<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>
GoodYear Tire and Rubber Company
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] 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
1999 ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
THE GOODYEAR TIRE & RUBBER COMPANY
1144 East Market Street
Akron, Ohio 44316-0001
DATE: Monday, April 12, 1999
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
SAMIR G. GIBARA
CHAIRMAN OF THE BOARD
CHIEF EXECUTIVE OFFICER AND PRESIDENT
FEBRUARY 26, 1999
DEAR SHAREHOLDERS:
You are cordially invited to attend your Company's 1999 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 12, 1999. We
hope you will be able to attend and participate. The Notice of 1999 Annual
Meeting of Shareholders and Proxy Statement follow. The 1998 Annual Report is
enclosed.
At the Annual Meeting, shareholders will elect four 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 seven
continuing directors.
Your Board of Directors is presenting for action by the shareholders its
proposal that shareholders ratify the Board's appointment of
PricewaterhouseCoopers LLP as independent accountants for the Company for 1999
(Item 2 on your Proxy). Your Board of Directors recommends that you vote for the
ratification of the appointment of PricewaterhouseCoopers 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 Lobby at the entrance to the Goodyear
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
<S> <C>
NOTICE OF THE 1999 ANNUAL MEETING OF SHAREHOLDERS............................... 1
PROXY STATEMENT
General Information.......................................................... 1
Shares Voting............................................................. 1
Vote Required............................................................. 1
Cumulative Voting For Directors........................................... 1
Voting of Proxy........................................................... 1
Confidentiality........................................................... 1
Revocability of Proxy..................................................... 2
The Board of Directors and Its Committees.................................... 2
Audit Committee........................................................... 2
Compensation Committee.................................................... 2
Nominating and Board Governance 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 1998................................................. 11
Option/SAR 1998 Exercises and Year-End Values............................. 12
Long Term Incentive Awards................................................ 12
Other Compensation Plan Information....................................... 13
Retirement Benefits....................................................... 15
Directors' Compensation................................................... 16
Other Matters............................................................. 17
Section 16(a) Beneficial Ownership Reporting Compliance...................... 17
Compensation Committee Report on Executive Compensation...................... 17
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
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 12, 1999
TO THE SHAREHOLDERS:
The 1999 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 12, 1999, at 10:00 A.M., Akron Time, for the
following purposes:
1. To elect four 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
PricewaterhouseCoopers LLP as independent accountants for the Company
for 1999 (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 16, 1999 as
the record date for determining shareholders entitled to notice of, and to vote
at, the 1999 Annual Meeting. Only holders of record of the Common Stock of the
Company at the close of business February 16, 1999 will be entitled to vote at
the 1999 Annual Meeting and adjournments, if any, thereof.
By order of the Board of Directors:
/s/ James Boyazis, Secretary
February 26, 1999 James Boyazis, Secretary
- --------------------------------------------------------------------------------
Please complete, date and sign your proxy and return it promptly
in the enclosed envelope.
1
<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 12, 1999 (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,
1998 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 1, 1999.
SHARES VOTING
Holders of shares of the Common Stock, without par value, of the Company (the
"Common Stock") at the close of business on February 16, 1999 (the "record
date") are entitled to notice of, and to vote shares of Common Stock held on the
record date at, the Annual Meeting. As of the close of business on the record
date, there were 155,987,453 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
Except for 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 at the Annual Meeting. In the election
of directors, the four candidates receiving the most votes will be elected.
CUMULATIVE VOTING FOR DIRECTORS
In the voting for directors, 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.
VOTING OF PROXY
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. Breen, Minter and Pytte, have
been designated as proxies to vote shares in accordance with the instructions on
the Proxy.
The Proxy will be voted for the four nominees whose names are set forth at
page 3, unless a shareholder requests that voting of his or her Proxy be
withheld for any one or more of the nominees for director. 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.
Shares of Common Stock will be voted (or withheld from voting) in accordance
with the instructions given on the Proxy. 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 PricewaterhouseCoopers LLP as independent accountants
for the Company for 1999.
CONFIDENTIALITY
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 1999 Annual Meeting.
-1-
<PAGE> 7
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. Ten of the eleven directors currently
serving are neither present nor past officers or employees of the Company or any
of its subsidiaries. Of the four nominees (each currently serving as a
director), three are neither present nor past officers or employees of the
Company or any of its subsidiaries.
The Board meets on a regularly scheduled basis at least six times during the
year. The average attendance of all directors at the six Board meetings held
during 1998 was 95.5%. The average attendance of all directors at all meetings
of the Board and its standing committees held during 1998 was 93.4%. During
1998, 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, except
that Mr. Cruikshank attended 58.3% 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. The
Audit Committee held three formal meetings during 1998. The current members are
J. G. Breen, W. E. Butler, T. H. Cruikshank, K. G. Farley, W. J. Hudson, Jr. and
G. H. Schofield (Chairman).
The Audit Committee reviews for the Board the activities of the Company's
internal auditors and its independent accountants and evaluates the Company's
organization, internal controls, policies, procedures and practices to determine
whether they 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 and approves audit fees and fees for non-audit services
rendered or to be rendered by the independent accountants, and reviews the audit
plan and the services rendered or to be rendered by the independent accountants
for each year and the results of their audit for the previous year. The Audit
Committee also reviews financial statements and reports and monitors compliance
with the Company's internal controls, policies, procedures and practices,
receiving direct compliance reports from the Company's internal auditors and
General Counsel and the independent accountants. In addition, the Audit
Committee performs such other responsibilities as may be delegated to it from
time to time by the Board of Directors.
COMPENSATION COMMITTEE
Established in 1979, the Compensation Committee is comprised of six directors
who are not present or past employees of the Company or any of its subsidiaries.
The Compensation Committee held two formal meetings during 1998. The current
members are J. G. Breen (Chairman), K. G. Farley, W. J. Hudson, Jr., S. A.
Minter, A. Pytte and M. D. Walker.
The Compensation Committee consults with the chief executive officer of the
Company regarding compensation policies, practices and plans for the Company's
directors, executive officers and other key personnel. The Compensation
Committee also consults with the chief executive officer of the Company and
advises the Board of Directors in establishing directors' and officers'
compensation and regarding management development and succession plans. In
addition, the Committee performs such other responsibilities as may be delegated
to it from time to time by the Board of Directors.
The Compensation Committee administers the Company's 1997 Performance
Incentive Plan,
-2-
<PAGE> 8
the 1989 Goodyear Performance and Equity Incentive Plan, the Company's
Performance Recognition Plan, the Company's Deferred Compensation Plan For
Executives and the Company's Outside Directors' Equity Participation Plan.
