<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 HOURLY 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 HOURLY 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 Hourly 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
Employee Savings Plan for Hourly 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. 33-65181 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 HOURLY
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 HOURLY EMPLOYEES
* * * * *
FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE> 4
[PW LOGO]
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR HOURLY EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR HOURLY EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for
Plan Benefits, with Fund Information at 3-4
December 31, 1997 and 1996
Statement of Changes in Net Assets
Available for Plan Benefits, with Fund
Information for the Years Ended 3-4
December 31, 1997 and 1996
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 Hourly
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 Hourly 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
The Goodyear Tire & Rubber Company
Employee Savings Plan For Hourly Employees
Statement of Net Assets Available For Plan Benefits, With Fund Information
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Thousands) December 31, 1997
------------------------------------------------------------------------------------------
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 $ 38,259 $ 11,196 $ 64 $ 311 $ 157 $ 11,027
======== ======== ==== ===== ===== ========
</TABLE>
<TABLE>
<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>
Plan's Interest in Master Trust
Representing Total Assets
Available for Plan Benefits $ 548 $ 835 $ 216 $ 10,771 $ 3,134
===== ===== ===== ======== =======
</TABLE>
Statement of Changes in Net Assets Available For Plan Benefits, With Fund
Information
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Thousands) For the Year Ended December 31, 1997
-------------------------------------------------------------------------------------
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 $ 644 $ -- $-- $-- $ -- $ --
Employee 2,104 1,152 12 51 31 661
-------- -------- ---- ----- ------- --------
2,748 1,152 12 51 31 661
Investment Income from Plan's
Interest in Master Trust 4,600 563 6 44 30 1,869
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 1,963 1,168 -- -- 10 378
Administrative Expenses 19 11 -- -- -- 8
-------- -------- ---- ----- ------- --------
1,982 1,179 -- -- 10 386
Transfers:
Transfers Between Plans (863) (401) (2) (53) (3) (129)
Transfers Between Funds -- (1,173) (14) (8) (63) 2,724
Loan Transfers To or From Plan -- 82 -- 7 -- 1
Loans to Participants -- (660) (2) (9) (9) (538)
Loan Repayments:
Principal -- 867 2 14 11 343
Interest -- 174 1 3 3 87
-------- -------- ---- ----- ------- --------
(863) (1,111) (15) (46) (61) 2,488
-------- -------- ---- ----- ------- --------
Increase in Assets During the Year 4,503 (575) 3 49 (10) 4,632
Net Assets at Beginning of Year 33,756 11,771 61 262 167 6,395
-------- -------- ---- ----- ------- --------
Net Assets at End of Year $ 38,259 $ 11,196 $ 64 $ 311 $ 157 $ 11,027
======== ======== ==== ===== ======= ========
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended 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>
Increase in Assets:
Contributions:
Employer $ -- $ -- $ -- $ 644 $ --
Employee 61 97 39 --
----- ------- ----- -------- -------
61 97 39 644 --
Investment Income from Plan's
Interest in Master Trust 110 35 5 1,674 264
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries (15) 10 (4) 416 --
Administrative Expenses -- -- -- -- --
----- ------- ----- -------- -------
(15) 10 (4) 416 --
Transfers:
Transfers Between Plans (5) (2) (2) (266) --
Transfers Between Funds 26 (886) 56 (662) --
Loan Transfers To or From Plan (1) (1) -- -- (88)
Loans to Participants (67) (72) (7) -- 1,364
Loan Repayments:
Principal 39 66 7 -- (1,349)
Interest 9 14 1 -- (292)
----- ------- ----- -------- -------
1 (881) 55 (928) (365)
----- ------- ----- -------- -------
Increase in Assets During the Year 187 (759) 103 974 (101)
Net Assets at Beginning of Year 361 1,594 113 9,797 3,235
----- ------- ----- -------- -------
Net Assets at End of Year $ 548 $ 835 $ 216 $ 10,771 $ 3,134
===== ======= ===== ======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE> 8
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(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 $ 33,756 $ 11,771 $ 61 $ 262 $ 167 $ 6,395
======== ======== ==== ===== ===== =======
</TABLE>
<TABLE>
<CAPTION>
(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 $ 361 $ 1,594 $ 113 $ 9,797 $ 3,235
===== ======= ===== ======= =======
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND
INFORMATION
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(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 $ 599 $ -- $ -- $ -- $ -- $ --
Employee 2,017 1,273 12 47 21 555
-------- -------- ---- ----- ----- -------
2,616 1,273 12 47 21 555
Investment Income from Plan's
Interest in Master Trust 4,280 824 3 44 14 1,281
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 387 342 -- -- -- 6
Administrative Expenses 88 46 -- -- -- 19
-------- -------- ---- ----- ----- -------
475 388 -- -- -- 25
Transfers:
Transfers Between Plans (1,156) (460) -- (6) -- (273)
