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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

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:

 

¨	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 §240.14a-12

 

 

THE GOODYEAR TIRE & RUBBER COMPANY

(Name of Registrant as Specified In Its Charter)

 

 

 

  

 

(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 the transaction applies:

 

 

  

 

(2)

Aggregate number of securities to which the transaction applies:

 

 

  

 

(3)

Per unit price or other underlying value of the 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 the 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.:

 

 

  

 

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Filing Party:

 

 

  

 

(4)

Date Filed:

 

 

  

 

 

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		GOODYEAR IS COMMITTED TO:   •   Delivering the highest quality in all that we do   •   Acting with honesty, integrity and respect   •   Encouraging wellness and safety, both on the job and away from work   •   Caring for our environment and communities   •   Supporting a team-based culture of continuous learning   •   Discussing problems openly and solving them as a team.     GOODYEAR WILL BE FIRST IN THE   GLOBAL TIRE INDUSTRY BY:   •   Attracting, developing, motivating and retaining the best team of associates   •   Earning and building long lasting relationships with customers, consumers and business partners and exceeding their expectations   •   Driving an efficient, aligned and effective organization   •   And creating a sustainable business model that consistently delivers a strong return on investment.

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PROXY STATEMENT SUMMARY

This summary is an overview of information that you will find elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

Proposals and Board Recommendations

 

Proposal				Board’s Voting Recommendation		Page Reference
1.		Election of Directors		FOR each Nominee			16
2.		Advisory Vote on Executive Compensation		FOR			23
3.		Ratification of Appointment of Independent Registered Public Accounting Firm		FOR			76
4.		Company Proposal with respect to the Removal and Election of Directors		FOR			77
5.		Company Proposal to Eliminate Certain Supermajority Voting Provisions		FOR			79
6.		Shareholder Proposal		AGAINST			80

 

 

2014 Business   Performance Highlights   For the second consecutive year, we delivered record segment operating income. We also delivered strong results across several other financial metrics.   *As defined for purposes of our compensation plans.

Executive Compensation Highlights

Our executive compensation program is designed to support achievement of our business objectives and to serve the long-term interests of our shareholders. Our executive compensation is strongly aligned to company performance and measurable financial metrics, thereby aligning management’s interests with our shareholders’ interests and driving increased shareholder value.

 

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				PROXY SUMMARY

For 2014, our financial metrics were:

 

				Incentive Program		Financial Metrics		Weighting
ANNUAL INCENTIVES				Annual Performance Plan		NEW METRIC FOR 2014: Free Cash Flow from Operations			40	%
						EBIT			40	%
						Operating Drivers			20	%
LONG-TERM AWARDS				Performance-Based Awards (Paid out in Equity and Cash)		Net Income			50	%
						NEW METRIC FOR 2014: Cash Flow Return on Capital			50	%
				Stock Options

 

Corporate Governance Highlights

 

 

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USE OF NON-GAAP FINANCIAL MEASURES

For additional information regarding segment operating income and free cash flow from operations, both non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, see Exhibit B to this Proxy Statement.

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GENERAL INFORMATION

Goodyear’s executive offices are located at:

200 Innovation Way

Akron, Ohio 44316-0001

Our telephone number is: 330-796-2121

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 (“Goodyear,” “Company,” “we,” “our” or “us”), to be voted at the annual meeting of shareholders to be held April 13, 2015 (the “Annual Meeting”), and at any adjournments thereof, for the purposes set forth in the accompanying notice.

Our Annual Report to Shareholders for the year ended December 31, 2014 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 materials are first being sent to shareholders is March 13, 2015.

Shares Voting

Holders of shares of the common stock, without par value, of Goodyear (the “Common Stock”) at the close of business on February 18, 2015 (the “record date”) are entitled to notice of, and to vote the shares of Common Stock they hold on the record date at, the Annual Meeting. As of the close of business on the record date, there were 269,763,591 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote.

Quorum

In order for any business to be conducted, holders of at least a majority of shares entitled to vote must be represented at the meeting, either in person or by proxy.

Adjourned Meeting

The holders of a majority of shares represented at the meeting, whether or not a quorum is present, may adjourn the meeting. If the time and place of the adjourned meeting is announced at the time adjournment is taken, no other notice need be given.

 

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				GENERAL INFORMATION
				Vote Required

Vote Required

In accordance with Goodyear’s Articles of Incorporation, a director nominee must receive, in an uncontested election of directors for which cumulative voting is not in effect, a greater number of votes cast “for” his or her election than “against” his or her election. Under Ohio law, an incumbent director who is not re-elected will continue in office as a “holdover” director until his or her successor is elected by a subsequent shareholder vote, or his or her earlier resignation, removal from office or death. In order to address “holdover” terms for any incumbent directors who fail to be re-elected under our majority vote standard, our Corporate Governance Guidelines provide that if a director nominee does not receive a majority affirmative vote, he or she will promptly offer his or her resignation as a director to the Board of Directors. Within 90 days, the Board will decide, after taking into account the recommendation of the Governance Committee (in each case excluding the nominee(s) in question), whether to accept the resignation. The Governance Committee and the Board may consider any relevant factors in deciding whether to accept a director’s resignation. The Board’s explanation of its decision shall be promptly disclosed in a filing with the Securities and Exchange Commission.

The affirmative vote of at least a majority of the shares of Common Stock outstanding on the record date is required for a management or shareholder proposal, other than an advisory vote, to be adopted at the Annual Meeting. When considering the results of advisory votes, the Board of Directors intends to consider only those votes actually cast at the Annual Meeting.

Abstentions and “broker non-votes,” which occur when your broker does not have discretionary voting authority on a matter and you do not provide voting instructions, have the same effect as votes against any proposal voted upon by shareholders but have no effect on the election of directors or advisory votes.

 

 

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				GENERAL INFORMATION
				Voting Shares Held in Street Name

Voting Shares Held in Street Name

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker, bank or nominee who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or nominee on how to vote and are also invited to attend the Annual Meeting. Your broker, bank or nominee has enclosed a voting instruction card for you to use in directing the broker, bank or nominee regarding how to vote your shares. If you do not return the voting instruction card, the broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under applicable rules, brokers have the discretion to vote only on matters deemed to be routine, such as the ratification of the selection of an accounting firm (Proposal 3). The election of directors (Proposal 1), the executive compensation advisory vote (Proposal 2), the amendments to our Articles of Incorporation and Code of Regulations (Proposals 4 and 5) and the shareholder proposal (Proposal 6) are not considered to be routine matters, and your broker will not have discretion to vote on those matters unless you specifically instruct your broker to do so by returning your signed voting instruction card. If you do not provide voting instructions to your broker, your shares will not be voted for any director nominee or on any matter on which your broker does not have discretionary authority (resulting in a broker non-vote).

Savings Plan Shares

A separate “Confidential Voting Instructions” card is being sent to each employee or former employee participating in the Goodyear Common Stock fund of certain employee savings plans. Shares of Common Stock held in the trusts for these plans will be voted by the trustee as instructed by the plan participants who participate in the Goodyear Common Stock fund. Shares held in the trusts for which voting instructions are not received will be voted by the trustee in the same proportion as it votes shares for which voting instructions were received from participants in the Goodyear Common Stock fund of the applicable trust.

Cumulative Voting for Directors

In the voting for directors, you have the right to vote cumulatively for the candidates nominated. Under the Ohio General Corporation Law, all of the shares of Common Stock may be voted cumulatively in the election of directors if any shareholder gives written notice to our President, a Vice President or the Secretary not less than 48 hours before the time set for the Annual Meeting, and an announcement of the notice is made at the beginning of the Annual Meeting by the Chairman or the Secretary or by or on behalf of the shareholder giving such notice. If cumulative voting is in effect, you may (a) give one candidate the number of votes equal to thirteen times the number of shares of Common Stock you are entitled to vote, or (b) distribute your votes among the thirteen candidates as desired.

 

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				GENERAL INFORMATION
				Voting of Proxy

Voting of Proxy

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on April 13, 2015:

The Proxy Statement, Proxy Card and Annual Report to Shareholders for the year ended December 31, 2014 are available at www.proxyvote.com.

David L. Bialosky, Laura K. Thompson and Bertram Bell have been designated as proxies to vote shares of Common Stock in accordance with your instructions. You may give your instructions using the accompanying proxy card, via the internet or by telephone.

You may vote your shares using the internet by accessing the following web site: http://www.proxyvote.com or by making a toll-free telephone call within the United States of America or Canada using a touch-tone telephone to the toll-free number provided on your proxy card, or if you hold your shares in “street name,” on the voting instruction card provided by your broker or nominee.

Your shares will be voted for the thirteen nominees identified at pages 16 through 22, unless your instructions are to vote against any one or more of the nominees or to vote cumulatively for one or more of the nominees for election. The proxies may cumulatively vote your shares if they consider it appropriate, except to the extent you expressly withhold authority to cumulate votes as to a nominee.

Your Board of Directors anticipates that all of the nominees named will be available for election. In the event an unexpected vacancy occurs, your proxy may be voted for the election of a new nominee designated by the Board of Directors.

Proxies received and not revoked prior to the Annual Meeting will be voted in favor of Proposals 2 through 5, and against Proposal 6, unless your instructions are otherwise.

Revocability of Proxy

You may revoke or revise your proxy (whether given by mail, via the internet or by telephone) by the delivery of a later proxy or by giving notice to Goodyear in writing or in open meeting. Your proxy revocation or revision will not affect any vote previously taken. If you hold your shares in “street name” please refer to the information forwarded by your broker, bank or nominee who is considered the shareholder of record for procedures on revoking or changing your voting instructions.

Confidentiality

Your vote will be confidential except (a) as may be required by law, (b) as may be necessary for Goodyear to assert or defend claims, (c) in the case of a contested election of director(s), or (d) at your express request.

 

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				GENERAL INFORMATION
				Shareholders Sharing The Same Address

Shareholders Sharing The Same Address

Goodyear has adopted a procedure called “householding,” which has been approved by the Securities and Exchange Commission. Under this procedure, Goodyear is delivering only one copy of the Annual Report and Proxy Statement to multiple shareholders who share the same address and have the same last name, unless Goodyear has received contrary instructions from an affected shareholder. This procedure reduces Goodyear’s printing costs, mailing costs and fees. Shareholders who participate in householding will continue to receive separate proxy cards.

Goodyear will deliver promptly upon written or oral request a separate copy of the Annual Report and the Proxy Statement to any shareholder at a shared address to which a single copy of either of those documents was delivered. To receive a separate copy of the Annual Report or Proxy Statement, you may write or call Goodyear’s Investor Relations Department at The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001, Attention: Investor Relations, telephone (330) 796-3751. You may also access Goodyear’s Annual Report and Proxy Statement on the Investor Relations section of Goodyear’s website at www.goodyear.com or at www.proxyvote.com.

If you are a holder of record and would like to revoke your householding consent and receive a separate copy of the Annual Report or Proxy Statement in the future, please contact Broadridge, either by calling toll free at (800) 542-1061 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. You will be removed from the householding program within 30 days of receipt of the revocation of your consent.

Any shareholders of record who share the same address and currently receive multiple copies of Goodyear’s Annual Report and Proxy Statement who wish to receive only one copy of these materials per household in the future should contact Goodyear’s Investor Relations Department at the address or telephone number listed above to participate in the householding program.

A number of brokerage firms have instituted householding. If you hold your shares in “street name,” please contact your bank, broker or other holder of record to request information about householding.

Form 10-K

Goodyear will mail without charge, upon written request, a copy of Goodyear’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, including the Consolidated Financial Statements, schedules and list of exhibits, and any particular exhibit specifically requested. Requests should be sent to: The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001, Attn: Investor Relations. The Annual Report on Form 10-K is also available at www.goodyear.com.

Costs of Solicitation

The costs of soliciting proxies will be borne by Goodyear. Goodyear has retained D.F. King & Co., Inc., 48 Wall Street, New York, New York 10005, to assist in distributing proxy materials and soliciting proxies for an estimated fee of $13,500, plus reimbursement of reasonable out-of-pocket expenses. D.F. King & Co. may solicit proxies from shareholders by mail, telephone or the internet. In addition, officers or other employees of Goodyear may, without additional compensation, solicit proxies in person or by telephone or the internet.

 

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				GENERAL INFORMATION
				Submission of Shareholder Proposals and Nominations

Submission of Shareholder Proposals and Nominations

If a shareholder desires to have a proposal included in the proxy materials of the Board of Directors for the 2016 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, including Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and must be received by Goodyear prior to the close of business on November 14, 2015. In addition, if a shareholder intends to present a proposal or other business (not including a proposal submitted for inclusion in our proxy materials pursuant to Rule 14a-8) or to nominate a candidate for election as a director at the 2016 Annual Meeting of Shareholders, the shareholder’s notice must be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Company not earlier than December 15, 2015 and not later than the close of business on January 14, 2016. If notice of a proposal or a director nomination is not received by the Company in accordance with the dates specified in the Code of Regulations or pursuant to Rule 14a-8, as the case may be, then the proposal or director nomination will be deemed untimely and we will have the right to exercise discretionary voting authority and vote proxies returned to us with respect to such proposal or director nomination. Shareholder proposals or director nominations should be sent to the executive offices of Goodyear, 200 Innovation Way, Akron, Ohio 44316-0001, Attention: Office of the Secretary.

For a proposal or director nomination to be properly presented at an annual meeting of shareholders, a shareholder must comply with the deadlines described in the preceding paragraph, as well as all of the other requirements of the Code of Regulations. Goodyear reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal or director nomination that does not comply with these and other applicable requirements.

 

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CORPORATE GOVERNANCE

PRINCIPLES AND BOARD MATTERS

Goodyear is committed to having sound corporate governance principles. Having such principles is essential to running Goodyear’s business efficiently and to maintaining Goodyear’s integrity in the marketplace. Goodyear’s Corporate Governance Guidelines, Business Conduct Manual, Board of Directors and Executive Officers Conflict of Interest Policy and charters for each of the Audit, Compensation, Corporate Responsibility and Compliance, Finance, and Governance Committees are available at http://investor.goodyear.com/governance.cfm. Please note, however, that information contained on the website is not incorporated by reference in this Proxy Statement or considered to be a part of this document. A copy of the committee charters and corporate governance policies may also be obtained upon request to the Goodyear Investor Relations Department.

CURRENT COMMITTEE MEMBERSHIP AND MEETINGS HELD DURING 2014

 

Committees

Independent

Audit

Compensation

Corporate Responsibility and Compliance

Finance

Governance

Mr. Conaty

MEMBER

MEMBER

Mr. Firestone

MEMBER

CHAIR

Mr. Geissler

MEMBER

CHAIR

Mr. Hellman

CHAIR

MEMBER

Ms. Koellner

Mr. Kramer

Mr. McCollough, Lead Director

MEMBER

MEMBER

Mr. McGlade

MEMBER

MEMBER

Mr. Morell

MEMBER

MEMBER

Mr. Palmore

MEMBER

CHAIR

Ms. Streeter

CHAIR

MEMBER

Mr. Weidemeyer

MEMBER

MEMBER

Mr. Wessel

MEMBER

Number of Meetings in 2014

6

5

3

3

4

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Board Independence

Board Independence

The Board has determined that eleven of the thirteen director nominees are independent within the meaning of Goodyear’s independence standards, which are based on the criteria established by The NASDAQ Stock Market and are included as Annex I to Goodyear’s Corporate Governance Guidelines. Mr. Kramer, our Chairman of the Board, Chief Executive Officer and President, is not considered independent. In addition, in light of his relationship with the United Steelworkers (the “USW”), Mr. Wessel is not considered independent. Further, the Board expects that Mr. Wessel will recuse himself from discussions and deliberations regarding Goodyear’s relationship with the USW. The Board also determined that the nature and size of the ordinary course commercial relationships between Goodyear and Xerox Corporation and between Goodyear and Air Products and Chemicals, Inc. did not impair the independence of Mr. Firestone or Mr. McGlade, respectively. In each case, the relationships were de minimis, constituting one-tenth of one percent (0.1%) or less of either Goodyear’s or the other company’s consolidated gross revenues in the current fiscal year and each of the last three completed fiscal years. Mr. McGlade retired from Air Products on July 1, 2014.

Board Structure and Committee Composition

As of the date of this Proxy Statement, Goodyear’s Board has thirteen directors, each elected annually, and the following five committees: (1) Audit, (2) Compensation, (3) Corporate Responsibility and Compliance, (4) Finance, and (5) Governance. The current membership and the function of each of the committees are described below. Each of the committees operates under a written charter adopted by the Board. During 2014, the Board held eight meetings. Each director attended at least 75% of all Board and applicable Committee meetings. Directors are expected to attend annual meetings of Goodyear’s shareholders. All of the directors attended the last annual meeting of shareholders, except for Ms. Streeter whose attendance was excused due to an unavoidable conflict with another business meeting. As described on Goodyear’s website at http://investor.goodyear.com/contactBoard.cfm, shareholders may communicate with the Board or any of the directors (including the Lead Director or the non-management directors as a group) by sending correspondence to the Office of the Secretary, The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001. All communications will be compiled by the Secretary and submitted to the Board or the individual directors on a periodic basis.

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Audit Committee

 

 

Audit Committee

 

MEMBERS:   Mr. Firestone   Mr. Geissler   Mr. Hellman (Chairman)   Mr. McCollough   Mr. Morell   MEETINGS IN 2014: 6   The Board has determined that each member of the Audit Committee is independent within the meaning of Goodyear’s independence standards and applicable Securities and Exchange Commission rules and regulations, and each of Mr. Hellman and Mr. McCollough is an audit committee financial expert.		KEY RESPONSIBILITIES:   The Audit Committee assists the Board in fulfilling its responsibilities for oversight of the integrity of Goodyear’s financial statements, Goodyear’s compliance with legal and regulatory requirements related to financial reporting, the independent registered public accounting firm’s qualifications and independence, and the performance of Goodyear’s internal auditors and independent registered public accounting firm. Among other things, the Audit Committee prepares the Audit Committee report for inclusion in the annual proxy statement; annually reviews the Audit Committee charter and the Committee’s performance; appoints, evaluates and determines the compensation of Goodyear’s independent registered public accounting firm; reviews and approves the scope of the annual audit plan; reviews and pre-approves all auditing services and permitted non-audit services (and related fees) to be performed by the independent registered public accounting firm; oversees investigations into complaints concerning financial matters; and reviews policies and guidelines with respect to risk assessment and risk management, including Goodyear’s major financial risk exposures. The Audit Committee works closely with management as well as Goodyear’s independent registered public accounting firm. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from Goodyear for, outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.   The report of the Audit Committee is on page 75 of this Proxy Statement.

 

 

Compensation Committee

 

MEMBERS:   Mr. Conaty   Mr. McCollough   Mr. McGlade   Ms. Streeter (Chairman)   MEETINGS IN 2014: 5   The Board has determined that each member of the Compensation Committee is independent within the meaning of Goodyear’s independence standards and applicable NASDAQ listing standards.		KEY RESPONSIBILITIES:   The Board of Directors has delegated to the Compensation Committee primary responsibility for establishing and administering Goodyear’s compensation programs for officers and other key personnel. The Compensation Committee oversees Goodyear’s compensation and benefit plans and policies for directors, officers and other key personnel, administers its equity compensation plans (including reviewing and approving equity grants to officers and other key personnel), and reviews and approves annually all compensation decisions relating to officers, including the Chief Executive Officer (“CEO”). The Compensation Committee also prepares a report on executive compensation for inclusion in the annual proxy statement and reviews and discusses the Compensation Discussion and Analysis with management and recommends its inclusion in the annual proxy statement. The report of the Compensation Committee is on page 51 of this Proxy Statement.   In performing its duties, the Compensation Committee meets periodically with the CEO to review compensation policies and specific levels of compensation paid to officers and other key personnel, and reports and makes recommendations to the Board regarding executive compensation policies and programs. The Compensation Committee informs the non- management directors of the Board of its decisions regarding compensation for the CEO

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Compensation Committee

 

 

Compensation Committee (continued)

 

		and other significant decisions related to the administration of its duties. The Compensation Committee also will consider the results of shareholder advisory votes on executive compensation matters and the changes, if any, to Goodyear’s executive compensation policies, practices and plans that may be warranted as a result of any such vote and reviews an annual risk assessment of Goodyear’s executive compensation policies, practices and plans as part of its role in overseeing management’s identification and management of, and planning for, compensation- related risks. Under its charter, the Compensation Committee may delegate its authority to one or more of its members as appropriate.   The Compensation Committee has the authority to retain outside advisors, including independent compensation consultants, to assist it in evaluating actual and proposed compensation for officers. The Compensation Committee also has the authority to approve, and receive appropriate funding from Goodyear for, any such outside advisor’s fees. Prior to retaining any such advisors, the Compensation Committee considers the independence-related factors identified in applicable securities laws and NASDAQ listing standards. The Compensation Committee has retained Frederic W. Cook & Co., Inc. (“F.W. Cook”) as its compensation consultant, and has determined that F.W. Cook is independent. The Compensation Committee solicits advice from F.W. Cook on executive compensation matters relating to the CEO and other officers.   This advice is described in more detail under the heading “Compensation Discussion and Analysis – Role of Compensation Consultant.”

 

 

Committee on Corporate Responsibility and Compliance

 

MEMBERS:   Mr. Geissler (Chairman)   Mr. Morell   Mr. Weidemeyer   Mr. Wessel   MEETINGS IN 2014: 3		KEY RESPONSIBILITIES:   The Committee on Corporate Responsibility and Compliance reviews Goodyear’s legal compliance programs as well as its business conduct policies and practices and its policies and practices regarding its relationships with shareholders, employees, customers, governmental agencies and the general public. The Committee also monitors Goodyear’s objectives, policies and programs with respect to sustainability, workplace health and safety, diversity and product quality. The Committee may also recommend appropriate new policies to the Board of Directors.

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Finance Committee

 

 

Finance Committee

 

MEMBERS:   Mr. Firestone (Chairman)   Mr. Hellman   Mr. Palmore   Mr. Weidemeyer   MEETINGS IN 2014: 3		KEY RESPONSIBILITIES:   The Finance Committee consults with management and makes recommendations to the Board of Directors regarding Goodyear’s capital structure, dividend policy, tax strategies, compliance with terms in financing arrangements, risk management strategies, banking arrangements and lines of credit, and pension plan funding. The Finance Committee also reviews and consults with management regarding policies with respect to interest rate and foreign exchange risk, liquidity management, counterparty risk, derivative usage, credit ratings, and investor relations activities.

 

 

Governance Committee

 

MEMBERS:   Mr. Conaty   Mr. McGlade   Mr. Palmore (Chairman)   Ms. Streeter   MEETINGS IN 2014: 4   The Board has determined that each member of the Governance Committee is independent within the meaning of Goodyear’s independence standards.		KEY RESPONSIBILITIES:   The Governance Committee identifies, evaluates and recommends to the Board of Directors candidates for election to the Board. The Committee also develops and recommends appropriate corporate governance guidelines, recommends policies and standards for evaluating the overall effectiveness of the Board of Directors in the governance of Goodyear and undertakes such other activities as may be delegated to it from time to time by the Board of Directors.

