<PAGE> 1
==============================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
COMMISSION FILE NUMBER: 1-1927
THE GOODYEAR TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
OHIO 34-0253240
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1144 EAST MARKET STREET, AKRON, OHIO 44316-0001
(Address of principal executive offices) (Zip Code)
(330) 796-2121
(Registrant's telephone number, including area code)
-----------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
----- -----
-----------------------------------
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Number of Shares of Common Stock, Without
Par Value, Outstanding at June 30, 1996: 155,220,358
==============================================================================
<PAGE> 2
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
Unaudited
<TABLE>
<CAPTION>
(Dollars in millions, except per share) Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1
Cost of Goods Sold 2,559.8 2,550.6 5,041.0 5,038.0
Selling, Administrative and General Expense 469.1 478.1 940.1 961.6
Interest Expense 35.4 36.3 67.4 68.3
Other (Income) Expense (24.3) 6.7 (10.3) 9.6
Foreign Currency Exchange 4.7 3.0 6.6 27.9
Minority Interest in Net Income of Subsidiaries 11.3 8.7 23.2 16.2
-------- -------- -------- --------
Income before Income Taxes 273.5 267.4 507.0 472.5
United States and Foreign Taxes on Income 85.6 93.6 167.3 165.4
-------- -------- -------- --------
NET INCOME $ 187.9 $ 173.8 339.7 307.1
======== ========
Retained Earnings at Beginning of Period 2,661.0 2,194.5
CASH DIVIDENDS 77.4 68.2
-------- --------
Retained Earnings at End of Period $2,923.3 $2,433.4
======== ========
PER SHARE OF COMMON STOCK:
Net Income $ 1.22 $ 1.15 $ 2.20 $ 2.03
======== ======== ======== ========
Cash Dividends $ 0.25 $ 0.25 $ 0.50 $ 0.45
======== ======== ======== ========
AVERAGE SHARES OUTSTANDING 155,099,068 151,741,845 154,642,859 151,613,546
</TABLE>
The accompanying notes are an integral part of this financial statement.
- 1 -
<PAGE> 3
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
<TABLE>
<CAPTION>
(Dollars in millions) June 30, December 31,
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 278.7 $ 268.3
Accounts and notes receivable, less
allowance (1996-$60.6, 1995-$56.2) 2,028.5 1,615.0
Inventories:
Raw materials 314.1 309.8
Work in process 82.1 75.4
Finished product 1,560.3 1,380.0
--------- ---------
1,956.5 1,765.2
Prepaid expenses and other current assets 180.6 193.1
--------- ---------
TOTAL CURRENT ASSETS 4,444.3 3,841.6
Investments in Affiliates, at equity 132.1 183.8
Long Term Accounts and Notes Receivable 224.9 252.0
Deferred Charges 829.9 793.3
Other Assets 161.0 157.7
Properties and Plants, less accumulated depreciation
(1996-$4,953.0, 1995-$4,788.7) 4,723.8 4,561.2
--------- ---------
TOTAL ASSETS $10,516.0 $ 9,789.6
========= =========
LIABILITIES
Current Liabilities:
Accounts payable - trade $ 1,052.3 $ 1,170.7
Compensation and benefits 731.3 711.9
Other current liabilities 282.0 263.9
United States and foreign taxes 373.3 363.1
Notes payable to banks 683.7 211.1
Long term debt due within one year 19.9 15.6
--------- ---------
TOTAL CURRENT LIABILITIES 3,142.5 2,736.3
Long Term Debt and Capital Leases 1,292.0 1,320.0
Compensation and Benefits 2,004.3 1,976.5
Other Long Term Liabilities 286.6 312.2
Minority equity in subsidiaries 223.4 162.9
--------- ---------
TOTAL LIABILITIES 6,948.8 6,507.9
SHAREHOLDERS' EQUITY
Preferred Stock, no par value:
Authorized 50,000,000 shares, unissued -- --
Common Stock, no par value:
Authorized 300,000,000 shares
Outstanding shares 155,220,358 (153,524,311 in 1995)
after deducting 40,458,310 treasury shares (42,154,357 in 1995) 155.2 153.5
Capital Surplus 1,027.2 975.2
Retained Earnings 2,923.3 2,661.0
Foreign Currency Translation Adjustment (513.8) (481.7)
Minimum Pension Liability Adjustment (24.7) (26.3)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 3,567.2 3,281.7
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,516.0 $ 9,789.6
========= =========
</TABLE>
The accompanying notes are an integral part of this financial statement.
- 2 -
<PAGE> 4
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
(Dollars in millions) Six Months Ended
June 30,
1996 1995
Cash Flows from Operating Activities: ------ ------
<S> <C> <C>
NET INCOME $ 339.7 $ 307.1
Adjustments to reconcile net income to net cash flows from operating
activities:
Depreciation 226.0 212.8
Accounts and notes receivable (425.4) (346.9)
Inventories (187.0) (359.0)
Accounts payable - trade (114.3) (8.8)
Other assets and liabilities 98.0 (46.5)
------- -------
Total adjustments (402.7) (548.4)
------- -------
NET CASH USED IN OPERATING ACTIVITIES (63.0) (241.3)
Cash Flows from Investing Activities:
Capital expenditures (267.9) (225.1)
Other transactions (75.0) 14.6
------- -------
NET CASH USED IN INVESTING ACTIVITIES (342.9) (210.5)
Cash Flows from Financing Activities:
Short term debt incurred 595.2 617.1
Short term debt paid (102.8) (178.2)
Long term debt incurred 6.3 84.3
Long term debt and capital leases paid (33.2) (29.1)
Common stock issued 53.7 17.8
Dividends paid (77.4) (68.2)
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 441.8 443.7
Effect of Exchange Rate Changes on Cash and Cash Equivalents (25.5) (1.8)
------- -------
Net Change in Cash and Cash Equivalents 10.4 (9.9)
Cash and Cash Equivalents at Beginning of the Period 268.3 250.9
------- -------
Cash and Cash Equivalents at End of the Period $ 278.7 $ 241.0
======= =======
</TABLE>
The accompanying notes are an integral part of this financial statement.
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<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ADJUSTMENTS
- -----------
All adjustments, consisting of normal recurring adjustments, necessary for a
fair statement of the results of these unaudited interim periods have been
included.
PER SHARE OF COMMON STOCK
- -------------------------
Per share amounts have been computed based on the average number of common
shares outstanding.
INFORMATION ABOUT NONCASH INVESTING AND FINANCING ACTIVITIES
- ------------------------------------------------------------
In 1995 the Company acquired, for cash, 32.7 percent of the outstanding shares
of a Polish tire manufacturer from the Polish government and agreed to purchase
original issue shares. The investment was accounted for using the equity method.
In the first quarter of 1996, the Company purchased original issue shares of
this tire manufacturer, bringing its ownership to 50.8 percent. This investment
is now accounted for as a consolidated subsidiary. Information in the
Consolidated Statement of Cash Flows is presented net of the effects of the
consolidation.
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<PAGE> 6
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
Unaudited
<TABLE>
<CAPTION>
(Dollars in millions) Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INDUSTRY SEGMENTS
Sales to Unaffiliated Customers:
Tires $2,526.5 $2,532.3 $5,042.8 $5,025.4
Related products and services 302.5 329.7 560.0 575.6
-------- -------- -------- --------
Total Tires 2,829.0 2,862.0 5,602.8 5,601.0
General products 466.2 457.5 906.0 931.2
Oil transportation 34.3 31.3 66.2 61.9
-------- -------- -------- --------
NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1
======== ======== ======== ========
Income:
Tires $ 248.4 $ 262.2 $ 500.8 $ 508.9
General products 51.3 51.5 93.0 94.3
Oil transportation 18.7 14.9 35.4 22.8
-------- -------- -------- --------
TOTAL OPERATING INCOME 318.4 328.6 629.2 626.0
Exclusions from operating income (44.9) (61.2) (122.2) (153.5)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES $ 273.5 $ 267.4 $ 507.0 $ 472.5
======== ======== ======== ========
GEOGRAPHIC SEGMENTS
Sales to Unaffiliated Customers:
United States $1,788.1 $1,857.6 $3,518.8 $3,667.6
Europe 766.2 715.2 1,530.0 1,388.1
Latin America 390.4 395.0 771.8 802.0
Asia 215.2 212.1 418.2 393.4
Canada 169.6 170.9 336.2 343.0
-------- -------- -------- --------
NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1
======== ======== ======== ========
Operating Income:
United States $ 131.8 $ 162.1 $ 260.3 $ 284.6
Europe 87.3 84.5 166.7 152.7
Latin America 67.2 53.9 138.4 131.0
Asia 25.7 18.7 51.2 42.1
Canada 6.4 9.4 12.6 15.6
-------- -------- -------- --------
TOTAL $ 318.4 $ 328.6 $ 629.2 $ 626.0
======== ======== ======== ========
</TABLE>
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<PAGE> 7
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
CONSOLIDATED
- ------------
SECOND QUARTER: Sales were $3.33 billion, compared to $3.35 billion in the
1995 period. Net income was $187.9 million or $1.22 per share, increasing 8.1
percent from $173.8 million or $1.15 per share in the 1995 period.
Sales reflected increased tire unit volume in Europe and Asia, but were
adversely affected by reduced sales to original equipment vehicle manufacturers
in North America (U.S. and Canada) and Latin America, competitive pricing
pressures in the North American replacement market and unfavorable translation
due to the strengthening of the U.S. dollar versus various foreign currencies.
Worldwide tire unit sales increased 4.5 percent from the 1995 period.
Cost of goods sold increased to 76.9 percent of sales from 76.1 percent in
the 1995 period, due primarily to the inclusion of expenses totaling $25.5
million ($17.5 million after tax or $.11 per share) resulting from the closure
of the Greece tire manufacturing facility, the discontinuance of PVC production
at Niagara Falls and workforce reductions. Costs were favorably impacted by
lower raw material prices, although reductions in production schedules in North
America to align inventory with market requirements also adversely affected
comparisons with prior periods.
Selling, administrative and general expense (SAG) decreased $9.0 million,
to 14.1 percent of sales from 14.3 percent in the 1995 period, primarily as a
result of ongoing cost containment measures. SAG included $5.7 million ($3.9
million after tax or $.03 per share) of expenses related to consolidation of
distribution and other facilities in North America. Other income and expense
included a gain of $32.8 million ($21.3 million after tax or $.14 per share)
resulting from the sale of business property in Asia. Net income benefitted from
a reduction in the estimated annual effective tax rate, due primarily to lower
U.S. taxes on foreign source income.
SIX MONTHS: Sales were $6.57 billion, compared to $6.59 billion in the 1995
period. Net income was $339.7 million or $2.20 per share, increasing 10.6
percent from $307.1 million or $2.03 per share in the 1995 period.
Sales reflected increased tire unit volume in Europe and Asia,
- 6 -
<PAGE> 8
but were adversely affected by reduced sales to original equipment vehicle
manufacturers in North America and Latin America, competitive pricing pressures
in the North American replacement market and unfavorable translation due to the
strengthening of the U.S. dollar versus various foreign currencies. Worldwide
tire unit sales increased 3.4 percent from the 1995 period.
Cost of goods sold increased to 76.7 percent of sales from 76.4 percent in
the 1995 period, due primarily to the inclusion of the previously mentioned
$25.5 million of expenses. Costs were favorably impacted by lower raw material
prices.
SAG decreased $21.5 million, to 14.3 percent of sales from 14.6 percent in
the 1995 period, primarily as a result of ongoing cost containment measures. SAG
included the previously mentioned $5.7 million of facility consolidation
expenses. Other income and expense included the previously mentioned gain of
$32.8 million. Foreign currency exchange expense decreased significantly
compared to the 1995 period, during which period European currencies had
strengthened versus the U.S. dollar.
