<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
COMMISSION FILE NUMBER: 1-1927
--------------------------
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
(FULL TITLE OF THE PLAN)
--------------------------
THE GOODYEAR TIRE & RUBBER COMPANY
(NAME OF ISSUER OF THE SECURITIES)
1144 EAST MARKET STREET
AKRON, OHIO 44316-0001
(ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICE)
<PAGE> 2
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
ITEM 1. Not applicable.
ITEM 2. Not applicable.
ITEM 3. Not applicable.
ITEM 4. FINANCIAL STATEMENTS OF THE PLAN
The Financial Statements of The Goodyear Tire & Rubber Company Employee
Savings Plan for Salaried Employees for the fiscal year ended December 31, 1997,
together with the report of Price Waterhouse LLP, independent accountants, are
attached to this Annual Report on Form 11-K as Annex A, and are by specific
reference incorporated herein and filed as a part of hereof. The Financial
Statements and the Notes thereto are presented in lieu of the financial
statements required by Items 1, 2 and 3 of Form 11-K and were prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974.
EXHIBITS.
EXHIBIT 4. THE PLAN, AS AMENDED. The Goodyear Tire & Rubber Company Savings
Plan for Salaried Employees (January 1, 1997 Restatement), as amended and in
effect.
EXHIBIT 23. CONSENT OF INDEPENDENT ACCOUNTANTS. Consent of Price Waterhouse
LLP, independent accountants, to incorporation by reference of their report set
forth at page 2 of Annex A to this Form 11-K in Registration Statement No.
33-65187 on Form S-8.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
PLAN ADMINISTRATOR HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
THE GOODYEAR TIRE & RUBBER COMPANY,
PLAN ADMINISTRATOR OF THE GOODYEAR TIRE
& RUBBER COMPANY EMPLOYEE SAVINGS PLAN
FOR SALARIED EMPLOYEES
Dated: June 25, 1998 By: /S/ RICHARD W HAUMAN
-------------------------
Richard W Hauman,
Vice President and Treasurer
1
<PAGE> 3
ANNEX A
TO
FORM 11-K
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
* * * * *
FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE> 4
ANNEX A
THE GOODYEAR TIRE & [LOGO]
RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR SALARIED EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits, with
Fund Information at December 31, 1997 and 1996 3-4
Statement of Changes in Net Assets Available for Plan
Benefits, with Fund Information for the Years Ended
December 31, 1997 and 1996 3-4
Notes to Financial Statements 5-15
</TABLE>
Note: Certain schedules required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because of
the absence of the conditions under which they are required.
<PAGE> 6
[PRICE WATERHOUSE LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
June 15, 1998
To the Plan Administrator and Participants
of the Employee Savings Plan for Salaried
Employees (sponsored by The Goodyear Tire
& Rubber Company)
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of the Employee Savings Plan for Salaried Employees (sponsored by The
Goodyear Tire & Rubber Company) at December 31, 1997 and 1996, and the changes
in net assets available for plan benefits for the years then ended, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The Fund
Information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Price Waterhouse LLP
<PAGE> 7
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 31, 1997
------------------------------------------------------------------------------------------
Fund Information
----------------------------------------------------------------------------
Conservative Moderate Aggressive S&P 500 Large
Stable Asset Asset Asset Equity Capitalization
Value Allocation Allocation Allocation Index Equity
Total Fund Fund Fund Fund Fund Fund
---------- -------- ----------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Plan's Interest in Master Trust
Representing Total Assets
Available for Plan Benefits $1,297,477 $444,804 $12,845 $37,900 $13,977 $285,410 $29,941
========== ======== ======= ======= ======= ======== =======
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- ---------------------------------------------------------------------------------------
(Dollars in Thousands)
----------------------------------------------------
----------------------------------------------------
Small International
Capitalization Stock Company
Equity Equity Stock Loan
Fund Fund Fund Fund
---------- --------- -------- -------
<S> <C> <C> <C> <C>
Plan's Interest in Master Trust
Representing Total Assets
Available for Plan Benefits $43,513 $18,739 $365,179 $45,169
======= ======= ======== =======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
=================================================================================================================================
(Dollars in Thousands) For the Year Ended December 31, 1997
--------------------------------------------------------------------------------------------
Fund Information
------------------------------------------------------------------------------
Conservative Moderate Aggressive
Stable Asset Asset Asset
Value Allocation Allocation Allocation
Total Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ 20,205 $ - $ - $ - $ -
Employee 60,995 31,269 587 2,672 1,311
----------- ----------- ----------- ----------- -----------
81,200 31,269 587 2,672 1,311
Investment Income from Plan's
Interest in Master Trust 194,292 28,756 1,402 6,058 1,954
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 74,292 38,446 472 1,589 534
Administrative Expenses 302 215 - - -
----------- ----------- ----------- ----------- -----------
74,594 38,661 472 1,589 534
Transfers:
Transfers Between Plans 2,389 962 7 84 38
Transfers Between Funds - (31,454) 5,356 5,021 1,568
Loan Transfers To or From Plan - (173) - (3) -
Loans to Participants - (13,023) (124) (618) (301)
Loan Repayments:
Principal - 14,184 156 652 365
Interest - 2,440 29 110 57
----------- ----------- ----------- ----------- -----------
2,389 (27,064) 5,424 5,246 1,727
----------- ----------- ----------- ----------- -----------
Increase in Assets During the Year 203,287 (5,700) 6,941 12,387 4,458
Net Assets at Beginning of Year 1,094,190 450,504 5,904 25,513 9,519
----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 1,297,477 $ 444,804 $ 12,845 $ 37,900 $ 13,977
=========== =========== =========== =========== ===========
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
=================================================================================================================================
(Dollars in Thousands) For the Year Ended December 31, 1997
----------------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------------------------
S&P 500 Large Small International
Equity Capitalization Capitalization Stock Company
Index Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ - $ - $ - $ - $ 20,205 $ -
Employee 17,629 2,419 3,402 1,706 - -
----------- ----------- ----------- ----------- ----------- -----------
17,629 2,419 3,402 1,706 20,205 -
Investment Income from Plan's
Interest in Master Trust 65,432 4,222 4,568 949 76,993 3,958
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 11,811 649 1,305 427 19,059 -
Administrative Expenses 79 - - - 8 -
----------- ----------- ----------- ----------- ----------- -----------
11,890 649 1,305 427 19,067 -
Transfers:
Transfers Between Plans 477 21 53 19 728 -
Transfers Between Funds 25,889 5,864 4,896 3,711 (20,851) -
Loan Transfers To or From Plan (28) (1) - (4) - 209
Loans to Participants (6,950) (704) (955) (332) - 23,007
Loan Repayments:
Principal 6,010 555 767 315 - (23,004)
Interest 1,042 107 150 52 - (3,987)
----------- ----------- ----------- ----------- ----------- -----------
26,440 5,842 4,911 3,761 (20,123) (3,775)
----------- ----------- ----------- ----------- ----------- -----------
Increase in Assets During the Year 97,611 11,834 11,576 5,989 58,008 183
Net Assets at Beginning of Year 187,799 18,107 31,937 12,750 307,171 44,986
----------- ----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 285,410 $ 29,941 $ 43,513 $ 18,739 $ 365,179 $ 45,169
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements
-3-
<PAGE> 8
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 31, 1996
--------------------------------------------------------------------------------------------
Fund Information
--------------------------------------------------------------------------------
Conservative Moderate Aggressive S&P 500
Stable Asset Asset Asset Equity
Value Allocation Allocation Allocation Index
Total Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Plan's Interest in Master Trust
Representing Total Assets
Available for Plan Benefits $1,094,190 $ 450,504 $ 5,904 $ 25,513 $ 9,519 $ 187,799
========== ========== ========== ========== ========== ==========
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- ------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 31, 1996
-----------------------------------------------------------------------------
Fund Information
-----------------------------------------------------------------------------
Large Small International
Capitalization Capitalization Stock Company
Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Plan's Interest in Master Trust
Representing Total Assets
Available for Plan Benefits $ 18,107 $ 31,937 $ 12,750 $ 307,171 $ 44,986
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- ---------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) For the Year Ended December 31, 1996
----------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------
Conservative Moderate Aggressive
Stable Asset Asset Asset
Value Allocation Allocation Allocation
Total Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ 21,116 $ -- $ -- $ -- $ --
Employee 61,367 36,406 391 2,418 958
----------- ----------- ----------- ----------- -----------
82,483 36,406 391 2,418 958
Investment Income from Plan's
Interest in Master Trust 117,295 26,331 420 2,790 892
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 46,968 25,045 162 909 263
Administrative Expenses 1,131 710 -- -- --
----------- ----------- ----------- ----------- -----------
48,099 25,755 162 909 263
Transfers:
Transfers Between Plans 1,524 396 2 38 --
Transfers Between Funds -- (32,157) 5,260 8,162 7,927
Loan Transfers To or From Plan -- (113) 1 (2) --
Loans to Participants -- (24,718) (128) (666) (231)
Loan Repayments: -- -- -- -- --
Principal 1 9,591 102 464 197
Interest 2 2,170 18 91 39
----------- ----------- ----------- ----------- -----------
1,527 (44,831) 5,255 8,087 7,932
----------- ----------- ----------- ----------- -----------
Increase in Assets During the Year 153,206 (7,849) 5,904 12,386 9,519
Net Assets at Beginning of Year 940,984 458,353 -- 13,127 --
----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 1,094,190 $ 450,504 $ 5,904 $ 25,513 $ 9,519
=========== =========== =========== =========== ===========
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) For the Year Ended December 31, 1996
-----------------------------------------------------------------------------------------------
Fund Information
-----------------------------------------------------------------------------------------------
S&P 500 Large Small International
Equity Capitalization Capitalization Stock Company
Index Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ -- $ -- $ -- $ -- $ 21,116 $ --
Employee 16,659 1,628 1,946 961 -- --
----------- ----------- ----------- ----------- ----------- -----------
16,659 1,628 1,946 961 21,116 --
Investment Income from Plan's
Interest in Master Trust 32,570 1,238 3,738 1,336 44,728 3,252
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 5,211 227 437 192 14,522 --
Administrative Expenses 247 -- -- -- 174 --
----------- ----------- ----------- ----------- ----------- -----------
5,458 227 437 192 14,696 --
Transfers:
Transfers Between Plans 437 (1) 6 (1) 647 --
Transfers Between Funds 8,671 15,576 26,923 10,690 (51,052) --
Loan Transfers To or From Plan (83) -- -- -- -- 197
Loans to Participants (8,084) (492) (693) (209) -- 35,221
Loan Repayments: -- -- -- -- -- --
Principal 3,444 320 382 139 -- (14,638)
Interest 740 65 72 26 -- (3,219)
----------- ----------- ----------- ----------- ----------- -----------
5,125 15,468 26,690 10,645 (50,405) 17,561
----------- ----------- ----------- ----------- ----------- -----------
Increase in Assets During the Year 48,896 18,107 31,937 12,750 743 20,813
Net Assets at Beginning of Year 138,903 -- -- -- 306,428 24,173
----------- ----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 187,799 $ 18,107 $ 31,937 $ 12,750 $ 307,171 $ 44,986
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE> 9
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The accounts of The Goodyear Tire & Rubber Company Employee Savings Plan for
Salaried Employees (the "Plan") are maintained on the accrual basis of
accounting and in accordance with The Northern Trust Company (the "Trustee")
Trust Agreement, effective as of November 1, 1995.
TRUST ASSETS
Savings plans sponsored by The Goodyear Tire & Rubber Company and certain
subsidiaries (the "Company") maintain their assets in a master trust
administered by the Trustee. At December 31, 1997 and 1996, the Company
sponsored six savings plans. The Plan's undivided interest in the trust is
presented in the accompanying financial statements in accordance with the
allocation made by the Trustee. At December 31, 1997 and 1996, the Plan's
undivided interest in the master trust was 66.0% and 67.3%, respectively.
ASSET VALUATION
The majority of the assets of the Plan are valued at the current market
value. Investments in the Company Stock Fund are valued at the last reported
sales price on the last business day of the month. If no sales were reported
on that date, the shares are valued at the last bid price. Investments held
in the Stable Value Fund are invested in various instruments that have a
rate of return, and are reported at contract value. Investments in the
Conservative Asset Allocation Fund, Moderate Asset Allocation Fund,
Aggressive Asset Allocation Fund, S&P 500 Index Stock Equity Fund, Small
Capitalization Stock Equity Fund, Large Capitalization Stock Equity Fund,
and the International Stock Equity Fund are valued based on units of
participation in commingled funds and mutual funds as reported by the fund
manager, which approximates fair market value. The allocation of assets,
interest and dividend income, and realized and unrealized appreciation and
depreciation is made based upon contributions received and benefits paid by
each participating plan on a daily basis.
INCOME RECOGNITION
Employer and employee contributions are recognized in Plan equity on the
accrual basis of accounting.
Dividend income is recorded on the ex-dividend date.
-5-
<PAGE> 10
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
Interest income is recorded as earned.
Appreciation or depreciation on Company common stock distributed to
participants is the difference between the weighted average cost and the
current market value at the time of distribution.
CONCENTRATION OF CREDIT RISK
The Stable Value Fund of the Plan invests part of the fund in investment
contracts of financial institutions with strong credit ratings and has
established guidelines relative to diversification and maturities that
maintain safety and liquidity.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the basic financial
statements and related notes to financial statements. Changes in such
estimates may affect amounts reported in future years.
2. GENERAL DESCRIPTION AND OPERATION OF THE PLAN:
INCEPTION
The Plan is a defined contribution plan which became effective July 1, 1984.
ELIGIBILITY
All salaried employees, including officers, of the Company are eligible to
participate in the Plan after completing up to one year of continuous
service depending upon hire date. At the end of the 1997 plan year,
approximately 17,858 employees (20,613 in 1996) of the Company were eligible
with approximately 14,524 employees (16,171 in 1996) participating in the
Plan.
VESTING
Employee contributions are fully vested. Employer matching contributions
become vested after the participant has completed four years of continuous
service with the Company.
-6-
<PAGE> 11
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
CONTRIBUTIONS
Eligible employees may elect to contribute any whole percent from 1% to 16%
of earnings, including wages, bonuses, commissions, overtime and vacation
pay into the Plan. Participating employees may elect to have their
contributions invested in the Stable Value Fund, Conservative Asset
Allocation Fund, Moderate Asset Allocation Fund, Aggressive Asset Allocation
Fund, S&P 500 Index Stock Equity Fund, Small Capitalization Stock Equity
Fund, Large Capitalization Stock Equity Fund, the International Stock Equity
Fund, or in any combination of these eight funds in multiples of 1%. The
Company calculates and deducts employee contributions from gross earnings
each pay period based on the percent elected by the employee. Employees may
change their contribution percent any time up to the 15th day of the month
for changes to be effective on the 1st day of the following month. Employees
may transfer amounts attributable to employee contributions from one fund to
the other on a daily basis. The minimum amount to be transferred is $100.
Eligible employees may enroll in the Plan effective on the 1st day of the
month by enrolling by the 15th day of the prior month. Employees may suspend
their contributions at any time effective immediately.
Employees who are 52 years of age or older are able to transfer employer
contributions from the Company Stock Fund into the plan's other investment
funds.
The Plan has been established under section 401 of the Internal Revenue
Code. Therefore, employee and employer contributions to the Plan are not
subject to federal withholding tax, but are taxable when they are withdrawn
from the Plan.
The Board of Directors of the Company determines the matching percent used
as the employer contribution for each Plan year. The Company matching
contributions are limited to the first 6% of employee contributions at the
rate of 50% and employee contributions are limited to $9,500 in both 1997
and 1996.
INVESTMENTS
The Trustee of the Plan maintains the following ten funds under the Plan:
- Stable Value Fund - Employee contributions are invested in various
investment contracts which provide for rates of return for particular
periods of time.
-7-
<PAGE> 12
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
- - Conservative Asset Allocation Fund - Employee contributions are
invested in a commingled fund containing a portfolio of U.S. common
stocks and bonds which provide an investment return similar to a
portfolio invested 40% in the Russell 3000 Equity Index plus reinvested
dividends and 60% in bonds which compose the Lehman Aggregate Long-Term
Bond Index.
- - Moderate Asset Allocation Fund - Employee contributions are invested in
a commingled fund containing a portfolio of U.S. common stocks and bonds
which provide an investment return similar to a portfolio invested 60%
in the Russell 3000 Equity Index plus reinvested dividends and 40% in
bonds which compose the Lehman Aggregate Long-Term Bond Index.
- - Aggressive Asset Allocation Fund - Employee contributions are invested
in a commingled fund containing a portfolio of U.S. common stocks,
international stocks, and bonds which provide an investment return
similar to a portfolio invested 65% in the Russell 3000 Equity Index
plus reinvested dividends, 15% in the MSCI EAFE Index, and 20% in bonds
which compose the Lehman Aggregate Long-Term Bond Index.
- - S&P 500 Index Stock Equity Fund - Employee contributions are invested
in a commingled fund consisting of a portfolio of common stocks which
provide a return similar to the Standard and Poor's Composite Index of
500 stocks plus reinvested dividends.
- - Large Capitalization Stock Equity Fund - Employee contributions are
invested in a commingled fund containing a portfolio of common stocks of
medium and large companies that are expected to provide
better-than-average prospects for appreciation.
- - Small Capitalization Stock Equity Fund - Employee contributions are
invested in a commingled fund containing a portfolio of common stocks of
small companies that are expected to provide long-term capital growth.
- - International Stock Equity Fund - Employee contributions are invested
in a commingled fund containing a portfolio of common stocks and debt
obligations of companies and governments located outside of the United
States that are expected to provide long-term capital growth.
-8-
<PAGE> 13
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
- - Loan Investment Fund - Employee contributions are transferred from
other funds into the Loan Investment Fund, and then loaned to the
participant. The interest rate on the loan is prime plus 1% as
determined by the Trustee.
- - Company Stock Fund - Employer contributions are invested in Goodyear
common stock except for short-term investments needed for Plan
operations. During 1997, the price per share of Goodyear common stock on
The New York Stock Exchange Composite Transactions ranged from $49.25 to
$71.25 ($41.50 to $53.00 during 1996). The closing price per share was
$63.63 at December 31, 1997 ($51.38 at December 31, 1996).
PARTICIPANT ACCOUNTS
A Stable Value Fund, Conservative Asset Allocation Fund, Moderate Asset
Allocation Fund, Aggressive Asset Allocation Fund, S&P 500 Index Stock
Equity Fund, Small Capitalization Stock Equity Fund, Large Capitalization
Stock Equity Fund, the International Stock Equity Fund, Loan Investment
Fund, and Company Stock Fund have been established for each participant in
the Plan. All accounts are valued daily by the Trustee.
Interest is automatically reinvested in each participant's respective
accounts. Price fluctuations and dividends in common stock of the Company
and companies in the Conservative Asset Allocation Fund, Moderate Asset
Allocation Fund, Aggressive Asset Allocation Fund, S&P 500 Index Stock
Equity Fund, Small Capitalization Stock Equity Fund, Large Capitalization
Stock Equity Fund, the International Stock Equity Fund, and the Company
Stock Fund are reflected in the unit value of the fund which effects the
value of the participant's accounts.
PLAN WITHDRAWALS AND DISTRIBUTIONS
Participants may withdraw vested amounts from their accounts if they:
- Attain the age of 59 1/2, or
- Qualify for a serious financial hardship.
The Internal Revenue Service (IRS) issued guidelines governing financial
hardship. Under the IRS guidelines, withdrawals are permitted for severe
financial hardship for the following reasons:
-9-
<PAGE> 14
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
- - Unreimbursed medical expense of participant, spouse, or dependent.
- - Post-secondary education of participant, spouse, or dependent.
- - Prevention of eviction from primary residence or the foreclosure on the
mortgage of the primary residence of participant.
- - Personal liability for expenses arising out of the death of a member of
participant's family.
- - Purchase of a primary residence of participant.
Contributions to the Plan are suspended for 12 months subsequent to a
financial hardship withdrawal.
Participant vested amounts are payable upon retirement, death or other
termination of employment.
All withdrawals and distributions are valued as of the end of the month they
are processed, and are subject to federal income tax upon receipt. Any
non-vested Company contributions are forfeited and applied to reduce future
contributions by the Company. During 1997 and 1996, the Plan had forfeiture
credits in the amounts of $696,017 and $385,011, respectively.
LOAN INVESTMENT FUND
Eligible employees may borrow money from their participant accounts. The
minimum amount to be borrowed is $1,000. The maximum amount to be borrowed
is the lesser of $50,000 reduced by the highest outstanding balance of any
loan during the preceding twelve month period, or 50% of the participant's
vested account balance. Effective February 1, 1996, the maximum number of
loans that a participant may have outstanding was increased from one to two.
The interest rate charged will be a fixed rate which will be established at
the time of the loan application. The interest rate at the beginning of 1997
was 9.25%, but was changed to 9.50% at the end of March. The interest rate
during 1996 was 9.25%.
Loan repayments, with interest, are made through payroll deductions. If a
loan is not repaid when due, the loan balance will be treated as a taxable
distribution from the Plan.
EXPENSES
Expenses of administering the Plan were paid partly by the Company and
partly by the Trust. The payment of Trustee's fees and brokerage commissions
associated with the Company Stock Fund are paid by the Company. Expenses
related to the asset management of the Investment Funds are paid from such
Funds which reduces the investment return reported and credited to
participant accounts.
-10-
<PAGE> 15
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
TERMINATION PROVISIONS
The Company anticipates and believes that the Plan will continue without
interruption, but reserves the right to discontinue the Plan. In the event
of termination, the obligation of the Company to make further contributions
ceases. All participants' accounts would then be fully vested with respect
to Company contributions.
3. RELATED PARTY TRANSACTIONS:
The Trustee serves as the fund manager of the S&P 500 Equity Index Fund.
The Company Stock Fund is designed primarily for investment in common stock
of the Company.
4. TAX STATUS OF PLAN:
The IRS has advised on May 22, 1995 that the Plan is qualified in accordance
with the appropriate sections of the Internal Revenue Code, and the trust
established with the Plan constitutes a qualified trust and is therefore
exempt from federal income taxes. The plan administrator does not anticipate
that changes in the Plan or other events occurring after the receipt of the
IRS ruling will affect the qualification of the Plan or the tax exempt
status of the Trust.
