<PAGE> 1
Filed Pursuant To Rule 424(B)(2)
Registration No.
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 11, 1998
$100,000,000
(LOGO)
THE GOODYEAR TIRE & RUBBER COMPANY
6 3/8% NOTES DUE 2008
------------------------------
The 6 3/8% Notes due 2008 (the "Notes") will mature on March 15, 2008.
Interest on the Notes is payable semi-annually on March 15 and September 15 of
each year, beginning September 15, 1998. The Notes will be redeemable, at the
option of The Goodyear Tire & Rubber Company (the "Company"), in whole at any
time or in part from time to time, at a redemption price equal to the greater of
(i) 100% of their principal amount, and (ii) the sum of the present values of
the Remaining Scheduled Payments (as defined herein) of principal and interest
thereon discounted to the date of redemption, on a semiannual basis, at the
Treasury Rate (as defined herein) plus 15 basis points, plus in each case
accrued interest thereon to the date of redemption. The Notes will not be
subject to any sinking fund. See "Description of Notes".
The Notes will be denominated in principal amounts of $1,000 or multiples
thereof and will be represented by Global Securities (as defined herein)
registered in the name of a nominee of The Depository Trust Company ("DTC"), as
Depositary. Interests in the Global Securities will be shown on, and transfers
thereof will be effected only through, records maintained by DTC and its
participants. Except as provided herein, Notes in definitive form will not be
issued. Settlement for the Notes will be made in immediately available funds.
The Notes will trade in DTC's Same-Day Funds Settlement System until maturity,
and secondary market trading activity for the Notes will therefore settle in
immediately available funds. All payments of principal and interest will be made
by the Company in immediately available funds. See "Description of Notes -- Same
Day Settlement and Payment" herein.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
------------------ ------------ --------------
<S> <C> <C> <C>
Per Note............................................. 99.568% .650% 98.918%
Total................................................ $99,568,000 $650,000 $98,918,000
</TABLE>
- ---------------
(1) Plus accrued interest, if any, from March 20, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(3) Before deducting expenses payable by the Company estimated at $181,100.
------------------------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Notes
will be ready for delivery in book-entry form only through the facilities of DTC
in New York, New York, on or about March 20, 1998, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO.
CITICORP SECURITIES, INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
------------------------------
The date of this Prospectus Supplement is March 17, 1998.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND
THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
THE COMPANY
The Goodyear Tire & Rubber Company (the "Company" and, together with its
domestic and foreign subsidiary companies, "Goodyear") is one of the world's
leading manufacturers of tires and rubber products. Goodyear engages in
operations in most regions of the world. In 1997, Goodyear's net sales were
$13.155 billion and its net income was $558.7 million. Goodyear's worldwide
employment averaged 95,472 during 1997. Goodyear's operations involve three
industry segments: Tires, General Products and Oil Transportation.
TIRES
Goodyear's principal industry segment is the development, manufacture,
distribution and sale of tires and related activities. In 1997, tire sales
accounted for approximately 78.7% of Goodyear's consolidated net sales and the
Tires segment represented 85.7% of its consolidated net sales and approximately
74.7% of its segment operating income.
TIRES. Goodyear manufactures and markets in most regions of the world a
broad line of rubber tires for automobiles, trucks, buses, tractors, farm
implements, earthmoving equipment, aircraft, industrial equipment and various
other applications, in each case for sale to original equipment manufacturers
and in the replacement market. Worldwide, the Company's sales of passenger,
truck and farm tires to the replacement market substantially exceed its sales of
passenger, truck and farm tires to original equipment manufacturers. Based on
various industry and other sources, Goodyear's share of the worldwide auto,
truck and farm tire markets was estimated to be approximately 19% in 1997.
In the United States and many other countries, the Company sells
Goodyear-brand tires to vehicle manufacturers for use as original equipment on
vehicles they produce. In the United States and most other countries, the
Company sells Goodyear-brand, other house brand and private brand tires through
various channels of distribution for sale to vehicle owners for replacement
purposes. Goodyear competes with other tire manufacturers on the basis of price,
warranty, service, consumer convenience and product design, performance and
reputation. The Company believes Goodyear-brand tires enjoy a high recognition
factor throughout the world and have a reputation for high quality and value.
Kelly-brand and various other house-brand tire lines offered by Goodyear compete
primarily on the basis of price and performance.
RELATED PRODUCTS AND SERVICES. Goodyear also retreads truck, aircraft and
heavy equipment tires, primarily as a service to its commercial customers, and
manufactures and sells tread rubber and other tire retreading materials for
various applications. Additional products and services in the Tires segment
include: automotive repair services provided by Goodyear through its retail
outlets; the sale to dealers and consumers of automotive repair and maintenance
items, automotive equipment and accessories and other items; the operation of
two rubber plantations and the processing and sale of natural rubber; and
miscellaneous other products and services.
