<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1997
REGISTRATION NO 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
----------
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 IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1144 EAST MARKET STREET, AKRON, OHIO 44316-0001
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
1997 PERFORMANCE INCENTIVE PLAN
OF THE GOODYEAR TIRE & RUBBER COMPANY
(FULL TITLE OF THE PLAN)
JAMES BOYAZIS, SECRETARY
THE GOODYEAR TIRE & RUBBER COMPANY
1144 EAST MARKET STREET
AKRON, OHIO 44316-0001
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(330) 796-2121
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH AMOUNT MAXIMUM AGGREGATE AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, Without Par Value
(including Preferred Stock 15,000,000 $62.1875 $932,812,500.00 $282,670.46
Purchase Rights) shares
===========================================================================================================================
<FN>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this Registration Statement shall cover such
additional shares as may herein after be offered or issued from stock split, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and Rule 457(h), based on
the average of the high and low sale prices per share of the Registrant's Common Stock on June 20, 1997, as reported on
the New York Stock Exchange Consolidated Transactions Composite Tape.
===========================================================================================================================
</TABLE>
<PAGE> 2
PART II.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
<PAGE> 3
THE GOODYEAR TIRE & RUBBER COMPANY
This Registration Statement on Form S-8 (the "Registration Statement") of
The Goodyear Tire & Rubber Company (the "Registrant") relates to the
registration under the Securities Act of 1933, as amended (the "Act"), of
15,000,000 shares of the Common Stock, without par value, of Registrant (the
"Common Stock") and related Preferred Stock Purchase Rights for offer and sale
pursuant to the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber
Company (the "Plan").
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, heretofore filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or the Securities Act of 1933, as amended (the
"Securities Act"), by The Goodyear Tire & Rubber Company (the "Registrant"),
are, as of their respective dates, incorporated in this Registration Statement
by reference and made a part hereof:
(1) Registrant's Annual Report on Form 10-K for its year ended December 31,
1996 (File No. 1-1927).
(2) Registrant's definitive Proxy Statement dated February 26, 1997, for its
Annual Meeting of Shareholders held on April 14, 1997.
(3) Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
1997.
(4) The description of the Common Stock in the Registration Statement on Form
10 filed pursuant to the Exchange Act and all amendments and reports filed
for the purpose of updating such description.
(5) Registrant's Registration Statement on Form 8-A dated June 11, 1996
relating to the registration of Preferred Stock Purchase Rights, including
the Rights Agreement dated June 4, 1996 filed as Exhibit 1 thereto.
(6) All documents filed by Registrant with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all
securities offered pursuant to this Registration Statement have been sold
or which deregisters all securities remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement contained in this Registration Statement on or in a document
incorporated, or deemed to be incorporated, by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or incorporated herein by reference, or
in any subsequently filed document that also is or is deemed to be incorporated
by reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
II-1
<PAGE> 4
ITEM 5. INTERESTS OF NAMED EXPERT AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Code of Regulations of the Registrant concerns
indemnification of the Registrant's directors and officers and provides as
follows:
"INDEMNIFICATION
The Company shall indemnify each person who is or was a director,
officer or employee of the Company, or of any other corporation which he
served as such at the request of the Company, against any and all liability
and reasonable expense that may be incurred by him in connection with or
resulting from any claim, action, suit, or proceeding (whether brought by
or in the right of the Company or such other corporation or otherwise),
civil or criminal, or in connection with an appeal relating thereto, in
which he may become involved, as a party or otherwise, by reason of his
being or having been a director, officer, or employee of the Company or of
such other corporation, or by reason of any past or future action taken or
not taken in his capacity as such director, officer, or employee, whether
or not he continues to be such at the time such liability or expense is
incurred, provided such person acted, in good faith, in what he reasonably
believed to be the best interests of the Company or such other corporation,
as the case may be, and, in addition, in any criminal action or proceeding,
had no reasonable cause to believe that his conduct was unlawful. As used
in this Article, the terms "liability" and "expense" shall include, but
shall not be limited to, counsel fees and disbursements and amounts of
judgments, fines, or penalties against, and amounts paid in settlement by,
a director, officer, or employee, other than amounts paid to the Company
itself or to such other corporation served at the Company's request. The
termination of any claim, action, suit, or proceeding, civil or criminal,
by judgment, settlement (whether with or without court approval) or
conviction or upon a plea of guilty or of nolo contendere, or its
equivalent, shall not create a presumption that a director, officer, or
employee did not meet the standards of conduct set forth in the first
sentence of this Article. Any such director, officer, or employee referred
to in this Article who has been wholly successful, on the merits or
otherwise, with respect to any claim, action, suit, or proceeding of the
character described herein shall be entitled to indemnification as of
right. Except as provided in the preceding sentence, any indemnification
hereunder shall be made at the discretion of the Company, but only if (1)
the Board, acting by a quorum consisting of directors who are not parties
to (or who have been wholly successful with respect to) such claim, action,
suit, or proceeding, shall find that the director, officer, or employee has
met the standards of conduct set forth in the first sentence of this
Article, or (2) independent legal counsel (who may be the regular counsel
of the Company) shall deliver to it their written advice that, in their
opinion, such director, officer, or employee has met such standards.
Expense incurred with respect to any such claim, action, suit, or
proceeding may be advanced by the Company prior to the final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to
repay such amount unless it shall ultimately be determined that he is
entitled to indemnification under this Article. The rights of
indemnification provided in this Article shall be in addition to any rights
to which any person concerned may otherwise be entitled by contract or as a
matter of law, and shall inure to the benefit of the heirs, executors, and
administrators of any such person."
Indemnification also may be made available by Registrant to its directors,
officers, employees and agents, and may be available as a matter of right, under
Section 1701.13(E) of the Ohio Revised Code. Section 1701.13(E) of the Ohio
Revised Code provides as follows:
"(E)(1) A corporation may indemnify or agree to indemnify any person who
was
II-2
<PAGE> 5
or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right
of the corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, if he had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, or
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was
unlawful.
(2) A corporation may indemnify or agree to indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action or suit by or in the right of the corporation
to procure a judgment in its favor, by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against expenses,
including attorney's fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such person is
adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation unless, and only to the extent that,
the court of common pleas or the court in which such action or suit
was brought determines, upon application, that, despite the
adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity
for such expenses as the court of common pleas or such other court
shall deem proper;
(b) Any action or suit in which the only liability asserted
against a director is pursuant to section 1701.95 of the Revised
Code.
(3) To the extent that a director, trustee, officer, employee,
member, manager, or agent has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in division (E)(1)
or (2) of this section, or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses, including attorney's
fees, actually and reasonably incurred by him in connection with the
action, suit, or proceeding.
(4) Any indemnification under division (E)(1) or (2) of this section,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case, upon a determination that indemnification
of the director, trustee, officer, employee, member, manager, or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in division (E)(1) or (2) of this section. Such
determination shall be made as follows:
(a) By a majority vote of a quorum consisting of directors of
the indemnifying corporation who were not and are not parties to or
threatened with the action, suit, or
II-3
<PAGE> 6
proceeding referred to in division (E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this
section is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm having
associated with it an attorney, who has been retained by or who has
performed services for the corporation or any person to be
indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which the
action, suit, or proceeding referred to in division (E)(1) or (2) of
this section was brought.
Any determination made by the disinterested directors under
division (E)(4)(a) or by independent legal counsel under division (E)(4)(b)
of this section shall be promptly communicated to the person who threatened
or brought the action or suit by or in the right of the corporation under
division (E)(2) of this section, and, within ten days after receipt of such
notification, such person shall have the right to petition the court of
common pleas or the court in which such action or suit was brought to
review the reasonableness of such determination.
(5) (a) Unless at the time of a director's act or omission that is
the subject of an action, suit, or proceeding referred to in division
(E)(1) or (2) of this section, the articles or the regulations of a
corporation state, by specific reference to this division, that the
provisions of this division do not apply to the corporation and unless the
only liability asserted against a director in an action, suit, or
proceeding referred to in division (E)(1) or (2) of this section is
pursuant to section 1701.95 of the Revised Code, expenses, including
attorney's fees, incurred by a director in defending the action, suit, or
proceeding shall be paid by the corporation as they are incurred, in
advance of the final disposition of the action, suit, or proceeding, upon
receipt of an undertaking by or on behalf of the director in which he
agrees to do both of the following:
(i) Repay such amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that
his action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the
corporation or undertaken with reckless disregard for the best
interests of the corporation:
(ii) Reasonably cooperate with the corporation concerning
the action, suit, or proceeding.
(b) Expenses, including attorney's fees, incurred by a director
trustee, officer, employee, member, manager, or agent in defending any
action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, may be paid by the corporation as they are incurred, in advance of
the final disposition of the action, suit, or proceeding, as authorized by
the directors in the specific case, upon receipt of an undertaking by or on
behalf of the director, trustee, officer, employee, member, manager, or
agent to repay such amount, if it ultimately is determined that he is not
entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under the articles, the regulations, any
agreement, a vote of shareholders or disinterested directors, or otherwise,
both as to action in their official capacities and as to action in another
capacity while holding their offices or positions, and shall continue as to
a person who has ceased to be a director, trustee, officer, employee,
member, manager, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
II-4
<PAGE> 7
(7) A corporation may purchase and maintain insurance or furnish
similar protection, including, but not limited to, trust funds, letters of
credit, or self-insurance, on behalf of or for any person who is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this section.
Insurance may be purchased from or maintained with a person in which the
corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant to
division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and (7)
of this section. Divisions (E)(1) and (2) of this section do not create any
obligation to repay or return payments made by the corporation pursuant to
division (E)(5), (6), or (7).
(9) As used in division (E) of this section, "corporation" includes
all constituent entities in a consolidation or merger and the new or
surviving corporation, so that any person who is or was a director,
officer, employee, trustee, member, manager, or agent of such a constituent
entity, or is or was serving at the request of such constituent entity as a
director, trustee, officer, employee, member, a manger, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust, or other
enterprise, shall stand in the same position under this section with
respect to new or surviving corporation as he would if he had served the
new or surviving corporation in the same capacity."
Registrant maintains and pays the premiums on contracts insuring Registrant
(with certain exclusions) against any liability to directors and officers it may
incur under the above provisions for indemnification and insuring each director
and officer of Registrant (with certain exclusions) against liability and
expense, including legal fees, which he or she may incur by reason of his or her
relationship to Registrant, even if Registrant does not have the obligation or
right to indemnify such director or officer against such liability or expense.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
ITEM NUMBER DESCRIPTION
---- ------ -----------
<S> <C> <C>
4 4.1 Certificate of Amended Articles of Incorporation of
Registrant, dated December 20, 1954, 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 to date).
4.2 Code Regulations of Registrant, adopted November 22,
1955, and amended April 5, 1985, April 7, 1980, April 6,
1981 and April 13, 1987.
</TABLE>
II-5
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
ITEM NUMBER DESCRIPTION
---- ------ -----------
<S> <C> <C>
4.3 Specimen nondenominational certificate for shares of the
Common Stock, Without Par Value, of Registrant; one
certificate, First Chicago Trust Company of New York,
Transfer Agent and Registrar.
4.4 Rights Agreement, dated as of June 4, 1996, between
Registrant and First Chicago Trust Company of New York,
Rights Agent.
4.5 The 1997 Performance Incentive Plan of Registrant.
5 5.1 Opinion of C. Thomas Harvie, Esq., Vice President and
General Counsel of Registrant, as to the legality of the
shares of Common Stock being registered.
23 23.1 The consent of Price Waterhouse LLP, independent
accountants, to the incorporation by reference in this
Registration Statement on Form S-8 of their report dated
February 3, 1997 appearing at page 30 of Registrant's
Annual Report on Form 10-K for the year ended December
31, 1996.
23.2 The consent of C. Thomas Harvie, Esq., Vice President
and General Counsel of the Registrant, is contained in
his opinion filed as Exhibit 5.1 to this Registration
Statement.
24 24.1 Power of Attorney dated June 3, 1997 authorizing Robert
W. Tieken, C. Thomas Harvie, James Boyazis, Richard W.
Hauman and John W. Richardson, or any one of them, to
sign this Registration Statement on behalf of the
Registrant and certain of the officers and directors of
Registrant.
</TABLE>
ITEM 9. UNDERTAKINGS.
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement, including (but not limited to) any addition or
deletion of a managing underwriter;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
II-6
<PAGE> 9
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be in the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-7
<PAGE> 10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IS HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF AKRON, STATE OF OHIO, ON THE 25TH DAY OF JUNE, 1997
THE GOODYEAR TIRE & RUBBER COMPANY
By /s/ ROBERT W. TIEKEN
----------------------------------
Robert W. Tieken,
Executive Vice President
and Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1993, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
SAMIR G. GIBARA Chairman of the |
Board, Chief Executive |
Officer and President |
and Director (Principal |
Executive Officer) |
|
JOHN W. RICHARDSON Vice President |
Financial Operations } By /s/ ROBERT W. TIEKEN
(Principal Accounting | ----------------------------
Officer) | Robert W. Tieken
|
JOHN G. BREEN Director |
| Signing individually as
WILLIAM E. BUTLER Director | Executive Vice President
| and Chief Financial Officer
THOMAS H. CRUIKSHANK Director | (Principal Financial Officer) of
| Registrant and as Attorney-in-Fact
WILLIAM J. HUDSON, JR Director | for the directors and officers
| whose names appear opposite
GERTRUDE G. MICHELSON Director |
|
STEVEN A. MINTER Director |
|
AGNAR PYTTE Director |
| June 25, 1997
GEORGE H. SCHOFIELD Director |
|
WILLIAM C. TURNER Director |
|
MARTIN D. WALKER Director |
</TABLE>
II-8
<PAGE> 11
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
ITEM NUMBER DESCRIPTION
---- ------ -----------
<S> <C> <C>
4 4.1 Certificate of Amended Articles of Incorporation of
Registrant, dated December 20, 1954, 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 to date).
4.2 Code Regulations of Registrant, adopted November 22,
1955, and amended April 5, 1985, April 7, 1980, April 6,
1981 and April 13, 1987.
4.3 Specimen nondenominational certificate for shares of the
Common Stock, Without Par Value, of Registrant; one
certificate, First Chicago Trust Company of New York,
Transfer Agent and Registrar.
4.4 Rights Agreement, dated as of June 4, 1996, between
Registrant and First Chicago Trust Company of New York,
Rights Agent.
4.5 The 1997 Performance Incentive Plan of Registrant.
5 5.1 Opinion of C. Thomas Harvie, Esq., Vice President and
General Counsel of Registrant, as to the legality of the
shares of Common Stock being registered.
23 23.1 The consent of Price Waterhouse LLP, independent
accountants, to the incorporation by reference in this
Registration Statement on Form S-8 of their report dated
February 3, 1997 appearing at page 30 of Registrant's
Annual Report on Form 10-K for the year ended December
31, 1996.
23.2 The consent of C. Thomas Harvie, Esq., Vice President
and General Counsel of the Registrant, is contained in
his opinion filed as Exhibit 5.1 to this Registration
Statement.
24 24.1 Power of Attorney dated June 3, 1997 authorizing Robert
W. Tieken, C. Thomas Harvie, James Boyazis, Richard W.
Hauman and John W. Richardson, or any one of them, to
sign this Registration Statement on behalf of the
Registrant and certain of the officers and directors of
Registrant.
</TABLE>
II-9
<PAGE> 1
EXHIBIT 4.1
-----------
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
<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
<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.
<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, , 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
day of A-D. .
Secretary of State
<PAGE> 5
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
<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."
2
<PAGE> 7
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.
3
<PAGE> 8
(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
4
<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
5
<PAGE> 10
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
6
<PAGE> 11
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
7
<PAGE> 12
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;
8
<PAGE> 13
(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
9
<PAGE> 14
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
<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
<PAGE> 16
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 Preferred Stock ranking prior and superior to the shares
of Series B Preferred Stock with
1
<PAGE> 17
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 Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon,
2
<PAGE> 18
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 immediately after
such event and the denominator of which is the number of shares of
3
<PAGE> 19
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]
4
<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 30th day of July A.D. 1996.
/s/ Bob Taft
----------------------------------------------------
BOB TAFT
Secretary of State
OHIO STATE
[SEAL] By: /s/ S Henderson
-------------------------------------------------
NOTICE: This is an official certification only when reproduced in red ink.