5. FINANCIAL DATA OF THE MASTER TRUST: (SEE PAGES 12 - 15)
-11-
<PAGE> 16
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 31, 1997
----------------------------------------------------------------------------
---------------------------------------------------------------
Conservative Moderate Aggressive S&P 500
Stable Asset Asset Asset Equity
Value Allocation Allocation Allocation Index
Total Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Market Value:
State Street Income and Growth Fund,
Cost $14,517 - 1,289,423 Units $ 16,463 $ -- $ 16,463 $ -- $ -- $ --
State Street Moderate Asset Allocation
Fund, Cost $41,282 - 3,675,050 Units 53,127 -- -- 53,127 -- --
State Street Life Solutions Growth A,
Cost $15,514 - 1,179,187 Units 18,931 -- -- -- 18,931 --
Collective Daily Stock Index Fund, Cost
$306,918 - 19,116,281 Units 451,335 -- -- -- -- 451,335
Twentieth Century Investors Income
Ultra Fund, Cost $45,978 - 1,555,172 Units 42,456 -- -- -- -- --
Franklin Strategic Series Small Cap
Growth Fund, Cost $58,150 - 2,732,539 Units 62,657 -- -- -- -- --
Templeton Foreign Fund, Cost
$26,699 - 2,573,654 Units 25,608 -- -- -- -- --
Common Stock of The Goodyear Tire & Rubber
Company, Cost $207,812 - 8,275,576 Shares 526,534 -- -- -- -- --
Short-Term Investments 24,286 12,310 -- -- -- --
Promissory Notes 85,517 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
1,306,914 12,310 16,463 53,127 18,931 451,335
---------- ---------- ---------- ---------- ---------- ----------
Investments at Contract Value:
Guaranteed Investment Contracts 656,767 656,767 -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Receivables:
Employee Contributions -- -- -- -- -- --
Employer Contributions 12 -- -- -- -- --
Transfers -- 723 128 5 (1) (1,081)
Accrued Interest and Dividends 1,886 1,160 3 11 4 535
Pending Security Sales -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
1,898 1,883 131 16 3 (546)
---------- ---------- ---------- ---------- ---------- ----------
Total Assets 1,965,579 670,960 16,594 53,143 18,934 450,789
---------- ---------- ---------- ---------- ---------- ----------
Liabilities:
Administrative Expenses Payable 113 72 -- -- -- 41
Distributions Payable -- -- -- -- -- --
Forfeiture Credits -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Liabilities 113 72 -- -- -- 41
---------- ---------- ---------- ---------- ---------- ----------
Net Assets $1,965,466 $ 670,888 $ 16,594 $ 53,143 $ 18,934 $ 450,748
========== ========== ========== ========== ========== ==========
<CAPTION>
(Dollars in Thousands) December 31, 1997
----------------------------------------------------------------------
Fund Information
----------------------------------------------------------------------
Large Small International
Capitalization Capitalization Stock Company
Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Market Value:
State Street Income and Growth Fund,
Cost $14,517 - 1,289,423 Units $ -- $ -- $ -- $ -- $ --
State Street Moderate Asset Allocation
Fund, Cost $41,282 - 3,675,050 Units -- -- -- -- --
State Street Life Solutions Growth A,
Cost $15,514 - 1,179,187 Units -- -- -- -- --
Collective Daily Stock Index Fund, Cost
$306,918 - 19,116,281 Units -- -- -- -- --
Twentieth Century Investors Income
Ultra Fund, Cost $45,978 - 1,555,172 Units 42,456 -- -- -- --
Franklin Strategic Series Small Cap
Growth Fund, Cost $58,150 - 2,732,539 Unit -- 62,657 -- -- --
Templeton Foreign Fund, Cost
$26,699 - 2,573,654 Units -- -- 25,608 -- --
Common Stock of The Goodyear Tire & Rubber
Company, Cost $207,812 - 8,275,576 Shares -- -- -- 526,534 --
Short-Term Investments -- -- -- 11,976 --
Promissory Notes -- -- -- -- 85,517
---------- ---------- ---------- ---------- ----------
42,456 62,657 25,608 538,510 85,517
---------- ---------- ---------- ---------- ----------
Investments at Contract Value:
Guaranteed Investment Contracts -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Receivables:
Employee Contributions -- -- -- -- --
Employer Contributions -- -- -- 12 --
Transfers 82 97 (260) (18) 325
Accrued Interest and Dividends 9 12 (6) 168 (10)
Pending Security Sales -- -- -- -- --
---------- ---------- ---------- ---------- ----------
91 109 (266) 162 315
---------- ---------- ---------- ---------- ----------
Total Assets 42,547 62,766 25,342 538,672 85,832
---------- ---------- ---------- ---------- ----------
Liabilities:
Administrative Expenses Payable -- -- -- -- --
Distributions Payable -- -- -- -- --
Forfeiture Credits -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Liabilities -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net Assets $ 42,547 $ 62,766 $ 25,342 $ 538,672 $ 85,832
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) December 31, 1996
-------------------------------------------------------------------------
------------------------------------------------------------
Conservative Moderate
Stable Asset Asset Asset
Value Allocation Allocation Allocation
Total Fund Fund Fund Fund
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Market Value:
State Street Income and Growth Fund,
Cost $6,870 - 675,788 Units $ 7,363 $ -- $ 7,363 $ -- $ --
State Street Moderate Asset Allocation
Fund, Cost $30,809 - 2,951,057 Units 35,076 -- -- 35,076 --
State Street Life Solutions Growth A,
Cost $11,639 - 949,240 Units 12,772 -- -- -- 12,772
Collective Daily Stock Index Fund, Cost
$231,718 - 16,369,098 Units 290,060 -- -- -- --
Twentieth Century Investors Income
Ultra Fund, Cost $25,304 - 909,122 Units 25,537 -- -- -- --
Franklin Strategic Series Small Cap
Growth Fund, Cost $42,224 - 2,188,282 Units 45,341 -- -- -- --
Templeton Foreign Fund, Cost
$15,889 - 1,639,127 Units 16,981 -- -- -- --
Common Stock of The Goodyear Tire & Rubber
Company, Cost $206,299 - 8,448,371 Shares 434,035 -- -- -- --
Short-Term Investments 29,439 22,775 -- -- --
Promissory Notes 80,906 -- -- -- --
---------- ---------- ---------- ---------- ----------
977,510 22,775 7,363 35,076 12,772
---------- ---------- ---------- ---------- ----------
Investments at Contract Value:
Guaranteed Investment Contracts 644,122 644,122 -- -- --
---------- ---------- ---------- ---------- ----------
Receivables:
Employee Contributions 28 16 -- 1 --
Employer Contributions 70 (13) -- -- --
Transfers -- 117 -- (61) (42)
Accrued Interest and Dividends 2,555 1,065 11 53 20
Pending Security Sales 2,481 -- -- -- --
---------- ---------- ---------- ---------- ----------
5,134 1,185 11 (7) (22)
---------- ---------- ---------- ---------- ----------
Total Assets 1,626,766 668,082 7,374 35,069 12,750
---------- ---------- ---------- ---------- ----------
Liabilities:
Administrative Expenses Payable 899 452 -- -- --
Distributions Payable 504 232 2 11 4
Forfeiture Credits -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Liabilities 1,403 684 2 11 4
---------- ---------- ---------- ---------- ----------
Net Assets $1,625,363 $ 667,398 $ 7,372 $ 35,058 $ 12,746
========== ========== ========== ========== ==========
<CAPTION>
(Dollars in Thousands) December 31, 1996
-------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------------
Aggressive S&P 500 Large Small International
Equity Capitalization Capitalization Stock Company
Index Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund Fund
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at Fair Market Value:
State Street Income and Growth Fund,
Cost $6,870 - 675,788 Units $ -- $ -- $ -- $ -- $ -- $ --
State Street Moderate Asset Allocation
Fund, Cost $30,809 - 2,951,057 Units -- -- -- -- -- --
State Street Life Solutions Growth A,
Cost $11,639 - 949,240 Units -- -- -- -- -- --
Collective Daily Stock Index Fund, Cost
$231,718 - 16,369,098 Units 290,060 -- -- -- -- --
Twentieth Century Investors Income
Ultra Fund, Cost $25,304 - 909,122 Units -- 25,537 -- -- -- --
Franklin Strategic Series Small Cap
Growth Fund, Cost $42,224 - 2,188,282 Unit -- -- 45,341 -- -- --
Templeton Foreign Fund, Cost
$15,889 - 1,639,127 Units -- -- -- 16,981 -- --
Common Stock of The Goodyear Tire & Rubber
Company, Cost $206,299 - 8,448,371 Shares -- -- -- -- 434,035 --
Short-Term Investments -- -- -- -- 6,664 --
Promissory Notes -- -- -- -- -- 80,906
--------- --------- --------- --------- --------- ---------
290,060 25,537 45,341 16,981 440,699 80,906
--------- --------- --------- --------- --------- ---------
Investments at Contract Value:
Guaranteed Investment Contracts -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Receivables:
Employee Contributions 10 -- 1 -- -- --
Employer Contributions -- -- -- -- 83 --
Transfers (328) 42 317 33 (222) 144
Accrued Interest and Dividends 440 39 69 26 708 124
Pending Security Sales -- -- -- -- 2,481 --
--------- --------- --------- --------- --------- ---------
122 81 387 59 3,050 268
--------- --------- --------- --------- --------- ---------
Total Assets 290,182 25,618 45,728 17,040 443,749 81,174
--------- --------- --------- --------- --------- ---------
Liabilities:
Administrative Expenses Payable 192 -- -- -- 255 --
Distributions Payable 90 8 14 5 138 --
Forfeiture Credits -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Liabilities 282 8 14 5 393 --
--------- --------- --------- --------- --------- ---------
Net Assets $ 289,900 $ 25,610 $ 45,714 $ 17,035 $ 443,356 $ 81,174
========= ========= ========= ========= ========= =========
</TABLE>
-13-
<PAGE> 18
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) For the Year Ended December 31, 1997
--------------------------------------------------------------------------------------
Fund Information
-------------------------------------------------------------------------
Conservative Moderate Aggressive
Stable Asset Asset Asset Equity
Value Allocation Allocation Allocation Index
Total Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ 38,672 $ 350 $ -- $ -- $ -- $ --
Employee 117,000 61,243 1,027 5,376 2,270 34,307
----------- ----------- ----------- ----------- ----------- -----------
155,672 61,593 1,027 5,376 2,270 34,307
Interest and Dividend Income 71,550 42,776 (9) (47) (17) 13
Net Appreciation (Depreciation)
in Fair Market Value of Assets 217,853 -- 1,776 8,390 2,641 101,723
----------- ----------- ----------- ----------- ----------- -----------
289,403 42,776 1,767 8,343 2,624 101,736
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 104,377 55,553 624 2,118 702 16,633
Administrative Expenses 595 410 -- -- -- 173
----------- ----------- ----------- ----------- ----------- -----------
104,972 55,963 624 2,118 702 16,806
Transfers:
Transfers Between Plans -- -- -- -- -- --
Transfers Between Funds -- (48,549) 6,977 6,446 1,813 42,872
Loan Transfers To or From Plan -- -- -- -- -- --
Loans to Participants -- (25,459) (212) (1,264) (491) (13,612)
Loan Repayments:
Principal -- 24,568 244 1,114 574 10,384
Interest -- 4,524 43 188 100 1,967
----------- ----------- ----------- ----------- ----------- -----------
-- (44,916) 7,052 6,484 1,996 41,611
----------- ----------- ----------- ----------- ----------- -----------
Increase (Decrease) in Assets During Year 340,103 3,490 9,222 18,085 6,188 160,848
Net Assets at Beginning of Year 1,625,363 667,398 7,372 35,058 12,746 289,900
----------- ----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 1,965,466 $ 670,888 $ 16,594 $ 53,143 $ 18,934 $ 450,748
=========== =========== =========== =========== =========== ===========
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) For the Year Ended December 31, 1997
-----------------------------------------------------------------------
Fund Information
-----------------------------------------------------------------------
S&P 500 Large Small International
Capitalization Capitalization Stock Company
Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ -- $ -- $ -- $ 38,322 $ --
Employee 4,097 5,915 2,765 -- --
----------- ----------- ----------- ----------- -----------
4,097 5,915 2,765 38,322 --
Interest and Dividend Income 8,601 2,641 762 9,577 7,253
Net Appreciation (Depreciation)
in Fair Market Value of Assets (2,607) 3,719 531 101,680 --
----------- ----------- ----------- ----------- -----------
5,994 6,360 1,293 111,257 7,253
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 803 1,686 568 25,690 --
Administrative Expenses -- -- -- 12 --
----------- ----------- ----------- ----------- -----------
803 1,686 568 25,702 --
Transfers:
Transfers Between Plans -- -- -- -- --
Transfers Between Funds 7,741 6,469 4,792 (28,561) --
Loan Transfers To or From Plan -- -- -- -- --
Loans to Participants (1,256) (1,666) (565) -- 44,525
Loan Repayments:
Principal 972 1,391 501 -- (39,748)
Interest 192 269 89 -- (7,372)
----------- ----------- ----------- ----------- -----------
7,649 6,463 4,817 (28,561) (2,595)
----------- ----------- ----------- ----------- -----------
Increase (Decrease) in Assets During Year 16,937 17,052 8,307 95,316 4,658
Net Assets at Beginning of Year 25,610 45,714 17,035 443,356 81,174
----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 42,547 $ 62,766 $ 25,342 $ 538,672 $ 85,832
=========== =========== =========== =========== ===========
</TABLE>
-14-
<PAGE> 19
<TABLE>
<CAPTION>
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS, WITH FUND INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) For the Year Ended December 31, 1996
----------------------------------------------------------------------------------------
Fund Information
-----------------------------------------------------------------------
Conservative Moderate Aggressive S&P 500
Stable Asset Asset Asset Equity
Value Allocation Allocation Allocation Index
Total Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ 37,939 $ 306 $ -- $ -- $ -- $ --
Employee 113,952 68,429 666 4,966 1,628 30,665
----------- ----------- ----------- ----------- ----------- -----------
151,891 68,735 666 4,966 1,628 30,665
Interest and Dividend Income 55,195 38,334 7 32 10 448
Net Appreciation (Depreciation)
in Fair Market Value of Assets 117,457 246 516 3,807 1,165 49,982
----------- ----------- ----------- ----------- ----------- -----------
172,652 38,580 523 3,839 1,175 50,430
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 63,857 35,330 171 1,039 289 7,217
Administrative Expenses 1,694 1,077 -- -- -- 389
----------- ----------- ----------- ----------- ----------- -----------
65,551 36,407 171 1,039 289 7,606
Transfers:
Transfers Between Plans -- -- -- -- -- --
Transfers Between Funds -- (48,299) 6,349 8,568 10,270 9,530
Loan Transfers To or From Plan -- 1 -- (1) -- (1)
Loans to Participants -- (45,793) (153) (1,258) (413) (15,397)
Loan Repayments:
Principal -- 16,441 133 671 312 6,001
Interest -- 3,923 25 140 63 1,359
----------- ----------- ----------- ----------- ----------- -----------
-- (73,727) 6,354 8,120 10,232 1,492
----------- ----------- ----------- ----------- ----------- -----------
Increase (Decrease) in Assets During Year 258,992 (2,819) 7,372 15,886 12,746 74,981
Net Assets at Beginning of Year 1,366,371 670,217 -- 19,172 -- 214,919
----------- ----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 1,625,363 $ 667,398 $ 7,372 $ 35,058 $ 12,746 $ 289,900
=========== =========== =========== =========== =========== ===========
<CAPTION>
(Dollars in Thousands) For the Year Ended December 31, 1996
--------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------------------
Large Small International
Capitalization Capitalization Stock Company
Equity Equity Equity Stock Loan
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase in Assets:
Contributions:
Employer $ -- $ -- $ -- $ 37,633 $ --
Employee 2,793 3,231 1,574 -- --
----------- ----------- ----------- ----------- -----------
2,793 3,231 1,574 37,633 --
Interest and Dividend Income 25 182 434 9,806 5,917
Net Appreciation (Depreciation)
in Fair Market Value of Assets 1,726 5,074 1,371 53,570 --
----------- ----------- ----------- ----------- -----------
1,751 5,256 1,805 63,376 5,917
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 284 487 230 18,810 --
Administrative Expenses -- -- -- 228 --
----------- ----------- ----------- ----------- -----------
284 487 230 19,038 --
Transfers:
Transfers Between Plans -- -- -- -- --
Transfers Between Funds 21,622 38,117 13,943 (60,100) --
Loan Transfers To or From Plan 1 -- -- -- --
Loans to Participants (977) (1,161) (350) -- 65,502
Loan Repayments:
Principal 589 633 247 -- (25,027)
Interest 115 125 46 -- (5,796)
----------- ----------- ----------- ----------- -----------
21,350 37,714 13,886 (60,100) 34,679
----------- ----------- ----------- ----------- -----------
Increase (Decrease) in Assets During Year 25,610 45,714 17,035 21,871 40,596
Net Assets at Beginning of Year -- -- -- 421,485 40,578
----------- ----------- ----------- ----------- -----------
Net Assets at End of Year $ 25,610 $ 45,714 $ 17,035 $ 443,356 $ 81,174
=========== =========== =========== =========== ===========
</TABLE>
-15-
<PAGE> 1
EXHIBIT 4
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR
SALARIED EMPLOYEES
(JANUARY 1, 1997 RESTATEMENT)
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
ARTICLE PAGE
- ------- ----
<S> <C> <C>
I THE PLAN 1
II DEFINITIONS 2
2.1 Meaning of Definitions.......................................................2
2.2 Pronouns.....................................................................9
III EMPLOYEE PARTICIPATION 10
3.1 Eligibility and Election to Partici-
pate........................................................................10
3.2 Notification of New Participants............................................10
3.3 Effect and Duration.........................................................10
3.4 Changes in Employment Status;
Transfers of Employment.....................................................11
3.5 Reemployment of a Participant...............................................11
3.6 Qualified Military Service..................................................11
IV TAX-DEFERRED CONTRIBUTIONS MADE ON BEHALF OF
PARTICIPANTS 12
4.1 Tax-Deferred Contributions..................................................12
4.2 Amount of Tax-Deferred Contributions........................................12
4.3 Limitation on Tax-Deferred Contribu-
tions of Highly Compensated
Employees...................................................................13
4.4 Administration..............................................................15
4.5 Limitation on Employer Contributions........................................16
4.6 Changes in Compensation Reduction
Authorization...............................................................16
4.7 Suspension of Contributions.................................................16
V AFTER-TAX CONTRIBUTIONS 18
5.1 After-Tax Contributions.....................................................18
5.2 Amount of After-Tax Contributions...........................................18
5.3 Administration..............................................................18
5.4 Changes in Payroll Deduction Authori-
zation......................................................................19
VI MATCHING EMPLOYER CONTRIBUTIONS 20
6.1 Payment of Contributions....................................................20
6.2 Limitation on Amount........................................................21
6.3 Allocation of Matching Employer
Contributions...............................................................21
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
6.4 Prevented Contributions.....................................................22
6.5 Determination of Annual Employer
Contribution Rate...........................................................22
6.6 Determination of Amount of Employer
Contribution................................................................23
6.7 Effect of Plan Termination..................................................23
6.8 Limitation on Matching Employer
Contributions and After-Tax
Contributions of Highly Compensated
Employees...................................................................23
VII DEPOSIT AND INVESTMENT OF CONTRIBUTIONS 27
7.1 Deposit of Contributions....................................................27
7.2 Investment Elections of Participants........................................27
7.3 Election to Transfer Interest Between
Funds.......................................................................28
7.4 Election to Transfer Interest from
Goodyear Stock Fund.........................................................28
VIII ESTABLISHMENT OF FUNDS AND PARTICIPANTS'
ACCOUNTS 29
8.1 Establishment of General Fund...............................................29
8.2 Investment Funds............................................................29
8.3 Goodyear Stock Fund.........................................................31
8.4 Appointment of Investment Managers..........................................31
8.5 Income on Trust Funds.......................................................32
8.6 Separate Accounts...........................................................32
8.7 Sub-Accounts................................................................32
8.8 Account Balances............................................................32
8.9 Funds from Predecessor Plans................................................32
IX LIMITATIONS ON ALLOCATIONS TO ACCOUNTS 35
9.1 Limitation on Crediting of
Contributions...............................................................35
9.2 Scope of Limitation.........................................................41
X VALUATIONS, DIVIDEND REINVESTMENTS, AND
VOTING 42
10.1 Valuation of Participant's Interest.........................................42
10.2 Reinvestment of Dividends...................................................43
10.3 Voting Company Stock........................................................43
10.4 Finality of Determinations..................................................44
10.5 Notification................................................................44
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
XI WITHDRAWALS WHILE EMPLOYED 45
11.1 Withdrawal of After-Tax
Contributions...............................................................45
11.2 Withdrawal of Matching Employer
Contributions...............................................................45
11.3 Withdrawal of Tax-Deferred
Contributions...............................................................45
11.4 Conditions and Limitations on
Hardship Withdrawals........................................................46
11.5 Special Age 70-1/2 Distribution.............................................48
11.6 Adjustment of Accounts......................................................48
XII TERMINATION OF PARTICIPATION AND DISTRIBUTION 49
12.1 Termination of Participation................................................49
12.2 Vesting of Separate Accounts................................................50
12.3 Distribution................................................................51
12.4 Required Commencement of
Distribution................................................................52
12.5 Form of Distribution........................................................53
12.6 Election of Former Vesting Schedule.........................................53
12.7 Buy Back of Forfeited Amounts...............................................54
12.8 Disposition of Forfeited Balances...........................................54
12.9 Effect of Company's Determination...........................................55
12.10 Reemployment of a Former Participant........................................55
12.11 Restrictions on Alienation..................................................56
12.12 Facility of Payment.........................................................56
12.13 Distributions to Other Qualified
Plans.......................................................................56
XIII BENEFICIARIES 58
13.1 Designation of Beneficiary..................................................58
13.2 Beneficiary in the Absence of
Designation.................................................................59
XIV ADMINISTRATION 60
14.1 Authority of Company........................................................60
14.2 Action of Company...........................................................60
14.3 Claims Review Procedure.....................................................61
14.4 Indemnification.............................................................62
14.5 Qualified Domestic Relations Orders.........................................62
XV TRUSTEE AND TRUST AGREEMENT 64
XVI AMENDMENT AND TERMINATION 65
16.1 Amendment...................................................................65
16.2 Limitation on Amendment.....................................................65
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
16.3 Termination.................................................................65
16.4 Withdrawal of an Employer...................................................67
16.5 Corporate Reorganization....................................................67
XVII ADOPTION BY SUBSIDIARIES; EXTENSION TO NEW
BUSINESS OPERATIONS 68
17.1 Adoption by Subsidiaries....................................................68
17.2 Extension to New Business Operations........................................68
XVIII MISCELLANEOUS PROVISIONS 69
18.1 No Commitment as to Employment..............................................69
18.2 Benefits....................................................................69
18.3 No Guarantees...............................................................69
18.4 Expenses....................................................................69
18.5 Precedent...................................................................69
18.6 Duty to Furnish Information.................................................69
18.7 Withholding.................................................................70
18.8 Merger, Consolidation, or Transfer of
Plan Assets.................................................................70
18.9 Back Pay Awards.............................................................70
18.10 Condition on Employer Contributions.........................................71
18.11 Return of Contributions to
Participants................................................................71
18.12 Return of Contributions to an
Employer....................................................................72
18.13 Validity of Plan............................................................72
18.14 Parties Bound...............................................................72
XIX TOP-HEAVY PROVISIONS 73
19.1 Applicability...............................................................73
19.2 Top-Heavy Definitions.......................................................73
19.3 Accelerated Vesting.........................................................75
19.4 Minimum Employer Contribution...............................................76
19.5 Adjustments to Section 415
Limitations.................................................................77
19.6 Compensation Taken Into Account.............................................77
XX LOANS 78
20.1 Application for Loan........................................................78
20.2 Reduction of Account Upon
Distribution................................................................79
20.3 Requirements to Prevent a Taxable
Distribution................................................................79
20.4 Administration of Loan Investment
Funds.......................................................................80
20.5 Default.....................................................................81
</TABLE>
(iv)
<PAGE> 6
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- -----
<S> <C> <C>
20.6 Changes in Employment Status and
Transfers of Employment Before
Loan Is Repaid in Full......................................................81
XXI ELIGIBLE ROLLOVER DISTRIBUTIONS 83
21.1 Direct Rollover.............................................................83
21.2 Definitions.................................................................83
</TABLE>
(v)
<PAGE> 7
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR
SALARIED EMPLOYEES
(FEBRUARY 1, 1996 RESTATEMENT)
ARTICLE I
THE PLAN
This Plan shall be known as The Goodyear
Tire & Rubber Company Employee Savings Plan for Salaried Employees and
constitutes a modification, restatement, and continuation of The Goodyear Tire
& Rubber Company Employee Savings Plan for Salaried Employees, as heretofore in
effect, that was originally effective with respect to eligible salaried
employees as of July 1, 1984. The Plan is intended to qualify under Section
401(a) of the Internal Revenue Code and to be a qualified cash-or-deferred
arrangement under Section 401(k) of the Internal Revenue Code. This restatement
shall be effective January 1, 1997.