GENERAL PRODUCTS
The General Products segment accounted for approximately 13.7% of
Goodyear's consolidated net sales and 19.9% of its segment operating income in
1997. The products and services comprising the General Products segment include:
(1) the manufacture of automotive belts and hoses, air springs, engine mounts,
and various chassis parts for motor vehicles; (2) the production of conveyor and
power transmission belts; air, steam, oil, water, gasoline, materials handling
and hydraulic hose for industrial applications; and various other products; and
(3) the production of a broad line of synthetic rubber, rubber latices, organic
chemicals used in rubber and plastic processing and vinyl resins and latices.
Most products are sold directly to manufacturers or sold through independent
wholesale distributors.
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<PAGE> 3
OIL TRANSPORTATION
The Oil Transportation segment accounted for approximately 0.6% of
Goodyear's consolidated net sales and 5.4% of its segment operating income in
1997. The principal activity of the Oil Transportation segment is the operation
of the All American Pipeline System, a heated crude oil pipeline system
consisting of a 1,225 mile mainline segment extending from Gaviota, California,
to McCamey, Texas, an 11 mile segment extending from Las Flores to Gaviota, and
related terminal and oil storage facilities. The All American Pipeline System is
capable of transporting up to 300,000 barrels per day of heavy crude oils,
450,000 barrels per day of lighter crude oils or lower daily volumes of
combinations of heavy and lighter crude oils. During 1997, the average daily
volume of crude oil transported by the All American Pipeline System was
approximately 195,000 barrels, the average tariff per barrel was $1.38 and the
average distance transported was 461 miles.
INTERNATIONAL OPERATIONS
The Company, through its foreign subsidiaries, engages in manufacturing or
sales operations in most countries in the world, including manufacturing
operations in 28 foreign countries. Foreign sales accounted for approximately
47% of consolidated net sales and foreign operating income represented
approximately 53% of total operating income in 1997. Goodyear's foreign
manufacturing operations consist primarily of the production of tires.
Industrial rubber and other products are also manufactured in certain of the
Company's foreign plants.
Goodyear also participates in joint ventures in various countries
including: South Pacific Tyres, an Australian partnership, and South Pacific
Tyres N.Z. Limited, a New Zealand company, in each of which Goodyear and Pacific
Dunlop Limited each have a 50% equity interest, which entities operate five tire
manufacturing plants, 20 retread plants and a chain of approximately 523 retail
outlets in Australia, New Zealand and Papua-New Guinea; a 50% interest in Nippon
Giant Tire Co., Ltd., which manufactures earthmover tires in Japan; and a 50%
(43.2% net equity) interest in a tire manufacturing facility under construction
near Bombay, India, which was substantially completed in 1997.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be used for general
corporate purposes.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Offered Debt
Securities") supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Notes set forth in the
Prospectus, to which description reference is hereby made. In addition, such
description is qualified in its entirety by reference to the Indenture under
which the Notes offered hereby are issued referred to in the Prospectus.
GENERAL
The Notes offered hereby constitute a series of Notes under the Indenture
referred to in the Prospectus, dated as of March 15, 1996, between the Company
and The Chase Manhattan Bank (formerly Chemical Bank), as Trustee under the
Indenture. Such series is limited to $100,000,000 aggregate principal amount.
The Notes are to mature on March 15, 2008. The Notes are issuable in
denominations of $1,000 and in any integral multiple thereof.
Each Note will bear interest from March 20, 1998 at the rate of 6 3/8% per
annum, payable on March 15 and September 15 of each year, commencing September
15, 1998. Interest will be computed on the basis of a 360-day year of twelve
30-day months. Interest will be payable generally to the person in whose name
the Note is registered at the close of business on the March 1 or September 1
next preceding the March 15 or September 15 interest payment date.
S-3
<PAGE> 4
The provisions of the Indenture relating to legal defeasance and covenant
defeasance (described under the caption "Description of Debt
Securities -- Defeasance" in the Prospectus) will apply to the Notes.