<PAGE> 1
EXHIBIT 4.2
================================================================================
THE GOODYEAR TIRE & RUBBER COMPANY
-----------------
CODE OF REGULATIONS
-----------------
ADOPTED NOVEMBER 22, 1955
AS AMENDED APRIL 5, 1965,
APRIL 7, 1980, APRIL 6, 1981
AND APRIL 13, 1987
================================================================================
<PAGE> 2
CODE OF REGULATIONS
ARTICLE I
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of shareholders of the Company
for the election of directors, the consideration of reports to be laid before
such meeting, and the transaction of such other business as may properly be
brought before such meeting, shall be held at the principal office of the
Company in Akron, Ohio, at ten o'clock a.m., or at such other time as may be
designated by the Board of Directors, by the Chairman of the Board, or by the
President and specified in the notice of the meeting, on the first Monday of
April in each year, unless the Board of Directors by a resolution adopted on or
before the first day of March of any year, shall fix a different date, which
date may be any day, other than a Sunday or a legal holiday, during the period
beginning April 1 and ending April 15 of such year, in which event the meeting
shall be held on the date set by such resolution.
SECTION 2. Special Meetings. Special meetings of the shareholders of the
Company may be held on any business day, when called by the Chairman of the
Board, or by the President, or by a Vice President, or by the Board acting at a
meeting, or by a majority of the directors acting without a meeting, or by the
persons who hold twenty-five per cent of all shares outstanding and entitled to
vote thereat. Upon request in writing delivered either in person or by
registered mail to the President or the Secretary by any persons entitled to
call a meeting of shareholders, such officer shall forthwith cause to be given
to the shareholders entitled thereto notice of a meeting to be held on a date
not less than seven or more than sixty days after the receipt of such request,
as such officer may fix. If such notice is not given within thirty days after
the delivery or mailing of such request, the persons calling the meeting may fix
the time of the meeting and give notice thereof in the manner provided by law or
as provided in these Regulations, or cause such notice to be given by any
designated representative. Each special meeting shall be called to convene
between nine o'clock a.m. and four o'clock p.m. and shall be held at the
principal office of the Company in Akron, Ohio, unless the same is called by the
directors, acting with or without a meeting, in which case such meeting may be
held at any place either within or without the State of Ohio designated by the
directors and specified in the notice of such meeting.
SECTION 3. Notice of Meetings. Not less than seven or more than sixty days
before the date fixed for a meeting of shareholders, written notice stating the
time, place, and purposes of such meeting shall be given by or at the direction
of the Secretary or an Assistant Secretary or any other person or persons
required or permitted by these Regulations to give such notice. The notice shall
be given by personal delivery or by mail to each shareholder entitled to notice
of the meeting who is of record as of the day next preceding the day on which
notice is given or, if a record date therefor is duly fixed, of
3
<PAGE> 3
record as of said date; if mailed, the notice shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
Company. Notice of the time, place, and purposes of any meeting of shareholders
may be waived in writing, either before or after the holding of such meeting, by
any shareholder, which writing shall be filed with or entered upon the records
of the meeting.
SECTION 4. Quorum; Adjournment. Except as may be otherwise provided by law
or by the Articles of Incorporation, at any meeting of the shareholders the
holders of shares entitling them to exercise a majority of the voting power of
the Company present in person or by proxy shall constitute a quorum for such
meeting; provided, however, that no action required by law, the Articles, or
these Regulations to be authorized or taken by a designated proportion of the
shares of the Company may be authorized or taken by a lesser proportion; and
provided, further, that the holders of a majority of the voting shares
represented thereat, whether or not a quorum is present, may adjourn such
meeting from time to time; if any meeting is adjourned, notice of such
adjournment need not be given if the time and place to which it is adjourned are
fixed and announced at such meeting.
SECTION 5. Proxies. Persons entitled to vote shares or to act with respect
to shares may vote or act in person or by proxy. The person appointed as proxy
need not be a shareholder.
SECTION 6. Approval and Ratification of Acts of Officers and Board. Except
as otherwise provided by the Articles of Incorporation or by law, any contract,
act, or transaction, prospective or past, of the Company, or of the Board, or of
the officers may be approved or ratified by the affirmative vote at a meeting of
the shareholders, or by the written consent, with or without a meeting, of the
holders of shares entitling them to exercise a majority of the voting power of
the Company, and such approval or ratification shall be as valid and binding as
though affirmatively voted for or consented to by every shareholder of the
Company.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Number and Classification; Authority. The Board of Directors
shall be composed of fifteen members and shall be divided into three classes
(Class I, Class II and Class III), each class to consist of five directors
unless the number of members of the Board of Directors or of any class is
changed by action of the shareholders taken in accordance with the laws of the
State of Ohio, the Articles of Incorporation and these Regulations or by a
resolution adopted by the affirmative vote of a majority of the directors then
in office. The directors may, from time to time, increase or decrease the number
of directors, provided that the directors shall not increase the number of
directors to more than nineteen persons or decrease the number of directors to
less than eleven persons and, provided further, that the directors shall not
decrease the number of directors in any class to fewer than three persons. Any
director's office that is created by an increase in the number of directors
pursuant to action taken by the Board of Directors
4
<PAGE> 4
may be filled by the vote of a majority of the directors then in office. In the
event of any increase in the number of directors of any class, any additional
director elected to such class shall hold office for a term which shall coincide
with the unexpired term of such class. No reduction in the number of directors
by action taken by the shareholders or the directors shall, of itself, shorten
the term or result in the removal of any incumbent director. Except where the
law, the Articles of Incorporation or these Regulations require action to be
authorized or taken by the shareholders, all of the authority of the Company
shall be exercised by the directors.
SECTION 2. Election of Directors; Term of Office. At each annual meeting of
shareholders, or at a special meeting called for the purpose of electing
directors, each successor to the directors of the class whose term shall expire
in that year shall be elected for a term of three years and shall hold office
until the third annual meeting of shareholders following his or her election as
a director and until his or her successor is elected and qualified, or until his
or her earlier resignation, removal from office or death. At a meeting of
shareholders at which directors of any class are to be elected, only persons
nominated as candidates shall be eligible for election as directors and the
candidates receiving the greatest number of votes shall be elected. A separate
election shall be held for each class of directors at any meeting of
shareholders at which a member of more than one class of directors is being
elected. Directors elected at the first election for Class I directors shall
hold office for a term of three years; directors elected at the first election
for Class II directors shall hold office for a term of two years; and directors
elected at the first election for Class III directors shall hold office for a
term of one year; and in each instance such directors shall hold office until
their successors are elected and qualified.
SECTION 3. Vacancies; Resignations; Removal of Directors. In the event of
the occurrence of any vacancy or vacancies in the Board, however caused, the
remaining directors, though less than a majority of the whole authorized number
of directors, may, by the vote of a majority of their number, fill any such
vacancy for the unexpired term of the class in which such vacancy occurred. Any
director may resign at any time by oral statement to that effect made at a
meeting of the Board or in a writing to that effect delivered to the Secretary,
such resignation to take effect immediately or at such other time as the
director may specify. All the directors, or all the directors of a particular
class, or any individual director, may be removed from office by the vote of the
holders of shares entitling them to exercise two-thirds of the voting power of
the Company entitled to vote to elect directors in place of the director or
directors to be removed, provided that unless all the directors, or all the
directors of a particular class, are removed, no individual director shall be
removed if the votes of a sufficient number of shares are cast against such
director's removal which, if cumulatively voted at an election of all the
directors, or all of the directors of a particular class, as the case may be,
would be sufficient to elect at least one director; provided further, that, if
shareholders do not have the right to vote cumulatively under the law of Ohio or
the Articles of Incorporation, such directors, class of directors or individual
director may be removed from office by the vote of the holders of shares
entitling them to exercise two-thirds of the voting power of the Company
entitled to vote to elect directors in place of the director or directors to be
removed. In the event of any
5
<PAGE> 5
such removal, a new director may be elected at the same meeting for the
unexpired term of each director removed. Failure to elect a director to fill the
unexpired term of any director so removed from office shall be deemed to create
a vacancy in the Board of Directors. Notwithstanding Article X of these
Regulations, the provisions of this Section 3 of Article II may be amended,
repealed or supplemented only by the shareholders at a meeting held for such
purpose by the affirmative vote of the holders of shares entitling them to
exercise two-thirds of the voting power of the Company on such proposal.
SECTION 4. Meetings. Immediately after each annual meeting of the
shareholders, the newly elected directors shall hold an organization meeting for
the purpose of electing officers and transacting any other business. Notice of
such meeting need not be given. Other meetings of the Board may be held at any
time within or without the State of Ohio in accordance with the bylaws,
resolutions, or other action by the Board. Unless otherwise expressly stated in
the notice thereof, any business may be transacted at any meeting of the Board.
SECTION 5. Quorum; Adjournment. A quorum of the Board shall consist of a
majority of the directors then in office; provided that a majority of the
directors present at a meeting duly held, whether or not a quorum is present,
may adjourn such meeting from time to time; if any meeting is adjourned, notice
of adjournment need not be given if the time and place to which it is adjourned
are fixed and announced at such meeting. At each meeting of the Board at which a
quorum is present, all questions and business shall be determined by a majority
vote of those present except as in these Regulations otherwise expressly
provided.
SECTION 6. Committees. The Board may from time to time create or appoint an
Executive Committee, a Finance Committee, a combined Executive and Finance
Committee, and any other committee or committees deemed advisable by the Board
for the proper transaction of the Company's business. Any such committee shall
be composed of not less than three directors (not less than five directors in
the case of an Executive and Finance Committee), each of whom shall serve at the
pleasure of, and be subject at all times to the control and direction of, the
Board. Any such committee shall act only in the intervals between meetings of
the Board and shall have such authority as adheres to the committee by virtue of
the provisions of this section or as may, from time to time, be delegated by the
Board, except that no committee shall have authority to fill vacancies in the
Board or in any committee of the Board. Subject to the aforesaid exceptions, and
in the absence of express delegation of authority by the Board, the Executive
Committee may transact all business and do and perform all things which may or
might be transacted or done by the Board, the Finance Committee shall have the
authority usually and ordinarily possessed by finance committees, and the
combined Executive and Finance Committee shall have the aforesaid authority of
the Executive Committee and of the Finance Committee. Subject to the aforesaid
exceptions with respect to the filling of vacancies in the Board or in any
committee, any person dealing with the Company shall be entitled to rely upon
any act of, or authorization of any act by, such committees, to the same extent
as an act or authorization of the Board. Each committee shall keep full and
complete records of all meetings and actions, which shall be open to inspection
6
<PAGE> 6
by the directors. Unless otherwise ordered by the Board, any such committee may
prescribe its own rules for calling and holding meetings, and for its own method
of procedure, and may act by a majority of its members at a meeting or without a
meeting by a writing or writings signed by all of its members. The directors may
appoint one or more alternate members of any such committee to take the place of
any absent member or members at any meeting of such committee and, if permitted
by law, to join in any action of such committee authorized or taken without a
meeting; each such alternate shall serve at the pleasure of, and be subject at
all times to the control and direction of, the Board.
SECTION 7. Bylaws. The Board may adopt bylaws for its own government, not
inconsistent with the Articles of Incorporation or these Regulations.
ARTICLE III
OFFICERS
SECTION 1. Election and Designation of Officers. The Board, at its
organization meeting, may elect a Chairman of the Board and shall elect a
President, a Secretary, a Treasurer, and, in its discretion, at any meeting of
the Board, may elect one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, a Comptroller, one or more
Assistant Comptrollers, and such other officers as the Board may deem necessary.
The Chairman of the Board and the President shall be directors, but no one of
the other officers need be a director. Any two or more of such offices may be
held by the same person, but no officer shall execute, acknowledge, or verify
any instrument in more than one capacity, if such instrument is required to be
executed, acknowledged, or verified by two or more officers.
SECTION 2. Term of Office; Vacancies. The officers of the Company shall
hold office until the next organization meeting of the Board and until their
successors are elected, except in case of resignation, death, or removal. The
Board may remove any officer at any time with or without cause by a two-thirds
vote of the members of the Board then in office. Any vacancy in any office may
be filled by the Board.
SECTION 3. Chairman of the Board. The Chairman of the Board, if any, shall
preside at all meetings of shareholders and of the Board and shall have such
authority and perform such duties as the Board may determine.
SECTION 4. President. Except for meetings at which the Chairman of the
Board, if any, presides in accordance with the preceding Section, the President
shall preside at all meetings of shareholders and of the Board. Subject to
directions of the Board, he shall have general executive supervision over the
property, business, and affairs of the Company.
SECTION 5. Vice Presidents. In case of the absence or disability of the
President, or when circumstances prevent the President from acting, the Vice
Presidents of the Company shall perform all the duties and possess all the
authority of the President, and shall have priority in the performance of such
duties and exercise of such authority in the order of their election by the
Board.
7
<PAGE> 7
SECTION 6. Secretary. The Secretary shall keep the minutes of meetings of
the shareholders and of the Board. He shall keep such books as may be required
by the Board, and shall give notices of shareholders' meetings and of Board
meetings required by law, or by these Regulations, or otherwise.
SECTION 7. Treasurer. The Treasurer shall receive and have in charge all
money, bills, notes, bonds, stocks in other corporations, and similar property
belonging to the Company, and shall do with the same as may be ordered by the
Board. He shall keep accurate financial accounts and hold the same open for the
inspection and examination of the directors.
SECTION 8. Comptroller. The Comptroller shall exercise a general check upon
the disbursement of funds of the Company and shall have general charge and
supervision of the preparation of financial reports.
SECTION 9. Other Officers. The Assistant Secretaries, Assistant Treasurers,
and Assistant Comptrollers, if any, in addition to such authority and duties as
the Board may determine, shall have such authority and perform such duties as
may be directed by their respective principal officers.
SECTION 10. Authority and Duties. The officers shall have such authority
and perform such duties, in addition to those specifically set forth in these
Regulations, as the Board may determine. The Board is authorized to delegate the
duties of any officer to any other officer and generally to control the action
of the officers and to require the performance of duties in addition to those
mentioned herein.
ARTICLE IV
COMPENSATION
The Board, by the affirmative vote of a majority of the directors in
office, and irrespective of any personal interest of any of them, shall have
authority to establish reasonable compensation, which may include pension,
disability and death benefits, for services to the Company by directors and
officers, or to delegate such authority to one or more officers or directors.
ARTICLE V
INDEMNIFICATION
The Company shall indemnify each person who is or was a director, officer
or employee of the Company, or of any other corporation which he served as
such at the request of the Company, against any and all liability and
reasonable expense that may be incurred by him in connection with or resulting
from any claim, action, suit, or proceeding (whether brought by or in the
right of the Company or such other corporation or otherwise), civil or
criminal, or in connection with an appeal relating thereto, in which he may
8
<PAGE> 8
become involved, as a party or otherwise, by reason of his being or having been
a director, officer, or employee of the Company or of such other corporation, or
by reason of any past or future action taken or not taken in his capacity as
such director, officer, or employee, whether or not he continues to be such at
the time such liability or expense is incurred, provided such person acted, in
good faith, in what he reasonably believed to be the best interests of the
Company or such other corporation, as the case may be, and, in addition, in any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. As used in this Article, the terms "liability" and
"expense" shall include, but shall not be limited to, counsel fees and
disbursements and amounts of judgments, fines, or penalties against, and amounts
paid in settlement by, a director, officer, or employee, other than amounts paid
to the Company itself or to such other corporation served at the Company's
request. The termination of any claim, action, suit, or proceeding, civil or
criminal, by judgment, settlement (whether with or without court approval) or
conviction or upon a plea of guilty or of nolo contendere, or its equivalent,
shall not create a presumption that a director, officer, or employee did not
meet the standards of conduct set forth in the first sentence of this Article.