Transfers Between Funds -- (1,825) 45 (24) 129 632
Loan Transfers To or From Plan -- 81 -- -- -- 13
Loans to Participants -- (1,786) (3) (14) (4) (544)
Loan Repayments: -- -- -- -- -- --
Principal -- 596 3 15 6 259
Interest (1) 172 1 3 1 54
-------- -------- ---- ----- ----- -------
(1,157) (3,222) 46 (26) 132 141
-------- -------- ---- ----- ----- -------
Increase in Assets During the Year 5,264 (1,513) 61 65 167 1,952
Net Assets at Beginning of Year 28,492 13,284 -- 197 -- 4,443
-------- -------- ---- ----- ----- -------
Net Assets at End of Year $ 33,756 $ 11,771 $ 61 $ 262 $ 167 $ 6,395
======== ======== ==== ===== ===== =======
</TABLE>
<TABLE>
<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 $ -- $ -- $ -- $ 599 $ --
Employee 38 55 16 -- --
------- ------- ------- ------- -------
38 55 16 599 --
Investment Income from Plan's
Interest in Master Trust 21 155 18 1,648 272
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries -- 3 -- 36 --
Administrative Expenses -- -- -- 23 --
------- ------- ------- ------- -------
-- 3 -- 59 --
Transfers:
Transfers Between Plans -- -- -- (417) --
Transfers Between Funds 310 1,411 83 (761) --
Loan Transfers To or From Plan -- -- -- -- (94)
Loans to Participants (31) (61) (10) -- 2,453
Loan Repayments: -- -- -- -- --
Principal 18 31 5 -- (933)
Interest 5 6 1 -- (244)
------- ------- ------- ------- -------
302 1,387 79 (1,178) 1,182
------- ------- ------- ------- -------
Increase in Assets During the Year 361 1,594 113 1,010 1,454
Net Assets at Beginning of Year -- -- -- 8,787 1,781
------- ------- ------- ------- -------
Net Assets at End of Year $ 361 $ 1,594 $ 113 $ 9,797 $ 3,235
======= ======= ======= ======= =======
</TABLE>
-4-
<PAGE> 9
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR HOURLY 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
Hourly 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. The Plan's undivided interest in the master
trust was 1.9% at December 31, 1997 and 2.0% at December 31, 1996.
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.
-5-
<PAGE> 10
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
Dividend income is recorded on the ex-dividend date.
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
Certain hourly employees 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 498 employees
(552 in 1996) of the Company were eligible with approximately 404 employees
(441 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 HOURLY 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 HOURLY 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 HOURLY 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 HOURLY 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 $2,806 and $0, 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, 1997, 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 HOURLY 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
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Thousands) 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>
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 -- -- -- --
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
---------- ---------- ---------- ---------- ----------
Investments at Contract Value:
Guaranteed Investment Contracts 656,767 656,767 -- -- --
---------- ---------- ---------- ---------- ----------
Receivables:
Employee Contributions -- -- -- -- --
Employer Contributions 12 -- -- -- --
Transfers -- 723 128 5 (1)
Accrued Interest and Dividends 1,886 1,160 3 11 4
Pending Security Sales -- -- -- -- --
---------- ---------- ---------- ---------- ----------
1,898 1,883 131 16 3
---------- ---------- ---------- ---------- ----------
Total Assets 1,965,579 670,960 16,594 53,143 18,934
---------- ---------- ---------- ---------- ----------
Liabilities:
Administrative Expenses Payable 113 72 -- -- --
Distributions Payable -- -- -- -- --
Forfeiture Credits -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Liabilities 113 72 -- -- --
---------- ---------- ---------- ---------- ----------
Net Assets $1,965,466 $ 670,888 $ 16,594 $ 53,143 $ 18,934
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
(Dollars in Thousands) 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>
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 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 -- -- -- -- 11,976 --
Promissory Notes -- -- -- -- -- 85,517
--------- ------- -------- --------- --------- --------
451,335 42,456 62,657 25,608 538,510 85,517
--------- ------- -------- --------- --------- --------
Investments at Contract Value:
Guaranteed Investment Contracts -- -- -- -- -- --
--------- ------- -------- --------- --------- --------
Receivables:
Employee Contributions -- -- -- -- -- --
Employer Contributions -- -- -- -- 12 --
Transfers (1,081) 82 97 (260) (18) 325
Accrued Interest and Dividends 535 9 12 (6) 168 (10)
Pending Security Sales -- -- -- -- -- --
--------- ------- -------- --------- --------- --------
(546) 91 109 (266) 162 315
--------- ------- -------- --------- --------- --------
Total Assets 450,789 42,547 62,766 25,342 538,672 85,832
--------- ------- -------- --------- --------- --------
Liabilities:
Administrative Expenses Payable 41 -- -- -- -- --
Distributions Payable -- -- -- -- -- --
Forfeiture Credits -- -- -- -- -- --
--------- ------- -------- --------- --------- --------
Total Liabilities 41 -- -- -- -- --