OPTIONAL REDEMPTION
The Notes will be redeemable, at the option of the Company, in whole at any
time or in part from time to time, on at least 30 but not more than 60 days
prior notice mailed to the Depositary, at a redemption price equal to the
greater of (i) 100% of their principal amount and (ii) the sum of the present
values of the Remaining Scheduled Payments (as hereinafter defined) thereon
discounted to the date of redemption, on a semiannual basis, at the Treasury
Rate (as defined herein) plus 15 basis points, plus in each case accrued
interest thereon to the date of redemption. Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
If money sufficient to pay the redemption price of and accrued interest on
all Notes (or portions thereof) to be redeemed on the redemption date is
deposited with the Trustee on or before the redemption date and certain other
conditions are satisfied, on and after such date interest will cease to accrue
on such Notes (or such portions thereof) called for redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co., Citicorp
Securities, Inc. and NationsBanc Montgomery Securities LLC and their respective
successors and, at the option of the Company, additional Primary Treasury
Dealers; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any Note, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
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<PAGE> 5
SINKING FUND
There is no provision for a sinking fund for any of the Notes.
BOOK-ENTRY SYSTEM
The Depository Trust Company, New York, New York, will act as securities
depositary (the "Depositary") for the Notes. The Notes will be represented by
global securities (collectively, the "Global Securities") registered in the name
of Cede & Co., the Depositary's partnership nominee. The provisions set forth
under "Description of Debt Securities -- Book-Entry System" in the Prospectus
will be applicable to the Notes. Accordingly, beneficial interests in the Notes
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Except as described under
"Description of Debt Securities -- Book-Entry System" in the Prospectus, owners
of beneficial interests in the Global Securities will not be entitled to receive
Notes in definitive form and will not be considered holders of Notes.
The following summary is based on information furnished by the Depositary:
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Direct and Indirect Participants are on file with the United States
Securities and Exchange Commission.
Purchases of Notes under the Depositary's system must be made by or through
Direct Participants, which will receive a credit for such Notes on the
Depositary's records. The ownership interest of each actual purchaser of each
Note represented by a Global Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which such Beneficial Owner
entered into the transaction. Transfers of ownership interests in a Global
Security are to be accomplished by entries made on the books of Direct or
Indirect Participants acting on behalf of Beneficial owners. Beneficial Owners
of a Global Security will not receive Notes in definitive form representing
their ownership interest therein, except in the event that use of the book-entry
system for the Notes is discontinued or upon the occurrence of certain other
events described herein.
To facilitate subsequent transfers, each Global Security is registered in
the name of the Depositary's nominee, Cede & Co. The deposit of a Global
Security with the Depositary and its registration in the name of Cede & Co.
effect no change in beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of a Global Security; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts such Notes are
credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
S-5
<PAGE> 6
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements made among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Redemption notices shall be
sent to Cede & Co.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Securities. Under its usual procedures, the Depositary mails an
omnibus proxy (an "Omnibus Proxy") to the Company as soon as possible after the
applicable record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose Accounts the Notes are
credited on the applicable record date (identified in a listing attached to the
Omnibus Proxy).
Principal and interest payments on the Global Securities representing the
Notes will be made in immediately available funds to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown on
the Depositary's records unless the Depositary has reason to believe that it
will not receive payment on such date. Payments by Direct or Indirect
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such Participant and not of the Depositary, the Trustee or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, premium, if any, and interest to the
Depositary is the responsibility of the Company or the Trustee, disbursement of
such payments to Direct Participants shall be the responsibility of the
Depositary, and disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants. Neither the Company nor
the Trustee will have any responsibility or liability for the disbursements of
payments in respect of ownership interests in the Notes by the Depositary or the
Direct or Indirect Participants or for maintaining or reviewing any records of
the Depositary or the Direct or Indirect Participants relating to ownership
interests in the Notes or the disbursement or payments in respect thereof.
The Depositary may discontinue providing its services as securities
depositary with respect to the Notes at any time by giving reasonable notice to
the Company or the Trustee. Under such circumstances, and in the event that a
successor securities depositary is not obtained, Notes in definitive form are
required to be printed and delivered to each holder.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depositary). In that
event, Notes in definitive form will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that the Company believes to
be reliable, but the Company takes no responsibility for the accuracy thereof
and such information is subject to any changes to the arrangements between the
Company and the Depositary and any changes to such procedures that may be
instituted unilaterally by the Depositary.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day Funds
Settlement System available to the Company, all payments of principal and
interest on the Notes will be made by the Company in immediately available
funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required by
the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-6
<PAGE> 7
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
(the "Underwriting Agreement"), the Company has agreed to sell to each of
Goldman, Sachs & Co., Citicorp Securities, Inc. and NationsBanc Montgomery
Securities LLC (the "Underwriters"), and the Underwriters have severally agreed
to purchase, the principal amount of the Notes set forth opposite their names
below. In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Notes offered
hereby if any of the Notes are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
------------ ------------
<S> <C>
Goldman, Sachs & Co......................................... $ 33,334,000
Citicorp Securities, Inc.................................... $ 33,333,000
NationsBanc Montgomery Securities LLC....................... $ 33,333,000
------------
Total............................................. $100,000,000
============
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at such price
less a concession not in excess of .40% of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of .25% of the principal amount of the Notes. After the initial public
offering, the public offering price, concession and discount may be changed.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. The Company has been advised
by the Underwriters that the Underwriters intend to make a market in the Notes,
but are not obligated to do so and may discontinue market making at any time
without notice. No assurance can be given as to the existence or liquidity of a
trading market for the Notes.
