Mandatory conversion for Goodyear preferred stock

Goodyear Tire & Rubber announced today that all outstanding shares of its 5.875 per cent mandatory convertible preferred stock will convert to Goodyear common stock shares at the close of business on 1 April 2014. On this mandatory conversion date, each preferred stock share, unless previously converted, will automatically convert into 2.7574 shares of common stock.

The number of common stock shares issuable on the mandatory conversion date was determined based on the average of the volume weighted average price per share of the company’s common stock over a 20-trading day period ending on 27 March 2014 and in accordance with customary anti-dilution adjustments in relation to cash dividends that were paid on the common stock, consistent with the terms of the Preferred Stock Designation included in Goodyear’s Articles of Incorporation. In lieu of any fractional share of common stock, the company will pay an amount in cash determined in accordance with the Preferred Stock Designation. In addition, a dividend of US$0.7344 per share of preferred stock is payable in cash to shareholders who present the preferred stock for mandatory conversion.

After the close of business on 1 April, preferred stock shares not previously converted will be deemed to be no longer outstanding and dividends on the preferred stock will cease to accrue and accumulate. All rights of the holders with respect to such preferred stock will terminate, except for the right to receive the number of whole shares of common stock issuable upon mandatory conversion of the preferred stock, accrued and unpaid dividends, and cash in lieu of any fractional shares of common stock, as described above.

Preferred stock shares were previously included as eligible dilutive securities in the company’s calculation of diluted earnings per share. Upon conversion, the newly issued shares of common stock will be included in Goodyear’s basic and diluted earnings per share.

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