<PAGE> 8
ARTICLE II
DEFINITIONS
2.1 MEANING OF DEFINITIONS.
As used herein, the following words and phrases shall have the
meanings hereinafter set forth, unless a different meaning is
plainly required by the context:
(a) The "Act" shall mean the Employee Retirement
Income Security Act of 1974, as amended from
time to time. Reference to a section of the
Act shall include such section and any comparable
section or sections of any future legislation
that amends, supplements, or supersedes such
section.
(b) An "After-Tax Contribution" shall mean the amount
which a Participant has elected to have deducted
from his Compensation in accordance with the
provisions of Section 5.1.
(c) The "Beneficiary" of a Participant, or of a
Former Participant, shall mean the person or
persons who, under the provisions of
Article XIII, shall be entitled to receive
distribution hereunder in the event such
Participant or Former Participant dies
before his interest shall have been
distributed to him in full.
(d) The "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Reference to a section of the Code shall
include such section and any comparable
section or sections of any future legislation
that amends, supplements, or supersedes such
section.
(e) The "Company" shall mean The Goodyear Tire &
Rubber Company, its corporate successors,
and any corporation or corporations into or
with which it may be merged or consolidated;
and a "subsidiary of the Company" shall mean
a subsidiary of the Company or of any of its
subsidiaries and shall include any related
corporation.
(f) The "Company Stock" shall mean common stock of the
Company.
-2-
<PAGE> 9
(g) The "Compensation" of a Participant for any
period shall mean the entire amount of com-
pensation paid, or which would have been
paid except for the provisions of the Plan,
to such Participant during such period by
reason of his employment as an Employee,
including payments made under bonus and
profit-sharing plans, commissions, overtime
pay, and vacation pay, as recorded in the
records of an Employer or any subsidiary of
the Company, but excluding any imputed in-
come, any supplemental unemployment benefit
payments, any payments under plans imposed
by governments other than the United States,
any payments made for transportation, any
special allowances, or any adjustments to
cover conditions or circumstances peculiar
to service in foreign countries. The Com-
pensation of a Participant shall not include
any payment made (i) in the Common Stock of
the Company or in any other security issued
by the Company under the Company's Key
Personnel Incentive Profit Sharing Plan, or
in cash to cover amounts withheld with
respect to any such payment in Common Stock
or other security issued by the Company;
(ii) under the Company's 1982 Employees'
Stock Option Plan, or any similar plan, with
respect to stock options or stock
appreciation rights granted thereunder,
whether in the Common Stock of the Company,
any other security issued by the Company, or
cash; or (iii) in the Common Stock of the
Company, in any other security issued by the
Company, or in cash under the 1989 Goodyear
Performance and Equity Incentive Plan, or
any similar plan or successor plan, whether
such payment is in respect of the grant or
exercise of a stock option or a stock
appreciation right, the grant or issuance of
restricted stock, or any other grant or
award thereunder.
In addition to other applicable limitations which
may be set forth in the Plan and notwithstanding
any other contrary provision of the Plan,
compensation taken into account under the Plan shall
not exceed $150,000, adjusted for changes in the
cost of living as provided in Section 401(a)(17)(B)
and Section 415(d) of the Code, for the purpose of
calculating a Plan Participant's accrued benefit
(including the right to any optional benefit
provided under the Plan) for any
-3-
<PAGE> 10
Plan year commencing after December 31, 1993.
However, the accrued benefit determined in
accordance with this provision shall not be less
than the accrued benefit determined on December 31,
1993, without regard to this provision.
(h) The "Continuous Service" of a Participant
shall mean the period of time (computed to
the nearest 1/12th of a year) between his
Employment Commencement Date and his most
recent Severance Date, provided, however,
that in the case of a person who is absent
from the service of the Employer on account
of maternity or paternity reasons, as de-
fined in paragraph (bb) of this Section 2.1,
the person's Continuous Service shall not
include the period of absence between the
first and second anniversaries of the first
date of such absence.
(i) An "Employee" shall mean a domestic employee
or foreign employee, as hereinafter defined,
other than any such employee (i) who is a
"leased employee" (as defined in Sec-
tion 414(n)(2) of the Code) or (ii) who is
covered by a collective bargaining agreement
unless such agreement or the Plan specif-
ically provides for coverage by the Plan; a
"domestic employee" shall mean any salaried
employee or officer of an Employer who is
located and serving within the continental
United States, Alaska, or Hawaii; and a
"foreign employee" shall mean any salaried
employee or officer of an Employer, if hired
while present in the continental United
States, Alaska, or Hawaii, who is located
and serving without the continental United
States, Alaska, and Hawaii. For the pur-
poses hereof, a "salaried employee" shall
include only an employee who has been desig-
nated as such in accordance with the policy
of his Employer, which policy shall be
applied on a uniform and non-discriminatory
basis.
(j) An "Employer" shall mean (i) the Company, and (ii)
any domestic subsidiary of the Company that adopts
the Plan as hereinafter provided, so long as it
continues as a subsidiary of the Company.
(k) The "Employer Contribution Rate" shall mean the
percentage rate to be used by the
-4-
<PAGE> 11
Employers for a specific Plan year in determining
the amount of Matching Employer Contribution for
such Plan year.
(l) The "Employment Commencement Date" of a Participant
shall mean the date on which he first performed an
Hour of Service with the Company or any subsidiary
of the Company, subject to the following provisions:
(i) If more than 12 months after an em-
ployee's Severance Date occurs, such
employee again performs an Hour of
Service, his Employment Commencement
Date shall be advanced by the period
of time between such Severance Date
and the date he again performed an
Hour of Service unless (ii) applies.
(ii) If an employee, who either had been a
Participant for less than three con-
tinuous years or had less than five
years of Continuous Service as of a
Severance Date, again performs an
Hour of Service more than 12 months
after such Severance Date, his Em-
ployment Commencement Date shall be
changed to the date he again per-
formed an Hour of Service, but only
if the period of time between such
Severance Date and the date such em-
ployee again performed an Hour of
Service equals or exceeds the greater
of five years or the period of time
between his Employment Commencement
Date and such Severance Date.
(iii) If an employee's Severance Date oc-
curs by reason of entering active
military service with the armed for
ces of the United States and if he
has reemployment rights with his Em-
ployer, his Employment Commencement
Date shall not be advanced so long as
he returns to employment with the
Company or any subsidiary of the Com-
pany within the time prescribed by
federal law.
(m) An "Enrollment Date" shall mean the first day of
each month.
-5-
<PAGE> 12
(n) A "Former Participant" shall mean a Participant who
has incurred a Settlement Date but who still has an
interest under the Plan.
(o) The "General Fund" shall mean the common
trust fund established in accordance with
the provisions of Section 8.1 as required to
hold and administer any assets of the Trust
Fund that are not allocated among any sepa-
rate Investment Funds or the Goodyear Stock
Fund as may be provided in the Plan or Trust
Agreement. No General Fund shall be estab-
lished if all assets of the Trust Fund are
allocated among separate Investment Funds or
the Goodyear Stock Fund.
(p) The "Goodyear Stock Fund" shall mean the common
trust fund established in accordance with the
provisions of Section 8.3.
(q) A "Highly Compensated Employee" shall mean
any Employee who (i) is a 5% owner, as
defined in Section 416(i)(1)(A)(iii) of the
Code, at any time during the year or the
preceding year, or (ii) received
compensation in excess of $80,000 (indexed
in accordance with Section 415(d) of the
Code) during the preceding year.
(r) An "Hour of Service" with respect to a Par-
ticipant shall mean each hour for which he
is paid, or entitled to payment, for the
performance of duties for the Company or any
subsidiary of the Company. The rules set
forth in Department of Labor Regulations
Section 2530.200b-2 and Section 2530.200b-3,
which relate to determining Hours of Service
attributable to reasons other than the per-
formance of duties and crediting hours to
computation periods, are hereby incorporated
into the Plan by reference.
(s) An "Investment Fund" shall mean any separate
investment trust fund established from time to time
by the Trustee as may be provided in Section 8.2 of
the Plan to which assets of the Trust Fund may be
allocated and separately invested.
(t) A "Matching Employer Contribution" shall mean the
amount which the Employers shall be obligated to
contribute to the Plan in accordance with the
provisions of Section 6.1.
-6-
<PAGE> 13
(u) A "Participant" shall mean an Employee who elects to
participate in the Plan in accordance with the
provisions of Article III, and whose participation
has not been terminated.
(v) The "Plan" shall mean this Employee Savings Plan for
Salaried Employees, as from time to time in effect.
(w) The "Plan Administrator," which is the ad-
ministrator for purposes of the Act and the plan
administrator for purposes of the Code, shall mean
the Company.
(x) A "Plan year" shall mean a calendar year.
(y) A "related corporation" shall mean any cor-
poration, other than an Employer, which is a
member of a controlled group of corporations
of which an Employer is a member as deter-
mined under Section 1563(a) of the Code,
without regard to Section 1563(a)(4) and
Section 1563(e)(3)(C) of the Code. Further-
more, the term shall include any trade or
business (whether or not incorporated),
other than an Employer, which is a member of
a group under common control of which an
Employer is also a member, as determined
under Section 414(c) of the Code. The term
shall also include each organization, other
than an Employer, that is a member of an
affiliated service group of which an Em-
ployer is also a member as determined under
Section 414(m) of the Code, and any entity,
other than an Employer, which is required to
be aggregated with an Employer under Sec-
tion 414(o) of the Code.
(z) A "separate account" shall mean the account
maintained by the Trustee in the name of a
Participant that reflects his interest in the Trust
Fund and any sub-accounts established thereunder,
as provided in Article VIII.
(aa) The "Settlement Date" of a Participant shall mean
the date on which a Participant ceases to be a
Participant in accordance with Section 12.1.
(bb) The "Severance Date" of a Participant shall
mean the earliest of (i) the date on which
he retires, dies, quits, or is discharged;
-7-
<PAGE> 14
or (ii) the date on which he ceases to accrue
continuous service credit in accordance with the
uniform policy adopted by his Employer with respect
to leaves of absence or layoffs, but in no event
earlier than the first anniversary of the first day
of a period in which he remains absent (with or
without pay) from the service of the Company and all
subsidiaries of the Company. Notwithstanding the
foregoing, the Severance Date of a Participant who
is absent from the service of his Employer for
maternity or paternity reasons beginning on or after
January 1, 1985, shall be the second anniversary of
the first date of such absence. For purposes of this
paragraph (bb), an absence from employment for
maternity or paternity reasons means an absence due
to (1) the pregnancy of the Employee, (2) the birth
of a child of the Employee, (3) the placement of a
child with the Employee in connection with the
adoption of such child by the Employee, or (4) the
provision of parental care for such child for a
period beginning immediately following such birth or
placement. An absence from work will be treated as
an absence for maternity or paternity reasons only
if and to the extent that the Employee furnishes to
the Company such timely information as it may
reasonably require to establish that the absence is
for one or more of the four maternity or paternity
reasons specified herein and to establish the number
of days of absence attributable to such reason or
reasons.
(cc) The "Tax-Deferred Contribution" with respect
to a Participant shall mean the percentage
by which a Participant has elected to have
his Compensation reduced in accordance with
Section 4.1 and which shall be contributed
to the Plan on his behalf by his Employer in
accordance with the provisions of Sec-
tion 4.4.
(dd) The "Trust Agreement" shall mean the agree ment
entered into between the Company and the Trustee, as
provided in Article XV hereof, together with all
amendments thereto.
(ee) The "Trustee" shall mean the trustee which at the
time shall be designated, qualified, and acting
under the Trust Agreement.
-8-
<PAGE> 15
(ff) The "Trust Fund" shall mean the trust maintained by
the Trustee under the Trust Agreement, which trust
is called the "Trust Fund for The Goodyear Tire &
Rubber Company Employee Savings Plan for Salaried
Employees."
(gg) A "valuation date" shall mean each business
day of the Plan year.
2.2 PRONOUNS.
The masculine pronoun wherever used herein shall include the
feminine in any case so requiring.
-9-
<PAGE> 16
ARTICLE III
EMPLOYEE PARTICIPATION
3.1 ELIGIBILITY AND ELECTION TO PARTICIPATE.
Each Employee who is a Participant under the Plan on January 1,
1997, shall continue as a Participant on and after that date.
Each other Employee shall become a Participant as of the January
1 next following his Employment Commencement Date or, if later,
the Enrollment Date next following the date on which he completes
six months of Continuous Service, or any subsequent Enrollment
Date, if he has timely filed with the Company an election in the
manner and form as prescribed by the Company. An Employee's
election shall contain (a) his authorization for his Employer to
reduce his Compensation and to make Tax-Deferred Contributions
on his behalf in accordance with the provisions of Sections 4.1
and 4.2, (b) an authorization for his Employer to make any
payroll deductions with respect to his After-Tax Contributions
to the Plan in accordance with the provisions of Sections 5.1 and
5.2, and (c) his election as to the investment of his
Tax-Deferred Contributions and After-Tax Contributions in
accordance with the provisions of Section 7.2. An Employee's
election to become a Participant under this Section 3.1 shall be
timely only if received by the Company in the manner and form as
prescribed by the Company by the 15th day of the month prior to
the Enrollment Date as of which his participation is to become
effective.
3.2 NOTIFICATION OF NEW PARTICIPANTS.
As soon as practicable after each Enrollment Date, each Employer
shall notify the Company of Employees becoming Participants on
such date.
3.3 EFFECT AND DURATION.
Upon becoming a Participant, an Employee shall be entitled to the
benefits and shall be bound by all the terms and conditions of
the Plan and the Trust Agreement. Each Employee who becomes a
Participant shall remain a Participant until his participation is
terminated as provided in Article XII.
-10-
<PAGE> 17
3.4 CHANGES IN EMPLOYMENT STATUS; TRANSFERS OF EMPLOYMENT.
If an Employee who is a Participant ceases to be an Employee but
continues in the employment of (i) an Employer in some other
capacity or (ii) a related corporation, he shall nevertheless
continue as a Participant until his status as a Participant is
otherwise terminated in accordance with the provisions of the
Plan. In either case, such Participant shall share in Matching
Employer Contributions for any payroll period of such
participation only to the extent and on the basis of Tax-Deferred
Contributions made on his behalf for such payroll period and his
After Tax Contributions made during such payroll period; no
Tax-Deferred Contributions shall be made on behalf of such
Participant in accordance with the terms of his Compensation
reduction authorization except on the basis of his Compensation
for services as an Employee; and such Participant shall not be
permitted to make After-Tax Contributions at any time during
which he is employed in any capacity other than as an Employee.
Moreover, if a person is transferred directly from employment
(iii) with an Employer in a capacity other than as an Employee or
(iv) with a related corporation to employment with an Employer as
an Employee, he shall become a Participant as of the date he is
so transferred if he had completed six months of Continuous
Service as of the immediately preceding Enrollment Date and if he
makes his election in accordance with the provisions of Section
3.1.
3.5 REEMPLOYMENT OF A PARTICIPANT.
If a retired or Former Participant is reemployed by an Employer
or a related corporation after he incurs a Settlement Date under
Section 12.1, he shall again become a Participant on the date he
is reemployed by an Employer and makes his election in accordance
with the provisions of Section 3.1, unless he is not reemployed
as an Employee, in which case he shall again become a Participant
on the first date thereafter on which he does become an Employee
if he has properly made such election.
3.6 QUALIFIED MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with
Section 414(u)(4) of the Code.
-11-
<PAGE> 18
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
MADE ON BEHALF OF PARTICIPANTS
4.1 TAX-DEFERRED CONTRIBUTIONS.
The provisions of this Section 4.1 and Section 4.2 shall be
subject to the provisions of Sections 3.1, 3.4, 4.6, and 4.7.
Commencing with the first payment of Compensation to a
Participant on or after the Enrollment Date occurring on February
1, 1996, or the Enrollment Date as of which he becomes a
Participant, if later, each Participant shall elect to have
Tax-Deferred Contributions made to the Plan on his behalf by his
Employer as hereinafter provided.
4.2 AMOUNT OF TAX-DEFERRED CONTRIBUTIONS.
The amount of Tax-Deferred Contributions to be made to the Plan
on behalf of a Participant by his Employer shall be an integral
percentage of his Compensation of not less than one percent nor
more than 16 percent and shall not, when aggregated with all
other elective deferrals of the Participant with respect to the
Plan year, exceed $9,500 (or such adjusted amount established by
the Secretary of the Treasury pursuant to Section 402(g)(5) of
the Code). The percentage rate of Tax-Deferred Contributions to
be made on a Participant's behalf, when combined with his
percentage rate After-Tax Contributions, shall in no event exceed
16 percent of his Compensation. In the event a Participant so
elects to have his Employer make Tax-Deferred Contributions on
his behalf, his Compensation shall be reduced for each payroll
period by the percentage he elects to have contributed on his
behalf to the Plan in accordance with the terms of the Compensa-
tion reduction authorization in effect pursuant to Section 3.1 or
4.6, subject, however, to the $9,500 (or adjusted) annual
aggregate limitation on Tax-Deferred Contributions and other
elective deferrals. In the event that a Participant's aggregate
elective deferrals with respect to a Plan year, including his
Tax-Deferred Contributions hereunder, exceed the then applicable
annual aggregate limitation on elective deferrals, the
Participant, not later than the first March 1 following the close
of the Plan year, may allocate the excess deferrals among the
plans under which the deferrals occurred and notify each plan of
the portion allocated to it, and the Company, not later than the
first
-12-
<PAGE> 19
April 15 following the close of the Plan year, shall distribute
to the Participant the annual amount of the excess deferral
allocated to the Plan and any income allocable thereto, provided,
however, that any such distributed excess deferral shall
nevertheless be taken into account for purposes of computing
deferral percentages for the Plan year under Section 4.3. In any
case where an excess deferral has been distributed to a Partici-
pant pursuant to this Section 4.2, any Matching Employer
Contributions attributable to such distributed excess deferral
(and the income allocable thereto) shall be forfeited by the
Participant at the time of the distribution and shall be treated
as a forfeiture under the Plan as of the last day of the month in
which the distribution occurs in accordance with the provisions
of Section 12.8. The amount of excess deferrals to be distributed
for a taxable year will be reduced by excess contributions
previously distributed or recharacterized under Section 4.3 for
the Plan year beginning in such taxable year.
4.3 LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY
COMPENSATED EMPLOYEES.
Notwithstanding anything to the contrary contained in the Plan,
no Tax-Deferred Contributions made with respect to a Plan year on
behalf of eligible Highly Compensated Employees may result in an
average deferral percentage for Highly Compensated Employees
that exceeds the greater of:
(a) a percentage that is equal to 125 percent of the
average deferral percentage for all other eligible
Employees for the preceding Plan year; or
(b) a percentage that is not more than 200 per-
cent of the average deferral percentage for
all other eligible Employees for the
preceding Plan year and that is not more
than two percentage points higher than the
average deferral percentage for all other
eligible Employees for the preceding Plan
year.
For purposes of applying the limitation contained in this Section
4.3, the deferral percentage for any Highly Compensated Employee
who is eligible to have contributions made on his behalf under
two or more arrangements described in Section 401(k) of the Code
that are maintained by an Employer or a related corporation shall
be determined as if all
-13-
<PAGE> 20
such contributions and any contributions described in Section
401(k)(3)(D) of the Code were made under a single arrangement.