--------- ------- -------- --------- --------- --------
Net Assets $ 450,748 $42,547 $ 62,766 $ 25,342 $ 538,672 $ 85,832
========= ======= ======== ========= ========= ========
</TABLE>
-12-
<PAGE> 17
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Thousands) 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>
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
========== ========= ======== ======== =========
</TABLE>
<TABLE>
<CAPTION>
(Dollars in Thousands) 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>
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 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 -- -- -- -- 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
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Thousands) For the Year Ended December 31, 1997
-------------------------------------------------------------------------------------
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 $ 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
=========== ========= ======== ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
(Dollars in Thousands) For the Year Ended 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>
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
THE GOODYEAR TIRE & RUBBER COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(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 $ 37,939 $ 306 $ -- $ -- $ --
Employee 113,952 68,429 666 4,966 1,628
----------- --------- ------- -------- --------
151,891 68,735 666 4,966 1,628
Interest and Dividend Income 55,195 38,334 7 32 10
Net Appreciation (Depreciation)
in Fair Market Value of Assets 117,457 246 516 3,807 1,165
----------- --------- ------- -------- --------
172,652 38,580 523 3,839 1,175
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 63,857 35,330 171 1,039 289
Administrative Expenses 1,694 1,077 -- -- --
----------- --------- ------- -------- --------
65,551 36,407 171 1,039 289
Transfers:
Transfers Between Plans -- -- -- -- --
Transfers Between Funds -- (48,299) 6,349 8,568 10,270
Loan Transfers To or From Plan -- 1 -- (1) --
Loans to Participants -- (45,793) (153) (1,258) (413)
Loan Repayments:
Principal -- 16,441 133 671 312
Interest -- 3,923 25 140 63
----------- --------- ------- -------- --------
-- (73,727) 6,354 8,120 10,232
----------- --------- ------- -------- --------
Increase (Decrease) in Assets During Year 258,992 (2,819) 7,372 15,886 12,746
Net Assets at Beginning of Year 1,366,371 670,217 -- 19,172 --
----------- --------- ------- -------- --------
Net Assets at End of Year $ 1,625,363 $ 667,398 $ 7,372 $ 35,058 $ 12,746
=========== ========= ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
(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 $ -- $ -- $ -- $ -- $ 37,633 $ --
Employee 30,665 2,793 3,231 1,574 -- --
--------- -------- -------- -------- --------- --------
30,665 2,793 3,231 1,574 37,633 --
Interest and Dividend Income 448 25 182 434 9,806 5,917
Net Appreciation (Depreciation)
in Fair Market Value of Assets 49,982 1,726 5,074 1,371 53,570 --
--------- -------- -------- -------- --------- --------
50,430 1,751 5,256 1,805 63,376 5,917
Decrease in Assets:
Benefits Paid to Participants
or Their Beneficiaries 7,217 284 487 230 18,810 --
Administrative Expenses 389 -- -- -- 228 --
--------- -------- -------- -------- --------- --------
7,606 284 487 230 19,038 --
Transfers:
Transfers Between Plans -- -- -- -- -- --
Transfers Between Funds 9,530 21,622 38,117 13,943 (60,100) --
Loan Transfers To or From Plan (1) 1 -- -- -- --
Loans to Participants (15,397) (977) (1,161) (350) -- 65,502
Loan Repayments:
Principal 6,001 589 633 247 -- (25,027)
Interest 1,359 115 125 46 -- (5,796)
--------- -------- -------- -------- --------- --------
1,492 21,350 37,714 13,886 (60,100) 34,679
--------- -------- -------- -------- --------- --------
Increase (Decrease) in Assets 74,981 25,610 45,714 17,035 21,871 40,596
During Year
Net Assets at Beginning of Year 214,919 -- -- -- 421,485 40,578
--------- -------- -------- -------- --------- --------
Net Assets at End of Year $ 289,900 $ 25,610 $ 45,714 $ 17,035 $ 443,356 $ 81,174
========= ======== ======== ======== ========= ========
</TABLE>
<PAGE> 1
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR
HOURLY EMPLOYEES
(January 1, 1997 Restatement)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
I THE PLAN 1
II DEFINITIONS 2
2.1 Meaning of Definitions................................................... 2
2.2 Pronouns................................................................. 8
III EMPLOYEE PARTICIPATION 9
3.1 Liability and Election to Participate.................................... 9
3.2 Notification of New Participants......................................... 9
3.3 Effect and Duration...................................................... 9
3.4 Changes in Employment Status; Transfers
of Employment............................................................ 10
3.5 Reemployment of a Participant............................................ 10
3.6 Qualified Military Service............................................... 10
IV TAX-DEFERRED CONTRIBUTIONS MADE ON BEHALF OF
PARTICIPANTS 11
4.1 Tax-Deferred Contributions............................................... 11
4.2 Amount of Tax-Deferred Contributions..................................... 11
4.3 Limitation on Tax-Deferred Contributions