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Board Leadership Structure

Board Leadership Structure

Mr. Kramer serves as our Chairman of the Board, Chief Executive Officer and President. In order to ensure that the independent and non-management members of the Board maintain proper oversight of management, the Board also has an independent Lead Director. The Company’s Corporate Governance Guidelines specifically provide that the independent directors of the Board must elect an independent Lead Director annually.

 

Mr. McCollough currently serves as our Lead Director. Additional duties of our Lead Director are set forth in Annex II to our Corporate Governance Guidelines.

The Board believes that the current Board leadership structure is the most appropriate for the Company and its shareholders at this time. Mr. Kramer has held positions of increasing responsibility at Goodyear for the past fifteen years, including Chief Financial Officer and President, North America, and has extensive knowledge of the Company and the tire industry, which is valuable to the Board in his role as Chairman.

The Board has no policy that requires the combination or separation of the Chairman and CEO roles, and may reconsider our leadership structure from time to time based on considerations at that time. The Board intends to consider whether to combine or separate the Chairman and CEO roles in connection with any CEO succession.

Board’s Role in Risk Oversight

Management continually monitors the material risks facing the Company, including competitive, financial (accounting, liquidity and tax), legal, operational, regulatory and strategic risks. The Board as a whole has responsibility for oversight of management’s identification and management of, and planning for, those risks. Reviews of certain areas are conducted by relevant Board Committees that report their deliberations to the Board.

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Board’s Role in Risk Oversight

The Board and its Committees oversee risks associated with their principal areas of focus, as summarized below. The Board and its Committees exercise their risk oversight function by carefully evaluating the reports they receive from management and by making inquiries of management with respect to areas of particular interest to the Board. Board oversight of risk is enhanced by the fact that the Lead Director and Chairman attend virtually all Committee meetings and that Committee reports are provided to the full Board following each Committee meeting. We believe that our leadership structure also enhances the Board’s risk oversight function since our Lead Director regularly discusses the material risks facing the Company with management. The Chairman is also expected to report candidly to his fellow directors on his assessment of the material risks we face, based upon the information he receives as part of his management responsibilities. Both the Lead Director and the Chairman are well-equipped to lead Board discussions on risk issues.

BOARD/COMMITTEE AREAS OF RISK OVERSIGHT

 

 

 

Full Board		•  Strategic, financial and execution risk associated with the annual operating plan and strategic plan (including allocation of capital investments);   •  Major litigation and regulatory matters;   •  Acquisitions and divestitures; and   •  Management succession planning.
Audit Committee		•  Risks associated with financial matters, particularly financial reporting, accounting, and disclosure and internal controls, and information technology and cybersecurity.
Compensation Committee		•  Risks associated with the establishment and administration of executive compensation, equity-based compensation programs, and performance management of officers.
Governance Committee		•  Risks associated with Board effectiveness and organization, corporate governance matters, and director succession planning.
Finance Committee		•  Risks associated with liquidity, pension plans (including investment performance, asset allocation and funded status), taxes, currency and interest rate exposures, and insurance strategies.
Committee on Corporate Responsibility and Compliance		•  Risks associated with health, safety and the environment, sustainability, and the Company’s legal and ethical compliance program.

 

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Consideration of Director Nominees

Consideration of Director Nominees

The policy of the Governance Committee is to consider properly submitted shareholder nominations of candidates for membership on the Board as described below under “Identifying and Evaluating Nominees for Director.” In evaluating such nominations, the Governance Committee seeks to address the criteria described below under “Director Selection Guidelines.”

Any shareholder desiring to submit a proposed candidate for consideration by the Governance Committee should send the name of such proposed candidate, together with biographical data and background information concerning the candidate, to the Office of the Secretary, The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001.

Director Selection Guidelines

The Board of Directors has approved guidelines for selecting directors as part of our Corporate Governance Guidelines. Criteria considered in the selection of directors include:

 

•

Personal qualities and characteristics, including the highest personal and professional integrity, sound judgment, and reputation in the business community or a record of public service;

 

•

Substantial business experience or professional expertise and a record of accomplishments;

 

•

Experience and stature necessary to be highly effective, working with other members of the Board, in serving the long-term interests of shareholders;

 

•

Ability and willingness to devote sufficient time to the affairs of the Board and the Company and to carry out their duties effectively;

 

•

The needs of the Company at the time of nomination to the Board and the fit of a particular individual’s skills and personality with those of the other directors in building a Board that is effective and responsive to the needs of the Company;

 

•

Diverse business experience, substantive expertise, skills and background, as well as diversity in personal characteristics, such as age, gender and ethnicity; and

 

•

Ability to satisfy Goodyear’s and The NASDAQ Stock Market’s independence standards.

Identifying and Evaluating Nominees for Director

The Governance Committee is responsible for identifying, screening and recommending persons for nomination to the Board. The Governance Committee considers candidates for Board membership suggested by its members and other Board members, as well as management and shareholders. On occasion, the Committee may also retain third-party executive search firms to identify candidates. In addition, under our prior master labor agreement with the USW, the USW had the right to nominate a candidate for consideration for membership on the Board. Mr. Wessel, who became a director in December 2005, was identified and recommended by the USW. Ms. Koellner was initially identified as a potential candidate for Board membership by a third-party search firm.

Once a prospective nominee has been identified, the Committee makes an initial determination on whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the Committee with the

 

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				CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
				Identifying and Evaluating Nominees for Director

recommendation of the prospective candidate, as well as the Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members and the likelihood that the prospective nominee can satisfy the director selection guidelines described above. If the Committee determines, in consultation with the Chairman of the Board, the Lead Director and other Board members as appropriate, that additional consideration is warranted, it may request a third-party search firm to gather additional information about the prospective nominee’s background and experience and to report its findings to the Committee. The Committee then evaluates the prospective nominee against the standards and qualifications set out in Goodyear’s director selection guidelines. The Committee also considers such other relevant factors as it deems appropriate, including the balance of management and independent directors and the evaluations of other prospective nominees. As described above under “Director Selection Guidelines,” diversity is among the many factors that the Committee considers in evaluating prospective nominees. We consider the members of our Board to have a diverse set of business and personal experiences, backgrounds and expertise, and to be diverse in terms of age, gender and ethnicity.

In connection with this evaluation, the Committee determines whether to interview the prospective nominee, and if warranted, the Lead Director, the Chairman of the Committee, one or more other members of the Committee, and others as appropriate, interview prospective nominees in person or by telephone. After completing this evaluation and interview, the Committee makes a recommendation to the full Board as to the persons who should be elected to the Board, and the Board makes its decision after considering the recommendation and report of the Committee.

 

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				PMT Insert

PROPOSAL 1 – ELECTION OF DIRECTORS

The Board of Directors has selected the following thirteen nominees recommended by the Governance Committee for election to the Board of Directors. The directors will hold office from their election until the next Annual Meeting of Shareholders, or until their successors are elected and qualified. If any of these nominees for director becomes unavailable, the persons named in the proxy intend to vote for an alternate designated by the current Board of Directors.

William J. Conaty

 

Director Since:       August 1, 2011           Committees:       Compensation       Governance           Age: 69		CURRENT PRINCIPAL OCCUPATION:   President of Conaty Consulting LLC and Advisory Partner of Clayton, Dubilier & Rice, LLC   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Conaty served as Senior Vice President of Corporate Human Resources for General Electric Company from 1993 to 2007. He joined General Electric in 1967 and in his 40-year career, moved through a progression of leadership roles in the company’s transportation, aerospace and aircraft engines businesses. Following his retirement from General Electric, he formed Conaty Consulting LLC and joined Clayton, Dubilier & Rice as an advisory partner. He is Chairman of the Board of Trustees of Bryant University and a trustee of Dartmouth-Hitchcock Hospital.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Hewitt Associates (2008 – 2010)   Mr. Conaty has extensive human resources, executive compensation and executive management experience from his long and successful tenure at General Electric. His skills in coaching and developing leaders and teams are an asset to both the Board of Directors and Goodyear, particularly with respect to talent development, succession planning, labor relations and executive compensation matters.

 

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				ELECTION OF DIRECTORS

James A. Firestone

 

Director Since:       December 3, 2007           Committees:       Audit       Finance (Chairman)           Age: 60		CURRENT PRINCIPAL OCCUPATION:   Executive Vice President and President, Corporate Strategy and Asia Operations of Xerox Corporation   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Firestone is an Executive Vice President of Xerox Corporation and has been President, Corporate Strategy and Asia Operations since January 1, 2014. Mr. Firestone was President, Corporate Operations from October 2008 to December 2013 and President of Xerox North America from October 2004 to September 2008. He has also served as head of Xerox’s channels group. Before joining Xerox in 1998, Mr. Firestone worked for IBM Corporation as general manager of the Consumer Division and for Ameritech Corporation as president of Consumer Services. He began his business career in 1978 with American Express, where during his 15-year tenure he ultimately rose to President, Travelers Cheques.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   The Nomura Partners Fund (2005 – 2014)   Mr. Firestone has extensive executive management experience in positions of increasing responsibility, including most recently as a senior executive officer of Xerox Corporation, which is of similar size and global complexity as Goodyear. He also has over 20 years of profit and loss management responsibility, as well as significant international business experience. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations and finance matters.

Werner Geissler

 

Director Since:       February 21, 2011           Committees:       Audit       Corporate Responsibility       and Compliance       (Chairman)           Age: 61		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly Vice Chairman, Global Operations of The Procter & Gamble Company Operating Partner of Advent International   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Geissler was Vice Chairman, Global Operations of The Procter & Gamble Company from August 2007 until his retirement on December 31, 2014, and was Group President, Central & Eastern Europe, Middle East and Africa from July 2004 to July 2007. He joined Procter & Gamble in 1979 and held positions of increasing responsibility in various brand and general management and operations roles in Europe, the Middle East, Central Asia, Japan, Africa and the United States. He is also a member of the Supervisory Board and Audit Committee of the International Management Development Institute in Lausanne, Switzerland, a leading global institution for senior management education.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Philip Morris International Inc. (January 1, 2015 – present)   Mr. Geissler, a native of Germany, has deep executive management experience, including as a senior executive officer of Procter & Gamble, where he oversaw Procter & Gamble’s extensive worldwide business operations. He has significant international business experience and profit and loss management responsibility. These experiences provide him with valuable insights as a director of Goodyear, particularly with respect to consumer marketing, and international, operations and finance matters.

 

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				ELECTION OF DIRECTORS

Peter S. Hellman

 

Director Since:       October 5, 2010           Committees:       Audit (Chairman)       Finance           Age: 65		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly President and Chief Financial and Administrative Officer of Nordson Corporation   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Hellman retired from Nordson Corporation, a designer, manufacturer and marketer of industrial equipment, in 2008 after a career of over 20 years with large, multinational companies in both financial and operating executive positions. Mr. Hellman was President and Chief Financial and Administrative Officer of Nordson Corporation from 2004 to January 2008 and Executive Vice President and Chief Financial and Administrative Officer from 2000 to 2004. Prior to joining Nordson in 2000, Mr. Hellman was with TRW Inc. for 10 years and held various positions, including President and Chief Operating Officer and Chief Financial Officer. Mr. Hellman also serves on the boards of several nonprofit organizations.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Baxter International Inc. (2005 – present) Owens-Illinois, Inc. (2007 – present) Qwest Communications International Inc. (2000 – 2011)   Mr. Hellman has significant financial reporting expertise due to his service as a Chief Financial Officer at both Nordson and TRW, providing him with the necessary skills to be Chairman of our Audit Committee, where he also qualifies as an “audit committee financial expert.” He also has extensive operational experience at both companies. In addition, Mr. Hellman has served on public company boards for over 20 years. Through his board and management experience, Mr. Hellman also has significant experience with corporate governance practices and legal and regulatory compliance issues. Mr. Hellman’s financial and operating experience, business leadership skills and board experience enable him to provide valuable contributions as a Goodyear director.

Laurette T. Koellner

 

Director Since:       February 23, 2015           Committees:       None           Age: 60		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly President of Boeing International and Executive Chairman of International Lease Finance Corporation   DESCRIPTION OF BUSINESS EXPERIENCE:   Ms. Koellner most recently served as Executive Chairman of International Lease Finance Corporation, an aircraft leasing subsidiary of American International Group, Inc., from June 2012 until its sale in May 2014. From 1978 until 2007, Ms. Koellner held positions of increasing responsibility at McDonnell Douglas Corporation and The Boeing Company, an aerospace company, including as President of Boeing International, where she oversaw Boeing’s international operations, and President of Connexion by Boeing, which provided satellite-based connectivity services to aircraft and maritime vessels. While at Boeing, Ms. Koellner also served as Vice President and General Auditor, Vice President and Corporate Controller, and Chief Human Resources Officer.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Celestica Inc. (2009 – present) Papa John’s International, Inc. (June 10, 2014 – present) The Hillshire Brands Company (formerly Sara Lee Corporation) (2003 – 2014) American International Group, Inc. (2009 – 2012)   Ms. Koellner has significant senior executive management experience, including extensive international business and financial leadership experience. Her service on several public company boards of directors also provide us with important insights on business practices in a variety of industries.

 

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				ELECTION OF DIRECTORS

Richard J. Kramer

 

Director Since:       February 22, 2010           Committees:       None           Age: 51		CURRENT PRINCIPAL OCCUPATION:   Chairman of the Board, Chief Executive Officer and President of Goodyear   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Kramer joined Goodyear in March 2000 as Vice President – Corporate Finance, serving in that capacity as Goodyear’s principal accounting officer until August 2002, when he was elected Vice President, Finance – North American Tire. In August 2003, he was named Senior Vice President, Strategic Planning and Restructuring, and in June 2004 was elected Executive Vice President and Chief Financial Officer. Mr. Kramer was elected President, North American Tire in March 2007 and continued to serve as Chief Financial Officer until August 2007. In June 2009, Mr. Kramer was elected Chief Operating Officer and continued to serve as President, North American Tire until February 2010. He was elected Chief Executive Officer and President effective April 13, 2010 and Chairman effective October 1, 2010. Prior to joining Goodyear, Mr. Kramer was with PricewaterhouseCoopers LLP for 13 years, including two years as a partner.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   The Sherwin-Williams Company (2012 – present)   Mr. Kramer has been an executive officer of Goodyear for 15 years. Mr. Kramer has held several key positions at Goodyear and has had a critical role in creating our strategy and strengthening our leadership teams as Chief Executive Officer and previously as Chief Financial Officer and as President, North American Tire. Mr. Kramer’s deep knowledge of Goodyear, global markets, manufacturing, finance and accounting provides our Board with valuable perspectives that are necessary to advance Goodyear’s business and the interests of our shareholders.

W. Alan McCollough

 

Director Since:       April 10, 2007           Lead Director           Committees:       Audit       Compensation           Age: 65		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly Chairman and Chief Executive Officer of Circuit City Stores, Inc.   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. McCollough joined Circuit City Stores, Inc., a consumer electronics retailer, in 1987 as general manager of corporate operations, and was named assistant vice president in 1989, president of central operations in 1991, and senior vice president of merchandising in 1994. He served as President and Chief Operating Officer from 1997 to 2000 and as President and Chief Executive Officer from 2000 to 2002. Mr. McCollough was elected Chairman, President and Chief Executive Officer of Circuit City in 2002 and served in those capacities until 2005. He remained Chief Executive Officer until February 2006 and Chairman until his retirement in June 2006.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   La-Z-Boy Inc. (2007 – present) VF Corporation (2000 – present)   Mr. McCollough has extensive senior executive management experience, particularly in operations and consumer merchandising and marketing. His experience as Chairman and Chief Executive Officer of Circuit City provides him with the necessary skills to be Lead Director and serve on our Audit Committee, where he also qualifies as an “audit committee financial expert.” Mr. McCollough’s past service as Chairman of Circuit City, as well as his current service on other public company boards of directors, provides us with important perspectives on corporate governance and executive compensation matters.

 

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				ELECTION OF DIRECTORS

John E. McGlade

 

Director Since:       December 5, 2012           Committees:       Compensation       Governance           Age: 61		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly Chairman, President and Chief Executive Officer of Air Products and Chemicals, Inc.   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. McGlade was Chairman, President and Chief Executive Officer of Air Products and Chemicals, Inc., a global provider of atmospheric, process and specialty gases, from March 2008 until his retirement on July 1, 2014. He joined Air Products in 1976 and held various positions of increasing responsibility, including as Group Vice President, Chemicals Group, and President and Chief Operating Officer.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Bunge Limited (August 5, 2014 – present) Air Products and Chemicals, Inc. (2007 – 2014)   Mr. McGlade has strong leadership skills and extensive management, international and operating experience, including as Chief Executive Officer of Air Products. He has also had responsibility for the environment, health, safety and quality function during his career at Air Products. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations matters.

Michael J. Morell

 

Director Since:       January 7, 2014           Committees:       Audit       Corporate Responsibility       and Compliance           Age: 56		CURRENT PRINCIPAL OCCUPATION:   Chief Executive Officer and President, Morell Consulting. Formerly Deputy Director of the Central Intelligence Agency   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Morell retired from the Central Intelligence Agency in 2013 following a 33-year career, including serving as Deputy Director from May 2010 to August 2013 and as Director for Intelligence from May 2008 to April 2010. He also served as Acting Director on two occasions. Mr. Morell has received numerous intelligence and defense awards for his service to the United States.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   None     Mr. Morell has extensive leadership and management experience through his positions with the Central Intelligence Agency, a large and complex global government agency. He also possesses extensive knowledge of national security issues, such as cybersecurity, terrorism and political and economic instability, which directly impact global businesses. These experiences, combined with his strong critical thinking and problem solving skills, make Mr. Morell a valuable contributor to the Board of Directors.

 

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				ELECTION OF DIRECTORS

Roderick A. Palmore

 

Director Since:       August 7, 2012           Committees:       Finance       Governance (Chairman)           Age: 63		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly Executive Vice President, General Counsel, Chief Compliance and Risk Management Officer, and Secretary of General Mills, Inc.   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Palmore joined General Mills, a global manufacturer and marketer of food products, as Executive Vice President, General Counsel, Chief Compliance and Risk Management Officer, and Secretary in February 2008 and served in that capacity until his retirement on February 16, 2015. From 1996 to 2008, he worked for Sara Lee Corporation in a variety of legal leadership roles, ultimately becoming Executive Vice President, General Counsel and Secretary. Prior to 1996, he worked at the U.S. Department of Justice and in private practice.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   CBOE Holdings, Inc. (2000 – present) Express Scripts Holding Co. (September 10, 2014 – present)   In his role at General Mills, he was responsible for the company’s worldwide legal activities, corporate ethics, compliance, and corporate security. Through his experience as general counsel of consumer product public companies, in private practice and as an Assistant U.S. Attorney, Mr. Palmore has extensive experience in corporate governance and the legal issues facing Goodyear. In addition, his experience provides him with strong risk management skills. This broad business knowledge and public board experience, as well as his strong leadership skills, are valuable assets to the Board of Directors.

Stephanie A. Streeter

 

Director Since:       October 7, 2008           Committees:       Compensation (Chairman)       Governance           Age: 57		CURRENT PRINCIPAL OCCUPATION:   Chief Executive Officer of Libbey Inc.   DESCRIPTION OF BUSINESS EXPERIENCE:   Ms. Streeter joined Libbey Inc., a producer of glass tableware products, as Chief Executive Officer on August 1, 2011. Previously, Ms. Streeter was with Banta Corporation, a provider of printing and supply chain management services, serving as President and Chief Operating Officer beginning in January 2001, and was elected Chief Executive Officer in 2002 and Chairman in 2004. She served as Chairman, President and Chief Executive Officer of Banta until its acquisition by R.R. Donnelley & Sons in 2007. Ms. Streeter also spent 14 years with Avery Dennison Corporation in a variety of product and business management positions, including as Group Vice President of Worldwide Office Products from 1996 to 2000. Ms. Streeter was a member of the board of		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   Libbey Inc. (2011 – present) Kohl’s Corporation (2007 – present)   directors of the United States Olympic Committee from 2004 to 2009, where she also served as Acting Chief Executive Officer from March 2009 to March 2010. She also serves on the board of Catalyst, a nonprofit organization.   Ms. Streeter has extensive senior executive management experience. Her experiences as Chief Executive Officer of Libbey, as Chairman, President and Chief Executive Officer of Banta and at Avery Dennison provide Ms. Streeter with an understanding of the operations and performance of public companies. Ms. Streeter’s service on several public company and nonprofit boards of directors also provide us with important insights on practices across a variety of industries.

 

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				ELECTION OF DIRECTORS

Thomas H. Weidemeyer

 

Director Since:       December 9, 2004           Committees:       Corporate Responsibility       and Compliance       Finance           Age: 67		CURRENT PRINCIPAL OCCUPATION:   Retired. Formerly Senior Vice President and Chief Operating Officer of United Parcel Service, Inc.   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Weidemeyer served as Senior Vice President and Chief Operating Officer of United Parcel Service, Inc., a transportation and logistics company, from January 2001, and as President and Chief Operating Officer of UPS Airlines from July 1994, until his retirement in February 2004. Mr. Weidemeyer became Manager of the Americas International Operation of UPS in 1989, and in that capacity directed the development of the UPS delivery network throughout Central and South America. In 1990, he became Vice President and Airline Manager of UPS Airlines and in 1994 was elected its President and Chief Operating Officer. Mr. Weidemeyer was a director of United Parcel Service from 1998 to 2003.		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   NRG Energy, Inc. (2003 – present) Waste Management, Inc. (2005 – present)   Mr. Weidemeyer has over 40 years of management and executive leadership experience. His logistics, finance and international management experience provides us with valuable insights on our supply chain and financial management practices, as well as our overall business. His service on other boards of directors also provides us with perspectives on issues facing companies in different industries.

Michael R. Wessel

 

Director Since:       December 6, 2005           Committees:       Corporate Responsibility       and Compliance           Age: 55		CURRENT PRINCIPAL OCCUPATION:   President of The Wessel Group Incorporated   DESCRIPTION OF BUSINESS EXPERIENCE:   Mr. Wessel has served as President of The Wessel Group Incorporated, a government and political affairs consulting firm, since May 2006. Prior to founding The Wessel Group, he served as Senior Vice President of the Downey McGrath Group, a government affairs consulting firm, from March 1999 to December 2005 and as Executive Vice President from January 2006 to April 2006.   Mr. Wessel is an attorney with over 30 years of experience as an economic and international trade policy advisor in Washington, D.C. Mr. Wessel has acted as an advisor to Congressman Richard Gephardt, both in the U.S. House of Representatives and to his presidential campaigns in 1987-88 and 2003-04, to the Clinton/Gore Transition		OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2010:   None   Office in 1992 and 1993, and to Senator John Kerry’s presidential campaign in 2004. Mr. Wessel also serves as a Commissioner on the U.S.-China Economic and Security Review Commission, a position he has held since April 2001.   Mr. Wessel’s extensive experience with public policy matters and his government service, including as an advisor to former Majority Leader Gephardt and as an appointee on government commissions, provides us with valuable perspectives on public policy matters impacting trade, international economic affairs and other matters of importance to Goodyear.