SEGMENT INFORMATION
- -------------------
SECOND QUARTER: Segment operating income of $318.4 million decreased 3.1
percent from $328.6 million in the 1995 period, due primarily to the inclusion
in the 1996 period of the previously mentioned expenses totaling $31.2 million
and the effects of reductions in production schedules in North America. Segment
operating margin decreased to 9.6 percent of sales from 9.8 percent in the 1995
period.
SIX MONTHS: Segment operating income was $629.2 million, compared to $626.0
million in the 1995 period. Segment operating margin increased to 9.6 percent of
sales from 9.5 percent in the 1995 period.
INDUSTRY SEGMENTS
- -----------------
Tires
- -----
SECOND QUARTER: Sales of $2.83 billion decreased 1.2 percent from $2.86
billion in the 1995 period. Operating income of $248.4 million decreased 5.2
percent from $262.2 million in the 1995 period.
Sales reflected increased tire unit volume in Europe and Asia, but were
adversely affected by reduced sales to original equipment vehicle manufacturers
in North America and Latin America, competitive pricing pressures in the North
American replacement market and unfavorable translation due to the strengthening
of the U.S. dollar versus various foreign currencies. Competitive pricing
pressures are expected to continue during 1996.
- 7 -
<PAGE> 9
The following table presents changes in tire unit sales:
Increase (Decrease) in Company Tire Unit Sales - - Second Quarter
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
1996 vs. 1995
-------------
<S> <C>
U.S. (2.2) %
International 12.6 %
Worldwide 4.5 %
</TABLE>
Although original equipment tire unit sales increased in Europe and Asia,
worldwide original equipment tire unit sales were lower. Worldwide replacement
tire unit sales were higher, increasing in the United States, Europe, Latin
America and Asia.
Operating income decreased due primarily to the inclusion of $26.9 million
of the previously mentioned expenses and reductions in production schedules in
North America. Operating income was favorably impacted by improved results in
Europe, Latin America and Asia, lower raw material costs and lower SAG.
SIX MONTHS: Sales were $5.60 billion, unchanged from the 1995 period.
Operating income of $500.8 million decreased 1.6 percent from $508.9 million in
the 1995 period.
Sales reflected increased tire unit volume in Europe and Asia, but were
adversely affected by reduced sales to original equipment vehicle manufacturers
in North America and Latin America, competitive pricing pressures in the North
American replacement market and unfavorable translation due to the strengthening
of the U.S. dollar versus various foreign currencies.
The following table presents changes in tire unit sales:
Increase (Decrease) in Company Tire Unit Sales - - Six Months
-------------------------------------------------------------
<TABLE>
<CAPTION>
1996 vs. 1995
-------------
<S> <C>
U.S. (3.5) %
International 11.7 %
Worldwide 3.4 %
</TABLE>
Although original equipment tire unit sales increased in Europe and Asia,
worldwide original equipment tire unit sales were lower. Worldwide replacement
tire unit sales were higher, increasing in the United States, Europe, Latin
America and Asia.
Operating income decreased due primarily to the inclusion of $32.5 million
of the previously mentioned expenses (including a first quarter charge of $5.6
million). Operating income was favorably impacted by improved results in Europe,
Latin America and Asia, lower raw material costs and lower SAG.
- 8 -
<PAGE> 10
General Products
- ----------------
SECOND QUARTER: Sales of $466.2 million increased 1.9 percent from $457.5
million in the 1995 period. Operating income was $51.3 million, compared to
$51.5 million in the 1995 period.
Sales and operating income in engineered products increased due primarily
to increased sales volume of industrial rubber products. Sales and operating
income in chemical products decreased due to both lower selling prices and
reduced sales volume. Operating income in the 1996 period also was reduced by a
$4.3 million charge related to the discontinuance of PVC production at Niagara
Falls.
SIX MONTHS: Sales of $906.0 million decreased 2.7 percent from $931.2
million in the 1995 period. Operating income of $93.0 million decreased 1.4
percent from $94.3 million in the 1995 period.
Sales in engineered products decreased and operating income was adversely
affected by reduced sales to original equipment vehicle manufacturers in North
America. Operating income increased due primarily to ongoing cost containment
measures. Sales and operating income in chemical products decreased due to both
lower selling prices and reduced sales volume. Operating income in the 1996
period also was reduced by the previously mentioned charge of $4.3 million and a
first quarter charge of $.9 million.
Oil Transportation
- ------------------
SECOND QUARTER: Sales of $34.3 million and operating income of $18.7
million were recorded in the second quarter of 1996, compared to $31.3 million
and $14.9 million, respectively, in the 1995 period. Improved trading results,
higher average tariffs and ongoing cost containment measures contributed to the
improvement.
SIX MONTHS: Sales of $66.2 million and operating income of $35.4 million
were recorded in the first six months of 1996, compared to $61.9 million and
$22.8 million, respectively, in the 1995 period. Operating income in the 1995
period was adversely affected by a charge of $5.0 million for the writedown of
surplus pipe and equipment. Improved trading results, higher average tariffs and
ongoing cost containment measures contributed to the improvement.
GEOGRAPHIC SEGMENTS
- -------------------
U.S. Operations
- ---------------
SECOND QUARTER: Sales of $1.79 billion decreased 3.7 percent from
$1.86 billion in the 1995 period. Operating income of $131.8
- 9 -
<PAGE> 11
million decreased 18.9 percent from $162.1 million in the 1995 period.
Sales and operating income decreased due primarily to reduced sales to
original equipment vehicle manufacturers and competitive tire pricing pressures
in the replacement market, although sales of engineered products increased.
Operating income was also reduced by $12.6 million of the previously mentioned
expenses and the effects of reductions in production schedules in North
America.
Operating income was favorably impacted by improved results in
engineered products and oil transportation activities, lower raw material costs
and lower SAG.
U.S. operations accounted for 53.7 percent of consolidated sales and
41.3 percent of consolidated operating income, compared to 55.4 percent and
49.3 percent, respectively, in the 1995 period.
SIX MONTHS: Sales of $3.52 billion decreased 4.1 percent from $3.67
billion in the 1995 period. Operating income of $260.3 million decreased 8.6
percent from $284.6 million in the 1995 period.
Sales and operating income decreased due primarily to reduced sales to
original equipment vehicle manufacturers and competitive tire pricing pressures
in the replacement market. Operating income also was reduced by $12.6 million
of the previously mentioned expenses.
Operating income was favorably impacted by lower raw material costs,
lower SAG and improved results in oil transportation activities (which in the
1995 period were affected by the aforesaid $5.0 million charge).
U.S. operations accounted for 53.5 percent of consolidated sales and
41.4 percent of consolidated operating income, compared to 55.6 percent and
45.5 percent, respectively, in the 1995 period.
International Operations
- ------------------------
SECOND QUARTER: Sales of $1.54 billion increased 3.2 percent from $1.49
billion in the 1995 period. Operating income of $186.6 million increased 12.2
percent from $166.5 million in the 1995 period. Operating income in the 1996
period was reduced by $18.6 million of the previously mentioned expenses.
In Europe, sales of $766.2 million increased 7.1 percent from $715.2
million in the 1995 period. Operating income of $87.3 million increased 3.3
percent from $84.5 million in the 1995 period. Operating income in the 1996
period was reduced by a $15.0 million charge related to the closure of the
Greece tire manufacturing facility.
- 10 -
<PAGE> 12
Sales and operating income in Europe increased due primarily to higher tire
unit sales and the acquisition of a majority ownership interest in a tire
manufacturing facility in Poland, but sales were adversely affected by the
strengthening of the U.S. dollar versus European currencies. Operating income
was favorably impacted by lower raw material costs, productivity improvements
and the effects of cost containment measures.
In Latin America, sales of $390.4 million decreased 1.2 percent from $395.0
million in the 1995 period. Operating income of $67.2 million increased 24.9
percent from $53.9 million in the 1995 period. Operating income in the 1996
period was reduced by $3.6 million of the previously mentioned workforce
reduction expenses.
Sales in Latin America decreased and operating income was adversely
affected by difficult economic conditions and lower original equipment tire unit
sales in Brazil. Operating income increased due primarily to improved mix and
volume in the region, lower SAG and raw material costs and improved
productivity.
In Asia, sales of $215.2 million increased 1.5 percent from $212.1 million
in the 1995 period. Operating income of $25.7 million increased 38.2 percent
from $18.7 million in the 1995 period.
Sales in Asia increased due primarily to higher tire unit sales, but were
adversely affected by the strengthening of the U.S. dollar versus Asian
currencies. Operating income increased due to the higher tire unit sales, lower
SAG and raw material costs and improved productivity.
In Canada, sales were $169.6 million, compared to $170.9 million in the
1995 period. Operating income of $6.4 million decreased 31.2 percent from $9.4
million in the 1995 period.
Sales and operating income in Canada decreased due primarily to reduced
sales to original equipment vehicle manufacturers.
International operations accounted for 46.3 percent of consolidated sales
and 58.7 percent of consolidated operating income, compared to 44.6 percent and
50.7 percent, respectively, in the 1995 period.
SIX MONTHS: Sales of $3.05 billion increased 4.4 percent from $2.92 billion
in the 1995 period. Operating income of $368.9 million increased 8.1 percent
from $341.4 million in the 1995 period. Operating income in the 1996 period was
reduced by the previously mentioned expenses totaling $25.1 million (including a
first quarter charge of $6.5 million.)
In Europe, sales of $1.53 billion increased 10.2 percent from
- 11 -
<PAGE> 13
$1.39 billion in the 1995 period. Operating income of $166.7 million increased
9.2 percent from $152.7 million in the 1995 period. Operating income in the 1996
period was reduced by a $15.0 million charge related to the closure of the
Greece tire manufacturing facility.
Sales and operating income in Europe increased due primarily to higher tire
unit sales and the acquisition of a majority ownership interest in a tire
manufacturing facility in Poland, but sales were adversely affected by the
strengthening of the U.S. dollar versus European currencies. Operating income
was favorably impacted by lower raw material costs, productivity improvements
and the effects of cost containment measures.
In Latin America, sales of $771.8 million decreased 3.8 percent from $802.0
million in the 1995 period. Operating income of $138.4 million increased 5.7
percent from $131.0 million in the 1995 period. Operating income in the 1996
period was reduced by $10.1 million of the previously mentioned expenses
(including a first quarter charge of $6.5 million).
Sales in Latin America decreased and operating income was adversely
affected by difficult economic conditions and lower tire unit sales in Brazil.
Operating income increased due primarily to improved mix, lower SAG and raw
material costs and improved productivity.
In Asia, sales of $418.2 million increased 6.3 percent from $393.4 million
in the 1995 period. Operating income of $51.2 million increased 21.8 percent
from $42.1 million in the 1995 period.
Sales in Asia increased due primarily to higher tire unit sales, but were
adversely affected by the strengthening of the U.S. dollar versus Asian
currencies. Operating income increased due to the higher tire unit sales, lower
SAG and raw material costs and improved productivity.
In Canada, sales of $336.2 million decreased 2.0 percent from $343.0
million in the 1995 period. Operating income of $12.6 million decreased 19.3
percent from $15.6 million in the 1995 period.
Sales and operating income in Canada decreased due primarily to reduced
sales to original equipment vehicle manufacturers.
International operations accounted for 46.5 percent of consolidated sales
and 58.6 percent of consolidated operating income, compared to 44.4 percent and
54.5 percent, respectively, in the 1995 period.
