to permit each shareholder of record at
the close of business on the record date to vote on the election of directors
and on the resolution proposed by the Board of Directors described in this Proxy
Statement. Three directors of the Company, Messrs. Gibara, 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 his or her Proxy be withheld
for any one or more of the nominees for director, the Proxy will be voted for
the three 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.
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 1998.
- 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 1998 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 the
authorization of 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. Eleven of the twelve directors currently
serving are neither present nor past officers or employees of the Company or any
of its subsidiaries. The three nominees (each currently serving as a director)
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 six times during
the year. The average attendance of all directors at the seven Board meetings
held during 1997 was 93.3%. The average attendance of all directors at all
meetings of the Board and its standing committees held during 1997 was 91.2%.
During 1997, 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. Breen who attended 71.4% of such meetings.
The Board of Directors has four standing committees to assist it in the
discharge of its responsibilities. Their principal activities are described
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 Audit Committee must be "independent" in the opinion of the
entire Board. The Audit Committee held three formal meetings during 1997.
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 accuracy and adequacy of the Company's records and financial
statements 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 three for- mal meetings during
1997.
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
- 2 -
<PAGE> 8
executive officer of the Company regarding executive compensation policies,
practices and plans, and undertakes such special studies regarding compensation
as he or the Board may request. The Compensation Committee also administers the
Company's 1997 Performance Incentive Plan, the 1989 Goodyear Performance and
Equity Incentive Plan, the Company's Performance Recognition Plan, the Company's
1987 Employees' Stock Option Plan, the Company's Deferred Compensation Plan For
Executives and the Company's Outside Directors' Equity Participation Plan.
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 one formal
meeting during 1997.
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 of the Company 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 eight directors who are not present or past officers or
employees of the Company or any of its subsidiaries. During 1997, 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 twelve directors until immediately
prior to the Annual Meeting, when the Board of Directors will be comprised of
eleven directors. The Board of Directors is classified into three classes of
directors. At each annual meeting of shareholders 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 of shareholders. Classes I, II and III are each currently comprised of
four directors. The current terms of the four Class II Directors will expire at
the 1998 Annual Meeting. The current terms of the four Class I Directors and the
four Class III Directors will expire at the 1999 and 2000 annual meetings,
respectively. Effective at the Annual Meeting, Classes I and III will each be
comprised of four directors and Class II will be comprised of three directors.
At the 1998 Annual Meeting three persons are to be elected to serve as
Class II Directors, each to a three year term. The Board of Directors has
selected the following nominees recommended by the Nominating Committee for
election to the Board of Directors, each to hold office for a three year term
expiring at the 2001 Annual Meeting and until his successor shall have been duly
elected and qualified:
John G. Breen
William E. Butler
George H. Schofield
Each nominee is an incumbent director whose term of office expires at the
Annual Meeting. The following page contains certain information concerning the
three nominees, which information was furnished by them.
- 3 -
<PAGE> 9
NOMINEES FOR DIRECTOR -- CLASS II, THREE YEAR TERMS EXPIRING IN 2001
- --------------------------------------------------------------------------------
JOHN G. BREEN
Chairman of the Board and Chief Executive Officer of 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 a director of Mead
Corporation, National City Corporation and Parker-Hannifin Corporation.
Chairman of Compensation Committee and member of Audit and Nominating
Committees.
Age: 63
Director since: January 7, 1992
- --------------------------------------------------------------------------------
WILLIAM E. BUTLER
Retired. Formerly Chairman of the Board and Chief Executive Officer of Eaton
Corporation, a global manufacturer of highly engineered products for the
automotive, industrial, construction, commercial and aerospace 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 a
director of Applied Industrial Technologies, Inc., Ferro Corporation, Pitney
Bowes Inc., Borg Warner Corporation and Zurn Industries, Inc.
Member of Audit, Compensation and Corporate Responsibility Committees.
Age: 66
Director since: February 8, 1995
- --------------------------------------------------------------------------------
GEORGE H. SCHOFIELD
Retired. Formerly Chairman of the Board and Chief Executive Officer of Zurn
Industries, Inc., which designs, manufactures and markets water control and HVAC
products.
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 a director of National Fuel Gas Company.
Chairman of Audit Committee and member of Compensation and Corporate
Responsibility Committees.
Age: 68
Director since: December 3, 1991
- --------------------------------------------------------------------------------
RETIRING DIRECTOR
- --------------------------------------------------------------------------------
GERTRUDE G. MICHELSON
Mrs. Michelson, after 17 years of distinguished service as a director of the
Company, will retire as a director immediately prior to the 1998 Annual Meeting.
At that time Class II will be comprised of three incumbent directors, each a
nominee for a new three year term.
- --------------------------------------------------------------------------------
The following two pages contain certain information concerning the eight
directors whose terms of office continue after the 1998 Annual Meeting, which
information was provided by the continuing directors.
- 4 -
<PAGE> 10
CONTINUING DIRECTORS -- CLASS 1, Terms Expiring in 1999
- --------------------------------------------------------------------------------
SAMIR G. GIBARA
Chairman of the Board, Chief Executive Officer and President
Mr. Gibara joined the Company in 1966, serving in various managerial posts prior
to being 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 and Chairman of the Board, Chief Executive Officer and President effective
July 1, 1996.
Member of Nominating Committee.
Age: 58
Director since: April 15, 1995
- --------------------------------------------------------------------------------
WILLIAM J. HUDSON, JR.
President and Chief Executive Officer and a Director of AMPIncorporated, 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 President and Chief Executive Officer effective January 1,
1993. Mr. Hudson is a director of Carpenter Technology, a director of the
National Association of Manufacturers, a member of the Executive Committee of
the Board of Governors of the National Electrical Manufacturing Association, a
member of the Board of Trustees and the Executive Committee of the United States
Council for International Business and a member of the Policy Committee of the
Business Round Table.
Member of Audit, Compensation and Corporate Responsibility Committees.
Age: 63
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 and investment
groups on international economic and political affairs, strategy, investments,
joint ventures and strategic alliances.
Mr. Turner has served as Chairman of the Board and Chief Executive Officer of
Argyle Atlantic Corporation since 1977. He is 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 American Graduate
School of International Management, a trustee and Executive Committee member of
the United States Council for International Business and a member of the Council
of American Ambassadors and of the Council on Foreign Relations.
Chairman of Committee on Corporate Responsibility and member of Compensation and
Nominating Committees.
Age: 68
Director since: October 3, 1978
- --------------------------------------------------------------------------------
MARTIN D. WALKER
Retired. Formerly Chairman of the Board and Chief Executive Officer of M. A.
Hanna Company, an international processor and distributor of polymers to the
plastics and rubber industries.
Mr. Walker served as Chairman of the Board and Chief Executive Officer of M. A.
Hanna Company from September 1, 1986 through December 31, 1996, when he retired
as Chief Executive Officer. He retired as Chairman of the Board of M. A. Hanna
Company on June 30, 1997. Mr. Walker is a principal in MORWAL Investments. He is
a director of Comerica, Inc., Lexmark International, M. A. Hanna Company,
Meritor Automotive Corporation, Reynolds & Reynolds, The Timken Company and
Textron, Inc.
