The Goodyear Tire & Rubber Company
8,700,000 Shares of 5.875% Mandatory Convertible Preferred Stock
UNDERWRITING AGREEMENT
March 28, 2011
Goldman, Sachs & Co.
J.P. Morgan Securities LLC
As Representatives of the
Several Underwriters
c/o Goldman, Sachs & Co.
200 West Street
New York, New York 10282
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
The Goodyear Tire & Rubber Company, an Ohio corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several underwriters (the "Underwriters") named in Schedule I hereto for whom you are acting as representatives (the "Representatives") an aggregate of 8,700,000 shares (the "Firm Shares") of the Company153s 5.875% Mandatory Convertible Preferred Stock, no par value (the "Preferred Stock"). The respective amounts of the Firm Shares to be so purchased by the several Underwriters are set forth opposite their names in Schedule I hereto. The Company also proposes to sell at the Underwriters153 option an aggregate of up to 1,300,000 additional shares of the Preferred Stock (the "Option Shares") as set forth below. The Preferred Stock will be established by a Certificate of Amendment (the "Certificate of Amendment") to the Amended Articles of Incorporation of the Company, as amended as of the date hereof (the "Amended Articles of
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Incorporation") to be filed with the Secretary of State of the State of Ohio on or before the Closing Date (as defined below).
As the Representatives, you have advised the Company (a) that you are authorized to enter into this Agreement on behalf of the several Underwriters, and (b) that the several Underwriters are willing, acting severally and not jointly, to purchase the number of Firm Shares set forth opposite their respective names in Schedule I, plus their pro rata portion of the Option Shares if you elect to exercise the option to purchase additional shares in whole or in part for the accounts of the several Underwriters. The Firm Shares and the Option Shares (to the extent the aforementioned option is exercised) are herein collectively called the "Preferred Shares." The Preferred Shares and the Underlying Common Shares (as defined below) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the interests of the parties in the transactions contemplated hereby, the parties hereto agree as follows:
1. Representations and Warranties of the Company.
The Company represents and warrants to each of the Underwriters as follows:
(a) An "automatic shelf registration statement" as defined in Rule 405 under the Securities Act of 1933, as amended (the "Act"), on Form S-3 (File No. 333-173118) in respect of the Preferred Shares and the shares (the "Underlying Common Shares") of common stock, no par value, of the Company (the "Common Stock") into which the Preferred Shares are convertible or may otherwise be issued in respect of the Preferred Shares, including a form of prospectus (the "Base Prospectus"), has been prepared and filed by the Company not earlier than three years prior to the date hereof, in conformity with the requirements of the Act and the rules and regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") thereunder and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto has been received by the Company. The Company and the transactions contemplated by this Agreement meet the requirements and comply with the conditions for the use of Form S-3. "Preliminary Prospectus" means the Base Prospectus, as supplemented by any preliminary prospectus (including any preliminary prospectus supplement) relating to the Shares filed with the Commission pursuant to Rule 424(b) under the Act and including the documents incorporated in the Base Prospectus by reference. Copies of such registration statement, including any amendments thereto, the Preliminary Prospectus and the exhibits, financial statements and schedules to such registration statement, in each case as finally amended and revised, have heretofore been delivered by the Company to you. Such registration statement, together with any post-effective amendment thereto filed by the Company pursuant to Rules 413(b) and 462(f) under the Act, is herein referred to as the "Registration Statement," which shall be deemed to include all information omitted therefrom in reliance upon Rule 430A, 430B or 430C under the Act and contained in the Prospectus referred to below. The Registration Statement has become effective under the Act and no post-effective amendment to the Registration Statement has been filed as of the date of this Agreement. "Prospectus" means the prospectus in the form first used to confirm sales of the
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Preferred Shares and filed with the Commission after the Applicable Time (as defined below) pursuant to and within the time limits described in Rule 424(b) under the Act and in accordance with Section 4(a) hereof. Any reference herein to the Registration Statement, any Preliminary Prospectus or to the Prospectus or to any amendment or supplement to any of the foregoing documents shall be deemed to refer to and include any documents incorporated by reference therein as of each effective date of such Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as applicable, and, in the case of any reference herein to the Prospectus, also shall be deemed to include any documents incorporated by reference therein, and any supplements or amendments thereto, filed with the Commission after the date of filing of the Prospectus under Rule 424(b) under the Act, and prior to the termination of the offering of the Preferred Shares by the Underwriters.
(b) As of the Applicable Time and as of the Closing Date and, if applicable, each Option Closing Date (each as defined below), neither (i) the General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the Statutory Prospectus (as defined below) and the information included on Schedule II hereto, all considered together (collectively, the "General Disclosure Package"), nor (ii) any individual Limited Use Free Writing Prospectus (as defined below), when considered together with the General Disclosure Package, included or will include any untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from the Statutory Prospectus or any Issuer Free Writing Prospectus, in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representatives, specifically for use therein, it being understood and agreed that the only such information is that described in Section 14 herein. As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means 4:45 p.m. (New York time) on the date of this Agreement or such other time as agreed to in writing by the Company and the Representatives.
"Statutory Prospectus" means the Preliminary Prospectus, as amended and supplemented by any document incorporated by reference therein and any prospectus supplement that has not been superseded, in each case, immediately prior to the Applicable Time.
"Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 under the Act, relating to the Preferred Shares in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company153s records pursuant to Rule 433(g) under the Act.
"General Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is identified on Schedule III to this Agreement.
"Limited Use Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus.
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(c) Each of the Company and its subsidiaries listed on Schedule IV hereto has been duly organized and is validly existing and in good standing under the laws of their respective jurisdictions of organization, with all requisite power and authority (corporate and other) necessary to own its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus, and has been duly qualified as a foreign corporation or limited liability company for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no liability or disability that is material to the Company and its subsidiaries taken as a whole by reason of the failure to be so qualified or in good standing in any such jurisdiction. As used in this Agreement, a "subsidiary" of any person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by: (i) such person, (ii) such person and one or more subsidiaries of such person or (iii) one or more subsidiaries of such person.
(d) The Company has an authorized capitalization as set forth in the Registration Statement and the Prospectus (and any similar section or information contained in the General Disclosure Package) and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; the Preferred Shares to be issued and sold by the Company have been duly authorized and when issued and paid for as contemplated herein on the Closing Date (and, if applicable, each Option Closing Date), will be validly issued, fully paid and non-assessable, and no preemptive rights of stockholders exist with respect to any of the Preferred Shares or the issue and sale thereof; the Shares will conform in all material respects to the description thereof contained in the General Disclosure Package, the Registration Statement and the Prospectus; neither the filing of the Registration Statement nor the offering or sale of the Preferred Shares as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied for or relating to the registration of any securities of the Company; and all of the issued shares of capital stock or other equity interests of each Significant Subsidiary (for purposes of this Section, as defined in Rule 1-02 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors153 qualifying shares and except as otherwise set forth in the Registration Statement, the General Disclosure Package and the Prospectus) the capital stock or other equity interests of each Significant Subsidiary is owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party, other than those which are "Permitted Liens" as defined in the Indenture dated as of August 13, 2010, among the Company, the subsidiaries party thereto and Wells Fargo Bank, N.A., as trustee, as amended and supplemented. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding subscriptions, rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity or other ownership interest in the Company or any of its Significant Subsidiaries. The Underlying Common Shares initially
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issuable upon conversion of the Preferred Shares in accordance with the terms of the Company153s Amended Articles of Incorporation and the Certificate of Amendment have been duly authorized and reserved for issuance upon such conversion and, when issued by the Company upon such conversion in accordance with the terms of the Company153s Amended Articles of Incorporation and the Certificate of Amendment, will be validly issued, fully paid and non-assessable, and no preemptive rights of stockholders exist with respect to any of the Underlying Common Shares issuable upon such conversion or the issue thereof.
(e) The Commission has not issued an order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus relating to the proposed offering of the Preferred Shares, and no proceeding for that purpose or pursuant to Section 8A of the Act has been instituted or, to the Company153s knowledge, threatened by the Commission. The Registration Statement, as of each effective date and at the date hereof, the Closing Date and any Option Closing Date, and the Prospectus, as of its date and at the date hereof, the Closing Date and any Option Closing Date, complied and will comply in all material respects with the requirements of the Act and the Rules and Regulations. The documents incorporated by reference in the Prospectus, at the time filed with the Commission conformed in all material respects to the requirements of the Exchange Act or the Act, as applicable, and the rules and regulations of the Commission thereunder. The Registration Statement and any amendment thereto as of each effective date and at the date hereof, the Closing Date and any Option Closing Date, did not contain, and will not contain, any untrue statement of a material fact and did not omit, and will not omit, to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments and supplements thereto as of its date and at the date hereof, the Closing Date and any Option Closing Date, did not contain, and will not contain, any untrue statement of a material fact and did not omit, and will not omit, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from the Registration Statement or the Prospectus, or any such amendment or supplement, in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representatives, specifically for use therein, it being understood and agreed that the only such information is that described in Section 14 herein.
