AKRON, Ohio, March 28, 2014 /PRNewswire/ -- The Goodyear Tire & Rubber Company (NASDAQ: GT) announced today that all of the outstanding shares of its 5.875% mandatory convertible preferred stock ("Preferred Stock;" NASDAQ: GTPPP) will convert to shares of Goodyear common stock ("Common Stock") effective at the close of business on April 1, 2014 ("Mandatory Conversion Date").
On the Mandatory Conversion Date, each share of Preferred Stock, unless previously converted, will automatically convert into 2.7574 shares of Common Stock. The number of shares of Common Stock 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 the 20-trading day period ending on March 27, 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 the company'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 73.44 cents per share of Preferred Stock is payable in cash to shareholders who present the Preferred Stock for mandatory conversion.
From and after the Mandatory Conversion Date, shares of the Preferred Stock 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.