Member of Audit, Compensation and Corporate Responsibility Committees.
Age: 65
Director since: February 4, 1997
- --------------------------------------------------------------------------------
- 5 -
<PAGE> 11
CONTINUING DIRECTORS -- CLASS III, Terms Expiring in 2000
- --------------------------------------------------------------------------------
THOMAS H. CRUIKSHANK
Retired. Formerly Chairman of the Board and Chief Executive Officer of
Halliburton Company, a suppler 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 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 a director of The
Williams Companies, Inc., Seagull Energy Corporation and Lehman Brothers
Holdings Inc.
Member of Audit, Compensation and Nominating Committees.
Age: 66
Director since: October 7, 1986
- --------------------------------------------------------------------------------
KATHERINE G. FARLEY
Managing Director of Tishman Speyer Properties, an international real estate
developer, owner, and property management firm.
Ms. Farley joined Tishman Speyer Properties in 1984. She was Managing Director -
International from 1984 to 1993, when she became Managing Director. In January
of 1998 she became Senior Managing Director. Ms. Farley is a director of Women
in Need.
Member of Compensation Committee.
Age: 48
Director since: February 3, 1998
- --------------------------------------------------------------------------------
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 a director of Consolidated Natural Gas Company, KeyCorp and Rubbermaid
Incorporated, a trustee of The College of Wooster and a director of The
Foundation Center.
Member of Compensation, Corporate Responsibility and Nominating Committees.
Age: 59
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 a director of A. O. Smith Corporation and the Sherman Fairchild
Foundation Inc.
Member of Compensation, Corporate Responsibility and Nominating Committees.
Age: 65
Director since: January 5, 1988
- --------------------------------------------------------------------------------
- 6 -
<PAGE> 12
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTS
(Item 2 on the Proxy)
Price Waterhouse LLP ("Price Waterhouse") served as the Company's
independent accountants for the year ended December 31, 1997. In addition to
rendering audit services during 1997, Price Waterhouse performed various
non-audit services for the Company and its subsidiaries. The Audit Committee was
advised of these non-audit services and has determined that the independence of
Price Waterhouse was not impaired.
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, 1998. In making its recommendation, the Audit Committee
reviewed past audit results and the non-audit services performed during 1997 and
proposed to be performed during 1998.
In selecting Price Waterhouse, the Audit Committee and the Board of
Directors carefully considered their independence. Price Waterhouse have
confirmed to the Company 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, 1998 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
1999.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
(PROXY ITEM 2).
OTHER BUSINESS
In addition to the matters described above, there will be an address by the
Chairman of the Board, Chief Executive Officer and President 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 17, 1998; except that (i) Brinson Partners, Inc. and
related entities, 209 South LaSalle, Chicago, Illinois 60604, filed an amended
Schedule 13G dated February 11, 1998 indicating beneficial ownership, with
shared voting and dispositive power, of 8,758,395 shares, or approximately 5.6%
of outstanding shares, of the Common Stock, (ii) Morgan Stanley, Dean Witter,
Discover & Co., 1585 Broadway, New York, New York 10036, filed a Schedule 13G
dated February 12, 1998 indicating beneficial ownership, with shared voting and
dispositive power of 8,761,705 shares, or approximately 5.6% of outstanding
shares, of the Common Stock, and (iii) The Northern Trust Company, 50 South
LaSalle Street, Chicago, Illinois, has reported that at the record date it held
15,272,761 shares, or approximately 9.7% of outstanding shares, of the Common
Stock for various beneficial owners, including 8,310,815 shares, or
approximately 5.3% of outstanding shares, of the Common Stock of the Company
held as the Trustee of four Employee Savings Plans sponsored by the Company.
At February 17, 1998, each director and nominee, each person named in the
Summary Compensation Table on page 9, 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.
- 7 -
<PAGE> 13
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP TABLE
BENEFICIAL OWNERSHIP AT FEBRUARY 17, 1998
- -----------------------------------------------------------------------------------------------------------------
SHARES OF
COMMON STOCK DEFERRED SHARE
NAME OWNED(1)(2) EQUIVALENT UNITS
---- ----------- ----------------
<S> <C> <C>
John G. Breen 5,200(3)(4) 1,230(11)
William E. Butler 405(5) 3,044(11)
Thomas H. Cruikshank 1,800(4) 2,871(11)
Eugene R. Culler, Jr 31,068(6)(7)(8) 2,882(12)
Katherine G. Farley 2,000 -0-
Samir G. Gibara 78,946(6)(7) 8,997(12)
C. Thomas Harvie 24,005(6)(7)(9) 1,922(12)
William J. Hudson, Jr 1,000 1,730(11)
Gertrude G. Michelson 1,200(4) 3,439(11)
Steven A. Minter 1,580(4) 824(11)
Agnar Pytte 1,200(4) 2,578(11)
George H. Schofield 2,200(4) 3,334(11)
William J. Sharp 29,729(6)(7) 5,315(12)
Robert W. Tieken 46,123(7) 5,188(12)
William C. Turner 1,600(4) 2,304(11)
Martin D. Walker 1,000 58(11)
All directors, the Named Officers and all other
Officers as a group (36 persons) 685,846(4)(6)(7)(10) 87,505(11)(12)
</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 officer, and by all directors and
officers as a group, and the percentage of Common Stock outstanding
beneficially owned by each person and the group, has been determined
in accordance with Rule 13d-3(d)(1) promulgated under the Securities
Exchange Act of 1934. In each case, beneficial ownership is less than
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 Nonemployee Directors which are subject to
certain restrictions.
(5) Shares owned jointly by Mr. Butler and his spouse.
(6) Includes shares which may be acquired upon the exercise of options
which are exercisable prior to April 18, 1998 under the 1989 Goodyear
Performance and Equity Incentive Plan (the "1989 Plan") and
predecessor employee stock option plans of the Company as follows: Mr.
Gibara, 63,600 shares; Mr. Sharp, 13,850 shares; Mr. Tieken, 43,750
shares; Mr. Culler, 18,250 shares; Mr. Harvie, 13,750 shares; and all
other officers, 384,990 shares.
(7) Includes full shares held in trust under the Company's Employee
Savings Plan for Salaried Employees.
(8) Includes 50 shares owned by Mr. Culler's spouse, as to which he
disclaims beneficial ownership.
(9) Includes 10,000 shares acquired by Mr. Harvie pursuant to the terms of
a Restricted Stock Purchase Agreement and the 1989 Plan, which are
subject to certain restrictions and the Company's repurchase option.
(10) Includes 115,087 shares owned of record and beneficially or owned
beneficially through a nominee, 25,485 shares held in the Savings Plan
Trust, 538,190 shares subject to options (exercisable prior to April
18, 1998) granted under the 1989 Plan and predecessor employee stock
option plans, and 7,084 shares held by or jointly with family members
of certain directors and officers.
(11) Deferred units, each equivalent to a hypothetical share of Common
Stock, accrued to accounts of the director under the Company's Outside
Directors' Equity Participation Plan, payable in cash following
retirement. See "Directors' Compensation" at page 16.