NOMINATING AND BOARD GOVERNANCE COMMITTEE
The Nominating and Board Governance Committee was established in 1998 and is
the successor of the Nominating Committee established in 1978. The Nominating
and Board Governance Committee 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 and Board Governance Committee held one formal
meeting during 1998. The current members are S. G. Gibara, W. J. Hudson, Jr., S.
A. Minter, A. Pytte, G. H. Schofield, W. C. Turner and M. D. Walker (Chairman).
The principal function of the Nominating and Board Governance Committee is to
identify and recommend to the Board of Director candidates for election to the
Board of Directors. The Nominating and Board Governance Committee has the
primary responsibility for considering and evaluating, and for recommending to
the Board, candidates submitted by shareholders for nomination for election to
the Board of Directors, 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.
The Nominating and Board Governance Committee is also responsible for
recommending to the Board of Directors policies and standards with respect to
the Board's evaluation of the overall effectiveness of the Board of Directors in
the governance of the Company and for undertaking such other activities as may
be delegated to it from time to time by the Board of Directors.
COMMITTEE ON CORPORATE RESPONSIBILITY
The Committee on Corporate Responsibility was established in 1976 and is
currently comprised of six directors who are not present or past officers or
employees of the Company or any of its subsidiaries. The Committee held two
formal meetings during 1998. The current members are W. E. Butler, T. H.
Cruikshank, S. A. Minter, A. Pytte, W. C. Turner (Chairman) and M. D. Walker.
The Committee on Corporate Responsibility reviews at least annually the
Company's legal compliance programs and reviews periodically the Company's
policies and practices relating to the manner in which the Company and its
subsidiaries conduct their business and the relationships of the Company and its
subsidiaries with their shareholders, employees and customers, as well as
governmental agencies and the general public. The Committee also reviews the
need for, and develops and recommends to the Board, new policies relating to
such matters and performs such other responsibilities as may be delegated to it
from time to time by the Board of Directors.
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY)
The Board of Directors is comprised of eleven directors and is classified
into three classes of directors. At each annual meeting 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 and III are each
currently comprised of four directors. Class II is currently comprised of three
directors. The current terms of the four Class I Directors will expire at the
Annual Meeting. The current terms of the four Class III Directors and the three
Class II Directors will expire at the 2000 and 2001 annual meetings,
respectively.
At the 1999 Annual Meeting four persons are to be elected to serve as Class I
Directors, each to a three year term. The Board of Directors has selected the
following nominees recommended by the Nominating and Board Governance Committee
for election to the Board of Directors, each to hold office for a three year
term expiring at the 2002 Annual Meeting and until his successor shall have been
duly elected and qualified:
Samir G. Gibara
William J. Hudson, Jr.
William C. Turner
Martin D. Walker
Each nominee is an incumbent director whose term of office expires at the
Annual Meeting. The following page contains certain information concerning the
four nominees, which information was furnished by them.
-3-
<PAGE> 9
NOMINEES FOR DIRECTOR -- CLASS I, TERMS EXPIRING IN 2002
- --------------------------------------------------------------------------------
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 and Board Governance Committee.
Age: 59
Director since: April 15, 1995
- --------------------------------------------------------------------------------
WILLIAM J. HUDSON, JR.
Vice Chairman and a Director of AMP, Incorporated, a manufacturer of electrical
and electronic connectors and terminals and related products and systems.
Mr. Hudson served as the President and Chief Executive Officer of AMP,
Incorporated from January 1, 1993 to August 20, 1998. Mr. Hudson has served as
the Vice Chairman of AMP, Incorporated since August 20, 1998. Mr. Hudson is a
director of Carpenter Technology, Vice Chairman of the National Association of
Manufacturers, a member 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 Roundtable.
Member of Audit, Compensation and Nominating and Board Governance Committees.
Age: 64
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 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 the Council on Foreign
Relations.
Chairman of Committee on Corporate Responsibility and member of Nominating and
Board Governance Committee.
Age: 69
Director since: October 3, 1978
- --------------------------------------------------------------------------------
MARTIN D. WALKER
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. On October 7, 1998 Mr. Walker was again elected
Chairman of the Board and Chief Executive officer of M. A. Hanna Company. Mr.
Walker is also a principal in MORWAL Investments and a director of Comerica,
Inc., Lexmark International, Meritor Automotive Corporation, Reynolds &
Reynolds, The Timken Company and Textron, Inc.
Chairman of Nominating and Board Governance Committee and member of Compensation
and Corporate Responsibility Committees.
Age: 66
Director since: February 4, 1997
- --------------------------------------------------------------------------------
The following two pages contain certain information concerning the seven
directors whose terms of office continue after the Annual Meeting, which
information was provided by the continuing directors.
-4-
<PAGE> 10
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 was Chairman of the Board and Chief Executive Officer of
Halliburton Company from June of 1989 through October 31, 1995, when he retired
as Chief Executive Officer. He retired as Chairman of the Board of Halliburton
Company on January 2, 1996. Mr. Cruikshank is a director of The Williams
Companies, Inc., Seagull Energy Corporation and Lehman Brothers Holdings Inc. He
is also Chairman of the Board of Up With People, Inc.
Member of Audit and Corporate Responsibility Committees.
Age: 67
Director since: October 7, 1986
- --------------------------------------------------------------------------------
KATHERINE G. FARLEY
Senior 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 the Chairperson of
the Board of Directors of Women in Need and a member of the Board of Directors
of the International Rescue Committee and of the Brearley School.
Member of Audit and Compensation Committees.
Age: 49
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
Undersecretary of the United States Department of Education from May of 1980
through January of 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 and Board
Governance Committees.
Age: 60
Director since: February 12, 1985
- --------------------------------------------------------------------------------
AGNAR PYTTE
President of Case Western Reserve University.
Dr. Pytte has served as the President and Chief Executive Officer of Case
Western Reserve University since July 1, 1987. Prior to July 1987, Dr. Pytte was
a research physicist at Princeton University, a Professor of Physics, Dean of
Science and Dean of Graduate Studies at Dartmouth College and the Provost of
Dartmouth. Dr. Pytte is a director of A. O. Smith Corporation and the Sherman
Fairchild Foundation Inc.
Member of Compensation, Corporate Responsibility and Nominating and Board
Governance Committees.
Age: 66
Director since: January 5, 1988
- --------------------------------------------------------------------------------
-5-
<PAGE> 11
CONTINUING DIRECTORS -- 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 Committee.