(f) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Preferred Shares, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference and any prospectus supplement deemed to be a part thereof that has not been superseded or modified; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, or any amendment or supplement thereto, in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representatives, specifically for use therein, it being understood and agreed that the only such information is that described in Section 14 herein.
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(g) The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the offering and sale of the Preferred Shares other than any Preliminary Prospectus, the Prospectus, any General Use Free Writing Prospectuses and other materials, if any, permitted under the Act and consistent with Section 4(b) below. The Company will file with the Commission all Issuer Free Writing Prospectuses in the time and manner required under Rules 163(b)(2) and 433(d) under the Act.
(h) (i) At the time of filing the Registration Statement, (ii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Preferred Shares in reliance on the exemption of Rule 163 under the Act and (iii) at the date hereof, the Company is a "well-known seasoned issuer" as defined in Rule 405 under the Act. The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) under the Act objecting to the use of the automatic shelf registration form.
(i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Preferred Shares and (ii) as of the date hereof (with such date being used as the determination date for purposes of this clause(ii)), the Company was not and is not an "ineligible issuer" (as defined in Rule 405 under the Act, without taking into account any determination by the Commission pursuant to Rule 405 under the Act that it is not necessary that the Company be considered an ineligible issuer), including, without limitation, for purposes of Rules 164 and 433 under the Act with respect to the offering of the Preferred Shares as contemplated by the Registration Statement.
(j) The financial statements and the related notes thereto included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified, in each case, on a consolidated basis; such financial statements have been prepared in conformity with United States generally accepted accounting principles ("GAAP") applied on a consistent basis (unless otherwise disclosed therein) throughout the periods covered thereby; and the other financial information included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus has been derived from the accounting records of the Company and its subsidiaries and presents fairly in all material respects the information shown thereby.
(k) PricewaterhouseCoopers LLP, who have certified certain consolidated financial statements of the Company and its consolidated subsidiaries incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, are an independent registered public accounting firm with respect to the Company and its subsidiaries as required by the Act and the Rules and Regulations and by the Public Company Accounting Oversight Board (United States) (the "PCAOB").
(l) Other than as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, since the date of the latest audited financial statements included or
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incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no change in the Company153s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company153s internal control over financial reporting.
(m) Except as would not reasonably be expected to have a material adverse effect on the business, properties, financial position or results of operations of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"), the Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management153s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management153s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(n) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company153s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
(o) Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is the subject, which would be required to be disclosed pursuant to Item 103 of Regulation S-K under the Exchange Act in the Company153s Annual Report on Form 10-K if such report were filed on the date hereof; and, to the best of the Company153s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.
(p) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects, except (i) such as are described in the Registration Statement, the General Disclosure Package and the Prospectus, (ii) such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries, (iii) such as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect or (iv) Permitted Liens; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries taken as a whole in any material respect.
(q) The Company and its subsidiaries have paid all federal, state, local and foreign taxes (except for such taxes that are not yet delinquent or that are being contested in good
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faith and by proper proceedings) and filed all tax returns required to be paid or filed through the date hereof, except in each case where the failure to pay or file would not reasonably be expected to have a Material Adverse Effect; and except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus or as would not reasonably be expected to have a Material Adverse Effect, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.
(r) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, any loss or interference with its business that is material to the Company and its subsidiaries, taken as a whole, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, except as set forth or contemplated in the Registration Statement, the General Disclosure Package and the Prospectus; and, since the date as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has not been any change in the capital stock (other than issuances pursuant to equity incentive plans) or increase in long-term debt of the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole, or any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the business, properties, financial position or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Registration Statement, the General Disclosure Package and the Prospectus.
(s) Since the date of the latest audited financial statements of the Company included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries, taken as a whole, or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries, taken as a whole, other than as set forth in the Registration Statement, the General Disclosure Package and the Prospectus.
(t) Neither the Company nor any of its subsidiaries is (i) in violation of its Articles of Incorporation or Code of Regulations or other similar organizational documents, (ii) in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or (iii) in violation of any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except, in the case of clauses (ii) and (iii), for any default or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(u) The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Preferred Shares, the issuance of the Underlying Common Shares
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upon conversion of the Preferred Shares in accordance with the terms of the Company153s Amended Articles of Incorporation and the Certificate of Amendment and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the Articles of Incorporation or Code of Regulations or other similar organizational documents of the Company or (iii) result in any violation of any law or statute or any judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, except, in the case of clauses (i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Preferred Shares, the issuance of the Underlying Common Shares upon conversion of the Preferred Shares in accordance with the terms of the Company153s Amended Articles of Incorporation and the Certificate of Amendment or the consummation by the Company of the transactions contemplated by this Agreement, except for the filing of the Certificate of Amendment with the Secretary of State of the State of Ohio and for such as have been obtained or made by the Company and are in full force and effect under the Act and for such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws or under the securities laws of Canada or any province thereof or from the Financial Industry Regulatory Authority ("FINRA") in connection with the purchase and resale of the Preferred Shares by the Underwriters.
(v) The Company has full right, corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby has been duly and validly taken.
(w) This Agreement conforms in all material respects to the description thereof contained in the Registration Statement and the Prospectus.
(x) This Agreement has been duly authorized, executed and delivered by the Company.
(y) The Company and its subsidiaries own, license or otherwise possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses, except where the failure to own, license or otherwise possess such rights would not reasonably be expected to have a Material Adverse Effect; and the conduct of their respective businesses will not conflict in any respect with any such rights of others, and the Company and, to the best
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of the Company153s knowledge, its subsidiaries, have not received written notice of any claim of infringement of or conflict with any such rights of others, except in each case such conflicts or infringements that, if adversely determined against the Company or any of its subsidiaries, would not reasonably be expected to have a Material Adverse Effect.
(z) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement, the General Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in the Registration Statement, the General Disclosure Package and the Prospectus or as would not reasonably be expected to have a Material Adverse Effect, neither the Company nor any of its subsidiaries has received written notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.
(aa) The statements set forth in the Registration Statement, the General Disclosure Package and the Prospectus under the caption "Description of Mandatory Convertible Preferred Stock" and "Description of Capital Stock," insofar as they purport to constitute a summary of the terms of the Shares, and under the caption "Certain Material United States Federal Income Tax Considerations," insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects.
(bb) Prior to the date hereof, neither the Company nor any of its affiliates (as defined in Rule 144 under the Act) has taken any action which is designed to or which has constituted or which might have been expected to cause or result in stabilization or manipulation of the price of any security of the Company in connection with the offering of the Preferred Shares.
(cc) Neither the Company nor any subsidiary of the Company is, and after giving effect to the offering and sale of the Preferred Shares, none of them will be an "investment company," as such term is defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(dd) Except as would not reasonably be expected to have a Material Adverse Effect, the Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in amounts and insures against such losses and risks as are customary among companies of established reputation engaged in the same or similar businesses and operating in the same or similar locations; and neither the Company nor, to the best of the Company153s knowledge, any of its subsidiaries, has (i) received written notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as
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may be necessary to continue its business, except, in the case of clause (ii), as would not reasonably be expected to have a Material Adverse Effect.
(ee) Except as would not reasonably be expected to have a Material Adverse Effect, (a) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates is in compliance in all material respects with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"), and (b) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for the plans that are subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the present value of all benefit liabilities under each such plan (based on the assumptions used for purposes of Accounting Standards Codification Topic 715) did not, as of the last date the plans were measured for year-end disclosure purposes, exceed by more than $1,162 million the fair market value of the assets of such plan, and the present value of all benefit liabilities of all underfunded plans (based on the assumptions used for purposes of Accounting Standards Codification Topic 715) did not, as of the last date the plans were measured for year-end disclosure purposes, exceed by more than $1,831 million the fair market value of the assets of all such underfunded plans, and no such plan has failed to satisfy the minimum funding standard as defined in Section 412 of the Code or Section 302 of ERISA.
(ff) The Company and its subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "Environmental Laws"); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except in any such case for any such failure to comply with, or failure to receive required permits, licenses or approvals, or liability, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(gg) None of the information on (or hyperlinked from) the Company153s website at www.goodyear.com, or any website of any subsidiary of the Company maintained or supported by the Company, includes or constitutes a "free writing prospectus" as defined in Rule 405 under the Act (other than any information that has been filed by the Company with the Commission in accordance with Rule 433 under the Act).