(12) Units, each equivalent to a hypothetical share of Common Stock,
deferred pursuant to awards made under the 1989 Plan and receivable in
cash, shares of Common Stock, or any combination thereof, at the
election of the officer. See Note (4) to the Summary Compensation
Table at page 9.
- 8 -
<PAGE> 14
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 1997 and
the persons who were, at December 31, 1997, the other four most highly
compensated executive officers of the Company (the "Named Officers") for
services in all capacities to the Company and its subsidiaries during 1997, 1996
and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------- ---------------------- ---------
SECURITIES
OTHER UNDERLYING LONG TERM ALL
ANNUAL RESTRICTED OPTIONS/ INCENTIVE OTHER
COMPEN- STOCK SARS PLAN COMPEN-
BONUS SATION AWARD(S) (NUMBER PAYOUTS SATION
SALARY (DOLLARS) (DOLLARS) (DOLLARS) OF (DOLLARS) (DOLLARS)
NAME AND PRINCIPAL POSITION YEAR (DOLLARS) (1) (2) (3) (SHARES) (4) (5)
- --------------------------- ---- --------- --------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SAMIR G. GIBARA 1997 $935,100 $961,875 $9,000 -0- 55,000 $674,843 $9,023
Chairman of the Board 1996 800,000 771,373 8,500 -0- 110,000 371,565 4,500
Chief Executive Officer 1995 463,542 387,301 8,500 -0- 30,000 242,663 4,500
and President(6)
WILLIAM J. SHARP 1997 472,917 391,875 9,000 -0- 21,500 283,434 8,340
President 1996 443,333 349,927 8,500 -0- 43,000 312,115 4,500
Global Support Operations(7) 1995 370,000 253,750 8,500 -0- 12,400 283,106 4,500
ROBERT W. TIEKEN 1997 401,667 313,500 8,000 -0- 15,000 276,685 8,254
Executive Vice President(8) 1996 381,667 301,182 8,000 -0- 25,000 304,683 4,500
1995 358,333 273,000 4,473 -0- 12,500 -0- 4,500
EUGENE R. CULLER, JR. 1997 342,500 255,938 -0- -0- 15,000 202,453 6,246
Executive Vice President (9) 1996 317,500 169,276 896,447 -0- 22,500 130,048 4,500
1995 303,802 123,107 $317,788 -0- 9,000 134,813 -0-
C. THOMAS HARVIE 1997 310,000 242,250 6,570 -0- 11,000 242,943 4,750
Vice President and 1996 287,500 229,472 43,288 -0- 22,000 -0- 4,500
General Counsel (10) 1995 137,500 105,000 50,000 $434,000 11,000 -0- -0-
</TABLE>
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Amounts awarded in respect of 1997, 1996 and 1995 and paid in February
of 1998, 1997 and 1996, respectively, pursuant to the Company's
Performance Recognition Plan for 1997, 1996 and 1995, respectively;
except that payment of a portion of the award to Mr. Gibara in respect
of 1996 and all of the award to Mr. Gibara in respect of 1997 was
deferred pursuant to the Company's Deferred Compensation Plan for
Executives. The payout in respect of plan year 1997 was determined
based on EBIT (defined under the Plan as sales minus cost of goods
sold and sales, administrative and general expense, after certain
adjustments) and cash flow targets for 1997. Deferred amounts are
included in the amounts shown in the Table.
(2) Amounts shown represent the cost to the Company of tax and financial
planning assistance provided by third parties, plus: (a) in respect of
Mr. Culler, payment in 1996 of $840,566 in reimbursement of Canadian
taxes in excess of normalized United States taxes, $35,514 for moving
expenses and $12,368 as reimbursement of United States taxes, and
payment in 1995 of $284,770 in reimbursement of Canadian taxes in
excess of normalized United States taxes, and $15,586 for relocation
allowances in 1995; and (b) in respect of Mr. Harvie, payments in 1997
of $576 and in 1996 of $34,658 for costs in connection with his
relocation and in 1995 of $50,000 as special compensation.
(3) No restricted stock was awarded or issued by the Company to any Named
Officer during 1997. On July 17, 1995, Mr. Harvie purchased, pursuant
to a Restricted Stock Purchase Agreement and the 1989 Plan, 10,000
shares of Common Stock for a purchase price of $.10 per share, which
shares are subject to various restrictions and to an option to
repurchase in favor of the Company under specified circumstances at a
price of $.10 per share through at least June 30, 1998. The dollar
value reported represents the per share closing price of the Common
Stock on the date of grant ($43.50 on July 17,
- 9 -
<PAGE> 15
1995), less the purchase price. Mr. Harvie receives all dividends paid
on said shares of Common Stock. At December 31, 1997, the aggregate
value of the 10,000 restricted shares of the Common Stock (net of the
purchase price) was $635,250.00, based on December 31, 1997 closing
price on the New York Stock Exchange Composite Transactions tape of
$63.625 per share. No other shares of restricted stock have been
awarded or issued to the Named Officers of the Company.
(4) The payouts indicated in respect of 1997 relate to amounts earned
pursuant to Performance Equity Grants made in 1995 pursuant to the
1989 Plan in respect of the three year performance period ended
December 31, 1997. Under the 1995 Performance Equity Grants (as
amended December 3, 1996), participants were granted a specified
number of performance units ("1997 Performance Units"), payable 50% in
shares of Common Stock and 50% in cash. Since the aggregate earnings
per share of Common Stock during the performance period were $13.07
(after adjustments by the Committee to eliminate the effects on 1996
earnings of the $872.0 million of asset writedown and rationalization
charges and the effects on 1997 earnings of the $265.2 million of
rationalization and other charges), each participant earned 106.8% of
the 1997 Performance Units granted. The value of each 1997 Performance
Unit was $63.19, which was the average of the high and the low sale
prices of the Common Stock on December 31, 1997, as reported on the
New York Stock Exchange Composite Transactions tape. The payment of
the Common Stock portion of the 1997 Performance Units earned was
automatically deferred in the form of Common Stock equivalent units
(which earn dividend equivalents) for at least five years (or
following earlier retirement) and will be payable at the election of
the participant in shares of Common Stock, cash, or any combination
thereof. The cash portion of the 1997 Performance Units earned was
paid in February 1998. The payouts indicated in respect of 1996 relate
to amounts earned pursuant to Performance Equity Grants made in 1994
pursuant to the 1989 Plan in respect of the three year performance
period ended December 31, 1996. Under the 1994 Performance Equity
Grants (as amended December 31, 1996), participants were Granted a
specified number of performance units ("1996 Performance Units"),
payable 50% in shares of Common Stock and 50% in cash. Since the
aggregate earnings per share of Common Stock during the performance
period were $12.11 (after adjustments by the Committee to eliminate
the effects on 1996 earnings of the $872.0 million of asset writedown
and rationalization charges), each participant earned 143.6% of the
1996 Performance Units granted. The value of each 1996 Performance
Unit was $41.75, which was the average of the high and the low sale
prices of the Common Stock on December 31, 1996, as reported on the
New York Stock Exchange Composite Transactions tape. The payment of
the Common Stock portion of the 1996 Performance Units earned was
automatically deferred in the form of Common Stock equivalent units
(which earn dividend equivalents) for at least five years (or
following earlier retirement) and will be payable at the election of
the participant in shares of Common Stock, cash, or any combination
thereof. The cash portion of the 1996 Performance Units earned was
paid in February 1997. The payouts indicated in respect of 1995 relate
to amounts distributed in February of 1996 pursuant to Performance
Equity Grants made 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 ("1995 Performance Units") payable 50% in shares of
Common Stock and 50% in cash if aggregate earnings per share of Common
Stock during the performance period were at least $9.15. Since the
aggregate earnings per share of Common Stock 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 1995
Performance Units. The 1995 Performance Units were valued at $44.9375
per share, which was the fair market value of the Common Stock at
December 29, 1995, based on 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. Deferred Amounts are
included in the amounts shown in the Table.