Age: 64
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 served as Chairman of the
Board and Chief Executive Officer of Eaton Corporation from January of 1992 to
December 31, 1995, when he retired. Mr. Butler is a director of Applied
Industrial Technologies, Inc., Ferro Corporation, Pitney Bowes Inc., Borg Warner
Corporation and U.S. Industries, Inc.
Member of Audit and Corporate Responsibility Committees.
Age: 67
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 Nominating and Board Governance
Committee.
Age: 69
Director since: December 3, 1991
- --------------------------------------------------------------------------------
-6-
<PAGE> 12
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON THE PROXY)
PricewaterhouseCoopers LLP ("PwC") served as the Company's independent
accountants for the year ended December 31, 1998. In addition to rendering audit
services during 1998, PwC performed various non-audit services for the Company
and its subsidiaries. The Audit Committee has determined that the performance of
such non-audit services did not impair independence of PwC.
The Board of Directors, on the recommendation of the Audit Committee, has
appointed PwC as independent accountants for the Company for the year ending
December 31, 1999. In making its recommendation, the Audit Committee reviewed
past audit results and the non-audit services performed during 1998 and proposed
to be performed during 1999. In selecting PwC, the Audit Committee and the Board
of Directors carefully considered their independence.
PwC 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 PwC 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 appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the year ending December 31,
1999 is hereby ratified."
In the event the appointment of PwC 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 2000.
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,
except that (i) Stanford C. Berstein & Co., Inc., 767 Fifth Avenue, New York,
New York 10153, filed a Schedule 13G, dated February 5, 1999, indicating
beneficial ownership of 18,581,088 shares of Common Stock, or approximately
11.9% of the shares outstanding, with sole voting and dispositive power, except
that voting power is shared in respect of 2,039,411 of said shares; (ii) Morgan
Stanley Dean Witter & Co., 1585 Broadway, New York, New York 10036, filed a
Schedule 13G, dated February 5, 1999, indicating beneficial ownership, with
shared voting and dispositive power, of 8,406,979 shares, or approximately 5.7%
of the outstanding shares, of the Common Stock; and (iii) The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois 60675, has reported that at
the record date it held 14,892,608 shares, or approximately 9.5% of outstanding
shares, of the Common Stock for various beneficial owners, including 8,467,922
shares, or approximately 5.4% of outstanding shares, of the Common Stock of the
Company held as the Trustee of four Employee Savings Plans sponsored by the
Company.
On the record date, 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
BENEFICIAL OWNERSHIP TABLE
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AT FEBRUARY 16,
1999
------------------------------------
SHARES OF
COMMON STOCK DEFERRED SHARE
NAME OWNED(1)(2) EQUIVALENT UNITS
- -------------------- ------------ ----------------
<S> <C> <C>
John G. Breen ................................. 5,200(3)(4) 1,585(10)
William E. Butler ............................. 405(5) 4,188(10)
Thomas H. Cruikshank .......................... 1,800(4) 3,895(10)
Eugene R. Culler, Jr. ......................... 36,719(6)(7)(8) 5,007(11)
Katherine G. Farley ........................... 2,000 302(10)
Samir G. Gibara ............................... 122,805(6)(7) 20,575(11)
C. Thomas Harvie .............................. 31,549(6)(7) 4,215(11)
William J. Hudson, Jr. ........................ 1,000 2,387(10)
Steven A. Minter .............................. 1,580(4) 1,228(10)
Agnar Pytte ................................... 1,200(4) 3,657(10)
George H. Schofield ........................... 2,200(4) 4,451(10)
William J. Sharp .............................. 49,105(6)(7) 9,806(11)
Robert W. Tieken .............................. 59,358(6)(7) 7,861(11)
William C. Turner ............................. 1,600(4) 2,514(10)
Martin D. Walker .............................. 1,000 844(10)
All directors, the Named Officers and all other
Executive Officers as a group (35 persons).. 770,617(9) 119,056(10)(11)
</TABLE>
Notes to Beneficial Ownership Table:
(1) Unless otherwise indicated in a subsequent note, each person named and
each member of the group has sole voting and investment power with
respect to the shares of Common Stock shown.
(2) The number of shares indicated as beneficially owned by each of the
directors and named executive officers, and by all directors and
officers as a group, and the percentage of 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 17, 1999 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,
107,350 shares; Mr. Sharp, 33,075 shares; Mr. Tieken, 56,875 shares; Mr.
Culler, 29,875 shares; Mr. Harvie, 24,750 shares; and all other
executive officers, 374,042 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 113, 189 shares owned of record and beneficially or owned
beneficially through a nominee, 22,330 shares held in the Savings Plan
Trust, 625,967 shares subject to options (exercisable prior to April 17,
1999) granted under the 1997 Plan and predecessor employee stock option
plans, and 9,131 shares held by or jointly with family members of
certain directors and officers.
(10) 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 from the Board of Directors. See "Directors' Compensation" at
page 16.
(11) 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 10.
-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 1998 and the
persons who were, at December 31, 1998, 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 1996, 1997 and 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
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 1998 $982,267 $589,032 $ 9,000 -0- 90,000 $1,153,562 $14,139
Chairman of the Board 1997 935,100 961,875 9,000 -0- 55,000 674,843 9,023
Chief Executive Officer 1996 800,000 771,373 8,500 -0- 110,000 371,565 4,500
and President(6)
WILLIAM J. SHARP 1998 491,667 204,501 9,000 -0- 21,500 443,678 10,317
President 1997 472,917 391,875 9,000 -0- 21,500 283,434 8,340
Global Support Operations 1996 443,333 349,927 8,500 -0- 43,000 312,115 4,500
ROBERT W. TIEKEN 1998 416,250 163,601 17,000 -0- 18,000 259,868 10,185
Executive Vice President 1997 401,667 313,500 8,000 -0- 15,000 276,685 8,254
1996 381,667 301,182 8,000 -0- 25,000 304,683 4,500
EUGENE R. CULLER, JR. 1998 366,667 143,808 16,966 -0- 18,000 209,162 7,792
Executive Vice President 1997 342,500 255,938 -0- -0- 15,000 202,453 6,246
1996 317,500 169,276 896,447 -0- 22,500 130,048 4,500
C. THOMAS HARVIE 1998 328,333 151,919 6,000 -0- 13,000 228,177 6,795
Vice President and 1997 310,000 242,250 6,570 -0- 11,000 242,943 4,750
General Counsel 1996 287,500 229,472 43,288 -0- 22,000 -0- 4,500
</TABLE>
NOTES TO SUMMARY COMPENSATION TABLE:
(1) Amounts awarded in respect of 1998, 1997 and 1996 and paid in February
of 1999, 1998 and 1997, respectively, pursuant to the Company's
Performance Recognition Plan for 1998, 1997 and 1996, respectively;
except that payment of a portion of the award to Mr. Gibara in respect
of 1996 and all of the awards to Mr. Gibara, and a portion of the awards
to Mr. Harvie, in respect of 1997 and 1998 were deferred pursuant to the
Company's Deferred Compensation Plan for Executives. The payout in
respect of plan year 1998 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), cash flow and other
specified targets for 1998. 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 1998 of $966 for moving costs and 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 (b) in respect of Mr. Harvie,
payments of $576 in 1997 and of $34,658 in 1996 for costs in connection
with his relocation.