The maximum amount permitted to be contributed to the Plan on a
Highly Compensated Employee's behalf under this Section 4.3
shall be determined by reducing Tax-Deferred Contributions made
on behalf of Highly Compensated Employees in order of their
actual deferral percentages beginning with the highest amount of
such contributions.
In the event that Tax-Deferred Contributions with respect to a
Plan year for eligible Highly Compensated Employees would
otherwise exceed the limit specified in the preceding paragraph,
the Tax-Deferred Contributions made with respect to a Highly
Compensated Employee that exceed the maximum amount permitted to
be contributed to the Plan on his behalf under this Section 4.3
will be excess contributions and, along with the income but minus
the loss allocable thereto, shall be distributed to the Highly
Compensated Employees prior to the end of the next following Plan
year, or, alternatively, to the extent provided in regulations,
shall become After-Tax Contributions at the election of the
Highly Compensated Employees and shall be subject to the
provisions of the Plan applicable thereto; provided, however,
that excess contributions will not be recharacterized with
respect to a Highly Compensated Employee to the extent that the
recharacterized amounts, in combination with After-Tax
Contributions actually made by the Highly Compensated Employee,
exceed the maximum amount of After-Tax Contributions (determined
prior to applying Section 401(m)(2)(A) of the Code) that the
Employee is permitted to make under the Plan in the absence of
recharacterization, and that recharacterized excess contributions
will remain subject to the nonforfeitability requirements and
distribution limitations that apply to Tax-Deferred Contribu-
tions. The amount of excess contributions to be distributed or
recharacterized shall be reduced by excess deferrals previously
distributed under Section 4.2 for the taxable year ending in the
same Plan year. If such excess contributions are distributed more
than 2-1/2 months after the last day of the Plan year for which
the excess occurred, an excise tax may be imposed under Section
4979 of the Code on the Employer maintaining the plan with
respect to such amounts. If such excess contributions are not
distributed by the close of the Plan year following the Plan year
for which the excess occurred, the cash or deferred arrangement
will fail to satisfy the requirements of
-14-
<PAGE> 21
Section 401(k)(3) of the Code for the Plan year for which the
excess occurred and for all subsequent years the excess
contributions remain in the Trust. The income allocable to excess
Tax-Deferred Contributions shall be determined by multiplying the
gain or loss allocable for the Plan year to the Tax-Deferred
Contributions by a fraction, the numerator of which is the amount
of the Participant's excess Tax-Deferred Contributions and the
denominator of which is the sum of (i) the balance of the
Participant's sub-accounts reflecting the Tax-Deferred
Contributions as of the beginning of the Plan year, plus (ii) the
Tax-Deferred Contributions made on behalf of the Participant. The
amount eligible to be distributed or alternatively
recharacterized as After-Tax Contributions shall be determined by
reducing the maximum percentage of Tax-Deferred Contributions
from sixteen percent to such smaller percentage that will result
in the limits set forth above not being exceeded, in accordance
with procedures adopted by the Company. Each Highly Compensated
Employee affected by a reduction in the percentage of
Tax-Deferred Contributions being made on his behalf shall be
notified by the Company of the reduction as soon as practicable.
For purposes of this Section 4.3, the "deferral percentage" of an
Employee for a Plan year shall be the ratio of his Tax-Deferred
Contributions with respect to the Plan year to his Compensation
for such Plan year; an "eligible Employee" shall mean an
Employee who has met the eligibility requirements of Section 3.1
to become a Participant, whether or not he has become a Partic-
ipant; and an "eligible Highly Compensated Employee" shall mean
a Highly Compensated Employee who has met the eligibility
requirements of Section 3.1 to become a Participant, whether or
not he has become a Participant. In any case where an amount of
Tax-Deferred Contributions has been distributed to a Participant
in order to satisfy the limitations of this Section 4.3, any
Matching Employer Contributions attributable to such distributed
Tax-Deferred Contributions (and the income allocable thereto)
shall be forfeited by the Participant at the time of the
distribution and shall be treated as a forfeiture under the Plan
as of the last day of the month in which the distribution occurs
in accordance with the provisions of Section 12.8.
4.4 ADMINISTRATION.
Each Employer shall cause to be delivered to the Trustee in cash
all Tax-Deferred Contributions made with respect to payroll
periods ending during each
-15-
<PAGE> 22
calendar month in accordance with the provisions of Section 4.2,
but not later than the 30th day of the next succeeding calendar
month. Subject to the provisions of Article X, the Trustee shall
credit the amount of Tax-Deferred Contributions made by each
Employer on behalf of each Participant for each payroll period
ending during a calendar month and received by it to such
Participant's separate account no later than the last day of such
month.
4.5 LIMITATION ON EMPLOYER CONTRIBUTIONS.
Notwithstanding anything to the contrary contained in the Plan,
each Employer's contribution to the Plan for any Plan year shall
be made only out of the current or net income of such Employer
and shall not exceed the limitation specified in Section 6.2.
4.6 CHANGES IN COMPENSATION REDUCTION AUTHORIZATION.
A Participant may change the percentage of his Compensation that
his Employer contributes on his behalf as a Tax-Deferred
Contribution as of the first day of any calendar month by filing
an amended Compensation reduction authorization with the Company
by the 15th day of the month prior to the date with respect to
which such change is to become effective, in the manner and
form, or at such other time, as prescribed by the Company, except
that he shall be limited to selecting an integral percentage of
his Compensation of not less than zero percent or more than
sixteen percent. The percentage rate of Tax-Deferred
Contributions to be made on a Participant's behalf, when combined
with his percentage rate of After-Tax Contributions, shall in no
event exceed sixteen percent of his Compensation. Tax-Deferred
Contributions shall be made on behalf of such Participant by his
Employer, pursuant to his amended Compensation reduction
authorization filed in accordance with the foregoing provisions
of this Section 4.6, commencing with Compensation paid to such
Participant on or after the date with respect to which such
filing is effective, until otherwise altered or terminated in
accordance with the Plan.
4.7 SUSPENSION OF CONTRIBUTIONS.
A Participant's Tax-Deferred Contributions with respect to a Plan
year shall automatically be suspended on the date that his
Tax-Deferred Contributions for the Plan year first equal or
exceed $9,500 (or such adjusted amount established by the
-16-
<PAGE> 23
Secretary of the Treasury pursuant to Section 402(g)(5) of the
Code). Any such automatic suspension shall be in effect only for
the remaining portion, if any, of the then current Plan year.
-17-
<PAGE> 24
ARTICLE V
AFTER-TAX CONTRIBUTIONS
5.1 AFTER-TAX CONTRIBUTIONS.
The provisions of this Section 5.1 and Section 5.2 shall be
subject to the provisions of Sections 3.1, 3.4, 5.4, and 5.5.
Commencing with the first payment of Compensation to a
Participant on or after the Enrollment Date as of which he
becomes a Participant, each Participant whose percentage rate of
Tax-Deferred Contributions would otherwise be limited by
paragraph (a) or (b) of Section 4.3 may, in addition to any
Tax-Deferred Contributions that are being made on his behalf,
make an After-Tax Contribution to the Plan as hereinafter
provided.
5.2 AMOUNT OF AFTER-TAX CONTRIBUTIONS.
A Participant may make an After-Tax Contribution to the Plan that
shall be an integral percentage of his Compensation of not less
than one percent or more than 16 percent. The percentage rate of
After-Tax Contributions, when combined with the percentage rate
of Tax-Deferred Contributions to be made on such Participant's
behalf, shall in no event exceed 16 percent of his Compensation.
Each Participant who is contributing under this Section 5.2
shall have the amount of his After-Tax Contribution deducted from
his Compensation by his Employer no less frequently than once
each calendar month in accordance with the terms of the payroll
deduction authorization in effect for such Participant pursuant
to Section 3.1 or 5.4.
5.3 ADMINISTRATION.
Each Employer shall cause to be delivered to the Trustee in cash
all After-Tax Contributions deducted from the Compensation of
Participants with respect to each payroll period ending during
each calendar month in accordance with the provisions of Section
5.2, but not later than the 30th day of the next succeeding
calendar month. Subject to the provisions of Article X, the
Trustee shall credit the amount of After-Tax Contributions made
by each Participant for each payroll period ending during a
calendar month and received by it to such Participant's separate
account no later than the last day of such month.
-18-
<PAGE> 25
5.4 CHANGES IN PAYROLL DEDUCTION AUTHORIZATION.
A Participant may change the percentage of his Compensation that
he contributes to the Plan as his After-Tax Contributions or
terminate such After-Tax Contributions as of the first day of any
calendar month by providing an amended payroll deduction
authorization by the 15th day of the month prior to the date on
which such change is to become effective, in the manner and
form, or at such other time, as prescribed by the Company.
Furthermore, a Participant whose Tax-Deferred Contributions have,
in whole or in part, been recharacterized as After-Tax
Contributions in accordance with the provisions of Section 4.3
may change the percentage of his Compensation that he contributes
to the Plan as his After-Tax Contributions as of the first day of
any calendar month by providing an amended payroll deduction
authorization by the 15 day of the month prior to the date on
which such change is to become effective, in the manner and form,
or at such other time, as provided by the Company. In any such
case, a Participant shall be limited to selecting an integral
percentage of his Compensation of not less than one percent nor
more than 16 percent. The percentage rate of After-Tax
Contributions, when combined with the percentage rate of Tax-
Deferred Contributions to be made on such Participant's behalf,
shall in no event exceed 16 percent of his Compensation.
After-Tax Contributions shall be made by such Participant, and
deducted by his Employer, pursuant to his amended payroll
deduction authorization filed in accordance with the foregoing
provisions of this Section 5.4, commencing with Compensation paid
to such Participant on or after the date with respect to which
such filing is effective, until otherwise altered or terminated
in accordance with the Plan.
-19-
<PAGE> 26
ARTICLE VI
MATCHING EMPLOYER CONTRIBUTIONS
6.1 PAYMENT OF CONTRIBUTIONS.
Each Employer shall cause to be paid to the Trustee as its
Matching Employer Contribution hereunder for each payroll period
an amount that is equal to the Employer Contribution Rate
multiplied by the aggregate of:
(a) the Tax-Deferred Contribution made by such Employer
on behalf of each Participant with respect to such
payroll period; plus
(b) the After-Tax Contribution made by each Participant
during such payroll period based on Compensation
paid by such Employer during such payroll period;
provided, however, that such aggregate amount shall not include
any portion of the sum of the Tax-Deferred Contributions and
After-Tax Contributions of a Participant with respect to such
payroll period that is in excess of six percent of his Com-
pensation for such payroll period. In addition to the Matching
Employer Contribution payable pursuant to the immediately
preceding sentence, for each payroll period each Employer shall
cause to be paid to the Trustee a further Matching Employer
Contribution (an "additional Matching Employer Contribution")
for the account of each Participant employed by the Employer who,
prior to such payroll period, had all of his Tax-Deferred
Contributions and After-Tax Contributions suspended (either volun
tarily or involuntarily) at a time when the aggregate of such
contributions for the calendar year exceeded six percent of his
Compensation paid during the calendar year and prior to the
suspension. The additional Matching Employer Contribution payable
with respect to a payroll period for the account of a Participant
described in the preceding sentence is to equal the Employer
Contribution Rate multiplied by six percent of the Compensation
paid to him for such payroll period; provided, however, that such
additional Matching Employer Contribution shall be paid for the
account of a Participant only until such time as the aggregate
amount of his Tax-Deferred Contributions and After-Tax
Contributions for the calendar year equals six percent of the
Compensation that has been paid to him with respect to the
calendar year. All Matching Employer
-20-
<PAGE> 27
Contributions for any payroll period ending during a calendar
month shall be paid in cash or in Company Stock to the Trustee
not later than the 30th day of the next succeeding calendar
month. In any case, the Matching Employer Contribution for each
payroll period ending during a calendar month, regardless of when
actually paid, shall for all purposes of the Plan be deemed to
have been made no later than the last day of such month.
6.2 LIMITATION ON AMOUNT.
Notwithstanding anything to the contrary contained in the Plan,
the Matching Employer Contributions of the Employers for any Plan
year, when combined with the Tax-Deferred Contributions made by
the Employers for such Plan year, shall be made only out of the
current or accumulated net income of the respective Employers
and shall in no event exceed (i) the maximum amount which will
constitute an allowable deduction for such year to the Employers
under Section 404 of the Code, (ii) the maximum amount which may
be contributed by the Employers under Section 415 of the Code, or
(iii) the maximum amount which may be contributed pursuant to any
wage stabilization law, or any regulation, ruling, or order
issued pursuant to law.
6.3 ALLOCATION OF MATCHING EMPLOYER CONTRIBUTIONS.
The Matching Employer Contributions for each payroll period
ending during a calendar month shall be allocated no later than
the last day of such month among Participants and Former
Participants on whose behalf Tax-Deferred Contributions were made
or who made After-Tax Contributions during such payroll period.
The allocation to be made to each such Participant and Former
Participant for such payroll period shall be an amount equal to
the Employer Contribution Rate multiplied by the aggregate of (a)
the amount contributed to the Plan on his behalf as a
Tax-Deferred Contribution for such payroll period, plus (b) the
amount he contributed to the Plan as an After-Tax Contribution
for such payroll period; provided, however, that such aggregate
amount shall not include any portion of the sum of the
Tax-Deferred Contributions and After-Tax Contributions of the
Participant with respect to a payroll period that is in excess of
six percent of his Compensation for such payroll period. An
Employer's Matching Employer Contribution for a Participant or
Former Participant shall be allocated with respect to the
Tax-Deferred Contributions made on his behalf and his After-Tax
Contributions
-21-
<PAGE> 28
only to the extent that such Tax-Deferred Contributions and such
After-Tax Contributions are based on Compensation paid, or which
would have been paid but for the provisions of the Plan, by such
Employer during such payroll period. Further, a Participant or
Former Participant with respect to whom an Employer has made an
additional Matching Employer Contribution for a calendar month in
accordance with Section 6.1 shall receive an allocation equal to
the amount of such additional Matching Employer Contribution made
for his account. Subject to the provisions of Article IX, the
Trustee shall credit the amount so allocated to each such
Participant or Former Participant to his separate account no
later than the last day of the month during which such payroll
period ends.
6.4 PREVENTED CONTRIBUTIONS.
The provisions of this Section 6.4 shall be given full force and
effect notwithstanding anything to the contrary, other than
Section 6.2, contained in the Plan. In the event that any
Employer which together with any other Employers hereunder
constitutes an affiliated group within the meaning of Section
1504 of the Code is prevented from paying any part or all of its
contribution to be made for any Plan year hereunder by reason of
its having no current or accumulated net income or because such
net income is less than the contribution which such Employer
would otherwise have made, then the amount thereof so prevented
shall be paid by the other Employers in such affiliated group, in
such proportion and to such extent as prescribed under Section
404(a)(3)(B) of the Code. Such amount for all purposes of the
Plan shall be deemed to be a contribution made for such Plan
year by the Employer on behalf of which it was made. In the event
an Employer which is not a member of such an affiliated group is
prevented from paying all or part of its contribution for any
Plan year, the amount so prevented shall not be paid by any other
Employer.
6.5 DETERMINATION OF ANNUAL EMPLOYER CONTRIBUTION RATE.
The Board of Directors of the Company shall determine the
percentage to be used as the Employer Contribution Rate for each
Plan year. The Employer Contribution Rate for a specific Plan
year shall be announced to Employees by November 15 of the pre-
ceding Plan year.
-22-
<PAGE> 29
6.6 DETERMINATION OF AMOUNT OF EMPLOYER CONTRIBUTION.
The Company shall determine the amount to be contributed by each
Employer for each payroll period in accordance with the
provisions of the Plan.
6.7 EFFECT OF PLAN TERMINATION.
Notwithstanding anything to the contrary contained in the Plan,
any termination of the Plan shall terminate the liability of the
Employers to make further contributions to the Plan, other than
contributions for any payroll period ended prior to the time of
such termination.
6.8 LIMITATION ON MATCHING EMPLOYER CONTRIBUTIONS AND
AFTER-TAX CONTRIBUTIONS OF HIGHLY COMPENSATED EM-
PLOYEES.
Notwithstanding anything to the contrary contained in the Plan,
no Matching Employer Contributions or After-Tax Contributions
made with respect to a Plan year on behalf of eligible Highly
Compensated Employees may result in an average contribution per-
centage for Highly Compensated Employees that exceeds the greater
of
(a) a percentage that is equal to 125 percent of the
average contribution percentage for all other
eligible Employees for the preceding Plan year, or
(b) a percentage that is not more than 200 per-
cent of the average contribution percentage
for all other eligible Employees for the
preceding Plan year and that is not more
than two percentage points higher than the
average contribution percentage for all
other eligible Employees for the preceding
Plan year.
In the event the Matching Employer Contributions and After-Tax
Contributions with respect to a Plan year for eligible Highly
Compensated Employees would otherwise exceed the limit specified
in the preceding sentence, a certain amount of the Matching
Employer Contributions and After-Tax Contributions, along with
the income but minus the losses allocable thereto, shall be
distributed or forfeited prior to the end of the next following
Plan year, with such certain amount and the treatment thereof to
be determined as follows:
-23-
<PAGE> 30
(c) first, the maximum percentage of After-Tax
Contributions shall be reduced, in accor-
dance with procedures adopted by the Com-
pany, from sixteen percent to the greater of
six percent or such percentage that will
result in the average contribution percent-
age limit specified above not being exceed-
ed, and the excess amount of After-Tax
Contributions attributable to such reduction
shall be distributed to the Highly Compensa-
ted Employees who made the excess contribu-
tions;
(d) second, if application of (c) does not cause
the Plan to meet the average contribution
percentage limit specified above, the maxi-
mum percentage of After-Tax Contributions
shall be further reduced from six percent to
such smaller percentage that, taking into
account the reduction in the After-Tax Con-
tributions and the loss of the Matching Em-
ployer Contribution related thereto, will
result in the average contribution percent-
age limit specified above not being ex-
ceeded, and the excess amount of After-Tax
Contributions attributable to such reduction
shall be distributed to the Highly Compen-
sated Employees who made the excess contri-
butions;
(e) third, if (d) is applicable, and a Highly
Compensated Employee receiving a distribu-
tion thereunder of excess After-Tax Contri-
butions was fully vested in amounts credited
to his Company Stock Fund Account as of the
time such excess contribution occurred, that
portion of the Matching Employer Contribu-
tion for such Plan year that relates to the
After-Tax Contributions distributed under
(d) shall also be distributed to the Highly
Compensated Employee; and
(f) fourth, if (d) is applicable but (e) is not
applicable, that portion of the Matching Em-
ployer Contribution for such Plan year that
relates to the After-Tax Contribution dis-
tributed under (d) shall be treated as a
forfeiture under the Plan as of the last day
of the next following Plan year.
The income allocable to excess Matching Employer Contributions
and After-Tax Contributions shall be determined in the same
manner set forth in Section 4.3, by substituting "excess
Matching Employer
-24-
<PAGE> 31
Contributions and After-Tax Contributions" for "excess
Tax-Deferred Contributions." For purposes of this Section 6.8,
the "contribution percentage" of an Employee for a Plan year
shall be the ratio of his aggregate After-Tax Contributions and
Matching Employer Contributions with respect to the Plan year to
his Compensation for such Plan year, except that, to the extent
permitted by regulations to be promulgated by the Secretary of
the Treasury, the Company may elect to take into account in
computing the numerator of each eligible Employee's Contribution
percentage the Tax-Deferred Contribution made on behalf of the
eligible Employee for the Plan year; an "eligible Employee" shall
mean an Employee who has met the eligibility requirements of
Section 3.1 to become a Participant, whether or not he has
become a Participant; and an "eligible Highly Compensated
Employee" shall mean a Highly Compensated Employee who has met
the eligibility requirements of Section 3.1 to become a
Participant, whether or not he has become a Participant. The
determination hereunder of whether excess After-Tax
Contributions or Matching Employer Contribution have been made
by an eligible Employee with the respect to a Plan year shall
occur after first determining the amount, if any, of that
portion of the Tax-Deferred Contribution of the eligible
Employee that is in excess of the annual aggregate limitation on
Tax-Deferred Contributions and then determining the amount, if
any, of Tax-Deferred Contributions made on behalf of the
eligible Employee that are in excess of the limitations imposed
under Section 4.3.
Notwithstanding anything to the contrary contained in the Plan,
the following multiple use limitation as required under Section
401(m) of the Code shall apply: the sum of the average deferral
percentage and the average contribution percentage for Highly
Compensated Employees may not exceed the aggregate limit. The
aggregate limit is the sum of (g) 125 percent of the greater of
the average contribution percentage or the average deferral
percentage for all other eligible Employees and (h) the lesser of
200 percent of, or two percentage points plus, the lesser of such
average contribution percentage or such average deferral
percentage, or, if it would result in a larger aggregate limit,
the sum of (i) 125 percent of the lesser of the average con-
tribution percentage or the average deferral percentage for all
other eligible Employees and (j) the lesser of 200 percent of, or
two percentage points plus, the greater of such average
contribution percentage or such average deferral
-25-
<PAGE> 32
percentage. In the event that, after the satisfaction of the
limitations in Section 4.3 and this Section 6.8, it is determined
that contributions under the Plan fail to satisfy this multiple
use limitation, the multiple use limitation shall be satisfied by
further reducing the contribution percentages of Highly
Compensated Employees (beginning with the highest amount of such
contributions) to the extent necessary to eliminate such excess,
with such further reductions to be treated as excess
contributions and disposed of as provided in this Section 6.8.
-26-
<PAGE> 33
ARTICLE VII
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
7.1 DEPOSIT OF CONTRIBUTIONS.
All Tax-Deferred Contributions and After-Tax Contributions shall
be deposited by the Trustee upon receipt in the Investment Funds
as the Company shall direct and all Matching Employer Contribu-
tions shall be deposited by the Trustee upon receipt in the
Goodyear Stock Fund; provided, however, that the Company's
directions with respect to all Tax-Deferred Contributions and
After-Tax Contributions shall be based on the investment
election of each Participant made in accordance with the
provisions of Section 7.2. For all purposes hereunder,
Tax-Deferred Contributions, After-Tax Contributions, and
Matching Employer Contributions for each payroll period ending
during a calendar month shall be deemed to have been deposited
no later than the last day of such month. The Trustee shall have
no duty to collect or enforce payment of contributions or
inquire into the amount or method used in determining the amount
of contributions, and shall be accountable only for
contributions received by it.