Settlement for the Notes will be made in immediately available funds and
all secondary trading in the Notes will settle in immediately available funds.
See "Description of the Notes -- Same-Day Settlement and Payment".
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by the
Underwriters in connection with the offering. Stabilizing transactions consist
of certain bids or purchases for the purpose of preventing or retarding a
decline in the market price of the Notes; and short positions created by the
Underwriters involve the sale by the Underwriters of a greater number of Notes
than they are required to purchase from the Company in the offering. The
Underwriters also may impose a penalty bid, whereby selling concessions allowed
to broker-dealers in respect of the securities sold in the offering may be
reclaimed by the Underwriters if such Notes are repurchased by the Underwriters
in stabilizing or covering transactions. These activities may stabilize,
maintain or otherwise affect the market price of the Notes, which may be higher
than the price that might otherwise prevail in the open market; and these
activities, if commenced, may be discontinued at any time. These transactions
may be effected in the over-the-counter market or otherwise.
Affiliates of Citicorp Securities, Inc. and NationsBanc Montgomery
Securities LLC participate on a regular basis in various general financing and
banking transactions for the Company and its affiliates, including participation
in the Company's revolving credit facilities whereunder the Company may borrow
up to $1.2 billion from 28 banks, including affiliates of Citicorp Securities,
Inc. and NationsBanc Montgomery Securities LLC.
The Underwriters and their associates or affiliates may in the future
engage in transactions with, or may in the future perform services for, the
Company and may in the future receive fees in connection therewith.
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for the Company by C. Thomas
Harvie, Esq., a Vice President and the General Counsel of the Company, and for
the Underwriters by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, New York 10019. Mr. Harvie directly or indirectly owns approximately
10,256 shares (which are subject to forfeiture and certain other restrictions),
and holds options and contingent rights granted pursuant to Company sponsored
compensation plans to acquire up to 64,522 additional shares, of the Common
Stock of the Company.
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<PAGE> 9
THE GOODYEAR TIRE & RUBBER COMPANY
DEBT SECURITIES
------------------------
The Goodyear Tire & Rubber Company (the "Company") may offer and sell from
time to time debt securities consisting of debentures, notes and/or other
unsecured evidences of indebtedness (the "Debt Securities") in one or more
series at an aggregate initial offering price not to exceed $500,000,000 (or its
equivalent at the time of offering in a non-U.S. dollar currency or a composite
currency or currencies). As used herein, the term Debt Securities shall include
securities denominated, or whose principal is payable, in United States dollars,
or, at the option of the Company, in any other currency or in a composite
currency or currencies or in amounts determined by reference to an index. The
Debt Securities may be offered in separate series in amounts, at prices and on
terms to be determined at the time of offering. The terms of the Debt
Securities, including, where applicable, the specific designation, aggregate
principal amount, denominations, maturity, interest rate or rates (which may be
fixed or variable) and time of payment of interest, if any, terms for redemption
at the option of the Company or the holder, terms for any sinking fund payments,
any listing on a securities exchange, the initial public offering price or
prices and certain other terms of the offering and sale of the Debt Securities
in respect of which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement (the "Prospectus Supplement").
The Debt Securities may be sold to or through underwriters, dealers or
agents or directly to other purchasers. See "Plan of Distribution." The names of
any underwriters, dealers or agents, the principal amounts to be purchased by
any underwriters or dealers acting for their own accounts and the compensation
of such underwriters, dealers or agents will be set forth in the applicable
Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is March 11, 1998
<PAGE> 10
NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS AND
THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and at its Regional Offices
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60604 and 7
World Trade Center, Suite 1300, New York, New York 10048, or on the Internet at
http://www.sec.gov. Copies of such material can be obtained, at prescribed
rates, by writing to the Commission, Public Reference Section, at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material can also be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, The Chicago Stock Exchange, Incorporated, 440 South LaSalle Street,
Chicago, Illinois, and The Pacific Stock Exchange, Incorporated, 115 Sansone
Street, San Francisco, California, on which exchanges shares of the Company's
Common Stock are listed.