(hh) Except as would not reasonably be expected to have a Material Adverse Effect, neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company and its subsidiaries, no director, officer, agent, employee or other person associated
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with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(ii) Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, no labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened, in each case that would be reasonably expected to have a Material Adverse Effect.
(jj) Except as would not reasonably be expected to have a Material Adverse Effect, the operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions applicable to the Company and its subsidiaries, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency applicable to the Company and its subsidiaries (collectively, the "Money Laundering Laws"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(kk) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"); and the Company will not, directly or indirectly, use the proceeds of the offering of the Preferred Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2. Purchase, Sale and Delivery of the Firm Shares.
(a) On the basis of the representations, warranties and covenants herein contained, and subject to the conditions herein set forth, the Company agrees to issue and sell to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase, the respective number of Firm Shares set forth opposite such Underwriter153s name in Schedule I hereto at a price equal to $48.50 per share, subject to adjustments in accordance with Section 10 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made in Federal (same day) funds against delivery thereof to the Representatives for the several accounts of the Underwriters. Such payment and delivery are to be made through the facilities of The Depository Trust Company, New York, New York at 10:00 a.m., New York time, on the third business day
12
after the date of this Agreement or at such other time and date not later than five business days thereafter as you and the Company shall agree upon, such time and date being herein referred to as the "Closing Date." (As used herein, "business day" means a day on which the New York Stock Exchange is open for trading and on which banks in New York are open for business and are not permitted by law or executive order to be closed.)
(c) In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase the Option Shares at the price per share as set forth in the first paragraph of this Section 2. The option granted hereby may be exercised in whole or in part by giving written notice (i) at any time before the Closing Date and (ii) at any time, from time to time (but no more than twice without the Company153s consent) thereafter within 30 days after the date of this Agreement, by you, as Representatives of the several Underwriters, to the Company setting forth the number of Option Shares as to which the several Underwriters are exercising the option and the time and date at which such Option Shares are to be delivered. The time and date at which Option Shares are to be delivered shall be determined by the Representatives but shall not be earlier than three nor later than 10 full business days after the exercise of such option, nor in any event prior to the Closing Date (each such time and date being herein referred to as an "Option Closing Date"). If the date of exercise of the option is three or more days before the Closing Date, the notice of exercise shall set the Closing Date as the Option Closing Date. The number of Option Shares to be purchased by each Underwriter shall be in the same proportion to the total number of Option Shares being purchased as the number of Firm Shares being purchased by such Underwriter bears to the total number of Firm Shares, adjusted by you in such manner as to avoid fractional shares. The option with respect to the Option Shares granted hereunder may be exercised in connection with the sale of the Firm Shares by the Underwriters. You, as Representatives of the several Underwriters, may cancel such option at any time prior to its expiration by giving written notice of such cancellation to the Company. To the extent that the option is exercised, payment for the Option Shares shall be made on each Option Closing Date in Federal (same day) funds through the facilities of The Depository Trust Company in New York, New York drawn to the order of the Company.
3. Offering by the Underwriters.
It is understood that the several Underwriters are to make a public offering of the Firm Shares as soon as the Representatives deem it advisable to do so. The Firm Shares are to be initially offered to the public at the initial public offering price set forth in the Prospectus. The Representatives may from time to time thereafter change the public offering price and other selling terms.
Any action by the Underwriters hereunder may be taken by the Representatives on behalf of the Underwriters, and any such action taken by the Representatives shall be binding upon the Underwriters.
4. Covenants of the Company.
The Company covenants and agrees with the several Underwriters that:
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(a) The Company will (i) prepare and timely file with the Commission under Rule 424(b) (without reliance on Rule 424(b)(8)) under the Act the Prospectus in a form approved by the Representatives containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430A, 430B or 430C under the Act, (ii) during the Prospectus Delivery Period (as defined below), not file any amendment to the Registration Statement or distribute an amendment or supplement to the General Disclosure Package or the Prospectus or any document incorporated by reference therein of which the Representatives shall not previously have been advised and furnished with a copy or to which the Representatives shall have reasonably objected in writing or which is not in compliance with the Rules and Regulations and (iii) file on a timely basis all reports and any definitive proxy or information statements required to be filed by the Company with the Commission subsequent to the date of the Prospectus and during the Prospectus Delivery Period.
(b) The Company will (i) not make any offer relating to the Preferred Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a "free writing prospectus" (as defined in Rule 405 under the Act) required to be filed by the Company with the Commission under Rule 433 under the Act unless the Representatives approve its use in writing prior to first use (each, a "Permitted Free Writing Prospectus"); provided that the prior written consent of the Representatives shall be deemed to have been given in respect of the Issuer Free Writing Prospectus(es) included in Schedule III hereto, (ii) treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, (iii) comply with the requirements of Rules 163, 164 and 433 under the Act applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the Commission, legending and record keeping and (iv) not take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Act a free writing prospectus prepared by or on behalf of such Underwriter that such Underwriter otherwise would not have been required to file thereunder.
(c) The Company will advise the Representatives promptly (i) when any post-effective amendment to the Registration Statement or new registration statement relating to the Shares shall have become effective, or any supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission relating to the Registration Statement or the Prospectus, (iii) of any request of the Commission for amendment of the Registration Statement or the filing of a new registration statement relating to the Shares or any amendment or supplement to the General Disclosure Package or the Prospectus or for any additional information relating to the Shares, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or such new registration statement or any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, or of the institution of any proceedings for that purpose or pursuant to Section 8A of the Act. The Company will use its best efforts to prevent the issuance of any such order and to obtain as soon as possible the lifting thereof, if issued.
(d) If at any time during the Prospectus Delivery Period the Company receives from the Commission a notice pursuant to Rule 401(g)(2) under the Act or otherwise ceases to be eligible to use the automatic shelf registration statement form, the Company will (i) promptly notify the Representatives, (ii) promptly file a new registration statement or post-effective
14
amendment on the proper form relating to the Shares, in a form satisfactory to the Representatives, (iii) use its best efforts to cause such registration statement or post-effective amendment to be declared effective as soon as practicable (if such filing is not otherwise effective immediately pursuant to Rule 462 under the Act), and (iv) promptly notify the Representatives of such effectiveness. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Preferred Shares to continue as contemplated in the Registration Statement that was the subject of the notice under Rule 401(g)(2) under the Act or for which the Company has otherwise become ineligible. References herein to the Registration Statement relating to the Shares shall include such new registration statement or post-effective amendment, as the case may be.
(e) The Company agrees to pay the required filing fees to the Commission relating to the Shares within the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act (including, if applicable, by updating the "Calculation of Registration Fee" table in accordance with Rule 456(b)(1)(ii), either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b) under the Act).
(f) The Company will promptly from time to time take such action as the Representatives may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the offering and resale of the Shares, provided that in connection therewith the Company shall not be required (i) to qualify as a foreign corporation, (ii) to file a general consent to service of process in any jurisdiction or (iii) to take any action that would subject itself to taxation in any jurisdiction if it is not otherwise so subject.
(g) The Company will deliver to, or upon the order of, the Representatives, from time to time, as many copies of any Preliminary Prospectus as the Representatives may reasonably request. The Company will deliver to, or upon the order of, the Representatives, from time to time, as many copies of any Issuer Free Writing Prospectus as the Representatives may reasonably request. The Company will deliver to, or upon the order of, the Representatives during the period when delivery of a Prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under the Act) is required under the Act (the "Prospectus Delivery Period"), as many copies of the Prospectus in final form, or as thereafter amended or supplemented, as the Representatives may reasonably request. The Company will deliver to the Representatives at or before the Closing Date, such number of copies of the Registration Statement (including such number of copies of the exhibits filed therewith that may reasonably be requested), including documents incorporated by reference therein, and of all amendments thereto, as the Representatives may reasonably request.
(h) The Company will comply with the Act and the Rules and Regulations, and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Preferred Shares as contemplated in this Agreement and the Prospectus. If during the Prospectus Delivery Period, any event shall occur as a result of
15
which, in the judgment of the Company or in the reasonable opinion of the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading, or, if it is necessary at any time to amend or supplement the Prospectus to comply with any law, the Company promptly will either (i) prepare and file with the Commission an appropriate amendment to the Registration Statement or supplement to the Prospectus or (ii) prepare and file with the Commission an appropriate filing under the Exchange Act which shall be incorporated by reference in the Prospectus so that the Prospectus as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Prospectus will comply with the law.