(5) All Other Compensation consists of: (a) in respect of 1997 (i) the
value of deferred Common Stock equivalent units ("Units") accrued as
dividend equivalents during 1997 to the accounts of the Named Officers
in respect of Units awarded and deferred in February of 1997, each
Unit or portion thereof valued at $63.625, the closing price of the
Common Stock of the Company on December 31, 1997, as reported on the
New York Stock Exchange Composite Transactions tape, and (ii) $4,750
of matching contributions to each Named Officer under the Company's
Savings Plan; and (b) in respect of 1996 and 1995 matching
contributions under the Company's Savings Plan. See "Savings Plan" at
page 14.
- 10 -
<PAGE> 16
(6) Mr. Gibara was elected Chairman of the Board, Chief Executive Officer
and President effective July 1, 1996. He 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 through December 31, 1995. He served as an Executive Vice
President of the Company from May 3, 1994 to April 15, 1995.
(7) Mr. Sharp was elected President, Global Support Operations effective
January 1, 1996. Mr. Sharp was an Executive Vice President of the
Company during 1995 and 1994.
(8) 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.
(9) 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.
(10) Mr. Harvie joined the Company on July 1, 1995 as a Vice President and
the General Counsel of the Company.
OPTION/SAR GRANTS IN 1997
The Option/SAR Grants Table below shows all grants of stock options and
stock appreciation rights ("SARs") during 1997 to the Named Officers. Stock
Options are ordinarily granted on an annual basis, usually in December of each
year.
<TABLE>
<CAPTION>
OPTION/ SAR GRANTS TABLE
OPTION/SAR GRANTS IN 1997
POTENTIAL
INDIVIDUAL GRANTS REAILIZABLE VALUE
---------------------------------------------- AT ASSUMED
NUMBER OF % OF ANNUAL RATES OF
SECURITIES TOTAL STOCK PRICE
UNDERLYING OPTIONS/ EXERCISE APPRECIATION FOR
OPTIONS/SARS SARS OR OPTION TERM
GRANTED GRANTED TO BASE PRICE (DOLLARS)(3)
(NUMBER OF EMPLOYEES (DOLLARS PER EXPIRATION -----------------------
NAME SHARES)(1) IN 1997 SHARE)(2) DATE 5%(4) 10%(4)
- ---- ---------- ------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Samir G. Gibara 55,000 2.90% $63.50 12-2-07 $2,196,150 $5,566,000
William J. Sharp 21,500 1.13 63.50 12-2-07 858,495 2,175,800
Robert W. Tieken 15,000 .79 63.50 12-2-07 598,950 1,518,000
Eugene R. Culler, Jr. 15,000 .79 63.50 12-2-07 598,950 1,518,000
C. Thomas Harvie 11,000 .58 63.50 12-2-07 439,230 1,113,200
</TABLE>
NOTES TO OPTION/SAR GRANTS TABLE:
(1) On December 2, 1997, incentive stock options and non-qualified stock
options in respect of an aggregate of 1,896,685 shares of Common Stock
were granted to 887 persons, including the Named Officers. In the case
of each Named Officer, incentive stock options were granted in respect
of 1,500 shares. The other shares indicated in respect of each Named
Officer are the subject of non-qualified stock options. 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 stock
option is exercisable in respect of 25% of the shares covered thereby
beginning December 2, 1998, in respect of 50% of the shares covered
thereby beginning December 2, 1999, in respect of 75% of the shares
covered thereby beginning December 2, 2000, and is fully exercisable
beginning December 2, 2001. 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
retirement or disability (as such terms are defined in the 1997 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 until December 2, 2007, and (b) in the event of the
death of the optionee more than six months after the grant thereof,
each 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. Each option also includes the right to the automatic
grant of a new option (a "reinvestment option") for that number of
shares tendered in the exercise of the original stock option. The
reinvestment option will have an exercise price equal to the fair
market value of the Common Stock on the date of the exercise of the
original stock option (which will also be the grant date of the
- 11 -
<PAGE> 17
reinvestment option) and will be subject to the same terms and
conditions as the original stock option (except for the reinvestment
option feature).
(2) In respect of each stock option granted during 1997, 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 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.
(3) 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.
(4) In order to realize the potential values set forth in the 5% and 10%
columns of the Option/SAR Grants Table, the per share price of the
Common Stock would be $103.43 and $164.70, respectively.
OPTION/SAR 1997 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 during
1997 and the value of options/SARs held by the Named Officers at December 31,
1997, valued at $63.625 per share, the closing price of the Common Stock on the
New York Stock Exchange Composite Transactions tape on December 31, 1997.
<TABLE>
<CAPTION>
OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION/SAR EXERCISES IN 1997 AND
DECEMBER 31, 1997 OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING
SHARES UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
ON EXERCISE VALUE DECEMBER 31, 1997 AT DECEMBER 31, 1997
(NUMBER OF REALIZED (NUMBER OF SHARES)(1) (DOLLARS)(2)
NAME SHARES)(1) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ---------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samir F. Gibara 23,900 $ 510,250 46,100 152,500 $888,638 $1,753,438
William J. Sharp 89,775 3,445,358 5,375 59,950 73,234 717,869
Robert W. Tieken -0- -0- 37,500 40,000 893,750 494,063
Eugene R. Culler, Jr. 19,600 608,300 14,625 36,375 291,328 389,297
C. Thomas Harvie -0- -0- 11,000 33,000 207,625 391,875
</TABLE>
NOTES TO OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE:
(1) All shares were acquired pursuant to, and all exercisable and
unexercised shares are the subject of, options to acquire Common
Stock.
(2) Based on the $63.625 closing price of the Common Stock of the Company
on December 31, 1997, as reported on the New York Stock Exchange
Composite Transactions tape .
LONG TERM INCENTIVE AWARDS
The 1997 Performance Incentive Plan of the Company (the "1997 Plan")
empowers the Committee to make grants and awards from time to time until
December 31, 2001. Such grants and awards may be incentive or non-qualified
stock options, stock appreciation rights, restricted stock grants, performance
grants, any other stock-based grants and awards authorized by the Committee, or
any combination of any or all of such grants and awards, whether in tandem with
each other or otherwise, to officers and other key employees of the Company and
its subsidiaries. The 1989 Goodyear Performance and Equity Incentive Plan (the
"1989 Plan"), which authorized similar grants and awards, expired on April 14,
1997, except with respect to the grants and awards then outstanding.