of Highly Compensated Employees.......................................... 12
4.4 Administration........................................................... 14
4.5 Limitation on Employer Contributions..................................... 15
4.6 Changes in Compensation Reduction
Authorization............................................................ 15
4.7 Suspension of Contributions.............................................. 15
V AFTER-TAX CONTRIBUTIONS 16
5.1 After-Tax Contributions.................................................. 16
5.2 Amount of After-Tax Contributions........................................ 16
5.3 Administration........................................................... 16
5.4 Changes in Payroll Deduction
Authorization............................................................ 17
VI MATCHING EMPLOYER CONTRIBUTIONS 18
6.1 Payment of Contributions................................................. 18
6.2 Limitation on Amount..................................................... 19
6.3 Allocation of Matching Employer
Contributions............................................................ 19
6.4 Prevented Contributions.................................................. 20
6.5 Determination of Annual Employer
Contribution Rate........................................................ 20
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
6.6 Determination of Amount of Employer
Contribution............................................................. 21
6.7 Effect of Plan Termination............................................... 21
6.8 Limitation on Matching Employer
Contributions and After-Tax
Contributions of Highly Compensated
Employees................................................................ 21
VII DEPOSIT AND INVESTMENT OF CONTRIBUTIONS 25
7.1 Deposit of Contributions................................................. 25
7.2 Investment Elections of Participants..................................... 25
7.3 Election to Transfer Interest Between
Funds.................................................................... 26
7.4 Election to Transfer Interest from
Goodyear Stock Fund...................................................... 26
VIII ESTABLISHMENT OF FUNDS AND PARTICIPANTS'
ACCOUNTS 27
8.1 Establishment of General Fund............................................ 27
8.2 Investment Funds......................................................... 27
8.3 Goodyear Stock Fund...................................................... 29
8.4 Appointment of Investment Managers....................................... 29
8.5 Income on Trust Funds.................................................... 29
8.6 Separate Accounts........................................................ 30
8.7 Sub-Accounts............................................................. 30
8.8 Account Balances......................................................... 30
8.9 Funds from Predecessor Plans............................................. 30
IX LIMITATIONS ON ALLOCATIONS TO ACCOUNTS 33
9.1 Limitation on Crediting of
Contributions............................................................ 33
9.2 Scope of Limitation...................................................... 39
X VALUATIONS, DIVIDEND REINVESTMENTS, AND
VOTING 40
10.1 Valuation of Participant's Interest...................................... 40
10.2 Reinvestment of Dividends................................................ 41
10.3 Voting Company Stock..................................................... 41
10.4 Finality of Determinations............................................... 42
10.5 Notification............................................................. 42
XI WITHDRAWALS WHILE EMPLOYED 43
11.1 Withdrawal of After-Tax Contributions.................................... 43
11.2 Withdrawal of Matching Employer
Contributions............................................................ 43
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
11.3 Withdrawal of Tax-Deferred
Contributions............................................................ 43
11.4 Conditions and Limitations on Hardship
Withdrawals.............................................................. 44
11.5 Special Age 70-1/2 Distribution.......................................... 46
11.6 Adjustment of Accounts................................................... 46
XII TERMINATION OF PARTICIPATION AND DISTRIBUTION 47
12.1 Termination of Participation............................................. 47
12.2 Vesting of Separate Accounts............................................. 48
12.3 Distribution............................................................. 49
12.4 Required Commencement of Distribution.................................... 50
12.5 Form of Distribution..................................................... 51
12.6 Election of Former Vesting Schedule...................................... 51
12.7 Buy Back of Forfeited Amounts............................................ 52
12.8 Disposition of Forfeited Balances........................................ 52
12.9 Effect of Company's Determination........................................ 53
12.10 Reemployment of a Former Participant..................................... 53
12.11 Restrictions on Alienation............................................... 54
12.12 Facility of Payment...................................................... 54