(i) If the General Disclosure Package is being used to solicit offers to buy the Preferred Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of the Underwriters, it becomes necessary to amend or supplement the General Disclosure Package in order to make the statements therein, in the light of the circumstances, not misleading, or to make the statements therein not conflict with the information contained in the Registration Statement then on file, or if it is necessary at any time to amend or supplement the General Disclosure Package to comply with any law, the Company promptly will either (i) prepare, file with the Commission (if required) and furnish to the Underwriters and any dealers an appropriate amendment or supplement to the General Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under the Exchange Act which shall be incorporated by reference in the General Disclosure Package so that the General Disclosure Package as so amended or supplemented will not, in the light of the circumstances, be misleading or conflict with the Registration Statement then on file, or so that the General Disclosure Package will comply with law.
(j) The Company will make generally available to its security holders, as soon as it is practicable to do so, but in any event not later than 16 months after the effective date of the Registration Statement, an earnings statement (which need not be audited) in reasonable detail, covering a period of at least 12 consecutive months beginning after the effective date of the Registration Statement, which earnings statement shall satisfy the requirements of Section 11(a) of the Act and Rule 158 under the Act.
(k) No offering, sale, short sale or other disposition of any shares of Preferred Stock or Common Stock or other securities convertible into or exchangeable or exercisable for shares of Preferred Stock or Common Stock (other than any Underlying Common Shares issued upon the conversion of the Preferred Shares) or a derivative of Preferred Stock or Common Stock (or agreement for such) will be made for a period of 90 days after the date of the Prospectus, directly or indirectly, by the Company otherwise than hereunder or with the prior written consent of the Representatives; provided, however, that the Company may file a registration statement on Form S-8 and may issue shares of its Common Stock and options to purchase shares of its Common Stock (including, but not limited to, "reload" options) pursuant to any stock option, stock bonus, employment agreement, employee benefit plan or other stock plan or arrangement, in each case in effect as of the date of this Agreement.
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(l) The Company has caused each person listed on Schedule V hereto to furnish to you, on or prior to the date of this Agreement, a letter or letters, substantially in the form attached hereto as Exhibit A (each such agreement, a "Lockup Agreement").
(m) The Company shall apply the net proceeds of its sale of the Preferred Shares as set forth in the Registration Statement, the General Disclosure Package and the Prospectus.
(n) The Company shall not be or become, at any time prior to the expiration of two years after the Closing Time, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the 1940 Act.
(o) The Company will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.
(p) The Company will reserve and keep available at all times, free of preemptive rights, such number of Underlying Common Shares as is necessary to enable the Company to satisfy any obligations to issue Underlying Common Shares issuable upon conversion of the Preferred Shares in accordance with the Company153s Amended Articles of Incorporation and the Certificate of Amendment.
(q) Between the date hereof and the Closing Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion price of the Preferred Shares.
(r) The Company will use reasonable best efforts to cause the Shares to be duly listed on the New York Stock Exchange as promptly as practicable.
5. Covenant of the Underwriters. Each Underwriter hereby represents and agrees that:
It has not and will not use, authorize use of, refer to, or participate in the planning for use of, any "free writing prospectus", as defined in Rule 405 under the Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that, solely as a result of use by such Underwriter, would not trigger an obligation to file such free writing prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Schedule III or prepared pursuant to Section 4(b) above (including any electronic road show), or (iii) any free writing prospectus prepared by such Underwriter and approved by the Company in advance in writing.
6. Costs and Expenses.
The Company will pay all costs, expenses and fees incident to the performance of the obligations of the Company under this Agreement, including, without limiting the generality of
17
the foregoing, the following: accounting fees of the Company; the fees and disbursements of counsel for the Company; any roadshow expenses incurred by the Company for airfare, hotel and other travel expenses; the cost of printing and delivering to, or as requested by, the Underwriters copies of the Registration Statement, Preliminary Prospectuses, the Issuer Free Writing Prospectuses, the Prospectus, this Agreement, the supplemental listing application with respect to the Shares on the New York Stock Exchange, the Blue Sky Survey and any supplements or amendments thereto; the filing fees of the Commission; the filing fees and expenses (including legal fees and disbursements) incident to securing any required review by the FINRA of the terms of the sale of the Preferred Shares; the fees and expenses of any transfer agent or registrar for the Common Stock and Preferred Stock; the fees and expenses incurred in connection with the listing of the Shares on the New York Stock Exchange; and the expenses, including the fees and disbursements of counsel for the Underwriters, incurred in connection with the qualification of the Shares under State securities or Blue Sky laws. The Company shall not, however, be required to pay for any of the Underwriter153s expenses (other than those related to qualification under FINRA regulations and State securities or Blue Sky laws) except that, if this Agreement shall not be consummated because the conditions in Section 7 hereof are not satisfied, or because this Agreement is terminated by the Representatives pursuant to Section 12 hereof, or by reason of any failure, refusal or inability on the part of the Company to perform any undertaking or satisfy any condition of this Agreement or to comply with any of the terms hereof on its part to be performed, unless such failure, refusal or inability is due primarily to the default or omission of any Underwriter, the Company shall reimburse the several Underwriters for reasonable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred in connection with investigating, marketing and proposing to market the Preferred Shares or in contemplation of performing their obligations hereunder; but the Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits from the sale by them of the Preferred Shares.
7. Conditions of Obligations of the Underwriters.
The several obligations of the Underwriters to purchase the Firm Shares on the Closing Date and the Option Shares, if any, on each Option Closing Date are subject to the accuracy, as of the date hereof and the Closing Date or each such Option Closing Date, as the case may be, of the representations and warranties of the Company contained herein, and to the performance by the Company of its covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto shall have become effective and the Prospectus and each Issuer Free Writing Prospectus shall have been filed as required by Rules 424, 430A, 430B, 430C or 433 under the Act, as applicable, within the time period prescribed by, and in compliance with, the Rules and Regulations, and any request of the Commission for additional information (to be included or incorporated by reference in the Registration Statement or otherwise) shall have been disclosed to the Representatives and complied with to the Representatives153 reasonable satisfaction. No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued and no proceedings for that purpose or pursuant to Section 8A under the Act shall have been taken or, to the knowledge of the Company, shall be contemplated or threatened
18
by the Commission and no injunction, restraining order or order of any nature by a Federal or state court of competent jurisdiction shall have been issued as of the Closing Date or any Option Closing Date, as the case may be, which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date and, if applicable, each Option Closing Date, the opinions of Covington & Burling LLP, counsel for the Company, and David L. Bialosky, Esq., Senior Vice President, General Counsel and Secretary of the Company, dated the Closing Date or each such Option Closing Date, as the case may be, addressed to the Underwriters, in each case, in form and substance satisfactory to you, substantially in the forms set forth in Annex I and Annex II hereto, respectively.
(c) The Representatives shall have received from Cravath, Swaine & Moore LLP, counsel for the Underwriters, an opinion or opinions dated the Closing Date and, if applicable, each Option Closing Date, with respect to such matters as the Representatives may reasonably request.
(d) You shall have received, on each of the date hereof, the Closing Date and, if applicable, each Option Closing Date, a letter dated the date hereof, the Closing Date or each such Option Closing Date, as the case may be, in form and substance satisfactory to you, of PricewaterhouseCoopers LLP confirming that they are an independent registered public accounting firm with respect to the Company and the subsidiaries within the meaning of the Act and the applicable Rules and Regulations and the PCAOB and stating that in their opinion the financial statements and schedules examined by them and included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the related Rules and Regulations; and containing such other statements and information as is ordinarily included in accountants153 "comfort letters" to Underwriters with respect to the financial statements and certain financial and statistical information contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(e) The Representatives shall have received on the Closing Date and, if applicable, each Option Closing Date, a certificate or certificates of an executive officer of the Company with specific knowledge of the Company153s financial affairs to the effect that, as of the Closing Date or such Option Closing Date, as the case may be, such executive officer represents as follows:
(i) the Registration Statement has become effective under the Act and no stop order suspending the effectiveness of the Registration Statement and no order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus has been issued, and no proceedings for such purpose or pursuant to Section 8A of the Act have been taken or are, to his or her knowledge, contemplated or threatened by the Commission;
(ii) the representations and warranties of the Company contained in Section 1 hereof are true and correct as of the Closing Date or such Option Closing Date, as the case may be;
19
(iii) since the Applicable Time (A) there has not been any downgrading in the rating accorded the Company153s debt securities by Moody153s Investors Service, Inc. ("Moody153s") or Standard & Poor153s Ratings Group ("S&P"), and (B) neither Moody153s nor S&P has publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company153s debt securities; and
(iv) since the date as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has not been any change in the capital stock (other than issuances pursuant to equity incentive plans) or increase in long-term debt of the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole, or any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the business, properties, financial position or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Registration Statement, the General Disclosure Package and the Prospectus.