(3) No restricted stock was awarded or issued by the Company to any Named
Officer during 1998. On July 17, 1995, Mr. Harvie purchased, pursuant to
the 1989 Plan and a related Restricted Stock Purchase Agreement, 10,000
shares of Common Stock for a purchase price of $.10 per share, which
shares were 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 per share
closing price of the Common Stock on the date of grant (July 17, 1995),
was $43.50. Mr. Harvie received all dividends paid on said shares of
Common Stock. On June 30, 1998, the Company's option and all other
-9-
<PAGE> 15
restrictions lapsed in respect of 7,101 of the shares. At December 31,
1998, the aggregate value of the remaining 2,899 restricted shares of
the Common Stock (net of the purchase price) was $145,928.41, based on
the December 31, 1998 closing price on the New York Stock Exchange
Composite Transactions tape of $50.4375 per share. On January 29, 1999,
the Company's option and all other restrictions lapsed in respect of the
remaining 2,899 shares. 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 1998 relate to amounts earned
pursuant to Performance Equity Grants granted on January 9, 1996 (as
amended December 3, 1996) under the 1989 Plan in respect of the three
year performance period ended December 31, 1998, whereunder participants
were granted a specified number of performance units (the "1998
Performance Units") payable 50% in shares and 50% in cash. The aggregate
earnings per share of Common Stock during the performance period were
$13.63, after adjustments by the Compensation Committee to eliminate the
$872.0 million of asset writedown and rationalization charges in 1996
and the $265.2 million of rationalization and other charges in 1997.
Each participant earned 125.20% of the 1998 Performance Units granted.
The value of each 1998 Performance Unit was $50.625, which was the
average of the high and low sale prices of the Common Stock on December
31, 1998, as reported on the New York Stock Exchange Composite
Transactions tape. The payouts indicated in respect of 1997 relate to
amounts earned pursuant to Performance Equity Grants granted on December
6, 1994 (as amended December 3, 1996) pursuant to the 1989 Plan in
respect of the three year performance period ended December 31, 1997,
whereunder participants were granted a specified number of performance
units ("1997 Performance Units"), payable 50% in shares of Common Stock
and 50% in cash. 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 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 granted on January
4, 1994 (as amended December 3, 1996) pursuant to the 1989 Plan in
respect of the three year performance period ended December 31, 1996,
whereunder participants were granted a specified number of performance
units ("1996 Performance Units"), payable 50% in shares of Common Stock
and 50% in cash. The aggregate earnings per share of Common Stock during
the performance period were $12.11 (after adjustments by the
Compensation 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. Payment of the Common Stock portion of the 1998 Performance Units,
the 1997 Performance Units and 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 from the
payment date (or following earlier retirement) and will be payable at
the election of each participant in shares of Common Stock, cash, or any
combination thereof. The cash portion of the 1998 Performance Units was
paid (unless deferred as Common Stock equivalent units by the
participant) in February 1999. The cash portions of the 1997 Performance
Units and the 1996 Performance Units earned were paid in February 1998
and February 1997, respectively. All deferred amounts are included in
the Table.
(5) All Other Compensation consists of: (a) for 1998 (i) the value of
deferred Common Stock equivalent units ("Units") accrued as dividend
equivalents during 1998 to the accounts of the Named Officers in respect
of Units awarded and deferred in February of 1998 and 1997, each Unit or
portion thereof valued at $50.4375, the closing price of the Common
Stock on December 31, 1998, and (ii) $4,800 of matching contributions to
each Named Officer under the Company's Savings Plan; (b) for 1997 (i)
the value of 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 on December 31, 1997, and (ii) $4,750
of matching contributions to each Named Officer under the Company's
Savings Plan; and (c) in respect of 1996 matching contributions under
the Company's Savings Plan. See "Savings Plan" at page 14.
-10-
<PAGE> 16
(6) Mr. Gibara has served as Chairman of the Board, Chief Executive Officer
and President since July 1, 1996. He served as President and Chief
Executive Officer and a director from January 1, 1996 to June 30, 1996.
OPTION/SAR GRANTS IN 1998
The Option/SAR Grants Table below shows all grants of stock options and stock
appreciation rights ("SARs") during 1998 to the Named Officers. Stock Options
are ordinarily granted on an annual basis, usually in December of each year.
OPTION/ SAR GRANTS TABLE
OPTION/SAR GRANTS IN 1998
<TABLE>
<CAPTION> POTENTIAL
INDIVIDUAL GRANTS REALIZABLE 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 1998 SHARE)(2) DATE 5%(4) 10%(4)
- ---- ------------ ---------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Samir G. Gibara 90,000 4.17% $57.25 11-30-08 $3,240,000 $8,211,600
William J. Sharp 21,500 1.00 57.25 11-30-08 774,000 1,961,660
Robert W. Tieken 18,000 .83 57.25 11-30-08 648,000 1,642,320
Eugene R. Culler, Jr. 18,000 .83 57.25 11-30-08 648,000 1,642,320
C. Thomas Harvie 13,000 .60 57.25 11-30-08 468,000 1,186,120
</TABLE>
NOTES TO OPTION/SAR GRANTS TABLE:
(1) On November 30, 1998, non-qualified stock options in respect of an
aggregate of 2,157,899 shares of Common Stock were granted to 902
persons, including the Named Officers. 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 November 30, 1999, in
respect of 50% of the shares covered thereby beginning November 30,
2000, in respect of 75% of the shares covered thereby beginning November
30, 2001, and is fully exercisable beginning November 30, 2002. 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 November 30, 2008, 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 three years
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 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 1998, 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 $93.25 and $148.49, respectively.
-11-
<PAGE> 17
OPTION/SAR 1998 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
1998 and the value of options/SARs held by the Named Officers at December 31,
1998.