7.2 INVESTMENT ELECTIONS OF PARTICIPANTS.
Each Participant shall, upon electing to participate under the
Plan in accordance with the provisions of Section 3.1, make an
investment election in the manner prescribed by the Company,
directing the manner in which his Tax-Deferred Contributions and
After-Tax Contributions shall be deposited and held by the
Trustee. The investment election of a Participant with respect to
his Tax-Deferred Contributions and After-Tax Contributions shall
specify the percentage of such contributions that is to be
deposited in each of the Investment Funds, which percentage
amounts must be whole percentage amounts not in excess in the
aggregate of 100%. The investment election by a Participant shall
remain in effect until he ceases to be a Participant in
accordance with the provisions of the Plan; provided, however,
that a Participant may change his investment election, at any
time, in the manner and form as prescribed by the Company by
making a new election specifying a change in his investment
election. Any such change must again specify a percentage of the
Tax-Deferred Contributions and After-Tax Contributions of the
Participant that is
-27-
<PAGE> 34
to be deposited in each of the Investment Funds, which percentage
amounts must be whole percentage amounts not in excess in the
aggregate of 100%, and shall not affect the amounts credited to
any separate account or sub-account of the Participant or to any
Investment Fund as of any date prior to the date on which such
change is to become effective.
7.3 ELECTION TO TRANSFER INTEREST BETWEEN FUNDS.
A Participant who has an interest in an Investment Fund may elect
at any time to transfer all or a portion of such interest to
another Investment Fund. The Participant election must specify
the Investment Fund from which the transfer is to be made, the
Investment Fund to which the transfer is to be made, and a
percentage of the amount eligible for transfer that is to be
transferred, which percentage must be an integral multiple of
1%. Any such transfer election must be made in the manner and
form and at the time prescribed by the Company. Once the election
becomes effective, it shall be irrevocable.
7.4 ELECTION TO TRANSFER INTEREST FROM GOODYEAR STOCK FUND.
A Participant who has attained age 52 and who has an interest in
the Goodyear Stock Fund may elect at any time to transfer all or
a portion of such interest to an Investment Fund. The Participant
election must specify the Investment Fund to which the transfer
is to be made and a dollar amount or percentage of the amount
eligible for transfer that is to be transferred. Any such
transfer election must be made in the manner and form and at the
time prescribed by the Company. Once the election becomes
effective, it shall be irrevocable. At no time may a Participant
transfer amounts from an Investment Fund to the Goodyear Stock
Fund.
-28-
<PAGE> 35
ARTICLE VIII
ESTABLISHMENT OF FUNDS AND PARTICIPANTS' ACCOUNTS
8.1 ESTABLISHMENT OF GENERAL FUND.
The Trustee shall establish a General Fund as required to hold
and administer any assets of the Trust Fund that are not
allocated among the separate Investment Funds or the Goodyear
Stock Fund as provided in the Plan or the Trust Agreement. The
General Fund shall be held and administered by the Trustee as a
separate common trust fund. The interest of each Participant,
Former Participant, or Beneficiary under the Plan in the General
Fund shall be an undivided interest.
8.2 INVESTMENT FUNDS.
The Trustee shall establish the following Investment Funds:
(a) A Stable Value Fund which shall be invested
primarily in contracts with banks, insurance
companies, or other financial institutions
which provide for rates of return for par-
ticular periods of time. Additionally, the
Stable Value Fund may be invested in invest-
ment grade securities which provide for
fixed or determinable rates of return. The
securities may be held directly by the Plan,
in group trusts, or in separate accounts of
insurance companies.
(b) An S&P 500 Index Stock Equity Fund which shall be
invested primarily in the 500 stocks that comprise
the S&P 500 Composite Index.
(c) Asset Allocation Funds comprised of the following
three balanced funds:
(i) A Conservative Asset Allocation Fund
which shall be invested primarily in
bonds and stocks with a target allo-
cation of 60% bonds and 40% United
States stocks.
(ii) A Moderate Asset Allocation Fund which
shall be invested primarily in bonds
and stock with a target allocation of
40% bonds and 60% United States stocks.
-29-
<PAGE> 36
(iii) An Aggressive Asset Allocation Fund
which shall be invested primarily in
bonds and stocks with a target allo-
cation of 65% United States stocks, 15%
international stocks, and 20% bonds.
(d) A Large Capitalization Stock Equity Fund which shall
be invested primarily in common stocks of medium and
large companies that have better-than-average
prospects for appreciation.
(e) A Small Capitalization Stock Equity Fund which shall
be invested primarily in small company stocks that
are expected to provide long-term capital growth.
(f) An International Stock Equity Fund which shall be
invested primarily in common stocks and debt
obligations of companies and governments outside of
the United States that are expected to produce
long-term capital growth.
(g) A Self-Directed Fund Account which the Par-
ticipant, Former Participant, or Beneficiary
may direct the investment of all or any part
of his separate account among a list of
mutual funds selected by the Company and the
Trustee. The provisions of this para-
graph (g) of Article 8.2 shall be effective
only if and to the extent that the Company,
in its discretion, implements them.
(h) If a loan from the Plan to a Participant is
approved in accordance with the provisions
of Article XX, the Company shall direct the
establishment and maintenance of a Loan
Investment Fund in the Participant's name.
Notwithstanding any other provision of the
Plan to the contrary, income received with
respect to a Participant's Loan Investment
Fund shall be allocated and the Loan Invest-
ment Fund shall be administered as provided
in Article XX.
The Company may determine from time to time to direct (i) the
closing of an Investment Fund or Investment Funds or (ii) the
establishment and maintenance of an additional Investment Fund or
Investment Funds and shall select the investments for such
Investment Fund or Investment Funds. The Company shall
communicate the same and any changes
-30-
<PAGE> 37
therein in writing to the Plan Administrator and the Trustee. All
assets of each Investment Fund, except for a Self-Directed Fund
Account or a Loan Investment Fund, shall be held and administered
by the Trustee as a separate trust fund. The interest of each
Participant, Former Participant, or Beneficiary under the Plan
in any Investment Fund, other than a Self-Directed Fund Account
or a Loan Investment Fund, and other than an Investment Fund that
consists of a mutual fund, shall be an undivided interest. The
interest of each Participant, Former Participant, or Beneficiary
under the Plan in any Investment Fund that consists of a mutual
fund shall be an undivided interest in the units of the mutual
fund held by the Plan. All assets of each Self-Directed Fund
Account and each Loan Investment Fund shall be held and
administered as a separate trust fund.
8.3 GOODYEAR STOCK FUND.
The Company shall direct the establishment and maintenance of a
Goodyear Stock Fund to which Matching Employer Contributions
shall be allocated. Subject to the provisions of the Trust
Agreement, the assets of the Goodyear Stock Fund shall be
invested by the Trustee primarily in Company Stock. Assets of the
Goodyear Stock Fund may also be invested by the Trustee in
interest-bearing common, commingled, group, or collective trust
funds maintained by the Trustee exclusively for the short-term
investment of assets of tax-qualified benefit plans. The Trustee
may purchase Company Stock on the open market through a national
securities exchange or in the over-the-counter market through a
broker-dealer which is a member of the National Association of
Securities Dealers. In addition, the Trustee may purchase Company
Stock from the Company in accordance with the requirements of
Section 408 of the Act. The Goodyear Stock Fund shall be held and
administered as a separate common trust fund. The interest of
each Participant, Former Participant, or Beneficiary under the
Plan in the Goodyear Stock Fund shall be an undivided interest.
8.4 APPOINTMENT OF INVESTMENT MANAGERS.
As provided in the Trust Agreement, the Company may appoint one
or more investment managers (as defined in Section 3(38) of
ERISA) with respect to any portion of any trust fund established
under this Article VIII.
-31-
<PAGE> 38
8.5 INCOME ON TRUST FUNDS.
Any dividends, interest, distributions, or other income received
by the Trustee in respect of a Fund shall be reinvested by the
Trustee in the respective Fund for which such income was
received.
8.6 SEPARATE ACCOUNTS.
As of the first date a contribution is made by or on behalf of an
Employee, there shall be established a separate account in his
name reflecting his interest in the Trust Fund. Each separate
account shall be maintained and administered for each
Participant, Former Participant, and Beneficiary in accordance
with the provisions of the Plan.
8.7 SUB-ACCOUNTS.
The separate account of each Participant, Former Participant, and
Beneficiary shall be divided into individual sub-accounts
reflecting the portion of such account which is derived from
Matching Employer Contributions, Tax-Deferred Contributions, and
After-Tax Contributions. Each sub-account shall reflect
separately contributions allocated to each Investment Fund and
the Goodyear Stock Fund and the earnings and losses attributable
thereto. Such other sub-accounts may be established as are
necesssary or appropriate to reflect the interest of a
Participant, Former Participant, or Beneficiary in the Trust
Fund.
8.8 ACCOUNT BALANCES.
For all purposes hereof, the balance of each separate account of
a Participant, Former Participant, or Beneficiary, including
sub-accounts, as of any date shall be the balance of such account
or sub-account after all credits and charges thereto, for and as
of such date, have been made as provided herein.
8.9 FUNDS FROM PREDECESSOR PLANS.
At the direction of the Company, the Trustee is authorized to
accept the transfer of funds being held by the funding agent for
a predecessor plan (as hereinafter defined) for the benefit of an
eligible Employee, provided that at no time in the course of the
transfer shall such funds be made available to the eligible
Employee. The Trustee shall have no duty to verify whether the
amount of any predecessor plan funds delivered to it is correct,
and
-32-
<PAGE> 39
shall have no duty of inquiry into the administration of any
predecessor plan or of any prior trust or other funding agency
for a predecessor plan. The Trustee shall deposit all funds
received by it from a predecessor plan in the Goodyear Stock Fund
and the Investment Funds in accordance with the directions of the
Company, which shall be based on the investment elections of the
eligible Employees made in the form and manner prescribed by the
Company; provided, however, that no predecessor plan funds may
be deposited in the Goodyear Stock Fund other than funds that
were invested in common stock of the Company under the
predecessor plan immediately prior to the transfer. The Trustee
shall establish and maintain a separate account and such
sub-accounts in the name of an eligible Employee as are necessary
to reflect his interest that is attributable to predecessor plan
funds and to reflect the portion of his predecessor plan funds
that is attributable to voluntary after-tax contributions, to
contributions made pursuant to a cash or deferred arrangement
qualified under Section 401(k) of the Code, and to other
employer contributions. Each such separate account shall, upon
each valuation date, share in the net increase or decrease in the
value of the assets of the Investment Funds and the Goodyear
Stock Fund maintained under the Plan on the basis of the balance
of such separate account immediately prior to the valuation date
in accordance with Section 10.1, provided, however, that such
balance for this purpose only shall be reduced by the amount of
any funds transferred to the Trustee since the immediately
preceding valuation date. With the exception of funds transferred
from a predecessor plan maintained by an Employer or a related
corporation, which shall be vested in accordance with the next
following sentence of this Section 8.9, all predecessor plan
funds shall at all times be fully vested and nonforfeitable. The
vested interest of a Participant in funds transferred from a
predecessor plan maintained by an Employer or a related
corporation shall be determined as of the date of transfer based
on the vesting provisions of the predecessor plan in effect on
such date, and on and after the date of transfer the vested
interest shall be determined based on the vesting provisions of
the Plan or, in the event an election under Section 12.6 applies
with respect to the Participant, based on the vesting provisions
of the predecessor plan as of the date of transfer. Predecessor
plan funds shall be distributed at such times and according to
such methods as are generally provided under the Plan. In
addition, predecessor plan
-33-
<PAGE> 40
funds attributable to voluntary, after-tax contributions made
under the predecessor plan shall be subject hereunder to the
withdrawal provisions applicable to After-Tax Contributions and
predecessor plan funds that were contributed pursuant to a cash
or deferred arrangement qualified under Section 401(k) of the
Code shall be subject hereunder to the withdrawal and
distribution provisions applicable to Tax-Deferred
Contributions. For purposes of this Section 8.9, a predecessor
plan shall mean any other defined contribution plan that com-
plies with the requirements of Section 401(a) of the Code and
satisfies the conditions specified in Section 401(a)(11)(B)(iii)
of the Code.
-34-
<PAGE> 41
ARTICLE IX
LIMITATIONS ON ALLOCATIONS TO ACCOUNTS
9.1 LIMITATION ON CREDITING OF CONTRIBUTIONS.
Notwithstanding anything to the contrary contained in the Plan,
the amount of Matching Employer Contributions, Tax-Deferred
Contributions, and After-Tax Contributions, which may be
credited to the separate account of any Participant or Former
Participant shall be subject to the following provisions:
(a) For purposes of this Section 9.1, the "annual
addition" with respect to a Participant or Former
Participant shall mean the sum for any Plan year of
the following amounts:
(i) Tax-Deferred Contributions, After-Tax
Contributions, and Matching Employer
Contributions that are credited to
the separate account of such Partici-
pant or Former Participant for such
Plan year pursuant to Sections 4.4,
5.3, and 6.4, and
(ii) the amount, if any, of Employer Con-
tributions and forfeitures and em-
ployee after-tax contributions that
are credited to the Participant or
Former Participant under any other
qualified defined contribution plan
(whether or not terminated) main-
tained by an Employer or a related
corporation concurrently with the
Plan.
(b) For purposes of this Section 9.1, the "com-
pensation" of a Participant or Former
Participant shall mean (in contrast with
Compensation as defined in paragraph (g) of
Section 2.1) his wages, salaries, and other
amounts received for personal services actu-
ally rendered in the course of employment
with an Employer or a related corporation,
excluding, however,
-35-
<PAGE> 42
(i) for Plan years beginning before
January 1, 1998, contributions made
by an Employer or a related
corporation to a plan of deferred
compensation (including Tax-Deferred
Contributions hereunder) to the
extent that, before the application
of the limitations of Section 415 of
the Code to such plan, the contribu-
tions are not includable in the gross
income of the Participant or Former
Participant for the taxable year in
which contributed;
(ii) for Plan years beginning before January
1, 1998, contributions made by an
Employer or a related corporation on
his behalf to a simplified employee
pension described in Section 408(k) of
the Code;
(iii) any distributions from a plan of de-
ferred compensation (other than amounts
received pursuant to an unfunded
non-qualified plan in the year such
amounts are includable in the gross
income of the Participant or Former
Participant);
(iv) amounts received from the exercise of a
non-qualified stock option or when
restricted stock or other property held
by the Participant or Former
Participant becomes freely transfer-
able or is no longer subject to sub-
stantial risk of forfeiture;
(v) amounts received from the sale, ex-
change, or other disposition of stock
acquired under a qualified stock op-
tion; and
(vi) any other amounts that receive special
tax benefits, such as premiums for
group term life insurance (but only to
the extent that the premiums are not
includable in the gross income of the
Participant or Former Participant).
(c) For the Plan year ending December 31, 1984, and each
Plan year thereafter, the annual addition with
respect to a Participant or
-36-
<PAGE> 43
Former Participant shall not exceed the
lesser of
(i) $30,000 (subject to adjustment annu-
ally pursuant to Internal Revenue
Service regulations and rulings under
Section 415 of the Code), or
(ii) 25 percent of such Participant's com-
pensation paid for such Plan year.
If as a result of the allocation of forfeitures, a
reasonable error in estimating the Participant's
compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of
Section 402(g)(3) of the Code) that may be made
with respect to any individual under the limits of
Section 415 of the Code, or other reasonable facts
and circumstances that the Commissioner of the
Internal Revenue finds to justify the availability
of the rules set forth below, the annual addition to
the separate account of a Participant or Former
Participant in any Plan year would exceed the amount
that may be applied for his benefit under the
limitation contained in this Section 9.1 absent such
limitation, the amount of his After-Tax
Contributions for such Plan year and of that portion
of the Matching Employer Contributions that would be
allocated to such Participant or Former Participant
under Section 6.3 based thereon, but that would
exceed the limitation herein, shall be reduced
(applying the same percentage reduction with
respect to both such After-Tax Contributions and
Matching Employer Contributions) to the extent
necessary to eliminate such excess. The amount of
any such reduction of After-Tax Contributions shall
be returned to such Participant or Former
Participant (plus the earnings, if any, attributable
to such amount), and the amount of any such
reduction of Matching Employer Contributions shall
be deemed a forfeiture for such Plan year and shall
be applied against the Company's Matching Employer
Contribution obligation as described below. If the
limitation contained in this Section 9.1 would still
be exceeded after application of the previous
sentence, the amount of the Tax-Deferred
Contributions made on behalf of such Participant or
Former Participant for such Plan year and that
-37-
<PAGE> 44
portion of the Matching Employer Contribution that
would be allocated to such Participant or Former
Participant under Section 6.3 based thereon, but
that would exceed the limitation herein, shall be
reduced (applying the same percentage reduction with
respect to both Tax-Deferred Contributions and
Matching Employer Contributions) to the extent
necessary to eliminate such excess. The amount of
any such reduction of Tax-Deferred Contributions
shall be applied as the initial Tax-Deferred
Contributions made by the Participant for the next
following limitation year until such amount is
exhausted, unless the Participant is not covered by
the Plan as of the end of the limitation year, in
which event such amount shall be deemed a for-
feiture for such Plan year and shall be applied
against the Company's Matching Employer Contribution
obligation as described below. The amount of any
such reduction of Matching Employer Contributions
shall be deemed a forfeiture for such Plan year and
shall be applied against the Company's Matching
Employer Contributions obligation as described
below. Amounts which are deemed forfeitures
hereunder with respect to the Company for a Plan
year shall be held unallocated in a suspense account
established with respect to the Company and shall
for all Plan purposes be applied against the
Company's Matching Employer Contribution obligation
for the next following Plan year (and succeeding
Plan years, as necessary). No such suspense account
shall share in any increase or decrease in the net
worth of the Investment Funds and the Goodyear Stock
Fund.
(d) For Plan years beginning before January 1,
2000, if any Participant or Former Partici-
pant in the Plan also shall be covered by a
qualified defined benefit plan (whether or
not terminated) maintained by an Employer or
a related corporation concurrently with the
Plan, the sum of subparagraphs (i) and (ii)
below shall in no event exceed 1.0 in any
Plan year where
(i) is the defined benefit plan fraction
(determined as of the close of such
Plan year), the numerator of which is
the projected annual benefit of such
-38-
<PAGE> 45
Participant or Former Participant under
such plan and the denominator of which
is the lessor of (1) the product of
1.25 multiplied by the dollar
limitation in effect under Section
415(b)(1)(A) of the Code for such Plan
year, or (2) the product of 1.4
multiplied by the amount which may be
taken into account under Section
415(b)(1)(B) of the Code with respect
to such Participant or Former
Participant for such Plan year; and
(ii) is the defined contribution plan
fraction, the numerator of which is
the sum of the annual addition to the
separate accounts of such Participant
or Former Participant as of the close
of such Plan year and for each prior
year of service with an Employer or a
related corporation and the denomina-
tor of which is the sum of the lesser
of the following amounts determined
for such Plan year and each prior
year of service with an Employer or
a related corporation: (1) the
product of 1.25 multiplied by the
dollar limitation in effect under
Section 415(c)(1)(A) of the Code for
such Plan year determined without
regard to Section 415(c)(6), or
(2) the product of 1.4 multiplied by
the amount which may be taken into
account under Section 415(c)(1)(B)
(or Section 415(c)(7) or (8), if ap-
plicable) with respect to such Par-
ticipant or Former Participant for
such Plan year.
In the event the special limitation contained in
this paragraph (d) is exceeded, the benefits
otherwise payable to the Participant or Former
Participant under any such qualified defined benefit
plan shall be reduced to the extent necessary to
meet such limitation. If the Plan satisfied the
applicable requirements of Section 415 of the Code
as in effect for all limitation years beginning
before January 1, 1987, an amount shall be
subtracted from the numerator of the defined
contribution plan fraction (not exceeding such
numerator) as prescribed by the Secretary of the
Treasury so that the sum of the defined benefit plan
-39-
<PAGE> 46
fraction and the defined contribution plan fraction
computed under Section 415(e)(1) of the Code, as
revised by the Tax Reform Act of 1986, does not
exceed 1.0 for such limitation year.
(e) In the event that a Participant or Former
Participant is covered by any other quali-
fied defined contribution plan (whether or
not terminated) maintained by an Employer
or a related corporation concurrently with
the Plan, the procedure set forth in para-
graph (c) of this Section 9.1 shall be
implemented first by returning the contribu-
tions made by the Participant or Former
Participant for such Plan year under all of
the defined contribution plans other than
the Plan. If the limitation contained in
this Section 9.1 is still not satisfied
after returning all of the contributions
made by the Participant or Former Partici-
pant under all such other plans, the proce-
dure set forth in paragraph (c) of this
Section 9.1, without regard to the foregoing
provisions of this paragraph (e), shall be
invoked to eliminate any such excess. If
the limitation contained in this Section 9.1
is still not satisfied after invocation of
the procedure set forth in paragraph (c) of
this Section 9.1, the portion of the Employ-
er contributions and of forfeitures for the
Plan year under all such other plans, which
has been allocated to such Participant
thereunder, but which exceeds the limitation
herein, shall be deemed a forfeiture for
such Plan year and shall, subject to the
provisions of this Section 9.1, be reallo-
cated among and credited to the separate
accounts of the remaining Participants and
Former Participants in such other plans who
are eligible to share in such contributions
and forfeitures for such Plan year; provid-
ed, however, that the amount of the Employer
contributions and of any forfeitures which
is deemed a forfeiture under this para-
graph (e) shall be effected on a pro rata
basis among all of such plans, including the
Plan, unless the Participant or Former Par-
ticipant is covered by a money purchase pen-
sion plan or a tax credit plan meeting the
requirements of Section 409 of the Code, in
which event the forfeiture shall be effected
first under the Plan (and any other defined
contribution plan which is not a money
-40-
<PAGE> 47
purchase pension plan nor a tax credit plan) and, if
the limitation is still not satisfied, then under
such money purchase pension plan, and finally, if
the limitation is still not satisfied, then under
such tax credit plan. In the event that a
Participant or Former Participant is covered by a
qualified defined benefit plan, the procedure set
forth in paragraph (d) of this Section 9.1 shall be
implemented prior to effecting any reduction in the
benefit of such Participant or Former Participant
under the defined contribution plans.