- 12 -
<PAGE> 14
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Net cash used in operating activities was $63.0 million during the first
six months of 1996. Working capital requirements increased for accounts
receivable, reflecting a worldwide shift in sales mix towards replacement tires
and longer average terms in Europe. Working capital requirements also increased
due to higher quantities of finished goods inventories.
Net cash used in investing activities was $342.9 million during the
first six months of 1996. Capital expenditures were $267.9 million, of which
amount $157.5 million was used on projects to increase capacity and improve
productivity and the balance was used for tire molds and various other
projects. Capital expenditures are expected to total $650 million in 1996.
Other investing activities in the period included the purchase of tire
manufacturing assets in the Philippines, the acquisition of a lightweight
conveyor belting manufacturer in the United States and an investment in a
retail tire chain in Sweden.
Net cash provided by financing activities was $441.8 million during the
first six months of 1996, primarily to support the previously mentioned
operating and investing activities. Consolidated debt at June 30, 1996 was
$1,995.6 million and amounted to 35.9 percent of debt and equity, compared to
$1,546.7 million and 32.0 percent, respectively, at the end of 1995.
The Company enters into interest rate contracts domestically in order to
manage the impact of fluctuations in interest rates on consolidated results of
operations and future cash outflows for interest. During the second quarter, the
Company entered into floating rate contracts with notional principal amounts
totaling $20 million, which increase its exposure to fluctuations in short term
interest rates. A summary of contracts in place and related weighted average
interest rates follows:
<TABLE>
<CAPTION>
(Dollars in millions) Fixed Rate Floating Rate
Contracts Contracts
---------- -------------
At June 30, 1996:
<S> <C> <C>
- Notional principal amount $ 175.0 $180.0
- Pay fixed rate 9.05 % -
- Receive variable LIBOR 5.56 % -
- Pay variable LIBOR - 5.46 %
- Receive fixed rate - 6.44 %
- Average years to maturity 1.1 6.7
- Fair value: (unfavorable) $ (5.4) $ (2.9)
Second quarter - Rate paid 8.95 % 5.41 %
- Rate received 5.59 % 6.44 %
Six months - Rate paid 8.95 % 5.45 %
- Rate received 5.75 % 6.44 %
</TABLE>
- 13 -
<PAGE> 15
Fixed rate contracts with notional principal amounts totaling $100 million
matured in the second quarter of 1996.
Substantial short term and long term credit sources are available to the
Company globally under normal commercial practices. At June 30, 1996 the Company
had short term uncommitted credit arrangements totaling $1.8 billion, of which
$422.7 million were unused. The Company also had available long term credit
arrangements at June 30, 1996 totaling $1.9 billion, of which $1.2 billion were
unused.
In July 1996, the Company's revolving credit facility agreements,
consisting of a $900 million five year revolving credit facility and a $294
million 364-day revolving credit facility, were renegotiated primarily to extend
maturities and lower commitment and usage fees. Effective July 15, 1996, each
facility agreement is with 28 domestic and international banks. The $900 million
five year revolving credit facility agreement provides that the Company may
borrow at any time until July 15, 2001, when the commitment terminates and any
outstanding loans mature. The commitment fee paid on the entire amount of the
commitment (whether or not borrowed) has been lowered to a range of 7.5 to 15
basis points. The usage fee on amounts borrowed (other than on a competitive bid
or prime rate basis) has been lowered to a range of 15 to 30 basis points. The
commitment and usage fees may fluctuate within these ranges quarterly based upon
the Company's performance as measured by defined ranges of leverage, and
currently are 10 and 20 basis points, respectively. Commitments under the $294
million 364-day credit facility agreement have been increased to $300 million
and are available until July 14, 1997, on which date this facility commitment
terminates, except as it may be extended on a bank by bank basis. If a bank does
not extend its commitment if requested to do so, the Company may obtain from
such bank a two year term loan up to the amount of such bank's commitment. The
commitment fee paid on the entire amount of the commitment (whether or not
borrowed) has been lowered to 8 basis points. The usage fee on amounts borrowed
(other than on a competitive bid or prime rate basis) has been lowered to 22
basis points.
Funds generated by operations, together with funds available under existing
credit arrangements, are expected to be sufficient to meet currently anticipated
funding requirements.
- 14 -
<PAGE> 16
PART II. OTHER INFORMATION
--------------------------
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
Reference is made to the Annual Report of The Goodyear Tire & Rubber
Company (the "Registrant") on Form 10-K for the year ended December 31, 1995
(the "Annual Report"), wherein at Item 3, pages 14, 15, 16 and 17, Registrant
reported certain legal proceedings. Registrant also reported certain
developments in respect of a legal proceeding at Item 1 of Part II of its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. Registrant
reports the following developments in respect of one of the legal proceedings
described at Item 3 of the Annual Report.
As reported at paragraph (E) of Item 3, at pages 15 and 16, of the
Annual Report, a civil action, Taylor Tire Company, et al. vs. Goodyear, was
filed in the United States District Court for the Southern District of
California against Registrant on behalf of a class of plaintiffs consisting of
four named tire dealers who are customers of Registrant and 253 other retailers
located in the State of California who are, or were on or at any time after
December 31, 1991, contract dealers or franchisees of Registrant.
On June 24, 1996, the Court, in response to Registrant's motions,
dismissed all claims made on behalf of 189 of the 257 members of the class, all
but two of the claims made on behalf of 36 of the class members and all but one
of the claims made by 32 members of the class. The claims remaining relate to
the failure of Registrant to file for an available exemption from registration
as a franchisor under the California Franchise Investment Law and a claim that
Registrant breached certain pricing provisions of the franchise agreements
between Registrant and 36 members of the class.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
The Annual Meeting of Shareholders of Registrant was held on April 15,
1996 (the "Annual Meeting"). Proxies for the Annual Meeting were solicited
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Act"), there was no solicitation in opposition to the four nominees of the
Board of Directors listed in the Proxy Statement of Registrant, dated February
27, 1996, for the Annual Meeting (the "Proxy Statement"), filed with the
Securities and Exchange Commission, and said four nominees were elected.
The following matters were acted upon by the shareholders of Registrant
at the Annual Meeting, at which 136,686,313 shares of the Common Stock, without
par
- 15 -
<PAGE> 17
value, of Registrant (the "Common Stock", the only class of voting securities
of Registrant outstanding), or approximately 88.49 percent of the 154,470,955
shares of Common Stock outstanding and entitled to vote at the Annual Meeting,
were present in person or by proxies:
1. ELECTION OF DIRECTORS. Four persons were nominated by the Board of
Directors of Registrant for election as directors of Registrant. Samir G.
Gibara, William J. Hudson, Jr., and William C. Turner were nominated as Class I
directors, each to hold office for a three year term expiring at the 1999 Annual
Meeting of Shareholders and until his successor shall have been duly elected and
qualified. Gertrude G. Michelson was nominated as a Class III director, to hold
office for a one year term expiring at the 1997 Annual Meeting of Shareholders
and until her successor shall have been duly elected and qualified. Each nominee
was an incumbent director. No other person was nominated. Each nominee was
elected. The votes cast for, or withheld or abstained with respect to, each
nominee were as follows:
<TABLE>
<CAPTION>
Shares of Common Shares of Common Stock
Name of Director Stock Voted For Withheld or Abstained
---------------- --------------- ---------------------
Class I Directors
-----------------
<S> <C> <C>
Samir G. Gibara 134,980,347 1,705,966
William J. Hudson, Jr. 134,999,475 1,686,838
William C. Turner 134,828,937 1,857,376
Class III Director
------------------
Gertrude G. Michelson 134,981,167 1,705,146
</TABLE>
The seven directors whose terms of office continue after the Annual Meeting
are: (A) Thomas H. Cruikshank, Steven A. Minter and Agnar Pytte, whose terms
expire in 1997; and (B) John G. Breen, William E. Butler, Stanley C. Gault
and George H. Schofield, whose terms expire in 1998.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS. A resolution
proposed by the Board of Directors of Registrant that the shareholders ratify
the action of the Board of Directors in selecting and appointing Price
Waterhouse LLP as independent accountants for Registrant for the year ending
December 31, 1996 was submitted to, and voted upon by, the shareholders of
Registrant. There were 135,701,758 shares of Common Stock voted in favor of, and
606,755 shares of Common Stock voted against, said resolution. The holders of
377,800 shares of Common Stock abstained. There were no "broker non-votes". The
resolution, having received the affirmative vote of the holders of a majority of
the shares of
- 16 -
<PAGE> 18
Common Stock outstanding and entitled to vote at the Annual Meeting, was
adopted and the appointment of Price Waterhouse LLP as the independent
accountants for Registrant for 1996 was ratified by the shareholders. The
resolution and related information are set forth under the caption
"Ratification of Appointment of Independent Accountants" at page 7 of the
Proxy Statement.
3. SHAREHOLDER PROPOSAL. A resolution submitted by a shareholder
requesting the Registrant to prepare a report describing its programs, progress,
and future plans relative to the environment and the Coalition of
Environmentally Responsible Economies ("CERES") Principles and using the
standard CERES Report Form as a guide was submitted to the shareholders. There
were 10,594,668 shares of Common Stock voted in favor of, and 107,553,561 shares
of Common Stock voted against, said resolution. In addition, the holders of
8,998,143 shares of Common Stock abstained from voting on said resolution and
there were "broker non-votes" in respect of 9,539,941 shares of Common Stock.
The resolution, having failed to receive the affirmative vote of at least a
majority of the shares of Common Stock entitled to vote at the Annual Meeting,
was not adopted. The resolution and related statements in support thereof and in
opposition thereto are set forth under the captions "Shareholder Proposal" and
"Statement of Board of Directors Opposing The Shareholder Proposal" at pages 7,
8 and 9 of the Proxy Statement.
[The information set forth above in this Item 4 was also set forth at
Item 4 of Part II of Registrant's Quarterly Report on Form 10-Q for its fiscal
quarter ended March 31, 1996.]
Mr. Gault retired from the Board of Directors of Registrant on June
30, 1996. Effective July 1, 1996, Mr. Samir G. Gibara was elected Chairman of
the Board, Chief Executive Officer and President of Registrant.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) A list of the exhibits required to be filed as a part of this
Quarterly Report on Form 10-Q is set forth at the Index of Exhibits beginning at
page E-1, which is by specific reference incorporated into and made a part of
this Quarterly Report on Form 10-Q.
(b) Registrant filed a Current Report on Form 8-K, dated June 4, 1996,
which contained at Item 5 (Other Events) information concerning the adoption by
Registrant of a Preferred Stock Purchase Rights Plan and included Exhibit 4(a),
a copy of the Rights Agreement, dated June 4, 1996, between Registrant and First
Chicago Trust Company of New York, Rights Agent, and Exhibit 99(a), Registrant's
Press Release dated June 4, 1996.
- 17 -
<PAGE> 19
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE GOODYEAR TIRE & RUBBER COMPANY
(Registrant)
Date: July 24, 1996 By /s/ Robert W. Tieken
---------------------------
Robert W. Tieken,
Executive Vice President
(Signing on behalf of Registrant as a
duly authorized officer of Registrant
and as the Principal Financial Officer
of Registrant.)
- 18 -
<PAGE> 20
THE GOODYEAR TIRE & RUBBER COMPANY
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX OF EXHIBITS (1)
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
Table Item No.* Description of Exhibit Number Page
- --------------- ------------------------------------------------------------- ------ ----
<S> <C> <C> <C>
3 ARTICLES OF INCORPORATION AND BY-LAWS
-------------------------------------------------------------
Certificate of Amended Articles of Incorporation 3.1 X-3.1-1
of Registrant, dated December 20, 1954, and
Certificate of Amendment to Amended Articles of
Incorporation of Registrant, dated April 6, 1993,
and certificate of Amendment to Amended
Articles of Incorporation of Registrant dated June
4, 1996, three documents comprising Registrant's
Articles of Incorporation as amended.