Any such director, officer, or employee referred to in this Article who has been
wholly successful, on the merits or otherwise, with respect to any claim,
action, suit, or proceeding of the character described herein shall be entitled
to indemnification as of right. Except as provided in the preceding sentence,
any indemnification hereunder shall be made at the discretion of the Company,
but only if (1) the Board, acting by a quorum consisting of directors who are
not parties to (or who have been wholly successful with respect to) such claim,
action, suit, or proceeding, shall find that the director, officer, or employee
has met the standards of conduct set forth in the first sentence of this
Article, or (2) independent legal counsel (who may be the regular counsel of the
Company) shall deliver to it their written advice that, in their opinion, such
director, officer, or employee has met such standards. Expense incurred with
respect to any such claim, action, suit, or proceeding may be advanced by the
Company prior to the final disposition thereof upon receipt of an undertaking by
or on behalf of the recipient to repay such amount unless it shall ultimately be
determined that he is entitled to indemnification under this Article. The rights
of indemnification provided in this Article shall be in addition to any rights
to which any person concerned may otherwise be entitled by contract or as a
matter of law, and shall inure to the benefit of the heirs, executors, and
administrators of any such person.
ARTICLE VI
RECORD DATES
For any lawful purpose, including, without limitation, the determination of
the shareholders who are entitled to:
(1) receive notice of or to vote at a meeting of shareholders,
(2) receive payment of any dividend or distribution,
(3) receive or exercise rights of purchase of or subscription for, or
exchange or conversion of, shares or other securities, subject to contract
rights with respect thereto, or
9
<PAGE> 9
(4) participate in the execution of written consents, waivers, or releases,
the Board may fix a record date which shall not be a date earlier than the
date on which the record date is fixed and, in the cases provided for in
clauses (1), (2), and (3) above, shall not be more than sixty days preceding
the date of the meeting of shareholders, or the date fixed for the payment
of any dividend or distribution, or the date fixed for the receipt or the
exercise of rights, as the case may be. The record date for the purpose of
the determination of the shareholders who are entitled to receive notice of
or to vote at a meeting of shareholders shall continue to be the record date
for all adjournments of such meeting, unless the Board or the persons who
shall have fixed the original record date shall, subject to the limitations
set forth in this Article, fix another date, and in case a new record date
is so fixed, notice thereof and of the date to which the meeting shall have
been adjourned shall be given to shareholders of record as of such date in
accordance with the same requirements as those applying to a meeting newly
called. The Board may close the share transfer books against transfers of
shares during the whole or any part of the period provided for in this
Article, including the date of the meeting of shareholders and the period
ending with the date, if any, to which adjourned.
ARTICLE VII
EXECUTION OF DOCUMENTS
Except as otherwise provided in these Regulations, or by specific or
general resolutions of the Board, all documents evidencing conveyances by or
contracts or other obligations of the Company shall be signed by the Chairman of
the Board, if any, the President, or a Vice President, and attested by the
Secretary or an Assistant Secretary.
ARTICLE VIII
CERTIFICATES FOR SHARES
SECTION 1. Form of Certificates and Signatures. Each holder of shares is
entitled to one or more certificates, signed by the Chairman of the Board or the
President or a Vice President and by the Secretary, an Assistant Secretary, the
Treasurer, or an Assistant Treasurer of the Company, which shall certify the
number and class of shares held by him in the Company, but no certificate for
shares shall be executed or delivered until such shares are fully paid. When
such a certificate is countersigned by an incorporated transfer agent or
registrar, the signature of any of said officers of the Company may be
facsimile, engraved, stamped, or printed. Although any officer of the Company
whose manual or facsimile signature is affixed to such a certificate so
countersigned ceases to be such officer before the certificate is delivered,
such certificate nevertheless shall be effective in all respects when delivered.
10
<PAGE> 10
SECTION 2. Transfer of Shares. Shares of the Company shall be transferable
upon the books of the Company by the holders thereof, in person, or by a duly
authorized attorney, upon surrender and cancellation of certificates for a like
number of shares of the same class or series, with duly executed assignment and
power of transfer endorsed thereon or attached thereto, and with such proof of
the authenticity of the signatures to such assignment and power of transfer as
the Company or its agents may reasonably require.
SECTION 3. Lost, Stolen, or Destroyed Certificates. The Company may issue a
new certificate for shares in place of any certificate theretofore issued by it
and alleged to have been lost, stolen, or destroyed, and the Board may, in its
discretion, require the owner, or his legal representatives, to give the Company
a bond containing such terms as the Board may require to protect the Company or
any person injured by the execution and delivery of a new certificate.
SECTION 4. Transfer Agents and Registrars. The Board may appoint, or revoke
the appointment of, transfer agents and registrars and may require all
certificates for shares to bear the signatures of such transfer agents and
registrars, or any of them. The Board shall have authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer,
and registration of certificates for shares of the Company.
ARTICLE IX
AUTHORITY TO TRANSFER AND VOTE SECURITIES
The Chairman of the Board, the President, and a Vice President of the
Company are each authorized to sign the name of the Company and to perform all
acts necessary to effect a transfer of any shares, bonds, other evidences of
indebtedness or obligations, subscription rights, warrants, and other securities
of another corporation owned by the Company and to issue the necessary powers of
attorney for the same; and each such officer is authorized, on behalf of the
Company, to vote such securities, to appoint proxies with respect thereto, and
to execute consents, waivers, and releases with respect thereto, or to cause any
such action to be taken.
ARTICLE X
AMENDMENTS
The Regulations of the Company may be amended or new Regulations may be
adopted by the shareholders, at a meeting held for such purpose by the
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power of the Company on such proposal or, without a meeting, by
the written consent of the holders of shares entitling them to exercise
two-thirds of the voting power on such proposal.
11
<PAGE> 1
COMMON STOCK COMMON STOCK
M NUMBER SHARES
[ GOODYEAR LOGO ]
INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO
THE GOODYEAR TIRE & RUBBER COMPANY
THIS CERTIFICATE IS TRANSFERABLE IN THE CITY OF NEW YORK.
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 382550 10 1
This is to Certify that
is the owner of
FULL-PAID AND NON-ASSESSABLE SHARES WITHOUT PAR VALUE OF THE COMMON STOCK OF
The Goodyear Tire & Rubber Company transferable on the books of the Corporation
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
Witness the seal of the Corporation and the signatures of its duly
authorized officers.
Dated The Goodyear Tire & Rubber Company.
/s/ James Boyazis /s/ Samir Gibara
SECRETARY CHAIRMAN OF THE BOARD
COUNTERSIGNED AND REGISTERED:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK TRANSFER AGENT
BY AND REGISTRAR.
AUTHORIZED SIGNATURE.
<PAGE> 2
THE GOODYEAR TIRE & RUBBER COMPANY
THE GOODYEAR TIRE & RUBBER COMPANY WILL MAIL, WITHOUT CHARGE, TO THE
REGISTERED HOLDER OF THIS CERTIFICATE A COPY OF THE EXPRESS TERMS (AS SET FORTH
IN THE ARTICLES OF INCORPORATION AND THE CODE OF REGULATIONS OF THE
CORPORATION) OF THE SHARES OF THE COMMON STOCK OF THE CORPORATION AND OF OTHER
CLASSES OR SERIES OF SHARES, IF ANY, WHICH THE CORPORATION IS AUTHORIZED TO
ISSUE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR, ADDRESSED
TO THE SECRETARY OF THE CORPORATION, AKRON, OHIO 44316.
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between THE GOODYEAR TIRE &
RUBBER COMPANY and FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent,
dated as of June 4, 1996 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of THE GOODYEAR TIRE & RUBBER COMPANY. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate. THE GOODYEAR TIRE & RUBBER COMPANY will mail to the holder of this
certificate a copy of the Rights Agreement (as in effect on the date of mailing)
without charge promptly after a receipt of a written request therefor. Under
certain circumstances, Rights which are or were beneficially owned by Acquiring
Persons or their Affiliates or Associates (as such terms are defined in the
Rights Agreement), and any subsequent holder of such Rights, may become null
and void.
Explanation of Abbreviations:
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common JT TEN as joint tenants with right
TEN ENT as tenants by the entireties of survivorship and not as
tenants in common
UNIF GIFT
MIN ACT Uniform Gifts to Minors Act
Additional abbreviations may also be used though not in the above list.
==============================================================================
ASSIGNMENT
For value received, ________hereby sell, assign and transfer unto
(Please Print or Type Name and Address of Assignee)
Name Insert here Social Security or Other
Identifying Number of Assignee
------------------------------------
| |
- ------------------------------------------------------------------------------
Street
----------
| SHARES |
- ------------------------------------------------------------------------------
City, State and Zip Code | |
| |
==============================================================================
(Please Print or Type Name and Address of Assignee)
Name Insert here Social Security or Other
Identifying Number of Assignee
------------------------------------
| |
- ------------------------------------------------------------------------------
Street
----------
| SHARES |
- ------------------------------------------------------------------------------
City, State and Zip Code | |
| |
==============================================================================
of the capital stock represented by the within Certificate and do hereby
irrevocably constitute and appoint ___________________________________________
__________________________________________ Attorney to transfer the said stock
on the books of the within named Corporation with full power of substitution in
the premises.
----------
Issue certificate to the same owner as shown on the face | SHARES |
of this certificate for any shares not assigned above. ----------
| |
----------
Dated ______________________
X ___________________________________________________
(The signature here must correspond with the name as
written upon the face of the certificate in every
particular, without alteration or enlargement or
any change whatever.)
SIGNATURE GUARANTEED:
<PAGE> 1
EXHIBIT 4.4
================================================================================
THE GOODYEAR TIRE & RUBBER COMPANY
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK, RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF JUNE 4, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RIGHTS AGREEMENT
Section 1. Certain Definitions....................................................................1
Section 2. Appointment of Rights Agent............................................................7
Section 3. Issue of Right Certificates............................................................7
Section 4. Form of Right Certificates.............................................................8
Section 5. Countersignature and Registration......................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........................10
Section 8. Cancellation and Destruction of Right Certificates....................................12
Section 9. Reservation and Availability of Shares of Capital Stock...............................12
Section 10. Preferred Stock Record Date...........................................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights................................................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................22
Section 13. Combination, Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.........................................................................23
Section 14. Fractional Rights and Fractional Shares...............................................25
Section 15. Rights of Action......................................................................26
Section 16. Agreement of Right Holders............................................................26
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 17. Right Certificate Holder Not Deemed a Shareholder.....................................27
Section 18. Concerning the Rights Agent...........................................................27
Section 19. Merger or Consolidation or Change of Name of Rights Agent.............................28
Section 20. Duties of Rights Agent................................................................29
Section 21. Change of Rights Agent................................................................31
Section 22. Issuance of New Right Certificates....................................................32
Section 23. Redemption and Termination............................................................32
Section 24. Exchange..............................................................................34
Section 25. Notice of Certain Events..............................................................35
Section 26. Notices...............................................................................36
Section 27. Supplements and Amendments............................................................36
Section 28. Successors............................................................................37
Section 29. Determinations and Actions by the Board of Directors, etc.............................37
Section 30. Benefits of This Agreement............................................................38
Section 31. Severability..........................................................................38
Section 32. Governing Law.........................................................................38
Section 33. Counterparts..........................................................................38
Section 34. Descriptive Headings..................................................................38
Exhibit A Form of Articles of Amendment........................................................A-1
Exhibit B Form of Rights Certificate...........................................................B-1
Exhibit C Summary of Rights to Purchase Preferred Stock........................................C-1
</TABLE>
-ii-
<PAGE> 4
RIGHTS AGREEMENT
----------------
RIGHTS AGREEMENT, dated as of June 4, 1996 (the "Agreement"), between
THE GOODYEAR TIRE & RUBBER COMPANY, a Ohio corporation (the 'Company"), and
FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation (the "Rights
Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Board of Directors of the Company on June 4, 1996 (the
"Rights Dividend Declaration Date") authorized and declared a dividend
distribution (the "Distribution") of one Right for each outstanding share of the
Common Stock, without par value, of the Company (the "Common Stock") outstanding
at the close of business on July 29, 1996 (the "Record Date") and has authorized
the issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(i) hereof) in respect of each share of Common
Stock issued (whether originally issued or delivered from the Company's treasury
shares) between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances, one
one-hundredth of a share of Series B Preferred Stock having the rights, powers
and preferences set forth in the Articles of Amendment attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of securities of the Company
constituting a Substantial Block (as such term is hereinafter defined),
but shall not include (i) the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan (the Persons
described in this clause (i) are herein referred to as "Exempt
Persons"), (ii) any Person who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of a
Substantial Block solely as a result of a change in the aggregate
number of shares
1
<PAGE> 5
of the Common Stock or other voting securities of the Company
outstanding since the last date on which such Person acquired
Beneficial Ownership of any securities of the Company constituting
such Substantial Block, or (iii) any Person who or which, together with
all Affiliates and Associates of such Person, becomes the Beneficial
Owner of a Substantial Block in the good faith belief that such
acquisition would not (x) cause such Person and its Affiliates and
Associates to become the Beneficial Owner of a Substantial Block and
such Person relied in good faith in computing the percentage of its
voting power on publicly filed reports or documents of the Company
which are inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in Section 11(a) to
occur. Notwithstanding clause (iii) of the prior sentence, if any
Person that is not an Acquiring Person due to such clause (iii) does
not cease to be the Beneficial Owner of a Substantial Block by the
close of business on the last Business Day of a period to be determined
by the Board of Directors of the Company and specified in a notice from
the Company that such Person is the Beneficial Owner of a Substantial
Block, such Person shall, at the end of such specified period, become
an Acquiring Person (and such clause (iii) shall no longer apply to
such Person). No failure by the Board of Directors of the Company to
give such notice for a period of time, and no notice specifying a
particular time period by which such Person must cease to be the
Beneficial Owner of a Substantial Block, shall be deemed a waiver of
the right of the Board of Directors to subsequently give or modify such
notice. For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the
Board of Directors of the Company, acting by a vote of those directors
of the Company whose approval would be required to redeem the Rights
under Section 23 hereof.
(b) "Act" shall have the meaning set forth in Section 9(c)
hereof.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in the
introduction hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
occurrence of an event) pursuant to any agreement, arrangement
or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights,
2
<PAGE> 6
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (1) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (2)
securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (3) securities
issuable upon exercise of Rights from and after the occurrence
of a Triggering Event (as such term is hereinafter defined),
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) hereof ("Original Rights") or
pursuant to Section 11(i) or Section 22 hereof in connection
with an adjustment made with respect to any Original Rights;
or
(ii) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to "beneficially own," any
security under this subparagraph (ii) if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor
report);
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subparagraph
(ii) of this paragraph (f)) or disposing of any securities of
the Company; or
(iv) which are directly, indirectly or constructively
owned by such Person or any of such Person's Affiliates or
Associates, within the meaning of Section 958 of the Internal
Revenue Code of 1986, as amended.
Notwithstanding the foregoing, nothing contained in this
definition shall cause a Person ordinarily engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own", any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the
Company.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in either the State of
Ohio or the state (if other than Ohio)
3
<PAGE> 7
in which the principal office of the Rights Agent are authorized or
obligated by law or executive order to close.
(h) "Certification" shall have the meaning set forth in
Section 18 hereof.
(i) "close of business" on any given date shall mean 5:00
P.M., Akron time, on such date; provided, however, if such date is not
a Business Day it shall mean 5:00 P.M., Akron time, on the next
succeeding Business Day.
(j) "Common Stock" when used with reference to the Company
shall mean the Common Stock, without par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest voting power of such
Person or the equity securities or other equity interest having power
to control or direct the management of such Person.
(k) "common stock equivalent" shall have the meaning set forth
in Section 11(a)(iii).
(l) "Company" shall mean The Goodyear Tire & Rubber Company,
an Ohio corporation.
(m) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "current market price" shall have the meaning set forth in
Section 11(d) hereof.
(o) "Distribution" shall have the meaning set forth in the
recitals hereto.
(p) "Distribution Date" shall mean the earlier of (i) the
close of business on the tenth Business Day after the Shares
Acquisition Date (or, if the tenth Business Day after the Shares
Acquisition Date occurs before the Record Date, the close of business
on the Record Date) or (ii) the close of business on the tenth
Business Day after the date of the commencement of, or first public
announcement of the intent of any Person to commence, a tender or
exchange offer if, upon consummation thereof, such Person would be an
Acquiring Person.
(q) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(r) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(s) "Expiration Date" shall mean the earlier of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, or (iii) the time at which all
exercisable Rights are exchanged as provided in Section 24 hereof.
4
<PAGE> 8
(t) "Final Expiration Date" shall mean the close of business
on July 29, 2006.