The Company has filed with the Commission a registration statement on Form
S-3 relating to the Debt Securities (such registration statement, together with
all amendments, exhibits and schedules, is referred to collectively herein as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement. Copies of the
Registration Statement may be inspected, without charge, at the offices of the
Commission, or obtained at prescribed rates from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1997 has been filed by the Company with the Commission (File No. 1-1927) under
the Exchange Act and is incorporated by reference into the Registration
Statement, of which this Prospectus is a part.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained in this
Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein,
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<PAGE> 11
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the request of such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such copies should
be directed to the attention of The Goodyear Tire & Rubber Company, 1144 East
Market Street, Akron, Ohio 44316-0001, Attention: Office of the Secretary
(Telephone number: 330-796-2121).
THE COMPANY
The Goodyear Tire & Rubber Company (the "Company" and, together with its
domestic and foreign subsidiary companies, "Goodyear") is a leading producer of
tires and rubber products. Goodyear manufactures and sells new tires for most
applications in most regions of the world. Goodyear also manufactures and
markets several lines of rubber and reinforced plastic products for the
transportation industry and various industrial and consumer markets and numerous
rubber-related chemicals for various applications, provides automotive repair
and other services and sells various other products. Goodyear's Celeron
subsidiaries engage in various crude oil transportation and related activities,
primarily the operation of the All American Pipeline System, a 1,225 mile crude
oil pipeline extending from two points along the central California coast to
McCamey, Texas.
The Company, an Ohio corporation organized in 1898, maintains its principal
executive offices at 1144 East Market Street, Akron, Ohio 44316-0001. The
Company's telephone number is 330-796-2121.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement relating to a series
of Debt Securities, the net proceeds from the sale of the Debt Securities will
be used for general corporate purposes, including, without limitation, to
refinance short-term bank borrowings and other existing indebtedness, future
acquisitions, capital expenditures and working capital. Each Prospectus
Supplement will contain specific information concerning the use of proceeds from
the issue and sale of the Debt Securities offered thereunder.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.................... 5.36 1.85 5.33 4.99 4.18
</TABLE>
For purposes of computing the Ratio of Earnings to Fixed Charges, (a)
"earnings" consist of income before income taxes, extraordinary items and
cumulative effect of accounting changes (plus amortization of capitalized
interest, minority interest in net income of subsidiaries with fixed charges and
the shares of fixed charges of equity investees, minus capitalized interest, the
interests of minorities in subsidiary losses and undistributed earnings of
equity investees), and (b) "fixed charges" include interest expense,
amortization of debt discount and expense, the portion of rents representative
of an interest factor, capitalized interest and the Company's share of fixed
charges of equity investees. Excluding a $755.6 million charge related to the
writedown of the All American Pipeline System and related assets, the ratio of
earnings to fixed charges for 1996 would have been 5.45. If the financing fees
associated with the Company's receivable sales programs were included in fixed
charges, the Ratio of Earnings to Fixed Charges would be 4.72, 1.73, 4.69, 4.48
and 3.90 for the years ended December 31, 1997, 1996, 1995, 1994 and 1993,
respectively.
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<PAGE> 12
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the series of Debt Securities offered by an accompanying
Prospectus Supplement (the "Offered Debt Securities"), and the extent to which
the following general provisions apply thereto, will be described therein.
The Debt Securities will be issued under an Indenture, dated as of March
15, 1996 (the "Indenture"), between the Company and The Chase Manhattan Bank
(formerly Chemical Bank), as Trustee (the "Trustee"), a form of which Indenture
is filed as an exhibit to the Registration Statement. The following summaries of
certain provisions of the Indenture do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein. Certain terms
defined in the Indenture are capitalized herein. Wherever capitalized terms are
used and not otherwise defined herein, it is intended that such terms shall have
the meanings assigned to them in the Indenture.
GENERAL
The Indenture limits the aggregate principal amount of the Debt Securities
which may be issued thereunder to $500,000,000. The Indenture does not further
limit the aggregate principal amount of any particular series of Offered Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in series. The Debt Securities will be direct
unsecured obligations of the Company and will rank pari passu in right of
payment with all other unsecured and unsubordinated indebtedness of the Company.