Code of Regulations of The Goodyear Tire & 3.2
Rubber Company, adopted November 22, 1955, as
amended April 5, 1965, April 7, 1980, April 6,
1981 and April 13, 1987 (incorporated by
reference, filed as Exhibit 4.1(B) to Registrant's
Registration Statement on Form S-3, File No. 333-
1955).
4 INSTRUMENTS DEFINING
THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES
-------------------------------------------------------------
Conformed copy of Rights Agreement, dated as 4.1
of July 2, 1986, between Registrant and
Manufacturers Hanover Trust Company, Rights
Agent, and a copy of the Appointment of
Successor Rights Agent, dated March 21, 1990,
whereunder Registrant appointed First Chicago
Trust Company of New York as the Successor
Rights Agent under the Rights Agreement, as
amended by that certain Amendment to Rights
Agreement dated as of April 6, 1993 between
<FN>
- ----------
*Pursuant to Item 601 of Regulation S-K.
</TABLE>
E-1
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
Table Item No.* Description of Exhibit Number Page
- --------------- ------------------------------------------------------------- ------ ----
<S> <C> <C> <C>
between Registrant and First Chicago Trust
Company of New York (incorporated by reference,
filed as Exhibit 4.3 to Registrant's Registration
Statement on Form S-8, File No. 33-65187).
Conformed copy of Rights Agreement, dated as 4.2
of June 4, 1996, between Registrant and First
Chicago Trust Company of New York, Rights
Agent (incorporated by reference, filed as Exhibit
1 to Registrant's Registration Statement on Form
8-A dated June 11, 1996 and as Exhibit 4(a) to
Registrant's Current Report on Form 8-K dated
June 4, 1996).
Specimen nondenominational Certificate for 4.3
shares of the Common Stock, Without Par Value,
of Registrant; one certificate, First Chicago Trust
Company of New York as transfer agent and registrar
(incorporated by reference, filed as Exhibit 4.2 to
Registrant's Registration Statement on Form S-8, File
No. 33-65187).
Conformed copy of Revolving Credit Facility 4.4
Agreement, dated as of July 15, 1994, among
Registrant, the Lenders named therein and
Chemical Bank, as Agent (incorporated by
reference, filed as Exhibit A to Registrant's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994, File No. 1-1927).
Conformed copy of Replacement and Restate- 4.5 X-4.5-1
ment Agreement, dated as of July 15, 1996, among
Registrant, the Lenders named therein and The
Chase Manhattan Bank, as Agent.
<FN>
- ----------
*Pursuant to Item 601 of Regulation S-K.
</TABLE>
E-2
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
Table Item No.* Description of Exhibit Number Page
- --------------- ------------------------------------------------------------- ------ ----
<S> <C> <C> <C>
No other instrument defining the rights of holders of
long-term debt which relates to securities having an
aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its subsidiaries
was entered into during the quarter ended June 30,
1996. In accordance with paragraph (iii) to Part 4 of
Item 601 of Regulation S-K, agreements and
instruments defining the rights of holders of
long term debt entered into during the quarter ended
June 30, 1996 which relate to securities having an
aggregate principal amount less than 10% of the
consolidated assets of Registrant and its Subsidiaries
are not filed herewith. The Registrant hereby agrees
to furnish a copy of any such agreements or
instruments to the Securities and Exchange Commission
upon request.
11 STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
-------------------------------------------------------------
Statement setting forth the computation of 11 X-11-1
per share earnings.
27 FINANCIAL DATA SCHEDULE 27 X-27-1
-------------------------------------------------------------
28 ADDITIONAL EXHIBITS
-------------------------------------------------------------
Registrant's definitive Proxy Statement, dated 28
February 27, 1995 (incorporated by reference,
filed with the Securities and Exchange
Commission, File No. 1-1927).
<FN>
- ----------
*Pursuant to Item 601 of Regulation S-K.
</TABLE>
E-3
<PAGE> 1
EXHIBIT 3.1
-----------
CERTIFICATE
OF
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
E. J. Thomas, President, and Arden E. Firestone, Secretary, of The Goodyear
Tire & Rubber Company, an Ohio corporation, with its principal office located at
Akron, Ohio, do hereby certify that a meeting of the holders of the shares of
Common Stock of said corporation (being the only class of shares outstanding)
entitled to vote on the proposal to adopt the Amended Articles of Incorporation
as contained in the following resolution was duly called and held on the 20th
day of December, 1954, at which meeting a quorum of such shareholders was
present in person or by proxy, and that by the affirmative vote of the holders
of shares entitled under the Articles to exercise at least two-thirds of the
voting power of the corporation on such proposal (the Articles not requiring a
greater proportion of such voting power) the following resolution was adopted:
RESOLVED, That The Goodyear Tire & Rubber Company hereby adopts the
following Amended Articles of Incorporation and that the President or
a Vice President and the Secretary or an Assistant Secretary of this
Corporation are hereby authorized and directed, on behalf of this
Corporation, to sign and file in the Office of the Secretary of State
of the State of Ohio, so as to make such Amended Articles of
Incorporation become effective, a certificate containing a copy of the
resolution adopting such Amended Articles of Incorporation and a
statement of the manner of the adoption thereof:
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
---------------
The Goodyear Tire & Rubber Company, a Corporation for profit heretofore
organized under the General Incorporation Laws of the State of Ohio, adopts
these Amended Articles of Incorporation:
FIRST: The name of said Corporation shall be The Goodyear Tire & Rubber
Company.
SECOND: Said Corporation is to be located at Akron in Summit County,
Ohio, and its principal business there transacted.
THIRD: Said Corporation is formed for the following purposes:
(a) To produce, manufacture, purchase, import, or otherwise acquire,
to own, process, operate, develop and use, to sell, lease, exchange, export or
otherwise dispose of or turn to account, and to generally deal in, and to render
any service in respect of: rubber, both natural and synthetic, compounds
thereof, substitutes therefor, substances having properties or
X-3.1-1
<PAGE> 2
2
uses similar thereto, and articles produced in whole or in part therefrom,
including without limitation tires and tubes of all types and kinds, belts, and
mechanical goods, cotton, rayon and other fibrous materials and articles of
which cotton, rayon or other fibrous materials are a component part, metals,
rims and automotive parts and accessories, guns, ammunition and other articles
useful in the national defense, aircraft and parts and accessories therefor,
and, in general, goods, commodities, and articles of personal property of
whatever nature, and to carry on and conduct the general business of
manufacturing and merchandising.
(b) To establish, maintain, and operate chemical, physical, and other
laboratories and to carry on chemical, physical, and industrial research of
every kind and character as may be necessary, useful or convenient in connection
with any business of the Corporation, and to produce, manufacture, construct,
import, purchase or otherwise acquire, to own, process, develop and use, to
sell, lease, exchange, export or otherwise dispose of or turn to account and
generally to deal in and with articles or substances invented or developed
thereby.
(c) To manufacture, construct, mine, produce, import, purchase, lease or
otherwise acquire, hold, own, use, process, maintain, operate, export, mortgage,
sell, convey, assign and otherwise dispose of, distribute, deal in and turn to
account machinery, apparatus, tools, implements, equipment, materials, supplies,
and other personal property of every kind and character which can or may be
advantageously used, consumed or dealt in by the Corporation in connection with
any business it is authorized to conduct; and, in general, to buy, sell,
produce, manufacture, process, use, export, import, trade in, deal with and turn
to account goods, wares, and merchandise of every class and description.
(d) To purchase, lease or otherwise acquire, own, hold, use, maintain,
operate, cultivate, develop, sell, lease, convey, exchange or otherwise
dispose of real estate, leaseholds, and other interests in real estate, and to
construct, equip, occupy, improve, use, operate, sell, lease, exchange or
otherwise dispose of buildings, factories, hangars, mills, workshops,
machineshops, laboratories, storehouses, offices, residences, stores, hotels,
facilities, and structures of all kinds, necessary, useful or convenient in
connection with any of the businesses or operations of the Corporation.
(e) To secure, register, purchase, lease, license, or otherwise to acquire,
and to hold, own, use, operate, develop, improve, introduce, grant licenses in
respect of, sell, assign, and otherwise dispose of and turn to account, letters
patent of the United States or any foreign country, patent rights, licenses,
privileges, inventions, devices, improvements, formulas, concessions,
processes, secret or otherwise, copyrights, trademarks, trade names and rights
analogous thereto granted by, recognized or otherwise existing under the laws of
the United States or any foreign country.
(f) To borrow money or otherwise use its credit for its corporate purposes,
to issue bonds, debentures, notes and other obligations, secured or unsecured,
from time to time, for moneys borrowed or for property acquired, or for any
other of the purposes of the Corporation, and to secure the same by mortgage,
deed of trust, pledge, or other lien upon any or all of the properties, rights,
privileges or franchises of the Corporation.
(g) To purchase, by subscription or otherwise, or acquire in any manner,
and to sell, negotiate, guarantee, assign, deal in, exchange, transfer, pledge
or otherwise dispose of, shares of the capital stock, scrip, bonds, coupons,
mortgages, debentures, debenture stock, acceptances, drafts, securities, and any
other evidences of indebtedness of, or interest in, other corporations, joint
stock companies or associations, whether public, private or municipal, or of
any corporate body, domestic or foreign, and while the owner thereof, to
X-3.1-2
<PAGE> 3
3
possess and exercise in respect thereof all the rights, powers, and privileges
of ownership, including but not limited to the right to vote thereon.
(h) To aid, in any manner whatsoever, any corporation, association,
copartnership or individual in whose business the Corporation may be in any way
interested or any of whose properties, including shares of capital stock, bonds
or other obligations or securities, are held by the Corporation or in which it
is in any way interested, and to do any acts or things which are or which may
appear necessary, useful, convenient or appropriate for the preservation,
protection, improvement or enhancement of the value of any such business or
property, or for the promotion of any interests of the Corporation.
(i) To lend money or credit, with or without security, and to guarantee
and become surety for payment of money and the performance of contracts or
obligations of any and all kinds, provided it shall not carry on the business of
an indemnity or a surety company.
(j) To purchase or otherwise acquire the whole or any part of the property,
assets, business, good will, and rights, and to undertake or assume the whole or
any part of the bonds, mortgages, franchises, leases, contracts, indebtedness,
guarantees, liabilities, and obligations of any person, firm or corporation,
and to pay therefor in whole or in part with shares of its own capital stock,
cash, bonds, debentures, notes or other obligations, or evidences of
indebtedness of the Corporation or otherwise; and to hold or in any manner
dispose of any part or all of the property, assets, business, good will, and
right so acquired, and to conduct in any lawful manner the whole or any part of
the business so acquired, and to exercise all the powers necessary or convenient
in and about the management and conduct of such business.
(k) In general, to carry on any lawful business whatsoever in connection
with or incidental to the foregoing, or which has for its object the
promotion, directly or indirectly, of the general interests of the Corporation,
or the protection, improvement, preservation or enhancement of the value of its
properties and rights, and to do whatever it may deem necessary, convenient or
proper for the accomplishment of any one or more of the purposes of the
Corporation, and, to the same extent and as fully as any natural person might
lawfully or could do, to do all and every lawful act and thing, and to enter
into and perform contracts of every kind and description with any person, firm,
association, corporation, municipality, county, state, body politic or
government, or subdivision thereof, without limitation as to amount, necessary,
suitable or convenient for the accomplishment of any of the purposes of the
Corporation or incident to any of the powers hereinbefore enumerated, the
enumeration of specific powers not being a limitation or restriction in any
manner of the general powers of the Corporation.