12.13 Distributions to Other Qualified Plans................................... 54
XIII BENEFICIARIES 56
13.1 Designation of Beneficiary............................................... 56
13.2 Beneficiary in the Absence of
Designation.............................................................. 57
XIV ADMINISTRATION 58
14.1 Authority of Company..................................................... 58
14.2 Action of Company........................................................ 58
14.3 Claims Review Procedure.................................................. 59
14.4 Indemnification.......................................................... 60
14.5 Qualified Domestic Relations Orders...................................... 60
XV TRUSTEE AND TRUST AGREEMENT 62
XVI AMENDMENT AND TERMINATION 63
16.1 Amendment................................................................ 63
16.2 Limitation on Amendment.................................................. 63
16.3 Termination.............................................................. 63
16.4 Withdrawal of an Employer................................................ 65
16.5 Corporate Reorganization................................................. 65
XVII ADOPTION BY SUBSIDIARIES; EXTENSION TO NEW
BUSINESS OPERATIONS 66
17.1 Adoption by Subsidiaries................................................. 66
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
17.2 Extension to New Business Operations..................................... 66
XVIII MISCELLANEOUS PROVISIONS 67
18.1 No Commitment as to Employment........................................... 67
18.2 Benefits................................................................. 67
18.3 No Guarantees............................................................ 67
18.4 Expenses................................................................. 67
18.5 Precedent................................................................ 67
18.6 Duty to Furnish Information.............................................. 67
18.7 Withholding.............................................................. 68
18.8 Merger, Consolidation, or Transfer of
Plan Assets.............................................................. 68
18.9 Back Pay Awards.......................................................... 68
18.10 Condition on Employer Contributions...................................... 69
18.11 Return of Contributions to
Participants............................................................. 69
18.12 Return of Contributions to an Employer................................... 69
18.13 Validity of Plan......................................................... 70
18.14 Parties Bound............................................................ 70
XIX TOP-HEAVY PROVISIONS 71
19.1 Applicability............................................................ 71
19.2 Top-Heavy Definitions.................................................... 71
19.3 Accelerated Vesting...................................................... 73
19.4 Minimum Employer Contribution............................................ 74
19.5 Adjustments to Section 415 Limitations................................... 75
19.6 Compensation Taken Into Account.......................................... 75
XX LOANS 76
20.1 Application for Loan..................................................... 76
20.2 Reduction of Account Upon Distribution................................... 77
20.3 Requirements to Prevent a Taxable
Distribution............................................................. 77
20.4 Administration of Loan Investment Fund................................... 78
20.5 Default.................................................................. 79
20.6 Changes in Employment Status and
Transfers of Employment Before Loan
Is Repaid in Full........................................................ 79
XXI ELIGIBLE ROLLOVER DISTRIBUTIONS 81
21.1 Direct Rollover.......................................................... 81
21.2 Definitions.............................................................. 81
</TABLE>
(iv)
<PAGE> 6
THE GOODYEAR TIRE & RUBBER COMPANY
EMPLOYEE SAVINGS PLAN
FOR
HOURLY EMPLOYEES
ARTICLE I
THE PLAN
This Plan shall be known as The Goodyear
Tire & Rubber Company Employee Savings Plan for Hourly Employees and constitutes
a modification, restatement, and continuation of The Goodyear Tire and Rubber
Company Employee Savings Plan for Hourly Employees, as heretofore in effect,
that was originally effective with respect to eligible hourly 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
as of January 1, 1997.
-1-
<PAGE> 7
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 In come
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> 8
(g) The "Compensation" of a Participant for any period shall
mean the entire amount of compensation 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 overtime and vacation
pay, as recorded in the records of an Employer or any
subsidiary of the Company, but excluding any imputed income,
any supple mental unemployment benefit payments, any
payments under plans imposed by governments other than the
United States, any payments made for transportation, or any
special allowances.
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 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 defined 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 any such
absence.