Reference is made to the Prospectus Supplement relating to the Offered Debt
Securities for the following terms or additional provisions thereof, where
applicable: (1) the title of the Offered Debt Securities; (2) any limit on the
aggregate principal amount of the Offered Debt Securities; (3) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (4) the date or dates on which the
Offered Debt Securities will mature; (5) the rate or rates (which may be fixed
or variable) at which the Offered Debt Securities will bear interest, if any;
(6) the date or dates from which any such interest will accrue, the date on
which payment of such interest will commence, the Interest Payment Dates, the
Regular Record Dates for such Interest Payment Dates, and the Person to whom any
such interest will be payable, if other than the Person in whose name the
Offered Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest payment; (7)
the place or places where the principal of (and premium, if any) and interest on
the Offered Debt Securities will be payable; (8) the dates on which and the
price or prices at which the Offered Debt Securities will, pursuant to any
mandatory sinking fund provisions, or may, pursuant to any optional sinking fund
provisions, be redeemed by the Company, and the other detailed terms and
provisions of such sinking funds; (9) the date, if any, after which, and the
price or prices at which, the Offered Debt Securities may, pursuant to any
optional redemption provisions, be redeemed at the option of the Company or of
the Holder thereof and the other detailed terms and provisions of such optional
redemptions; (10) the currency or currencies, including composite currencies, in
which payment of the principal of (and premium, if any) and interest on the
Offered Debt Securities will be payable if other than U.S. dollars; (11) any
index used to determine the amount of payments of principal of (and premium, if
any) or interest on the Offered Debt Securities; (12) the portion of the
principal amount of the Offered Debt Securities, if other than the principal
amount thereof, payable upon acceleration of maturity thereof; (13) the right of
the Company to defease the Offered Debt Securities for purposes of certain
restrictive covenants and certain Events of Default under the Indenture; (14)
whether such Debt Securities will be issued in fully registered form without
coupons or will be issued in the form of one or more global securities in
temporary global form or definitive global form; and (15) any other terms of the
Offered Debt Securities. (Section 3.01)
Unless otherwise provided in the Prospectus Supplement relating to the
Offered Debt Securities, (1) principal of (and premium, if any) and interest on
the Debt Securities will be payable, and the Debt
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<PAGE> 13
Securities of each series will be exchangeable and transfers thereof will be
registrable, at the Corporate Trust Office of the Trustee, except that, at the
option of the Company, interest may be paid by mailing a check to the address of
the Person entitled thereto as it appears in the Security Register; (2) payment
of any interest due on any Debt Security will be made to the Person in whose
name such Debt Security is registered at the close of business on the Regular
Record Date for such interest; and (3) the Debt Securities will be issued only
in fully registered form without coupons and in denominations of $1,000 or any
integral multiples thereof. No service charge will be made for any transfer or
exchange of the Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Sections 3.01, 3.02, 3.05, 3.07 and 10.02)
Debt Securities may be issued as Original Issue Discount Debt Securities to
be sold at a substantial discount from their principal amount. In that event,
special federal income tax, accounting and other considerations applicable
thereto will be described in the Prospectus Supplement rating thereto. "Original
Issue Discount Security" means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof. (Section 1.01)
The applicable Prospectus Supplement will describe the federal income tax
consequences of the ownership of any Offered Debt Securities denominated in
other than U.S. dollars.
COVENANTS
LIMITATION ON SECURED INDEBTEDNESS. The Company will covenant that it will
not, and will not permit any Restricted Subsidiary (as defined below) to, issue,
assume or guarantee any Secured Indebtedness (as defined below), if such Secured
Indebtedness is secured by a Lien upon Restricted Property (as defined below) of
the Company or a Restricted Subsidiary (as defined below) without securing the
Debt Securities equally and ratably with, or prior to, such Debt Securities. The
limitation on Secured Indebtedness does not apply, however, to: (i) any Lien on
property of any corporation if such Lien is in existence at the time such
corporation becomes a Restricted Subsidiary, (ii) any Lien on Restricted
Property if such Lien is in existence at the time of acquisition by the Company
or a Restricted Subsidiary of such Restricted Property; (iii) any Lien on
Restricted Property to secure the payment of all or any part of the purchase
price (or other acquisition cost) of such Restricted Property or to secure any
indebtedness incurred (prior to, at the time of, or within one year after, the
acquisition by the Company or a Restricted Subsidiary of such Restricted
Property) for the purpose of, or in connection with, financing all or any part
of the purchase price thereof; (iv) any Lien on property of the Company or a
Restricted Subsidiary if such Lien was in existence prior to the time a
corporation is merged into or consolidated with, or prior to the time of a sale,
lease or other disposition of the properties of such corporation as an entirety
or substantially as an entirety to, the Company or a Restricted Subsidiary; (v)
any Lien securing Secured Indebtedness owing by any Restricted Subsidiary to the
Company or another Restricted Subsidiary; (vi) any Lien on Restricted Property
in favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the United
States of America or any State thereof, or in favor of any other country, or any
political subdivision thereof, to secure partial, progress, advance or other
payments, or performance of any other obligations, pursuant to any contract or
statute or to secure any indebtedness incurred for the purpose of financing all
or any part of the purchase price or cost of construction of the Restricted
Property subject to such Lien, including, without limitation, Liens to secure
pollution control bonds or industrial revenue or other types of bonds; (vii) any
Lien on personal property (other than manufacturing equipment); (viii) any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Secured Indebtedness or any Lien
referred to in clauses (i) through (vii), provided that the principal amount of
Secured Indebtedness secured by the Lien shall not exceed the principal amount
of Secured Indebtedness so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement Lien shall be
limited to all or a part of the Restricted Property which secured the Lien so
extended, renewed or replaced (plus improvements on such Restricted Property);
and (ix) Liens on Restricted Property if, immediately after the grant thereof,
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<PAGE> 14
the aggregate amount of all Secured Indebtedness secured by Liens that would not
be permitted but for this clause (ix) does not exceed 15% of the Shareholders'
Equity of the Company (as defined below) as at the last day of the then most
recently completed fiscal quarter of the Company, as reported on the
consolidated balance sheet of the Company. (Section 10.05.)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company will covenant
that it will not, and will not permit any Restricted Subsidiary to, enter into
any lease (except leases for a term of not more than three years and excluding
leases of newly acquired, improved or constructed property) covering any
Restricted Property of the Company or a Restricted Subsidiary owned at March 15,
1996 that is sold to any other person in connection with such lease (a "Sale and
Leaseback Transaction"), unless the Company or such Restricted Subsidiary would
either (a) be entitled, pursuant to the provisions of Section 10.05 of the
Indenture, to incur Secured Indebtedness secured by a Lien on the Restricted
Property to be leased in an amount equal to the Attributable Debt with respect
to such Sale and Leaseback Transaction without equally and ratably securing the
Debt Securities, or (b) the Company or such Restricted Subsidiary applies an
amount equal to the proceeds from the sale of such Restricted Property to the
retirement of any Funded Debt (as defined below) of the Company or such
Restricted Subsidiary within 120 days of the effective date of such Sale and
Leaseback Transaction. This restriction on Sale and Leaseback Transactions does
not, however, prevent the Company or any Restricted Subsidiary from: (i)
entering into any transaction not involving a lease with a term of more than
three years; or (ii) entering into any Sale and Leaseback Transaction if it is
entered into within 180 days after the later of the acquisition, completion of
construction of such property, or the commencement of operation of such
Restricted Property. (Section 10.06)
CERTAIN DEFINITIONS. As used in the Indenture: "Attributable Debt" will
mean the total net amount of rent required to be paid during the remaining term
of the relevant lease, discounted at the rate per annum equal to the lesser of
(i) the prevailing market interest rate at the relevant date, on United States
Treasury obligations having a maturity substantially equal to the average term
of the relevant lease, plus 3%, or (ii) the weighted average interest rate borne
by the Debt Securities then outstanding; "Funded Debt" will mean as any date as
of which any determination thereof is being or to be made, all Indebtedness that
by its terms (i) matures more than one year after the date on which it was so
issued, incurred, assumed or guaranteed by the Company (or a Restricted
Subsidiary), or (ii) matures one year or less after the date it was issued,
incurred, guaranteed or assumed which at such date may be renewed at the sole
election or option of the Company (or a Restricted Subsidiary) so as to mature
more than one year after such date; "Indebtedness" of any person will mean
indebtedness for money borrowed (including capitalized lease obligations and
conditional sales and similar agreements which provide for the deferral of the
payment of the purchase price for property or services for a period in excess of
one year after acceptance of the complete delivery thereof); "Lien" will mean
with respect to any asset, (i) any mortgage, deed of trust, lien, pledge,
encumbrance, charge or security interest in or on such asset, or (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement relating to such asset; "Restricted Property"
will mean any manufacturing plant or equipment owned by the Company or a
Restricted Subsidiary which is used primarily to manufacture tires or other
automotive products and is located within any one or more of the States of the
United States of America, but shall not include (i) retread plants, (ii) plants
or equipment which, in the opinion of the Board of Directors of the Company, are
not of material importance to the total business conducted by the Company and
its Subsidiaries as a whole, or (iii) plants, facilities or equipment which, in
the opinion of the Board of Directors of the Company, are used primarily for
transportation, marketing or warehousing; "Restricted Subsidiary" will mean a
subsidiary organized under the laws of any State of the United States of America
engaged primarily in manufacturing tires or other automotive products (i)
substantially all of the assets of which are located within any one or more of
the States of the United States of America, and (ii) which has assets in excess