(l) To do all or any of such acts and things and exercise any of such acts
in any state of the United States, in any district, territory, colony,
protectorate or possession thereof, and in any and all foreign countries, and
to maintain such offices, branches, plants, properties, plantations, mines,
and establishments in any or all thereof that may be deemed advisable by the
Corporation.
FOURTH: The number of shares which the Corporation is authorized to have
outstanding is 15,000,000, all of which shall be Common Stock with a par value
of $5 each (being the shares heretofore authorized as shares with a par value
of $10 each) having the terms and provisions set forth in these Amended Articles
of Incorporation. Each holder of record of Common Stock shall be entitled to one
vote for each share of said Common Stock standing in his name on the books of
the Corporation.
X-3.1-3
<PAGE> 4
4
No holder of Common Stock, present, past, or future, shall be entitled as
such as a matter of right to subscribe for or purchase any part of not exceeding
500,000 shares of such Common Stock which may, subsequent to October 31, 1954 be
allotted and sold to employees of the Corporation or any of its subsidiaries,
pursuant to such plan or plans for such allotment and sale as the Board of
Directors has determined or may from time to time determine, whether any such
shares of Common Stock shall be issued for cash, property, services or
otherwise.
FIFTH: The total stated capital of the Corporation at the time of adopting
these Amended Articles of Incorporation is $45,532,000.00.
SIXTH: These Amended Articles of Incorporation supersede and take the
place of the heretofore existing Amended Articles of Incorporation, adopted
March 31, 1952, and filed in the Office of the Secretary of the State of Ohio on
April 3, 1952, including all Certificates of Amendment to Amended Articles of
Incorporation subsequently filed in the Office of the Secretary of the State
of Ohio.
IN WITNESS WHEREOF, said E. J. Thomas, President, and Arden E. Firestone,
Secretary, of The Goodyear Tire & Rubber Company, acting for and on behalf of
said corporation, have hereunto subscribed their names and caused the seal of
said corporation to be hereunto affixed this 20th day of December, 1954.
BY E. J. THOMAS
President
(CORPORATE SEAL)
BY ARDEN E. FIRESTONE
Secretary
UNITED STATES OF AMERICA, )
STATE OF OHIO, )
OFFICE OF THE SECRETARY OF STATE. )
I, Ted W. Brown, Secretary of State of the State of Ohio, do hereby certify
that the foregoing is an exemplified copy, carefully compared by me with the
original record now in my official custody as Secretary of State, and found to
be true and correct, of the
CERTIFICATE
OF
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
filed in this office on the 30th day of December A. D. 1954 and recorded in
Volume 696, Page 255, of the Records of Incorporations.
WITNESS my hand and official seal, at
Columbus, Ohio, this 30th
day of December A-D. 1954.
TED W. BROWN
Secretary of State
X-3.1-4
<PAGE> 5
Exhibit 3.1 (Continued)
-----------------------
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
Hoyt M. Wells, President, and James Boyazis, Secretary, of The Goodyear
Tire & Rubber Company, an Ohio Corporation, with its principal office located at
Akron, Summit County, Ohio, do hereby certify that a meeting of the holders of
the shares of Common Stock of said corporation (being the only class of shares
outstanding) entitling them to vote on the proposal to amend the Amended
Articles of Incorporation thereof, as Contained in the following resolution, was
duly called and held on the 5th day of April, 1993, at which meeting a quorum of
such shareholders was present in person or by proxy, and that by the affirmative
vote of the holders of shares entitled under the Amended Articles of Incorpora-
tion to exercise at least two-thirds of the voting power of the corporation on
such proposal (the Amended Articles of Incorporation not requiring a greater
proportion of such voting power) the following resolution was adopted:
RESOLVED, that The Goodyear Tire & Rubber Company hereby adopts the
following amendment to its Amended Articles of Incorporation and that the
President or a Vice President and the Secretary or an Assistant Secretary of
The Goodyear Tire & Rubber Company are hereby authorized and directed to sign
and file in the office of the Secretary of State of the State of Ohio a
certificate containing a copy of the resolution adopting the amendment and a
statement of the manner of its adoption:
The Amended Articles of Incorporation are hereby amended by striking out
in its entirety Article FOURTH and substituting in lieu thereof the
following:
FOURTH: The maximum number of shares which the Corporation is authorized
to have outstanding is 350,000,000, consisting of 300,000,000 shares of
Common Stock without par value (hereinafter referred to as "Common Stock")
and 50,000,000 shares of Preferred Stock without par value (hereinafter
referred to as "Preferred Stock").
The express terms of the shares of each class are as follows:
PART A
EXPRESS TERMS OF THE COMMON STOCK
Section 1. General.
The Common Stock shall be subject to the express terms of the Preferred
Stock and any series thereof. Each share of Common Stock shall be equal to each
other share of Common Stock. Each holder of record of Common Stock shall be
entitled to one vote for each share of said Common Stock standing in his or her
name on the books of the Corporation upon all matters presented to the
shareholders.
Section 2. Preemptive Rights.
No holder of Common Stock, present, past or future, shall be entitled as such
as a matter of right to subscribe for or purchase any part of any new or
additional issue of stock or of securities of the Corporation convertible into
stock of any class whatsoever, whether now or hereafter authorized, and whether
issued for cash, property, services or otherwise.
1
X-3.1-5
<PAGE> 6
Section 3. Purchase of Shares by Corporation.
The Corporation is authorized to purchase shares of Common Stock at such
times, in such manner, for such reasons and on such terms and conditions as
shall be deemed appropriate by the Board of Directors.
PART B
EXPRESS TERMS OF THE PREFERRED STOCK
Section 1. Series.
The Preferred Stock may be issued from time to time in one or more series.
All shares of Preferred Stock shall be of equal rank and the express terms
thereof shall be identical, except in respect of the terms that may be fixed by
the Board of Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. Subject to the provisions of Sections 2
through 8, inclusive, of this Part B, which shall apply to all Preferred Stock,
the Board of Directors is hereby authorized to cause shares of Preferred Stock
to be issued in one or more series and with respect to each such series to
determine and fix:
(a) The designation of the series, which may be by distinguishing number,
letter or title.
(b) The authorized number of shares constituting the series, which number the
Board of Directors may, except to the extent otherwise provided in the creation
of the series, from time to time increase or decrease, but not below the number
of shares thereof then outstanding.
(c) The rate at which dividends shall be payable on shares of such series.
(d) The dates on which dividends, if declared, shall be payable on shares of
such series and the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of the
series.
(f) The amount, terms, conditions and manner of operation of any retirement
or sinking fund to be provided for the purchase or redemption of shares of the
series.
(g) The amounts payable on shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Corporation.
(h) Whether the shares of the series shall be convertible into shares of any
other class or series, and, if so, the specification of such other class or
series, the conversion price or prices or rate or rates, any adjustments
thereof, the date or dates as of which such shares shall be convertible and all
other terms and conditions upon which such conversion may be made.
(i) The conditions or restrictions, if any, upon the issue of any additional
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments
to the Amended Articles of Incorporation fixing, with respect to each series,
the matters described in clauses (a) to (i), inclusive, of this Section 1.
Section 1-A. Series A $10.00 Preferred Stock, Without Par Value.
A series of Preferred Stock is hereby created having the following terms:
1. Designation. The shares of such series are designated as: "Series A $10.00
Preferred Stock, without par value."
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2. Authorized Number of Shares - Fractional Shares. The authorized number
of shares constituting the Series A $10.00 Preferred Stock is 3,000,000. Series
A $10.00 Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A $10.00 Preferred
Stock.
3. Dividends and Distributions. (A) Subject to any prior and superior rights
of the holders of any series of Preferred Stock ranking prior and superior to
the shares of Series A $10.00 Preferred Stock with respect to dividends that may
be authorized by the Amended Articles of Incorporation, the holders of shares of
Series A $10.00 Preferred Stock shall be entitled prior to the payment of any
dividends on shares ranking junior to the Series A $10.00 Preferred Stock to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of January, April, July and October in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A $10.00 Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10.00 or (b) subject to the
provisions for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A $10.00 Preferred Stock.
In the event the Corporation shall at any time after July 28, 1986 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the Outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A $10.00 Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A
$10.00 Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Payment Date, a dividend of $10.00 per share on the Series A $10.00 Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A $10.00 Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A $10.00 Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A $10.00 Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date.
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(D) Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A $10.00 Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A $10.00 Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 60 days prior to the date fixed for the payment thereof.
(E) Dividends in full shall not be declared or paid or set apart for payment
on the Series A $10.00 Preferred Stock for a dividend period terminating on the
Quarterly Dividend Payment Date unless dividends in full have been declared or
paid or set apart for payment on the Preferred Stock of all series (other than
series with respect to which dividends are not cumulative from a date prior to
such dividend date) for the respective dividend periods terminating on such
dividend date. When the dividends are not paid in full on all series of the
Preferred Stock, the shares of all series shall share ratably in the payment of
dividends, including accumulations, if any, in accordance with the sums which
would be payable on said shares if all dividends were declared and paid in full.
4. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A $10.00 Preferred Stock
unless, prior thereto, the holders of shares of Series A $10.00 Preferred Stock
shall have received $10.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A $10.00
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock) (such number in clause (ii) is hereinafter referred to as
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A $10.00 Preferred Stock and Common Stock,
respectively, holders of Series A $10.00 Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A $10.00 Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock that were
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<PAGE> 9
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
5. Conversion on Merger, Consolidation, etc. In case the Corporation shall
enter into any merger, consolidation, combination or other transaction in which
the shares of Common Stock are exchanged or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A $10.00 Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change of
shares of Series A $10.00 Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
6. Redemption. The outstanding shares of Series A $10.00 Preferred Stock
shall not be redeemable.
7. Condition to Issuance of any other Series. The Articles of Incorporation
of the Corporation shall not be further amended to provide for the issuance of
any other series of Preferred Stock without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series A $10.00 Preferred
Stock, voting separately as one voting group.
Section 2. Dividends.
(a) The holders of Preferred Stock of each series, in preference of the
holders of shares of Common Stock and of any other class of shares ranking
junior to the Preferred Stock, shall be entitled to receive out of any funds
legally available and when and as declared by the Board of Directors dividends
in cash at the rate for such series fixed in accordance with the provisions of
Section 1 of this Part B and no more, payable on the dividend payment dates
fixed for such series. Such dividends shall be cumulative, in the case of
shares of each particular series, from and after the date or dates fixed with
respect to such series. No dividend may be paid upon or declared or set apart
for any series of the Preferred Stock at any time unless at the same time a like
proportionate dividend for the dividend periods terminating on the same date or
any earlier date, ratably in proportion to the respective annual dividend rates,
shall have been paid upon or declared or funds therefor set apart for all shares
of Preferred Stock of all series then issued and outstanding and entitled to
receive such dividend.
(b) So long as any Preferred Stock shall be outstanding, no dividend, except
a dividend payable in Common Stock or other shares ranking junior to the
Preferred Stock, shall be paid or declared or any distribution be made except as
aforesaid on the Common Stock or any other shares ranking junior to the
Preferred Stock, nor shall any shares of Common Stock or any other shares
ranking junior to the Preferred Stock be purchased, retired or otherwise
acquired by the Corporation (except out of the proceeds of the sale of Common
Stock or other shares ranking junior to the Preferred Stock received by the
Corporation on or subsequent to the date on which shares of Preferred Stock are
first issued), unless (i) all accrued and unpaid dividends upon all Preferred
Stock then outstanding payable on all dividend payment dates occurring on or
prior to the date of such
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action shall have been declared and paid or funds sufficient therefor, set
apart, and (ii) at the date of such action there shall be no arrearages with
respect to the redemption of Preferred Stock of any series from any sinking fund
provided for shares of such series in accordance with the provisions of Section
1 of this Part B.