 

 

Your Board of Directors unanimously recommends that shareholders vote FOR each of the nominees for director named in this Proxy Statement (Proposal 1).

 

 

 

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				PMT Insert

PROPOSAL 2 – ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

We are seeking your vote to approve, on an advisory (or non-binding) basis, the compensation of our named executive officers as disclosed in this Proxy Statement.

Our Compensation Discussion and Analysis (“CD&A”), which starts on page 24, describes our executive compensation program. We encourage you to read the CD&A before casting your vote.

The advisory resolution below, commonly known as a “say-on-pay” proposal, gives you the opportunity to express your views on our executive compensation program for our named executive officers. The “say-on-pay” proposal is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation policies, practices and plans described in this Proxy Statement.

The resolution is required by Section 14A of the Securities Exchange Act of 1934. The resolution is not intended to indicate your approval of the matters disclosed under the heading “Risks Related to Compensation Policies and Practices” or future “golden parachute” payments. We will seek shareholder approval of any “golden parachute” payments at the time of any transaction triggering such payments to the extent required by applicable law.

We ask you to vote “FOR” the following resolution which will be presented by the Board of Directors at the Annual Meeting:

“RESOLVED, that the shareholders of The Goodyear Tire & Rubber Company approve, on an advisory basis, the compensation of the named executive officers as disclosed in the Company’s Proxy Statement for the 2015 Annual Meeting of Shareholders.”

Although this proposal is an advisory vote that will not be binding on the Compensation Committee or the Board of Directors, the Compensation Committee will consider the results of this shareholder advisory vote and the changes, if any, to our executive compensation policies, practices and plans that may be warranted as a result of this vote. The Board of Directors has determined, consistent with the shareholders’ vote on the matter in 2011, to hold an advisory vote regarding the compensation of our named executive officers every year until the next vote on the frequency of such advisory votes, which is currently expected to occur at the 2017 Annual Meeting of Shareholders.

 

 

Your Board of Directors unanimously recommends that shareholders vote FOR the advisory resolution to approve the compensation of our named executive officers (Proposal 2).

 

 

 

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				PMT Insert

COMPENSATION DISCUSSION AND ANALYSIS TABLE OF CONTENTS

Introduction

This Compensation Discussion and Analysis describes the Company’s executive compensation philosophy and programs, focusing in particular on the Compensation Committee’s decisions about named executive officers (“NEOs”) in 2014.

OUR NEOS FOR 2014 ARE:

 

Richard J. Kramer		Chairman, Chief Executive Officer and President
Laura K. Thompson		Executive Vice President and Chief Financial Officer
Darren R. Wells		President, Europe, Middle East and Africa
Gregory L. Smith		Senior Vice President, Global Operations
David L. Bialosky		Senior Vice President, General Counsel and Secretary

Table of Contents

 

 

USE OF NON-GAAP FINANCIAL MEASURES

For additional information regarding segment operating income and free cash flow from operations, both non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, see Exhibit B to this Proxy Statement.

 

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COMPENSATION

DISCUSSION AND ANALYSIS

Executive Summary

RECORD SEGMENT OPERATING INCOME IN 2014   We delivered record segment operating income of $1.7 billion in 2014 – for the second consecutive year. We achieved these results despite experiencing volatile global industry conditions in 2014, including economic weakness in Europe, economic and political volatility in Latin America, and slowing growth in Asia. We also produced record segment operating income of $803 million in North America in 2014.   PERFORMANCE HIGHLIGHTS   The following summarizes key elements of the company’s performance in 2014.

 

 

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Executive Summary

 

KEY ACCOMPLISHMENTS IN 2014

 

 

Record Segment Operating Income Performance		• For the second year in a row, we delivered record segment operating income. Our 2014 segment operating income was $1.7 billion.
		• Operating income was also at record levels in North America – an improvement of $1.1 billion since 2009.
Strong Cash Flow		• We generated free cash flow from operations of $981 million in 2014.
Shareholder Return Program		• We increased our Common Stock dividend by 20% and our share repurchase program by $350 million in 2014, returning $293 million to our shareholders, comprised of $60 million of dividends and $233 million of share repurchases.
Addressed Legacy Pension Liabilities		• We fully funded and froze substantially all of our hourly U.S. pension plans.   • Combined with similar prior actions on our salaried U.S. pension plans, these actions substantially reduce a long-standing legacy liability that drove volatility in earnings and cash flows.

 

ALIGNMENT OF PAY AND PERFORMANCE

Goodyear’s executive compensation is strongly aligned to company performance and measurable financial metrics.

 

•

Target CEO pay is near the median of general industry survey data and our peer group

 

 

90% of our CEO’s pay opportunity is performance based and over 75% is tied to stock price

 

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Executive Summary

 

Our CEO’s realized pay shows strong alignment to our stock price

 

As a result of our operating performance, payouts under our annual incentive plan ranged from 122% to 134% of target for our named executive officers. In addition, the performance targets for the 2014 performance periods under our 2012-2014, 2013-2015 and 2014-2016 long-term awards were exceeded and payouts ranging from 125% to 193% of target were approved for the applicable periods, subject to continued service and a relative total shareholder return modifier (which we refer to as the “TSR modifier” and which is described in more detail on page 41). Our stock out-performed 62% of the companies in the S&P 500 during the three-year period ending December 31, 2014, resulting in a TSR modifier of 1.1 times.

ELEMENTS OF EXECUTIVE COMPENSATION

Compensation for NEOs is comprised of a mix of variable and fixed compensation that is strongly linked to company performance and targeted to the median of general industry survey data.

Following the changes we made for 2014 (which are discussed below under “2014 Program Adjustments”), the mix of performance metrics is as follows:

 

				Incentive Program		Financial Metrics		Weighting
ANNUAL INCENTIVES				Annual Performance Plan		NEW METRIC FOR 2014: Free Cash Flow from Operations			40	%
						EBIT			40	%
						Operating Drivers			20	%
LONG-TERM AWARDS				Performance-Based Awards (Paid out in Equity and Cash)		Net Income			50	%
						NEW METRIC FOR 2014: Cash Flow Return on Capital			50	%
				Stock Options

 

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				Executive Summary

We believe that these changes, together with our existing compensation practices, result in a compensation program that is consistent with our performance-based compensation philosophy and serves the long-term interests of our shareholders. That said, we will continue to seek feedback from our investors and consider ongoing enhancements to the program.

2014 SHAREHOLDER ENGAGEMENT

At our 2014 annual meeting, 90% of our voting shareholders approved our say on pay proposal.

We believe that it is important for us to communicate regularly with shareholders regarding areas of interest or concern. As part of that commitment and in an effort to continue to understand our investors’ perspective and thoughts regarding our executive compensation program, we requested the opportunity to meet many of our top shareholders and we ultimately held one-on-one conversations with shareholders representing approximately 41% of our outstanding Common Stock as of September 30, 2014.

Our outreach meetings gave us the chance to highlight the strong operating performance delivered by the Company over the past several years and to make clear our commitment to the alignment of pay and performance. We received positive feedback on the improvements we made to our disclosure in the 2014 Proxy Statement and the diversification of the metrics in our annual and long-term incentive plans. We also received suggestions for further improvements to our executive compensation program and related disclosures, including additional transparency surrounding our target setting process. All of the shareholder feedback and suggestions that we received were reported to the Compensation Committee and the Board of Directors for its consideration. For further insight on our target setting process, see “Target Setting” at page 35.

2014 PROGRAM ADJUSTMENTS

As a result of the investor feedback we received over the last few years and our own review process, our Compensation Committee made the following changes beginning in 2014:

KEY PROGRAM CHANGES FOR 2014

 

 

Enhancing Long-Term Alignment of Pay for Performance		•  Even Weighting Over Performance Period. Three-year performance cycle will be evenly weighted (1/3, 1/3, 1/3) instead of 50%, 30%, 20% (to balance awards across each year in the three-year performance cycle). We will continue to set targets at the beginning of the three-year period.
Diversifying Metrics Across Program		•  Short-Term. Changed annual incentive metric from “operating cash flow” to “free cash flow from operations” (a key management metric for business performance) to better link compensation to the underlying cash generation of our business.
		•  Long-Term. Changed long-term incentive metric from “total cash flow, net of debt” to “cash flow return on capital” (greater measurement of capital efficiency with long-term focus).

 

 

 

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				Executive Summary

COMPENSATION BEST PRACTICES

The Compensation Committee has adopted a number of best practices that are consistent with our performance-based compensation philosophy and serve the long-term interests of our shareholders:

 

 

Strong Link to TSR		Relative TSR modifier on all long-term performance-based awards
Dividend Policy		No dividends or dividend equivalents on unearned performance-based equity awards
No Repricing		No repricing of options without shareholder approval
No Additional Service Credit in Pension		No pension credit for newly hired executives to make up for service at prior employers. The company has not granted any pension credit since 2007.
Double-Trigger Change-in-Control		Double-trigger change-in-control provisions in our change-in-control plan and our equity compensation plans, and no walk-away rights
No Gross-Ups		No tax gross-ups in our change-in-control plan or for perquisites
Strong Stockholding and Retention Policies		Robust stockholding guidelines for officers and directors, including stock retention provisions following the exercise of stock options or the vesting of other stock-based awards
No Hedging or Pledging		Hedging and pledging of our Common Stock by officers, directors and employees is prohibited
Clawback Policy		Robust clawback policy in place
Independent Committee		Compensation Committee consists only of independent Board members
Leading Independent Consultant		Engaged a leading independent compensation consultant to assist the Compensation Committee and Board in determining executive compensation and evaluating program design

 

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Compensation Philosophy

Compensation Philosophy

The following core principles form the foundation of the compensation program for our executives, including the named executive officers:

 

 

FIRST, compensation programs should motivate our executives to take actions that are aligned with our short- and long-term strategic objectives, and appropriately balance risk versus potential reward.				SECOND, as executives move to a greater level of responsibility, the percentage of their pay based on performance should increase to ensure the highest level of accountability to shareholders.
THIRD, performance pay should offer an opportunity for above average compensation when our performance exceeds our goals balanced by the risk of below average compensation when it does not.				FOURTH, the percentage of total compensation paid in the form of equity should also increase as executives have increasing responsibility for corporate performance, thereby more closely aligning their interests with those of our shareholders.

Components of Executive Compensation

We provide executive compensation and benefits that are market-competitive in which a large portion of the total opportunity is variable and tied to our performance and changes in shareholder value over a multi-year period. The key components of compensation provided to our executive officers and how each supports our compensation objectives are presented in the following table:

 

		Description		Objectives
Annual Compensation
Base Salary		Annual cash compensation		•  Provide an appropriate level of fixed compensation necessary to attract and retain employees   •  Recognize and reward skills, competencies, experience, leadership and individual contribution
Annual Incentive Plans		Annual cash incentive based on corporate performance (corporate and/or operating unit performance measures) and individual performance		Link annual cash compensation to attainment of key short-term performance goals:   •  Across total company and operating units as measured primarily by achievement of annual operating goals   •  By the individual as measured by achievement of specific strategic goals and demonstrated leadership traits

 

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				Components of Executive Compensation

		Description		Objectives
Long-Term Incentive Compensation
Stock Options		Provides opportunity to purchase stock at the grant date fair market value over a ten-year period. Results in value only if stock price increases		•  Link realized compensation over long-term to appreciation in stock price   •  Facilitate retention   •  Build executive stock ownership   •  Align interests of management with those of shareholders
Performance-Based Awards		Long-term incentive program with award payouts tied to achievement of corporate goals over a three-year period, with performance targets for each year of the three-year period established on the grant date, subject to a relative total shareholder return modifier over that three-year period   Payable in shares of Common Stock and cash		•  Link multi-year compensation to performance against key operational goals over a three-year period, as well as changes in share price on both an absolute and relative basis   •  Facilitate retention   •  Align interests of management with those of shareholders
Retirement Programs
Qualified Retirement Plans		Post-retirement benefits		•  Necessary to attract and retain employees
Supplementary Pension Plan and Excess Benefit Plans		Additional retirement benefits		•  Facilitate attraction and retention of executive officers   •  Provide for retirement replacement income, thereby facilitating an orderly succession of talent
Other Executive Benefits
Perquisites		Home security systems Tire program Financial planning and tax preparation services Annual physical exams Limited use of company aircraft		•  Assure protection of officers   •  Enable officers to focus on Company business with minimal disruption
Other Benefits		Medical, welfare and other benefits		•  Necessary to attract and retain employees

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Compensation Decision-Making

Compensation Decision-Making

The Compensation Committee undertakes ongoing review of our executive compensation policies, practices and plans to determine whether they are consistent with our compensation philosophy and objectives, and whether they need to be modified in light of changes in our business or the markets in general. The Compensation Committee meets periodically with the CEO to review compensation policies and specific levels of compensation paid to officers and other key personnel, and reports and makes recommendations to the Board regarding executive compensation policies and programs. In addition, the CEO annually makes recommendations to the Compensation Committee regarding salary adjustments and the setting of annual and long-term incentive targets and awards for officers other than himself, including the other named executive officers. The Compensation Committee also obtains feedback, advice and recommendations on our compensation program from its independent compensation consultant, F.W. Cook. The Compensation Committee also reviews Company performance, compensation practices of its peers, compensation surveys and other materials regarding executive compensation.

In determining the compensation of a named executive officer, the Compensation Committee considers various factors, including:

 

•

Company performance against corporate and operating unit objectives,

 

•

The Company’s relative shareholder return,

 

•

The compensation of officers with similar responsibilities at comparable companies,

 

•

Individual performance,

 

•

Current and future responsibilities,

 

•

Retention considerations,

 

•

The awards given to the named executive officer in past years, and

 

•

The relationship between the compensation to be received by the officer and the compensation to be received by the other named executive officers (which we refer to as “internal pay equity”), including comparing the relationship to that found at comparable companies.

We generally target base salaries for our officers below median market rates, in the aggregate, consistent with the requirements of our master labor agreement with the United Steelworkers (the “USW Agreement”), and we target annual and long-term incentive compensation at rates that, when added to base salaries, result in median market levels of target primary compensation, on average. The actual positioning of target compensation relative to the median varies based on each executive’s experience and skill set, and generally results in executives who are new in their role being placed lower in the range and those with more experience being placed higher in the range. We emphasize variable compensation because it minimizes fixed expense associated with salary and enables total compensation to fluctuate directly with performance against operating goals and changes in share price. This approach aligns overall costs with performance and provides executives with a leveraged and attractive compensation opportunity that varies based on results.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Compensation Decision-Making

The Compensation Committee generally sets “primary compensation,” which we define to include salary, annual cash incentives and long-term compensation, for the CEO and the other named executive officers as follows:

 

Long-term compensation is delivered through grants of long-term performance-based incentive awards that are payable in shares of Common Stock and cash, and stock options. The mix of long-term compensation between cash-based long-term incentives, performance shares and stock options is based, in part, on the market value of our Common Stock, the number of shares available for grant under our shareholder-approved equity compensation plan, and considerations relating to managing the dilutive effect of share-based awards. These factors impact our ability to use stock-based compensation to deliver a specified level of targeted compensation opportunity.

For further information regarding the Compensation Committee and its authority and responsibilities, see “Corporate Governance Principles and Board Matters – Compensation Committee” at page 9.

Role of Compensation Consultant

The Compensation Committee has the authority to retain outside advisors, including compensation consultants, to assist it in evaluating actual and proposed compensation for our officers. During 2014, the Compensation Committee retained F.W. Cook as its independent compensation consultant.

As part of its engagement, F.W. Cook reviewed our executive compensation peer group and conducted a competitive analysis of compensation for the named executive officers as well as our operational and stock price performance relative to the peer group. F.W. Cook also assisted the Committee with a variety of other issues, including setting CEO compensation, compensation related to leadership succession activities, the design and establishment of performance goals under our variable incentive plans, and reviewing our compensation risk analysis.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Role of Compensation Consultant

In addition, F.W. Cook reviewed and provided recommendations regarding our non-management director compensation program and made a presentation to the full Board on trends and regulatory developments in executive compensation. A representative of F.W. Cook regularly attends Compensation Committee meetings. F.W. Cook works with Goodyear management only under the direction of the Compensation Committee and does not provide any other advice or consulting services to the Company.

P eer Group Benchmarking of Primary Compensation

As noted above, the Compensation Committee generally targets primary compensation levels for officers at median market rates. For these purposes, the Compensation Committee has determined market rates by considering two sources:

 

•

Proxy statements and other public filings of 17 peer companies; and

 

•

Broad-based compensation surveys published from time to time by national human resources consulting firms.

 

This peer group was selected because the companies, as a whole, represent organizations of comparable size and complexity with which we compete for executive talent. The peer group includes companies in similar industries with comparable business models and global reach. It does not include other companies in the tire industry because no other U.S.-based tire company is similar in size and complexity to us, and non-U.S.-based tire companies do not publish comparable compensation information.

 

The Compensation Committee strongly believes that performance should be the primary basis on which compensation decisions are made. At the same time, the Compensation Committee believes that our peer group should reflect the fact that our executive officers are responsible for managing a larger and more complex enterprise relative to that of many other publicly traded companies with a larger market capitalization. Accordingly, for 2014 compensation decisions, the Compensation Committee reviewed the composition of the peer group using the following criteria:

 

(1)	companies with which we compete for executive talent;

 

(2)	size, including revenues, net income, total assets, market capitalization and enterprise value;

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Peer Group Benchmarking of Primary Compensation

 

(3)	global manufacturing focus;

 

(4)	industry focus, particularly companies in the automotive industry;

 

(5)	consumer branded product companies; and

 

(6)	number of employees.

Our peer group had annual revenues – the size criteria most strongly correlated to compensation – ranging from $11.2 billion to $55.2 billion and median revenues of $18.1 billion (for 2014, we had revenues of $18.1 billion), and had over 70% of our selected peer companies in common with each of the peer groups constructed by two leading proxy advisory firms.

As a result of its review, the Compensation Committee did not make any changes to our peer group for 2014 compensation decisions. The Compensation Committee may make changes in the peer group from time to time based on the criteria described above or other relevant factors.

Data with respect to comparable elements of primary compensation is compiled for the peer group of companies described above from available sources, including, in most cases, the most recently available annual proxy statements and other SEC filings that address executive compensation matters.

Target Setting

The Compensation Committee set the performance targets for our 2014 executive compensation program in February 2014. The Compensation Committee believes that the performance targets it established are rigorous and reflect a significant stretch for the Company. The performance targets require us to generate significant organic earnings growth and free cash flow over the next three years. The achievement of the performance targets would enable us to fund our balanced capital allocation plan, and would mean we had successfully met the significant challenges posed by volatile global economic conditions, were a stronger competitor and were poised for future growth.

The Compensation Committee considered the following factors when establishing the performance targets, including the related threshold and maximum target levels:

 

•

Corporate strategy

 

•

Annual and long-term operating plans

 

•

Publicly disclosed financial targets and guidance

 

•

Performance history

 

•

Macro-economic and tire industry environment

 

•

Input from F.W. Cook and management

 

•

Difficulty of the targets in light of the above factors

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Target Setting

The chart below illustrates how our 2014 performance targets corresponded with our corporate strategy, annual and long-term operating plans, publicly announced financial targets and performance history.

 

The performance targets established under our annual and long-term incentive plans would be achieved, at the target performance level, if we successfully executed our operating plan for 2014 and the 2014-2016 performance cycle.

ANNUAL COMPENSATION TARGETS

The 2014 Corporate EBIT target represented a 12% increase over our 2013 actual results, consistent with our goal to grow segment operating income 10% to 15% annually from 2014 to 2016. The 2014 free cash flow from operations target corresponded with our goal to generate cumulative free cash flow from operations of $2.1 to $2.3 billion from 2014 to 2016.

The successful management of our business requires us to carefully balance the following items: inventories, accounts receivable and accounts payable, and cash. Our cash flow is impacted by changes in our accounts receivable, inventories and accounts payable, which we define as our working capital.

While our 2014 target for free cash flow from operations represented a decrease from our 2013 actual results, this decline is more than explained by the changes we planned in working capital for 2014. In 2014, working capital was expected to be neither a source nor use of cash since we were operating at historically low levels of working capital, and believed that further reductions in working capital would adversely impact our ability to timely fulfill customer orders. In contrast, our cash flow from working capital reductions in 2013 was $415 million. As such, our 2014 target of $800 million represented a 36% increase over 2013 actual results when taking into account this anticipated change. In setting the free cash flow from operations target, the Compensation Committee also considered our planned capital expenditures of $900 million to $1.0 billion, which enable us to take advantage of future growth opportunities, interest expense of $430 million to $455 million, and forecasted tax payments.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Target Setting

LONG-TERM COMPENSATION TARGETS

The 2014 net income target represented a 2% increase over our 2013 actual results and was also based on our goal to grow segment operating income 10% to 15% annually from 2014 to 2016. The rate of increase in net income was expected to be less than that of segment operating income primarily due to higher expected taxes and minority interest in our European operations, higher finance expense due to higher average debt levels and interest rates, and a reduction in other income.

The 2014 target for cash flow return on capital reflected the working capital considerations and expected uses of cash described above. In addition, the 2014 target also reflected an expected increase in average net fixed assets driven by investments in our plants.

Annual Compensation

2014 BASE SALARY DECISIONS

 

Name		2014 Base Salary1				% Increase
Kramer		$	1,100,000				4.8%
Thompson			525,000				10.5
Wells			615,000				2.5
Smith			550,000				4.8
Bialosky			555,000				2.8

 

1	Base salary increases were effective May 1, 2014.

Ms. Thompson’s base salary increased by 10.5% to bring her somewhat closer to median market rates and to provide for greater internal pay equity with other senior executive officers following her promotion to Executive Vice President and Chief Financial Officer in December 2013. Salaries of the named executive officers in 2014 were an average of 9% lower than the median indicated by the salary guidelines described above, consistent with the USW Agreement.

2014 ANNUAL CASH INCENTIVE PAYOUTS

For 2014, the performance objectives under our annual incentive plans were as follows:

Corporate Officers

 

 

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				Annual Compensation

Officers of Our Four Operating Units

 

We believe these weightings hold our operating unit executives most accountable for financial results in the areas where they have the most control and influence, but also motivate them to work cooperatively with other operating units to maximize results for the entire Company.

The Compensation Committee used Corporate EBIT and Operating Unit EBIT to measure our results of operations and free cash flow from operations to measure our ability to generate cash, which enables us to provide funding for dividends and share repurchases, debt repayments, pension funding and restructuring actions. The Compensation Committee also emphasized the balance between profitability and cash generation by equally weighting EBIT and free cash flow from operations.