(u) "Independent Director" shall mean any member of the Board
of Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and was a member of the
Board prior to the time that any Person becomes an Acquiring Person,
and any successor of an Independent Director, while such successor is a
member of the Board, who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate, and is
recommended or elected to succeed the Independent Director by a
majority of the Independent Directors.
(v) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(w) "Person" shall mean any individual, firm, corporation,
partnership, association, joint stock company, trust, business trust,
government or political subdivision, any unincorporated organization,
or any other association or entity, including any "group" within the
meaning of Section 13(d)(3) of the Exchange Act and the General Rules
and Regulations thereunder.
(x) "Preferred Stock" shall mean shares of Series B Preferred
Stock, without par value, of the Company having the rights and
preferences set forth in the form of Certificate of Amendment To
Amended Articles of Incorporation attached to this Agreement as
Exhibit A.
(y) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(z) "Purchase Price" shall mean initially $250 per one
one-hundredth of a share of Preferred Stock and shall be subject to
adjustment from time to time as provided in this Agreement.
(aa) "Record Date" shall mean the close of business on July
29, 1996.
(bb) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(dd) "Rights" shall have the meaning set forth in the recitals
hereto.
(ee) "Rights Agent" shall mean First Chicago Trust Company of
New York, and its successors and assigns.
5
<PAGE> 9
(ff) "Rights Dividend Declaration Date" shall mean June 4,
1996.
(gg) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii).
(hh) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii).
(ii) "Section 13 Event' shall mean any event described in
Section 13(a).
(jj) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, includes a
report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become
such.
(kk) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Subsidiary" shall mean, with reference to any Person,
any corporation (or other legal entity) of which an amount of voting
securities (or comparable ownership interests) sufficient to elect at
least a majority of the directors (or comparable persons) of such
corporation (or other legal entity) is beneficially owned or otherwise
controlled, directly or indirectly, by such Person.
(mm) "Substantial Block" shall mean a number of shares of the
Common Stock equal to or in excess of 15% of the number of shares of
the Common Stock then outstanding.
(nn) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(oo) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(pp) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(qq) "Triggering Event" shall mean any Section 11(a)(ii) Event
or Section 13 Event.
(rr) "Voting Shares" shall mean all capital stock of the
Company authorized to be issued from time to time under the Amended
Articles of Incorporation of the Company which by its terms may be
voted on all matters submitted to shareholders of the Company
generally.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions
6
<PAGE> 10
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time act as Co-Rights Agent and may from time to time, upon ten
calendar days' written notice to the Rights Agent, appoint such other Co-Rights
Agents as it may deem necessary or desirable. In no event shall the Rights Agent
have any duty to supervise or in any way be liable for such Co-Rights Agents.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution
Date, (i) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for the Common
Stock shall be deemed also to be Right Certificates) and not by separate Right
Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of the Common Stock. As soon
as practicable after receipt by the Rights Agent of written notice from the
Company of the Distribution Date, the Rights Agent, at the Company's expense,
will send by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto, evidencing one Right for each
share of the Common Stock so held, subject to adjustment as provided herein. As
of and after the close of business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Stock, in substantially
the form attached hereto as Exhibit C (the "Summary of Rights"), by prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock, and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the certificates for the Common Stock
outstanding on the Record Date shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date, or, in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates representing such shares of
Common Stock shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between THE
GOODYEAR TIRE & RUBBER COMPANY and FIRST CHICAGO TRUST COMPANY OF NEW
YORK, as Rights Agent, dated as of June 4, 1996 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of THE GOODYEAR TIRE &
7
<PAGE> 11
RUBBER COMPANY. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. THE GOODYEAR TIRE &
RUBBER COMPANY will mail to the holder of this certificate a copy of
the Rights Agreement (as in effect on the date of mailing) without
charge promptly after receipt of a written request therefor. Under
certain circumstances, Rights which are or were beneficially owned by
Acquiring Persons or their Affiliates or Associates (as such terms are
defined in the Rights Agreement), and any subsequent holder of such
Rights, may become null and void.
After the due execution of any supplement or amendment to this
Agreement in accordance with the terms hereof, the reference to this Agreement
in the foregoing legend shall mean the Agreement as so supplemented or amended.
Until the Distribution Date, the Rights associated with the Common Stock
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Right Certificates
shall be in machine-printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates, whenever distributed, shall be dated as of the Record
Date, shall show the date of countersignature, and on their face shall entitle
the holders thereof to purchase such number of one one-hundredth of a share of
Preferred Stock (or following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as shall be set forth
therein at the Purchase Price per share set forth therein, but the number of
such shares and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to Section 3(a), 6, 7(e),
11(i) or 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the
8
<PAGE> 12
Company has determined is part of a plan, arrangement or understanding (whether
or not in writing) which has as a primary purpose or effect avoidance of Section
7(e) hereof, and any Right Certificate issued pursuant to Section 6, Section 11
or Section 22 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company in the manner provided
in the Code of Regulations of the Company for Common Stock certificates. The
Right Certificates shall be manually countersigned by an authorized signatory of
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Section 4(b), 7(e) and Section 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a share of Preferred Stock (or
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender
9
<PAGE> 13
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner or former Beneficial Owner or Affiliates or
Associates of such Beneficial, or of any other Person with which such holder or
any of such holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company, as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 20(k) hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment from a Right
Certificates holder of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Right's Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, along with a signature guarantee and
such other and further documentation as the Rights Agent may reasonably request,
and if requested by the Company, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii), 23(a) and 24(b) hereof)
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of one one-hundredths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $250.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with Section 7(c) below.
10
<PAGE> 14
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed and completed accompanied by payment of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) to be purchased and an amount equal to
any applicable transfer tax in cash, or by certified check or bank draft payable
to the order of the Company, the Rights Agent shall thereupon, subject to
Section 20(k) hereof, thereupon promptly (i) requisition from the Company
certificates for the total number of one one-hundredths of a share of Preferred
Stock to be purchased, (ii) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (iii) when appropriate,
requisition from any transfer agent of the Common Stock of the Company
certificates for the total number of shares of Common Stock to be paid in
accordance with Section 11(a)(i) and 11(a)(iii), (iv) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (v) promptly after receipt
of such certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder, and (vi) when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. The payment of the then
Purchase Price must be made in cash or by certified bank check or bank draft or
money order payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Stock), pay cash or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash or other
property are available for distribution or payment by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person or of any such
Associate or Affiliate who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person which whom
the Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
11
<PAGE> 15
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to an
Acquiring Person, or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner), Affiliates or Associates, or of
any other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company, as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL STOCK. The
Company covenants and agrees that:
(a) It will, subject to Section 11(a)(iii), prior to the Distribution
Date, seek to cause to be reserved and kept available out of its authorized and
unissued Preferred Stock (and, following the occurrence of a Triggering Event,
out of its authorized and unissued shares of Common Stock or its authorized and
issued Common Stock held in treasury and/or other securities), the number of
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) that, as provided in this Agreement, will
be sufficient to permit the exercise in full of all outstanding Rights (it being
understood that any of the foregoing shares or securities may also be reserved
for other purposes) or will take such other
12
<PAGE> 16
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable upon the
exercise of Rights may be listed on any national securities exchange, it will
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) It will use its best efforts to (i) file, as soon as practicable
following the first occurrence of a section 11(a)(ii) Event, or as soon as
required by law, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company will also take such action
as may be appropriate under the blue sky laws of the various states. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained. Unless otherwise
notified in writing by the Company, the Rights Agent may assume that any Right
exercised is permitted to be exercised under applicable law and shall have no
liability for acting in reliance upon such assumptions.
(d) It will take all such action as may be necessary to ensure that all
one one-hundredths of a share of Preferred Stock (and following the occurrence
of a Triggering Event, Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) It will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required (a) to
pay any transfer tax which may be payable in respect of any transfer involved in
the transfer or delivery of Right Certificates or the issuance or delivery of
certificates for the one one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as
13
<PAGE> 17
the case may be) in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to issue or
deliver any certificates for one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
shares of Common Stock and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of the Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the Rights
Dividend Declaration Date (A) declare a dividend on the Preferred Stock payable
in shares of the Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in connection with a
combination, consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Preferred
Stock or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive upon payment of the Purchase Price then in
effect the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the
14
<PAGE> 18
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any Person,
alone or together with its Affiliates and Associates, becomes at any time after
the Rights Dividend Declaration Date an Acquiring Person, except as the result
of a transaction set forth in Section 13(a) hereof, then, prior to the date on
which the Company's right of redemption pursuant to Section 23(a) expires (as
the same may be extended pursuant to Section 27) with respect to an event
described in this Section 11(a)(ii), proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have a right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of shares of
Preferred Stock, such number of shares of the Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a share of Preferred Stock for
which such Right is then exercisable and dividing that product by (y) 50% of the
current market price per share of the Common Stock of the Company (determined
pursuant to Section 11(d)) on the date of the occurrence of any one of the
events listed above in this subparagraph (ii) (such number of shares is
hereinafter referred to as the "Adjustment Shares"), provided that the Purchase
Price and the number of Adjustment Shares shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) In the event that the number of shares of the Common Stock which
are authorized by the Company's Amended Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company shall (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon exercise of the Rights and payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company (including, without
limitation, preference shares, or units of preference shares, which a majority
of the Independent Directors and the Board of Directors of the Company have
deemed to have the same value as the Common Stock (such preference shares,
"common stock equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been determined by a
majority of the Independent Directors and the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires, as the same may
15
<PAGE> 19
be extended pursuant to Section 27 (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of the Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
shares of the Common Stock could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (u) shall provide, subject to section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(v) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company will issue a public announcement and will give
concurrent written notice to the Rights Agent stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement and
notice to the Rights Agent at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the shares of the
Common Stock shall be the current market price (as determined pursuant to
Section 11(d) hereof) per share on the Section 11(a)(ii) Trigger Date and the
value of any "common stock equivalent' shall be deemed to be the same as the
value of the Common Stock on such date. The Company shall give the Rights Agent
notice of the selection of any "common stock equivalent" under this Section
11(a)(iii).
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or securities having
substantially the same or more favorable rights, privileges and preferences as
Preferred Stock ("preferred stock equivalents")) or securities convertible into
Preferred Stock or preferred stock equivalents at a price per share of Preferred
Stock or per share of preferred stock equivalents (or having a conversion price
per share, if a security convertible into Preferred Stock or preferred stock
equivalents) less than the current market price (as defined in Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of the Preferred Stock
outstanding on such record date plus the number of shares of the Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of shares of the
Preferred Stock outstanding on such record date plus the number of additional
shares of the Preferred Stock and preferred stock equivalents to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially
16
<PAGE> 20
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In the event that Company shall fix a record date for the making of
a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a combination, consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
retained earnings of the Company at a rate not in excess of 125% of the last
cash dividend theretofore paid), assets, stock (other than a dividend payable in
Preferred Stock, but including any dividend payable in Common Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price, as defined in Section 11(d), per one
one-hundredth of a share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
one-hundredth of a share of Preferred Stock and the denominator of which shall
be such current market price per one one-hundredth of a share of Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "current market price" per
share of the Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined in this paragraph
(d)) immediately prior to such date and, for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per share of
the Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in the
event that the current market price per share of the Common Stock is determined
during the period following the announcement by the issuer of such Common Stock
of (A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into such Common Stock (other than the
Rights) or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration
17
<PAGE> 21
of the requisite 30 Trading Day or 10 Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current market price shall be appropriately adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of the Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of the Common Stock are listed or
admitted to trading or, if the shares of the Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of the Common Stock are not quoted by
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the shares of the Common Stock
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the shares of the Common Stock, the fair value of
such shares on such date shall be as determined in good faith by the Independent
Directors if the Independent Directors constitute a majority of the Board of
Directors or, in the event the Independent Directors do not constitute a
majority of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of the Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of
the Common Stock are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of New York, are not authorized or obligated
by law or executive order to close. If the Common Stock is not publicly held or
not so listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Independent Directors if the
Independent Directors constitute a majority of the Board of Directors or, in the
event the Independent Directors do not constitute a majority of the Board of
Directors, by an independent investment banking firm selected by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately
18
<PAGE> 22
adjusted for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common Stock. If neither
the Common Stock nor the Preferred Stock is publicly held or so listed or
traded, "current market price" per share of the Preferred Stock shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the "current market price" of one one-hundredth of a share of
Preferred Stock shall be equal to the "current market price" of one share of
Preferred Stock divided by 100.
(iii) If a security is not publicly held or not so listed or trade,
"current market price" shall mean the fair value per share or other unit of such
security, determined reasonably and in good faith the Board of Directors of the
Company; provided, however, that if at the time of such determination there is
an Acquiring Person, the current market price of such security on such date
shall be determined by a nationally recognized investment banking firm selected
by the Board of Directors, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights.
(iv) In the case of property other than securities, the current market
price thereof shall be determined reasonably and in good faith by the Board of
Directors of the Company, provided, however, that if at the time of such
determination there is an Acquiring Person, the current market value of such
property on such date shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and shall be binding upon
the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one ten-thousandth of a share of Common Stock or one-millionth of a
share of Preferred Stock, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three years from the date of the transaction
which mandates such adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than shares of Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a) through (o) inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the shares of the
Preferred Stock shall apply on like terms to any such other shares.
19
<PAGE> 23
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share of Preferred
Stock covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after the adjustment of the Purchase
Price. The Company shall make a public announcement and shall give simultaneous
written notice to the Rights Agent of its election to adjust the number of
Rights, indicating the record date for the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right
20
<PAGE> 24
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-hundredth of a share and the number of one
one-hundredths of a share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of a
share of Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue such number of fully
paid and nonassessable shares of such Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a share of Preferred Stock
and other share capital or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of Preferred Stock,
issuance wholly for cash of any of Preferred Stock at less than the current
market price, issuance wholly for cash of Preferred Stock or securities which by
their terms are convertible into or exchangeable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to hereinabove in
this Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Sections 23, 24 and 27 hereof, take (nor
will it permit any of its Subsidiaries to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that it shall not, at any time
after a Section 11(a)(ii) Event, (i) combine or consolidate with any other
Person, (ii) merge with or into any other Person, or (iii) sell or transfer (or
permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its wholly-owned subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more
21
<PAGE> 25
transactions each of which complies with Section 11(n)) if (x) at the time of or
immediately after such combination, consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such combination, consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(p) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date, the Company may, in lieu of making any adjustment to
the Purchase Price, the number of one one-hundredths of a share of Preferred
Stock eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Sections 11(a)(i),
11(b), 11(c), 11(h) or 11(i), make.such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
(q) In the event the Company shall at any time after the date of this
Agreement and prior to the Distribution Date (i) declare a dividend on the
outstanding Common Stock payable in shares of Common Stock or (ii) effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, the
number of Rights associated with each share of Common Stock shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of any such event listed in clause (i) or
(ii) above and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event
listed in clause (i) or (ii) above. The adjustments provided for in this Section
11(q) shall be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consideration is effected.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment and the adjusted
Purchase Price, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
26. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.