(i) An "Employee" shall mean any employee who is an "hourly
employee," as hereinafter defined, other than any such
employee (i) who is a "leased employee" (as defined in
Section 414(n)(2) of the Code) or (ii) who is covered by a
collective bargaining agreement unless such agreement or the
Plan specifically provides for coverage by the Plan. For the
purposes hereof, an "hourly employee" shall include only an
employee who has
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been designated 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 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 employee'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 continuous
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 Employment Commencement
Date shall be changed to the date he again
performed an Hour of Service, but only if the
period of time between such Severance Date and
the date such employee 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 occurs by reason
of entering active military service with the
armed forces of the United States and if he has
reemployment rights with his Employer, his
Employment
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<PAGE> 10
Commencement Date shall not be advanced so long
as he returns to employment with the Company or
any subsidiary of the Company within the time
prescribed by federal law.
(m) An "Enrollment Date" shall mean the first day of each month.
(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 separate Investment
Funds or the Goodyear Stock Fund as may be provided in the
Plan or Trust Agreement. No General Fund shall be
established 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 Participant 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
2530.00b-3, which relate to determining Hours of Service
attributable to reasons other than the performance 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
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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.
(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 Hourly
Employees, as from time to time in effect.
(w) The "Plan Administrator," which is the administrator 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 corporation, other
than an Employer, which is a member of a controlled group of
corporations of which an Employer is a member as determined
under Section 1563(a) of the Code, without regard to Section
1563(a)(4) and Section 1563(e)(3)(C) of the Code.
Furthermore, 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
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 Employer is also a
member as determined under Section 414(m) of the Code, any
entity, other than an Employer, which is required to be
aggregated with an Employer under Section 414(c) 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
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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; 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 (i) the pregnancy of the Em-
ployee, (ii) the birth of a child of the Employee, (iii) the
placement of a child with the Employee in connection with
the adoption of such child by the Employee, or (iv) 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 Section 4.4.
(dd) The "Trust Agreement" shall mean the agreement entered into
between the Company and the Trustee, as provided in Article
XV hereof, together with all amendments thereto.
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<PAGE> 13
(ee) The "Trustee" shall mean the trustee which at the time shall
be designated, qualified, and acting under the Trust
Agreement.
(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 Hourly 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.
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<PAGE> 14
ARTICLE III
EMPLOYEE PARTICIPATION
3.1 Liability 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.
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<PAGE> 15
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.
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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
Participants behalf, when combined with his percentage rate of
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 Compensation 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
Participants 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
April 15 following the close of the Plan year, shall distribute to
the Participant the annual amount of the
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<PAGE> 17
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
Participant 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 percent 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 related corporation shall be determined
as if all such contributions and any contributions described in
Section 401(k)(3)(D) of the Code were made under a
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<PAGE> 18
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 the 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 Contributions.
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
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.
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<PAGE> 19
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 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.
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 calendar month in accordance with the provisions
of
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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, except that he shall be limited to selecting an
integral percent age 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 Par-
ticipant 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 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.
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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.
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<PAGE> 22
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 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 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.
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<PAGE> 23
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 calendar month based on Compensation paid by such
Employer during such calendar month;
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 Compensation 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 voluntarily 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
Contributions for any payroll
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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 only
to the extent that such Tax-Deferred Contributions and such After-Tax
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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 payroll period 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 is made. In the event an
Employer which is not a member of such an affiliated group is
prevented from paying all or a 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 preceding Plan year.
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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
Employees.
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 percentage 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 percent 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:
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(c) first, the maximum percentage of After-Tax Contributions
shall be reduced, in accordance with procedures adopted by
the Company, from sixteen percent to the greater of six
percent or such percentage that will result in the average
contribution percentage limit specified above not being
exceeded, and the excess amount of After-Tax Contributions
attributable to such reduction shall be distributed to the
Highly Compensated Employees who made the excess
contributions;
(d) second, if application of (c) does not cause the Plan to
meet the average contribution percentage limit specified
above, the maximum 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 Contributions and the loss of the Matching
Employer Contribution related thereto, will result in the
average contribution percentage limit specified above not
being exceeded, and the excess amount of After-Tax
Contributions attributable to such reduction shall be
distributed to the Highly Compensated Employees who made the
excess contributions;
(e) third, if (d) is applicable, and a Highly Compensated
Employee receiving a distribution thereunder of excess
After-Tax Contributions 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
Contribution 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 Employer Contribution for such Plan
year that relates to the After-Tax Contribution distributed
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
Contributions and After-Tax Contributions" for "excess Tax-Deferred
Contributions." For purposes of this Section 6.8, the "contribution
percentage" of an
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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
contribution 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 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
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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.
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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 Contributions 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 to be deposited in each of the Investment Funds,
which
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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.
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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
particular periods of time. Additionally, the Stable Value
Fund may be invested in investment 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 allocation 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.
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<PAGE> 33
(iii) An Aggressive Asset Allocation Fund which shall
be invested primarily in bonds and stocks with a
target allocation 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 Participant, 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 paragraph (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 Investment 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 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
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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.