“EBIT,” as defined in our annual incentive plans, means the Company’s net sales, less cost of goods sold and selling, administrative and general expenses, excluding the effects of restructuring charges, accelerated depreciation, certain pension curtailment and settlement charges, discontinued operations, extraordinary items, other unusual or non-recurring items, and the cumulative effect of tax or accounting changes. “Free cash flow from operations,” as defined in our annual incentive plans, means cash flow from operating activities before pension contributions and direct payments and rationalization payments, less capital expenditures.

In 2014, the Compensation Committee established the following operating drivers that were consistent with our annual operating plan and are tied to the achievement of important strategic objectives that drive the success of our business:

 

Strategic Objective		Operating Driver
Market-Back Innovation Excellence Sales & Marketing Excellence		New Product Vitality – Meet goals for the proportion of branded replacement tire sales volume from products launched in the last four years.
Operational Excellence		Total Delivered Cost Productivity – Achieve $200 million in cost reductions from improvements in labor, overhead and utilities cost, raw material cost, and transportation and warehousing cost productivity.
Enabling Investments		Working Capital Excellence – Achieve an average ratio of working capital to net sales of 13.0%.

 

 

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Annual Compensation

Overall Company performance is relevant for determining the annual incentive payments for all named executive officers. Additionally, EMEA’s performance is relevant for determining the annual incentive payment for Mr. Wells. In February 2015, the Compensation Committee reviewed actual results for 2014 with respect to achievement of the company-wide and operating unit performance objectives. The table below shows the performance objectives, actual results for 2014 and corresponding payout percentages under our annual incentive plans.

 

		Payout Under Annual Incentive Plans
		50%				100%				200%				Actual Results				Payout Percentage
Overall Company Performance (2014):
Corporate EBIT		$	1,280 million			$	1,600 million			$	1,840 million			$	1,554 million				93%
Free cash flow from operations		$	600 million			$	800 million			$	1,100 million			$	981 million				160%

EMEA’s Operating Unit EBIT payout percentage was 118% of target and its free cash flow from operations payout percentage was 177% of target.

The Committee also assessed whether our performance against the operating drivers was below, at or above target. The Committee determined that we exceeded two of the three operating drivers. In reaching that conclusion, the Committee considered, among other things, the following achievements by the Company and the contributions of each operating unit to those achievements:

 

•

Exceeding our goal for the proportion of branded replacement tire sales volume coming from products launched in the last four years by 6%.

 

•

Achieving $201 million of total delivered cost productivity savings versus a goal of $200 million.

We achieved an average ratio of working capital to net sales of 13.5%, which fell short of our goal of 13.0% by a small amount, while still reducing year-end working capital levels.

Since the overall company and EMEA operating unit performance targets were substantially met or exceeded, the Committee determined that the operating driver performance should mirror the calculated performance using the financial performance measures. In reaching these decisions, the Committee considered whether the performance under the financial performance measures and the operating drivers were appropriately aligned, and concluded that they were.

The Compensation Committee reviewed its assessment of the CEO’s performance and the CEO’s assessment of each of the other named executive officer’s performance during 2014, and their respective contributions to our results. In particular, the Compensation Committee considered the CEO’s contributions to the achievement of:

 

•

Record segment operating income.

 

•

Continued strong cash flow performance.

 

•

Continued progress on operational excellence initiatives, including $201 million of total delivered cost productivity savings.

 

•

Continued strong momentum in innovation.

 

•

Updating our capital allocation plan, including significant increases in our shareholder return program.

 

•

Fully funding our hourly U.S. pension plans.

 

•

Continued strengthening of our leadership team and pipeline.

 

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				Annual Compensation

The CEO and the Compensation Committee also considered the contributions of the other named executive officers in furthering the Company’s strategic initiatives described in the preceding bullet points.

The Compensation Committee then established an aggregate incentive pool for all officers, and determined the payout for each officer. In this process, the officer’s target incentive amount is first multiplied by the same percentage used to determine the applicable portion of the aggregate incentive pool. (For example, if the portion of the aggregate incentive pool applicable to such officer, e.g., overall company, is funded at 150% of the aggregate target incentive amount, the officer’s individual payout initially would be set at 150% of his individual incentive target.) Then, the CEO assesses the officer’s individual performance and contributions towards Company goals and makes his recommendations with respect to individual payout amounts to the Compensation Committee, which considers the CEO’s recommendations and determines the final payouts. The Compensation Committee undertakes the same process for the CEO and makes the determination as to the final payout amount for the CEO. Officers can earn between 0% and 200% of their target incentive, but the total payout for all officers may not exceed the aggregate incentive pool.

The Compensation Committee, consistent with the CEO’s recommendation, decided to reduce the annual incentive payout percentage for each named executive officer by 5% since tire unit volume growth was less than contemplated by our annual operating plan and our initial publicly disclosed guidance.

The Compensation Committee approved the following awards for our named executive officers under our annual incentive plans:

 

Name		Target Award ($)				Actual Award ($)				Actual Award as a % of Target Award
Kramer		$	1,650,000			$	2,013,000				122%
Thompson			498,750				608,475				122%
Wells			584,250				782,895				134%
Smith			495,000				603,900				122%
Bialosky			444,000				541,680				122%

Long-Term Compensation

2014 GRANTS OF PERFORMANCE-BASED INCENTIVES

The Compensation Committee granted long-term performance-based incentives in February 2014 that have the following characteristics:

 

•

The awards will be payable 23% in shares of Common Stock and 77% in cash.

 

•

The payout is based on results over a three-year performance cycle, with performance targets for each year of the three-year period established on the grant date in order to provide greater accountability for long-term results, weighted one-third for each year in the three-year performance cycle.

 

•

The payout can range from 0% to 200% for the 2014-2016 performance cycle based on actual results (and assuming the recipient remains continuously employed by us through the entire three-year period).

 

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				Long-Term Compensation

 

•

The payout can increase or decrease up to 20% (up to a maximum payout of 200%) based on our total shareholder return versus the S&P 500 over the three-year period ending December 31, 2016.

The performance criteria for the 2014, 2015 and 2016 performance periods for the 2014-2016 performance cycle are, consistent with our strategic plan, based 50% on net income and 50% on cash flow return on capital, providing a balanced emphasis on profitability and capital efficiency. Results will be based on our consolidated performance, with no award tied to business unit performance. In this manner, the plan balances performance measures used under our annual incentive plans and reinforces the need for teamwork among executives. Net income is used as a measure to focus on improvement in profitability. Cash flow return on capital is an efficiency metric that measures how much return is generated in proportion to the investment in the business in terms of plant, property and equipment and working capital.

“Net income,” as defined in our long-term incentive plans, means the Company’s net income, excluding charges for restructurings, accelerated depreciation, and the cumulative effect of accounting changes. Our “net income” targets and results also exclude (1) the net foreign currency losses resulting from Venezuelan currency changes and (2) the impact of the release of the U.S. tax valuation allowance. Our 2014 “net income” for purposes of our long-term incentive plans was calculated as follows:

 

Goodyear net income (as reported)		$	2,452
Restructuring charges			70
Net foreign currency losses due to Venezuelan currency changes			209
Release of U.S. tax valuation allowance			(2,048	)
Net income (for compensation plans)		$	683

“Cash flow return on capital,” as defined in our long-term incentive plans, means free cash flow from operations (as defined for purposes of our annual incentive plan) divided by the sum of average net fixed assets and average working capital.

The TSR modifier measures the relative performance of our Common Stock versus the S&P 500 over the three-year performance cycle of our long-term incentive awards, and is calculated based on the trailing two-month average closing price for our Common Stock and the S&P 500 (as in existence at the end of the period), assuming the reinvestment of dividends. The TSR modifier will cause the payout of our long-term incentive awards to increase or decrease up to 20% (up to a maximum payout of 200%) as follows:

 

Goodyear Common Stock vs. S&P 5001		TSR Modifier
³ 75th Percentile		1.2 times
= 50th Percentile		1.0 times
£ 25th Percentile		0.8 times

 

1	Results between these performance levels will be interpolated.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Long-Term Compensation

The table below shows the aggregate value of the long-term performance-based incentives granted to each of our named executive officers for the 2014-2016 performance cycle at the target award opportunity, as well as the amount payable in shares of Common Stock and cash.

 

Name		Aggregate Target Award ($)1				Portion Payable in Shares (# of Shares)				Portion Payable in Cash ($)
Kramer		$	6,287,796				49,924			$	4,840,000
Thompson			714,517				5,673				550,000
Wells			1,429,034				11,346				1,100,000
Smith			1,141,785				9,065				878,900
Bialosky			1,057,484				8,396				814,000

 

1	Reflects the target amount of the award opportunity for the cash portion of the award plus the grant date fair value for the equity portion.

PERFORMANCE FOR THE 2014 PERFORMANCE PERIOD

The table below shows the performance goals, actual results and payout percentages for the 2014 performance period applicable to the 2012-2014, 2013-2015 and 2014-2016 performance cycles.

2014 PERFORMANCE PERIOD

 

Net Income

Performance Cycle

Threshold

Target

Maximum

Actual Results

Payout Percentage

2012-20141

$

230 million

$

610 million

$

745 million

$

683 million

154%

2013-20152

240 million

550 million

705 million

186%

2014-20163

485 million

750 million

940 million

87%

 

Total Cash Flow, Net of Debt

Performance Cycle

Threshold

Target

Maximum

Actual Results

Payout Percentage

2012-20141

$

570 million

$

700 million

$

970 million

$

978 million

200%

2013-20152

300 million

500 million

700 million

200%

 

		Cash Flow Return on Capital
Performance Cycle		Threshold				Target				Maximum				Actual Results				Payout Percentage
2014-20163			6.1	%			8.1	%			11.1	%			10.0	%			163	%

 

1	For the 2012-2014 awards, each year was weighted 50%, 30%, 20% (2014 = 20%), goals were set on the grant date in February 2012 and the maximum payout was 200% of the target award opportunity.

 

2	For the 2013-2015 awards, each year was weighted 50%, 30%, 20% (2014 = 30%), goals were set on the grant date in February 2013 and the maximum payout was 200% of the target award opportunity.

 

3	For the 2014-2016 awards, each year was weighted evenly (33%), goals were set on the grant date in February 2014 and the maximum payout was 200% of the target award opportunity.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Long-Term Compensation

“Total cash flow, net of debt,” as defined in our long-term incentive plans, means cash flow from operating and investing activities, each excluding foreign currency exchange, less the change in restricted cash, dividends paid to minority interests in subsidiaries, cash payments related to restructuring actions and pension funding, and the cumulative effect of accounting changes. Our “total cash flow, net of debt” targets and results also exclude the impact of devaluations of the Venezuelan currency.

In 2014, we faced a number of challenges and successfully addressed those challenges, as discussed above under “Executive Summary.” As a result, we exceeded our cash flow return on capital target for the 2014 performance period due to our superior free cash flow performance relative to our investments in the business, and fell short of our net income target for the 2014 performance period primarily due to lower volume globally, economic and political volatility in Latin America, slowing growth in Asia, and a stronger U.S. dollar globally.

Based on the results during the 2014 performance period, the Compensation Committee approved earnings on the long-term incentive awards for such period in an amount equal to 177% of the target amount for 2012-2014 awards, 193% for 2013-2015 awards and 125% for 2014-2016 awards. The payout of these amounts is contingent upon the named executive officer’s continued service during the related three-year performance cycle, except in the case of certain events, such as retirement, death, disability or severance following a change-in-control, and is subject to a three-year relative total shareholder return modifier.

The table below shows amounts earned by each of the named executive officers in respect of their long-term incentive grants for the 2014 performance period with respect to their 2012-2014 awards, which represents 20% of the three-year target award opportunity:

 

Name		Aggregate Target Award ($)				Portion of Actual Award Payable in Cash ($)1				Portion of Actual Award Payable in Shares (# of Shares)1
Kramer		$	1,057,290			$	1,593,000				20,516
Thompson			56,386				84,960				1,094
Wells			248,819				374,886				4,829
Smith			216,689				328,512				4,055
Bialosky			203,498				308,334				3,821

 

1	Payable subject to a three-year relative total shareholder return modifier. See “Impact of TSR Modifier and Payout of 2012-2014 Long-Term Incentive Awards” below.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Long-Term Compensation

The table below shows amounts earned by each of the named executive officers in respect of their long-term incentive grants for the 2014 performance period with respect to their 2013-2015 awards, which represents 30% of the three-year target award opportunity:

 

Name		Aggregate Target Award ($)				Portion of Actual Award Payable in Cash ($)1				Portion of Actual Award Payable in Shares (# of Shares)1
Kramer		$	1,861,627			$	3,057,120				39,254
Thompson			204,147				347,400				3,414
Wells			421,684				694,800				8,721
Smith			338,009				555,068				7,127
Bialosky			313,097				514,152				6,602

 

1	Payable contingent on continued service through December 31, 2015 and subject to a three-year relative total shareholder return modifier.

The table below shows amounts earned by each of the named executive officers in respect of their long-term incentive grants for the 2014 performance period with respect to their 2014-2016 awards, which represents one-third of the three-year target award opportunity:

 

Name		Aggregate Target Award ($)				Portion of Actual Award Payable in Cash ($)1				Portion of Actual Award Payable in Shares (# of Shares)1
Kramer		$	2,096,018			$	2,016,750				20,802
Thompson			238,239				229,250				2,363
Wells			476,378				458,375				4,727
Smith			380,638				366,250				3,777
Bialosky			352,571				339,250				3,498

 

1	Payable contingent on continued service through December 31, 2016 and subject to a three-year relative total shareholder return modifier.

IMPACT OF TSR MODIFIER AND PAYOUT OF 2012 – 2014 LONG-TERM INCENTIVE AWARDS

Our stock out-performed 62% of the companies in the S&P 500 during the three-year period ending December 31, 2014, resulting in a TSR modifier of 1.1 times. See page 41 for more information on the calculation of the TSR modifier.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Long-Term Compensation

The Compensation Committee approved the payout of shares of Common Stock and cash to the named executive officers with respect to the 2012-2014 performance cycle as follows.

 

		Cash Payout
Name		2012 Performance Period1				2013 Performance Period2				2014 Performance Period				Impact of TSR Modifier				Total Payout of 2012-2014 Awards
Kramer		$	3,735,000			$	2,700,000			$	1,593,000			$	792,000			$	8,820,000
Thompson			199,200				144,000				84,960				42,240				470,400
Wells			879,302				635,600				374,886				186,440				2,076,228
Smith			770,406				556,800				328,512				163,358				1,819,076
Bialosky			723,262				522,800				308,334				153,352				1,707,748
		Shares Payout
Name		2012 Performance Period1 (# of Shares)				2013 Performance Period2 (# of Shares)				2014 Performance Period (# of Shares)				Impact of TSR Modifier (# of Shares)				Total Payout of 2012-2014 Awards (# of Shares)
Kramer			48,106				34,776				20,516				10,201				113,599
Thompson			2,566				1,854				1,094				544				6,058
Wells			11,324				8,186				4,829				2,401				26,740
Smith			9,506				6,872				4,055				2,017				22,450
Bialosky			8,959				6,476				3,821				1,900				21,156

 

1	Previously reported in 2012 Summary Compensation Table and Proxy Statement dated March 18, 2013.

 

2	Previously reported in 2013 Summary Compensation Table and Proxy Statement dated March  14, 2014.

2014 STOCK OPTION GRANTS

Stock options granted in 2014 have the following terms:

 

•

options vest in equal, annual installments over a four-year period;

 

•

options have a ten-year term; and

 

•

the exercise price is equal to the closing market price of our Common Stock on the date of grant.

All options granted to named executive officers during 2014 were non-qualified stock options. The portion of long-term compensation provided in the form of stock option grants each year is determined based on the number of available options under our equity compensation plans, as well as market data on long term-compensation. We use a Black-Scholes valuation model to determine the number of stock options needed to provide the desired value consistent with overall median market compensation.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Long-Term Compensation

The table below shows the aggregate grant date fair value and the number of stock options granted to each of our named executive officers in 2014.

 

Name		Aggregate Grant Date Fair Value ($)				Number of Stock Options (#)
Kramer		$	2,639,994				221,105
Thompson			299,993				25,125
Wells			599,997				50,251
Smith			479,391				40,150
Bialosky			443,989				37,185

Retirement and Other Benefits

RETIREMENT BENEFITS

We provide our named executive officers with retirement benefits under both tax-qualified and non-qualified retirement plans. Tax-qualified plan benefits are pursuant to a defined benefit pension plan, the Goodyear Salaried Pension Plan (the “Salaried Plan”), which was frozen effective December 31, 2008, and a defined contribution plan, the Goodyear Employee Savings Plan for Salaried Employees (the “Savings Plan”). Non-qualified plan benefits are pursuant to an unfunded defined benefit plan, the Goodyear Supplementary Pension Plan (the “Supplementary Plan”). We also maintain a non-qualified unfunded defined benefit Excess Benefit Plan, which was also frozen effective December 31, 2008, that pays an additional pension benefit over that paid from the Salaried Plan if a participant does not meet the eligibility requirements of the Supplementary Plan. For all employees who do not meet the eligibility requirements of the Supplementary Plan, there is also a corresponding non-qualified defined contribution Excess Benefit Plan that mirrors the retirement contributions feature of the Savings Plan.

None of the named executive officers, other than Ms. Thompson, are currently eligible to receive a benefit under the Supplementary Plan because they have not met the age and service requirements of the Supplementary Plan. Messrs. Kramer and Wells and Ms. Thompson will receive benefits from the frozen Salaried Plan, and Messrs. Kramer and Wells will receive benefits from the frozen defined benefit Excess Benefit Plan upon termination prior to retirement eligibility. Messrs. Smith and Bialosky are not eligible to participate in the Salaried Plan or the defined benefit Excess Benefit Plan. Participants in the Savings Plan, including all of the named executive officers, are currently eligible to receive Company matching contributions and retirement contributions.

The Supplementary Plan provides additional pension benefits to officers and certain other key individuals identified by the Compensation Committee. All of the named executive officers participate in the Supplementary Plan. The Committee believes supplemental executive retirement plans such as the Supplementary Plan are an important part of executive compensation and are utilized by many large companies that compete with the Company for executive talent. Retirement benefits, including those provided through a supplemental executive retirement plan, are essential to attracting, motivating and retaining talented

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Retirement and Other Benefits

executives with a history of leadership and to providing retirement replacement income. Retirement benefits are an important factor in an executive’s decision to accept or reject a new position. The Compensation Committee has adopted a policy prohibiting the grant of additional service credit in the Supplementary Plan for newly hired officers and other key employees.

For more information regarding the terms of these plans and the named executive officers’ accrued benefits under these plans, see “Defined Contribution Plan Benefits” at page 58 and “Pension Benefits” at page 58.

SEVERANCE AND CHANGE-IN-CONTROL BENEFITS

Our Executive Severance and Change in Control Plan (the “Executive Severance Plan”) provides for the payment of severance benefits to our officers, including all of the named executive officers, if their employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The Executive Severance Plan does not provide for any excise tax gross-ups or walk-away rights.

The Executive Severance Plan is designed to attract, retain and motivate officers, provide for stability and continuity in the event of an actual or threatened change-in-control, and ensure that our officers are able to devote their full time and attention to the Company’s operations in the event of an actual or threatened change-in-control.

The Executive Severance Plan and the related change-in-control triggers (commonly referred to as “double triggers”) generally provide for the payment of severance benefits if employment is terminated under certain circumstances during certain periods before or within two years following a change-in-control of the Company. The change-in-control triggers in our equity compensation plans are substantially similar to those in the Executive Severance Plan. We selected the specific change-in-control triggers used in the Executive Severance Plan and our equity compensation plans, such as the acquisition of 20% or more of Goodyear’s Common Stock, a significant change in the composition of the Board of Directors or the acquisition of actual control of Goodyear, based upon our review of market practices, including provisions included in similar agreements of other public companies. Based upon that review, we determined that the terms and conditions of the Executive Severance Plan, including the specific change-in-control triggers were consistent with market practices.

The Executive Severance Plan also provides severance benefits to our officers, including each of the named executive officers, if their employment is terminated by us other than for Cause (as defined in the Executive Severance Plan), death or disability, and other than in connection with a change-in-control.

To be eligible to receive benefits under the Executive Severance Plan, an officer must execute a release and agree, among other things, to certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.

The Compensation Committee believes that our severance benefits are in the best interests of the Company and our shareholders, are a necessary component of a competitive compensation program, and are in line with severance benefits in place at other companies.

For additional information regarding the terms of the Executive Severance Plan and benefits payable under that plan, see “Potential Payments Upon Termination or Change-in-Control” at page 63.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Retirement and Other Benefits

PERQUISITES

We provide certain executive officers, including our named executive officers, with limited personal benefits and perquisites, as described below and in footnote 5 to the Summary Compensation Table at page 53. The Compensation Committee has reviewed and approved the perquisites described below. The Compensation Committee recognizes that these perquisites are an important factor in protecting our executive officers and in enabling them to focus on our business with minimal disruption. We do not provide any tax reimbursements to our executive officers for any of the perquisites we provide them.

Home Security Systems. We pay for the cost of home security systems for a limited number of executive officers in order to enhance their safety and protect our investment in them. We cover the cost of installation, monitoring and maintenance for these systems.

Use of Company Aircraft. In limited circumstances, executive officers are permitted to use our company aircraft for personal travel.

Tire Program. We offer our executive officers and Board members the opportunity to receive up to two sets of tires per year at our expense, including the cost of tires, mounting, balancing and disposal fees.

Financial Planning and Tax Preparation Services. We offer financial assistance to our executive officers to help them cover the cost of financial planning and tax preparation services. In providing this benefit, we seek to alleviate our executives’ concern regarding personal financial planning so that they may devote their full attention to our business. The maximum annual cost to the Company under this program is $9,000 per officer.

Club Memberships. We pay the annual dues for a corporate club membership that is available to Mr. Kramer. None of the other named executive officers utilize this corporate club membership. The membership is intended to be used primarily for business purposes, although members may use the club for personal purposes so long as they pay all incremental costs, other than the annual dues, related to that personal use.

Annual Physical Exams. We strongly encourage our executive officers to have an annual comprehensive physical examination which we pay for in order to enhance their physical well-being and protect our investment in them.

EXECUTIVE DEFERRED COMPENSATION PLAN

The Goodyear Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) is a non-qualified deferred compensation plan that provides named executive officers and other highly compensated employees the opportunity to defer various forms of compensation. For participants, this offers an additional means to save for retirement on a tax-deferred basis. There is no guaranteed return associated with any deferred amounts. During 2014, no named executive officers made deferrals under the Deferred Compensation Plan.

For additional information regarding the terms of the Deferred Compensation Plan and participant balances, see “Nonqualified Deferred Compensation” at page 62.