22
<PAGE> 26
SECTION 13. COMBINATION, CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER. (a) In the event that, following a Section 11(a)(ii)
Event, directly or indirectly, (x) the Company shall combine or consolidate
with, or merge with or into, any other Person (other than a Subsidiary of the
Company in a transaction not prohibited by Section 11(n) hereof) and the Company
shall not be the continuing or surviving corporation of such combination,
consolidation or merger, (y) any Person (other than a Subsidiary of the Company
in a transaction not prohibited by Section 11(n) hereof) shall combine,
consolidate or merge with or into the Company and the Company shall be the
continuing or surviving corporation of such combination, consolidation or merger
and, in connection with such combination, consolidation or merger, all or part
of the Common Stock shall be changed into or exchanged for shares or other
securities of the Company of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company or any of its wholly-owned Subsidiaries in one
or more transactions each of which complies with Section 11(n) hereof), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right (except as provided in Section 7(e)) shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly issued,
fully paid, nonassessable and freely tradeable Common Stock of the Principal
Party (as hereinafter defined), not subject to any liens, encumbrances, rights
of call or first refusal, or other adverse claims as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the current market price
per share of Common Stock of such Principal Party (determined in the manner
described in Section 11(d)) on the date of consummation of such combination,
consolidation, merger, sale or transfer; (ii) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 shall
thereafter apply to such Principal Party; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock in accordance with Section 9) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
23
<PAGE> 27
(1) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger, combination or consolidation,
and, if no securities are so issued, the Person that is the other party
to the merger, combination or consolidation; and
(2) in the case of any transaction described in clause (z) of
the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction;
provided, however, that in any such case, (x) if the Common Stock of
such Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another corporation the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such other
Person; (y) if such Person is a direct or indirect Subsidiary or Affiliate of
more than one Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value of
shares outstanding; and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of Common
Stock which are neither outstanding nor reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any combination, consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will at its own expense:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, will use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the Expiration
Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or appropriate;
24
<PAGE> 28
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the eligibility
requirements for quotations on NASDAQ; and
(iv) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock) upon exercise or exchange of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredths of a share
of Preferred Stock, the Company may pay to the registered holders of Right
Certificates at the time the Rights evidenced thereby are exercised or exchanged
as herein provided an amount in cash equal to the same fraction of the
25
<PAGE> 29
current market value of one one-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one one-hundredth of
a share of Preferred Stock shall be one one-hundredth of the closing price of a
share of Preferred Stock, as determined pursuant to Section 11(d) hereof, for
the Trading Day immediately prior to the date of such exercise or exchange, as
the case may be.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right, except as otherwise permitted by this Section
14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if
surrendered at the principal
26
<PAGE> 30
office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6, Section 7(e) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatever;
and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary;
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company
must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock, Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised or exchanged in accordance with
the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent
(including the reasonable
27
<PAGE> 31
fees and expenses of counsel), for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, instruction, adjustment notice, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
(c) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with its administration of this Agreement in reliance upon
(i) the proper execution of the certification appended to the Form of Assignment
and the Form of Election to Purchase included as part of Exhibit B hereto (the
"Certification"), unless the Rights Agent shall have actual knowledge that, as
executed, the Certification is untrue, or (ii) the non-execution or failure to
complete the Certification including, without limitation, any refusal to honor
any otherwise permissible assignment or election by reason of such non-execution
or failure.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business and/or the stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force
28
<PAGE> 32
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion. The Company shall only be responsible for
reasonable fees and expenses of counsel engaged by the Rights Agent
with the Company's prior express written consent.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment
required under the provisions of Sections 11 or 13 hereof or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights
29
<PAGE> 33
evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it be responsible for any determination by the
Board of Directors of the Company of the current market value of the
Rights or Preferred Stock pursuant to the provisions of Section 14
hereof; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any shares of the Preferred Stock or Common Stock or other securities
to be issued pursuant to this Agreement or any Right Certificate or as
to whether any shares of Preferred Stock or Common Stock will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision hereof
from any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Company, and is
authorized to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either by itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect
or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there
30
<PAGE> 34
shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting the Company.
The Company shall give the Rights Agent prompt written instructions as
to the action to be taken regarding the Right Certificates involved.
The Rights Agent shall not be liable for acting in accordance with such
instructions.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Stock and the Common Stock by registered or
certified mail, and, at the Company's expense, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Stock and the Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the Company shall become
the temporary Rights Agent and the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under the
laws of the United States or of the State of New York (or of any other state of
the United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, having a
principal office in the State of New York, which is authorized under such laws
to exercise corporate trust powers and/or stock transfer powers and is subject
to supervision or examination by federal or state authority or which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent
31
<PAGE> 35
and each transfer agent of the Preferred Stock and Common Stock and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of the Common Stock following the
Distribution Date and prior to the Expiration Date of the Rights, the Company
(a) shall, with respect to shares of the Common Stock so issued or sold pursuant
to the exercise of options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) The Board of Directors of
the Company may, at its option, at any time prior to the earlier of (x) the
close of business on the tenth Business Day following the Shares Acquisition
Date (or if the Shares Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth Business Day following the Record
Date), or (y) the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.001 per Right as
appropriately adjusted to reflect any stock split, dividend of shares or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, pay the Redemption Price either in shares of the Common Stock
(valued at their current market price as defined in Section 11(d) on the date
of the redemption), other securities, cash, other assets or any other form of
consideration deemed appropriate by the Board of Directors; provided, however,
that if the Board of Directors of the Company authorizes redemption of the
Rights in either of the circumstances set forth in clauses (x) or (y) below
then there must be Independent Directors in office and such authorization shall
require the concurrence of a majority of the Independent Directors: (x) such
authorization occurs on or after the Shares Acquisition Date or (y) such
authorization occurs on or after the date of a change (resulting from a proxy
or consent solicitation) in a majority of the Directors of the Company in
office at the commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or if upon the commencement of
such solicitation a majority of the
32
<PAGE> 36
directors of the Company has determined in good faith) that such Person (or any
of its Affiliates or Associates) intends to take, or may consider taking, any
action which would result in such Person becoming an Acquiring Person or which
would cause the occurrence of a Triggering Event. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired, as the same
may be extended pursuant to Section 27 hereof.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the directors of the Company shall act in good faith, in a
manner they reasonably believe to be in the best interests of the Company and
with such care, including reasonable inquiry, skill and diligence, as a person
of ordinary prudence would use under similar circumstances, and they may
consider the long-term and short-term effects of any action upon employees,
customers and creditors of the Company and upon communities in which offices or
other establishments of the Company are located, and all other pertinent
factors.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Within ten Business Days after the action
of the Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to holders of the then outstanding Rights
by mailing such notice to the Rights Agent and to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock prior to the
Distribution Date.
(d) In the event the Company shall at any time after the date of this
Rights Agreement (i) pay any dividend on Common Stock in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock into a greater number of
shares or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares of the outstanding shares of Common Stock, then and in each
such event the Redemption Price after such event shall equal the Redemption
Price immediately prior to such event multiplied by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event; provided, however, that in each case
such adjustment to the Redemption Price shall be made only if the amount of the
Redemption Price shall be reduced or increased by $0.0001 per Right.
33
<PAGE> 37
SECTION 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time on or after the occurrence of a Section 11(a)(ii) Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock of the Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give notice of any such exchange in accordance
with Section 26 hereof; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. Each such
notice of exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of the Common Stock exchangeable for a
Right (i) common stock equivalents, (ii) Preferred Stock (or preferred stock
equivalents, as such term is defined in Section 11(b) hereof), (iii) cash, (iv)
debt or other securities of the Company, (v) other property, or (vi) any
combination of the foregoing, having an aggregate value which a majority of the
Independent Directors and the Board of Directors of the Company shall have
determined in good faith to be equal to the current market price of one share
of the Common Stock on the Trading Day immediately preceding the date of
exchange pursuant to this Section 24.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock (or preferred stock equivalents) issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional shares of Common Stock or
Preferred Stock (or preferred stock equivalents) for issuance upon exchange of
the Rights.
(e) The Company shall not be required to issue fractions of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. If the Company elects not to issue such fractional shares of Common
Stock, the Company shall pay, in lieu of such fractional shares of Common Stock,
to the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an
34
<PAGE> 38
amount in cash equal to the same fraction of the current market price of a whole
share of Common Stock. For the purposes of this paragraph (e), the current
market price of a whole share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. In case the Company shall propose
at any time following the Distribution Date (a) to declare or pay any dividend
payable in shares of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular periodic cash dividend at a rate in excess of 125% of the rate of the
last cash dividend theretofore paid), or (b) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of the Preferred Stock or share capital of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding Preferred Stock), or (d) to effect any combination,
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Sections 11(n) hereof), or (e) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise), or (f) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holders of a
Right, in accordance with Section 26, a notice of such proposed action, which
shall specify the record date for the purposes of such dividend of shares,
distribution of rights or Rights, or the date on which such reclassification,
combination, consolidation, merger, sale, transfer, liquidation', dissolution,
or winding up is to take place and the date of participation therein by the
holders of the Preferred Stock and/or Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least twenty (20) days prior to the record date for
determining holders of the Preferred Stock and/or Common Stock for purposes of
such action, and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of its Common Stock, whichever shall be the
earlier.
In case a Section 11(a)(ii) Event shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to the Rights Agent and
to each holder of a Right, to the extent feasible and in accordance with Section
26, a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section 11(a)(ii).
35
<PAGE> 39
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
The Goodyear Tire & Rubber Company
1144 East Market Street
Akron, Ohio 44316-0001
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the earlier of the
Distribution Date or the Shares Acquisition Date and subject to the penultimate
sentence of this Section 27, the Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates.
From and after the earlier of the Distribution Date or the Shares Acquisition
Date, and subject to the penultimate sentence of this Section 27, the Company
may from time to time supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to lengthen the time
period during which the Rights may be redeemed following the Shares Acquisition
Date for up to an additional twenty Business Days beyond the time period set
forth in Section 23(a) (provided, that any such lengthening shall be effective
only if a majority of the Board of Directors of the Company is comprised of
Independent Directors and a majority of such Independent Directors concur in
such lengthening) or (iv) to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement shall not be supplemented or amended in
any way (other than
36
<PAGE> 40
pursuant to clauses (i) and (ii) above) unless such amendment is approved by a
majority of the Independent Directors whose determination shall be final and
the Independent Directors constitute a majority of the Board of Directors. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made on or after the Distribution Date which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable. Prior to the earlier of the Shares Acquisition Date
or the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company (and, where specifically
provided for herein, the Independent Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or the Company (or, as expressly provided, the
Independent Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for the purpose of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, as
provided for, by the Independent Directors) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (ii) not subject the Board or the
Independent Directors to any liability to the holders of the Right Certificates
or to any other Person.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock).
The Rights Agent is the Agent of the Company and not of the holders of the
Rights
37
<PAGE> 41
and/or Rights Certificates.
SECTION 31. SEVERABILITY. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
SECTION 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Ohio and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
38
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
THE GOODYEAR TIRE & RUBBER COMPANY
/s/ Samir F. Gibara
Attest: By:______________________________
Name: Samir F Gibara,
Title: President and Chief Executive Officer
/s/ James Boyazis
By: _______________________________
Name: James Boyazis,
Title: Secretary
[SEAL]
FIRST CHICAGO TRUST COMPANY OF NEW YORK
(AS RIGHTS AGENT)
/s/ John G. Herr
Attest: By: ________________________________
Name: John G. Herr
Title: Assistant Vice President
/s/ Joanne Gorostiola
By: ___________________________
Name: Joanne Gorostiola
Title: Assistant Vice President
39
<PAGE> 43
EXHIBIT A
---------
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
A-1
<PAGE> 44
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 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-2
<PAGE> 45
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 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.
A-3
<PAGE> 46
(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 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
A-4
<PAGE> 47
hereunto subscribed their names and caused the seal of said corporation to be
hereunto affixed this 4th day of June, 1996.
By: ________________________________
Samir F. Gibara, President
By: ________________________________
James Boyazis, Secretary
[SEAL]
A-5
<PAGE> 48
EXHIBIT B
---------
(Form of Right Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER JULY 29, 2006 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES RIGHTS MAY NOT BE
EXERCISABLE. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Right Certificate
This certifies that _____________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of June 4, 1996 (the "Rights Agreement") between THE GOODYEAR
TIRE & RUBBER COMPANY, an Ohio corporation (the "Company"), and FIRST CHICAGO
TRUST COMPANY OF NEW YORK, a New York corporation (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Akron time) on July
29, 2006 at the office of the Rights Agent, or its successors as Rights Agent,
in New York, New York, one one-hundredth of a fully paid and nonassessable share
of the Series B Preferred Stock, without par value (the "Preferred Stock"), of
the Company, at a
- ----------
*The portion of the legend in
brackets shall be inserted only
if applicable.
B-1
<PAGE> 49
purchase price of $250.00 per share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and related certificate duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of July 29, 1996, based on the
Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate of
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who after such transfer, became an Acquiring
Person, such Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock as the.Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (a) may be redeemed by the Company at its option at a
redemption price of $.001 per Right at any time prior to the earlier of the
close of business on (i) the tenth Business Day following the Shares
Acquisition Date or (ii) the final Expiration Date, or (b) may be exchanged
B-2
<PAGE> 50
in whole or in part for shares of the Common Stock, and/or other securities,
cash or other assets of the Company deemed to have the same value as shares of
the Common Stock, at any time after a Section 11(a)(ii) Event.
No fractional shares of the Preferred Stock (or other securities) will
be issued upon the exercise or exchange of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock which may, at the option of the Company, be evidenced
by depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised or exchanged for shares of the Common Stock as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of , .
[SEAL]
ATTEST: THE GOODYEAR TIRE & RUBBER COMPANY
By: ______________________________ By: _______________________________
Name: Name:
Title: Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
By:
Authorized Signature
Date:
B-3
<PAGE> 51
(Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ____________________, ____
____________________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
B-4
<PAGE> 52
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) This Right Certificate / / is / / is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned, it
/ / did / / did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
(3) Exercising this Right Certificate will / / will not / / enable the
undersigned, its Affiliates, its Associates, and/or any other Person with which
the undersigned or any of the undersigned's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the Company,
to become an Acquiring Person.
Dated: _________________ ________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE> 53
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To The Goodyear Tire & Rubber Company:
The undersigned hereby irrevocably elects to exercise _________________
___________________ Rights represented by this Right Certificate to purchase the
shares of the Series B Preferred Stock issuable upon the exercise of such Rights
(or such other securities of the Company or of any other Person which may be
issuable upon the exercise of the Rights) and requests that certificates for
such shares be issued in the name of:
Please insert social security or other taxpayer identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or
other taxpayer identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ___________________ _____________________________
Signature
Signature Guaranteed: (Signature must conform in all
(Signatures must be guaranteed.) respects to name of holder as
specified on the face of this Right
Certificate)
B-6
<PAGE> 54
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate box that:
(1) This Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
(3) Exercising this Right Certificate will [ ] will not [ ] enable the
undersigned, its Affiliates, its Associates, and/or any other Person with which
the undersigned or any of the undersigned's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the Company,
to become an Acquiring Person.
Dated: ______________________ ________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed.)
_________________________________
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or.enlargement or any change whatsoever.
B-7
<PAGE> 55
EXHIBIT C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On June 4, 1996 the Board of Directors of THE GOODYEAR TIRE & RUBBER
COMPANY (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, without par value (the "Common Stock"), of
the Company. The distribution is payable on July 29, 1996 (the "Record Date") to
the shareholders of record on the Record Date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series B Preferred Stock, without par value (the "Preferred Stock"), or in
certain circumstances, Common Stock, other securities, cash or assets as
summarized below, at a price of $250.00 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
- -------------------------------------
Until the earlier to occur of (i) ten Business Days following the date
(the "Shares Acquisition Date") of the public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of a number of shares of
the Common Stock equal to 15% or more of the outstanding shares of the Common
Stock or (ii) ten Business Days following the commencement or announcement of
an intention to make a tender offer or exchange offer if, upon consummation
thereof, such person would be an Acquiring Person (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with and only with
the Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuance of the common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Common Stock certificates outstanding as
of the Record Date will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on July 29, 2006, unless earlier redeemed
or exchanged by the Company as described below.
C-1
<PAGE> 56
Exercise of Rights for Shares of the Common Stock of the Company
- ----------------------------------------------------------------
In the event that a Person becomes an Acquiring Person at any time
following the Rights Dividend Declaration Date, each holder of a Right will,
after the Distribution Date, have the right to receive, upon exercise, shares
of Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right then in effect. Notwithstanding any of the foregoing, following
the occurrence of the event set forth in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
- ------------------------------------------------------
In the event that, at any time following a Section 11(a)(ii) Event, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, the common stock or other capital stock of the acquiring company
having a value equal to two times the Purchase Price of the Right then in
effect. The events set forth in this paragraph and in the preceding paragraph
are referred to as "Triggering Events."
Adjustments to Purchase Price
- -----------------------------
The Purchase Price payable, and the number of shares of Preferred Stock
(or Common Stock or other securities, as the case may be) issuable upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a dividend of shares on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for shares of the
Preferred Stock or convertible securities at less than the current market price
of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in the Preferred Stock) or of
subscription rights or warrants (other than those referred to above). Prior to
the Distribution Date, the Board of Directors of the Company may make such
equitable adjustments as it deems appropriate in the circumstances in lieu of
any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Purchase Price will be
required until the time at which cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional shares will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of exercise.