(f) In the event that the limitations of paragraph (d)
of this Section 9.1 are applicable, the following
adjustments shall be made for purposes of applying
such paragraph (d):
If, before October 3, 1973, the Particpant or
Former Participant was an active participant in a
qualified defined benefit plan maintained by an
Employer and otherwise satisfies the
requirements of Section 2004(d)(2) of the Act,
the defined benefit plan fraction described in
sub-paragraph (d)(i) shall not exceed 1.0.
(g) For purposes of this Section 9.1, the meaning of
"related corporation" shall be as modified by
Section 415(h) of the Code.
9.2 SCOPE OF LIMITATION.
The limitations contained in this Article IX shall be applicable
only with respect to benefits provided pursuant to the defined
contribution plans and defined benefit plans described in Sec-
tion 415(k) of the Code.
-41-
<PAGE> 48
ARTICLE X
VALUATIONS, DIVIDEND REINVESTMENTS, AND VOTING
10.1 VALUATION OF PARTICIPANT'S INTEREST.
As of each valuation date hereunder, the Trustee shall adjust
each separate account of each Participant, Former Participant
and Beneficiary, and any sub-account maintained thereunder, to
reflect any increase or decrease in the value of the Trust Fund
since the immediately preceding valuation date in the following
manner:
(a) The Trustee shall value all of the assets of the
Goodyear Stock Fund at fair market value.
(b) The Trustee shall value all of the assets of
the Investment Funds with respect to which
no investment manager has been appointed at
fair market value and each investment mana-
ger shall value all of the assets of the
Investment Fund with respect to which he has
been appointed at fair market value and
shall provide the same to the Trustee. In
valuing the Investment Funds with respect to
which no investment manager has been ap-
pointed that consist of mutual funds, the
Trustee may rely on price data supplied by
the mutual fund manager.
(c) The Trustee shall then ascertain the net in-
crease or decrease in the value of the re-
spective Investment Funds and the Goodyear
Stock Fund which is attributable to net
income, investment management fees, and all
profits and losses, realized and unrealized,
since the immediately preceding valuation
date, on the basis of the valuation provided
under paragraphs (a) and (b) of this Sec-
tion 10.1, and after making appropriate
adjustments for the amount of all contribu-
tions made with respect to the month in
which such valuation date occurs and for any
distributions and withdrawals from the
respective Investment Funds and the Goodyear
Stock Fund since such preceding valuation
date and prior to such date.
(d) The Trustee shall then allocate the net increase or
decrease in the value of the respective Investment
Funds and the Goodyear
-42-
<PAGE> 49
Stock Fund as thus determined among all
Participants, Former Participants, and Bene-
ficiaries who have an interest in the respective
Investment Funds and the Goodyear Stock Fund,
separately with respect to each of such Investment
Funds and the Goodyear Stock Fund, in the ratio that
the balance of each separate account maintained
under such Investment Fund or the Goodyear Stock
Fund on the date immediately preceding such valu-
ation date bears to the aggregate of the balances of
all such separate accounts on the day immediately
preceding such valuation date, and shall credit or
charge, as the case may be, each such separate
account with the amount of its allocated share.
Moreover, the Trustee shall in the same manner
credit or charge any sub-account maintained
thereunder with the amount of its allocated
share.
(e) Finally, the Trustee shall then credit to
the appropriate separate account and sub-
accounts of each Participant and Former Par-
ticipant, as applicable and in accordance
with the provisions of Article VIII, the
Tax-Deferred Contributions made on his be-
half, his After-Tax Contributions, and his
share of Matching Employer Contributions
made since the immediately preceding
valuation date.
The Trustee may maintain its records for the Plan on the basis of
unit accounting.
10.2 REINVESTMENT OF DIVIDENDS.
Except as may be otherwise directed by the Company, all dividends
and other earnings of the Goodyear Stock Fund shall be used by
the Trustee to purchase additional Company Stock.
10.3 VOTING COMPANY STOCK.
At least 30 days prior to each annual or special meeting of its
shareholders, the Company shall cause to be sent to each
Participant, and to each Former Participant and Beneficiary, a
copy of the proxy solicitation material therefor, together with a
form requesting that each such Participant, Former Participant,
or Beneficiary give to the Trustee or proxy solicitation and
tabulation agent his confidential instructions with respect to
the manner in which his proportionate interest in the Company
-43-
<PAGE> 50
Stock held in the Goodyear Stock Fund shall be voted by the
Trustee. Upon receipt of such instructions, the Trustee shall
vote the Company Stock as instructed. Furthermore, the Trustee
shall vote the Company Stock with respect to which it does not
receive instructions in the same proportions as it votes the
Company Stock for which it received instructions. Instructions
received from individual Participants, Former Participants, and
Beneficiaries by the Trustee shall be held in the strictest
confidence and shall not be divulged or released to any person,
including officers or employees of the Company.
10.4 FINALITY OF DETERMINATIONS.
The Trustee shall have exclusive responsibility for determining
the net income, liabilities, and value of the assets of the
Goodyear Stock Fund and for determining the balance of each
separate account and sub-account maintained hereunder. The
Trustee shall have exclusive responsibility for determining the
net income, liabilities, and value of the assets of the
Investment Funds with respect to which no investment manager has
been appointed, and each investment manager shall have exclusive
responsibility for determining the net income, liabilities, and
value of the assets of the Investment Fund with respect to which
he has been appointed. In determining the net income,
liabilities, and value of the assets of the Investment Funds with
respect to which no investment manager has been appointed that
consist of mutual funds, the Trustee may rely on information
provided by the mutual fund manager. The Trustee's and investment
manager's determinations thereof shall be conclusive upon the
Employers, and all Participants, Former Participants, and
Beneficiaries hereunder.
10.5 NOTIFICATION.
As soon as reasonably possible after the end of each Plan year,
the Company shall notify each Participant, Former Participant,
and Beneficiary of the balance of his separate account and sub-
accounts as of the last day of such Plan year.
-44-
<PAGE> 51
ARTICLE XI
WITHDRAWALS WHILE EMPLOYED
11.1 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS.
A Participant may elect to withdraw in cash an amount equal to
all or any portion of the value of the balance of his sub-account
attributable to his After-Tax Contributions as of the most recent
valuation date. In the event a Participant has more than one
Investment Fund in his sub-account attributable to After-Tax
Contributions and he withdraws only a portion of the balance of
such sub-account, the withdrawal shall be charged to each of the
Investment Funds in the ratio that the balance of the sub-account
invested in the Investment Fund as of the most recent valuation
date bears to the balance of the sub-account as of such date.
11.2 WITHDRAWAL OF MATCHING EMPLOYER CONTRIBUTIONS.
Prior to his attainment of age 59-1/2, a Participant may not
withdraw amounts attributable to Matching Employer Contributions
unless the Company has made a determination that a hardship
exists and such withdrawal is made in accordance with the pro-
visions of Section 11.4. A Participant who has attained the age
of 59-1/2 may elect to withdraw in cash an amount equal to all or
any portion of his vested interest in the value of the balance of
his sub-account attributable to Matching Employer Contributions
as of the most recent valuation date. A Participant's vested
interest in Matching Employer Contributions shall be the amount
in which he would be vested under Section 12.2 had he terminated
his employment with his Employer. In the event a Participant has
one or more Investment Funds in his sub-account attributable to
Matching Employer Contributions and he withdraws only a portion
of the balance of such sub-account, the withdrawal shall be
charged to each of the Investment Funds and the Goodyear Stock
Fund in the ratio that the balance of the sub-account invested in
the Investment Fund or the Goodyear Stock Fund as of the most
recent valuation date bears to the balance of the sub-account as
of such date.
11.3 WITHDRAWAL OF TAX-DEFERRED CONTRIBUTIONS.
Prior to his attainment of age 59-1/2, a Participant may not
withdraw amounts attributable to Tax-Deferred Contributions
unless the Company has made
-45-
<PAGE> 52
a determination that a hardship exists and such withdrawal is
made in accordance with the provisions of Section 11.4. A
Participant who has attained the age of 59-1/2 may elect to
withdraw in cash an amount equal to all or any portion of the
value of the balance of his sub-account attributable to his
Tax-Deferred Contributions as of the most recent valuation date.
In the event a Participant has more than one Investment Fund in
his sub-account attributable to Tax-Deferred Contributions and he
withdraws only a portion of the balance of such sub-account, the
withdrawal shall be charged to each of the Investment Funds in
the ratio that the balance of the sub-account invested in the
Investment Fund as of the most recent valuation date bears to the
balance of the sub-account as of such date.
11.4 CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS.
Notwithstanding anything to the contrary contained in this
Article XI, the restrictions imposed in Sections 11.2 and 11.3
which prohibit withdrawal of amounts attributable to Tax-Deferred
Contributions and Matching Employer Contributions prior to the
attainment of age 59-1/2 shall be inapplicable in any case in
which the Company, with respect to a withdrawal made hereunder,
has made a determination that the withdrawal is necessary to
satisfy an immediate and heavy financial need of the Participant
in accordance with the provisions of this Section 11.4. The
Company shall grant a hardship withdrawal only if it determines
that the withdraw al is necessary to meet an immediate and heavy
financial need of the Participant. An immediate and heavy
financial need of the Participant means a financial need on
account of:
(a) medical expenses described in Section 213(d) of the
Code incurred by the Participant, the Participant's
spouse, or any dependent of the Participant (as
defined in Section 152 of the Code);
(b) purchase (excluding mortgage payments) of a
principal residence for the Participant.
(c) payment of tuition, related educational fees, and
room and board expenses for the next 12 months of
post-secondary education for the Participant, the
Participant's spouse, or any dependent of the
Participant;
-46-
<PAGE> 53
(d) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the
mortgage of the Participant's principal residence;
or
(e) funeral expenses of a member of the Participant's
family.
A withdrawal shall be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant only if all
of the following requirements are satisfied:
(f) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the
Participant.
(g) The Participant has obtained all distributions,
other than hardship distributions, and all
non-taxable loans currently available under all
plans maintained by the Company or any related
corporation.
(h) The Participant's Tax-Deferred Contributions
and After-Tax Contributions and the Partici-
pant's elective tax-deferred contributions
and employee after-tax contributions under
all other tax-qualified plans maintained by
the Company or any related corporation shall
be suspended for at least 12 months after
his receipt of the withdrawal and he may not
have any further Tax-Deferred Contributions
made on his behalf nor shall he make any
further After-Tax Contributions until the
Enrollment Date next following the expira-
tion of 12 months after the effective date
of such withdrawal; provided, however, that
this paragraph (h) shall not apply if the
Participant has attained age 59-1/2.
(i) The Participant shall not make Tax-Deferred
Contributions or elective tax-deferred con-
tributions under any other tax-qualified
plan maintained by the Company or any re-
lated corporation for the Participant's
taxable year immediately following the tax-
able year of the withdrawal in excess of
the applicable limit under Section 402(g)
of the Code for such next taxable year less
the amount of the Participant's Tax-Deferred
Contributions and elective tax-deferred con-
tributions under any other plan maintained
by the Company or any related corporation
for the taxable year of the withdrawal;
-47-
<PAGE> 54
provided, however, that this paragraph (i)
shall not apply if the Participant has
attained age 59-1/2.
The maximum amount that a Participant may withdraw because of a
hardship is (i) the balance of his sub-account attributable to
Tax-Deferred Contributions, exclusive of any earnings credited
to such amounts after December 31, 1988, except to the extent
permitted by regulations issued under Section 401(k) of the
Code, (ii) his vested interest in his sub-account attributable to
Matching Employer Contributions, and (iii) the balance of his
sub-account attributable to After-Tax Contributions. Hardship
withdrawals shall be made effective as of the date on which the
withdrawal application is filed and shall be paid to the
Participant as soon as practicable thereafter. A Participant
shall not fail to be treated as an eligible Employee for the
purposes of applying the limitations contained in Sections 4.3
and 6.8 of the Plan merely because his Tax-Deferred Contributions
and After-Tax Contributions are suspended in accordance with
this Section 11.4.
11.5 SPECIAL AGE 70-1/2 DISTRIBUTION.
Notwithstanding any other provisions of the Plan to the contrary,
a Participant may elect to commence distribution of his vested
interest in his separate account as of any date after such
Participant has attained age 70-1/2. Any distribution of a
Participant's interest under this Section 11.5 shall be made in
accordance with the otherwise applicable provisions of Article
XII.
11.6 ADJUSTMENT OF ACCOUNTS.
The Trustee shall adjust the separate account and sub-accounts of
each Participant who makes a withdrawal under Section 11.1,
11.2, 11.3, 11.4, or 11.5 to reflect such withdrawal as of the
date of such withdrawal, charging any such withdrawal against the
Goodyear Stock Fund or the Investment Funds, as appropriate.
-48-
<PAGE> 55
ARTICLE XII
TERMINATION OF PARTICIPATION AND DISTRIBUTION
12.1 TERMINATION OF PARTICIPATION.
Each Participant shall cease to be a Participant hereunder on the
first to occur of the following dates:
(a) on the date such Participant's employment
with an Employer or a related corporation is
terminated after he has attained age 65;
(b) on the date such Participant's employment
with an Employer or a related corporation is
terminated because of physical or mental
disability preventing his continuing in the
service of such employer, as determined by
the Company upon the basis of a written cer-
tificate of a physician acceptable to it or,
if earlier, on the first anniversary of the
first day of a period in which he remains
absent from the service of the Company and
all subsidiaries of the Company upon the
basis of a written certificate of a physi-
cian acceptable to it;
(c) on the date such Participant's employment with an
Employer or a related corporation is terminated
because of the death of such Participant;
(d) on the date such Participant's employment with an
Employer or a related corporation is terminated
after he
(i) retires under the provisions of the
pension plan maintained by his em-
ployer for his benefit, or
(ii) has completed four years of Continu-
ous Service; or
(e) on the date such Participant's employment
with an Employer or a related corporation is
terminated under any other circumstances,
including, in particular, (i) the date the
Participant's employment with an Employer or
related corporation is terminated in con-
nection with the sale by the Employer or
related corporation of substantially all of
the assets used in a trade or business, even
-49-
<PAGE> 56
though the Participant continues employment with the
entity acquiring such assets, and (ii) the date of
the sale by an Employer or related corporation of
its interest in a subsidiary that employs the
Participant, even though the Participant continues
employment with such subsidiary.
provided, however, that if any such date shall be a valuation
date, such Participant shall for all purposes hereof cease to be
a Participant upon the next succeeding day. Written notice of a
Participant's Settlement Date shall be given promptly by the
Company to the Trustee. Notwithstanding anything to the contrary
contained in the Plan, a Participant's right to receive
distribution of the balance of his separate account as of his
Settlement Date, in accordance with the provisions of this
Article XII, shall be fully vested and nonforfeitable upon
attainment of age 65.
12.2 VESTING OF SEPARATE ACCOUNTS.
A Participant's vested interest in his sub-accounts attributable
to Tax-Deferred Contributions and After-Tax Contributions shall
be at all times 100%. As of a Participant's Settlement Date, and
after notice thereof has been given as provided in Section 12.1,
the balance of the Participant's sub-account attributable to
Matching Employer Contributions shall be vested as follows:
(a) In the event such Participant's Settlement
Date occurs under the conditions specified
in paragraph (a), (b), (c) or (d) of Sec-
tion 12.1, such Participant shall be 100%
vested in the entire balance of his sub-
account attributable to Matching Employer
Contributions as of such Settlement Date.
(b) In the event such Participant's Settlement
Date occurs under the conditions stated in
paragraph (e) of Section 12.1, such Partici-
pant shall have no vested interest in his
sub-account attributable to Matching Employ-
er Contributions, and he shall in no event
receive any distribution from his sub-
account attributable to Matching Employer
Contributions as of such Settlement Date.
As of such Settlement Date, moreover, his interest in his
sub-account attributable to Matching Employer Contributions
which is not distributable to him under paragraph (b)(ii) of this
Section 12.2 shall
-50-
<PAGE> 57
be disposed of in accordance with the provisions of
Section 12.8.
12.3 DISTRIBUTION.
The Trustee shall make distribution to or for the benefit of the
Former Participant or his Beneficiary, as the case may be, of
his vested interest in his separate account, provided, however,
that, in order to insure that all pre-Settlement Date con-
tributions have been credited to the separate accounts of the
Former Participant, no distribution shall be made prior to the
last day of the month in which the Former Participant's
Settlement Date occurs. Distribution shall be made in a lump-sum
payment unless such Participant's Settlement Date occurred under
the conditions specified in paragraph (a), (b), (c), or (d)(i)
of Section 12.1, in which event distribution shall be made by
such one or more of the following methods as the Former
Participant shall select:
(a) in a single lump-sum payment; or
(b) in a series of installments over a period
not in excess of the normal life expectancy
of the distributee, such installments to be
equal in amount except as necessary to ad-
just for any net income of and changes in
the market value of the respective Funds, or
by any other method reasonably calculated to
provide a more rapid distribution of his in-
terest.
Distribution under any such method shall be made or commenced as
soon as reasonably practicable after the Former Participant's
Settlement Date, but in no event later than 60 days after the
close of the Plan year in which the Former Participant termi-
nated employment after having attained age 65; provided, that the
Company with the consent of a Former Participant whose Settlement
Date occurs under the conditions stated in either paragraph (a)
or (d)(i) of Section 12.1 may defer making or commencing
distribution beyond the date otherwise specified in this sentence
until the Former Participant attains age 70 or dies, or until
the Plan is terminated, whichever first occurs. In the event that
the Trustee is unable to make a distribution to a Former
Participant or Beneficiary within one year of the date
distribution is otherwise to be made in accordance with the
provisions of this Section 12.3, due to its inability to find
such Former Participant or Beneficiary, the entire interest of
-51-
<PAGE> 58
such Former Participant or Beneficiary shall be disposed of in
accordance with the provisions of Section 12.8; provided, that in
the event such Former Participant or Beneficiary shall at any
time in the future make a claim for his interest in the Plan, it
shall be paid to him as soon as possible. Notwithstanding the
foregoing, if the balance carried in the separate account of a
Former Participant is or ever was in excess of $3,500 and the
Former Participant has not attained age 65, no distribution
shall be made to such Former Participant without his written
consent.
12.4 REQUIRED COMMENCEMENT OF DISTRIBUTION.
Notwithstanding any other provisions of the Plan to the contrary,
in no event shall the interest attributable to a Participant or
Former Participant be distributed commencing later than the April
1 following the later of (a) the calendar year in which he
attains age 70 1/2, or (b) except in the case of a Participant
who is a five-percent owner with respect to the Plan year ending
in the calendar year in which the Participant attains age 70-1/2,
the calendar year in which he retires. In addition, in no event
shall such interest be payable over a period extending beyond the
life of the Participant or the joint lives of the Participant
and his Beneficiary, or, alternatively, over a period extending
beyond the life expectancy of the Participant or the joint life
expectancy of the Participant and his Beneficiary. A Participant,
other than a five-percent owner, who has attained age 70-1/2 and
has not retired and who has been receiving required minimum
distributions from the Plan for any year prior to 1997 may elect
not to receive any further distributions from the Plan until not
later than April 1 following the calendar year in which he
retires.
If a Participant or Former Participant dies after distribution of
his entire interest has been commenced, the remaining portion of
his interest under the Plan, if any, shall be distributed to his
Beneficiary at least as rapidly as under the method of
distribution being used at the date of his death. If a
Participant or Former Participant dies before the distribution of
his entire interest has commenced, the entire interest
attributable to such Former Participant must be distributed
within 5 years after the date of his death; except that such
5-year distribution requirement shall not apply (i) to any
portion of such Former Participant's interest under the Plan that
is payable to his
-52-
<PAGE> 59
Beneficiary over the Beneficiary's lifetime, or over a period not
extending beyond the life expectancy of his Beneficiary, so long
as such distribution commences no later than one year after the
date of such Former Participant's death (or such later date as
may be prescribed by applicable Treasury Regulations), or (ii) to
any portion of such Former Participant's interest under the Plan
that is payable to his surviving spouse over the surviving
spouse's lifetime, or over a period not extending beyond the life
expectancy of such surviving spouse, so long as the distribution
commences no later than the date on which the Former Participant
would have attained age 70 1/2. If a surviving spouse dies before
distribution commences pursuant to the immediately foregoing
clause (ii), the 5-year distribution requirement applies as if
the surviving spouse were the Former Participant.
12.5 FORM OF DISTRIBUTION.
All distributions under this Article XII with respect to any
amount which is attributable to the interest of a Former
Participant shall be made in the form of cash, except that if he
or, if he is deceased, his Beneficiary so requests, the amount
attributable to his interest in the Goodyear Stock Fund shall be
paid in the form of Company Stock, with an amount equivalent in
value to any fractional share of Company Stock paid in cash.
12.6 ELECTION OF FORMER VESTING SCHEDULE.
In the event the Company adopts an amendment to the Plan that
directly or indirectly affects the computation of a
Participant's nonforfeitable interest attributable to Matching
Employer Contributions, any Participant with three or more years
of Continuous Service shall have a right to have his non-
forfeitable interest in amounts attributable to Matching Employer
Contributions continue to be determined under the vesting
schedule in effect prior to such amendment rather than under the
new vesting schedule, unless the nonforfeitable interest of such
Participant in amounts attributable to Matching Employer
Contributions under the Plan, as amended, at any time is not less
than such interest determined without regard to such amendment.
An Employee shall exercise such right by giving written notice
of his exercise thereof to the Company within 60 days after the
latest of (i) the date he received notice of such amendment from
the Company, (ii) the effective date of the amendment, or
-53-
<PAGE> 60
(iii) the date the amendment is adopted. Notwithstanding the
foregoing provisions of this Section 12.6, the vested interest
of each Participant on the effective date of such amendment shall
not be less than his vested interest under the Plan as in effect
immediately prior to the effective date thereof.