OPTION/SAR EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND
DECEMBER 31, 1998 OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARs AT IN-THE-MONEY OPTIONS/SARs
ACQUIRED DECEMBER 31, 1998 AT DECEMBER 31, 1998
ON EXERCISE VALUE (NUMBER OF SHARES)(1) (DOLLARS)(2)
(NUMBER OF REALIZED ---------------------------- ----------------------------
NAME SHARES)(1) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ---------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samir G. Gibara 5,000 $130,312.50 89,850 193,750 $432,881 $277,656
William J. Sharp 0 0 24,600 62,225 87,936 122,538
Robert W. Tieken 0 0 50,625 44,875 469,727 91,992
Eugene R. Culler, Jr. 0 0 26,250 42,750 142,500 61,500
C. Thomas Harvie 0 0 22,000 35,000 103,297 59,641
</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) Determined using $50.4375 per share, the closing price of the Common
Stock of the Company on December 31, 1998, 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 1998 to the Named Officers, all of which were
Performance Unit Grants under the 1997 Plan.
LONG TERM INCENTIVE PLAN AWARDS TABLE
LONG TERM INCENTIVE PLANS - AWARDS IN 1998
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
NUMBER OF SHARES, PRICE-BASED PLANS(3)
UNITS OR --------------------------------------------------
OTHER RIGHTS THRESHOLD TARGET MAXIMUM
(EXPRESSED IN PERFORMANCE (EXPRESSED IN (EXPRESSED IN (EXPRESSED IN
NUMBER OF OR OTHER NUMBER OF NUMBER OF NUMBER OF
SHARES OF PERIOD UNTIL SHARES OF SHARES OF SHARES OF
COMMON STOCK) MATURATION OR COMMON COMMON COMMON
NAME (1)(2) PAYOUT(2) STOCK)(4) STOCK)(5) STOCK(6)
- ----- ----------------- ------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Samir G. Gibara 30,000 1/1/99 to 12/31/01 15,000 30,000 45,000
William J. Sharp 8,000 1/1/99 to 12/31/01 4,000 8,000 12,000
Robert W. Tieken 6,000 1/1/99 to 12/31/01 3,000 6,000 9,000
Eugene R. Culler, Jr. 6,000 1/1/99 to 12/31/01 3,000 6,000 9,000
C. Thomas Harvie 4,600 1/1/99 to 12/31/01 2,300 4,600 6,900
</TABLE>
-12-
<PAGE> 18
NOTES TO LONG TERM INCENTIVE PLAN AWARDS TABLE:
(1) On November 30, 1998, the Committee granted performance units ("2001
Performance Units") under the 1997 Plan to the Named Officers and to 24
other key executives of the Company. The number of 2001 Performance
Units paid to each grantee will be determined by and contingent upon the
extent to which specific performance goals are achieved. Payment of 50%
of the 2001 Performance Units earned will be made in cash in February of
2002 (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 2001 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, 2001 (the "2001 Performance
Period").
(2) A participant must be an employee at the end of the Performance Period
to receive the proceeds of the Performance Units; except that if such
participant dies, retires or becomes disabled prior to the end of the
Performance Period, 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 50% 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
2001 Performance Period and the per share value of the Common Stock when
the Performance Units earned are ultimately paid.
(4) The Cumulative Net Income per share of Common Stock during the 2001
Performance Period must be at least $10.40 before any distribution may
be made. If Cumulative Net Income is at least $10.40 for the 2001
Performance Period, at least 50% of the 2001 Performance Units will be
awarded.
(5) If the Cumulative Net Income per share of Common Stock is $13.87 for the
2001 Performance Period, 100% of the 2001 Performance Units will be
awarded.
(6) If the Cumulative Net Income per share of Common Stock is $16.64 or more
during the 2001 Performance Period, 150% of the 2001 Performance Units
will be awarded.
OTHER COMPENSATION 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, which 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 16, 1999,
there were outstanding under the 1997 Plan and the 1989 Plan stock options in
respect of 9,135,028 shares and SARs in respect of 44,150 shares.
PERFORMANCE RECOGNITION PLAN
On November 30, 1998, the Board of Directors of the Company approved the
participation of approximately 990 key employees, including all executive
officers of the Company, in Plan Year 1999 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"), cash flow for the Company or an operating unit, as the case may be, and
quarterly finished goods inventory days for the
-13-
<PAGE> 19
operating unit, if any, in respect of the participant. In addition, a portion
of each participant's award will also 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 1999 under the Performance Plan will
be made in February of 2000 (except to the extent deferred by the Committee or
by an eligible participant pursuant to the Company's Deferred Compensation Plan
for Executives) contingent upon the (i) level of achievement of the EBIT, cash
flow and, in some cases, inventory 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 1999 as follows: Mr. Gibara, $1,066,600; Mr.
Sharp, $420,000; Mr. Tieken, $330,000; Mr. Culler, $300,000; Mr. Harvie,
$260,000; and all participants (990 persons) as a group, $26,901,552.
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 three 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 1999). 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 1999, 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 1999 or $9,600) 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 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, 1998 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, $3,923,750; Mr. Sharp, $1,783,750; Mr.
Tieken, $1,477,000; Mr. Culler, $1,261,874; and Mr. Harvie, $1,164,500.
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
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<PAGE> 20
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 Salaried Pension Plan (the "Pension 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
executive officers, are eligible to participate. The Pension Plan permits any
eligible employee to make monthly optional contributions at an annual rate equal
to (a) 1% of his or her annual earnings up to a maximum of $36,300, or a maximum
1999 contribution of $363.00, and (b) at an annual rate equal to 2% of such
annual earnings in excess of $36,300, up to a maximum 1999 contribution of
$2,474. The Pension Plan also permits the option of making contributions only on
2% of annual earnings in excess of $36,300. The Code limits the maximum amount
of earnings that may be used in calculating benefits under the Pension Plan,
which limit is $160,000 for 1999. The Pension Plan provides benefits to
participants who have at least five years of service, including a lump sum
settlement of the benefits payable under the Pension Plan upon any termination
of employment.
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 Pension Plan and the monthly amount
which would have been paid under the Pension Plan if calculated without the Code
limitation on annual compensation ($160,000 in 1999) 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 certain officers and other key employees of the Company.
Participants in the Supplementary Plan do not participate in the Excess Benefits
Plan.
The Supplementary Plan provides 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 below shows estimated annual benefits payable at
selected earnings levels under the Pension Plan, as supplemented by the
Supplementary Plan (the "Pension Plans"), assuming retirement on July 1, 1999 at
age 65 after selected periods of service.
The pension benefit amounts shown in the Pension Plan Table include the
maximum benefits obtainable under the formula for the optional contributory
portion of the Pension Plan and under the Supplementary Plan and assume payments
are made on a five year certain and life annuity basis
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT AT JULY 1, 1999, FOR YEARS OF SERVICE INDICATED.