The Long Term Incentive Plan Awards Table below sets forth the long term
incentive grants made in 1997 to the Named Officers, all of which were
Performance Unit Grants under the 1997 Plan.
- 12 -
<PAGE> 18
<TABLE>
<CAPTION>
LONG TERM INCENTIVE PLAN AWARDS TABLE
LONG TERM INCENTIVE PLANS - AWARDS IN 1997
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) (2) PAYOUT(2) STOCK)(4) STOCK)(5) STOCK(6)
- ----- --------------- -------------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Samir F. Gibara 28,000 1/1/98 to 12/31/00 22,400 28,000 42,000
William J. Sharp 8,000 1/1/98 to 12/31/00 6,400 8,000 12,000
Robert W. Tieken 6,000 1/1/98 to 12/31/00 4,800 6,000 9,000
Eugene R. Culler, Jr. 6,000 1/1/98 to 12/31/00 4,800 6,000 9,000
C. Thomas Harvie 4,600 1/1/98 to 12/31/00 3,680 4,600 6,900
</TABLE>
NOTES TO LONG TERM INCENTIVE PLAN AWARDS TABLE:
(1) On December 2, 1997, the Committee granted performance equity grant
units ("2000 Performance Units") under the 1997 Plan to the Named
Officers and to 29 other key executives of the Company. The number of
2000 Performance Units paid will be determined by and contingent upon
the extent to which specified performance goals are achieved. Payment
of 50% of the 2000 Performance Unit earned will be made in cash in
February of 2001 (unless payment is deferred in whole or in part by
the Committee on a mandatory basis or pursuant to the timely election
of the grantee). Payment of the other 50% of the 2000 Performance
Units earned will be deferred for at least five years (or following
earlier retirement) in the form of Common Stock equivalent units. The
Common Stock equivalent units will earn dividend equivalents and will
be payable in shares of Common Stock, in cash in an amount per unit
equal to the value of a share of Common Stock at the distribution
date, or in any combination thereof, at the election of the grantee.
The performance goals are specified levels of aggregate earnings per
share of Common Stock during the three year period ending December 31,
2000 (the "2000 Performance Period").
(2) A participant must be an employee at the end of 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, the participant will receive a prorated portion of
any Performance Units earned 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
granted, may be earned based on the Cumulative Net Income Per Share
(as defined in the 1997 Plan) of Common Stock during the Performance
Period. The amount ultimately realized by a Named Officer or other
grantee will depend on the Cumulative Net Income Per Share of Common
Stock during the 2000 Performance Period and the per share value of
the Common Stock when the amount earned is ultimately paid.
(4) The Cumulative Net Income per share of Common Stock during the 2000
Performance Period must be at least $14.69 before any distribution may
be made. If Cumulative Net Income is at least $14.69 during the 2000
Performance Period, at least 80% of the 2000 Performance Units will be
awarded.
(5) If the Cumulative Net Income per share of Common Stock is $15.44
during the 2000 Performance Period, 100% of the 2000 Performance Units
will be awarded.
(6) If the Cumulative Net Income per share of Common Stock is $16.69 or
more during the 2000 Performance Period, 150% of the 2000 Performance
Units will be awarded.
- 13 -
<PAGE> 19
OTHER PLAN INFORMATION
STOCK OPTIONS AND APPRECIATION RIGHTS
The 1997 Plan provides, among other things, for the granting of incentive
stock options, non-qualified stock options, Stock Appreciation Rights ("SARs")
and other grants and awards in respect of up to approximately 15,000,000 shares
of the Common Stock. The 1989 Plan expired April 14, 1997, except with respect
to Stock Options, SARs and other grants and awards then outstanding, also
provided for the granting of stock options and SARs. At February 17, 1998, there
were outstanding under the 1997 Plan, the 1989 Plan and certain prior employee
stock option plans stock options in respect of 7,641,086 shares and SARs in
respect of 44,500 shares.
PERFORMANCE RECOGNITION PLAN
On December 2, 1997, the Board of Directors of the Company approved the
participation of approximately 942 key employees, including all executives of
the Company, in Plan Year 1998 of the Performance Recognition Plan of the
Company (the "Performance Plan"). 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 120%, 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 operating
earnings (calculated as the amount equal to sales minus cost of goods sold and
sales, administrative and general expense, herein "EBIT") and cash flow for the
Company or an operating unit, as the case may be, in respect of the participant.
In addition, a portion of each participant's award will be dependent upon the
extent to which such participant achieves other specific goals established for
such participant. Payment of awards in respect of Plan Year 1998 under the
Performance Plan will be made in February of 1999, 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 (i) level of achievement
of the EBIT and cash flow goals, (ii) the extent to which each participant
achieves his or her specific additional goals, and (iii) 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 1998 as follows: Mr. Gibara, $1,012,500; Mr. Sharp, $412,500; Mr.
Tieken, $330,000; Mr. Culler, $262,500; Mr. Harvie, $255,000; and all
participants (942 persons) as a group, $25,078,176.
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 ($10,000 in
1998). 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 1998, 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 1998 or $10,000) with 50 cents. The level of
the Company's matching contributions in future years will be determined 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 investment 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
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<PAGE> 20
subsidiaries completed by such employee and (b) one month's pay for each $12,000
of such employee's total annual compensation (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
(defined below) 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, 1997 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. Gibara, $3,817,350; Mr. Sharp, $1,733,750; Mr.
Tieken, $1,447,000; Mr. Culler, $1,211,875; and Mr. Harvie, $1,124,500.
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 $160,000 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, unless payment is authorized by the Compensation Committee 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 investment 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 ($31,128 in 1998), up to a
maximum 1998 contribution of $2,577.44. The Code limits the maximum amount of
earnings that may be used in calculating benefits under the Retirement Plan,
which limit is $160,000 for 1998. 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
($160,000 in 1998) 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 Pension 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, 1998 at age 65 after
selected periods of service.
The pension benefit amounts shown in the Pension Plan Table include the
maximum benefits ob-
- 15 -
<PAGE> 21
<TABLE>
<CAPTION>
PENSION PLAN TABLE
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT JULY 1, 1998, 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 $ 70,335 $ 89,435 $ 101,969 $ 114,502 $ 122,658 $ 130,814 $ 138,970
500,000 151,087 192,608 220,818 249,029 263,929 278,830 293,730
750,000 233,587 297,608 340,818 384,029 406,429 428,830 451,230
1,000,000 316,087 402,608 460,818 519,029 548,929 578,830 608,730
1,250,000 398,587 507,608 580,818 654,029 691,429 728,830 766,230
1,500,000 481,087 612,608 700,818 789,029 833,929 878,830 923,730
1,750,000 563,587 717,608 820,818 924,029 976,429 1,028,830 1,081,230
2,000,000 646,087 822,608 940,818 1,059,029 1,118,929 1,178,830 1,238,730
2,250,000 728,587 927,608 1,060,818 1,194,029 1,261,429 1,328,830 1,396,230
2,500,000 811,087 1,032,608 1,180,818 1,329,029 1,403,929 1,478,830 1,553,730
</TABLE>
tainable 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 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 62% 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. The years of credited service under the
Plans for each of the Named Officers are: Mr. Gibara, 31 years; Mr. Sharp, 33
years; Mr. Tieken, 5 years; Mr. Culler, 36 years; and Mr. Harvie, 3 years.