Section 3. Redemption.
(a) Subject to the express terms of each series, the Corporation may from
time to time redeem all or any part of the Preferred Stock of any series at the
time outstanding (i) at the option of the Board of Directors at the applicable
redemption price for such series fixed in accordance with the provisions of
Section 1 of this Part B or (ii) in fulfillment of the requirements of any
sinking fund provided for shares of such series at the applicable sinking fund
redemption price fixed in accordance with the provisions of Section 1 of this
Part B, together in each case with (1) all then unpaid dividends upon such
shares payable on all dividend payment dates for such series occurring on or
prior to the redemption date, plus (2) if the redemption date is not a dividend
payment date for such series, a proportionate dividend, based on the number of
elapsed days, for the period from the day following the most recent such
dividend payment date through the redemption date.
(b) Notice of every such redemption shall be mailed, postage prepaid, to the
holders of record of the Preferred Stock to be redeemed at their respective
addresses then appearing on the books of the Corporation, not less than 30 days
nor more than 60 days prior to the date fixed for such redemption. At any time
after notice has been given as above provided and before the date of redemption
specified in such notice the Corporation may deposit the aggregate redemption
price of the shares of Preferred Stock to be redeemed, together with an amount
equal to the aggregate amount of dividends payable upon such redemption, with
any bank or trust company in New York, New York, having capital and surplus of
more than $100,000,000, named in such notice, and direct that such deposited
amount be paid to the respective holders of the shares of Preferred Stock so to
be redeemed upon surrender of the stock certificate or certificates held by
such holders. After the mailing of such notice and the making of such deposit
of money, such holders shall cease to be shareholders with respect to such
shares and shall have no interest in or claim against the Corporation with
respect to such shares, except only the right to receive such money from such
bank or trust company without interest or to exercise, before the redemption
date, any unexpired privileges of conversion.
(c) In the event less than all of the outstanding shares of any series of
Preferred Stock are to be redeemed, the Corporation shall select pro rata or by
lot the shares so to be redeemed in such manner as shall be prescribed by the
Board of Directors.
(d) If the holders of shares of Preferred Stock which shall have been called
for redemption shall not, within six years after such deposit, claim the amount
deposited for the redemption thereof, any such bank or trust company shall, upon
demand, pay over to the Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(e) Any shares of Preferred Stock (i) redeemed by the Corporation pursuant
to the provisions of this Section 3, (ii) purchased and delivered in
satisfaction of any sinking fund requirements provided for shares of any series
of Preferred Stock, (iii) converted in accordance with the express terms of any
such series, or (iv) otherwise acquired by the Corporation, shall resume the
status of authorized and unissued shares of Preferred Stock without serial
designation.
Section 4. Liquidation.
(a) The holders of Preferred Stock of any series shall, in case of voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, be
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entitled to receive in full out of the assets of the Corporation, including its
capital, before any amount shall be paid or distributed among the holders of
shares of Common Stock or any other shares ranking junior to the Preferred
Stock, the amounts fixed with respect to shares of such series in accordance
with Section 1 of this Part B, plus an amount equal to (i) all then unpaid
dividends upon such shares payable on all dividend payment dates for such series
occurring on or prior to the date of payment of the amount due pursuant to such
liquidation, dissolution or winding up, plus (ii) if such date is not a dividend
payment date for such series, a proportionate dividend, based on the number of
elapsed days, for the period from the day following the most recent such
dividend payment date through such date of payment of the amount due pursuant to
such liquidation, dissolution or winding up. In case the net assets of the
Corporation legally available therefor are insufficient to permit the payment
upon all outstanding shares of Preferred Stock of the full preferential amount
to which they are respectively entitled, then such net assets shall be
distributed ratably upon outstanding shares of Preferred Stock in proportion to
the full preferential amount to which each such share is entitled.
After payment to holders of Preferred Stock of the full preferential amounts
as aforesaid, holders of Preferred Stock as such shall have no right or claim to
any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Corporation shall not be deemed to be a dissolution, liquidation or winding up
for the purposes of this Section 4.
Section 5. Voting.
(a) The holders of Preferred Stock shall not be entitled to vote upon matters
presented to the shareholders, except as provided in this Section 5 or as
required by law.
(b) Whenever, and so long as, the Corporation shall be in default in the
payment of the equivalent of six full quarterly dividends (whether or not
consecutive) on any series of Preferred Stock at the time outstanding, whether
or not earned or declared, the holders of Preferred Stock of all series, voting
separately as a class without regard to series, shall be entitled to elect, as
herein provided, two members of the Board of Directors of the Corporation;
provided, however, that the holders of shares of Preferred Stock shall not have
or exercise such special class voting rights except at meetings of such
shareholders for the election of directors at which the holders of not less than
a majority of the outstanding shares of Preferred Stock of all series then
outstanding are present in person or by proxy; and provided further that the
special class voting rights provided for in this paragraph, when the same shall
have become vested, shall remain so vested until all accrued and unpaid
dividends on the Preferred Stock of all series then outstanding shall have been
paid, whereupon the holders of Preferred Stock shall be divested of this special
class voting rights in respect of subsequent elections of directors, subject to
the revesting of such special class voting rights in the event of the occurrence
of the default hereinabove specified in this Subsection (b). In the event of a
default entitling the holders of Preferred Stock to elect two Directors as
specified in this Subsection (b), a special meeting of such holders for the
purpose of electing such directors shall be called by the Secretary of the
Corporation upon written request of, or may be called by, the holders of record
of at least 10% of the shares of Preferred Stock of all series at the time
outstanding, and notice thereof shall be given in the same manner as that
required for the annual meeting of shareholders; provided, however, that the
Corporation shall not be required to call such special meeting if the annual
meeting of shareholders shall be held within 120 days after the date of receipt
of the foregoing written request from the holders of Preferred Stock. At any
meeting at which the holders of Preferred Stock shall be entitled to elect
Directors, the holders of a majority of the then outstanding shares of Preferred
Stock of all series, present
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in person or by proxy, shall be sufficient to constitute a quorum, and the vote
of the holders of a majority of such shares so present at any such meeting at
which there shall be such a quorum shall be sufficient to elect the members of
the Board of Directors which the holders of Preferred Stock are entitled to
elect as hereinabove provided. Notwithstanding any provision of these Amended
Articles of Incorporation or the Code of Regulations of the Corporation or any
action taken by the holders of any class of shares fixing the number of
Directors of the Corporation, the two Directors who may be elected by the
holders of Preferred Stock pursuant to this Subsection (b) shall serve in
addition to any other Directors then in office or proposed to be elected
otherwise than pursuant to this Subsection (b). Nothing in this Subsection (b)
shall prevent any change otherwise permitted in the total number of Directors of
the Corporation or require the resignation of any Director elected otherwise
than pursuant to this Subsection (b). Notwithstanding any classification of the
other Directors of the Corporation, the two Directors elected by the holders of
Preferred Stock shall be elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(c) The affirmative vote or consent of the holders of at least two-thirds of
the shares of Preferred Stock at the time outstanding, voting or consenting
separately as a class, given in person or by proxy either in writing or at a
meeting called for the purpose, shall be necessary to effect any one or more of
the following (but so far as the holders of Preferred Stock are concerned, such
action may be effected with such vote or consent):
(1) Any amendment, alteration or repeal of any of the provisions of the
Amended Articles of Incorporation or of the Code of Regulations of the
Corporation which adversely affects the preferences or voting or other
rights of the holders of Preferred Stock; provided, however, that for the
purpose of this Subsection (c) only, neither the Amendment of the Amended
Articles of Incorporation so as to authorize, create or change the
authorized or outstanding amount of Preferred Stock or of any shares of
any class ranking on a parity with or junior to the Preferred Stock nor
the amendment of the provisions of the Code of Regulations so as to
change the number of directors of the Corporation shall be deemed to
affect adversely the preferences or voting or other rights of the holders
of Preferred Stock; and provided further, that if such amendment,
alteration or repeal affects adversely the preferences or voting or other
rights of one or more but not all series of Preferred Stock at the time
outstanding, only the affirmative vote or consent of the holders of at
least two-thirds of the number of the shares at the time outstanding of
the series so affected shall be required;
(2) The purchase or redemption (for sinking fund purposes or otherwise) of
less than all of the Preferred Stock then outstanding except in
accordance with a stock purchase offer made to all holders of record of
Preferred Stock, unless all dividends on all Preferred Stock then
outstanding for all previous dividend periods shall have been declared
and paid for funds therefor set apart and all accrued sinking fund
obligations applicable thereto shall have been complied with; or
(3) The authorization, creation or the increase in the authorized amount of
any shares of any class or any security convertible into shares of any
class, in either case ranking prior to the Preferred Stock.
(d) The affirmative vote or consent of the holders of at least a majority of
the shares of Preferred Stock at the time outstanding, voting or consenting
separately as a class, given in person or by proxy either in writing or at a
meeting called for the purpose, shall be necessary to effect any one or more of
the following (but so far as the holders of Preferred Stock are concerned, such
action may be effected with such vote or consent):
(1) The sale, lease or conveyance by the Corporation of all or substantially
all of its property or business;
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(2) The consolidation of the Corporation with or its merger into any other
corporation, unless the corporation resulting from such consolidation or
surviving such merger will not have after such consolidation or merger
any class of shares either authorized or outstanding ranking prior to or
on a parity with the Preferred Stock except the same number of shares
ranking prior to or on a parity with the Preferred Stock and having the
same rights and preferences as the shares of the Corporation authorized
and outstanding immediately preceding such consolidation or merger (and
each holder of Preferred Stock immediately preceding such consolidation
or merger shall receive the same number of shares with the same rights
and preferences of the resulting or surviving corporation); or
(3) The authorization of any shares ranking on a parity with the
Preferred Stock or an increase in the authorized number of shares of
Preferred Stock.
(e) Neither the vote, consent nor any adjustment of the voting rights of
holders of shares of Preferred Stock shall be required for an increase in the
number of shares of Common Stock authorized or issued or for stock splits of the
Common Stock or for stock dividends on any class of stock payable solely in
Common Stock; and none of the foregoing actions shall be deemed to affect
adversely the preferences or voting or other rights of Preferred Stock within
the meaning and for the purpose of this Part B.
Section 6. Convertible Series.
If and to the extent that there are created series of Preferred Stock which
are convertible (hereinafter referred to as "convertible series") into shares of
Common Stock or into shares of any other class or series of the Corporation
(hereinafter collectively called "conversion shares"), the following terms and
provisions shall be applicable to all convertible series, except as may be
otherwise expressly provided in the terms of any such series.
(a) The holder of each share of a convertible series may exercise the
conversion privilege in respect thereof by delivering to any transfer agent for
the respective series the certificate for the share to be converted and written
notice that the holder elects to convert such share. Conversion shall be deemed
to have been effected immediately prior to the close of business on the date
when such delivery is made, and such date is referred to in this Section as the
"conversion date". On the conversion date or as promptly thereafter as
practicable, the Corporation shall deliver to the holder of the stock
surrendered for conversion, or as otherwise directed by him in writing, a
certificate for the number of full conversion shares deliverable upon the
conversion of such stock and a check or cash in respect of any fraction of a
share as provided in Subsection (b) of this Section 6. The person in whose name
the stock certificate is to be registered shall be deemed to have become a
holder of the conversion shares of record on the conversion date. No adjustment
shall be made for any dividends on shares of stock surrendered for conversion or
for dividends on the conversion shares delivered on conversion.