---------------------------------------------------------------------------------------------------
5 YEAR AVERAGE
ANNUAL
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS 45 YEARS
- -------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 500,000 $ 152,639 $ 193,416 $ 221,709 $ 248,863 $ 263,708 $ 278,626 $ 293,545
750,000 235,139 298,416 341,709 383,863 406,208 428,626 451,045
1,000,000 317,639 403,416 461,709 518,863 548,708 578,626 608,545
1,250,000 400,139 508,416 581,709 653,863 691,208 728,626 766,045
1,500,000 482,639 613,416 701,709 788,863 833,708 878,626 923,545
1,750,000 565,139 718,416 821,709 923,863 976,208 1,028,626 1,081,045
2,000,000 647,639 823,416 941,709 1,058,863 1,118,708 1,178,626 1,238,545
2,250,000 730,139 928,416 1,061,709 1,193,863 1,261,208 1,328,626 1,396,045
2,500,000 812,639 1,033,416 1,181,709 1,328,863 1,403,708 1,478,626 1,553,545
</TABLE>
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<PAGE> 21
(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
Pension 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,
32 years; Mr. Sharp, 34 years; Mr. Tieken, 5 years; Mr. Culler, 37 years; and
Mr. Harvie, 4 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 $1,700 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 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 business day of the seventh month following the month during which the
participant ceases to be a director or the fifth 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 16, 1999 are set forth in
the "Deferred Share Equivalent Units" column of the Beneficial Ownership Table
on page 8.
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<PAGE> 22
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 1998, 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, 1998,
except that: (1) Ms. K. G. Farley, a Director of the Company, filed her Form 3,
dated February 23, 1998, approximately ten days late due to an administrative
error; and (2) Mr. W. H. Hopkins, a Vice President of the Company, filed an
amendment dated July 6, 1998, to his Form 3 dated May 19, 1998, 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 1998.
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. Since May 19, 1998, the Compensation
Committee has been comprised of six directors who are not former or current
employees of the Company. Prior to that date, each director who was not a former
or current officer or employee of the Company was 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. The Company provides compensation in the form of:
(1) competitive salaries; (2) annual cash bonuses based on performance measured
against specific goals for operating earnings before interest and taxes
(calculated as the amount equal to sales
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<PAGE> 23
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 predetermined 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 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
determined that it would be appropriate to authorize the payment of compensation
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 Units awarded in February of
1997 and 1998 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 and
Mr. Harvie in respect of 1998 exceeded $1 million. In approving the payment of
such amounts 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. The 1997 Plan also permits other appropriate
forms of compensation that are 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 1998 adjustments to the salary and Performance Plan
participation guidelines for each executive officer position and certain other
key positions. The
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<PAGE> 24
guidelines for each position were based primarily on market data from three
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 600 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 bonus
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 1998, salaries of the executive officers named in the Summary Compensation
Table (the "Named Officers") were an average of 4.1% lower than the median
indicated by the guidelines and 5.0% higher than in 1997. The aggregate salaries
paid to all executive officers during 1998, which included promotional and merit
increases, were 5.1% higher than in 1997. Salaries averaged approximately 72% of
total annual cash compensation paid to executive officers, and 67% of total
annual cash compensation paid to the Named Officers, in respect of 1998.
Pursuant to the Company's Performance Recognition Plan (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 1998. Compensation paid
under the Performance Plan in respect of plan year 1998 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 80% on
the EBIT and cash flow performance of the entire Company and 20% on other
specified performance criteria. Depending on the extent to which the applicable
EBIT, cash flow and other goals were achieved, payouts could have ranged from
zero to 120% of the target amounts. The target annual incentive compensation
levels (assuming payout at 100% of target) for 1998 represented approximately
41% of total 1998 annual cash (salary and Performance Plan bonus) compensation,
which was substantially the same proportion as the median level established by
the aforesaid surveys. EBIT and cash flow goals for 1998 were not exceeded by
the Company and most operating units. Payouts for 1998 averaged approximately
59% of the target levels for the various operating units and were 59% of the
target level for the Company. The Performance Plan payments represented an
average of approximately 33% of annual cash compensation of the Named Officers
and 28% of the total 1998 annual cash compensation of the Company's executive
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 over a three year performance period by the
Company's cumulative net income per share or other appropriate standard.
Performance 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, and, in
respect of 1998, pursuant to the Company's 1997 Performance Incentive Plan (the
"1997 Plan"). The Committee, after consultation with and based on the
recommendations of the Chief Executive Officer, establishes the terms and
conditions of all grants (including the performance criteria, the target levels
for payout and the aggregate amount of grants), selects the persons to whom
grants are made and fixes the size of each such person's grant. Performance
equity grants are designed to comprise approximately 50% of target medium and
long term compensation.
The Committee awarded payouts in respect of the performance grants made in
January 1996 pursuant to the 1989 Plan for the three year Performance Period
ended December 31, 1998, at 125.2% of the units granted. The payment of 50% of
the units awarded 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 1999 (except to the extent the participant
elected to have
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<PAGE> 25
the cash portion of the payout deferred in Common Stock equivalent units). The
awards were made based on aggregate earnings per share of $13.63, 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 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 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 1997. 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, 2000, which must equal or exceed $14.69 per share of
Common Stock in order for any payout to be made. If total net income per share
during the performance period is $16.69 or more, 150% of the targeted amount may
be paid.
Performance Unit Grants for 1999 were granted by the Committee under the 1997
Plan to all executive officers and certain other key employees of the Company on
November 30, 1998, based on guidelines established using the median of medium
and long term compensation awards by 43 manufacturing companies (having median
annual sales of approximately $19.0 billion) included in a 1998 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 1998. 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,
2001, which must equal or exceed $10.40 per share in order for any payout to be
made. If total Cumulative Net Income Per Share during the performance period is
$16.64 or more, 150% of the targeted amount may be paid.
The Cumulative Net Income Per Share of Common Stock targets for the
Performance Unit grants for the three year performance periods ending on
December 31, 1999 and December 31, 2000 were amended by the Committee in
February 1999 to be consistent with the targets for the Performance Unit grants
for the three year performance period ending on December 31, 2001. The
Cumulative Net Income Per Share of Common Stock during the three year
performance period ending on December 31, 1999 must equal or exceed $10.77 per
share in order for any payout to be made and must exceed $17.23 for 150% of the
Units granted to be paid. The Cumulative Net Income Per Share of Common Stock
during the three year performance period ending December 31, 2000 must equal or
exceed $11.69 per share in order for any payout to be made and must exceed
$18.71 for 150% of the Units granted to 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 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 November 30, 1998, stock options in respect of 2,157,899 shares of Common
Stock were granted pursuant to the 1997 Plan at $57.25 per share (the
-20-
<PAGE> 26
fair market value of the Common Stock on that day) to 902 key employees
(including all executive officers), which options expire on November 30, 2008.