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, $8,750 per
calendar quarter, plus $1,500 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 July 1, 1998 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 $2,500 ($2,000 in respect of
each quarter during the period April 1, 1996 through June 30, 1998) 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
- 16 -
<PAGE> 22
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 participant'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 further aligns 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 share equivalent units accrued to the accounts of the participating
directors under the Directors' Equity Plan at February 17, 1998 are set forth in
the "Deferred Share Equivalent Units" column of the Beneficial Ownership Table
on page 8.
The Company also sponsors 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 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.
OTHER MATTERS
During 1997, 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1997,
except that: Mr. L. N. Fiedler, a Vice President of the Company, filed an
amendment, dated January 13, 1998, to his Form 4 for December 1997, dated
January 5, 1998, to correct the reporting of his holdings of Common Stock to
reflect a gift of 42 shares of Common Stock made on December 23, 1997; Mr. R. W.
Hauman, a Vice President and the Treasurer of the Company, filed amendments,
each dated January 5, 1998, to his Form 4 for June 1997 and his Form 4 for
September 1997 to correct an administrative error in the reporting of his
holdings of Common Stock; and Mr. G. A. Miller, a Vice President of the Company,
filed amendments, each dated February 6, 1998, to his Form 4 for November 1997
and to his Form 4 for December 1997 to correct an administrative error in the
reporting of his holdings of Common Stock. 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 1997.
- 17 -
<PAGE> 23
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 performing 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 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 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 operating earnings before
interest and taxes (calculated as the amount equal to sales minus cost of goods
sold and sales, administrative and general expense, herein "EBIT"), cash flow,
and other appropriate criteria; (3) intermediate term compensation in the form
of the Common Stock of the Company and cash pursuant to performance unit grants
having three year performance periods, where payout is dependent on the Company
achieving designated levels of Cumulative Net Income Per Share of Common Stock
during the performance period; and (4) long term compensation in the form of
stock options granted at the fair market value of the 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.
In addition, the Committee desires to encourage ownership of the Common
Stock by the executive officers of the Company by providing forms of
intermediate and long term performance based incentive compensation which afford
convenient methods for executive officers to acquire shares of Common Stock. In
furtherance of this objective, the Chief Executive Officer reviews ownership
levels among the executive officers and reports them to the Committee. Although
the Committee has elected not to require specific levels of ownership, the
Committee has increased the connection between the performance of the Common
Stock over time with the compensation of executive officers and other key
employees of the Company by requiring the deferral of 50% of the payouts which
may be earned pursuant to all outstanding performance unit grants for at least
five years (or, if earlier, upon retirement) in the form of Common Stock
equivalent units, which may be paid in shares of Common Stock, cash or any
combinations thereof at the election of the executive officer. Further, each
executive officer may, by making a timely election, defer all or a portion of
the remaining 50% of the payment in the form of such Common Stock equivalent
units.
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. In the past, compensation which would be subject to the Section 162(m)
limitations has been automatically deferred until the payment of such
compensation would be deductible by the Company. However, the Committee has
determined that it is appropriate to authorize the payment of compensa-
- 18 -
<PAGE> 24
tion that is not fully deductible where it would be consistent with the
Company's compensation philosophy and goals and in the best interests of the
Company and its shareholders.
The amounts paid in respect of the Performance Equity Units awarded in
February of 1997 were not exempt from Section 162(m) because adjustments were
made by the Committee to the payout formula to eliminate the effects of the
December 31, 1997 writedown of certain assets of the Company and rationalization
charges. As a result, the compensation subject to Section 162(m) paid to Mr.
Gibara in respect of 1997 exceeded $1 million. In approving the payment of such
amount in excess of $1 million, the Committee considered all relevant factors,
including the net cost to the Company resulting from the non-deductibility of
such amount, and determined that it would be consistent with the Committee's
compensation philosophy and in the best interests of the Company and its
shareholders to pay such nondeductible amount.
In order to continue to provide intermediate and long term performance
based incentive compensation, the Committee and the Board of Directors adopted,
and the Company's shareholders approved at the 1997 Annual Meeting, the
Company's 1997 Performance Incentive Plan (the "1997 Plan"). The 1997 Plan
provides the appropriate means for granting various forms of performance based
incentive compensation , including the grant of stock options, stock
appreciation rights, performance units and, under certain circumstances,
restricted stock and other stock-based grants and awards, on a basis that
permits the Company to comply with Section 162(m) of the Code and provides for
other forms of compensation which are appropriate to the needs of the Company
and consistent with the compensation policies and practices of the Committee.
COMPENSATION OF EXECUTIVE OFFICERS
The Committee met with the Chief Executive Officer to receive his
recommendations regarding 1997 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 four generally available surveys of the salary and annual bonus
practices of other companies. Each of the surveys included compensation data
compiled from at least 300 companies, with one survey using data compiled from
more than 1,300 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, eight
other general surveys indicating past, present and projected salary structures
and increases for executive positions were reviewed.
The compensation levels indicated by the surveys were the principal basis
used by the Committee for establishing the combined salary and annual
Performance Plan compensation. The Committee also considered the Chief Executive
Officer's recommendations, which were based in substantial part on the aforesaid
guidelines as well as on certain subjective factors, including his evaluation of
the performance of each executive officer, the performance of the Company and
general economic and competitive conditions.
In 1997, salaries of the executive officers named in the Summary
Compensation Table (the "Named Officers") were an average of 5.9% lower than the
median indicated by the guidelines and 10.9% higher than in 1996. The aggregate
salaries paid to all executive officers during 1997, which included promotional
and merit increases, were 7.5% higher than in 1996. Salaries averaged
approximately 59% of total annual cash compensation paid to executive officers,
and 53% of total annual cash compensation paid to the Named Officers, in respect
of 1997.
Pursuant to the Performance Plan, 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 for plan
year 1997. Compensation paid under the Performance Plan in respect of plan year
1997 was based on the EBIT 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. Gibara, Sharp, Tieken
and Harvie, based solely on the EBIT and cash flow performance of the entire
Company. Depending on the extent to which applicable EBIT and cash flow goals
were achieved, payouts could have ranged from zero to 170% of the target
amounts. The target annual incentive compensation levels (assuming payout at
100% of target) for 1997 represented approximately 29% of total 1997 annual cash
(salary and Performance Plan) compensation, which was substantially the same
proportion as the median level established by the aforesaid surveys. EBIT and
cash flow goals for 1997 were exceeded by the Company and most operating units.
Payouts for 1997 averaged
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<PAGE> 25
approximately 143% of the target levels for the various operating units and were
143% of the target level for the Company. The Performance Plan payments
represented an average of approximately 41% of the total 1997 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 other appropriate standard. Performance equity grants have been made
annually since 1992 to executive officers (and certain other key employees) of
the Company pursuant to the 1989 Goodyear Performance and Equity Incentive Plan
(the "1989 Plan"), which has terminated except with respect to grants and awards
outstanding at termination. 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 are designed to comprise approximately 50% of target medium and
long term compensation.