8.5 Income on Trust Funds.
Any dividends, interest, distributions, or other income received by
the Trustee in respect of a Fund
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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 the 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 necessary 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 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
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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 Sec-
tion 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 are generally provided under the
Plan. In addition, predecessor plan 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
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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 complies 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.
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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 Participant 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 contri-
butions and forfeitures and employee
after-tax contributions that are credited
to the Participant or Former Participant
under any other qualified defined contri-
bution plan (whether or not terminated)
maintained by an Employer or a related
corporation concurrently with the Plan.
(b) For purposes of this Section 9.1, the
"compensation" of a Participant or Former
Participant shall mean (in contrast with
Compensation as defined in paragraph (g) of Sec
tion 2.1) his wages, salaries, and other amounts
received for personal services actually rendered
in the course of employment with an Employer or
a related corporation, excluding, however,
(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 contributions are
not includable in the gross income of the
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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 deferred
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
transferable or is no longer subject to
substantial risk of forfeiture;
(v) amounts received from the sale, exchange, or
other disposition of stock acquired under a
qualified stock option; and
(vi) any other amounts that receive special tax
benefits, such as premiums for group 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 Former Participant shall not exceed the
lesser of
(i) $30,000 (subject to adjustment annually pursuant
to internal Revenue Service regulations and
rulings under Section 415 of the Code), or
(ii) 25 percent of such Participant's compensation
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
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(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 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 Sec
tion 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 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 forfeiture for such Plan year and
shall be applied against the Company's Matching
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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 Contribution 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 Participant in the Plan also shall be
covered by a qualified defined benefit plan (whether or not
terminated) maintained by an Employer or a related corpo-
ration 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 Partici-
pant or Former Participant under such
plan and the denominator of which is the
lesser of (1) the product of 1.25 mul-
tiplied by the dollar limitation in ef-
fect 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 frac-
tion, 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 denominator of which is the sum
of the lesser of the following amounts
determined for such Plan year and each
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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 Sec tion
415(c)(7) or (8), if applicable) with respect to
such Participant 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
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 Par ticipant is
covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a
related corporation concurrently with the Plan, the
procedure set forth in paragraph (c) of this Section 9.1
shall be implemented first by returning the contributions
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 Participant
under all such other plans, the procedure 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
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forth in paragraph (c) of this Section 9.1, the portion of
the Employer 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 reallocated 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;
provided, however, that the amount of the Employer
contributions and of any forfeitures which is deemed a
forfeiture under this paragraph (e) shall be effected on a
pro rata basis among all of such plans, including the Plan,
unless the Participant or Former Participant is covered by a
money purchase pension 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
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 Participant 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
subparagraph (d)(i) shall not exceed 1.0.
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(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 Section
415(k) of the Code.
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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 manager
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 appointed 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 respective 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 Section 10.1,
and after making appropriate adjustments for the amount of
all contributions 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 Stock Fund as thus determined among all
Participants, Former Participants, and Beneficiaries who
have an interest in the respective Investment Funds and
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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 on the date
immediately preceding such valuation 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 Participant, as applicable and in accordance with the
provisions of Article VIII, the Tax-Deferred Contributions
made on his behalf, 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 Par ticipant, 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 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
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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 deter mining 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 managers'
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.
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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 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 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 a determination that a hardship exists and such withdrawal
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is made in accordance with the provisions of Sec tion 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
aggregate 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 withdrawal 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;
(d) the need to prevent the eviction of the Par ticipant from
his principal residence or
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foreclosure on the mortgage of the Participant's
principal residence;
(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 Participant'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 with drawal and he may not
have any further Tax- Deferred Contributions made on his
behalf nor shall he make any further After-Tax Contribu-
tions until the Enrollment Date next following the
expiration of 12 months after the effective date of such
withdrawal; provided, however, that this paragraph (h) shall
not apply if the Par ticipant has attained age 59-1/2.
(i) The Participant shall not make Tax-Deferred Contributions or
elective tax-deferred contributions under any other
tax-qualified plan maintained by the Company or any related
corporation for the Participant's taxable year immediately
following the taxable year of the withdrawal in excess of
the applicable limit under Sec tion 402(g) of the Code for
such next taxable year less the amount of the Participant's
Tax- Deferred Contributions and elective tax-deferred
contributions under any other plan maintained by the Company
or any related corporation for the taxable year of the
withdrawal; provided, how ever, that this paragraph (i)
shall not apply if the Participant has attained age 59-1/2.
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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 accor-
dance 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 with drawal 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.