(b) The Corporation shall not be required to deliver fractional shares upon
conversion of shares of a convertible series. If more than one share shall be
surrendered for conversion at one time by the same holder, the number of full
conversion shares deliverable upon conversion thereof shall be computed on the
basis of the aggregate number of shares so surrendered. If any fractional
interest in a conversion share would otherwise be deliverable upon the
conversion, the Corporation shall in lieu of delivering a fractional share
therefor make an adjustment therefor in cash at the current market value
thereof, computed (to the nearest cent) on the basis of the closing price of the
conversion share on the last business day before the conversion date.
For the purpose of this Section, the "closing price of the conversion share"
on any business day shall be the last reported sales price regular way per share
on such day, or, in
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case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case on the New York Stock
Exchange, or, if the conversion shares are not then listed or admitted to
trading on such Exchange, on the principal national securities exchange on which
the conversion shares are listed or admitted to trading as determined by the
Board of Directors, or if not so listed or admitted, the mean between the
average bid and asked prices per conversion shares in the over-the-counter
market as furnished by any member of the National Association of Securities
Dealers or other nationally recognized organization of securities dealers
selected from time to time by the Board of Directors for that purpose; and
"business day" shall be each day on which the New York Stock Exchange or other
national securities exchange or over-the-counter market used for purposes of
the above calculation is open for trading.
(c) Upon conversion of shares of any convertible series, the stated capital
of the conversion shares delivered upon such conversion shall be the aggregate
par value of the shares so delivered having par value, or, in the case of shares
without par value, shall be an amount equal to the stated capital represented by
each such share outstanding at the time of such conversion multiplied by the
number of such shares delivered upon such conversion. The stated capital of
the Corporation shall be correspondingly increased or reduced to reflect the
difference between the stated capital of the shares of the convertible series so
converted and the stated capital of the shares delivered upon such conversion.
(d) In the event of any reclassification or change of outstanding conversion
shares (except a split or combination, or a change in par value, or a change
from par value to no par value, or a change from no par value to par value),
provision shall be made as part of the terms of such reclassification or change
that the holder of each share of each convertible series then outstanding shall
have the right to receive upon the conversion of such share, at the conversion
rate or price which otherwise would be in effect at the time of conversion, with
substantially the same protection against dilution as is provided in the terms
of such convertible series, the same kind and amount of stock and other
securities and property as he would have owned or have been entitled to receive
upon the happening of any of the events described above had such share been
converted immediately prior to the happening of the event.
(e) In the event the Corporation shall be consolidated with or shall merge
into any other corporation, provision shall be made as a part of the terms of
such consolidation or merger whereby the holder of each share of each
convertible series outstanding immediately prior to such event shall
thereafter be entitled to such rights with respect to securities of the
Corporation resulting from such consolidation or merger so that rights of such
holders as specified in the terms of such convertible series shall not be
substantially prejudiced; provided, however, that the provisions of this
Subsection (e) shall be inapplicable if such consolidation or merger shall be
approved by the holders of two-thirds of the outstanding shares of such
convertible series of Preferred Stock.
(f) The Corporation hereby reserves and shall at all times reserve and keep
available free from preemptive rights, out of its authorized but unissued shares
or treasury shares, for the purpose of delivery upon conversion of shares of
each convertible series, such number of conversion shares as shall from time to
time be sufficient to permit the conversion of all outstanding shares of all
convertible series of Preferred Stock.
Section 7. Preemptive Rights - Purchase of Shares by Corporation.
(a) No holder of Preferred Stock, present, past or future, shall be entitled
as such as a matter of right to subscribe for or purchase any part of any new or
additional stock of any series or class or of securities of the Corporation
convertible into stock of any class whatsoever, whether now or hereafter
authorized, and whether issued for cash, property, services or otherwise.
10
X-3.1-14
<PAGE> 15
(b) The Corporation is authorized to purchase any shares of any series of
Preferred Stock from time to time and at such times, in such manner, for such
reasons and on such terms and conditions as shall be deemed appropriate by the
Board of Directors.
Section 8. Definitions.
For the purpose of this Part B:
Whenever reference is made to shares "ranking prior to the Preferred Stock",
such reference shall mean and include all shares of the Corporation in respect
of which the rights of the holders thereof either as to the payment of dividends
or as to distribution in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation are given preference over the right
of the holders of Preferred Stock; whenever reference is made to shares "on a
parity with the Preferred Stock", such reference shall mean and include all
shares of the Corporation in respect of which the right of the holders thereof
(i) are not given preference over the rights of the holders of Preferred Stock
either as to the payment of dividends or as to distributions in the event of a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and (ii) either as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, or as to both, rank on an equality
(except as to the amounts fixed therefor) with the rights of the holders of
Preferred Stock; and whenever reference is made to shares "ranking junior to the
Preferred Stock" such reference shall mean and include all shares of the
Corporation in respect of which the rights of the holders thereof both as to
the payment of dividends and as to distributions in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation are junior
and subordinate to the rights of the holders of the Preferred Stock.
IN WITNESS WHEREOF, said Hoyt M. Wells, President, and James Boyazis,
Secretary, of THE GOODYEAR TIRE & RUBBER COMPANY, acting for and on behalf of
said corporation, have hereunto subscribed their names and caused the seal of
said corporation to be hereunto affixed this 6th day of April, 1993.
By /s/ HOYT M. WELLS
--------------------------------
HOYT M. WELLS, PRESIDENT
[SEAL]
By /s/ JAMES BOYAZIS
--------------------------------
JAMES BOYAZIS, SECRETARY
11
X-3.1-15
<PAGE> 16
EXHIBIT 3.1 (CONTINUED)
-----------------------
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
Samir F. Gibara, President, and James Boyazis, Secretary, of The
Goodyear Tire & Rubber Company, an Ohio corporation, with its principal office
located at Akron, Summit County, Ohio, do hereby certify that, pursuant to the
authority conferred upon the Board of Directors of said corporation by Section 1
of Part B of ARTICLE FOURTH of the Amended Articles of Incorporation of the said
corporation and by the Ohio General Corporation Law, at a meeting of the Board
of Directors of said corporation duly called and held on the 4th day of June,
1996, at which meeting a quorum of the Board of Directors was at all times
present, the Board of Directors was without shareholder action, which
shareholder action was not required, the following resolution:
RESOLVED, that The Goodyear Tire & Rubber Company hereby
adopts the following amendment to its Amended Articles of
Incorporation, as amended to date, and that the Chairman of the Board,
the President or a Vice President and the Secretary or an Assistant
Secretary of the Company are hereby authorized and directed to sign and
file in the office of the Secretary of State of the State of Ohio a
certificate containing a copy of the resolution adopting the amendment
and a statement of the manner of its adoption:
The Amended Articles of Incorporation of the Company are
hereby amended to create a new series of Preferred Stock by adding a
new Section 1-B to PART B of ARTICLE FOURTH as follows:
Section 1-B. Series B Preferred Stock, Without Par Value.
A series of Preferred Stock is hereby created having the
following terms:
1. Designation. The shares of such series are designated as:
"Series B Preferred Stock, without par value."
2. Authorized Number of Shares - Fractional Shares. The
authorized number of shares constituting the Series B Preferred Stock
is 7,000,000. Series B Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Series B Preferred Stock.
3. Dividends and Distributions.
(A) Subject to any prior and superior rights of the holders of
any series of
X-3.1-16
<PAGE> 17
Preferred Stock ranking prior and superior to the shares of Series B
Preferred Stock with respect to dividends that may be authorized by the
Amended Articles of Incorporation, the holders of shares of Series B
Preferred Stock shall be entitled prior to the payment of any dividends
on shares ranking junior to the Series B Preferred Stock to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
last day of January, April, July and October in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $25.00 or (b) subject to the provisions for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series B Preferred Stock. In the event the Corporation shall
at any time after July 29, 1996 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $25.00 per share on the Series B Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series B Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Series B Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date.
(D) Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of Series B
X-3.1-17
<PAGE> 18
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than
60 days prior to the date fixed for the payment thereof.
(E) Dividends in full shall not be declared or paid or set
apart for payment on the Series B Preferred Stock for a dividend period
terminating on the quarterly Dividend Payment Date unless dividends in
full have been declared or paid or set apart for payment on the
Preferred Stock of all series (other than series with respect to which
dividends are not cumulative from a date prior to such dividend date)
on such dividend date. When the dividends are not paid in full on all
series of the Preferred Stock, the shares of all series shall share
ratably in the payment of dividends, including accumulations, if any,
in accordance with the sums which would be payable on said shares if
all dividends were declared and paid in full.
4. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall
have received $25.00 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment (the "Series B Liquidation Preference").
Following the payment of the full amount of the Series B Liquidation
Preference, no additional distributions shall be made to the holders of
shares of Series B Preferred Stock unless, prior thereto, the holders
of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the
Series B Liquidation Preference by (ii) 100 (as appropriately adjusted
as set forth in subparagraph (C) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii) is hereinafter referred to as
the "Adjustment Number"). Following the payment of the full amount of
the Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Preferred Stock and
Common Stock, respectively, holders of Series B Preferred Stock and
holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Series B
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series B
Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which
is the number of shares of Common Stock outstanding
X-3.1-18
<PAGE> 19
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
5. Conversion on Merger, Consolidation, etc. In case the
Corporation shall enter into any merger, consolidation, combination or
other transaction in which the shares of Common Stock are exchanged or
changed into other stock or securities, cash and/or any other property,
then in any such case each share of Series B Preferred Stock shall at
the time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal
to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series B Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
6. Redemption. The outstanding shares of Series B Preferred
Stock shall not be redeemable.
7. Condition to Issuance of any other Series. The Articles of
Incorporation of the Corporation shall not be further amended to
provide for the issuance of any other series of Preferred Stock without
the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series B Preferred Stock, voting separately as
one voting group.
IN WITNESS WHEREOF, said Samir F. Gibara, President, and James Boyazis,
Secretary, of The Goodyear Tire & Rubber Company, acting on behalf of said
corporation, have hereunto subscribed their names and caused the seal of said
corporation to be hereunto affixed this 4th day of June, 1996.
By: /s/ Samir F. Gibara
---------------------------------
Samir F. Gibara, President
By: /s/ James Boyazis
---------------------------------
James Boyazis, Secretary
[SEAL]
X-3.1-19
<PAGE> 20
UNITED STATES OF AMERICA,
STATE OF OHIO,
OFFICE OF THE SECRETARY OF STATE
I, BOB TAFT, Secretary of State of the State of Ohio, do
hereby certify that the foregoing is a true and correct copy,
consisting of 4 pages, as taken from the original record now in my
official custody as Secretary of State.
WITNESS, my hand and official seal of Columbus,
Ohio, this 14th day of June A.D. 1996.
/s/ Bob Taft
----------------------------------------------------
BOB TAFT
Secretary of State
By: /s/ S Henderson
-------------------------------------------------
X-3.1-20
<PAGE> 1
EXHIBIT 4.5
-----------
REPLACEMENT AND RESTATEMENT AGREEMENT dated
as of July 15, 1996, among THE GOODYEAR TIRE & RUBBER
COMPANY, an Ohio corporation (the "Borrower"), the
undersigned lenders (the "Lenders") and THE CHASE
MANHATTAN BANK, a New York banking corporation, as
agent for the Lenders (in such capacity, the
"Agent").
WHEREAS, the parties hereto desire to replace and restate the
Revolving Credit Facility Agreement (the "Agreement"), dated as of July 15,
1994, among the Borrower, the Lenders and the Agent, on the terms and conditions
set forth herein;
NOW, THEREFORE, for and in consideration of the premises and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree, on the terms and subject to the
conditions set forth herein, as follows:
1. Subject to the conditions set forth in Section 7, the
Agreement, including all schedules and exhibits thereto, is hereby replaced and
restated as of the date hereof in the form of a new agreement (the "New
Agreement") identical to the Agreement except as expressly provided herein, and
all rights and obligations of the Borrower, the Lenders and the Agent under the
Agreement (including accrued Fees) shall continue as rights and obligations of
such parties under the New Agreement, modified as expressly provided herein.