C-2
<PAGE> 57
Redemption and Exchange of Rights
- ---------------------------------
At any time prior to 5:00 P.M. Akron time on the tenth day following
the Shares Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.001 per Right (the "Redemption Price"). Under
certain circumstances set forth in the Rights Agreement, the decision to redeem
shall require the concurrence of a majority of the Independent Directors.
Immediately upon the action of the Board of Directors of the Company electing
to redeem the Rights with, if required, the concurrence of the Independent
Directors, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
At any time after the occurrence of any of the events set forth under
the heading "Exercise of Rights for shares of the Common Stock of the Company"
above, the Board of Directors may exchange the Rights (other than Rights owned
by an Acquiring Person, which have become void), in whole or in part, at an
exchange ratio of one share of the Common Stock, and/or other securities, cash
or other property deemed to have the same value as one share of the Common
Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Amendments to Terms of the Rights
- ---------------------------------
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interest of any Acquiring Person); provided, that no supplement
or amendment may be made on or after the Distribution Date which changes those
provisions relating to the principal economic terms of the Rights. The Board may
also, with the concurrence of a majority of the Independent Directors, extend
the redemption period for up to an additional twenty Business Days.
The term "Independent Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or elected by a majority of
the Independent Directors, but shall not include an Acquiring Person or any
representative thereof.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
June 11, 1996. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
C-3
<PAGE> 1
EXHIBIT 4.5
1997 PERFORMANCE INCENTIVE PLAN
OF
THE GOODYEAR TIRE & RUBBER COMPANY
1. PURPOSE.
The purposes of the 1997 Performance Incentive Plan of The Goodyear Tire
& Rubber Company (the "Plan") are to advance the interests of the Company and
its shareholders by strengthening the ability of the Company to attract, retain
and reward highly qualified officers and other employees, to motivate officers
and other selected employees to achieve business objectives established to
promote the long-term growth, profitability and success of the Company, and to
encourage ownership of the Common Stock of the Company by participating officers
and other selected employees. The Plan authorizes performance-based stock and
cash incentive compensation in the form of stock options, stock appreciation
rights, restricted stock, performance grants and awards, and other stock-based
grants and awards.
2. DEFINITIONS.
For the purposes of the Plan, the following terms shall have the
following meanings:
(a) "ADJUSTED NET INCOME" means, with respect to any calendar or other
fiscal year of the Company, the amount reported as "Net Income" in the audited
Consolidated Income Statement of the Company and Subsidiaries for such year (as
set forth in the Company's Annual Report to Shareholders for such year),
adjusted to exclude any of the following items: (i) extraordinary items (as
described in Accounting Principles Board Opinion No. 30); (ii) gains or losses
on the disposition of discontinued operations; (iii) the cumulative effects of
changes in accounting principles; (iv) the writedown of any asset; and (v)
charges for restructuring and rationalization programs.
(b) "ANNUAL NET INCOME PER SHARE" means, with respect to any calendar or
other fiscal year of the Company in respect of which a determination thereof is
being or to be made, the Adjusted Net Income for such year divided by the
average number of shares of Common Stock outstanding during such year.
(c) "AWARD" means any payment or settlement in respect of a grant made
pursuant to the Plan, whether in the form of shares of Common Stock or in cash,
or in any combination thereof.
(d) "BOARD OF DIRECTORS" means the Board of Directors of the Company.
(e) "CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute thereto, together with the
published rulings, regulations and interpretations duly promulgated thereunder.
(f) "COMMITTEE" means the committee of the Board of Directors established
and constituted as provided in Section 5 of the Plan.
(g) "COMMON STOCK" means the common stock, without par value, of the
Company, or any security issued by the Company in substitution or exchange
therefor or in lieu thereof.
(h) "COMMON STOCK EQUIVALENT" means a Unit (or fraction thereof, if
authorized by the Committee) substantially equivalent to a hypothetical share of
Common Stock, credited to a Participant and having a value at any time equal to
the Fair Market Value of a share of Common Stock (or such fraction thereof) at
such time.
(i) "COMPANY" means The Goodyear Tire & Rubber Company, an Ohio
corporation, or any successor corporation.
(j) "COVERED EMPLOYEE" means any person who is a "covered employee" within
the meaning of Section 162(m) of the Code.
--1--
<PAGE> 2
(k) "CUMULATIVE NET INCOME" means, in respect of any Performance Period,
the aggregate cumulative amount of the Adjusted Net Income for the calendar or
other fiscal years of the Company during such Performance Period.
(l) "CUMULATIVE NET INCOME PER SHARE" means, in respect of any Performance
Period, the aggregate cumulative amount of the Annual Net Income Per Share for
the calendar or other fiscal years of the Company during such Performance
Period.
(m) "DIVIDEND EQUIVALENT" means, in respect of a Common Stock Equivalent
and with respect to each dividend payment date for the Common Stock, an amount
equal to the cash dividend on one share of Common Stock payable on such dividend
payment date.
(n) "EMPLOYEE" means any individual, including any officer of the Company,
who is on the active payroll of the Company or a Subsidiary at the relevant
time.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, including all rules and regulations promulgated
thereunder.
(p) "FAIR MARKET VALUE" means, in respect of any date on or as of which a
determination thereof is being or to be made, the average of the high and low
per share sale prices of the Common Stock reported on the New York Stock
Exchange Composite Transactions tape on such date, or, if the Common Stock was
not traded on such date, on the next preceding day on which sales of shares of
the Common Stock were reported on the New York Stock Exchange Composite
Transactions tape.
(q) "INCENTIVE STOCK OPTION" means any option to purchase shares of Common
Stock granted pursuant to the provisions of Section 6 of the Plan that is
intended to be and is specifically designated as an "incentive stock option"
within the meaning of Section 422A of the Code.
(r) "NON-QUALIFIED STOCK OPTION" means any option to purchase shares of
Common Stock granted pursuant to the provisions of Section 6 of the Plan that is
not an Incentive Stock Option.
(s) "PARTICIPANT" means any Employee of the Company or a Subsidiary who
receives a grant or Award under the Plan.
(t) "PERFORMANCE GRANT" means a grant made pursuant to Section 9 of the
Plan, the Award of which is contingent on the achievement of specific
Performance Goals during a Performance Period, determined using a specific
Performance Measure, all as specified in the grant agreement relating thereto.
(u) "PERFORMANCE GOALS" mean, with respect to any applicable grant made
pursuant to the Plan, the one or more targets, goals or levels of attainment
required to be achieved in terms of the specified Performance Measure during the
specified Performance Period, all as set forth in the related grant agreement.
(v) "PERFORMANCE MEASURE" means, with respect to any applicable grant made
pursuant to the Plan, one or more of the criteria identified at Section 9(c) of
the Plan selected by the Committee for the purpose of establishing, and
measuring attainment of, Performance Goals for a Performance Period in respect
of such grant, as provided in the related grant agreement.
(w) "PERFORMANCE PERIOD" means, with respect to any applicable grant made
pursuant to the Plan, the one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select during which the
attainment of one or more Performance Goals will be measured to determine
whether, and the extent to which, a Participant is entitled to receive payment
of an Award pursuant to such grant.
(x) "PLAN" means this 1997 Performance Incentive Plan of the Company, as
set forth herein and as hereafter amended from time to time in accordance with
the terms hereof.
(y) "RESTRICTED STOCK" means shares of Common Stock issued pursuant to a
Restricted Stock Grant under Section 8 of the Plan so long as such shares remain
subject to the restrictions and conditions specified in the grant agreement
pursuant to which such Restricted Stock Grant is made.
--2--
<PAGE> 3
(z) "RESTRICTED STOCK GRANT" means a grant made pursuant to the provisions
of Section 8 of the Plan.
(aa) "STOCK APPRECIATION RIGHT" means a grant in the form of a right to
benefit from the appreciation of the Common Stock made pursuant to Section 7 of
the Plan.
(bb) "STOCK OPTION" means and includes any Non-Qualified Stock Option and
any Incentive Stock Option granted pursuant to Section 6 of the Plan.
(cc) "SUBSIDIARY" means any corporation or entity in which the Company
directly or indirectly owns or controls 50% or more of the equity securities
issued by such corporation or entity having the power to vote for the election
of directors.
(dd) "UNIT" means a bookkeeping entry used by the Company to record and
account for the grant, settlement or, if applicable, deferral of an Award until
such time as such Award is paid, canceled, forfeited or terminated, as the case
may be, which, except as otherwise specified by the Committee, shall be equal to
one Common Stock Equivalent.
3. EFFECTIVE DATE; TERM.
(a) EFFECTIVE DATE. The Plan shall be effective on April 14, 1997, upon
approval by the shareholders of the Company at the 1997 annual meeting of
shareholders or any adjournments thereof.
(b) TERM. The Plan shall remain in effect until December 31, 2001, unless
sooner terminated by the Board of Directors. Termination of the Plan shall not
affect grants and Awards then outstanding.
4. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN. The
maximum aggregate number of shares of Common Stock which may be issued pursuant
to the Plan, subject to adjustment as provided in Section 4(b) of the Plan,
shall be fifteen million, plus (i) any shares of Common Stock issued under the
Plan that are forfeited back to the Company or are canceled, and (ii) any shares
of Common Stock that are tendered, whether by physical delivery or by
attestation, to the Company by a Participant as full or partial payment of the
exercise price of any Stock Option granted pursuant to the Plan, in connection
with the payment or settlement of any other grant or Award made pursuant to the
Plan, or in payment of any applicable withholding for federal, state, city,
local or foreign income, payroll or other taxes incurred in connection with the
exercise of any Stock Option or Stock Appreciation Right granted under the Plan
or the receipt or settlement of any other grant or Award under the Plan. The
shares of Common Stock which may be issued under the Plan may be authorized and
unissued shares or issued shares which have been reacquired by the Company. No
fractional share of the Common Stock shall be issued under the Plan. Awards of
fractional shares of the Common Stock, if any, shall be settled in cash.
(b) ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event of any
change in the capital structure, capitalization or Common Stock of the Company
such as a stock dividend, stock split, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Stock, such proportionate adjustments, if
any, as the Board of Directors in its discretion may deem appropriate to reflect
such change shall be made with respect to: (i) the maximum number of shares of
Common Stock which may be (1) issued pursuant to the Plan, (2) the subject of
any type of grant or Award under the Plan, and (3) granted, Awarded or issued to
any Participant pursuant to any provision of the Plan; (ii) the number of shares
of Common Stock subject to any outstanding Stock Option, Stock Appreciation
Right or other grant or Award made to any Participant under the Plan; (iii) the
per share exercise price in respect of any outstanding Stock Options and Stock
Appreciation Rights; (iv) the number of shares of Common Stock and the number of
Units or the value of such Units, as the case may be, which are the subject of
other grants and Awards then outstanding under the Plan; and (v) any other term
or condition of any grant affected by any such change.
--3--
<PAGE> 4
5. ADMINISTRATION.
(a) THE COMMITTEE. The Plan shall be administered by the Committee to be
appointed from time to time by the Board of Directors and comprised of not less
than three of the then members of the Board of Directors who qualify as
"non-employee directors" within the meaning of Rule 16(b)-3 promulgated under
the Exchange Act and as "outside directors" within the meaning of Section 162(m)
of the Code. Members of the Committee shall serve at the pleasure of the Board
of Directors. The Board of Directors may from time to time remove members from,
or add members to, the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business and the acts of a
majority of the members present at any meeting at which a quorum is present
shall be the acts of the Committee. Any one or more members of the Committee may
participate in a meeting by conference telephone or similar means where all
persons participating in the meeting can hear and speak to each other, which
participation shall constitute presence in person at such meeting. Action
approved in writing by a majority of the members of the Committee then serving
shall be fully as effective as if the action had been taken by unanimous vote at
a meeting duly called and held. The Company shall make grants and effect Awards
under the Plan in accordance with the terms and conditions specified by the
Committee, which terms and conditions shall be set forth in grant agreements
and/or other instruments in such forms as the Committee shall approve.
(b) COMMITTEE POWERS. The Committee shall have full power and authority to
operate and administer the Plan in accordance with its terms. The powers of the
Committee include, but are not limited to, the power to: (i) select Participants
from among the Employees of the Company and Subsidiaries; (ii) establish the
types of, and the terms and conditions of, all grants and Awards made under the
Plan, subject to any applicable limitations set forth in, and consistent with
the express terms of, the Plan; (iii) make grants and pay or otherwise effect
Awards subject to, and consistent with, the express provisions of the Plan; (iv)
establish Performance Goals, Performance Measures and Performance Periods,
subject to, and consistent with, the express provisions of the Plan; (v) reduce
the amount of any grant or Award; (vi) prescribe the form or forms of grant
agreements and other instruments evidencing grants and Awards under the Plan;
(vii) pay and to defer payment of Awards on such terms and conditions, not
inconsistent with the express terms of the Plan, as the Committee shall
determine; (viii) direct the Company to make conversions, accruals and payments
pursuant to the Plan; (ix) construe and interpret the Plan and make any
determination of fact incident to the operation of the Plan; (x) promulgate,
amend and rescind rules and regulations relating to the implementation,
operation and administration of the Plan; (xi) adopt such modifications,
procedures and subplans as may be necessary or appropriate to comply with the
laws of other countries with respect to Participants or prospective Participants
employed in such other countries; (xii) delegate to other persons the
responsibility for performing administrative or ministerial acts in furtherance
of the Plan; (xiii) engage the services of persons and firms, including banks,
consultants and insurance companies, in furtherance of the Plan's activities;
and (xiv) make all other determinations and take all other actions as the
Committee may deem necessary or advisable for the administration and operation
of the Plan.
(c) COMMITTEE'S DECISIONS FINAL. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration or application of the Plan, and of any grant agreement, shall be
final, conclusive and binding upon all Participants, and all persons claiming
through Participants, affected thereby.
(d) ADMINISTRATIVE ACCOUNTS. For the purpose of accounting for Awards
deferred as to payment, the Company shall establish bookkeeping accounts
expressed in Units bearing the name of each Participant receiving such Awards.
Each account shall be unfunded, unless otherwise determined by the Committee in
accordance with Section 15(d) of the Plan.
(e) CERTIFICATIONS. In respect of each grant under the Plan to a Covered
Person which the Committee intends to be "performance based compensation" under
Section 162(m) of the Code, the provisions of the Plan and the related grant
agreement shall be construed to confirm such intent, and to conform to the
requirements of Section 162(m) of the Code, and the Committee shall certify in
writ-
--4--
<PAGE> 5
ing (which writing may include approved minutes of a meeting of the Committee)
that the applicable Performance Goal(s), determined using the Performance
Measure specified in the related grant agreement, was attained during the
relevant Performance Period at a level that equaled or exceeded the level
required for the payment of such Award in the amount proposed to be paid and
that such Award does not exceed any applicable Plan limitation.
6. STOCK OPTIONS.
(a) IN GENERAL. Options to purchase shares of Common Stock may be granted
under the Plan and may be Incentive Stock Options or Non-Qualified Stock
Options. All Stock Options shall be subject to the terms and conditions of this
Section 6 and shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall
determine. Stock Options may be granted in addition to, or in tandem with or
independent of Stock Appreciation Rights or other grants and Awards under the
Plan. The Committee may grant Stock Options that provide for the automatic grant
of a replacement Stock Option if payment of the exercise price and/or any
related withholding taxes is made by tendering (whether by physical delivery or
by attestation) shares of Common Stock or by having shares of Common Stock
withheld by the Company. The replacement Stock Option would cover the number of
shares of Common Stock tendered or withheld, would have a per share exercise
price equal to at least 100% of the Fair Market Value of a share of Common Stock
on the date of the exercise of the original Stock Option, and would have such
other terms and conditions as may be specified by the Committee and set forth in
the related grant agreement.
(b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
Employee of the Company or a Subsidiary may be granted Stock Options. The
Committee shall determine, in its discretion, the Employees to whom Stock
Options will be granted, the timing of such grants, and the number of shares of
Common Stock subject to each Stock Option granted; provided, that (i) the
maximum aggregate number of shares of Common Stock which may be issued and
delivered upon the exercise of Non-Qualified Stock Options granted under the
Plan shall be fourteen million, (ii) the maximum aggregate number of shares of
Common Stock which may be issued and delivered upon the exercise of Incentive
Stock Options shall be five million, (iii) the maximum number of shares of
Common Stock in respect of which Stock Options may be granted to any Employee
during any calendar year shall be 500,000, and (iv) in respect of Incentive
Stock Options, the aggregate Fair Market Value (determined as of the date the
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which an Incentive Stock Option becomes exercisable for the first time by a
Participant during any calendar year shall not exceed $100,000, or such other
limit as may be required by the Code, except that, if authorized by the
Committee and provided for in the related grant agreement, any portion of any
Incentive Stock Option that cannot be exercised as such because of this
limitation may be converted into and exercised as a Non-Qualified Stock Option.