The options provide for the automatic grant of new "reinvestment options" for
that number of shares of 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 May 1, 1998 to an annual
rate of $1,000,000.
Pursuant to the Performance Plan for 1998, the Committee established a target
bonus of $1,012,500 for Mr. Gibara, the payout of which was subject to
adjustment from zero to 120% of the target amount depending on the extent to
which total Company EBIT, cash flow and other goals were achieved. The Company
did not exceed the EBIT and cash flow goals for 1998 and, accordingly, Mr.
Gibara earned 58% of his target bonus. Mr. Gibara elected to defer his
Performance Plan payout earned in respect of 1998 pursuant to the Company's
Deferred Compensation Plan for Executives. As a result, the award was not
subject to the deduction limitation of Section 162(m) of the Code.
In 1998 Mr. Gibara received payment of the performance grants made in
December 1994 and June 1995 in respect of the three year performance period
ended December 31, 1997. The award was subject to Section 162(m). As a result, a
portion of his total compensation received during 1998 which was not exempt from
Section 162(m) exceeded the $1 million limitation of Section 162(m) and,
therefore, was not deductible by the Company. 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.
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 November 30,
1998 for the three year performance period ending on December 31, 2001 for
30,000 Units, each equivalent to one share of Common Stock.
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 1998 was
made 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 the Common Stock. He was granted stock options in respect of 90,000
shares in respect of 1999 on November 30, 1998. All options provide for the
automatic grant of reinvestment options.
February 2, 1999
THE COMPENSATION COMMITTEE
John G. Breen, Chairman
Katherine G. Farley Steven A. Minter
William J. Hudson, Jr. Agnar Pytte
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, 1993 and ending December 31, 1998. The graph assumes the
investment of $100 on December 31, 1993 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, 1993 1994 1995 1996 1997 1998
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GOODYEAR COMMON 100.00 74.98 103.62 119.83 151.34 122.38
- -------------------------------------------------------------------------------------------------------
S & P 500 100.00 101.32 139.40 171.41 228.59 293.92
- -------------------------------------------------------------------------------------------------------
DOW AUTO PARTS 100.00 85.12 105.75 119.57 152.73 143.39
- -------------------------------------------------------------------------------------------------------
</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 2000 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, 1999 at the executive
offices of the Company, 1144 East Market Street, Akron, Ohio 44316-0001,
Attention: Office of the Secretary. The Company's receipt of notice of a
shareholder's intent to submit a proposal outside Rule 14a-8 at the 2000 annual
meeting of shareholders after January 11, 2000 will be considered untimely.
10-K REPORT
Interested shareholders may obtain a copy of the Company's Annual Report on
Form 10-K for 1998 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, 1999
By Order of the Board of Directors
/s/ JAMES BOYAZIS
JAMES BOYAZIS, Secretary
-23-
<PAGE> 29
[GOODYEAR LOGO]
<PAGE> 30
GOODYEAR LOGO
THE GOODYEAR TIRE & RUBBER COMPANY
PROXY FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a holder (or designated proxy) of shares of the
P Common Stock of The Goodyear Tire & Rubber Company, hereby appoints
JOHN G. BREEN, STEVEN A. MINTER, and AGNAR PYTTE, and each or any of
R them, the proxies or proxy of the undersigned, with full power of
substitution, to represent the undersigned, and to vote all of the
O shares of Common Stock that the undersigned is entitled to vote, at the
Annual Meeting of Shareholders of the Company to be held at its offices
X in Akron, Ohio, on Monday, April 12, 1999, at 10:00 A.M., Akron time,
and at any and all adjournments thereof; with the power to vote said
Y shares FOR the election of four Directors of the Company, and with the
power to vote said shares FOR the ratification of appointment of
Independent Accountants and upon all other matters as may properly come
before the meeting or any adjournment thereof. This Proxy is given and
is to be construed according to the laws of the State of Ohio.
UNLESS OTHERWISE SPECIFIED ON THE REVERSE SIDE, THE PROXY WILL
BE VOTED: FOR ELECTION OF THE FOUR NOMINEES FOR DIRECTOR NAMED ON THE
REVERSE SIDE, WITH DISCRETIONARY AUTHORITY TO CUMULATE VOTES
(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 1999 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 12, 1999
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 Lobby at the
entrance 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
vote in blue or
black ink as in
this example
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF NOTICE OF 1999 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.
<TABLE>
<S> <C> <C> <C>
WITHHOLD NOMINEES: Samir G. Gibara
FOR ALL [ ] AUTHORITY [ ] Class I Directors--Each William J. Hudson, Jr.
NOMINEES AS TO ALL to serve a 3-year term: William C. Turner
NOMINEES Martin D. Walker
</TABLE>
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME IN THE SPACE BELOW.)
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2. Ratification of appointment of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as
Independent Accountants.
I plan to attend the Annual Meeting [ ]
of Shareholders
------------------------------------------
SIGNATURE DATE
------------------------------------------
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.
- -------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
GOODYEAR
COMPANY
OWNED &
OPERATED GOODYEAR LOGO
SPECIAL SAVINGS
Call 1-888-GDYR-STORES for store locations.
--------------------------- ----------------------------
OIL LUBE 10% SHAREHOLDER
& FILTER DISCOUNT
$5.00 OFF Purchase any Goodyear
INCLUDES: WITH THIS COUPON passenger or light truck
- Lube (where applicable) tire at a Goodyear Auto
- New oil filter installed Service Center or Just
- Up to 5 quarts premium Tires location and receive
brand oil a 10% discount
OFFER GOOD ONLY AT LOCATIONS OFFER GOOD ONLY AT LOCATIONS
DISPLAYING COMPANY OWNED & DISPLAYING COMPANY OWNED &
OPERATED SIGN [GOODYEAR LOGO] OPERATED SIGN [GOODYEAR LOGO]
DIRECT MAIL I.D. GAR DIRECT MAIL I.D. GAR
Environmental disposal fee may
apply in some areas. Most cars.
No other discounts apply. No other discounts apply.
Offer ends 12/31/99. Offer ends 12/31/99.