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Retirement and Other Benefits

OTHER BENEFITS

Payments to Expatriate Employees. Where warranted, we provide tax equalization payments, housing allowances, and other similar benefits to employees, including Mr. Wells, living outside of their home country to compensate them for the additional costs of those assignments.

Compensation Policies and Practices

STOCKHOLDING GUIDELINES

To better link the interests of management and our stockholders, the Compensation Committee has established stockholding guidelines for our officers. These guidelines specify a number of shares that our officers are expected to accumulate and hold based on a multiple of annual base salary of five times for the CEO, three times for Executive Vice Presidents, Presidents of our operating units and Senior Vice Presidents, and two times for elected Vice Presidents. Therefore, the stockholding requirement for Mr. Kramer is five times his annual base salary and for Ms. Thompson and Messrs. Wells, Smith and Bialosky is three times their annual base salary. All shares of Common Stock owned outright by officers (or their spouses) and held by them in the Goodyear stock fund of the Savings Plan, and 60% of the shares of restricted stock, restricted stock units and earned (but unvested) performance shares awarded to officers and share equivalent units held in our deferred compensation plan, are counted as ownership in assessing compliance with the guidelines. Unexercised stock options and unearned performance shares are not counted toward compliance with the guidelines. The stock price used in assessing compliance with the guidelines as of May 1st of each year will be the average closing stock price for the prior 60-day period.

The stockholding guidelines also include stock retention provisions. If an officer has met their stockholding requirement, they are required to retain 25% of the net shares received from any exercised options or any vested shares of Common Stock for at least one year from the date of exercise or vesting and may only sell or otherwise dispose of shares to the extent they will still meet their stockholding requirement following that sale or disposition. If an officer has not met their stockholding requirement, they are required to retain all of the net shares received from any exercised options or any vested shares of Common Stock, and may not sell or otherwise dispose of shares until they have met their stockholding requirement, unless they demonstrate a need to sell shares due to a financial hardship. Net shares are the shares remaining after payment of the exercise price and/or withholding taxes.

Mr. Kramer has held all of the net shares he has received as compensation during his tenure at Goodyear and now holds shares of Common Stock worth over 10 times his annual base salary, well in excess of his minimum stockholding requirement. Messrs. Wells, Smith and Bialosky have also met their stockholding requirement, and Ms. Thompson is making progress towards satisfying her stockholding requirement.

PROHIBITION ON HEDGING AND PLEDGING

We have adopted, as part of our insider trading policy, prohibitions on the short sale of our Common Stock and other securities and the issuance, purchase or sale of, or trading or dealing in, puts, calls or other options or rights relating to our Common

 

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				COMPENSATION DISCUSSION AND ANALYSIS
				Compensation Policies and Practices

Stock and other securities. These provisions prohibit our directors, officers and employees from hedging the risk of their ownership of our Common Stock. We also prohibit our directors, officers and employees from holding our Common Stock and other securities in a margin account or otherwise pledging them as collateral for a loan.

RECOVERY OF COMPENSATION (CLAWBACK POLICY)

If the Compensation Committee determines that an officer has engaged in conduct detrimental to the Company, the Compensation Committee may take a range of actions to remedy this conduct, prevent its recurrence and impose appropriate discipline. Discipline would vary depending on the facts and circumstances, and may include (1) termination of employment, (2) cancelling or reducing any outstanding compensatory grants or awards, (3) initiating an action for breach of fiduciary duty or fraud which could include recovery of any unjustly obtained incentive compensation, and (4) requiring reimbursement of compensation or other payments in accordance with provisions of the Sarbanes-Oxley Act of 2002, our claw-back policy described below or the terms of the relevant compensation plan. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities.

Beginning with awards made in 2012, the Compensation Committee adopted a claw-back policy that effectively contractually extends the claw-back provisions of the Sarbanes-Oxley Act of 2002 that apply to our Chief Executive Officer and Chief Financial Officer to the Presidents of each of our strategic business units and all of our Senior Vice Presidents. If we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement as a result of misconduct, the claw-back policy would permit the Compensation Committee to require reimbursement of (1) any incentive compensation received from us during the one-year period following the publication of misstated financial statements and (2) any profits realized from the sale of our securities during that one-year period. We will make any necessary revisions to our claw-back policy once implementing rules pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 are adopted by the Securities and Exchange Commission and The NASDAQ Stock Market.

In addition, under our Executive Performance Plan and equity compensation plans, the Compensation Committee may require a plan participant who engages in competition with us within 18 months after their termination of employment to return or forfeit the realized value of all awards under those plans during such period of time that the Compensation Committee determines. Our Executive Severance Plan also provides for the recovery or forfeiture of severance payments if a person receiving payments pursuant to the plan violates certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.

 

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				PMT Insert

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2014.

THE COMPENSATION COMMITTEE

Stephanie A. Streeter, Chairman

William J. Conaty

W. Alan McCollough

John E. McGlade

 

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				PMT Insert

NAMED EXECUTIVE OFFICER COMPENSATION TABLES

Summary Compensation Table

The table below sets forth information regarding the compensation of the CEO, the Chief Financial Officer of Goodyear (the “CFO”), and the persons who were, at December 31, 2014, the other three most highly compensated executive officers of Goodyear (collectively, the “named executive officers”) for services in all capacities to Goodyear and its subsidiaries during 2012, 2013 and 2014.

 

Name and Principal Position		Year				Salary ($)				Bonus ($)				Stock Awards ($)1				Option Awards ($)2				Non-Equity  Incentive Plan Compensation ($)3				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)4				All Other  Compensation ($)5				Total ($)
Richard J. Kramer			2014			$	1,083,333			$	0			$	1,447,796			$	2,639,994			$	9,471,870			$	3,121,153			$	88,951			$	17,853,097
Chairman of the Board,			2013				1,050,000				0				925,415				2,640,000				13,965,003				538,440				71,642				19,190,500
Chief Executive Officer			2012				1,033,333				0				786,504				2,249,999				9,304,867				3,673,172				57,849				17,105,724
and President
Laura K. Thompson			2014				508,333				0				164,517				299,993				1,312,325				793,689				35,824				3,114,681
Executive Vice President			2013				321,667				0				1,007,100				318,918				1,510,735				26,908				43,692				3,229,020
and Chief Financial Officer
Darren R. Wells			2014				610,000				0				329,034				599,997				2,497,396				714,245				32,929				4,783,601
President, Europe,			2013				567,917				0				209,772				599,992				3,893,987				36,634				36,507				5,344,809
Middle East and Africa			2012				555,000				0				185,136				529,646				2,674,733				846,993				33,325				4,824,833
Gregory L. Smith			2014				541,667				0				262,885				479,391				2,017,088				311,328				33,291				3,645,650
Senior Vice President,			2013				525,000				0				733,545				479,397				3,136,143				190,138				26,635				5,090,858
Global Operations			2012				525,000				0				155,431				444,671				1,866,980				165,295				34,848				3,192,225
David L. Bialosky			2014				550,000				0				243,484				443,989				1,856,768				420,789				25,731				3,540,761
Senior Vice President,			2013				540,000				0				155,637				443,995				2,910,435				187,694				27,091				4,264,852
General Counsel and			2012				533,333				0				146,475				419,025				2,141,601				398,517				26,260				3,665,211
Secretary

 

1

Represents the aggregate grant date fair value as of the respective grant date for each award. The maximum amount to be awarded with respect to each of the named executive officers is shown in the Grants of Plan-Based Awards Table in the column “Estimated Future Payouts Under Equity Incentive Plan Awards – Maximum.” The assumptions made in valuing stock awards reported in this column are discussed in Note to the Consolidated Financial Statements No. 1, “Accounting Policies” under “Stock-Based Compensation” and Note to the Consolidated Financial Statements No. 17, “Stock Compensation Plans” included in Goodyear’s Annual Report for the year ended December 31, 2014. For additional information regarding such grants, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Grants of Performance-Based Incentives.” See also “Grants of Plan-Based Awards” below.

 

2

Represents the aggregate grant date fair value as of the respective grant date for each award. The assumptions made in valuing option awards reported in this column are discussed in Note to the Consolidated Financial Statements No. 1, “Accounting Policies” under “Stock-Based Compensation” and Note to the Consolidated Financial Statements No. 17, “Stock Compensation Plans” included in Goodyear’s Annual Report for the year ended December 31, 2014. For additional information regarding such grants, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Stock Option Grants.” See also “Grants of Plan-Based Awards” below.

 

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				Summary Compensation Table

 

3	Represents amounts awarded under our annual and long-term incentive compensation plans. For additional information regarding annual cash incentive awards in 2014, see “Compensation Discussion and Analysis — Annual Compensation — 2014 Annual Cash Incentive Payouts.”

 

Amounts awarded under our long-term incentive compensation plans are, for 2014, in respect of the one-year performance period ended December 31, 2014 for the 2012-2014 awards, the 2013-2015 awards and the 2014-2016 awards. The 2013-2015 awards and the 2014-2016 awards remain subject to the named executive officer’s continued service and a three-year relative total shareholder return modifier. For additional information regarding long-term incentive awards, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Grants of Performance-Based Incentives,” “— Performance for the 2014 Performance Period,” and “— Impact of TSR Modifier and Payout of 2012-2014 Long-Term Incentive Awards.”

 

The following table provides further information on the amounts payable, or earned but not yet payable, for performance periods ending on December 31, 2014:

 

		2014 Annual Incentive (Currently Payable)				2014 Period; 2012-2014 Long- Term Incentive (Currently Payable)				2012-2014 Impact of TSR Modifer (Currently Payable)				2014 Period; 2013-2015 Long- Term Incentive (Not Yet Payable)				2014 Period; 2014-2016 Long- Term Incentive (Not Yet Payable)
Mr. Kramer		$	2,013,000			$	1,593,000			$	792,000			$	3,057,120			$	2,016,750
Ms. Thomspon			608,475				84,960				42,240				347,400				229,250
Mr. Wells			782,895				374,886				186,440				694,800				458,375
Mr. Smith			603,900				328,512				163,358				555,068				366,250
Mr. Bialosky			541,680				308,334				153,352				514,152				339,250

 

4

Represents total change in pension value for each named executive officer, which reflects both the accrual of additional benefits and changes in the assumptions used to value the benefits. The discount rate used to calculate the pension value decreased from 4.50% at December 31, 2013 to 4.00% at December 31, 2014. Also, the interest rate used to determine the lump sum value of the Supplementary Plan benefit increased from 1.75% to 2.00%. These changes in assumptions accounted for a portion of the total increase in pension value for each of the named executive officers. The table below allocates the total change in pension value between the actual increase in accrued benefits, including the growth in pension value due to the passage of time, and assumption changes.

 

				Increase in Pension Value due to Benefit Accrual				Increase in Pension Value due to Assumption Changes				Total Increase in Pension Value
Mr. Kramer				$	2,742,548			$	378,605			$	3,121,153
Ms. Thompson					688,182				105,507				793,689
Mr. Wells					593,414				120,831				714,245
Mr. Smith					291,635				19,693				311,328
Mr. Bialosky					420,394				395				420,789

 

No nonqualified deferred compensation earnings are required to be reported because the Deferred Compensation Plan does not provide for “above-market” or preferential earnings as defined in applicable Securities and Exchange Commission rules and regulations.

 

5

Includes amounts for home security system monitoring expenses, personal financial planning services, the cost of annual physical exams, and provision of up to two sets of automobile tires per year. Mr. Kramer’s total also includes amounts for the personal use of company aircraft and the annual dues for a club membership. The value of the total perquisites in 2014 was $40,285 for Mr. Kramer, $12,424 for Ms. Thompson, $9,000 for Mr. Wells, $15,083 for Mr. Smith, and $12,731 for Mr. Bialosky. Company contributions to qualified defined contribution plans in 2014 were $25,898 for Mr. Kramer, $23,400 for Ms. Thompson, $23,400 for Mr. Wells, $13,000 for Mr. Smith, and $13,000 for Mr. Bialosky. The value of dividends on shares of restricted stock or dividend equivalents accrued on restricted stock units that were not included in prior years’ grant date fair value for those awards was $22,768 for Mr. Kramer, $529 for Mr. Wells and $5,208 for Mr. Smith. Ms. Thompson is eligible to receive retiree medical benefits at age 62; however, the present value of those accumulated retiree medical benefits declined by $229, and is not reflected in “All Other Compensation.”

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Summary of Realized Pay Earned by Our Chief Executive Officer for 2012, 2013 and 2014

Summary of Realized Pay Earned by Our Chief Executive Officer for 2012, 2013 and 2014

Our compensation programs for Mr. Kramer and our other officers are primarily based on performance. The information shown below is intended to supplement and not be a substitute for the information in the Summary Compensation Table. The Summary Compensation Table includes several items that are driven by accounting and actuarial assumptions, which are not necessarily reflective of compensation actually realized by Mr. Kramer in a particular year. For example, the information required to be in the Summary Compensation Table combines pay actually received (base salary and annual cash incentive payments) with the accounting value of equity compensation granted, which may never be realized, and earned but unvested long term cash awards, which continue to be subject to forfeiture, as well as a TSR modifier, until the vesting date. The Summary Compensation Table is also required to include other compensation (contributions to qualified defined contribution plans and perquisites) and the change in pension values (based on actuarial assumptions), much of which is not realized in the periods presented.

The following table reports base salary, annual incentive earned, long term incentive to be paid out for the three-year performance cycle ending in each respective year and pre-tax compensation earned upon the exercise of stock options and the vesting of stock awards regardless of when they were granted.

 

Name		Year				Salary ($)1				Annual Incentive  ($)2				Long Term Incentive Payout  ($)3				Stock Option Exercises  ($)4				Equity (PSU)  Vesting ($)5				Total Realized Pay ($)
Kramer			2014			$	1,083,333			$	2,013,000			$	8,820,000			$	3,882,624			$	3,245,523			$	19,044,480
			2013				1,050,000				2,945,250				6,753,301				129,482			$	1,882,600				12,760,633
			2012				1,033,333				2,331,000				4,502,319				2,347				780,458				8,649,457

 

1	Mr. Kramer’s salary was targeted below market median (approximately 80% of market median) for 2012, 2013 and 2014.

 

2	Mr. Kramer’s individual targets were set at 150% of base salary for 2012, 2013 and 2014. The Committee assessed overall company performance at 148% of target in 2012, 187% of target in 2013 and 122% of target in 2014. Mr. Kramer’s actual awards were consistent with these assessments.

 

3

Beginning in 2014, fifty-five percent of Mr. Kramer’s long term incentive target will be paid in cash. This column shows the cash payout for each of the performance cycles completed in the respective year. The 2010-2012 awards were earned at 147% of target, the 2011-2013 awards were earned at 176% of target (including the impact of the TSR modifier) and the 2012-2014 awards were earned at 196% of target (including the impact of the TSR modifier).

 

4

Thirty percent of Mr. Kramer’s long term incentive target is granted in the form of stock options. In 2014, Mr. Kramer exercised 74,455 stock options and realized $3,882,624 as shown in the Option Exercises and Stock Vested Table on page 58. At December 31, 2014, Mr. Kramer’s vested, exercisable, in-the-money stock options had a potential value of $11,610,364, based on the difference between the closing market price of our Common Stock on December 31, 2014 ($28.57) and the exercise price of such stock options.

 

5

Beginning in 2014, fifteen percent of Mr. Kramer’s long term incentive target will be paid in shares of Common Stock. This column shows the value of the shares that vested for each of the performance cycles completed in the respective year. The 2010-2012 awards were earned at 150% of target, the 2011-2013 awards were earned at 180% of target (including the impact of the TSR modifier) and the 2012-2014 awards were earned at 196% of target (including the impact of the TSR modifier). The value of the shares earned in each year is based on the closing market price of our Common Stock on December 31 of that year.

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Grants of Plan-Based Awards

Grants of Plan-Based Awards

The following table summarizes grants of plan-based awards made to the named executive officers during 2014.

 

																														All Other Option Awards: Number of Securities Underlying Options (#)3				Exercise or Base Price of Option Awards ($/Sh)4				Grant Date Fair Value of Stock and Option Awards ($)
						Estimated Future Payouts Under Non-Equity Incentive Plan Awards1												Estimated Future Payouts Under Equity Incentive Plan Awards2
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)
Kramer			2/24/2014			$	2,420,000			$	4,840,000			$	9,680,000
Kramer			2/24/2014																24,962				49,924				99,848											$	1,447,796
Kramer			2/24/2014																												221,105				26.44				2,639,994
Thompson			2/24/2014				275,000				550,000				1,100,000
Thompson			2/24/2014																2,837				5,673				11,346												164,517
Thompson			2/24/2014																												25,125				26.44				299,993
Wells			2/24/2014				550,000				1,100,000				2,200,000
Wells			2/24/2014																5,673				11,346				22,692												329,034
Wells			2/24/2014																												50,251				26.44				599,997
Smith			2/24/2014				439,450				878,900				1,757,800
Smith			2/24/2014																4,533				9,065				18,130												262,885
Smith			2/24/2014																												40,150				26.44				479,391
Bialosky			2/24/2014				407,000				814,000				1,628,000
Bialosky			2/24/2014																4,198				8,396				16,792												243,484
Bialosky			2/24/2014																												37,185				26.44				443,989

 

1

Grants of the cash portion of our long-term incentive awards were made under the 2013 Performance Plan. For additional information regarding such awards, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Grants of Performance-Based Incentives.” Mr. Kramer, Ms. Thompson, Mr. Wells, Mr. Smith and Mr. Bialosky also received annual cash incentive awards under the Management Incentive Plan for the year ending December 31, 2014 that were earned and paid out in the amounts of $2,013,000; $608,475; $782,895; $603,900; and $541,680, respectively. For additional information regarding the awards under the Management Incentive Plan, see “Compensation Discussion and Analysis — Annual Compensation — 2014 Annual Cash Incentive Payouts.”

 

2	Grants of the equity portion of our long-term incentive awards were made under the 2013 Performance Plan. For additional information regarding such grants, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Grants of Performance-Based Incentives.”

 

3

Grants of stock option were made under the 2013 Performance Plan. Each unexercised stock option terminates automatically if the optionee ceases to be an employee of Goodyear or one of its subsidiaries for any reason, except that (a) upon retirement or disability of the optionee more than six months after the grant date, the stock option will become immediately exercisable and remain exercisable until the earlier of five years or its expiration date, (b) in the event of the death of the optionee more than six months after the grant date, each stock option will become immediately exercisable and remain exercisable until the earlier of three years after the date of death of the optionee or its expiration date, and (c) in the event of the termination of the optionee’s employment by the Company other than for cause, each vested stock option will remain exercisable for 90 days following the date of termination of their employment. For additional information regarding such grants, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Stock Option Grants.”

 

4	Unless otherwise indicated, the exercise price of each stock option is equal to the closing market price of the Common Stock on the date granted.

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Outstanding Equity Awards at Fiscal Year-End

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information about outstanding equity awards held by the named executive officers as of December 31, 2014.

 

		Option Awards																Stock Awards
Name		Number  of Securities Underlying Unexercised Options Exercisable (#)1				Number of Securities Underlying Unexercised Options Unexercisable (#)				Option Exercise Price ($)2				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)3				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not  Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)3
Kramer																			231,344	10		$	6,609,498				46,841	15		$	1,338,247
			26,000							$	17.15				12/6/2015
			55,000								24.71				2/27/2017
			10,573	*							25.33				12/6/2015
			10,100	*							27.93				12/6/2015
			50,740								26.74				2/21/2018
			22,794								18.12				8/4/2019
			210,590								12.74				2/23/2020
			198,624				66,209	4			13.91				2/22/2021
			176,609				176,609	5			12.94				2/27/2022
			110,552				331,659	6			12.98				2/28/2023
							221,105	7			26.44				2/24/2024
Thompson																			52,009	11		$	1,485,897				4,961	15		$	141,736
			2,500							$	17.15				12/6/2015
			3,000								24.71				2/27/2017
			2,606								26.74				2/21/2018
			31,535								4.81				2/26/2019
			14,297								12.74				2/23/2020
			12,535				4,179	4			13.91				2/22/2021
			9,419				9,419	5			12.94				2/27/2022
			5,653				16,960	6			12.98				2/28/2023
			4,116				12,351	8			22.62				12/13/2023
							25,125	7			26.44				2/24/2024
Wells																			35,261	12		$	1,007,407				10,576	15		$	302,156
			13,500							$	24.71				2/27/2017
			12,333								26.74				2/21/2018
			20,125								4.81				2/26/2019
			68,079								12.74				2/23/2020
			52,803				17,602	4			13.91				2/22/2021
			41,573				41,574	5			12.94				2/27/2022
			23,806				71,420	6			12.98				2/28/2023
			785				2,358	8			22.62				12/13/2023
							50,251	7			26.44				2/24/2024
Smith																			48,425	13		$	1,383,502				8,505	15		$	242,988
			45,702				15,235	9		$	13.64				10/24/2021
			34,903				34,904	5			12.94				2/27/2022
			20,075				60,226	6			12.98				2/28/2023
							40,150	7			26.44				2/24/2024
Bialosky																			21,502	14		$	614,312				7,877	15		$	225,046
			31,948							$	16.86				9/23/2019
			42,329				14,110	4			13.91				2/22/2021
			32,890				32,891	5			12.94				2/27/2022
			18,592				55,779	6			12.98				2/28/2023
							37,185	7			26.44				2/24/2024

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Outstanding Equity Awards at Fiscal Year-End

 

*

Represents the grant of a reinvestment option. Each stock option granted prior to 2008 included a right to the automatic grant of a new option, which we refer to as a “reinvestment option,” for the number of shares tendered upon the exercise of the original stock option and withheld to pay income taxes. The reinvestment option is granted on, and has an exercise price equal to the fair market value of the Common Stock (calculated as the average of the high and low stock price) on, the date of the exercise of the original stock option, and is subject to the same terms and conditions as the original stock option. Such reinvestment options vest one year from the date of grant and expire on the date the original option would have expired. No further reinvestment options will be granted upon the exercise of a reinvestment option.

 

1	Because the options in this column were fully vested as of December 31, 2014, the vesting schedules for these options are not reported.

 

2

The exercise price of each option granted under our equity compensation plans is equal to 100% of the per share fair market value of the Common Stock on the date granted (for plans adopted prior to April 8, 2008, calculated as the average of the high and low stock price for such date, and for plans adopted on and after April 8, 2008, calculated as the closing market price for such date). The option exercise price and/or withholding tax obligations may be paid by delivery of shares of Common Stock valued at the fair market value on the date of exercise.

 

3	Calculated by multiplying $28.57, the closing market price of our Common Stock on December 31, 2014, by the number of shares of restricted stock, restricted stock units or performance share units that are not vested or are unearned at December 31, 2014.

 

4	Vests in full on February 22, 2015.

 

5	Vests as to one-half of the options on each of February 27, 2015 and February 27, 2016.

 

6	Vests as to one-third of the options on each of February 28, 2015, February 28, 2016 and February 28, 2017.

 

7	Vests as to one-fourth of the options on each of February 24, 2015, February 24, 2016, February 24, 2017 and February 24, 2018.