The Committee awarded payouts in respect of the performance equity grants
made in January 1995 pursuant to the 1989 Plan for the three year Performance
Period ended December 31, 1997, at 106.8% of the units granted. The payment of
50% was automatically deferred (except payments due to retirees) for at least
five years in the form of Common Stock equivalent units. The other 50% was paid
in cash in February 1998 (except to the extent the participant elected to have
the cash portion of the payout deferred in Common Stock equivalent units). The
awards were made based on aggregate earnings per share of $13.07, determined by
the Committee after adjusting 1996 earnings per share to eliminate the effects
of the $872.0 million of asset writedown and rationalization charges and after
adjusting 1997 earnings per share to eliminate the effects of $265.2 million of
rationalization charges. The Committee deemed the adjustments to 1996 and 1997
earnings to be appropriate.
Performance equity grants for 1997 were granted by the Committee under the
1989 Plan to all executive officers and certain other key employees of the
Company on December 3, 1996, based on guidelines established using the median of
medium and long term compensation awards by 40 manufacturing companies (having
median annual sales of approximately $14.6 billion) included in a 1996 survey
acquired by the Company. The performance equity grants were granted to each
Named Officer in respect of substantially the same number of units as were
granted in respect of 1996. 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 during the three year performance
period ending December 31, 1999, which must equal or exceed $13.25 per share of
Common Stock in order for any payout to be made. If total net income per share
during the performance period is $15.25 or more, 150% of the targeted amount may
be paid.
Performance Unit Grants for 1998 were granted by the Committee under the
1997 Plan to all executive officers and certain other key employees of the
Company on December 2, 1997, based on guidelines established using the median of
medium and long term compensation awards by 40 manufacturing companies (having
median annual sales of approximately $14.6 billion) included in the 1996 survey
acquired by the Company. The Performance Unit Grants were granted to each Named
Officer in respect of substantially the same number of units as were granted in
respect of 1997. Payouts in respect of the Performance Unit Grants may range
from zero to 150% of the target amounts, depending on the Cumulative Net Income
Per Share of Common Stock during the three year performance period ending
December 31, 2000, which must equal or exceed $14.69 per share in order for any
payout to be made. If total Cumulative Net Income Per Share during the
performance period is $16.69 or more, 150% of the targeted amount may be paid.
The Committee also grants stock options to officers and other key employees
of the Company. 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 Common Stock of the Company.
All options are granted at a per share exercise price equal to the market value
of the Common Stock on the date of grant. The Committee is provided survey
information regarding 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
- 20 -
<PAGE> 26
the same dollar value, determined using the standard growth methodology applied
in the survey used by the Company for determining performance equity grant
levels, 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. Stock options have been granted to all executive
officers and other key employees annually, ordinarily at the end 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. Recent Company performance, prior
grants and the prior performance of the executive officers were also considered
in determining the size of the grants.
On December 2, 1997, stock options in respect of 1,896,685 shares of Common
Stock were granted pursuant to the 1997 Plan at $63.50 per share (the fair
market value of the Common Stock on that day) to 887 key employees (including
all executive officers), which options expire on December 2, 2007. The options
provide for the automatic grant of new "reinvestment options" for that number of
shares Common Stock tendered as payment of the exercise price. The reinvestment
option will be granted at an exercise price equal to the fair market value of
the Common Stock on the date the original option is exercised.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Gibara is the Chairman of the Board, Chief Executive Officer and
President of the Company. The Committee reviewed Mr. Gibara's compensation in
the same manner as described above for the other executive officers. In light of
Mr. Gibara's responsibilities and in recognition of his outstanding performance,
the Committee increased his annual salary effective April 1, 1997 to an annual
rate of $946,800.
Pursuant to the Performance Plan for 1997, the Committee established a
target bonus of $675,000 for Mr. Gibara, the payout of which was subject to
adjustment from zero to 170% of the target amount depending on the extent to
which total company EBIT and cash flow goals were achieved. Under Mr. Gibara's
leadership, the Company exceeded the EBIT and cash flow goals for 1997 resulting
in Mr. Gibara earning 143% of his target bonus. Mr. Gibara elected to defer 100%
of the Performance Plan payout earned in respect of 1997 pursuant to the
Company's Deferred Compensation Plan for Executives. As a result, the award was
not subject to the deductions limitations of Section 162(m) of the Code.
In 1997 Mr. Gibara received payment of the performance equity grant made in
January 1994 in respect of the three year performance period ended December 31,
1996. The award was subject to Section 162(m). As a result, a portion of his
total compensation received during 1997 which was not exempt from Section 162(m)
exceeded the $1 million limitation of Section 162(m) and, therefore, was not
deductible. The Committee considered all relevant factors, including the cost to
the Company, and determined that it was in the best interest of the Company to
authorize payment of the non-deductible amount.
Mr. Gibara also received payment in 1998 of the performance equity grants
made in December 1994 and June 1995 in respect of the three year performance
period ended December 31, 1997. The cash portion of the award was paid in
February 1998 and is subject to Section 162(m). The Committee, after considering
all relevant factors and determining that payment would be in the best interests
of the Company, authorized payment of the non-deductible amount.
Applying the same guidelines used in respect of other executive officers,
Mr. Gibara was granted, as incentive compensation contingent upon the Cumulative
Net Income Per Share of the Common Stock, a performance unit grant on December
2, 1997 for the three year performance period ending on December 31, 2000.
Mr. Gibara was granted stock options as long term incentive compensation
based on the same guidelines applied by the Committee in respect of the stock
option grants to the other executive officers. The grant in respect of 1997 was
made on December, 1996 consisting of non-qualified stock options in respect of
53,000 shares of Common Stock and incentive stock options in respect of 2,000
shares of the Common Stock. He was granted stock options in respect of 55,000
shares in respect of 1998 on December 2, 1997, consisting of non-qualified stock
options in respect of 53,500 shares of Common Stock and incentive stock options
in respect of 1,500 shares of Common Stock. All of these stock options also
provide for the automatic grant of reinvestment options.
February 3, 1998
The Compensation Committee
John G. Breen, Chairman
William E. Butler Steven A. Minter
Thomas H. Cruikshank Agnar Pytte
William J. Hudson, Jr. George H. Schofield
Gertrude G. Michelson William C. Turner
Martin D. Walker
- 21 -
<PAGE> 27
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, 1992 and ending December 31, 1997. The graph assumes the
investment of $100 on December 31, 1992 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>
December 31, 1992 1993 1994 1995 1996 1997
------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GOODYEAR COMMON 100.00 135.76 101.79 140.67 162.69 205.47
S & P 500 100.00 110.08 111.53 153.45 188.68 251.64
DOW AUTO PARTS 100.00 124.11 105.64 131.25 148.39 189.55
</TABLE>
- 22 -
<PAGE> 28
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 1999 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 29, 1998 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 on
Form 10-K for 1997 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: 330-796-3457 or to
515-263-6408.