(f) The Company shall have furnished to the Representatives such further certificates and documents confirming the representations and warranties, covenants and conditions contained herein and related matters as the Representatives may reasonably have requested.
(g) The Lockup Agreements described in Section 4(l) are in full force and effect.
If any of the conditions hereinabove provided for in this Section 7 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representatives by notifying the Company of such termination in writing at or prior to the Closing Date or any Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be under any obligation to each other (except to the extent provided in Sections 6 and 9 hereof).
8. Conditions of the Obligations of the Company.
The obligations of the Company to sell and deliver the Preferred Shares required to be delivered as and when specified in this Agreement are subject to the conditions that at the Closing Date or the Option Closing Date, as the case may be, no stop order suspending the effectiveness of the Registration Statement shall have been issued and be in effect or proceedings therefor initiated or threatened.
9. Indemnification.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter, the directors and officers of each Underwriter, each affiliate of any Underwriter and each person, if any, who controls
20
any Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which such Underwriter, such affiliate or any such controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any amendment or supplement thereto, (ii) with respect to the Registration Statement or any amendment or supplement thereto, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) with respect to any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any amendment or supplement thereto, the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus, or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 14 herein; and
(2) to reimburse each Underwriter, each Underwriter153s directors and officers, each affiliate of any Underwriter and each such controlling person upon demand for any legal or other out-of-pocket expenses reasonably incurred by such Underwriter, such affiliate or such controlling person in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding or in responding to a subpoena or governmental inquiry related to the offering of the Preferred Shares, whether or not such Underwriter or controlling person is a party to any action or proceeding. In the event that it is finally judicially determined that the Underwriters were not entitled to receive payments for legal and other expenses pursuant to this subparagraph, the Underwriters will promptly return all sums that had been advanced pursuant hereto. This indemnity agreement in this Section 9(a) will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any Preliminary
21
Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any amendment or supplement thereto, (ii) with respect to the Registration Statement or any amendment or supplement thereto, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) with respect to any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any amendment or supplement thereto, the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made; and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding; provided, however, that each Underwriter will be liable in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission has been made in the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or such amendment or supplement, in reliance upon and in conformity with written information relating to such Underwriter furnished to the Company by or through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 14 herein. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to this Section 9, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing. No indemnification provided for in Section 9(a) or (b) shall be available to any party who shall fail to give notice as provided in this Section 9(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which it or they may have to the indemnified party for contribution or otherwise than on account of the provisions of Section 9(a) or (b). In case any such proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and shall pay as incurred the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel at its own expense. Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or within 30 days of presentation) the fees and expenses of the counsel retained by the indemnified party, reasonably incurred, in the event (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or (iii) the indemnifying party shall have failed to assume the defense and employ counsel acceptable to the indemnified party within a reasonable period of time after notice of commencement of the action. Such firm shall be designated in
22
writing by you in the case of parties indemnified pursuant to Section 9(a) and by the Company in the case of parties indemnified pursuant to Section 9(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. In addition, the indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding of which indemnification may be sought hereunder (whether or not any indemnified party is an actual or potential party to such claim, action or proceeding) unless such settlement, compromise or consent (x) includes an unconditional release of each indemnified party from all liability arising out of such claim, action or proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) To the extent the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under Section 9(a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Preferred Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties153 relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 9(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 9(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 9(d) shall be deemed to include any legal or other expenses reasonably incurred by
23
such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Preferred Shares purchased by such Underwriter and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters153 obligations in this Section 9(d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any supplement or amendment thereto, each party against whom contribution may be sought under this Section 9 hereby consents to the jurisdiction of any court having jurisdiction over any other contributing party, agrees that process issuing from such court may be served upon it by any other contributing party and consents to the service of such process and agrees that any other contributing party may join it as an additional defendant in any such proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 9 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 9 shall remain operative and in full force and effect, regardless of any termination of this Agreement. A successor to any Underwriter, its directors or officers or any person controlling any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 9.
10. Default by Underwriters.
If on the Closing Date or any Option Closing Date, as the case may be, any Underwriter shall fail to purchase and pay for the portion of the Preferred Shares which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), you, as Representatives of the Underwriters, shall use your reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Preferred Shares which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours you, as such Representatives, shall not have procured such other Underwriters, or any others, to purchase the Preferred Shares agreed to be purchased by the defaulting Underwriter or Underwriters, then the Company shall be entitled to a further period of 36 hours within which to procure another party or parties satisfactory to you to purchase such Preferred Shares on such terms. If, after giving effect to any arrangements for the purchase of Preferred Shares by a defaulting Underwriter by you and the Company provided above, the aggregate number of Preferred Shares with respect to which such default shall occur does not exceed 10% of the Preferred Shares to be purchased on the Closing Date or any such Option Closing date, as the case may be, the other Underwriters shall be obligated, severally, in
24
proportion to the respective numbers of Preferred Shares which they are obligated to purchase hereunder, to purchase the Preferred Shares which such defaulting Underwriter or Underwriters failed to purchase. If, after giving effect to any arrangements for the purchase of the Preferred Shares by a defaulting Underwriter by you and the Company provided above, the aggregate number of Preferred Shares with respect to which such default shall occur exceeds 10% of the Preferred Shares to be purchased on the Closing Date or any such Option Closing Date, as the case may be, the Company or you as the Representatives of the Underwriters will have the right, by written notice given within the next 36-hour period to the parties to this Agreement, to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Sections 6 and 9 hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Section 10, the Representatives or the Company shall have the right to postpone the Closing Date or any such Option Closing Date, as the case may be, for a period not exceeding seven days in order that the required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements may be effected. The term "Underwriter" includes any person substituted for a defaulting Underwriter. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
11. Notices.
All communications hereunder shall be in writing and, except as otherwise provided herein, will be mailed, delivered, telecopied or telegraphed and confirmed as follows: if to the Underwriters, to Goldman, Sachs & Co., 200 West Street New York, New York 10282; Attention: Registration Department and J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179; Attention: Equity Syndicate Desk; if to the Company, to the address of the Company set forth in the Prospectus, Attention: Secretary.
12. Termination.
This Agreement may be terminated by you by notice to the Company (a) at any time prior to the Closing Date or any Option Closing Date (if different from the Closing Date and then only as to Option Shares) if any of the following has occurred: (i) since the date as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has been (A) any change in the capital stock (other than issuances pursuant to equity incentive plans) or increase in long-term debt of the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole, or (B) any material adverse change, or any development that would reasonably be expected to result in a material adverse change, in or affecting the business, properties, financial position or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Registration Statement, the General Disclosure Package and the Prospectus and, in the case of clause (A) or (B), the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Preferred Shares on the terms and in the manner contemplated by this Agreement, the General Disclosure Package and the Prospectus, (ii) since the Applicable Time there has been any outbreak or escalation of hostilities or declaration of war or national emergency or other national or international calamity
25
or crisis (including, without limitation, an act of terrorism) or change in economic or political conditions if the effect of such outbreak, escalation, declaration, emergency, calamity, crisis or change on the financial markets of the United States would, in your judgment, materially impair the investment quality of the Preferred Shares, (iii) since the Applicable Time there has been a suspension of trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market or limitation on prices (other than limitations on hours or numbers of days of trading) for securities on any such Exchange, (iv) since the Applicable Time there has been a declaration of a banking moratorium by United States or New York State authorities, (v) since the Applicable Time (A) there has been any downgrading in the rating accorded the Company153s debt securities by Moody153s or S&P, or (B) either Moody153s or S&P, or both, have publicly announced that they have under surveillance or review, with possible negative implications, their rating of any of the Company153s debt securities or (vi) since the Applicable Time there has been the suspension of trading of any securities issued or guaranteed by the Company by the New York Stock Exchange, the Commission, or any other governmental or regulatory authority; or
(b) as provided in Sections 7 and 10 of this Agreement.
13. Successors.
This Agreement has been and is made solely for the benefit of the Underwriters and the Company and their respective successors, executors, administrators, heirs and assigns, and the officers, directors and controlling persons referred to herein, and no other person will have any right or obligation hereunder. No purchaser of any of the Preferred Shares from any Underwriter shall be deemed a successor or assign merely because of such purchase.
14. Information Provided by Underwriters.
The Company and the Underwriters acknowledge and agree that the only information furnished or to be furnished by any Underwriter to the Company for inclusion in the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus consists of the information set forth in the fifth and eighth paragraphs in their entirety and the fifth and sixth sentences of the thirteenth paragraph under the caption "Underwriting" in the Prospectus.