2. The New Agreement shall be dated as of July 15, 1996 (which
shall constitute the "date hereof" in respect of the New Agreement); the date
"July 15, 1999" in the definition of the term "Maturity Date" in Section 1.01 of
the Agreement is hereby deleted and replaced by inserting the date "July 15,
2001" in lieu thereof.
3. Effective as of July 1, 1996, the definition of "Facility
Fee Percentage" in Section 1.01 of the Agreement is deleted and replaced by
inserting the following definition of Facility Fee Percentage:
"FACILITY FEE PERCENTAGE" shall mean, as at the date as of
which any determination in respect thereof is being or to be made, the
applicable percentage set forth below based upon the Leverage Ratio as
of the last day of the relevant fiscal quarter:
<TABLE>
<CAPTION>
Leverage Ratio Facility Fee Percentage
- -------------- -----------------------
<S> <C>
less than or equal to 25% 0.0750%
greater than 25% but less 0.1000%
than or equal to 40%
greater than 40% but less 0.1250%
than or equal to 55%
greater than 55% 0.1500%"
</TABLE>
The Leverage Ratio shall be determined at the end of each calendar
quarter of Borrower and shall be effective in respect of the entire
next succeeding calendar quarter of Borrower. The Borrower shall
deliver a certificate setting forth the calculation of the
X-4.5-1
<PAGE> 2
leverage ratio with respect to the end of each calendar quarter within
60 days after the end of such calendar quarter.
4. The table in the definition of "Spread" in Section 1.01
of the Agreement is hereby deleted and replaced by inserting the
following table:
<TABLE>
<CAPTION>
Leverage Ratio Spread
- -------------- ------
<S> <C>
less than or equal to 25% 0.1500%
greater than 25% but less than
or equal to 40% 0.2000%
greater than 40% but less than
or equal to 55% 0.2500%
greater than 55% 0.3000%
</TABLE>
5. Schedule 2.01 to the Agreement is hereby deleted and
replaced by Schedule 2.01 hereto.
6. The representations and warranties set forth in Article III
of the Agreement shall be deemed to have been repeated in the New Agreement on
and as of the date hereof, with all references therein to "this Agreement" being
deemed to refer to the New Agreement, which is the Agreement as modified by this
Replacement and Restatement Agreement.
7. The New Agreement shall become effective, as of the date
hereof, only upon the satisfaction of the following conditions:
(a) The Agent shall have received an opinion of counsel for
the Borrower, dated the date hereof, in the form attached as Exhibit B
to the Agreement, but with all references therein being to the New
Agreement.
(b) The Agent shall have received evidence reasonably
satisfactory to it of the Borrower's corporate power and authority to
enter into the New Agreement.
(c) The Agent shall have received counterparts of this
Replacement and Restatement Agreement executed on behalf of the
Borrower and each Lender.
8. This Replacement and Restatement Agreement may be executed
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all which taken together will constitute one and the
same agreement.
X-4.5-2
<PAGE> 3
9. THIS REPLACEMENT AND RESTATEMENT AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders
have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
THE GOODYEAR TIRE & RUBBER COMPANY,
by
/s/ R.W. Tieken
----------------------------
Name: R. W. Tieken
Title: Executive Vice
President
THE CHASE MANHATTAN BANK,
individually and as Agent,
by
/s/ Julie S. Long
----------------------------
Name: Julie S. Long
Title: Vice President
X-4.5-3
<PAGE> 4
BANQUE NATIONALE DE PARIS, CHICAGO
BRANCH,
by
/s/ Arnaud Collin du Bocage
-------------------------------
Name: Arnaud Collin du Bocage
Title: Executive Vice
President
CIBC INC.,
by
/s/ Kent Davis
-------------------------------
Name: Kent Davis
Title: Director
THE SUMITOMO BANK, LIMITED, NEW YORK
BRANCH,
by
/s/ Yoshinori Kawamura
-------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
COMMERZBANK AKTIENGESELLSCHAFT
CHICAGO BRANCH,
by
/s/ William J. Binder
-------------------------------
Name: William J. Binder
Title: Assistant Vice
President
by
/s/ Dr. Helmut R. Tollner
-------------------------------
Name: Dr. Helmut R. Tollner
Title: Executive Vice
President
BANK OF AMERICA ILLINOIS,
by
/s/ Lynn W. Stetson
-------------------------------
Name: Lynn W. Stetson
Title: Managing Director
ABN AMRO BANK N.V., BY ABN AMRO
NORTH AMERICA, INC., as Agent,
by
/s/ Andre Nel
-------------------------------
Name: Andre Nel
Title: SVP and Managing
Director
by
/s/ James M. Janovsky
-------------------------------
Name: James M. Janovsky
Title: GVP and Director
X-4.5-4
<PAGE> 5
BANK OF MONTREAL,
by
/s/ Marc R. Heyden
-------------------------------
Name: Marc R. Heyden
Title: Director
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH,
by
/s/ Friedrich N. Wilms
-------------------------------
Name: Friedrich N. Wilms
Title: Attorney-In-Fact
BARCLAYS BANK PLC,
by
/s/ Keith Mackie
-------------------------------
Name: Keith Mackie
Title: Director
CITIBANK, N.A.,
by
/s/ William G. McKnight
-------------------------------
Name: William G. McKnight
Title: Vice President
CREDIT LYONNAIS, CHICAGO BRANCH,
by
/s/ Sandra E. Horwitz
-------------------------------
Name: Sanda E. Horwitz
Title: First Vice President
Branch Manager
CREDIT SUISSE,
by
/s/ Eileen O'Connell Fox
-------------------------------
Name: Eileen O'Connell Fox
Title: Member of Senior
Management
by
/s/ Elizabeth Whalen
-------------------------------
Name: Elizabeth Whalen
Title: Associate
THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH,
by
/s/ Takeshi Hemmi
-------------------------------
Name: Takeshi Hemmi
Title: Vice President
X-4.5-5
<PAGE> 6
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH,
by
/s/ Ralf Hofmann
-------------------------------
Name: Ralf Hoffmann
Title: Vice President
by
/s/ Robert M. Wood, Jr.
-------------------------------
Name: Robert M. Wood, Jr.
Title: Vice President
DRESDNER BANK LUXEMBOURG S.A.,
by
/s/ M. Brunkhorst
-------------------------------
Name: M. Brunkhorst
Title: Authorized Signature
by
/s/ K. Diederich
-------------------------------
Name: K. Diederich
Title: Assistant Manager Loans
X-4.5-6
<PAGE> 7
THE FIRST NATIONAL BANK OF CHICAGO,
by
/s/ Robert L. Jackson
-------------------------------
Name: Robert L. Jackson
Title: Authorized Agent
THE INDUSTRIAL BANK OF JAPAN,
LIMITED,
by
/s/ Hiroaki Nakamura
-------------------------------
Name: Hiroaki Nakamura
Title: Joint General Manager
ISTITUTO BANCARIO SAN PAOLO DI
TORINO S.P.A.,
by
/s/ Robert Wurster
-------------------------------
Name: Robert Wurster
Title: F.V.P.
by
/s/ William DeAngelo
-------------------------------
Name: William DeAngelo
Title: F.V.P.
KEYBANK NATIONAL ASSOCIATION,
by
/s/ Karen A. Lee
-------------------------------
Name: Karen A. Lee
Title: Vice President
NATIONAL CITY BANK,
by
/s/ Jeffrey C. Douglas
-------------------------------
Name: Jeffrey C. Douglas
Title: Vice President
NATIONSBANK, N.A.,
by
/s/ Philip S. Durand
-------------------------------
Name: Philip S. Durand
Title: Vice President
X-4.5-7
<PAGE> 8
THE NORTHERN TRUST COMPANY,
by
/s/ S. Bif Bowman
-------------------------------
Name: S. Bif Bowman
Title: Vice President
ROYAL BANK OF CANADA,
by
/s/ Patrick K. Shields
-------------------------------
Name: Patrick K. Shields
Title: Manager, Corporate
Banking
THE SANWA BANK, LIMITED, CHICAGO
BRANCH,
by
/s/ James P. Byrnes
-------------------------------
Name: James P. Byrnes
Title: Vice President
SOCIETE GENERALE, CHICAGO BRANCH,
by
/s/ Gilles Demeulenaere
-------------------------------
Name: Gilles Demeulenaere
Title: Vice President &
Team Leader
UNION BANK OF SWITZERLAND,
by
/s/ James P. Kelleher
-------------------------------
Name: James P. Kelleher
Title: Assistant Vice
President
by
/s/ Laurent J. Chaix
-------------------------------
Name: Laurent J. Chaix
Title: Vice President
THE YASUDA TRUST & BANKING CO.,
LTD., CHICAGO BRANCH,
by
/s/ Koichiro Inoue
-------------------------------
Name: Koichiro Inoue
Title: Joint General Manager
[Schedule 2.01 is omitted]
X-4.5-8
<PAGE> 1
EXHIBIT 11
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Set forth below are computations, on a primary basis and on a fully
diluted basis in accordance with subparagraph (b) (11) of Item 601 of Regulation
S-K of the Securities and Exchange Commission, of earnings per share of the
Common Stock, without par value, of Registrant.
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary:
Net Income $ 187.9 $173.8 $339.7 $307.1
Adjusted average number of
shares outstanding 157,066,067 153,773,661 156,604,045 153,240,246
PRIMARY EARNINGS PER SHARE $1.20 $1.13 $2.17 $2.00
Fully Diluted:
Net Income $187.9 $173.8 $339.7 $307.1
Adjusted average number
of shares outstanding 157,066,256 153,868,214 156,610,047 153,739,915
FULLY DILUTED EARNINGS PER SHARE $1.20 $1.13 $2.17 $2.00
</TABLE>
The foregoing computations do not reflect any significant potentially
dilutive effect Registrant's Preferred Stock Purchase Rights Plan could have in
the event such Rights become exercisable and any such shares of either Series A
Preferred Stock or Common Stock of Registrant are issued upon the exercise of
such Rights. Reference is made to Note 18, captioned "Preferred Stock Purchase
Rights Plan", in the Notes to Financial Statements set forth in Item 8 of the
Registrant's Annual Report on form 10-K for the year ended December 31, 1995 at
page 49.
X - 11 - 1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION ABSTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS AND THE CONSOLIDATED
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 279
<SECURITIES> 0
<RECEIVABLES> 2,089
<ALLOWANCES> 61
<INVENTORY> 1,956
<CURRENT-ASSETS> 4,444
<PP&E> 9,677
<DEPRECIATION> 4,953
<TOTAL-ASSETS> 10,516
<CURRENT-LIABILITIES> 3,142
<BONDS> 1,292
155
0
<COMMON> 0
<OTHER-SE> 3,412
<TOTAL-LIABILITY-AND-EQUITY> 10,516
<SALES> 6,575
<TOTAL-REVENUES> 6,575
<CGS> 5,041
<TOTAL-COSTS> 5,041
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67
<INCOME-PRETAX> 507
<INCOME-TAX> 167
<INCOME-CONTINUING> 340
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 340
<EPS-PRIMARY> 2.20
<EPS-DILUTED> 0
<FN>
THIS SCHEDULE SHALL NOT BE DEEMED FILED FOR PURPOSES OF SECTION 11 OF THE
SECURITIES ACT OF 1933 OR SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934.
</FN>
</TABLE>