12.7 BUY BACK OF FORFEITED AMOUNTS.
A Participant who forfeited all or a portion of the amounts
credited to his sub-account attributable to Matching Employer
Contributions in accordance with the provisions of Section 12.2
and who is reemployed by an Employer or a related corporation
shall have such forfeited amounts recredited to his sub-account
attributable to Matching Employer Contributions upon his
subsequent reemployment as an Employee, without adjustment for
interim gains or losses experienced by the Trust Fund, if:
(a) he returns to employment with an Employer or a
related corporation before he incurs five
consecutive breaks in service commencing after the
later of his Settlement Date or the date he received
distribution of the vested portion of his separate
account;
(b) he resumes employment covered under the Plan before
the end of the five-year period beginning on the
date he is reemployed; and
(c) if he received distribution of the vested portion of
his separate account, he repays to the Plan the full
amount of such distribution before the end of the
five-year period beginning on the date he is
reemployed.
Funds needed in any Plan year to recredit the sub-account
attributable to Matching Employer Contributions of such
Participant with the amounts or prior forfeitures in accordance
with the preceding sentence shall first come from forfeitures
that arise during such Plan year, to the extent sufficient, next
shall be provided by his Employer by way of a separate Matching
Employer Contribution, and shall finally come from income earned
by the Trust Fund in such Plan year.
12.8 DISPOSITION OF FORFEITED BALANCES.
Whenever settlement is made with respect to a Former Participant
on the occurrence of his Settlement Date and the balance of his
sub-account
-54-
<PAGE> 61
attributable to Matching Employer Contributions is not vested,
such balance shall be deemed a forfeiture for the month in which
the settlement occurs. If settlement is not made with respect to
a Former Participant on the occurrence of his Settlement Date and
if the balance of his sub-account attributable to Matching
Employer Contributions is not vested, such balance shall be
deemed a forfeiture for the month in which the fifth anniversary
of his Severance Date occurs, unless he is reemployed as an
Employee prior to such date. In either case, as of the last day
of such month, the forfeitures attributable to each sub-account
attributable to Matching Employer Contributions and to each other
separate account shall be applied against the Matching Employer
Contribution obligation of the Employers incurred during such
month. Notwithstanding the foregoing, however, should the amount
of all such forfeitures of Matching Employer Contributions for
any Plan year exceed the amount of the Matching Employer
Contribution obligation of the Employers for such Plan year, the
excess amount of such forfeitures (together with any such forfei-
tures for prior Plan years not theretofore applied against such
contribution obligation of the Employers) shall for all Plan
purposes be applied against the Matching Employer Contribution
obligation of the Employers for the next following Plan year.
12.9 EFFECT OF COMPANY'S DETERMINATION.
In exercising its authority under this Article XII, the Company
shall act in such manner as it shall in good faith determine will
most adequately and fairly meet the needs of each Former
Participant or Beneficiary, as the case may be. No authority
shall be exercised in such manner as to discriminate between any
class or group of Participants. The Company's determination of
all questions which may arise under this Article XII (if made in
accordance with the standards prescribed herein and in Section
14.1) shall be conclusive upon all persons claiming to have any
interest hereunder. In making any determinations hereunder, the
Company may rely upon any signed statement which the Participant
files with it.
12.10 REEMPLOYMENT OF A FORMER PARTICIPANT.
Subject to the provisions of Section 3.5 and Section 12.7, in
the event a Former Participant is reemployed by an Employer, he
shall be treated as a new employee for all purposes of the Plan.
If he again becomes a Participant, he shall lose his
-55-
<PAGE> 62
right to any distributions or further distributions from the
Trust Fund with respect to the prior termination of his
employment, and his interest in the Trust Fund shall thereafter
be treated in the same manner as that of any other Participant.
12.11 RESTRICTIONS ON ALIENATION.
Except as provided in Section 401(a)(13)(B) of the Code relating
to qualified domestic relations orders, no benefit under the
Plan at any time shall be subject in any manner to anticipation,
alienation, assignment (either at law or in equity), encumbrance,
garnishment, levy, execution, or other legal or equitable
process; and no person shall have power in any manner to
anticipate, transfer, assign (either at law or in equity),
alienate or subject to attachment, garnishment, levy, execution,
or other legal or equitable process, or in any way encumber his
benefits under the Plan, or any part thereof, and any attempt to
do so shall be void.
12.12 FACILITY OF PAYMENT.
In the event that it shall be found that any individual to whom
an amount is payable hereunder is incapable of attending to his
financial affairs because of any mental or physical condition,
including the infirmities of advanced age, such amount (unless
prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of
the Company, be paid to another person for the use or benefit
of the individual found incapable of attending to his financial
affairs or in satisfaction of legal obligations incurred by or on
behalf of such individual. The Trustee shall make such payment
only upon receipt of written instructions to such effect from the
Company. Any such payment shall be charged to the sub-account
from which any such payment would otherwise have been paid to the
individual found incapable of attending to his financial affairs
and shall be a complete discharge of any liability therefor under
the Plan.
12.13 DISTRIBUTIONS TO OTHER QUALIFIED PLANS.
In the case of a Participant or Former Participant whose vested
interest in his separate account under the Plan has not been
fully distributed and who is eligible to participate in another
plan that is qualified under Section 401(a) of the Code, the
Company may direct the Trustee to transfer the
-56-
<PAGE> 63
amount of such accounts under the Plan to the funding agent for
such plan if the plan to receive the transfer (i) authorizes
acceptance of such transfers, (ii) provides that transferred
amounts shall be held in a separate account, and (iii) provides
that the transferred amounts shall be fully vested and
nonforfeitable, with the exception that in the case of a transfer
of accounts to a plan of an Employer or related corporation, the
Participant's or Former Participant's vested interest in such
transferred accounts shall be determined as of the date of
transfer based on the vesting provisions of the Plan in effect on
such date, and on and after the date of transfer the vested
interest shall be determined based on the vesting provisions of
the transferee plan or, in the event an election of a prior
vesting schedule applies with respect to the Participant or
Former Participant, based on the vesting provisions of the Plan
as of the date of transfer.
-57-
<PAGE> 64
ARTICLE XIII
BENEFICIARIES
13.1 DESIGNATION OF BENEFICIARY.
In the case of a Participant or Former Participant who is not
married, the Beneficiary to whom distribution shall be made
hereunder in the event such Participant or Former Participant
dies before his interest shall have been distributed to him in
full shall be such person or persons designated by the
Participant or Former Participant. In the case of a Participant
or Former Participant who is married, the Beneficiary to whom
distribution shall be made hereunder in the event such
Participant or Former Participant dies before his interest shall
have been distributed to him in full shall be his surviving
spouse, if any, or alternatively such person or persons
designated by the Participant or Former Participant, provided
that such designation has been consented to by the surviving
spouse, if any, of such Participant or Former Participant in the
manner herein specified. A designation of Beneficiary hereunder
may be changed at any time and from time to time by the
Participant or Former Participant, provided that such change of
designation has been consented to by the surviving spouse, if
any, of such Participant or Former Participant in the manner
herein specified. Any such designation or change of designation,
with spousal consent when necessary, shall be made in writing in
the form prescribed by the Company, and shall become effective
only when filed by the Participant or Former Participant with the
Company; provided, however, that any such designation or change
of designation which is received by the Company after the death
of the Participant or Former Participant shall be disregarded.
Spousal consent, where required, shall be effective only if it is
in writing, it includes an acknowledgment of the effect of the
consent being given, and it is witnessed by a Plan representative
or a notary public. Spousal consent shall not be required if a
Plan representative finds that such spouse cannot be located or
because of other circumstances set forth in Section 417(a)(2)(B)
of the Code and regulations thereunder. Any consent by a spouse
obtained under this Section 13.1 shall be effective only with
respect to such spouse.
-58-
<PAGE> 65
13.2 BENEFICIARY IN THE ABSENCE OF DESIGNATION.
If a deceased Participant or Former Participant has no surviving
spouse and if either no Beneficiary for such Participant or
Former Participant shall have been designated, or if all those
designated as his Beneficiary shall die prior to the death of
such Participant or Former Participant, then the Beneficiary
shall be one of the following: his surviving children per
stirpes; if there are no surviving children, then his surviving
parents per stirpes; if there are no surviving parents, then his
surviving brothers and sisters per stirpes, then the estate of
such Participant or Former Participant. If any Beneficiary shall
die after becoming entitled to receive distribution hereunder
and before such distribution is made in full, and if no other
Beneficiary shall have been designated to receive the balance of
such distribution upon the happening of such contingency, the
estate of such deceased Beneficiary shall become the Beneficiary
as to such balance.
-59-
<PAGE> 66
ARTICLE XIV
ADMINISTRATION
14.1 AUTHORITY OF COMPANY.
The Company shall have all the powers and authority expressly
conferred upon it herein and further shall have the sole right to
interpret and construe the Plan, and to determine any disputes
arising thereunder, subject, however, to the provisions of
Section 14.3. In exercising such powers and authority, the
Company shall at all times exercise good faith, apply standards
of uniform application, and refrain from arbitrary action. The
Company may employ such attorneys, agents, and accountants as it
may deem necessary or advisable to assist it in carrying out its
duties hereunder. The Company and the Trustee shall be "named
fiduciaries" as that term is defined in Section 402(a)(2) of the
Act. The Company, by action of its Board of Directors, may:
(a) allocate any of the powers, authority, or
responsibilities for the operation and ad-
ministration of the Plan, which are retained by it
or to it granted by this Article XIV, to the
Trustee; and
(b) designate a person or persons other than the Company
to carry out any of such powers, authority, or
responsibilities;
except that no power, authority, or responsibility of the Trustee
shall be subject to the provisions of paragraph (b) of this
Section 14.1, and except that no allocation or delegation by the
Company of any of its powers, authority, or responsibilities to
the Trustee shall become effective unless such allocation or
delegation shall first be accepted by the Trustee in a writing
signed by it and delivered to the Company.
14.2 ACTION OF COMPANY.
Any act authorized, permitted, or required to be taken by the
Company under the Plan, which has not been delegated in
accordance with Section 14.1, may be taken by a majority of the
members of the Board of Directors of the Company, either by vote
at a meeting, or in writing without a meeting. All notices,
advice, directions, certifications, approvals, and instructions
required or authorized to be
-60-
<PAGE> 67
given by the Company under the Plan shall be in writing and
signed by either (i) a majority of the members of the Board of
Directors of the Company, or by such member or members as may be
designated by an instrument in writing, signed by all the mem-
bers thereof, as having authority to execute such documents on
its behalf, or (ii) a person authorized to act for the Company in
accordance with Section 14.1. Subject to the provisions of
Section 14.3, any action taken by the Company which is
authorized, permitted, or required under the Plan shall be final
and binding upon the Employers, the Trustee, all persons who have
or who claim an interest under the Plan, and all third parties
dealing with the Employers or the Trustee.
14.3 CLAIMS REVIEW PROCEDURE.
Whenever the Company decides for whatever reason to deny, whether
in whole or in part, a claim for benefits filed by any person
(herein referred to as the "Claimant"), the Plan Administrator
shall transmit a written notice of the Company's decision to the
Claimant, which notice shall be written in a manner calculated to
be understood by the Claimant and shall contain a statement of
the specific reasons for the denial of the claim and a statement
advising the Claimant that, within 60 days of the date on which
he receives such notice, he may obtain review of the decision of
the Company in accordance with the procedures hereinafter set
forth. Within such 60-day period, the Claimant or his authorized
representative may request that the claim denial be reviewed by
filing with the Plan Administrator a written request therefor,
which request shall contain the following information:
(a) the date on which the claimant's request was
filed with the Plan Administrator; provided,
however, that the date on which the Claim-
ant's request for review was in fact filed
with the Plan Administrator shall control in
the event that the date of the actual filing
is later than the date stated by the Claim-
ant pursuant to this paragraph (a);
(b) the specific portions of the denial of his claim
which the Claimant request the Plan Administrator to
review;
(c) a statement by the Claimant setting forth the basis
upon which he believes the Plan Administrator should
reverse the Company's
-61-
<PAGE> 68
previous denial of his claim for benefits
and accept his claim as made; and
(d) any written material (offered as exhibits) which the
Claimant desires the Plan Administrator to examine
in its consideration of his position as stated
pursuant to paragraph (c) of this Section 14.3.
Within 60 days of the date determined pursuant to paragraph (a)
of this Section 14.3, the Plan Administrator shall conduct a
full and fair review of the Company's decision denying the
Claimant's claim for benefits. Within 60 days of the date of such
hearing, the Plan Administrator shall render its written decision
on review, written in a manner calculated to be understood by the
Claimant, specifying the reasons and Plan provisions upon which
its decision was based.
14.4 INDEMNIFICATION.
In addition to whatever rights of indemnification the members of
the Board of Directors of the Company, or any other person or
persons (other than the Trustee) to whom any power, authority, or
responsibility of the Company is designated pursuant to
paragraph (b) of Section 14.1, may be entitled under the articles
of incorporation or regulations of the Company, under any
provision of law or under any other agreement, the Company shall
satisfy any liability actually and reasonably incurred by any
such member or such other person or persons, including expenses,
attorneys' fees, judgments, fines, and amounts paid in
settlement, in connection with any threatened, pending or
completed action, suit, or proceeding which is related to the
exercising or failure to exercise by such member or such other
person or persons of any of the powers, authority,
responsibilities, or discretion of the Company as provided under
the Plan, or reasonably believed by such member or such other
person or persons to be provided hereunder, and any action taken
by such member or such other person or persons in connection
therewith.
14.5 QUALIFIED DOMESTIC RELATIONS ORDERS.
The Company shall establish reasonable procedures to determine
the status of domestic relations orders and to administer
distributions under domestic relations orders which are deemed to
be qualified orders. Such procedures shall be in writing and
shall comply with the provisions of Section 414(p)
-62-
<PAGE> 69
of the Code and regulations issued thereunder. Notwithstanding
any other provisions of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to
an alternate payee pursuant to a qualified domestic relations
order, as defined in Section 414(p) of the Code, regardless of
whether the Participant's Settlement Date has occurred or whether
the Participant is otherwise entitled to receive a distribution
under the Plan.
-63-
<PAGE> 70
ARTICLE XV
TRUSTEE AND TRUST AGREEMENT
The Company has executed a Trust Agreement
with the Trustee, setting forth the terms, provisions, and conditions of a trust
for the Plan, pursuant to which the Trustee shall hold, manage, and administer
all trust property so as to effectuate the provisions of the Plan. The Trust
Agreement is subject to amendment and termination, and the Company may change
the Trustee, all as provided in the Trust Agreement. The terms and provisions of
the Trust Agreement are hereby incorporated by reference.
-64-
<PAGE> 71
ARTICLE XVI
AMENDMENT AND TERMINATION
16.1 AMENDMENT.
Subject to the provisions of Section 16.2, the Company may at
any time and from time to time, by action of its Board of
Directors, amend the Plan, except that the powers and duties of
the Trustee shall not be substantially changed without its ap-
proval. Any such amendment shall be by written instrument
executed by the Company and delivered to the Trustee, and may be
made retroactively if in the opinion of the Company such
amendment is necessary to enable the Plan and Trust Fund to meet
the requirements of the Code (including the regulations and
rulings issued thereunder) or the requirements of any
governmental authority.
16.2 LIMITATION ON AMENDMENT.
The Company shall make no amendment to the Plan which shall
result in the forfeiture or reduction of the interest of any
Employee, Participant, Former Participant or person claiming
under or through any one or more of them pursuant to the Plan,
except that nothing herein contained shall restrict the right to
amend the provisions hereof relating to the administration of the
Plan and Trust Fund. Moreover, no such amendment shall be made
hereunder of the Trust Fund which shall permit any part of the
property to revert to any Employer or be used or be diverted to
purposes other than the exclusive benefit of employees,
Participants, Former Participants, and Beneficiaries.
16.3 TERMINATION.
The Company reserves the right, by action of its Board of
Directors, to terminate the Plan as to all Employers at any time,
which termination shall become effective upon notice in writing
to the Trustee (the effective date of such termination being
hereinafter referred to as the "termination date"). The Plan
shall terminate automatically if there shall be a complete
discontinuance of contributions hereunder by all Employers. In
the event of the termination of the Plan, written notice thereof
shall be given to all Participants, Former Participants, and
Beneficiaries having an interest under the Plan and to the
Trustee. Upon any such termination of the Plan, the Trustee, the
investment
-65-
<PAGE> 72
managers, and the Company shall take the following actions for
the benefit of Participants, Former Participants, and
Beneficiaries:
(a) As of the termination date, the Trustee
shall value the Goodyear Stock Fund and the
assets of the Investment Funds with respect
to which no investment manager has been ap-
pointed, and each investment manager shall
value the assets of the Investment Fund with
respect to which he has been appointed. In
valuing the Investment Funds with respect to
which no investment manager has been ap-
pointed that consist of mutual funds, the
Trustee may rely on price data supplied by
the mutual fund manager. The Trustee shall
then adjust all separate accounts and sub-
accounts in the manner provided in
Section 10.1, with any unallocated contribu-
tions being allocated as of the termination
date in the manner otherwise provided in the
Plan. The termination date shall become a
valuation date for purposes of Article X.
In determining the net worth of the Trust
Fund hereunder, the Trustee shall include as
a liability such amounts as in its judgment
shall be necessary to pay all expenses in-
connection with the termination of the Trust
Fund and the liquidation and distribution of
the property of the Trust Fund, as well as
other expenses, whether or not accrued, and
shall include as an asset all accrued in-
come.
(b) The Trustee thereafter shall then dispose of all
separate accounts to or for the benefit of each
Participant, Former Participant, or Beneficiary in
accordance with the provisions of Section 12.3.
Notwithstanding anything to the contrary contained in the Plan,
upon any such Plan termination, the interest of each Participant,
Former Participant, and Beneficiary shall be fully vested and
nonforfeitable; and, if there is a partial termination of the
Plan, the interest of each Participant, Former Participant, and
Beneficiary who is affected by such partial termination shall be
fully vested and nonforfeitable. Moreover, no such Plan
termination shall affect the continuance of distributions from
any separate accounts of Former Participants whose Settlement
Dates occurred prior to the termination date in accordance with
the method determined by the Company prior to such date.
-66-
<PAGE> 73
16.4 WITHDRAWAL OF AN EMPLOYER.
An Employer other than the Company may, by action of its Board of
Directors, withdraw from the Plan, such withdrawal to be
effective upon notice in writing to the Trustee (the effective
date of such withdrawal being hereinafter referred to as the
"withdrawal date"), and shall thereupon cease to be an Employer
for all purposes of the Plan. An Employer shall be deemed
automatically to withdraw from the Plan in the event of its
complete discontinuance of contributions, or (subject to Sec-
tion 16.5) in the event it ceases to be a subsidiary. The
withdrawal of an Employer shall be treated as a termination of
the Plan with respect to such Employer, and with respect to
Participants who at the time are employed by such Employer. In
the event of any such withdrawal of an Employer, the Trustee, the
investment managers, and the Company shall, as of the withdrawal
date, take the action specified in Section 16.3, as on a termina-
tion of the Plan, except that there shall be a distribution from
the separate accounts only in the case of Participants who are
employed solely by the withdrawing Employer, and who, upon such
withdrawal, are neither transferred to nor continued in
employment with any other Employer or a related corporation. The
interest of any Participant employed by such withdrawing
Employer who is transferred to or continues in employment with
any other Employer or a related corporation, and the interest of
any Participant employed solely by an Employer other than the
withdrawing Employer, or a related corporation, shall remain
unaffected by such withdrawal; no adjustment in his separate
account shall be made by reason of the withdrawal; and he shall
continue as a Participant hereunder subject to the remaining
provisions of the Plan.
16.5 CORPORATE REORGANIZATION.
The merger, consolidation, or liquidation of the Company or any
Employer with or into the Company, any other Employer, or a
related corporation shall not constitute a termination of the
Plan as to the Company or such Employer.
-67-
<PAGE> 74
ARTICLE XVII
ADOPTION BY SUBSIDIARIES; EXTENSION
TO NEW BUSINESS OPERATIONS
17.1 ADOPTION BY SUBSIDIARIES.
Any subsidiary of the Company which at the time is not an
Employer may, with the consent of the Board of Directors of the
Company, adopt the Plan and become an Employer hereunder by
causing an appropriate written instrument evidencing such
adoption to be executed pursuant to the authority of its board of
directors and filed with the Company and the Trustee.
17.2 EXTENSION TO NEW BUSINESS OPERATIONS.
Should any Employer acquire or establish a new plant, division,
or other business operation, such Employer may, by action of its
board of directors, and with the consent of the Chairman of the
Board, the President or an Executive Vice President of the
Company, extend Plan coverage to such plant, division, or
operation.
-68-
<PAGE> 75
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.1 NO COMMITMENT AS TO EMPLOYMENT.
Nothing herein contained shall be construed as a commitment or
agreement upon the part of any Employee hereunder to continue
his employment with an Employer, and nothing herein contained
shall be construed as a commitment on the part of any Employer
to continue the employment or rate of Compensation of any
Employee hereunder for any period.
18.2 BENEFITS.
Nothing in the Plan nor the Trust Agreement shall be construed to
confer any right or claim upon any person, firm, or corporation
other than the Employers, the Trustee, Participants, Former
Participants, and Beneficiaries.
18.3 NO GUARANTEES.
No Employer nor the Trustee guarantees the Trust Fund from loss
or depreciation, nor the payment of any amount which may become
due to any person hereunder.
18.4 EXPENSES.
The expenses of administration of the Plan are considered
expenses of the Plan and shall be paid in total from the Trust
Fund and by the Company. The brokerage expenses of the Goodyear
Stock Fund and the fees of the Trustee shall be paid by the Com-
pany. All expenses of the Investment Funds shall be paid from
such Funds.
18.5 PRECEDENT.
Except as otherwise specifically provided, no action taken in
accordance with the Plan by the Employers or the Trustee shall
be construed or relied upon as a precedent for similar action
under similar circumstances.
18.6 DUTY TO FURNISH INFORMATION.
Each of the Employers and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other
information that any other reasonably deems necessary to perform
its
-69-
<PAGE> 76
duties imposed hereunder or otherwise imposed by
law.
18.7 WITHHOLDING.
The Trustee shall withhold any tax which by any present or future
law is required to be withheld, and which the Company notifies
the Trustee in writing is to be so withheld, from any payment to
any Participant, Former Participant, or Beneficiary
hereunder.
18.8 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS.