15. Miscellaneous.
(a) The reimbursement, indemnification and contribution agreements contained in this Agreement and the representations, warranties and covenants in this Agreement shall remain in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or controlling person thereof, or by or on behalf of the Company or its directors or officers and (ii) delivery of and payment for the Preferred Shares under this Agreement.
(b) The Company acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm153s length contractual counterparty to the Company with respect to the offering of the Preferred Shares contemplated hereby (including in connection with
26
determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, neither the Representatives nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company with respect to the matters covered by this paragraph. Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company.
(c) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(d) This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.
(e) The Underwriters, on the one hand, and the Company (on its own behalf and, to the extent permitted by law, on behalf of its stockholders), on the other hand, waive any right to trial by jury in any action, claim, suit or proceeding with respect to your engagement as underwriter or your role in connection herewith.
(f) No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
27
If the foregoing letter is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the Company and the several Underwriters in accordance with its terms.
Very truly yours, THE GOODYEAR TIRE & RUBBER COMPANY |
||||
By |
/s/ Scott A. Honnold |
|||
Scott A. Honnold |
||||
Vice President and Treasurer |
[Signature page to Underwriting Agreement]
size=2 width="100%" noshade style='color:#A0A0A0' align=center>
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
GOLDMAN, SACHS & CO.
For itself and as Representative of the several
Underwriters listed on Schedule I
By |
/s/ Goldman, Sachs & Co. |
|||
(Goldman, Sachs & Co.) |
||||
J.P. MORGAN SECURITIES LLC For itself and as Representative of the several |
||||
By |
/s/ J.P. Morgan Securities LLC |
|||
(J.P. Morgan Securities LLC) |
||||
[Signature page to Underwriting Agreement]
size=2 width="100%" noshade style='color:#A0A0A0' align=center>
SCHEDULE I
Schedule of Underwriters
Number of Firm |
||||
Underwriter |
Shares to be Purchased |
|||
Goldman, Sachs & Co. |
2,610,000 |
|||
J.P. Morgan Securities LLC |
1,740,000 |
|||
Citigroup Global Markets Inc. |
1,740,000 |
|||
Credit Agricole Securities (USA) Inc. |
1,740,000 |
|||
BNP Paribas Securities Corp. |
290,000 |
|||
HSBC Securities (USA) Inc. |
290,000 |
|||
Natixis Bleichroeder LLC |
290,000 |
|||
Total |
8,700,000 |
size=2 width="100%" noshade style='color:#A0A0A0' align=center>
SCHEDULE II
Filed Pursuant to Rule 433
Relating to the
Preliminary Prospectus Supplement dated March 28, 2011
Registration No. 333-173118
March 28, 2011
Pricing Term Sheet
Issuer: |
The Goodyear Tire & Rubber Company |
|
Ticker / Exchange for Common Stock: |
GT / The New York Stock Exchange ("NYSE") |
|
Securities Offered: |
8,700,000 shares of 5.875% Mandatory Convertible Preferred Stock (10,000,000 shares if the underwriters exercise their option to purchase additional shares in full) (the "mandatory convertible preferred stock") |
|
Liquidation Preference per Share: |
$50.00 per share of mandatory convertible preferred stock (the "initial liquidation preference"), plus an amount equal to any accrued and unpaid dividends |
|
Public Offering Price: |
$50.00 per share of mandatory convertible preferred stock $435,000,000 in aggregate ($500,000,000 in aggregate if the underwriters exercise their option to purchase additional shares in full) |
|
Annual Dividend Rate: |
5.875% per share on the initial liquidation preference of $50.00 per share ($2.9375 per annum), payable quarterly in arrears in cash |
|
Dividend Payment Dates: |
If declared, January 1, April 1, July 1 and October 1 of each year |
|
First Dividend Payment Date: |
July 1, 2011 |
size=2 width="100%" noshade style='color:#A0A0A0' align=center>
Expected Amount of First Dividend Payment per Share:
|
$0.7425
|
|
Expected Amount of Each Subsequent Dividend Payment per Share:
|
$0.7344
|
|
Share Cap:
|
In no event will the number of shares of the Issuer153s common stock delivered upon conversion of the mandatory convertible preferred stock, including any shares delivered in connection with unpaid dividends, exceed an amount per share equal to the product of (i) 2 and (ii) the maximum conversion rate, subject to adjustment in the same manner as each fixed conversion rate as described in the preliminary prospectus supplement
|
|
Mandatory Conversion Date:
|
April 1, 2014
|
|
Last Reported Sale Price of Common Stock on NYSE on March 28, 2011:
|
$14.57 per share of common stock
|
|
Initial Price:
|
$14.57 per share of common stock (subject to adjustment as described in the preliminary prospectus supplement)
|
|
Threshold Appreciation Price:
|
$18.2125, which represents an appreciation of 25% over the initial price; the threshold appreciation price is subject to adjustment as described in the preliminary prospectus supplement
|
|
Conversion Rate on Mandatory
|
The conversion rate of each share of mandatory convertible preferred stock will not be more than 3.4317 shares of common stock (the "maximum conversion rate") and not less than 2.7454 shares of common stock (the "minimum conversion rate"); the maximum conversion rate and the minimum conversion rate are subject to adjustment as described in the preliminary prospectus supplement The following table illustrates the conversion rate per share of the mandatory convertible preferred stock based on the average of the volume weighted average price of the Issuer153s common stock for the 20 consecutive trading-day period ending on, and including, the third trading day immediately preceding the mandatory conversion date (the "applicable market value"):
|
2
Applicable Market Value
|
Conversion Rate per Share of Mandatory Convertible Preferred Stock
|
|
Less Than or Equal to the Initial Price
|
The maximum conversion rate per share of mandatory convertible preferred stock
|
|
Greater Than the Initial Price and Less Than the Threshold Appreciation Price
|
$50.00 divided by the applicable market value
|
|
Equal to or Greater Than the Threshold Appreciation Price
|
The minimum conversion rate per share of mandatory convertible preferred stock
|
|
Conversion at Option of the Holder:
|
Other than during the fundamental change conversion period or following the Issuer153s issuance of a dividend nonpayment conversion notice as described in the preliminary prospectus supplement, holders of the mandatory convertible preferred stock have the right to convert the mandatory convertible preferred stock, in whole or in part, at any time prior to April 1, 2014, into shares of the Issuer153s common stock at the minimum conversion rate of 2.7454 shares of the Issuer153s common stock per share of mandatory convertible preferred stock, subject to adjustment as described in the preliminary prospectus supplement
|
|
Fundamental Change Conversion Rate:
|
The table below sets forth the number of additional shares payable upon conversion upon a fundamental change per share of the mandatory convertible preferred stock based on the effective date of the fundamental change and the stock price in the fundamental change:
|
3
Stock Price on Effective Date
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date
|
$
|
5.00
|
$
|
7.50
|
$
|
10.00
|
$
|
14.570
|
$
|
18.2125
|
$
|
20.00
|
$
|
30.00
|
$
|
40.00
|
$
|
50.00
|
$
|
60.00
|
$
|
70.00
|
$
|
80.00
|
$
|
90.00
|
$
|
100.00
|
||||||||||||||||||||||||||||
3/31/2011
|
(0.1320
|
)
|
(0.2590
|
)
|
(0.3669
|
)
|
(0.5015
|
)
|
0.1206
|
0.0984
|
0.0336
|
0.0127
|
0.0051
|
0.0021
|
0.0009
|
0.0004
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
4/1/2011
|
(0.1318
|
)
|
(0.2588
|
)
|
(0.3667
|
)
|
(0.5014
|
)
|
0.1207
|
0.0984
|
0.0336
|
0.0127
|
0.0051
|
0.0021
|
0.0009
|
0.0004
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
7/1/2011
|
(0.1140
|
)
|
(0.2389
|
)
|
(0.3499
|
)
|
(0.4919
|
)
|
0.1260
|
0.1023
|
0.0339
|
0.0124
|
0.0048
|
0.0020
|
0.0008
|
0.0003
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
10/1/2011
|
(0.0959
|
)
|
(0.2175
|
)
|
(0.3313
|
)
|
(0.4815
|
)
|
0.1315
|
0.1062
|
0.0338
|
0.0119
|
0.0045
|
0.0018
|
0.0007
|
0.0003
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
1/1/2012
|
(0.0780
|
)
|
(0.1946
|
)
|
(0.3110
|
)
|
(0.4703
|
)
|
0.1373
|
0.1100
|
0.0334
|
0.0111
|
0.0040
|
0.0015
|
0.0006
|
0.0002
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
4/1/2012
|
(0.0608
|
)
|
(0.1705
|
)
|
(0.2887
|
)
|
(0.4581
|
)
|
0.1431
|
0.1138
|
0.0326
|
0.0102
|
0.0034
|
0.0012
|
0.0005
|
0.0002
|
0.0001
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
7/1/2012
|
(0.0445
|
)
|
(0.1447
|
)
|
(0.2639
|
)
|
(0.4445
|
)
|
0.1491
|
0.1172
|
0.0311
|
0.0089
|
0.0028
|
0.0009
|
0.0003
|
0.0001
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
10/1/2012
|
(0.0295
|
)
|
(0.1172
|
)
|
(0.2356
|
)
|
(0.4291
|
)
|
0.1553
|
0.1203
|
0.0288
|
0.0073
|
0.0020
|
0.0006
|
0.0002
|
0.0001
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
1/1/2013
|
(0.0169
|
)
|
(0.0883
|
)
|
(0.2031
|
)