------------------------------- -----------------------------
<PAGE> 32
GOODYEAR LOGO
THE GOODYEAR TIRE & RUBBER COMPANY
PROXY FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a holder (or designated proxy) of shares of
the Common Stock of The Goodyear Tire & Rubber Company, hereby
P appoints JOHN G. BREEN, STEVEN A. MINTER, and AGNAR PYTTE, and each or
any of them, the proxies or proxy of the undersigned, with full power
R of substitution, to represent the undersigned, and to vote all of the
shares of Common Stock that the undersigned is entitled to vote, at
O the Annual Meeting of Shareholders of the Company to be held at its
offices in Akron, Ohio, on Monday, April 12, 1999, at 10:00 A.M.,
X Akron time, and at any and all adjournments thereof; with the power to
vote said shares FOR the election of four Directors of the Company,
Y 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 FOUR 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 1999 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 12, 1999
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 Lobby at the
entrance 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
| 5721
------
X Please mark your
vote in blue or
black ink as in
this example.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF NOTICE OF 1999 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.
<TABLE>
<S> <C> <C> <C>
WITHHOLD NOMINEES: Samir G. Gibara
FOR ALL [ ] AUTHORITY [ ] Class I Directors--Each William J. Hudson, Jr.
NOMINEES AS TO ALL to serve a 3-year term: William C. Turner
NOMINEES Martin D. Walker
</TABLE>
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME IN THE SPACE BELOW.)
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2. Ratification of appointment of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as
Independent Accountants.
I plan to attend the Annual Meeting [ ]
of Shareholders.
------------------------------------------
SIGNATURE DATE
------------------------------------------
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.
- -------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
GOODYEAR
COMPANY
OWNED &
OPERATED GOODYEAR LOGO
SPECIAL SAVINGS
Call 1-888-GDYR-STORES for store locations.
--------------------------- ----------------------------
OIL LUBE 10% SHAREHOLDER
& FILTER DISCOUNT
$5.00 OFF Purchase any Goodyear
INCLUDES: WITH THIS COUPON passenger or light truck
- Lube (where applicable) tire at a Goodyear Auto
- New oil filter installed Service Center or Just
- Up to 5 quarts premium Tires location and receive
brand oil a 10% discount
OFFER GOOD ONLY AT LOCATIONS OFFER GOOD ONLY AT LOCATIONS
DISPLAYING COMPANY OWNED & DISPLAYING COMPANY OWNED &
OPERATED SIGN [GOODYEAR LOGO] OPERATED SIGN [GOODYEAR LOGO]
DIRECT MAIL I.D. GAR DIRECT MAIL I.D. GAR
Environmental disposal fee may
apply in some areas. Most cars.
No other discounts apply. No other discounts apply.
Offer ends 12/31/99. Offer ends 12/31/99.
------------------------------- -----------------------------
<PAGE> 34
CONFIDENTIAL VOTING INSTRUCTIONS -- 1999 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
12, 1999 are delivered herewith.
Under each Employee Savings Plan in which you participate
("Plan"), you have the right to give written instructions to the
Trustee for such Plan to vote as you specify the number of full shares
of Common Stock of The Goodyear Tire & Rubber Company representing
your proportionate interest in each such Plan on February 16, 1999.
If you wish to have such shares voted by the Trustee, please
sign the authorization on the reverse side of this card and return it
in the accompanying envelope. If you do not give instructions by
marking, signing and returning this Confidential Voting Instructions
Card in the envelope provided, shares of the Common Stock held for
your account in each Plan will be voted by the Trustee in the same
proportion as it votes shares for which Confidential Voting
Instructions are received by the Trustee from other participants in
that Plan.
I hereby instruct the Trustee to vote (or cause to be voted)
all shares of Common Stock of The Goodyear Tire & Rubber Company
credited to my account under each Plan at February 16, 1999 at the
Annual Meeting of Shareholders to be held on April 12, 1999, and at
any adjournment thereof, as indicated on the reverse side hereof or,
if not so indicated, as recommended by the Board of Directors.
UNLESS INSTRUCTIONS ARE GIVEN ON THE REVERSE SIDE, THE TRUSTEE
WILL VOTE FOR THE ELECTION OF THE FOUR NOMINEES FOR DIRECTOR, WITH
DISCRETIONARY AUTHORITY TO CUMULATE VOTES (ITEM 1 ON REVERSE SIDE),
AND FOR RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON REVERSE SIDE).
IF YOU PLAN TO ATTEND THE 1999 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 12, 1999
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 Lobby at the
entrance to the Theater in Goodyear Hall.
WE INVITE YOU TO JOIN US.
YOUR VOTE IS IMPORTANT
______________________
______________________
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 35
X Please mark your |8396
vote in blue or |
black ink as in -----
this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES AND FOR
ITEM 2.
ITEM 1. ELECTION OF DIRECTORS.
<TABLE>
<S> <C> <C> <C>
WITHHOLD NOMINEES: Samir G. Gibara
FOR ALL [ ] AUTHORITY [ ] Class I Directors--Each William J. Hudson, Jr.
NOMINEES AS TO ALL to serve a 3-year term: William C. Turner
NOMINEES Martin D. Walker
</TABLE>
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME IN THE SPACE BELOW.)
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2. Ratification of appointment of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as
Independent Accountants.
I plan to attend the Annual Meeting [ ]
of Shareholders.
AUTHORIZATION: I ACKNOWLEDGE RECEIPT OF THE NOTICE OF 1999 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
ACCOUNT(S) AS SPECIFIED ABOVE, OR, IF NOT SPECIFIED ABOVE, AS RECOMMENDED
BY THE BOARD OF DIRECTORS.
------------------------------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
GOODYEAR
COMPANY
OWNED &
OPERATED GOODYEAR LOGO
SPECIAL SAVINGS
Call 1-888-GDYR-STORES for store locations.
--------------------------- ----------------------------
OIL LUBE 10% SHAREHOLDER
& FILTER DISCOUNT
$5.00 OFF Purchase any Goodyear
INCLUDES: WITH THIS COUPON passenger or light truck
- Lube (where applicable) tire at a Goodyear Auto
- New oil filter installed Service Center or Just
- Up to 5 quarts premium Tires location and receive
brand oil a 10% discount
OFFER GOOD ONLY AT LOCATIONS OFFER GOOD ONLY AT LOCATIONS
DISPLAYING COMPANY OWNED & DISPLAYING COMPANY OWNED &
OPERATED SIGN [GOODYEAR LOGO] OPERATED SIGN [GOODYEAR LOGO]
DIRECT MAIL I.D. GAR DIRECT MAIL I.D. GAR
Environmental disposal fee may
apply in some areas. Most cars.
No other discounts apply. No other discounts apply.
Offer ends 12/31/99. Offer ends 12/31/99.
------------------------------- -----------------------------