The Plan shall not be merged or consolidated with any other plan,
nor shall any of its assets or liabilities be transferred to
another plan, unless, immediately after such merger,
consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan
which is at least equal to the benefit he would have received
immediately prior to such merger, consolidation, or transfer of
assets or liabilities (assuming in each instance that the Plan
had then terminated).
18.9 BACK PAY AWARDS.
The provisions of this Section 18.9 shall apply only to an
Employee or Former Employee who becomes entitled to back pay by
an award or agreement of an Employer without regard to mitigation
of damages. If a person to whom this Section 18.9 applies was or
would have become an Employee after such back pay award or
agreement has been effected, and if any such person who had not
previously become a Participant pursuant to Section 3.1 shall
within 30 days of the date he receives notice of the provisions
of this Section 18.9 make an election to become a Participant in
accordance with such Section 3.1 (retroactive to any Enrollment
Date as of which he was or has become eligible to do so), then
such Participant may elect that any Tax-Deferred Contributions
not previously made on his behalf but which, after application of
the foregoing provisions of this Section 18.9, would have been
made under the provisions of Article IV and any After-Tax
Contributions which he had not previously made but which, after
application of the foregoing provisions of this Section 18.9, he
would have made under the provisions of Article V, shall be made
out of the proceeds of such back pay award or agreement. To the
extent that any additional Tax-Deferred Contributions or
After-Tax
-70-
<PAGE> 77
Contributions are made during the month in accordance with the
provisions of the foregoing sentence, his Employer shall make a
Matching Employer Contribution for such month equal to the
amount of the Matching Employer Contribution which would have
been allocated to such Participant under the provisions of
Article VI as in effect during each Plan year to which such
additional contributions relate. The amounts of such additional
contributions shall be credited to the separate account of such
Participant or Former Participant, as appropriate. Any additional
contributions made by such Participant and by an Employer
pursuant to this Section 18.9 shall be made in accordance with,
and subject to the limitations of the applicable provisions of
Articles IV, V, and VI.
18.10 CONDITION ON EMPLOYER CONTRIBUTIONS.
Notwithstanding anything to the contrary contained in the Plan or
the Trust Agreement, any obligation of an Employer to make any
contribution hereunder hereby is conditioned upon the continued
qualification of the Plan under Section 401(a) of the Code, the
exempt status of the Trust Fund under Section 501(a) of the
Code, and the deductibility of the contribution under Section 404
of the Code. Except as otherwise provided in this Section 18.10,
however, in no event shall any portion of the property of the
Trust Fund ever revert to or otherwise inure to the benefit of an
Employer or any related corporation.
18.11 RETURN OF CONTRIBUTIONS TO PARTICIPANTS.
Notwithstanding anything to the contrary contained in the Plan or
the Trust Agreement, in the event of the cessation of a
Participant's participation in the Plan, on a day other than the
last day of a month, or in the event of any termination of the
Plan, any After-Tax Contributions which have been deducted from
the compensation of a Participant and any Tax-Deferred
Contributions which would have reduced his Compensation during
such month shall be returned to such Participant or his
Beneficiary, and such After-Tax Contributions and Tax-Deferred
Contributions shall be treated for all Plan purposes as if they
had never been made.
-71-
<PAGE> 78
18.12 RETURN OF CONTRIBUTIONS TO AN EMPLOYER.
The corpus or income of the Trust may not be diverted to or used
for other than the exclusive benefit of the Participants or their
Beneficiaries. Notwithstanding anything to the contrary contained
in the Plan or the Trust Agreement, in the event a Tax-Deferred
Contribution or a Matching Employer Contribution:
(a) is made under a mistake of fact, or
(b) is conditioned upon deduction of the contribution
under Section 404 of the Internal Revenue Code and
such deduction is disallowed, or
(c) is conditioned upon the initial qualification of
the Plan, or the continuing qualification of the
Plan following amendment, under Section 401(a) of
the Internal Revenue Code and the Plan does not so
qualify,
such a contribution may be returned to the Employer within one
(1) year after the payment of the contribution, the disallowance
of the deduction to the extent disallowed, or the date of denial
of the qualification of the Plan, whichever is applicable.
18.13 VALIDITY OF PLAN.
The validity of the Plan shall be determined and the Plan shall
be construed and interpreted in accordance with the laws of the
State of Ohio. The invalidity or illegality of any provision of
the Plan shall not affect the legality or validity of any other
part thereof.
18.14 PARTIES BOUND.
The Plan shall be binding upon the Employers, all Participants,
Former Participants, and Beneficiaries hereunder, and, as the
case may be, the heirs, executors, administrators, successors,
and assigns of each of them.
-72-
<PAGE> 79
ARTICLE XIX
TOP-HEAVY PROVISIONS
19.1 APPLICABILITY.
Notwithstanding anything to the contrary contained in the Plan,
the provisions of this Article XIX shall be applicable during any
Plan year in which the Plan is determined to be a top-heavy plan
as hereinafter defined. In the event that the Plan is determined
to be a top-heavy plan and upon a subsequent determination date
is determined to no longer be a top-heavy plan, the vesting
provisions specified in Section 12.2 and the contribution provi-
sions specified in Section 6.1 shall again become applicable as
of such subsequent determination date; provided, however, that in
the event such prior vesting schedule does again become applica-
ble, the provisions of Section 12.6 shall apply (i) to preserve
the nonforfeitable accrued benefit of any Participant, Former
Participant, or Beneficiary and (ii) to permit any Participant
with three years of Continuous Service to elect to continue to
have his nonforfeitable interest in his Company Stock Fund
Account determined in accordance with the vesting schedule
specified in Section 19.3.
19.2 TOP-HEAVY DEFINITIONS.
For purposes of this Article XIX, the following definitions shall
apply:
(a) The "determination date" with respect to any Plan
year shall mean the last day of the preceding Plan
year (or, in the case of the first Plan year of the
Plan, the last day of the first Plan year).
(b) The "valuation date" with respect to any de-
termination date shall mean the most recent
revaluation date occurring within a 12-month period
ending on the determination date.
(c) A "key employee" shall mean any Employee or Former
Employee who is a key employee pursuant to the
provisions of Section 416(i)(1) of the Code and any
Beneficiary of such Employee or Former Employee.
(d) A "non-key employee" shall mean any Employee who is
not a key employee.
-73-
<PAGE> 80
(e) A "top-heavy plan" with respect to a partic-
ular Plan year shall mean (i), in the case
of a defined contribution plan, a plan for
which, as of the determination date, the
aggregate of the accounts (within the mean-
ing of Section 416(g) of the Code and the
regulations and rulings thereunder) of key
employees exceeds 60 percent of the aggre-
gate of the accounts of all participants
under the plan, with the accounts valued as
of the relevant valuation date, (ii), in the
case of a defined benefit plan, a plan for
which, as of the determination date, the
present value of the cumulative accrued
benefits payable under the plan (within the
meaning of Section 416(g) of the Code and
the regulations and rulings thereunder) to
key employees exceeds 60 percent of the
present value of the cumulative accrued ben-
efits under the plan for all employees, with
present value of accrued benefits to be de-
termined in accordance with the actuarial
assumptions specified in such defined bene-
fit plan, and (iii) any plan included in a
required aggregation group that is a top-
heavy group. Notwithstanding the foregoing,
if a plan is included in a required or per-
missive aggregation group that is not a
top-heavy group, such plan shall not be a
top-heavy plan. In the case of a defined
benefit plan, the accrued benefit of a Par-
ticipant other than a key employee shall be
determined under the method, if any, that
uniformly applies for accrual purposes
under all defined benefit plans maintained
by the Employer or if there is no such
method, as if such benefit accrued not more
rapidly than the slowest accrual rate
permitted under the fractional rule of Sec-
tion 411(b)(1)(C) of the Code. For purposes
of this paragraph (e), for any Plan year
beginning after December 31, 1984, the
accounts and accrued benefits of any em-
ployee who has not performed an hour of
service during the five-year period ending
on the determination date shall be disre-
garded.
(f) A "super top-heavy plan" with respect to a
particular Plan year shall mean a plan that, as of
the determination date, would qualify as a top-heavy
plan under the definition in paragraph (e) of this
Section 19.2 with "90 percent" substituted for "60
percent"
-74-
<PAGE> 81
each place where "60 percent" appears in such
definition. A plan is also a "super top-heavy plan"
if it is part of a super top-heavy group.
(g) A "required aggregation group" shall include
(i) all plans of each Employer in which a
key employee is a participant, and (ii) all
other plans of such Employer, including any
plans terminated during the five-year period
ending on the determination date, which
enable a plan described in (i) to meet the
requirements of Sections 401(a)(4) or 410 of
the Code.
(h) A "permissive aggregation group" shall mean
those plans included in each Employer's
required aggregation group together with
any other plan or plans of the Employer,
so long as the entire group of plans would
continue to meet the requirements of Sec-
tions 401(a)(4) and 410 of the Code.
(i) A "top-heavy group" with respect to a par-
ticular Plan year shall mean a required or a
permissive aggregation group if the sum, as
of the determination date, of the present
value of the cumulative accrued benefits for
key employees under all defined benefit
plans included in such group and the aggre-
gate of the account balances of key employ-
ees under all defined contribution plans
included in such group exceeds 60 percent of
a similar sum determined for all employees
covered by the plans included in such group.
(j) A "super top-heavy group" with respect to a
particular Plan year shall mean a required
or permissive aggregation group that, as of
the determination date, would qualify as a
top-heavy group under the definition in
paragraph (i) of this Section 19.2 with
"90 percent" substituted for "60 percent"
each place where "60 percent" appears in
such definition.
19.3 ACCELERATED VESTING.
In the event the Plan is determined to be a top-heavy plan with
respect to any Plan year beginning after December 31, 1983, a
Participant whose Settlement Date occurs during such Plan year
under the conditions specified in paragraph (e) of Section 12.1
shall be vested in a nonforfeitable
-75-
<PAGE> 82
percentage of the balance of his sub-account
attributable to Matching Employer Contributions
which shall be determined by application of the
following vesting schedule:
Nonforfeitable
Years Of Continuous Service Percentage
--------------------------- ----------
Less than 2 years 0%
2 years but less than 3 years 25%
3 years but less than 4 years 50%
4 years but less than 5 years 75%
5 years or more 100%
19.4 MINIMUM EMPLOYER CONTRIBUTION.
In the event the Plan is determined to be a top-heavy plan with
respect to any Plan year beginning after December 31, 1983, the
Employer contributions and forfeitures allocated to the
sub-account attributable to Matching Employer Contributions of
each non-key employee who is a Participant (or who was eligible
under Section 3.1 to become a Participant prior to the end of
the Plan year but failed to make the written election described
therein) and who is not separated from service with the Employer
as of the end of the Plan year shall be no less than the lesser
of (i) three percent of his compensation or (ii) the largest
percentage of Compensation that is allocated for such Plan year
to the sub-account attributable to Matching Employer Con-
tributions of any key employee; except that, in the event the
Plan is part of a required aggregation group, and the Plan
enables a defined benefit plan included in such group to meet the
requirements of Section 401(a)(4) or 410 of the Code, the minimum
allocation of Employer contributions and forfeitures to the
sub-account attributable to Matching Employer Contributions of
each such non-key employee shall be three percent of the
Compensation of the non-key employees. Any minimum allocation to
the sub-account attributable to Matching Employer Contributions
of a non-key employee required by this Section 19.4 shall be made
without regard to any social security contribution made by an
Employer on behalf of the non-key employee. Notwithstanding the
minimum top-heavy allocation requirements of this Section 19.4,
in the event that the Plan is a top-heavy plan, each non-key
employee who is a Participant hereunder (or who was eligible
under Section 3.1 to become a Participant prior to the end of the
Plan year but failed to make the written election described
therein) and who is also covered under a top-heavy defined
-76-
<PAGE> 83
benefit plan maintained by an Employer will receive the top-heavy
benefits provided under such defined benefit plan in lieu of the
minimum top-heavy allocation under the Plan.
19.5 ADJUSTMENTS TO SECTION 415 LIMITATIONS.
In the event that the Plan is a top-heavy plan and an Employer
maintains a defined benefit plan covering some or all of the
Employees that are covered by the Plan, the provisions of
subparagraphs (i) and (ii) of paragraph (d) of Section 9.1 shall
be applied to the Plan by substituting "1.0" for "1.25" each
place where "1.25" appears and Section 415(e)(6)(B)(i) of the
Code shall be applied to the Plan by substituting "$41,500" for
"$51,875", except that such substitutions shall not be applied to
the Plan if (i) the Plan is not a super top-heavy plan, (ii) the
Employer contribution for such Plan year for each non-key
employee who is to receive a minimum top-heavy benefit hereunder
is not less than four percent of such non-key employee's
compensation, (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined
benefit plans of an Employer or a related corporation is not less
than the lesser of three percent times years of service with an
Employer or a related corporation or thirty percent, and (iv) a
non-key employee who participates under both a defined benefit
plan and a defined contribution plan of an Employer receives an
allocation of Employer contributions and forfeitures equal to at
least seven and one-half percent of his Compensation.
19.6 COMPENSATION TAKEN INTO ACCOUNT.
The annual compensation of any Participant to be taken into
account under the Plan during any Plan year in which the Plan is
determined to be a top-heavy plan shall not exceed (a) $200,000
for Plan years beginning prior to January 1, 1994, or (b)
$150,000 for Plan years beginning on or after January 1, 1994,
both subject to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code.
-77-
<PAGE> 84
ARTICLE XX
LOANS
20.1 APPLICATION FOR LOAN.
A Participant may make application to the Company for a loan from
his separate account under the Investment Funds, in accordance
with procedures established by the Company; provided, however,
that no loan in excess of 50% of the Participant's vested
interest under the Plan shall be made hereunder; and, provided
further, that the amount of any loan must be at least $1,000.
Loans shall not be made available to Highly Compensated Employees
in an amount greater than the amount made available to other
Employees and shall be subject to the following additional
conditions:
(a) At the time the loan is made, the Partici-
pant shall agree to repay the loan by pay-
roll withholding; provided, however, that in
the event a Participant terminates employ-
ment with the Employer prior to the repay-
ment of any loan hereunder, such Former
Participant may continue to repay the amount
of his loan in monthly payments forwarded to
the Trustee. Any loan may be repaid in
full, without penalty, at any time after the
loan has been in existence for at least
three months.
(b) A loan shall not be granted hereunder unless the
Participant consents to the charging of his separate
account in accordance with the provisions of Section
20.5 for unpaid principal and interest in the event
the loan is declared to be in default.
(c) As collateral for a loan granted hereunder,
the Participant shall grant to the Plan a
security interest in such Participant's
separate account, which security interest
shall not exceed 50% of such Participant's
vested interest under the Plan, determined
as of the date as of which the loan is made.
(d) A participant shall not have more than two loans
outstanding at any time from the Plan and all other
plans of the Employer and any related corporation.
-78-
<PAGE> 85
(e) Loans shall be made to Participants in accordance
with written procedures established by the Company,
which written procedures are hereby incorporated
into and made a part of the Plan.
20.2 REDUCTION OF ACCOUNT UPON DISTRIBUTION.
Notwithstanding any other provision of the Plan to the contrary,
the amount of a Participant's separate account that is
distributable to the Participant or his Beneficiary under the
Plan shall be reduced by the portion of his vested interest that
is held by the Plan as security for any loan outstanding to the
Participant, provided that the reduction is used to repay the
loan. If a distribution is made because of the death of a
Participant prior to the commencement of a distribution of his
separate accounts, and less than 100% of the Participant's vested
interest in his separate account (determined without regard to
the preceding sentence) is payable to such Participant's surviv-
ing spouse, then the balance of the Participant's vested interest
in his separate account shall be adjusted by reducing such
Participant's vested account balance by the amount of the
security used to repay the loan, as provided in the preceding
sentence, prior to determining the amount of the Participant's
separate account that is payable to such Participant's surviving
spouse.
20.3 REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION.
Notwithstanding any other provision of the Plan to the contrary,
the following terms and conditions shall apply to any loan made
to a Participant under this Article XX.
(a) The interest rate on any loan made to a Par-
ticipant hereunder shall be the "prime rate"
(as hereinafter defined) charged by the
Trustee and in effect on the date the Par-
ticipant's loan request is made, plus one
percent. For purposes of determining the
rate to be used in calculating the interest
charged on loans made hereunder, the "prime
rate" shall be the prime rate set by the
Trustee from time to time as reported by it
and as in effect on the first business day
of each month. If the Trustee does not set
a prime rate, the interest rate on any loan
made to a Participant hereunder shall be a
reasonable interest rate commensurate with
current interest rates charged for loans
-79-
<PAGE> 86
made under similar circumstances by persons
in the business of lending money.
(b) The amount of any loan to a Participant (when added
to the outstanding balance of all other loans to the
Participant from the Plan and all other plans
maintained by the Employer or a related corporation)
shall not exceed the lesser of:
(i) $50,000, reduced by the highest out-
standing balance of any other loan to
the Participant from the Plan and all
other plans maintained by the Employer
or a related corporation during the
preceding 12-month period; or
(ii) 50% of the vested portion of the Par-
ticipant's separate account under the
Plan and his vested interest under all
other plans maintained by the Employer
or a related corporation.
(c) The repayment term of any loan granted to a
Participant hereunder shall be 12, 24, 36, 48 or 54
months, as specified by the Participant.
(d) Except as otherwise permitted under Treasury
regulations, substantially level amortization shall
be required over the term of the loan with payments
being made not less frequently than quarterly.
20.4 ADMINISTRATION OF LOAN INVESTMENT FUNDS.
Upon approval of a loan to a Participant hereunder, the Company
shall direct the Trustee to establish a Loan Investment Fund in
the name of such Participant, and to transfer to such Loan
Investment Fund such portion of the Participant's separate
account invested in the Investment Funds as shall equal the
amount of the Participant's loan; provided, however, that the
portion of the Participant's investment in the Investment Funds
that is to be debited for any loan to be made to the Participant
hereunder shall be in the same proportion as the Participant's
current balance in those Investment Funds. Any loan approved by
the Company shall be made to the Participant out of the
Participant's Loan Investment Fund. All principal and interest
paid by the Participant on a loan made under this Article XX
shall be deposited in his Loan Investment Fund and shall be
transferred, upon receipt,
-80-
<PAGE> 87
to the Investment Funds in accordance with the Participant's
most recent investment directions on the date of payment of the
Loan Investment Fund. The balance of the Participant's loan shall
be decreased by the amount of principal payments, and the Loan
Investment Fund shall be terminated when the loan has been repaid
in full.
20.5 DEFAULT.
If a Participant fails to make, or fails to cause to be made, any
payment required under the terms of the loan within 60 days
following the date on which such payment shall become due, the
Company may direct the Trustee to declare the loan to be in de-
fault, in accordance with the provisions of the Plan's written
loan procedure, and the entire unpaid balance of such loan,
together with accrued interest, shall be immediately due and
payable. In any such event, if such balance and interest thereon
is not then paid, the Trustee shall charge the separate account
of the borrower with the amount of such balance and interest as
of the earliest date, including the borrower's Severance Date, if
applicable, upon which a distribution may be made from the Plan
to the borrower without adversely affecting either the tax
qualification of the Plan or the qualified status of the cash or
deferred arrangement maintained under the Plan.
20.6 CHANGES IN EMPLOYMENT STATUS AND TRANSFERS OF EM-
PLOYMENT BEFORE LOAN IS REPAID IN FULL.
Subject to the provisions of Section 3.4, in the event a
Participant:
(a) ceases to be an Employee but continues in the
employment of (i) an Employer in some other capacity
or (ii) a related corporation, and
(b) becomes a participant in
(i) The Goodyear Tire & Rubber Company
Employee Savings Plan for Hourly
Employees,
(ii) The Goodyear Tire & Rubber Company
Employee Savings Plan for Bargaining
Unit Employees, or
(iii) Celeron Corporation Employee Savings
Plan,
-81-
<PAGE> 88
his separate account under the Plan and his Loan Investment Fund, if any, shall
be transferred to the savings plan in which he becomes a participant. Any
transfer of his separate account and Loan Investment Fund made in accordance
with the provisions of this Section 20.6 shall be made as soon as
administratively practicable after the Participant's change in employment
status or transfer of employment, subject to compliance with Section 414(l) of
the Code and the regulations thereunder.
-82-
<PAGE> 89
ARTICLE XXI
ELIGIBLE ROLLOVER DISTRIBUTIONS
21.1 DIRECT ROLLOVER.
This Article XXI applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election
under this Article XXI, a distributee may elect, at the time and
in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a
direct rollover.
21.2 DEFINITIONS.
(a) Eligible rollover distribution: An eligible
rollover distribution is any distribution of
all or any portion of the balance to the
credit of the distributee, except that an
eligible rollover distribution does not
include: any distribution that is one of a
series of substantially equal periodic pay-
ments (not less frequently than annually)
made for the life (or life expectancy) of
the distributee or the joint lives (or joint
life expectancies) of the distributee and
the distributee's designated beneficiary, or
for a specified period of ten years or more;
any distribution to the extent such distri-
bution is required under Section 401(a)(9)
of the Code; and the portion of any distri-
bution that is not includable in gross in-
come (determined without regard to the
exclusion for net unrealized appreciation
with respect to employer securities).
(b) Eligible retirement plan: An eligible re-
tirement plan is an individual retirement
account described in Section 408(a) of the
Code, an individual retirement annuity de-
scribed in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of
the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribu-
tion. However, in the case of an eligible
rollover distribution to the surviving
spouse, an eligible retirement plan is an
-83-
<PAGE> 90
individual retirement account or individual
retirement annuity.
(c) Distributee: A distributee includes an
Employee or Former Employee. In addition,
the Employee's or former Employee's sur-
viving spouse and the Employee's or former
Employee's spouse or former spouse who is
the alternate payee under a qualified domes-
tic relations order, as defined in Sec-
tion 414(p) of the Code, are distributees
with regard to the interest of the spouse or
former spouse.
(d) Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified
by the distributee.
* * *
EXECUTED at Akron, Ohio, this _____ day of
_________________, 1997.
THE GOODYEAR TIRE & RUBBER COMPANY
By _______________________________
Attest:
- ----------------------
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-65187) of The Goodyear Tire & Rubber Company of
our report dated June 15, 1998 appearing at page 2 of Annex A of this Form 11-K.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Cleveland, Ohio
June 25, 1998