 

8	Vests as to one-third of the options on each of December 13, 2015, December 13, 2016 and December 13, 2017.

 

9	Vests in full on October 24, 2015.

 

10

103,492 restricted shares (which Mr. Kramer will receive when the value of the shares is deductible by the Company for federal income tax purposes), 107,050 earned performance share units vest on December 31, 2015, and 20,802 earned performance share units vest on December 31, 2016 (each subject to a three-year relative total shareholder return modifier).

 

11	9,312 earned performance share units vest on December 31, 2015, 2,363 earned performance share units vest on December 31, 2016 (each subject to a three-year relative total shareholder return modifier), and 40,334 restricted stock units vest on December 13, 2016.

 

12	23,785 earned performance share units vest on December 31, 2015, 4,727 earned performance share units vest on December 31, 2016 (each subject to a three-year relative total shareholder return modifier), and 6,749 restricted stock units vest on February 23, 2015.

 

13	19,439 earned performance share units vest on December 31, 2015, 3,777 earned performance share units vest on December 31, 2016 (each subject to a three-year relative total shareholder return modifier), and 25,209 restricted stock units vest on December 13, 2016.

 

14	18,004 earned performance share units vest on December 31, 2015 and 3,498 earned performance share units vest on December 31, 2016 (each subject to a three-year relative total shareholder return modifier).

 

15	Unearned performance share units that will vest on December 31, 2015 or December 31, 2016, subject to the achievement of performance goals in 2015 and 2016 and a three-year relative total shareholder return modifier.

During the restriction period for shares of restricted stock, the recipient is not entitled to delivery of the shares, restrictions are placed on the transferability of the shares, and all or a portion of the shares will be forfeited if the recipient terminates employment for reasons other than as approved by the Compensation Committee. Upon expiration of the restriction period, the appropriate number of shares of Common Stock will be delivered to the grantee free of all restrictions. During the restriction period for shares of restricted stock, the grantee shall be entitled to vote restricted shares and receive dividends. For grants made after April 2013, shares of restricted stock will be credited with notional dividends that vest and are payable in cash (without interest) at the same time and subject to the same conditions as the underlying shares of restricted stock. Restricted stock units do not have any voting rights but receive dividend equivalents that vest and are payable in shares of Common Stock at the same time and subject to the same conditions as the underlying restricted stock units. Earned and unearned, but unvested, performance share units do not have any voting rights and are not entitled to receive dividend equivalents. For additional information regarding the terms of the performance share units, see “Compensation Discussion and Analysis — Long-Term Compensation — 2014 Grants of Performance-Based Incentives.”

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Option Exercises and Stock Vested

Option Exercises and Stock Vested

The following table sets forth certain information regarding option exercises by, and the vesting of stock awards for, the named executive officers during 2014.

 

		Option Awards										Stock Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized On Exercise ($)1						Number of Shares Acquired on Vesting (#)				Value Realized On Vesting ($)
Kramer			74,455			$	3,882,624						113,599			$	3,245,523	2
Thompson			609				29,991						6,058				173,077	2
Wells			34,936				1,760,126						89,005				2,474,282	3
Smith			—				—						55,001				1,318,783	4
Bialosky			15,338				823,951						21,156				604,427	2

 

1	Represents the difference between the exercise price and the fair market value of our Common Stock on the date of exercise.

 

2	Represents the total value realized upon the vesting of performance share awards for 2012-2014, which were paid 100% in shares of Common Stock.

 

3	Represents the total value realized upon the vesting of 26,740 performance share awards for 2012-2014, which were paid 100% in shares of Common Stock, and the total value realized upon the vesting of 62,265 restricted stock units.

 

4	Represents the total value realized upon the vesting of 22,450 performance share awards for 2012-2014, which were paid 100% in shares of Common Stock, and the total value realized upon the vesting of 32,551 shares of restricted stock.

Defined Contribution Plan Benefits

The Savings Plan is a tax-qualified defined contribution plan that permits eligible employees, including all of the named executive officers, to contribute 1% to 50% of their compensation to their Savings Plan account, subject to an annual contribution ceiling ($17,500 in 2014). Savings Plan participants who are age 50 or older and contributing at the maximum plan limits or at the annual contribution ceiling are entitled to make “catch-up” contributions annually up to a specified amount ($5,500 in 2014). Participants in the Savings Plan are eligible to receive Company matching contributions in addition to the retirement contributions described below under “Pension Benefits.” Savings Plan participants are also eligible to make after-tax contributions subject to limits imposed by the Code. Contributions are invested, at the direction of the participant, in any one or more of the fifteen available funds and/or in mutual funds under a self-directed account.

Pension Benefits

Goodyear’s Salaried Pension Plan is a defined benefit plan qualified under the Code in which U.S.-based salaried employees hired before January 1, 2005 participate, including Messrs. Kramer and Wells and Ms. Thompson. Accruals in the Salaried Plan were frozen effective December 31, 2008. The Salaried Plan was designed to provide tax-qualified pension benefits for most Goodyear salaried employees. The Salaried Plan contains formulas based on age and service. These formulas are multiplied by five-year average compensation below and above a breakpoint ($51,000 in 2008, the year the Salaried Plan was frozen), with the result representing a lump sum benefit under the plan. Compensation is held to the qualified plan limit under the Code, which was $230,000 for 2008. A portion of the benefit may be paid by employee contributions. Effective

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Pension Benefits

December 31, 2007, all active participants in the Salaried Plan became vested and are entitled to a benefit upon any termination of employment. Benefits are available on a five-year certain and continuous annuity basis at age 65, by converting the lump sum to an annuity. Annuity benefits payable to a participant who retires prior to age 65 are subject to a reduction for each month retirement precedes age 65. Benefits under the Salaried Plan are funded by an irrevocable tax-exempt trust.

Participation in the Salaried Plan was frozen effective December 31, 2004. Subsequent hires, including Messrs. Smith and Bialosky, participate in the retirement contributions feature of the Savings Plan. Under the Savings Plan, each participant receives an allocation each pay period equal to a percentage of compensation, with compensation held to the qualified plan limit under the Code. Effective January 1, 2009, Salaried Plan participants, including Messrs. Kramer and Wells and Ms. Thompson, also began receiving allocations under the retirement contributions feature of the Savings Plan.

Goodyear also maintains the Supplementary Plan, a non-qualified, unfunded plan which provides additional retirement benefits to our officers and certain other key employees, including all of the named executive officers. The Supplementary Plan provides pension benefits to participants who retire with at least 30 years of service, retire after age 55 with at least ten years of service or retire after age 65 with at least five years of service. The formula for an annuity benefit is based on a percentage determined using credited service (22% with 10 years, 38% with 20 years, 48% with 30 years and 54% with 40 years) times five-year average compensation above the breakpoint ($58,500 in 2014), with compensation inclusive of base salary and annual incentive payments. The five-year average compensation uses the highest five calendar years, not necessarily consecutive, out of the last ten years. Benefits are offset for the Salaried Plan, the retirement contributions feature of the Savings Plan, applicable non-U.S. benefits and certain prior employer benefits. Under the Supplementary Plan, benefits payable to a participant who retires prior to age 62 are subject to a reduction of 0.4% for each month retirement precedes age 62. All benefits from the Supplementary Plan will be paid in a lump sum. Benefits cannot be distributed prior to six months after separation of service. Ms. Thompson is the only named executive officer vested in the Supplementary Plan benefits.

Messrs. Kramer and Wells and Ms. Thompson are eligible for immediate commencement of the benefit from the Salaried Plan as of December 31, 2014. Messrs. Smith and Bialosky are not participants in the Salaried Plan. The chart below indicates the date at which each named executive officer is or will be eligible to receive a benefit from the Supplementary Plan.

SUPPLEMENTARY PLAN

 

Name		Earliest Eligibility for Benefit Commencement
Kramer		July 31, 2016
Thompson		Currently eligible
Wells		December 31, 2020
Smith		October 31, 2021
Bialosky		September 30, 2019

We also maintain a non-qualified unfunded defined benefit Excess Benefit Plan that pays an additional pension benefit over that paid from the Salaried Plan if a participant does not meet the eligibility requirements of the Supplementary Plan. The additional benefit is equal to the amount a participant would have received from the Salaried Plan but does not because of the limitations imposed by the Code on pension benefits under qualified plans. This plan is provided to allow the extension of benefits from the qualified plan to individuals whose compensation exceeds the Code guidelines for qualified plans. Distribution

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Pension Benefits

of amounts earned and vested prior to January 1, 2005 will be paid out in the same manner as the Salaried Plan unless otherwise elected by the participant at least 12 months prior to termination or severance. Distributions for amounts earned or vested on or after January 1, 2005 will be paid out in a lump sum. For participants considered to be among the top 50 wage earners of the Company, benefits vested on or after January 1, 2005 are paid out six months after termination of service. For employees hired after December 31, 2004, and for all employees as of December 31, 2008, who do not meet the eligibility requirements of the Supplementary Plan, there is a corresponding defined contribution Excess Benefit Plan that mirrors the retirement contributions feature of the Savings Plan. Like the qualified plans, effective December 31, 2008 accruals were frozen under the defined benefit Excess Benefit Plan and all affected participants began receiving defined contribution allocations under the defined contribution Excess Benefit Plan.

The Pension Benefits table below shows for the named executive officers the number of years of credited service, present value of accumulated benefit and payments during the last fiscal year, for each defined benefit plan.

The “Present Value of Accumulated Benefit” is the lump sum value as of December 31, 2014 of the expected pension benefit payable at age 62 that was earned as of December 31, 2014. That is, the benefit reflects service and compensation only through 2014, not projected for future years. The benefit payment at age 62 is assumed to be the lump sum form. The present value is measured using the same assumptions used for financial reporting purposes (and which are set forth following the Pension Benefits Table), with the exception of the commencement age. The commencement age is assumed to be 62 because that is the age at which the Supplementary Plan benefit is payable with no reduction for early retirement.

Generally, a participant’s years of credited service under the Supplementary Plan are based on years of employment with Goodyear. However, in the past, credit for service prior to employment with Goodyear was infrequently granted. Mr. Kramer received 13.6 additional years of credited service in connection with his hiring by Goodyear in 2000 in respect of service with a prior employer. The benefits paid to Mr. Kramer under the Supplementary Plan will be reduced by amounts he is entitled to receive under the pension plan maintained by his prior employer. Due to this service grant, the present value of accumulated benefit in the Pension Benefits table is $4,646,088 higher for Mr. Kramer. None of the other named executive officers have received any additional years of credited service.

The Compensation Committee has adopted a policy prohibiting the grant of additional service credit in the Supplementary Plan for newly hired officers and other key employees.

 

Name		Plan Name		Number of Years Credited Service  (#)				Present Value of Accumulated Benefit ($)1				Payments During Last Fiscal Year ($)
Kramer		Supplementary Pension Plan			28.42			$	12,700,459			$	—
		Salaried Pension Plan			8.83				245,490				—
Thompson		Supplementary Pension Plan			31.17				2,167,090				—
		Salaried Pension Plan			25.17				311,380				—
Wells		Supplementary Pension Plan			12.42				2,593,691				—
		Salaried Pension Plan			6.42				170,449				—
Smith		Supplementary Pension Plan			3.17				683,430				—
Bialosky		Supplementary Pension Plan			5.25				1,446,452				—

 

1	All amounts shown are estimates as of December 31, 2014; the actual benefits to be paid to the named executive officers will be based on their credited service, compensation, and other factors at the time of their retirement.

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Pension Benefits

The amounts set forth in the table above are based on the following assumptions:

 

•

the measurement date is December 31, 2014

 

•

the form of payment is a lump sum

 

•

the interest rate used to calculate the Supplementary Plan lump sum payment for benefits commencing in 2015 or later: 2.00%

 

•

the interest rate used to calculate the Salaried Plan lump sum payment for benefits commencing in 2015 or later: 4.00% (Messrs. Kramer and Wells and Ms. Thompson)

 

•

the mortality assumptions used to calculate the lump sum are those set forth in Internal Revenue Code Section 417(e) for the Salaried Plan, and those set forth in UP-1984 Mortality for the Supplementary Plan

 

•

the discount rate used to determine the present value of the accumulated benefit is 4.00%

 

•

the benefit commencement age is 62 (or, if older, age at the measurement date)

 

•

the accumulated benefit is calculated based on credited service and pay as of December 31, 2014 (for the Salaried Plan, credited service and pay as of December 31, 2008).

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Nonqualified Deferred Compensation

Nonqualified Deferred Compensation

The Goodyear Executive Deferred Compensation Plan is a non-qualified deferred compensation plan that provides named executive officers and certain other highly compensated employees the opportunity to defer their base salary and annual incentive payments. Deferred amounts may be invested in one of five investment alternatives or, with respect to annual incentive payments, Goodyear stock units. Four of these investment alternatives are funds managed by The Northern Trust Company, and currently include a money market fund, a bond fund, an equity index fund and a balanced fund. The average interest rate payable with respect to funds invested in the Northern Trust money market fund was 0.01% for the year ended December 31, 2014. The fifth investment vehicle is a growth fund managed by American Century Investments. Investment elections among the five investment alternatives may be changed daily. Deferrals of annual incentive payments into Goodyear stock units will result in a 20% premium paid in stock units that will vest in one year. There is no guaranteed return associated with any deferred amounts, and deferred amounts are subject to the claims of creditors in the event of our bankruptcy. Distribution of deferred amounts may begin after separation of service or in a selected number of years ranging from one to 20. Payment of deferred amounts will be in a lump sum or up to 15 annual installments, as elected at the time of deferral. Redeferral of amounts originally deferred prior to January 1, 2005 is allowed only if elected one year prior to the scheduled payout. Any stock units are converted to shares of Common Stock and distributed to the participant in January of the fourth year following the end of the plan year under which the award was earned.

The Deferred Compensation Plan is unfunded. The following table sets forth certain information regarding nonqualified deferred compensation of the named executive officers.

 

Name		Executive Contributions in  Last FY ($)1				Registrant Contributions  in Last FY ($)				Aggregate Earnings in  Last FY ($)2				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at  Last FYE ($)
Kramer			—				—			$	7,017				—			$	148,180
Thompson			—				—				—				—				—
Wells			—				—				—				—				—
Smith			—				—				—				—				—
Bialosky			—				—				—				—				—

 

1	Represents deferral in 2014 of base salary and/or annual incentive payments in respect of performance in 2013.

 

2	No portion of these earnings were included in the Summary Compensation Table because the Deferred Compensation Plan does not provide for “above-market” or preferential earnings as defined in applicable Securities and Exchange Commission rules and regulations.

 

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				NAMED EXECUTIVE OFFICER COMPENSATION TABLES
				Potential Payments Upon Termination or Change-in-Control

Potential Payments Upon Termination or Change-in-Control

We provide for the payment of severance and certain other benefits to our named executive officers upon certain types of terminations of employment, as described below.

EXECUTIVE SEVERANCE PLAN

The Executive Severance Plan provides severance benefits to the Company’s officers, including all of the named executive officers, as follows:

 

(1)

If a participant’s employment is terminated by the Company and its affiliates other than for Cause (as such term is defined below), death or disability (and other than in connection with a change-in-control, as described in paragraph (2) below), such participant will generally receive: (i) earned but unpaid base salary and annual incentive compensation and accrued paid vacation, sick leave, sabbatical, holiday and other paid time off; (ii) a pro-rated annual incentive payment based on actual performance for the entire fiscal year in an amount not to exceed the participant’s target annual incentive; (iii) a cash severance payment equal to the sum of the participant’s base salary and target annual incentive at the time of severance multiplied by the participant’s severance multiple, which is established by the Compensation Committee and currently ranges from 1.0x to 2.0x; (iv) if the sum of the participant’s age plus years of credited service is equal to or greater than 75, vesting of the participant’s benefit under the Supplementary Plan; (v) continued health care coverage for a number of years equal to the participant’s severance multiple; and (vi) outplacement services in an amount not to exceed $25,000. Mr. Kramer’s severance multiple is 2.0x and each of the other named executive officers’ severance multiple is 1.5x.

 

(2)

If a participant’s employment is terminated involuntarily other than for Cause, death, disability or mandatory retirement or by the participant for Good Reason during the pendency of, and for ninety days following the cessation of, a Potential Change in Control (as such term is defined below) or within two years following a Change in Control (as such term is defined below), such participant will generally receive: (i) earned but unpaid base salary and annual incentive compensation and accrued paid vacation, sick leave, sabbatical, holiday and other paid time off; (ii) a pro-rated annual incentive payment based on the participant’s target annual incentive; (iii) a cash severance payment equal to twice the sum of the participant’s base salary and target annual incentive; (iv) if the participant has at least five years of service, vesting of the participant’s Supplementary Plan benefit; (v) continued health care coverage for up to two years; and (vi) outplacement services in an amount not to exceed $25,000 and reimbursement for certain legal fees incurred in connection with certain claims made under the Executive Severance Plan.

To be eligible to receive the benefits described above, the participant must execute a release and agree, among other things, to certain confidentiality, non-disparagement, non-solicitation and non-competition covenants.

The Executive Severance Plan became effective on February 28, 2013 and will continue in effect for three years, and thereafter will automatically renew for additional one-year periods unless the Company provides notice, at least 90 days prior to the end of the initial or extended term, of its intent not to renew the Executive Severance Plan.

As used in the Executive Severance Plan:

“Cause” means (1) the continued failure by an eligible employee to substantially perform the employee’s duties with the Company (other than any such failure resulting from the employee’s incapacity due to physical or mental illness),

 

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				Potential Payments Upon Termination or Change-in-Control

(2) the engaging by the employee in conduct which is demonstrably injurious to the Company, monetarily or otherwise, (3) the employee committing any felony or any crime involving fraud, breach of trust or misappropriation or (4) any breach or violation of any agreement relating to the employee’s employment with the Company where the Company, in its discretion, determines that such breach or violation materially and adversely affects the Company.

A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

 

(1)

any person is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company other than securities acquired by virtue of the exercise of a conversion or similar privilege or right unless the security being so converted or pursuant to which such right was exercised was itself acquired directly from the Company) representing 20% or more of (A) the then outstanding shares of Common Stock of the Company or (B) the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

 

(2)

the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board of Directors (the “Incumbent Board”): individuals who, on February 28, 2013, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, without limitation, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors on February 28, 2013 or whose appointment, election or nomination for election was previously so approved or recommended; or

 

(3)

there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or consolidation pursuant to which (A) the voting securities of the Company outstanding immediately prior to such merger or consolidation will continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) more than 50% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, (B) no person will become the beneficial owner, directly or indirectly, of securities of the Company or such surviving entity or any parent thereof representing 20% or more of the outstanding shares of common stock or the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to such merger or consolidation) and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation (or any parent thereof) resulting from such merger or consolidation; or

 

(4)

the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, (A) more than 50% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of which (or of any parent of such entity) is owned by shareholders of the Company in substantially the same proportions as their ownership of the Company

 

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				Potential Payments Upon Termination or Change-in-Control

immediately prior to such sale, (B) in which (or in any parent of such entity) no person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 20% or more of the outstanding shares of common stock resulting from such sale or disposition or the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to such sale or disposition) and (C) in which (or in any parent of such entity) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors.

“Good Reason” means the occurrence during the pendency of, and for ninety days following the cessation of, a Potential Change in Control or within two years following a Change in Control, without the affected eligible employee’s written consent, of any of the following:

 

(1)

the assignment to the employee of duties that are materially inconsistent with the employee’s authority, duties or responsibilities immediately prior to a Potential Change in Control or, in the absence thereof, a Change in Control (other than pursuant to a transfer or promotion to a position of equal or enhanced responsibility or authority) or any other action by the Company which results in a material diminution in such authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the employee, provided, however, that any such material diminution that is primarily a result of the Company no longer being a publicly traded entity or becoming a subsidiary or division of another entity shall not be deemed “Good Reason” for purposes of the Executive Severance Plan, except that an employee shall have Good Reason if the Company is no longer a publicly traded entity and, immediately before the Change in Control that caused the Company no longer to be a publicly traded entity, substantially all of the employee’s duties and responsibilities related to public investors or government agencies that regulate publicly traded entities;

 

(2)	a change in the location of such employee’s principal place of business by more than 50 miles when compared to the employee’s principal place of business immediately before a Potential Change in Control or, in the absence thereof, a Change in Control;

 

(3)	a material reduction in the Employee’s annual base salary or target annual incentive opportunity from that in effect immediately before a Potential Change in Control or, in the absence thereof, a Change in Control; and

 

(4)

the failure by any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform the Executive Severance Plan in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place.

A “Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

 

(1)	the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(2)	the Company or any person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control;

 

(3)

any person becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company other than securities acquired by virtue of the exercise of a conversion or similar privilege or right unless the security being so converted or pursuant to which such right

 

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				Potential Payments Upon Termination or Change-in-Control

was exercised was itself acquired directly from the Company) representing 20% or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the Company’s then outstanding voting securities; or

 

(4)	the Board adopts a resolution to the effect that a Potential Change in Control has occurred.

The description above is meant only to be a summary of the provisions of the Executive Severance Plan. The Executive Severance Plan was an exhibit to a Form 8-K filed with the Securities and Exchange Commission on March 6, 2013.

QUANTIFICATION OF TERMINATION BENEFITS

The table below shows amounts that would be payable to each of the named executive officers, as of December 31, 2014, upon the termination of their employment in the circumstances indicated in each row of the table. The amounts shown are calculated on the assumption that the triggering event occurred on December 31, 2014. We have assumed that, if a named executive officer resigned or was terminated for Cause, the Compensation Committee would have exercised its discretion to cancel any outstanding awards in respect of the performance cycles ending on December 31, 2014 prior to the payment of those awards in February 2015. Other assumptions used to determine the amounts shown are described below.

Cash Severance. The amounts shown in the rows captioned “Termination Without Cause” and “Involuntary Termination Within Two Years of Change in Control” are calculated in accordance with the terms of the Executive Severance Plan. (See “Executive Severance Plan” above.) Cash severance is not payable in any other circumstance.

Annual and Long-Term Cash Incentives. The amounts shown in the table for annual and long-term cash incentives are the amounts earned for the annual or three-year performance cycles ended December 31, 2014. The amounts shown in the row captioned “Death/Disability” also include the amounts earned but not yet payable for completed performance periods under the 2013-2015 and 2014-2016 long-term cash incentive awards. The amounts shown in the row captioned “Involuntary Termination Within Two Years of Change in Control” also include (a) the amounts earned but not yet payable for completed performance periods and (b) the unearned amounts at the target amount of the award opportunity for uncompleted performance periods under the 2013-2015 and 2014-2016 long-term cash incentive awards.