|
(0.4113
|
)
|
0.1614
|
0.1226
|
0.0254
|
0.0055
|
0.0013
|
0.0003
|
0.0001
|
0.0000
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
4/1/2013
|
(0.0077
|
)
|
(0.0597
|
)
|
(0.1663
|
)
|
(0.3906
|
)
|
0.1670
|
0.1235
|
0.0208
|
0.0036
|
0.0007
|
0.0001
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
7/1/2013
|
(0.0022
|
)
|
(0.0322
|
)
|
(0.1226
|
)
|
(0.3643
|
)
|
0.1715
|
0.1215
|
0.0147
|
0.0017
|
0.0002
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
10/1/2013
|
(0.0002
|
)
|
(0.0102
|
)
|
(0.0710
|
)
|
(0.3279
|
)
|
0.1729
|
0.1132
|
0.0071
|
0.0004
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
1/1/2014
|
(0.0000
|
)
|
(0.0005
|
)
|
(0.0178
|
)
|
(0.2665
|
)
|
0.1620
|
0.0866
|
0.0009
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
||||||||||||||||||||||||||||||||||||||
4/1/2014
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
The exact stock price and effective date may not be set forth on the table, in which case:
|
if the stock price is between two stock price amounts on the table or the effective date is between two dates on the table, the number of additional shares will be determined by straight-line interpolation between the number of additional shares set forth for the higher and lower stock price amounts and the two effective dates, as applicable, based on a 365-day year;
|
||||
|
if the stock price is in excess of $100.00 per share (subject to adjustment as described in the preliminary prospectus supplement), then no additional shares will be issued upon conversion; and
|
||||
|
if the stock price is less than $5.00 per share (subject to adjustment as described in the preliminary prospectus supplement), then no additional shares will be issued upon conversion.
|
||||
Discount Rate for Purposes of Determining Present Value of Remaining Dividends:
|
7%
|
||||
Joint Book-Running Managers:
|
Goldman, Sachs & Co.
|
||||
Co-Managers:
|
BNP Paribas Securities Corp.
|
||||
4
Net Proceeds of the Mandatory
|
$48.50 per share of mandatory convertible preferred stock $421,950,000 in aggregate ($485,000,000 in aggregate if the underwriters exercise their option to purchase additional shares in full); these figures do not include a deduction for estimated offering expenses of approximately $1,000,000
|
|
Use of Proceeds:
|
The Issuer intends to use a portion of the net proceeds from the offering to redeem $350 million in principal amount of its outstanding 10.500% Senior Notes due May 15, 2016 at the redemption price of 110.500% of the principal amount, plus accrued and unpaid interest to the redemption date; the Issuer intends to use the remaining net proceeds from the offering for general corporate purposes
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Underwriters153 Discount:
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$1.50 per share of mandatory convertible preferred stock $13,050,000 in aggregate ($15,000,000 in aggregate if the underwriters exercise their option to purchase additional shares in full)
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Pricing Date:
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March 28, 2011
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Trade Date:
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March 29, 2011
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Settlement Date:
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March 31, 2011
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CUSIP:
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382550 309
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ISIN:
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US3825503093
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Application has been made for the listing of the mandatory convertible preferred stock under the symbol "GTPrA."
The Issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Goldman, Sachs & Co. at (212) 902-9316 or J.P. Morgan Securities LLC toll-free at (866) 803-9204.
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SCHEDULE III
The pricing term sheet set forth on Schedule II hereto.
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SCHEDULE IV
Celeron Corporation
Dapper Tire Co., Inc.
Divested Companies Holding Company
Divested Litchfield Park Properties, Inc.
Goodyear Canada Inc.
Goodyear Export Inc.
Goodyear Farms, Inc.
Goodyear International Corporation
Goodyear Western Hemisphere Corporation
Wheel Assemblies Inc.
Wingfoot Commercial Tire Systems, LLC
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SCHEDULE V
The following executive officers have entered into Lock-Up Agreements:
1. Richard J. Kramer (Chairman of the Board, Chief Executive Officer and President)
2. Curt Andersson (President, North American Tire)
3. Arthur de Bok (President, Europe, Middle East and Africa Tire)
4. Jaime C. Szulc (President, Latin American Tire)
5. Pierre Cohade ( President, Asia Pacific Tire)
6. Darren R. Wells (Executive Vice President and Chief Financial Officer)
7. David L. Bialosky (Senior Vice President, General Counsel and Secretary)
8. Jean-Claude Kihn (Senior Vice President and Chief Technical Officer
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EXHIBIT A
LOCK-UP AGREEMENT
______________________, 2011
The Goodyear Tire & Rubber Company
Goldman, Sachs & Co.
J.P. Morgan Securities LLC
As Representatives of the
Several Underwriters
c/o Goldman, Sachs & Co.
200 West Street
New York, New York 10282
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
The undersigned understands that Goldman, Sachs & Co. and J.P. Morgan Securities LLC, as representatives (the "Representatives") of the several underwriters (the "Underwriters"), proposes to enter into an Underwriting Agreement (the "Underwriting Agreement") with The Goodyear Tire & Rubber Company (the "Company"), providing for the public offering (the "Public Offering") by the Underwriters, including the Representatives, of the Company153s mandatory convertible preferred stock, no par value (the "Preferred Stock"), which Preferred Stock shall be convertible into common stock, no par value, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned agrees that, without the prior written consent of the Representatives, the undersigned will not, directly or indirectly, (1) offer, sell, pledge, contract to sell (including any short sale), grant any option to purchase or otherwise dispose of any shares of Common Stock (including, without limitation, shares of Common Stock which may be deemed to be beneficially owned by the undersigned on the date hereof in accordance with the rules and regulations of the Securities and Exchange Commission, shares of Common Stock which may be issued upon exercise of a stock option or warrant and any other security convertible into or exchangeable for Common Stock) or (2) enter into any Hedging
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Transaction (as defined below) relating to the Common Stock (each of the foregoing referred to as a "Disposition") during the period specified in the following paragraph (the "Lock-Up Period"). The foregoing restriction is expressly intended to preclude the undersigned from engaging in any Hedging Transaction or other transaction which is designed to or is reasonably expected to lead to or result in a Disposition during the Lock-Up Period even if the securities would be disposed of by someone other than the undersigned. "Hedging Transaction" means any short sale (whether or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from the Common Stock.
The initial Lock-Up Period will commence on the date hereof and continue until, and include, the date that is 90 days after the date of the final prospectus relating to the Public Offering (the "Initial Lock-Up Period").
Notwithstanding the foregoing, the undersigned may (a) transfer shares of Common Stock acquired pursuant to the Company153s employee stock purchase plans in existence on the date hereof, including, without limitation, any such plan under Section 401(k) of the Internal Revenue Code, (b) transfer shares of Common Stock to the Company for the purpose of exercising employee stock options pursuant to the share swap exercise provisions set forth therein, provided that the shares acquired upon the exercise of such options shall be subject to the provisions of this Lock-Up Agreement, and (c) transfer shares of Common Stock or other Company securities if the transfer is by gift, will or intestacy; provided that the transferee executes an agreement stating that the transferee is receiving and holding the securities subject to the provisions of this Lock-Up Agreement.
The undersigned agrees that the Company may, with respect to any shares of Common Stock or other Company securities for which the undersigned is the beneficial or record holder, cause the transfer agent for the Company to note stop transfer instructions with respect to such securities on the transfer books and records of the Company.
Notwithstanding anything herein to the contrary, if the closing of the Public Offering has not occurred prior to April 16, 2011 or the Underwriting Agreement shall have been terminated pursuant to Section 12 thereof, this agreement shall be of no further force or effect.
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The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.