In no event shall any Stock Option or Stock Appreciation Right be granted to a
Participant in exchange for the Participant's agreement to the cancellation of
one or more Stock Options or Stock Appreciation Rights then held by such
Participant if the exercise price of the new grant is lower than the exercise
price of the grant to be cancelled and in no event shall any Stock Option or
Stock Appreciation Right be amended to reduce the option price, except as
contemplated by Section 4(b) of the Plan.
(c) OPTION EXERCISE PRICE. The per share exercise price of each Stock
Option granted under the Plan shall be determined by the Committee prior to or
at the time of grant, but in no event shall the per share exercise price of any
Stock Option be less than 100% of the Fair Market Value of the Common Stock on
the date of the grant of such Stock Option.
(d) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee; except that in no event shall the term of any Incentive Stock Option
exceed ten years after the date such Incentive Stock Option is granted.
(e) EXERCISABILITY. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the date of grant; provided, however,
--5--
<PAGE> 6
that no Stock Option shall be exercisable during the first six months after the
date such Stock Option is granted. No Stock Option may be exercised unless the
holder thereof is at the time of such exercise an Employee and has been
continuously an Employee since the date such Stock Option was granted, except
that the Committee may permit the exercise of any Stock Option for any period
following the Participant's termination of employment not in excess of the
original term of the Stock Option on such terms and conditions as it shall deem
appropriate and specify in the related grant agreement.
(f) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the number
of shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, plus any required withholding taxes, in
cash or, if permitted by the terms of the related grant agreement or otherwise
approved in advance by the Committee, in shares of Common Stock already owned by
the Participant valued at the Fair Market Value of the Common Stock on the date
of exercise. The Committee may also permit Participants, either on a selective
or aggregate basis, to simultaneously exercise Stock Options and sell the shares
of Common Stock thereby acquired pursuant to a brokerage or similar arrangement
approved in advance by the Committee and to use the proceeds from such sale to
pay the exercise price and withholding taxes.
7. STOCK APPRECIATION RIGHTS.
(a) IN GENERAL. Stock Appreciation Rights in respect of shares of Common
Stock may be granted under the Plan alone, in tandem with, in addition to or
independent of a Stock Option or other grant or Award under the Plan. A Stock
Appreciation Right entitles a Participant to receive an amount equal to the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise over the Fair Market Value of a share of Common Stock on the date of
grant of the Stock Appreciation Right, or such other higher price as may be set
by the Committee, multiplied by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised.
(b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
Employee of the Company or a Subsidiary selected by the Committee may be granted
Stock Appreciation Rights. The Committee shall determine, in its discretion, the
Employees to whom Stock Appreciation Rights will be granted, the timing of such
grants and the number of shares of Common Stock in respect of which each Stock
Appreciation Right is granted; provided that (i) the maximum aggregate number of
shares of Common Stock in respect of which Stock Appreciation Rights may be
granted shall be six million, (ii) the maximum aggregate number of shares of
Common Stock which may be issued and delivered in payment or settlement of Stock
Appreciation Rights shall be three million, and (iii) the maximum number of
shares of Common Stock in respect of which Stock Appreciation Rights may be
granted to any Employee during any calendar year shall be 250,000.
(c) EXERCISABILITY; EXERCISE; FORM OF PAYMENT. A Stock Appreciation Right
may be exercised by a Participant at such time or times and in such manner as
shall be authorized by the Committee and set forth in the related grant
agreement, except that in no event shall a Stock Appreciation Right be
exercisable within the first six months after the date of grant. The Committee
may provide that a Stock Appreciation Right shall be automatically exercised on
one or more specified dates. No Stock Appreciation Right may be exercised unless
the holder thereof is at the time of exercise an Employee and has been
continuously an Employee since the date the Stock Appreciation Right was
granted, except that the Committee may permit the exercise of any Stock
Appreciation Right for any period following the Participant's termination of
employment not in excess of the original term of the Stock Appreciation Right on
such terms and conditions as it shall deem appropriate and specify in the
related grant agreement. A Stock Appreciation Right may be exercised, in whole
or in part, by giving the Company a written notice specifying the number of
shares of Common Stock in respect of which the Stock Appreciation Right is to be
exercised. Stock Appreciation Rights may be paid upon exercise in cash, in
shares of Common Stock, or in any combination of cash and shares of Common Stock
as determined by the Committee.
--6--
<PAGE> 7
8. RESTRICTED STOCK GRANTS AND AWARDS.
(a) IN GENERAL. A Restricted Stock Grant is the issue of shares of Common
Stock in the name of an Employee, which issuance is subject to such terms and
conditions as the Committee shall deem appropriate, including, without
limitation, restrictions on the sale, assignment, transfer or other disposition
of such shares and the requirement that the Employee forfeit such shares back to
the Company (i) upon termination of employment for specified reasons within a
specified period of time, or (ii) if any specified Performance Goals are not
achieved during a specified Performance Period, or (iii) if such other
conditions as the Committee may specify are not satisfied.
(b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
key Employee of the Company or a Subsidiary selected by the Committee may
receive a Restricted Stock Grant. The Committee, in its sole discretion, shall
determine whether a Restricted Stock Grant shall be made, the Employee to
receive the Restricted Stock Grant, and the conditions and restrictions imposed
on the Restricted Stock Grant. The maximum number of shares of Common Stock
which may be issued as Restricted Stock under the Plan shall be two million. The
maximum number of shares of Common Stock which may be issued to any Employee as
Restricted Stock during any calendar year shall not exceed 200,000. The maximum
amount any Employee may receive as a Restricted Stock Grant in any calendar year
shall not exceed $10 million, determined using the Fair Market Value of such
Restricted Stock Grant as at the date of the grant thereof.
(c) RESTRICTION PERIOD. Restricted Stock Grants shall provide that in order
for a Participant to receive shares of Common Stock free of restrictions, the
Participant must remain in the employment of the Company or its Subsidiaries,
subject to such exceptions as the Committee shall deem appropriate and specify
in the related grant agreement, for a period of not less than three years
commencing on the date of the grant and ending on such later date or dates as
the Committee may designate at the time of the grant (the "Restriction Period").
The Committee, in its sole discretion, may provide for the lapse of restrictions
in installments during the Restriction Period. The Committee may also establish
one or more Performance Goals that are required to be achieved during one or
more Performance Periods within the Restriction Period as a condition to the
lapse of the restrictions.
(d) RESTRICTIONS. The following restrictions and conditions shall apply to
each Restricted Stock Grant during the Restriction Period: (i) the Participant
shall not be entitled to delivery of the shares of the Common Stock; (ii) the
Participant may not sell, assign, transfer, pledge, hypothecate, encumber or
otherwise dispose of or realize on the shares of Common Stock subject to the
Restricted Stock Grant; and (iii) the shares of the Common Stock issued as
Restricted Stock shall be forfeited to the Company if the Participant for any
reason ceases to be an Employee prior to the end of the Restriction Period,
except due to circumstances specified in the related grant agreement or
otherwise approved by the Committee. The Committee may in, its sole discretion,
include such other restrictions and conditions as it may deem appropriate.
(e) PAYMENT. Upon expiration of the Restriction Period and if all
conditions have been satisfied and any applicable Performance Goals attained,
the shares of the Restricted Stock will be made available to the Participant,
subject to satisfaction of applicable withholding tax requirements, free of all
restrictions; provided, that the Committee may, in its discretion, require (i)
the further deferral of any Restricted Stock Grant beyond the initially
specified Restriction Period, (ii) that the Restricted Stock be retained by the
Company, and (iii) that the Participant receive a cash payment in lieu of
unrestricted shares of Common Stock.
(f) RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect to
shares of Restricted Stock, all of the rights of a shareholder of the Company,
including the right to vote the shares and receive any cash dividends paid
thereon. Stock dividends distributed with respect to shares of Restricted Stock
shall be treated as additional shares under the Restricted Stock Grant and shall
be subject to the restrictions and other terms and conditions set forth therein.
--7--
<PAGE> 8
9. PERFORMANCE GRANTS AND AWARDS.
(a) ELIGIBILITY AND TERMS. The Committee may grant to officers of the
Company and other key Employees of the Company and its Subsidiaries the
prospective contingent right, expressed in Units, to receive payments of shares
of Common Stock, cash or any combination thereof, with each Unit equivalent in
value to one share of Common Stock, or equivalent to such other value or
monetary amount as may be designated or established by the Committee
("Performance Grants"), based upon Company performance over a specified
Performance Period. The Committee shall, in its sole discretion, determine the
officers of the Company and other key Employees eligible to receive Performance
Grants. At the time each Performance Grant is made, the Committee shall
establish the Performance Period, the Performance Measure and the targets to be
attained relative to such Performance Measure (the "Performance Goals") in
respect of such Performance Grant. The number of shares of Common Stock and/or
the amount of cash earned and payable in settlement of a Performance Grant shall
be determined at the end of the Performance Period (a "Performance Award").
(b) LIMITATIONS ON GRANTS AND AWARDS. The maximum number of shares of
Common Stock which may be issued pursuant to Performance Grants shall be three
million. The maximum number of shares which may be the subject of Performance
Grants made to any Participant in respect of any Performance Period or during
any calendar year shall be 100,000. The maximum amount any Participant may
receive during any calendar year as Performance Awards pursuant to Performance
Grants shall not exceed $15 million, determined using the Fair Market Value of
such Performance Awards as at the last day of the applicable Performance Period
or Periods or as at date or dates of the payment thereof, whichever is higher.
(c) PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS. Each
Performance Grant shall provide that, in order for a Participant to receive an
Award of all or a portion of the Units subject to such Performance Grant, the
Company must achieve certain Performance Goals over a designated Performance
Period having a minimum duration of one year, with attainment of the Performance
Goals determined using a specific Performance Measure. The Performance Goals and
Performance Period shall be established by the Committee in its sole discretion.
The Committee shall establish a Performance Measure for each Performance Period
for determining the portion of the Performance Grant which will be earned or
forfeited based on the extent to which the Performance Goals are achieved or
exceeded. In setting Performance Goals, the Committee may use a Performance
Measure based on any one, or on any combination, of the following Company
performance factors as the Committee deems appropriate: (i) Cumulative Net
Income Per Share; (ii) Cumulative Net Income; (iii) return on sales; (iv) total
shareholder return; (v) return on assets; (vi) economic value added; (vii) cash
flow; (viii) return on equity; and (ix) cumulative operating income (which shall
equal consolidated sales minus cost of goods sold and selling, administrative
and general expense). Performance Goals may include minimum, maximum and target
levels of performance, with the size of Performance Award based on the level
attained. Once established by the Committee and specified in the grant
agreement, and if and to the extent provided in or required by the grant
agreement, the Performance Goals and the Performance Measure in respect of any
Performance Grant (or any Restricted Stock Grant or Stock-Based Grant that
requires the attainment of Performance Goals as a condition to the Award) shall
not be changed. The Committee may, in its discretion, eliminate or reduce (but
not increase) the amount of any Performance Award (or Restricted Stock or
Stock-Based Award) that otherwise would be payable to a Participant upon
attainment of the Performance Goal(s).
(d) FORM OF GRANTS. Performance Grants may be made on such terms and
conditions not inconsistent with the Plan, and in such form or forms, as the
Committee may from time to time approve. Performance Grants may be made alone,
in addition to in tandem with, or independent of other grants and Awards under
the Plan. Subject to the terms of the Plan, the Committee shall, in its
discretion, determine the number of Units subject to each Performance Grant made
to a Participant and the Committee may impose different terms and conditions on
any particular Performance Grant made to any Participant. The Performance Goals,
the Performance Period or Periods, and the Performance Measure applicable to a
Performance Grant shall be set forth in the relevant grant agreement.
--8--
<PAGE> 9
(e) PAYMENT OF AWARDS. Each Participant shall be entitled to receive
payment in an amount equal to the aggregate Fair Market Value (if the Unit is
equivalent to a share of Common Stock), or such other value as the Committee
shall specify, of the Units earned in respect of such Performance Award. Payment
in settlement of a Performance Award may be made in shares of Common Stock, in
cash, or in any combination of Common Stock and cash, and at such time or times,
as the Committee, in its discretion, shall determine.
10. OTHER STOCK-BASED GRANTS AND AWARDS.
(a) IN GENERAL. The Committee may make other grants and Awards pursuant to
which Common Stock is, or in the future may be, acquired by Participants, and
other grants and Awards to Participants denominated in Common Stock Equivalents
or other Units ("Stock-Based Grants"). Such Stock-Based Grants may be granted
alone or in addition to, in tandem with, or independent of any other grant made
or Award effected under the Plan.
(b) ELIGIBILITY AND TERMS. The Committee may make Stock-Based Grants to
officers of the Company and other key Employees of the Company and its
Subsidiaries. Subject to the provisions of the Plan, the Committee shall have
authority to determine the Employees to whom, and the time or times at which,
Stock-Based Grants will be made, the number of shares of Common Stock, if any,
to be subject to or covered by each Stock-Based Grant, and any and all other
terms and conditions of each Stock-Based Grant.
(c) LIMITATIONS. The aggregate number of shares of Common Stock issued to
Participants pursuant to Stock-Based Grants made and Awards effected pursuant to
this Section 10 shall not exceed three million. No Participant shall receive
more than 100,000 shares of Common Stock in settlement of Stock-Based Awards
during any calendar year. The maximum amount any Participant may receive in
Stock-Based Awards during any calendar year shall not exceed $5 million,
determined using the Fair Market Value of any shares of Common Stock delivered
in payment of the Stock-Based Awards on the date or dates of the payment
thereof.
(d) FORM OF GRANTS; PAYMENT OF AWARDS. Stock-Based Grants may be made in
such form or forms and on such terms and conditions, including the attainment of
specific Performance Goals, as the Committee, in its discretion, shall approve.
Payment of Stock-Based Awards may be made in cash, in shares of Common Stock, or
in any combination of cash and shares of Common Stock, and at such time or
times, as the Committee shall determine.
11. DEFERRALS.
The Committee may, whether at the time of grant or at anytime thereafter
prior to payment or settlement, require a Participant to defer, or permit
(subject to such conditions as the Committee may from time to time establish) a
Participant to elect to defer, receipt of all or any portion of any payment of
cash or shares of Common Stock that would otherwise be due to such Participant
in payment or settlement of any Award under the Plan. If any such deferral is
required by the Committee (or is elected by the Participant with the permission
of the Committee), the Committee shall establish rules and procedures for such
payment deferrals. The Committee may provide for the payment or crediting of
interest, at such rate or rates as it shall in its discretion deem appropriate,
on such deferred amounts credited in cash and the payment or crediting of
dividend equivalents in respect of deferred amounts credited in Common Stock
Equivalents. Deferred amounts may be paid in a lump sum or in installments in
the manner and to the extent permitted, and in accordance with rules and
procedures established, by the Committee.
12. NON-TRANSFERABILITY OF GRANTS AND AWARDS.
No grant or Award under the Plan, and no right or interest therein, shall be
(i) assignable, alienable or transferable by a Participant, except by will or
the laws of descent and distribution, or (ii) subject to any obligation, or the
lien or claims of any creditor, of any Participant, or (iii) subject to any
lien, encum-
--9--
<PAGE> 10
brance or claim of any party made in respect of or through any Participant,
however arising. During the lifetime of a Participant, Stock Options and Stock
Appreciation Rights are exercisable only by, and shares of Common Stock issued
upon the exercise of Stock Options and Stock Appreciation Rights or in
settlement of other Awards will be issued only to, and other payments in
settlement of any Award will be payable only to, the Participant or his or her
legal representative. The Committee may, in its sole discretion, authorize
written designations of beneficiaries and authorize Participants to designate
beneficiaries with the authority to exercise Stock Options and Stock
Appreciation Rights granted to a Participant in the event of his or her death.