Equity. Our equity compensation plans provide that unexercised stock options terminate automatically if the optionee ceases to be an employee of Goodyear or one of its subsidiaries for any reason, except that (a) upon retirement or disability of the optionee more than six months after the grant date, the stock option will become immediately exercisable and remain exercisable until the earlier of five years or its expiration date, (b) in the event of the death of the optionee more than six months after the grant date, each stock option will become immediately exercisable and remain exercisable until the earlier of three years after the date of death of the optionee or its expiration date, and (c) for options granted on or after June 8, 2010, in the event of the termination of the optionee’s employment by us other than for cause, each vested stock option will remain exercisable for 90 days following the date of termination of their employment. For these purposes, resignations, terminations without cause, and involuntary terminations upon a change in control are treated like a retirement if the employee is eligible for retirement as of the date of termination. Only Ms. Thompson was eligible for retirement on December 31, 2014.

The amounts shown in the table for equity with respect to performance share awards are the amounts earned for the three-year performance cycle ended December 31, 2014. The amounts shown in the row captioned “Death/Disability” also include

 

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				Potential Payments Upon Termination or Change-in-Control

the amounts earned but not yet payable for completed performance periods under the 2013-2015 and 2014-2016 performance share awards. The amounts shown in the row captioned “Involuntary Termination Within Two Years of Change in Control” also include (a) the amounts earned but not yet payable for completed performance periods and (b) the unearned amounts at the target amount of the award opportunity for uncompleted performance periods under the 2013-2015 and 2014-2016 performance share awards. In each case, the amounts shown are calculated based on a per share price of $28.57, the closing market price of our Common Stock on December 31, 2014.

Additional Retirement Benefits. The table below shows the additional retirement benefits, if any, that would be payable to the named executive officer if the named executive officer’s employment was terminated on December 31, 2014, and that named executive officer was vested in the benefit as of that date. Ms. Thompson is vested in her Supplementary Plan benefit. Mr. Kramer and Mr. Wells are not yet vested in a Supplementary Plan benefit and would instead receive substantially smaller benefits from the defined benefit and defined contribution Excess Benefit Plans. Mr. Smith and Mr. Bialosky are not yet vested in a Supplementary Plan benefit, are not eligible to participate in the Salaried Plan or the defined benefit Excess Benefit Plan, and would instead receive substantially smaller benefits from the defined contribution Excess Benefit Plan. The Supplementary Plan and Salaried Plan amounts shown in the Pension Benefits table are the present values at December 31, 2014 of benefits that would be payable in lump sum form at age 62 (or age at December 31, 2014, if older than 62). The amounts shown in the table below are the additional amounts that would be payable, together with the amounts shown in the Pension Benefits table, in lump sum form after termination of employment at December 31, 2014.

Mr. Kramer is 51.2 years old with 28.42 years of credited service in the Supplementary Plan. In the event of a “Termination Without Cause,” Mr. Kramer’s benefit under the Supplementary Plan will become vested because the sum of his age and years of service equals or exceeds 75. In the event of an “Involuntary Termination Within Two Years of Change in Control,” Mr. Kramer’s benefit under the Supplementary Plan will become vested since he has five years of credited service. The difference between the amount payable from the Supplementary Plan upon a triggering event ($14,545,758) and the value presented in the Pension Benefits table ($12,700,459) is solely due to differences in the assumptions used in the calculations.

In the event of an “Involuntary Termination Within Two Years of Change in Control,” Mr. Wells’ benefit under the Supplementary Plan will become vested since he has five years of credited service. The difference between the amount payable from the Supplementary Plan upon a triggering event ($2,669,048) and the value presented in the Pension Benefits table ($2,593,691) is solely due to differences in the assumptions used in the calculations.

In the event of an “Involuntary Termination Within Two Years of Change in Control,” Mr. Bialosky’s benefit under the Supplementary Plan will become vested since he has five years of credited service. The difference between the amount payable from the Supplementary Plan upon a triggering event ($1,760,952) and the value presented in the Pension Benefits table ($1,446,452) is solely due to differences in the assumptions used in the calculations.

 

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				Potential Payments Upon Termination or Change-in-Control

All Other Benefits. The amounts shown for all other benefits for each scenario include the payment of accrued vacation. In addition, the amounts shown in the row captioned “Termination Without Cause” include reimbursement of COBRA payments and payments for outplacement services (capped at $25,000), and the amounts shown in the row captioned “Involuntary Termination Within Two Years of Change in Control” include reimbursement of COBRA payments, payments for outplacement services (capped at $25,000), and reimbursement for legal fees, if any (assumed to be $0 for purposes of the table below).

 

Name		Triggering Event		Cash Severance				Annual and Long-Term Cash Incentives				Equity				Additional Retirement Benefits				All Other Benefits				Total
Kramer		Death/Disability		$	0			$	21,186,870			$	19,227,562			$	0			$	105,769			$	40,520,201
		Termination Without Cause			5,500,000				10,833,000				6,202,290				1,845,299				164,600				24,545,189
		Involuntary Termination Within Two Years of Change in Control			5,500,000				25,469,470				20,565,809				1,845,299				164,600				53,545,178
Thompson		Retirement/ Death/ Disability			0				2,255,525				1,509,556				0				60,577				3,825,658
		Termination Without Cause			1,535,625				1,078,875				173,077				0				101,061				2,888,638
		Involuntary Termination Within Two Years of Change in Control			2,047,500				2,742,125				2,400,582				0				106,223				7,296,430
Wells		Death/Disability			0				5,212,298				3,885,201				0				59,135				9,156,634
		Termination Without Cause			1,798,875				2,859,123				763,962				0				109,330				5,531,290
		Involuntary Termination Within Two Years of Change in Control			2,398,500				6,185,598				4,215,886				75,357				117,728				12,993,069
Smith		Death/Disability			0				4,303,094				3,354,040				0				42,308				7,699,442
		Termination Without Cause			1,567,500				2,422,976				641,397				0				94,656				4,726,529
		Involuntary Termination Within Two Years of Change in Control			2,090,000				5,080,794				4,065,333				0				103,772				11,339,899
Bialosky		Death/Disability			0				3,990,830				2,888,477				0				42,692				6,921,999
		Termination Without Cause			1,498,500				2,249,428				604,427				0				93,317				4,445,672
		Involuntary Termination Within Two Years of Change in Control			1,998,000				4,711,030				3,113,523				314,500				101,859				10,238,912

 

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				PMT Insert

DIRECTOR COMPENSATION TABLE

The table below sets forth information regarding the compensation paid to our non-employee directors during 2014.

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)1				All Other Compensation ($)2				Total ($)
Conaty		$	120,000			$	128,629			$	2,083			$	250,712
Firestone			135,000				135,106				893				270,999
Geissler			135,000				129,373				—				264,373
Hellman			140,000				130,075				—				270,075
McCollough			175,000				135,728				—				310,728
McGlade			120,000				125,829				1,595				247,424
Morell			118,000				92,070				—				210,070
Palmore			135,000				126,458				—				261,458
Peterson(3)			60,000				75,888				—				135,888
Streeter			134,176				134,209				1,339				269,724
Weidemeyer			125,824				138,150				—				263,974
Wessel			120,000				137,032				—				257,032

 

1	Represents quarterly grants of restricted stock units, together with dividend equivalents paid during 2014, pursuant to the Outside Directors’ Equity Participation Plan. For further information regarding this plan, see the description below.

 

As of December 31, 2014, the following directors held the total number of restricted stock units and deferred share equivalent units indicated next to his or her name:

 

Name		Number of Restricted Stock Units				Number of Deferred Share Equivalent Units				Total Share Equivalents
Conaty			24,097				—				24,097
Firestone			49,831				3,861				53,692
Geissler			27,496				—				27,496
Hellman			30,702				—				30,702
McCollough			49,831				6,701				56,532
McGlade			11,301				—				11,301
Morell			3,627				—				3,627
Palmore			14,178				—				14,178
Peterson			—				20,594				20,594
Streeter			49,590				—				49,590
Weidemeyer			49,831				17,766				67,597
Wessel			49,831				12,659				62,490

 

2	Represents income associated with the Company’s provision of up to two sets of automobile tires per year to the directors.

 

3	Mrs. Peterson left the Board of Directors effective on April 14, 2014.

Goodyear directors who are not officers or employees of Goodyear or any of its subsidiaries receive, as compensation for their services as a director, a combination of cash retainer and stock awards pursuant to the Outside Directors’ Equity Participation Plan (the “Directors’ Equity Plan”).

 

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				DIRECTOR COMPENSATION TABLE

For the year ended December 31, 2014, outside directors received cash compensation in the amount of $30,000 per calendar quarter. The Lead Director received an additional $13,750 per calendar quarter. The chairpersons of the Audit and Compensation Committees received an additional $5,000 per calendar quarter, and the chairpersons of all other committees received an additional $3,750 per calendar quarter. Any director who attended more than 24 board and committee meetings received $1,700 for each additional meeting attended ($1,000 if the meeting was attended by telephone). In addition, the Board may form special committees from time to time and determine the compensation of the chairperson of such committees. Travel and lodging expenses incurred in attending board and committee meetings are paid by Goodyear. Mr. Kramer did not receive additional compensation for his service as a director.

Outside directors also participate in the Directors’ Equity Plan, which is intended to further align the interests of directors with the interests of shareholders by making part of each director’s compensation dependent on the value and appreciation over time of our Common Stock. For 2014, each eligible director received a quarterly grant of restricted stock units with a grant date fair value of $31,250 for the portion of a calendar quarter during which he or she served as a director, payable on the first business day of the subsequent calendar quarter based on the closing market price of our Common Stock on that date. These restricted stock units will be paid to directors in shares of Common Stock on the fifth business day of the quarter following the quarter during which the director leaves the Board. The Directors’ Equity Plan also permits each participant annually to elect to have 25%, 50%, 75% or 100% of his or her cash retainer and meeting fees deferred and converted into share equivalent units based on the closing market price of our Common Stock on the payment date. Under the Directors’ Equity Plan, the restricted stock units and share equivalent units receive dividend equivalents at the same rate as our Common Stock, which dividends will be converted into restricted stock units or share equivalent units, as the case may be, based on the closing market price of our Common Stock on the dividend payment date. Share equivalent units accrued prior to October 1, 2010 will be converted to a dollar value at the closing market price of our Common Stock on the later of the first business day of the seventh month following the month during which the participant ceased to be a director and the fifth business day of the year next following the year during which the participant ceased to be a director. Such amounts earned and vested prior to January 1, 2005, will be paid in ten annual installments or, at the discretion of the Compensation Committee, in a lump sum or in fewer than ten installments beginning on the fifth business day following the conversion from share equivalent units to a dollar value. Amounts in Directors’ Equity Plan accounts that are to be paid in installments 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. Amounts earned and vested on or after January 1, 2005, will be paid out in a lump sum on the fifth business day following the conversion from share equivalent units to a dollar value. Share equivalent units accrued on or after October 1, 2010 will be paid to directors in shares of Common Stock on the fifth business day of the quarter following the quarter during which the director leaves the Board.

The stockholding guidelines for directors specify that a director must accumulate and hold a number of shares equal in value to five times the annual cash retainer. Shares owned directly and restricted stock units and share equivalent units accrued to a Directors’ Equity Plan account are counted as ownership in assessing compliance with the guidelines. The stock price to be used in assessing compliance with the guidelines as of May 1st of each year will be the average closing stock price for the prior 60-day period. Messrs. Conaty, Firestone, Geissler, Hellman, McCollough, Weidemeyer and Wessel and Ms. Streeter have met their stockholding requirement. All of our other directors are making progress towards satisfying their stockholding requirement.

 

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RISKS RELATED TO COMPENSATION POLICIES AND PRACTICES

We have reviewed our compensation policies and practices for our employees and have concluded that the risks arising from those policies and practices are not reasonably likely to have a material adverse effect on us.

BENEFICIAL OWNERSHIP OF COMMON STOCK

The persons identified in the table below have reported that they beneficially owned at December 31, 2014 more than 5% of the outstanding shares of the Common Stock as follows:

 

Name and Address of Beneficial Owner		Shares of Common Stock Beneficially Owned				Percent of Common Stock Outstanding Beneficially Owned
BlackRock, Inc.
55 East 52nd Street New York, New York 10022			23,134,700	1			8.6%
The Vanguard Group, Inc.
100 Vanguard Blvd. Malvern, Pennsylvania 19355			19,923,063	2			7.4%

 

1	Sole voting power in respect of 21,472,863 shares and sole dispositive power in respect of 23,134,700 shares, as stated in a Schedule 13G/A filed with the Securities and Exchange Commission on January 23, 2015.

 

2	Sole voting power in respect of 395,585 shares, sole dispositive power in respect of 19,550,378 shares and shared dispositive power in respect of 372,685 shares, as stated in a Schedule 13G/A filed with the Securities and Exchange Commission on February 10, 2015.

In addition, The Northern Trust Company, 181 Madison Street, Chicago, Illinois 60603, has indicated that at the record date it held 4,771,983 shares, or approximately 1.8% of the outstanding shares, of Common Stock as the trustee of various employee savings plans sponsored by Goodyear and certain subsidiaries.

 

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				BENEFICIAL OWNERSHIP OF COMMON STOCK

On February 18, 2015, each director and nominee, each named executive officer, and all directors and executive officers as a group, beneficially owned the number of shares of Common Stock set forth in the table below.

 

		Beneficial Ownership at February 18, 20151
Name		Shares of Common Stock Owned Directly2				Shares of Common Stock Held in Savings Plan3				Shares of Common Stock Subject to Exercisable Options4				Deferred Share Equivalent Units and Restricted Stock Units				Percent of Class
William J. Conaty			-0-				-0-				-0-				25,200	6			*
James A. Firestone			-0-				-0-				-0-				54,794	6			*
Werner Geissler			15,000				-0-				-0-				28,598	6			*
Peter S. Hellman			-0-				-0-				-0-				31,805	6			*
Laurette T. Koellner10			-0-				-0-				-0-				-0-				*
W. Alan McCollough			-0-				-0-				-0-				57,634	6			*
John E. McGlade			-0-				-0-				-0-				12,403	6			*
Michael J. Morell			1,925				-0-				-0-				4,729	6			*
Roderick A. Palmore			-0-				-0-				-0-				15,281	6			*
Stephanie A. Streeter			-0-				-0-				-0-				50,693	6			*
Thomas H. Weidemeyer			1,000				-0-				-0-				68,699	6			*
Michael R. Wessel			-0-				-0-				-0-				63,592	6			*
Richard J. Kramer			433,864	5			216				1,191,924				459	7			*
Laura K. Thompson			19,215				-0-				106,483				40,334	8			*
Darren R. Wells			113,098				141				307,762				6,749	9			*
Gregory L. Smith			79,842				-0-				148,244				25,209	8			*
David L. Bialosky			94,307				-0-				184,203				-0-				*
All directors, the named executive officers and all other executive officers as a group (25 persons)			968,252				2,387				2,567,935				655,791				1.3%

 

*	Less than 1%

 

1

The number of shares indicated as beneficially owned by each of the directors and named executive officers, and by all directors and executive officers as a group, and the percentage of Common Stock outstanding beneficially owned by each person and the group, has been determined in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934.

 

2	Unless otherwise indicated in a subsequent note, each person named and each member of the group has sole voting and investment power with respect to the shares of Common Stock shown.

 

3	Shares held in trust under Goodyear’s Employee Savings Plan for Salaried Employees.

 

4	Shares that may be acquired upon the exercise of options which are exercisable on or prior to April 19, 2015.

 

5	Includes 103,492 shares acquired under Restricted Stock Purchase Agreements.

 

6

Deferred share equivalent units and restricted stock units, each equivalent to a share of Common Stock, accrued to accounts of the director under Goodyear’s Outside Directors’ Equity Participation Plan. Deferred share equivalent units are payable in cash, and restricted stock units are payable in Common Stock, following retirement from the Board of Directors. See “Director Compensation Table” at page 69.

 

7	Units, each equivalent to a share of Common Stock, deferred pursuant to performance awards earned, and payable in cash, shares of Common Stock, or any combination thereof, at the election of the executive officer.

 

8	Restricted stock units, each equivalent to a share of Common Stock, that vest on December 13, 2016.

 

9	Restricted stock units, each equivalent to a share of Common Stock, that vested on February 23, 2015.

 

10	Ms. Koellner was elected to the Board of Directors on February 23, 2015.

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and officers to file reports of holdings and transactions in our equity securities with the Securities and Exchange Commission. As a practical matter, we assist our directors and officers by completing and filing these reports electronically on their behalf. We believe that our directors and officers timely complied with all such filing requirements during 2014.

RELATED PERSON TRANSACTIONS

During 2014, Goodyear 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 Goodyear non-management directors are executive officers and/or directors. Goodyear does not consider the transactions to be material to its business and believes such transactions were not material in relation to the business of such other corporations or the interests of the directors concerned.

On an annual basis, each director and executive officer is obligated to complete a Director and Officer Questionnaire that requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. Under the “Board of Directors and Executive Officers Conflict of Interest Policy,” directors and executive officers are expected to promptly disclose potential conflicts of interest to Goodyear’s General Counsel, who may consult with the Chairman of the Governance Committee on matters of interpretation of the policy. Any waivers of the policy are required to be approved by the Board of Directors, and any such waivers will be promptly disclosed to shareholders.

 

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PRINCIPAL ACCOUNTANT FEES

AND SERVICES

The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as Goodyear’s independent registered public accounting firm for the fiscal year ending December 31, 2015. Representatives of PwC are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

The following table presents fees and expenses for services rendered by PwC for fiscal 2014 and 2013.

(IN THOUSANDS)

 

		2014				2013
Audit Fees and Expenses1		$	12,706			$	12,836
Audit-Related Fees and Expenses2			296				356
Tax Fees and Expenses3			1,116				1,974
All Other Fees and Expenses4			30				221
Total		$	14,148			$	15,387

 

1

Audit fees and expenses represent fees and expenses for professional services provided in connection with the audit of our financial statements and the effectiveness of internal control over financial reporting, the review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

 

2	Audit-related fees and expenses consist primarily of accounting consultations and services related to business acquisitions and divestitures.

 

3	Tax fees and expenses consist primarily of assistance in the preparation of international tax returns and consultations on various tax matters worldwide.

 

4	All other fees and expenses principally include fees related to advisory services and information and education services.

All audit, audit-related, tax and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by PwC was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s Pre-Approval Policy provides for pre-approval of audit, audit-related, tax and all other fees on an annual basis and, in addition, individual engagements anticipated to exceed pre-established thresholds must be separately approved. Under the policy, the Audit Committee delegates pre-approval authority to the Chairman of the Committee. The Chairman is to report any such pre-approval decisions to the Audit Committee at its next scheduled meeting.

 

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REPORT OF THE AUDIT COMMITTEE

Management has the primary responsibility for the integrity of Goodyear’s financial information and the financial reporting process, including the system of internal control over financial reporting. PricewaterhouseCoopers LLP (“PwC”), Goodyear’s independent registered public accounting firm, is responsible for conducting independent audits of Goodyear’s financial statements and the effectiveness of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and expressing an opinion on the financial statements and the effectiveness of internal control over financial reporting based upon those audits. The Audit Committee is responsible for overseeing the conduct of these activities by management and PwC.

As part of its oversight responsibility, the Audit Committee has reviewed and discussed the audited financial statements, the adequacy of financial controls and the effectiveness of Goodyear’s internal control over financial reporting with management and PwC. The Audit Committee also has discussed with PwC the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended, as adopted by the PCAOB in Rule 3200T. The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC their independence from Goodyear.

Based on the review and discussions with management and PwC referred to above, the Audit Committee has recommended to the Board of Directors that Goodyear include the audited consolidated financial statements of Goodyear and subsidiaries for the year ended December 31, 2014 in Goodyear’s Annual Report on Form 10-K for the year ended December 31, 2014 and in its 2014 Annual Report to Shareholders.

THE AUDIT COMMITTEE

Peter S. Hellman, Chairman

James A. Firestone

Werner Geissler

W. Alan McCollough

Michael J. Morell

 

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PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has the ultimate authority and responsibility to directly appoint, retain, compensate, oversee, evaluate, and, where appropriate, terminate the independent accountants. The Audit Committee has appointed PwC as the independent registered public accounting firm to audit Goodyear’s consolidated financial statements as of and for the fiscal year ending December 31, 2015 and its internal control over financial reporting as of December 31, 2015. During fiscal year 2014, PwC served as Goodyear’s independent registered public accounting firm and also provided audit-related, tax and other services. See “Principal Accountant Fees and Services” above.

The Audit Committee engages in an annual evaluation of the independent auditor’s qualifications, performance and independence and periodically considers the advisability and potential impact of selecting a different independent registered public accounting firm. In accordance with SEC rules and PwC’s policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to us. For lead and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years. We select the Company’s lead audit partner pursuant to this rotation policy following meetings between the Chairman of the Audit Committee and candidates for that role, as well as discussion by the full Committee and with management. The members of the Audit Committee believe that the continued retention of PwC to serve as Goodyear’s independent registered public accounting firm is in the best interests of Goodyear and its shareholders.

As a result, the following resolution will be presented by the Board of Directors at the Annual Meeting:

“RESOLVED, that the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2015 is hereby ratified.”

Ratification of the appointment of PwC requires the affirmative vote of a majority of our outstanding Common Stock. 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 Audit Committee that it should consider selecting another independent registered public accounting firm for 2016.

 

 

Your Board of Directors unanimously recommends that shareholders vote FOR ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2015 (Proposal 3).

 

 

 

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PROPOSAL 4 – PROPOSAL WITH RESPECT TO THE REMOVAL AND ELECTION OF DIRECTORS

Our Code of Regulations (the “Regulations”) contains only two supermajority voting provisions, which are interrelated:

 

•

To remove all of the directors requires the approval of two-thirds of the voting power of the Company; and

 

•

To remove less than all of the directors requires the approval of approximately 93% of the voting power of the Company, due to a mandatory provision of Ohio law that is intended to protect cumulative voting rights.

After careful review, our Board of Directors recommends that Article II, Section 3 of Goodyear’s Regulations be amended to reduce the vote required to remove a director, and to make subsequent amendments to that provision, from a vote of two-thirds of the voting power of the Company to a vote of a majority of the voting power of the Company and, in order to effectuate that change, that amendments to Goodyear’s Amended Articles of Incorporation, as amended (the “Articles”), be adopted to eliminate cumulative voting in the election of directors.

All of our directors currently stand for election annually and are required to receive a greater number of votes cast “for” his or her election than “against” his or her election in order to be elected. In reaching its recommendation in support of this proposal, the Board of Directors weighed general investor sentiment against supermajority voting provisions against the extraordinary act of removing a director between annual meetings of shareholders, given Goodyear’s unclassified board and majority vote election standard. The Board of Directors ultimately concluded that a reduction in the vote required from two-thirds to a majority of the voting power of the Company was appropriate.