Signature:
Print Name:
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ANNEX I
[Form of Opinion of Covington & Burling LLP]
1. Each Covered Subsidiary is a corporation validly existing and in good standing under the laws of its state of incorporation.
2. The Registration Statement has become effective under the Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened under the Act.
3. Except as to the financial statements, including the notes and schedules thereto, and other financial and statistical data included in the Registration Statement or the Prospectus, as to which we express no opinion, the Registration Statement, as of its effective date, and the Prospectus, as of its date, complied as to form in all material respects with the requirements of the Act.
4. The statements in the General Disclosure Package under the caption "Certain Material United States Federal Income Tax Considerations," insofar as such statements constitute summaries of the laws, regulations, legal matters, agreements or other legal documents referred to therein, as of 4:45 p.m. New York time on the date of the Underwriting Agreement (the "Applicable Time"), are accurate in all material respects and fairly summarize the matters referred to therein. The statements in the Prospectus under the caption "Certain Material United States Federal Income Tax Considerations," insofar as such statements constitute summaries of the laws, regulations, legal matters, agreements or other legal documents referred to therein, as of the date of the Prospectus and as of the date hereof, are accurate in all material respects and fairly summarize the matters referred to therein.
5. The Underwriting Agreement conforms in all material respects to the description thereof contained in the General Disclosure Package and the Prospectus.
6. No consent, approval, authorization or other action by or filing with any governmental agency or instrumentality of the State of New York or the United States of America is required on the part of the Company for the execution and delivery of the Underwriting Agreement, the issuance and sale of the Preferred Shares, the issuance of shares of common stock of the Company upon conversion of the Preferred Shares in accordance with the terms of the Amended Articles of Incorporation and the consummation of the transactions contemplated by the Underwriting Agreement in accordance with the terms thereof or the performance by the Company of its obligations thereunder, except for (i) those already obtained or made and (ii) any of the foregoing as may be required under state securities or blue sky laws and the rules and regulations promulgated thereunder.
7. The issuance and sale of the Preferred Shares, the issuance of shares of common stock of the Company upon conversion of the Preferred Shares in accordance with the terms of the Amended Articles of Incorporation, the execution, delivery and performance by the Company of the Underwriting Agreement and the consummation of the transactions therein
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contemplated will not (i) violate any New York State or federal statute, law, rule or regulation to which the Company is subject or (ii) breach the provisions of, or cause a default under, or result in the creation or imposition of any lien, charge or encumbrance upon or with respect to any property or assets of the Company under any agreement listed in Exhibit B hereto.
8. The Company is not and, after giving effect to the offering and sale of the Preferred Shares and the application of the proceeds thereof as described in the Prospectus will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
In addition, in accordance with our understanding with the Company as to the scope of our services in connection with the offering of the Preferred Shares, as counsel to the Company, we reviewed the Registration Statement, the Prospectus and the General Disclosure Package and participated in discussions with your representatives and those of the Company, your counsel and the Company153s accountants. On the basis of the information that was reviewed by us in the course of the performance of the services referred to above, considered in the light of our understanding of the applicable law and the experience we have gained through our practice under the federal securities laws, we confirm to you that nothing that came to our attention in the course of such review has caused us to believe that the Registration Statement, at the time the Registration Statement became effective under the Act (including the information deemed to be part of the Registration Statement at the time it became effective pursuant to Rule 430B under the Act), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, that the Prospectus, as of its date or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or that the General Disclosure Package, as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process are such, however, that we do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Prospectus or the General Disclosure Package, except as specified in paragraph 4 above. Also, we do not express any opinion or belief as to the financial statements, including the notes and schedules thereto, and other financial and statistical data included in the Registration Statement, the Prospectus or the General Disclosure Package.
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ANNEX II
[Form of Opinion of David L. Bialosky]
1. The Company and the subsidiaries listed on Exhibit A hereto (each, a "Subsidiary" and collectively, the "Subsidiaries") are each duly incorporated, validly existing and in good standing under the laws of their respective jurisdictions of organization. The Company has the power and authority to execute and deliver the Underwriting Agreement, to consummate the transactions contemplated thereby and to perform its obligations thereunder. Each of the Company and the Subsidiaries has the requisite power and authority to own its respective properties and to conduct the businesses in which it is engaged, except where the failure to have such power or authority would not, individually or in the aggregate, have a Material Adverse Effect. Each of the Company and the Subsidiaries is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.
2. The Company has duly authorized, executed and delivered the Underwriting Agreement.
3. The Preferred Shares have been duly authorized and, when issued and delivered against payment therefor as provided in the Underwriting Agreement on the Closing Date, will be validly issued, fully paid and non-assessable. The Preferred Shares will not be subject to any preemptive rights or any similar rights under the Company153s Amended Articles of Incorporation or Code of Regulations.
4. The shares of common stock of the Company, without par value (the "Common Stock"), initially issuable upon conversion of the Preferred Shares in accordance with the terms of the Amended Articles of Incorporation and the Certificate of Amendment (the "Conversion Shares") have been duly authorized and reserved for issuance upon such conversion by the Company. Upon issuance and delivery of any Conversion Shares in accordance with the terms of the Amended Articles of Incorporation and the Certificate of Amendment, such Conversion Shares will be validly issued, fully paid and non-assessable and will be free of any preemptive rights or any similar rights, under the Amended Articles of Incorporation or Code of Regulations.
5. The Company has an authorized capitalization as set forth in footnote 5 to the table set forth under the caption "Capitalization" in the General Disclosure Package and the Prospectus, and all outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable.
6. No consent, approval, authorization or other action by or filing with any governmental agency or instrumentality of the State of Ohio is required on the part of the Company for the execution and delivery of the Underwriting Agreement, the issuance and sale of
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the Preferred Shares, the issuance and delivery of any Conversion Shares upon the conversion of the Preferred Shares in accordance with the terms of the Amended Articles of Incorporation and the consummation of the transactions contemplated by the Underwriting Agreement or the performance by the Company of its obligations thereunder, except (i) those already obtained or made, and (ii) any of the foregoing as may be required under state securities laws or blue sky laws and the rules and regulations promulgated thereunder.
7. The execution, delivery and performance by the Company of the Underwriting Agreement, the issuance and sale of the Preferred Shares, the issuance and delivery of the Conversion Shares upon conversion of the Preferred Shares in accordance with the terms of the Amended Articles of Incorporation and the Certificate of Amendment and the compliance by the Company with all applicable provisions of the Underwriting Agreement and the consummation of the transactions therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any agreement or instrument (x) to which the Company is a party or by which the Company is bound or to which any of its property or assets is subject and (y) that is listed under the heading "Instruments Defining the Rights of Security Holders, Including Indentures" or "Material Contracts" in the section entitled "Index of Exhibits" in the Company153s Annual Report on Form 10-K for the year ended December 31, 2010, except as would not, individually or in the aggregate, have a Material Adverse Effect, (ii) result in any violation of the provisions of the Amended Articles of Incorporation or Code of Regulations or (iii) result in any violation of any judgment, writ, injunction, order, rule or regulation of any court or governmental authority binding on the Company of which I am aware, that is material to the Company and its subsidiaries taken as a whole.
8. Except as set forth in the General Disclosure Package and the Prospectus, to my knowledge, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, which would be required to be disclosed pursuant to Item 103 of Regulation S-K under the Exchange Act in the Company153s Annual Report on Form 10-K if such report were filed on the date hereof.
9. The statements in the General Disclosure Package under the captions "Description of Mandatory Convertible Preferred Stock" and "Description of Capital Stock" insofar as such statements constitute summaries of the terms of the Preferred Shares and the Conversion Shares, as of 4:45 p.m. (New York time) on the date of the Underwriting Agreement (the "Applicable Time"), are accurate in all material respects and fairly summarize the matters referred to therein. The statements in the Prospectus under the captions "Description of Mandatory Convertible Preferred Stock" and "Description of Capital Stock," insofar as such statements constitute summaries of the terms of the Preferred Shares and the Conversion Shares, as of the date of the Prospectus and as of the date hereof, are accurate in all material respects and fairly summarize the matters referred to therein.
10. Except as described in or contemplated by the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding securities of the
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Company convertible or exchangeable into or evidencing the right to purchase or subscribe for any shares of capital stock of the Company and there are no outstanding or authorized options, warrants or rights of any character obligating the Company to issue any shares of its capital stock or any securities convertible or exchangeable into or evidencing the right to purchase or subscribe for any shares of such stock.
11. The documents incorporated by reference in the Registration Statement and the Prospectus, at the time they became effective or were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act (except as to the financial statements and schedules and other financial and statistical data contained therein, as to which I express no opinion).
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