Notwithstanding the foregoing, the Committee may, in its sole discretion and on
and subject to such terms and conditions as it shall deem appropriate, which
terms and conditions shall be set forth in the related grant agreement: (i)
authorize a Participant to transfer all or a portion of any Non-Qualified Stock
Option or Stock Appreciation Right, as the case may be, granted to such
Participant; provided, that in no event shall any transfer be made to any person
or persons other than such Participant's spouse, children or grandchildren, or a
trust for the exclusive benefit of one or more such persons, which transfer must
be made as a gift and without any consideration; and (ii) provide for the
transferability of a particular grant or Award pursuant to a qualified domestic
relations order. All other transfers and any retransfer by any permitted
transferee are prohibited and any such purported transfer shall be null and
void. Each Stock Option or Stock Appreciation Right which becomes the subject of
permitted transfer (and the Participant to whom it was granted by the Company)
shall continue to be subject to the same terms and conditions as were in effect
immediately prior to such permitted transfer. The Participant shall remain
responsible to the Company for the payment of all withholding taxes incurred as
a result of any exercise of such Stock Option or Stock Appreciation Right. In no
event shall any permitted transfer of a Stock Option or Stock Appreciation Right
create any right in any party in respect of any Stock Option, Stock Appreciation
Right or other grant or Award, other than the rights of the qualified transferee
in respect of such Stock Option or Stock Appreciation Right specified in the
related grant agreement.
13. CHANGE IN CONTROL.
(a) EFFECT ON GRANTS. In the event of a Change in Control (as defined
below) of the Company, except as the Board of Directors comprised of a majority
of Continuing Directors may expressly provide otherwise, and notwithstanding any
other provision of the Plan to the contrary: (i) all Stock Options and Stock
Appreciation Rights then outstanding shall become fully exercisable as of the
date of the Change in Control, whether or not then exercisable; (ii) all
restrictions and conditions in respect of all Restricted Stock Grants then
outstanding shall be deemed satisfied as of the date of the Change in Control;
and (iii) all Performance Grants and other Stock-Based Grants shall be deemed to
have been fully earned, at the maximum amount of the award opportunity specified
in the grant agreement, as of the date of the Change in Control.
(b) CHANGE IN CONTROL DEFINED. A "Change in Control" of the Company shall
occur when: (i) any Acquiring Person (other than the Company, any Subsidiary,
any employee benefit plan of the Company or of any Subsidiary, or any person or
entity organized, appointed or established by the Company or a Subsidiary for or
pursuant to the terms of any such plans), alone, or together with its Affiliates
and Associates, shall become the beneficial owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding (except pursuant to an offer
for all outstanding shares of Common Stock at a price and upon such terms and
conditions as a majority of the Continuing Directors determines to be in the
best interest of the Company and its shareholders); or (ii) the shareholders of
the Company approve a definitive agreement for a merger or consolidation
involving the Company which would result in the Common Stock outstanding
immediately prior to such merger or consolidation continuing to represent
(whether by remaining outstanding or by being converted into voting securities
of the surviving entity) less than fifty percent of the combined voting power of
the Company and such other entity outstanding immediately after such merger or
consolidation; or (iii) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or other
disposition of all or substantially all of the assets of the Company; or (iv)
the Continuing Directors no longer constitute a majority of the Board of
Directors. "Acquiring Person" means any person (any indi-
--10--
<PAGE> 11
vidual, firm, corporation or other entity) who or which, together with all its
Affiliates and Associates, shall be the beneficial owner of a substantial block
of Common Stock. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act. "Continuing
Director" means any individual who is a member of the Board of Directors, while
such individual is a member of the Board of Directors, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
or nominee of an Acquiring Person or of any such Affiliate or Associate, and was
a member of the Board of Directors prior to the occurrence of a Change in
Control, and any successor of a Continuing Director, while such successor is a
member of the Board of Directors, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or representative or nominee of
an Acquiring Person or of any such Affiliate or Associate, and is recommended or
elected to succeed the Continuing Director by a majority of the Continuing
Directors.
14. AMENDMENT AND TERMINATION.
The Board of Directors may at any time terminate the Plan, except with
respect to grants then outstanding. The Board of Directors may amend the Plan at
any time and from time to time in such respects as the Board of Directors may
deem necessary or appropriate without approval of the shareholders, unless such
approval is necessary in order to comply with applicable laws, including the
Exchange Act and the Code. In no event may the Board of Directors amend the Plan
without the approval of the shareholders to (i) increase the maximum number of
shares of Common Stock which may be issued pursuant to the Plan, (ii) increase
any limitation set forth in the Plan on the number of shares of Common Stock
which may be issued, or the aggregate value of Awards which may be made, in
respect of any type of grant to all Participants during the term of the Plan or
to any Participant during any specified period, (iii) reduce the minimum
exercise price for Stock Options and Stock Appreciation Rights, or (iv) change
the Performance Measure criteria identified at Section 9(c) of the Plan.
15. MISCELLANEOUS.
(a) WITHHOLDING TAXES. All Awards under the Plan will be made subject to
any applicable withholding for taxes of any kind. The Company shall have the
right to deduct from any amount payable under the Plan, including delivery of
shares of Common Stock to be made under the Plan, all federal, state, city,
local or foreign taxes of any kind required by law to be withheld with respect
to such payment and to take such other actions as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
If shares of Common Stock are used to satisfy withholding taxes, such shares
shall be valued based on the Fair Market Value thereof on the date when the
withholding for taxes is required to be made. The Company shall have the right
to require a Participant to pay cash to satisfy withholding taxes as a condition
to the payment of any amount (whether in cash or shares of Common Stock) under
the Plan.
(b) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the making
of any grant or Award shall confer upon any Employee any right to continued
employment with the Company or any Subsidiary, nor shall it interfere in any way
with the right of the Company or any Subsidiary to terminate the employment of
any Employee at any time, with or without cause.
(c) UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under the Plan. Any liability of the Company to any person with respect to any
Award under the Plan shall be based solely upon any contractual obligations that
may be effected pursuant to the Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.
(d) PAYMENTS TO TRUST. The Committee is authorized to cause to be
established a trust agreement or several trust agreements whereunder the
Committee may make payments of amounts due or to become due to Participants in
the Plan.
(e) ENGAGING IN COMPETITION WITH COMPANY. In the event a Participant
terminates his or her employment with the Company or a Subsidiary for any reason
whatsoever, and within eighteen (18) months after the date thereof accepts
employment with any competitor of, or otherwise engages in com-
--11--
<PAGE> 12
petition with, the Company, the Committee, in its sole discretion, may require
such Participant to return, or (if not received) to forfeit, to the Company the
economic value of any Award which is realized or obtained (measured at the date
of exercise, vesting or payment) by such Participant (i) at any time after the
date which is six months prior to the date of such Participant's termination of
employment with the Company or (ii) during such other period as the Committee
may determine.
(f) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of any termination indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any pension or other employee benefit plan or similar arrangement
provided by the Company or any Subsidiary, unless (i) expressly so provided by
such other plan or arrangement or (ii) the Committee expressly determines that
an Award or a portion thereof should be included as recurring compensation.
Nothing contained in the Plan shall prohibit the Company or any Subsidiary from
establishing other special awards, incentive compensation plans, compensation
programs and other similar arrangements providing for the payment of
performance, incentive or other compensation to Employees. Payments and benefits
provided to any Employee under any other plan, including, without limitation,
any stock option, stock award, restricted stock, deferred compensation, savings,
retirement or other benefit plan or arrangement, shall be governed solely by the
terms of such other plan.
(g) SECURITIES LAW RESTRICTIONS. In no event shall the Company be obligated
to issue or deliver any shares of Common Stock if such issuance or delivery
shall constitute a violation of any provisions of any law or regulation of any
governmental authority or securities exchange. No shares of Common Stock shall
be issued under the Plan unless counsel for the Company shall be satisfied that
such issuance will be in compliance with all applicable Federal and state
securities laws and regulations and all requirements of any securities exchange
on which the Common Stock is listed.
(h) GRANT AGREEMENTS. Each Participant receiving a grant under the Plan
shall enter into a grant agreement with the Company in a form specified by the
Committee agreeing to the terms and conditions of the grant and such related
matters as the Committee shall, in its sole discretion, determine.
(1) SEVERABILITY. In the event any provision of the Plan shall be held to
be invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the remaining provisions of the Plan.
(j) TRANSITION - 1989 PLAN. The Plan replaces and supersedes the 1989
Goodyear Performance and Equity Incentive Plan (the "1989 Plan") and the 1989
Plan shall automatically terminate when the Plan becomes effective, except that
such termination shall not affect any grants or awards then outstanding under
the 1989 Plan.
(k) GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.
--12--
<PAGE> 1
Exhibit 5.1
THE GOODYEAR TIRE & RUBBER COMPANY
AKRON, OHIO 44316-0001
GENERAL COUNSEL
June 25, 1997
The Goodyear Tire & Rubber Company
1144 East Market Street
Akron, Ohio 44316-0001
Gentlemen:
Reference is made to the Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), to be filed with the Securities and Exchange Commission by The Goodyear
Tire & Rubber Company, an Ohio corporation (the "Company"), relating to
15,000,000 shares of the Common Stock, without par value, of the Company (the
"Common Stock") which may be issued and sold from time to time upon the exercise
of options or stock appreciation rights granted, or issued and delivered as
restricted stock grants and awards, performance awards or in connection with
other stock based grants and awards made, to employees of the Company and its
subsidiaries from time to time pursuant to and in accordance with the 1997
Performance Incentive Plan of The Goodyear Tire & Rubber Company (the "Plan").
Each of the said 15,000,000 shares of the Common Stock will include (subject to
the terms and conditions of the Rights Agreement, dated as of June 4, 1996 (the
"Rights Agreement"), between the Company and First Chicago Trust Company of New
York, as Rights Agent) one right to purchase one one-hundredth of a share of
Series B Preferred Stock ("Series B Preferred") without par value, of the
Company or, in certain circumstances, Common Stock, other securities, cash or
assets (the "Rights").
I am an attorney-at-law regularly employed as the General Counsel for
the Company and I am also a Vice President of the Company. As the General
Counsel of the Company, I am familiar with the Amended Articles of Incorporation
and Code of Regulations of the Company, as each is amended to date, and the
proceedings of the Board of Directors of the Company and of the shareholders of
the Company relating to the adoption and approval of the Plan and to the
issuance of up to 15,000,000 shares of Common Stock pursuant thereto. I have
also examined, or caused to be examined, the Plan, the Rights Agreement, and
such other corporate records, agreements, documents and other instruments, and I
have made, or caused to be made, such investigations of law, as in my judgment
are necessary or appropriate as a basis for the opinion expressed below.
<PAGE> 2
Based upon the foregoing, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of
Ohio.
2. The Plan has been duly adopted by the Board of Directors of the
Company and ` approved by the shareholders of the Company.
3. The 15,000,000 shares of the Common Stock to which the Registration
Statement relates are duly authorized and have been reserved for
issuance upon the exercise of options or stock appreciation rights
granted, or as payment of or in connection with other grants and
awards made, pursuant to the Plan.
4. In the case of each of the 15,000,000 shares of the Common Stock
which may from time to time be issued and delivered pursuant to and
in accordance with the Plan, when said shares of the Common Stock
shall have been duly issued and sold upon the exercise of stock
options or stock appreciation rights duly granted pursuant to, and
exercised in accordance with, the Plan, or issued and delivered as
payment of, or otherwise in connection with, other grants and awards
duly made pursuant to and in accordance with the Plan, each of the
15,000,000 shares of the Common Stock, when duly executed and
delivered by the Company, will be legally and validly issued, fully
paid and nonassessable.
5. The issuance of one Right with each of the 15,000,000 shares of the
Common Stock which may from time to time be issued pursuant to the
Plan has been duly authorized by the Company and the Rights, when
duly issued by the Company in accordance with the Rights Agreement
with such shares of the Common Stock, will be legally and validly
issued, and the issuance of the Series B Preferred upon the proper
exercise of the Rights has been duly authorized by the Company and
the Series B Preferred, when issued by the Company upon the proper
exercise of the Rights, will be legally and validly issued, fully
paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to its use in connection therewith. This does not
constitute a consent under Section 7 of the Act.
Very truly yours,
/s/ C T Harvie
General Counsel
C T Harvie
mff
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 3, 1997
appearing on page 30 of The Goodyear Tire & Rubber Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
PRICE WATERHOUSE LLP
Cleveland, Ohio
June 25, 1997
<PAGE> 1
EXHIBIT 24.1
------------
THE GOODYEAR TIRE & RUBBER COMPANY
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, THE GOODYEAR TIRE
& RUBBER COMPANY, a corporation organized and existing under the laws of the
State of Ohio, and the undersigned directors and officers of THE GOODYEAR TIRE &
RUBBER COMPANY and the undersigned members of the COMPENSATION COMMITTEE of THE
GOODYEAR TIRE & RUBBER COMPANY (the Committee which administers the 1997
PERFORMANCE INCENTIVE PLAN OF THE GOODYEAR TIRE & RUBBER COMPANY), hereby
constitute and appoint Robert W Tieken, C Thomas Harvie, James Boyazis, Richard
W Hauman and John W Richardson, and any one or more of them, their true and
lawful attorneys-in-fact and agents, to do any and all of the acts and things,
and to execute any and all instruments, which said attorneys and agents or any
one of them may deem necessary and advisable to enable said THE GOODYEAR TIRE &
RUBBER COMPANY to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the registration, under the Securities Act
of 1933, as amended, of up to a maximum of fifteen million (15,000,000) shares
of its Common Stock, without par value, which may be offered for sale in
connection with the exercise of stock options and stock appreciation rights
granted under, or issued pursuant to restricted stock grants and awards,
performance grants and awards or other stock-based grants and awards made under,
the 1997 PERFORMANCE INCENTIVE PLAN OF THE GOODYEAR TIRE & RUBBER COMPANY and
the resale of such shares by certain persons acquiring such shares; including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of THE GOODYEAR TIRE & RUBBER COMPANY, the names
of the undersigned directors and officers in the capacities indicated below and
the names of the members of the COMPENSATION COMMITTEE as indicated below to a
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission in respect of said shares of Common Stock, to any and all amendments
to said Registration Statement and to any and all instruments or documents filed
as a part of or in connection with said Registration Statement or amendments
thereto; and each of the undersigned hereby ratifies and confirms all that the
said attorneys-in-fact and agents, and any one of them, shall do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed or caused to be
subscribed these presents this 3rd day of June, 1997.
Attest: THE GOODYEAR TIRE & RUBBER COMPANY
/s/James Boyazis By /s/Samir G Gibara
- ---------------- -------------------
James Boyazis, Secretary Samir G Gibara,
Chairman of the Board,
Chief Executive Officer
and President
Page 1 of 3
<PAGE> 2
Director and Chairman of
the Board, Chief Executive
Officer and President
(principal executive officer) /s/Samir G Gibara
------------------------------------
Samir G Gibara
Executive Vice President
(principal financial officer) /s/Robert W Tieken
------------------------------------
Robert W Tieken
Vice President
(principal accounting officer) /s/John W Richardson
------------------------------------
John W Richardson
Director and Chairman of the
Compensation Committee /s/John G Breen
------------------------------------
John G Breen
Director and Member of the
Compensation Committee /s/William E Butler
------------------------------------
William E Butler
Director and Member of the
Compensation Committee /s/Thomas H Cruikshank
------------------------------------
Thomas H Cruikshank
Director and Member of the
Compensation Committee ` /s/William J Hudson, Jr
------------------------------------
William J Hudson, Jr
Director and Member of the
Compensation Committee /s/Gertrude G Michelson
------------------------------------
Gertrude G Michelson
Page 2 of 3
<PAGE> 3
Director and Member of the
Compensation Committee /s/Steven A Minter
------------------------------------
Steven A Minter
Director and Member of the
Compensation Committee /s/Agnar Pytte
------------------------------------
Agnar Pytte
Director and Member of the
Compensation Committee /s/George H Schofield
------------------------------------
George H Schofield
Director and Member of the
Compensation Committee /s/William C Turner
------------------------------------
William C Turner
Director and Member of the
Compensation Committee /s/Martin D Walker
------------------------------------
Martin D Walker
Page 3 of 3