Furthermore, our Regulations, consistent with a mandatory provision of Ohio law, prohibit the removal of a director (unless all of the directors are removed) if the votes of a sufficient number of shares are cast against that director’s removal which, if cumulatively voted at an election of all the directors, would be sufficient to elect at least one director. This provision effectively requires the affirmative vote of approximately 93% of the voting power of the Company in order to remove less than all of the directors. Consequently, in order to effectuate a meaningful change in the vote required to remove directors, cumulative voting must also be eliminated.

Under Ohio law, because our Articles currently do not address cumulative voting, our shareholders have the right to elect to vote cumulatively in any election of directors. Cumulative voting enables a shareholder to cumulate his or her voting power to give one nominee a number of votes equal to the number of directors to be elected multiplied by the number of shares he or she holds, or to distribute the votes among two or more nominees as he or she sees fit. Thus, with cumulative voting, shareholders can cast all of their votes “for” one nominee, instead of voting each share “for” or “against” or “abstain” for each nominee, and thereby can potentially elect a nominee that has not been supported by the holders of a majority of the shares voting on the election of directors. As a result, cumulative voting is at odds with the objectives of Goodyear’s majority voting

 

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				PROPOSAL WITH RESPECT TO THE REMOVAL AND ELECTION OF DIRECTORS

standard for director elections because cumulative voting potentially empowers shareholders with less than a majority of the shares to elect one or more directors, while majority voting seeks to hold every director accountable to those with a majority of shares voting on the election of directors. Coupled with the annual election of directors, cumulative voting also increases the chances that a minority shareholder could take disruptive actions in opposition to the wishes of the majority of shareholders.

Our Board believes that each director should only be elected if that director receives a majority of the votes cast and that each director should represent the interests of all shareholders, rather than the interests of a minority shareholder or limited constituency. Our Board also acknowledges that, with cumulative voting, the ability of shareholders to remove a director as currently provided by our Regulations is illusory. Therefore, our Board believes that it is in the best interests of the Company and the shareholders to eliminate cumulative voting.

The elimination of cumulative voting might under certain circumstances render more difficult or discourage a proxy contest, tender offer or the assumption of control by a holder of a large block of our Common Stock. Neither management nor our Board is aware of any attempt by any shareholder to accumulate sufficient shares to undertake any such actions. Our Board views this proposal as an appropriate balancing measure in view of the ability to remove directors, the annual election of our directors, and our director majority voting standard.

The text of the amendments to the Regulations are set forth in Exhibit A to this Proxy Statement. The proposed amendment to the Articles would be added as a new Article Eighth, the text of which is also set forth in Exhibit A of this Proxy Statement. In addition, Article Seventh of the Articles, which relates to our director majority voting standard, will be revised to remove references to cumulative voting, as shown in Exhibit A.

Adoption of the amendments to the Regulations and the Articles requires the affirmative vote of two-thirds of our outstanding Common Stock.

 

 

Your Board of Directors unanimously recommends that shareholders vote FOR approval of amendments to Goodyear’s Code of Regulations and Articles of Incorporation to reduce the vote required to remove directors (and to make subsequent amendments to that provision) and to eliminate cumulative voting in the election of directors (Proposal 4).

 

 

 

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PROPOSAL 5 – PROPOSAL TO ELIMINATE CERTAIN SUPERMAJORITY VOTING PROVISIONS

Our Board of Directors recommends that the shareholders approve an amendment the Articles to reduce the vote required to approve certain business combination transactions from two-thirds of the voting power of the Company to a majority of the voting power of the Company.

Under Ohio law, shareholder approval of business combination transactions generally requires the affirmative vote of the holders of shares entitling them to exercise two-thirds of the voting power of a corporation unless the corporation’s articles of incorporation provide for the affirmative vote of a greater or lesser proportion, but not less than a majority, of the voting power of the corporation. Under the proposal, certain of these statutorily-provided supermajority voting requirements would be eliminated and a new Article would be added to provide that certain mergers, consolidations and sales of all or substantially all of the Company’s assets may be approved by a majority of the voting power of the Company, as permitted under Ohio law.

The Board of Directors has observed that shareholder proposals seeking to remove similar supermajority voting requirements have been proposed in recent years at other public companies and have received significant shareholder support. This evidences the growing investor sentiment that supermajority voting requirements for business combination transactions may permit a minority of shareholders to halt a business combination transaction that is supported by the majority of the shareholders. Given the amount of shareholder support generally for similar proposals and following a careful assessment, the Board of Directors has decided to propose the elimination of the supermajority voting requirements for approval of certain business combination transactions.

The text of the amendment to the Articles is set forth in Exhibit A to this Proxy Statement.

Adoption of the amendment to the Articles requires the affirmative vote of two-thirds of our outstanding Common Stock.

 

 

Your Board of Directors unanimously recommends that shareholders vote FOR approval of an amendment to Goodyear’s Amended Articles of Incorporation to reduce the vote required for certain business combination transactions (Proposal 5).

 

 

 

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PROPOSAL 6 – SHAREHOLDER PROPOSAL

The proposal set forth below has been submitted by Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, the beneficial owner of no fewer than 300 shares of Goodyear’s Common Stock.

Proposal 6 – Simple Majority Vote

RESOLVED, Shareholders request that our board take the steps necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws.

Shareowners are willing to pay a premium for shares of corporations that have excellent corporate governance. Supermajority voting requirements have been found to be one of six entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are arguably most often used to block initiatives supported by most shareowners but opposed by a status quo management.

This proposal topic also won 98% support of all votes cast at our 2013 annual meeting. It is up to management to explain in its response to this proposal how a proposal that receives 98% support is not adopted.

This proposal topic also won 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. The proponents of these proposals included Ray T. Chevedden and William Steiner. Currently a 1%-minority can frustrate the will of our 66%-shareholder majority.

An added incentive to vote for this proposal is our Company’s clearly improvable corporate governance as reported in 2014:

GMI, an independent investment research firm, said Richard Kramer had total realized pay of $17 million for 2013. GMI said multiple related party transactions and other potential conflicts of interest involving Goodyear’s board or senior managers should be reviewed in greater depth, as such practices raise concerns regarding potential self-dealing or abuse. Goodyear had not disclosed specific, quantifiable performance target objectives for our CEO.

Returning to the core topic of this proposal from the context of our clearly improvable corporate performance, please vote to protect shareholder value:

Simple Majority Vote – Proposal 6

 

 

Your Board of Directors unanimously recommends that shareholders vote AGAINST approval of this shareholder proposal (Proposal 6).

 

 

 

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OTHER BUSINESS

Your 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.

After the conclusion of the matters described above, shareholders will have an opportunity to ask appropriate questions regarding Goodyear and its operations.

If any other matters properly come before the Annual Meeting, your proxy will be voted by Mr. Bialosky, Ms. Thompson or Mr. Bell in such manner as they, in their discretion, deem appropriate.

March 13, 2015

By Order of the Board of Directors

 

DAVID L. BIALOSKY

Secretary

 

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EXHIBIT A

Proposal 4 – To reduce the voting standard to remove directors and to eliminate cumulative voting in the election of directors.

Text of amendments to the Code of Regulations:

ARTICLE II, SECTION 3. Vacancies; Resignations; Removal of Directors. In the event of the occurrence of any vacancy or vacancies in the Board, however caused, the remaining directors, though less than a majority of the whole authorized number of directors, may, by the vote of a majority of their number, fill any such vacancy for the unexpired term. Any director may resign at any time by oral statement to that effect made at a meeting of the Board or in a writing to that effect delivered to the Secretary, such resignation to take effect immediately or at such other time thereafter as the director may specify. All the directors, or any individual director, may be removed from office by the vote of the holders of shares entitling them to exercise two-thirds a majority of the voting power of the Company entitled to vote to elect directors in place of the director or directors to be removed, provided that unless all the directors are removed, no individual director shall be removed if the votes of a sufficient number of shares are cast against such director’s removal which, if cumulatively voted at an election of all the directors would be sufficient to elect at least one director; provided further, that, if shareholders do not have the right to vote cumulatively under the laws of the State of Ohio or the Articles of Incorporation, such directors or individual director may be removed from office by the vote of the holders of shares entitling them to exercise two-thirds of the voting power of the Company entitled to vote to elect directors in place of the director or directors to be removed. In the event of any such removal, a new director may be elected at the same meeting for the unexpired term of each director removed. Failure to elect a director to fill the unexpired term of any director so removed from office shall be deemed to create a vacancy in the Board of Directors. Notwithstanding Article X of these Regulations, the provisions of this Section 3 of Article II may be amended, repealed or supplemented only by the shareholders at a meeting held for such purpose by the affirmative vote of the holders of shares entitling them to exercise two-thirds a majority of the voting power of the Company on such proposal.

Text of amendments to the Amended Articles of Incorporation:

New Article Eighth would read in its entirety as follows:

No holder of shares of the Corporation shall have the right to cumulate his or her voting power in the election of directors of the Corporation.

Article Seventh would also be amended as follows:

SEVENTH: In order for a nominee to be elected a director of the corporation in an uncontested election for which cumulative voting is not in effect, the nominee must receive a greater number of votes cast “for” his or her election than “against” his or her election. In a contested election or if cumulative voting is in effect, the nominees receiving the greatest number of votes shall be elected, up to the number of directors to be elected. An election shall be considered contested if there are more nominees for election than director positions to be filled in that election.

 

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				EXHIBIT A

Proposal 5 – To reduce the voting standard for certain business combination transactions.

Text of amendments to the Amended Articles of Incorporation:

New Article Ninth would read in its entirety as follows:

 

(a)

Notwithstanding any provision of the laws of the State of Ohio requiring the vote of the holders of a designated proportion (but less than all) of the voting power of the Corporation, the vote of such holders required to approve, adopt or authorize any Business Combination (as hereinafter defined), where any provision of the laws of the State of Ohio requires such a vote, shall be the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation on the proposal, and the affirmative vote of the holders of shares of any particular class that is otherwise required by these Articles of Incorporation.

 

(b)	A Business Combination, for purposes of this Article Ninth, shall mean:

 

(i)

any merger or consolidation of the Corporation into or with any other person, corporation or entity; or

 

(ii)

any sale, lease, exchange, transfer or other disposition of all or substantially all of the assets of the Corporation to or with any other corporation, person or entity.

 

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EXHIBIT B

Use of Non-GAAP Financial Measures

RECONCILIATION FOR SEGMENT OPERATING INCOME

 

		Twelve Months Ended December 31,
($ in millions)		2014				2013				2012				2011				2010				2009
Total Segment Operating Income		$	1,712			$	1,580			$	1,248			$	1,368			$	917			$	372
Rationalizations			(95	)			(58	)			(175	)			(103	)			(240	)			(227	)
Interest expense			(428	)			(392	)			(357	)			(330	)			(316	)			(311	)
Other expense			(302	)			(97	)			(139	)			(73	)			(186	)			(40	)
Asset write-offs & accelerated depreciated			(7	)			(23	)			(20	)			(50	)			(15	)			(43	)
Corporate incentive compensation plans			(97	)			(108	)			(69	)			(70	)			(71	)			(41	)
Corporate pension curtailments/settlements			(33	)			—				1				(15	)			—				—
Intercompany profit elimination			4				4				(1	)			(5	)			(14	)			(13	)
Retained expenses of divested operations			(16	)			(24	)			(14	)			(29	)			(20	)			(17	)
Other			(51	)			(69	)			(34	)			(75	)			(47	)			(37	)
Income (Loss) before Income Taxes		$	687			$	813			$	440			$	618			$	8			$	(357	)
United States and Foreign Taxes			(1,834	)			138				203				201				172				7
Less: Minority Shareholders Net Income			69				46				25				74				52				11
Goodyear Net Income (Loss)		$	2,452			$	629			$	212			$	343			$	(216	)		$	(375	)

RECONCILIATION FOR FREE CASH FLOW FROM OPERATIONS

The amounts below are calculated from the Consolidated Statements of Cash Flows except for pension expense, which is as reported in the pension-related note in the Notes to Consolidated Financial Statements

 

		Year Ended December 31,
($ in millions)		2014				2013				2012				2011				2010				2009
Net Income (Loss)		$	2,521			$	675			$	237			$	417			$	(164	)		$	(364	)
Depreciation and Amortization			732				722				687				715				652				636
Change in Working Capital(a)			(1	)			415				457				(650	)			52				1,081
Pension Expense(b)			158				285				307				266				300				387
Other(c)			(1,506	)			75				140				461				546				187
Capital Expenditures			(923	)			(1,168	)			(1,127	)			(1,043	)			(944	)			(746	)
Free Cash Flow from Operations (non-GAAP)		$	981			$	1,004			$	701			$	166			$	442			$	1,181
Capital Expenditures			923				1,168				1,127				1,043				944				746
Pension Contributions & Direct Payments			(1,338	)			(1,162	)			(684	)			(294	)			(405	)			(430	)
Rationalizations Payments			(226	)			(72	)			(106	)			(142	)			(57	)			(200	)
Cash Flow from Operating Activities (GAAP)		$	340			$	938			$	1,038			$	773			$	924			$	1,297

 

(a)	Working capital represents total changes in accounts receivable, inventories and accounts payable — trade.

 

(b)	Pension expense is the net periodic pension cost before curtailments, settlements and termination benefits as reported in the pension-related note in the Notes to Consolidated Financial Statements.

 

(c)

Other includes amortization and write-off of debt issuance costs, deferred income taxes, net pension curtailments and settlements, net rationalization charges, net (gains) losses on asset sales, net Venezuela currency loss, customer prepayments and government grants, insurance proceeds, compensation and benefits less pension expense, other current liabilities, and other assets and liabilities.

 

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For additional information on Goodyear’s commitment to corporate responsibility, see our annual Corporate Responsibility Report which is available online at www.goodyear.com/responsibility.

Please note, however, that information contained on the website is not incorporated by reference in this Proxy Statement or considered to be a part of this document.

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C/O COMPUTERSHARE TRUST COMPANY, N.A. P.O. BOX 43069 PROVIDENCE, RI 02940-3069		VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 12, 2015. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
		ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by The Goodyear Tire & Rubber Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
		VOTE BY TELEPHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 12, 2015. Have your proxy card in hand when you call and then follow the instructions.
		VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to The Goodyear Tire & Rubber Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.   If you vote via the Internet or by phone, please do not mail your card. Your vote is important. Please vote immediately.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M84213-P59552                                     KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

THE GOODYEAR TIRE & RUBBER COMPANY

The Board of Directors recommends that you vote   FOR the election of all Nominees.

ITEM 1. Election of Directors     NOMINEES:

For

Against

Abstain

1a)    William J. Conaty     1b)   James A. Firestone     1c)   Werner Geissler     1d)   Peter S. Hellman

¨   ¨   ¨   ¨

¨   ¨   ¨   ¨

¨   ¨   ¨   ¨

1l)     Thomas H. Weidemeyer   1m)   Michael R. Wessel   The Board of Directors recommends that you vote

For   ¨   ¨

Against   ¨   ¨

Abstain   ¨   ¨

FOR the following proposals.

1e)   Laurette T. Koellner     1f)   Richard J. Kramer     1g)   W. Alan McCollough     1h)   John E. McGlade     1i)   Michael J. Morell     1j)   Roderick A. Palmore     1k)   Stephanie A. Streeter

¨   ¨   ¨   ¨   ¨   ¨   ¨

¨   ¨   ¨   ¨   ¨   ¨   ¨

¨   ¨   ¨   ¨   ¨   ¨   ¨

ITEM 2.  Advisory vote to approve executive compensation.   ITEM 3.  Ratification of appointment of                 PricewaterhouseCoopers LLP as Independent                 Registered Public Accounting Firm.   ITEM 4.  Approve amendments to the Articles of                 Incorporation and Code of Regulations to                 reduce the vote required to remove directors                 and to eliminate cumulative voting in the                 election of directors.   ITEM 5.  Approve amendments to the Articles of                 Incorporation to reduce the vote required for                 certain business combination transactions.   The Board of Directors recommends that you vote AGAINST the following proposal.   ITEM 6. Shareholder Proposal re: Simple Majority Vote.

¨     ¨       ¨         ¨           ¨

¨     ¨       ¨         ¨           ¨

¨     ¨       ¨         ¨           ¨

Please indicate if you plan to attend this meeting.

Yes ¨

No ¨

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.   The undersigned hereby acknowledges receipt of the Notice of 2015 Annual Meeting of Shareholders and Proxy Statement.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

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ANNUAL MEETING OF SHAREHOLDERS

THE GOODYEAR TIRE & RUBBER COMPANY

APRIL 13, 2015

4:30 P.M.

HILTON AKRON/FAIRLAWN

3180 WEST MARKET STREET

AKRON, OHIO

PLEASE VOTE — YOUR VOTE IS IMPORTANT

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The 2015 Notice and Proxy Statement and 2014 Annual Report are available at www.proxyvote.com.

 

M84214-P59552        

 

				THE GOODYEAR TIRE & RUBBER COMPANY
				PROXY FOR 2015 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 appoints David L. Bialosky, Laura K. Thompson and Bertram Bell and each or any of them, the proxies or proxy of the undersigned, with full power of substitution, to represent the undersigned, and to vote all of the shares of Common Stock that the undersigned is entitled to vote, at the Annual Meeting of Shareholders of the Company to be held at the Hilton Akron/Fairlawn in Akron, Ohio, on Monday, April 13, 2015, at 4:30 P.M., Akron time, and at any and all adjournments thereof; with the power to vote said shares for the election of thirteen Directors of the Company (with discretionary authority to cumulate votes), upon the other matters listed on the reverse side hereof 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.   If you sign and return this card without marking, this proxy card will be treated as being FOR the election of Directors (with discretionary authority to cumulate votes), FOR Items 2, 3, 4 and 5, and AGAINST Item 6.
		If you plan to attend the 2015 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.

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C/O COMPUTERSHARE TRUST COMPANY, N.A. P.O. BOX 43069 PROVIDENCE, RI 02940-3069		VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on April 8, 2015. Have your voting instruction card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
		ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by The Goodyear Tire & Rubber Company in mailing proxy materials, you can consent to receiving all future proxy statements, voting instruction cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.
		VOTE BY TELEPHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on April 8, 2015. Have your voting instruction card in hand when you call and then follow the instructions.
		VOTE BY MAIL Mark, sign and date your voting instruction card and return it in the postage-paid envelope we have provided or return it to The Goodyear Tire & Rubber Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.   If you vote via the Internet or by phone, please do not mail your card. Your vote is important. Please vote immediately.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M84215-P59552                                     KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

THE GOODYEAR TIRE & RUBBER COMPANY

The Board of Directors recommends that you vote   FOR the election of all Nominees.

ITEM 1. Election of Directors     NOMINEES:

For

Against

Abstain

1a)    William J. Conaty     1b)   James A. Firestone     1c)   Werner Geissler     1d)   Peter S. Hellman

¨   ¨   ¨   ¨

¨   ¨   ¨   ¨

¨   ¨   ¨   ¨

1l)     Thomas H. Weidemeyer   1m)    Michael R. Wessel   The Board of Directors recommends that you vote

For   ¨   ¨

Against   ¨   ¨

Abstain   ¨   ¨

FOR the following proposals.

1e)   Laurette T. Koellner     1f)   Richard J. Kramer     1g)   W. Alan McCollough     1h)   John E. McGlade     1i)   Michael J. Morell     1j)   Roderick A. Palmore     1k)   Stephanie A. Streeter

¨   ¨   ¨   ¨   ¨   ¨   ¨

¨   ¨   ¨   ¨   ¨   ¨   ¨

¨   ¨   ¨   ¨   ¨   ¨   ¨

ITEM 2.  Advisory vote to approve executive compensation.   ITEM 3.  Ratification of appointment of                 PricewaterhouseCoopers LLP as Independent                 Registered Public Accounting Firm.   ITEM 4.  Approve amendments to the Articles of                 Incorporation and Code of Regulations to reduce the                 vote required to remove directors and to eliminate                 cumulative voting in the election of directors.   ITEM 5.  Approve amendments to the Articles of                 Incorporation to reduce the vote required for                 certain business combination transactions.   The Board of Directors recommends that you vote AGAINST the following proposal.   ITEM 6. Shareholder Proposal re: Simple Majority Vote.

¨   ¨         ¨     ¨           ¨

¨   ¨         ¨     ¨           ¨

¨   ¨         ¨     ¨           ¨

Please indicate if you plan to attend this meeting.

Yes ¨

No ¨

Authorization: I acknowledge receipt of the Notice of 2015 Annual Meeting of Shareholders and Proxy Statement. I hereby instruct the trustee to vote by proxy, in the form solicited by the Board of Directors, the number of full shares in this Plan account(s) as specified above, or, if not specified above, as recommended by the Board of Directors.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

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Table of Contents

ANNUAL MEETING OF SHAREHOLDERS

THE GOODYEAR TIRE & RUBBER COMPANY

APRIL 13, 2015

4:30 P.M.

HILTON AKRON/FAIRLAWN

3180 WEST MARKET STREET

AKRON, OHIO

PLEASE VOTE — YOUR VOTE IS IMPORTANT

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The 2015 Notice and Proxy Statement and 2014 Annual Report are available at www.proxyvote.com.

 

  M84216-P59552          

 

				CONFIDENTIAL VOTING INSTRUCTIONS 2015 ANNUAL MEETING OF SHAREHOLDERS FOR EMPLOYEE SAVINGS AND OTHER PLANS Solicited on Behalf of the Board of Directors April 13, 2015
		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 13, 2015, are delivered herewith.   Under each employee savings or similar plan in which you participate, 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 18, 2015.   As a participant in and a named fiduciary (i.e., the responsible party identified in the voting section of each Plan Document) under an employee savings plan or other similar plan, you have the right to direct The Northern Trust Company, as trustee, how to vote the shares of Common Stock of The Goodyear Tire & Rubber Company allocated to this account under such plan as well as a portion of any shares for which no timely voting instructions are received from other participants. Each savings plan provides that the trustee will vote the shares for which voting instructions have not been received in the same proportion as it votes the shares for which it has received such instructions unless to do so would be inconsistent with the trustee’s duties. If you wish to have the shares allocated to this account under the plan as well as a portion of any shares for which no timely voting instructions are received from other participants voted by the trustee in accordance with your instructions, please sign the authorization on the reverse side of this card and return it in the enclosed envelope or give your instructions by telephone or via the Internet.   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 this account under each plan on February 18, 2015, at the Annual Meeting of Shareholders to be held on April 13, 2015, and at any adjournment thereof as indicated on the reverse side hereof and upon all other matters as may properly come before the meeting or any adjournment thereof.   Unless otherwise specified on the reverse side, if you give your instructions by signing and returning this card, or by telephone or via the Internet, the Trustee will vote FOR the election of Directors (with discretionary authority to cumulate votes), FOR Items 2, 3, 4 and 5, and AGAINST Item 6.
		If you plan to attend the 2015 ANNUAL MEETING, please mark the box indicated on the reverse side.   THIS CONFIDENTIAL VOTING INSTRUCTION CARD IS CONTINUED ON THE REVERSE SIDE. PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.