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 Georgeson & Company Inc., Wall Street Plaza, 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 $12,000 plus reimbursement
of reasonable out-of-pocket expenses. Georgeson & Company 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 26, 1998
By Order of the Board of Directors
/s/ James Boyazis
JAMES BOYAZIS, Secretary
- 23 -
<PAGE> 29
[GOODYEAR LOGO]
700-862-928-659
<PAGE> 30
- -------------------------------------------------------------------------------
[GOODYEAR LOGO]
THE GOODYEAR TIRE & RUBBER COMPANY
PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned, a holder (or designated proxy) of shares of the Common
R Stock of The Goodyear Tire & Rubber Company, hereby appoints SAMIR G.
GIBARA, STEVEN A. MINTER, and AGNAR PYTTE, and each or any of them, the
O 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
X 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
Y Monday, April 6, 1998, at 10:00 A.M., Akron time, and at any and all
adjournments thereof; with the power to vote said shares FOR the election
of three Directors of the Company, and with the power to vote said shares
FOR the ratification of appointment of Independent Accountants 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 THREE NOMINEES FOR DIRECTOR NAMED ON THE REVERSE
SIDE, WITH DISCRETIONARY AUTHORITY TO CUMULATE VOTES (ITEM 1 ON THE REVERSE
SIDE), AND FOR RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON THE REVERSE SIDE).
IF YOU PLAN TO ATTEND THE 1998 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 6, 1998
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> 31
[X] Please mark your
votes in blue or
black ink as in this
example.
<TABLE>
<S> <C> <C> <C> <C>
The undersigned hereby acknowledges receipt of Notice of 1998 Annual Meeting of Shareholders and Proxy Statement.
The Board of Directors Recommends a Vote FOR Election of All Nominees and FOR Item 2.
ITEM 1. ELECTION OF DIRECTORS.
NOMINEES:
Class II Directors -- Each John G. Breen FOR AGAINST ABSTAIN
WITHHOLD to serve a 3-year term: William E. Butler ITEM 2. Ratification [ ] [ ] [ ]
FOR ALL [ ] AUTHORITY [ ] George H. Schofield of appointment
NOMINEES AS TO ALL of Price Waterhouse LLP
NOMINEES as Independent Accountants.
(To withhold authority to vote for any individual nominee write that nominee's I plan to attend the Annual [ ]
name in the space below) Meeting of Shareholders.
----------------------------------------------------------------------------
-----------------------------------------------
SIGNATURE DATE
Please sign name exactly as it appears above. Each joint owner should sign.
Please indicate title if you are signing as executor, administrator, trustee, -----------------------------------------------
custodian, guardian or corporate officer. SIGNATURE DATE
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FOLD AND DETACH HERE
COMPANY OWNED & OPERATED
[GOODYEAR LOGO]
SPECIAL SAVINGS
----------------------------------- -------------------------------
| [GOODYEAR COUPON] | | [GOODYEAR COUPON] |
| OIL LUBE & FILTER | | ANY TIRE |
| $5.00 OFF | | $5.00 OFF |
| WITH THIS COUPON | | PER TIRE |
| Includes: | | 1 TIRE ....$5.00 OFF |
| - Lube (where applicable) | | 2 TIRES ....$10.00 OFF |
| - New oil filter installed | | 3 TIRES ....$15.00 OFF |
| - Up to 5 quarts premium | | 4 TIRES ...$20.00 OFF |
| brand oil | | |
| | | |
| OFFER GOOD ONLY AT LOCATIONS | | OFFER GOOD ONLY AT LOCATIONS |
| DISPLAYING COMPANY OWNED & | | DISPLAYING COMPANY OWNED & |
| OPERATED SIGN [LOGO] | | OPERATED SIGN [LOGO] |
| DIRECT MAIL I.D.GAR | | DIRECT MAIL I.D.GAR |
| | | |
|Environmental disposal fee may apply| | No other discounts apply. |
|in some areas. Most cars. No other | | Offer ends 7/31/98. |
|discounts apply. Offer ends 7/31/98.| | |
------------------------------------- --------------------------------
<PAGE> 32
CONFIDENTIAL VOTING INSTRUCTIONS--1998 ANNUAL MEETING OF SHAREHOLDERS
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 6, 1998 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 17, 1998.
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 17, 1998 at the Annual Meeting of Shareholders to be held
on April 6, 1998, 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 THREE NOMINEES FOR DIRECTOR, WITH DISCRETIONARY
AUTHORITY TO CUMULATE VOTES (ITEM 1 ON REVERSE SIDE), AND FOR RATIFICATION OF
APPOINTMENT OF INDEPENDENT ACCOUNTANTS (ITEM 2 ON REVERSE SIDE).
If you plan to attend the 1998 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 6, 1998
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.
<TABLE>
<S> <C> <C> <C> <C>
The Board of Directors Recommends a Vote FOR Election of All Nominees and FOR Item 2.
ITEM 1. ELECTION OF DIRECTORS.
NOMINEES:
Class II Directors -- Each John G. Breen FOR AGAINST ABSTAIN
WITHHOLD to serve a 3-year term: William E. Butler ITEM 2. Ratification [ ] [ ] [ ]
FOR ALL [ ] AUTHORITY [ ] George H. Schofield of appointment
NOMINEES AS TO ALL of Price Waterhouse LLP
NOMINEES as Independent Accountants.
(To withhold authority to vote for any individual nominee write that nominee's I plan to attend the Annual [ ]
name in the space below) Meeting of Shareholders.
----------------------------------------------------------------------------
Authorization: I acknowledge receipt of the Notice of the 1998 Annual Meeting and
Proxy Statement. I hereby instruct the trustee to vote by proxy, in the form -----------------------------------------------
solicited by the Board of Directors, the number of full shares in my Plan SIGNATURE DATE
account(s) as specified above, or, if not specified above, as recommended by the
Board of Directors.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FOLD AND DETACH HERE
COMPANY OWNED & OPERATED
[GOODYEAR LOGO]
SPECIAL SAVINGS
----------------------------------- -------------------------------
| [GOODYEAR COUPON] | | [GOODYEAR COUPON] |
| OIL LUBE & FILTER | | ANY TIRE |
| $5.00 OFF | | $5.00 OFF |
| WITH THIS COUPON | | PER TIRE |
| Includes: | | 1 TIRE ....$5.00 OFF |
| - Lube (where applicable) | | 2 TIRES ....$10.00 OFF |
| - New oil filter installed | | 3 TIRES ....$15.00 OFF |
| - Up to 5 quarts premium | | 4 TIRES ....$20.00 OFF |
| brand oil | | |
| | | |
| OFFER GOOD ONLY AT LOCATIONS | | OFFER GOOD ONLY AT LOCATIONS |
| DISPLAYING COMPANY OWNED & | | DISPLAYING COMPANY OWNED & |
| OPERATED SIGN [LOGO] | | OPERATED SIGN [LOGO] |
| DIRECT MAIL I.D.GAR | | DIRECT MAIL I.D.GAR |
| | | |
|Environmental disposal fee may apply| | No other discounts apply. |
|in some areas. Most cars. No other | | Offer ends 7/31/98. |
|discounts apply. Offer ends 7/31/98.| | |
------------------------------------- --------------------------------