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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 certificate 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 because
of physical or mental disability preventing his continuing
in the service of his employer, as determined by the Company
upon the basis of a written certificate of a physician
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 pen-
sion plan maintained by his employer for
his benefit, or
(ii) has completed four years of Continuous
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 corpora
tion is terminated in connection with the sale by the
Employer or related corporation of substantially all of the
assets used in a trade or
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business, even though the Participant continues employment
with the entity acquiring such as sets, 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 Section 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 Participant shall have no vested interest in his
sub-account attributable to Matching Employer 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
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paragraph (b) of this Section 12.2 shall 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 contributions 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
adjust for any net income of and changes in the market value
of the respective Funds, or by any other method reason ably
calculated to provide a more rapid distribution of his
interest.
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 terminated 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
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of such Former Participant or Beneficiary shall be disposed of in
accordance with the provisions of Sec tion 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 Bene-
ficiary 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 Par ticipant 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 Beneficiary over the
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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 nonforfeitable 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 there of 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 (iii)
the date the amendment is
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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 subaccount 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 of 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 attributable to
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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 forfeitures 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 right to any distributions
or further distributions from
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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 separate accounts 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 amount of such accounts under the Plan to
the funding agent
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for such plan if the plan to receive the transfer (i) authorizes
acceptance of such transfers, (ii) provides that assets transferred
shall be held in a separate account, and (iii) provides that the
transferred assets 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.
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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
specified herein. 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 specified herein. 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.
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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; if there are no surviving brothers or sisters, 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.
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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 administration 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 given by the Company under the Plan shall be in writing and
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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 members
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 Claimant'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 Claimant pursuant to this paragraph (a);
(b) the specific portions of the denial of his claim which the
Claimant requests 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 previous denial of his claim for benefits and
accept his claim as made; and
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(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) of the Code and regulations issued
thereunder. Notwithstanding any
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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.
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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.
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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 approval. 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 managers, and the Company
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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 appointed, 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 appointed 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 contributions 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 in-
clude as an asset all accrued income.
(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.
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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 Section 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
termination 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.
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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.
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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 Company. 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
duties imposed hereunder or otherwise imposed by law.
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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
Contributions are made during the month in accordance with the provi-
sions of the foregoing sentence, his Employer shall
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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.
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
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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 in-validity 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.
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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 provisions 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 applicable, 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 determination 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.
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(e) A "top-heavy plan" with respect to a particular 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 meaning of Section
416(g) of the Code and the regulations and rulings
thereunder) of key employees exceeds 60 percent of the
aggregate 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
benefits under the plan for all employees, with present
value of accrued benefits to be determined in accordance
with the actuarial assumptions specified in such defined
benefit 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
permissive 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 Participant
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 Section 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 employee who has not performed an hour of
service during the five-year period ending on the
termination date shall be disregarded.
(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" substi-
tuted for "60 percent" 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.
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(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 Sections 401(a)(4) and 410 of the Code.
(i) A "top-heavy group" with respect to a particular 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
aggregate of the account balances of key employees 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 percentage of the balance of his
sub-account attributable to Matching Employer Contributions which
shall be determined by application of the following vesting schedule:
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<TABLE>
<CAPTION>
Nonforfeitable
Years of Continuous Service Percentage
- --------------------------- --------------
<S> <C>
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%
</TABLE>
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 Contributions 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
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.
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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.
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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 Participant shall agree to
repay the loan by payroll withholding; provided, however,
that in the event a Participant terminates employment with
the Employer prior to the repayment 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.
(e) Loans shall be made to Participants in accordance with
written procedures established by the
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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 account, 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 surviving spouse, then the balance of the Partici-
pant'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 Participant
hereunder shall be the "prime rate" (as hereinafter defined)
charged by the Trustee and in effect on the date the
Participant'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
made under similar circumstances by persons in the business
of lending money.
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<PAGE> 83
(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 outstanding
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 Participant'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 Fund.
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, to the Investment Funds in accordance with the Participant's
most recent investment directions on the date of payment to the Loan
Investment Fund. The balance of the Participant's loan
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<PAGE> 84
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 default, 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 Employment 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 Salaried Employees,
(ii) The Goodyear Tire & Rubber Company Employee
Savings Plan for Bargaining Unit Employees, or
(iii) Celeron Corporation Employee Savings
Plan,
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
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<PAGE> 85
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(1) of the Code and
the regulations thereunder.
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<PAGE> 86
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 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 payments (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 distribution is required under section
401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described 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 distribution. However, in
the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's
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or former Employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order,
as defined in section 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. 33-65181) 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