of 5% of the total consolidated assets of the Company and its consolidated
Subsidiaries (as shown on the then most recent annual or quarterly consolidated
balance sheet of the Company), except that "Restricted Subsidiary" will not
include any subsidiary the principal business of which is financing accounts
receivable, leasing, owning and developing real estate, engaging in
transportation activities, or engaging in distribu-
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<PAGE> 15
tion or related activities; "Secured Indebtedness" will mean Indebtedness of the
Company or any Restricted Subsidiary secured a Lien on Restricted Property, but
excluding from such definition all Indebtedness which is (i) outstanding on
March 15, 1996 and secured by Liens existing on that date, or (ii) not Funded
Debt; "Shareholders' Equity" of the Company will mean, the sum of the stated
capital, plus capital surplus, plus Retained Earnings of the Company and its
Consolidated Subsidiaries as set forth on the then most recent annual or
quarterly consolidated balance sheet; and "Subsidiary" will mean any corporation
more than 50% of the voting stock of which is owned, directly or indirectly, by
the Company and/or one or more other Subsidiaries of the Company. (Section 1.01)
CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company will covenant that
it will not merge into or consolidate with any other corporation, or sell all or
substantially all of its assets as an entirety to any person (except for cash),
unless (a) the successor is a corporation organized under the laws of the United
States of America or any State thereof, and (b) the successor assumes all the
obligations under the Debt Securities and the Indenture. (Section 8.01). Upon
any such merger, consolidation or sale, the successor will succeed to, and will
be substituted in lieu of, the Company. (Section 8.02).
LEVERAGED TRANSACTIONS AND CHANGES IN CONTROL. Other than the Limitation
on Secured Indebtedness and Limitation on Sale and Leaseback Transactions
covenants described above, the Indenture and the Debt Securities do not contain
any covenants or other provisions designed to afford holders of the Debt
Securities protection in the event of a highly leveraged transaction involving
the Company. The Indenture does not contain provisions requiring redemption of
the Debt Securities by the Company, or adjustment to any terms of the Debt
Securities, upon any change in control of the Company.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is
defined in the Indenture as: (1) default for 30 days in payment of any interest
on any Debt Security of that series; (2) default in payment of principal of (or
premium, if any, on) any Debt Security of that series at Maturity; (3) failure
to deposit any sinking fund payment when due in respect of that series; (4)
failure by the Company for 60 days after due notice in performance of any other
of the covenants or warranties in the Indenture (other than a covenant or
warranty included in the Indenture solely for the benefit of a series of Debt
Securities other than that series); (5) certain events of bankruptcy, insolvency
or reorganization of the Company; and (6) any other Event of Default provided
with respect to Debt Securities of that series. (Section 5.01)
The Indenture provides that, if any Event of Default with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing,
either the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of that series may declare the principal amount
(or, if any of the Debt Securities of that series are Original Issue Discount
Debt Securities, such portion of the principal amount of such Debt Securities as
may be specified in the terms thereof) of all Debt Securities of that series to
be due and payable immediately, but upon certain conditions such declaration may
be annulled and past defaults (except, unless theretofore cured, a default in
payment of principal of (or premium, if any) or interest on the Debt Securities
of that series and certain other specified defaults) may be waived by the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series on behalf of the Holders of all Debt Securities of that series.
(Sections 5.02 and 5.13)
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities that consists in whole or in part of Original Issue
Discount Debt Securities for the particular provisions relating to acceleration
of the Maturity of a portion of the principal amount of such Original Issue
Discount Debt Securities upon the occurrence of an Event of Default and the
continuation thereof.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to Debt Securities of any series at the
time Outstanding, give to the Holders of the Outstanding Debt Securities of that
series notice of such default known to it if uncured and not waived, provided
that, except in the case of default in the payment of principal of (or premium,
if any) or interest on any Debt Security of that series, on in the deposit of
any sinking fund payment which is provided, the Trustee will
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<PAGE> 16
be protected in withholding such notice if the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders of the
Outstanding Debt Securities of such series; and, provided further, that in the
case of any default of the character specified in clause (4) under "Events of
Default," such notice shall not be given until at least 30 days after the
occurrence thereof. The term "default" with respect to any series of Outstanding
Debt Securities for the purpose only of this provision means any event which is,
or after notice or lapse of time or both would become, an Event of Default.
(Section 6.02)
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the Holders of any series of Outstanding Debt Securities
before proceeding to exercise any right or power under the Indenture at the
request of the Holders of such series of Debt Securities. (Section 6.03) Subject
to such provisions for indemnification of the Trustee, the Indenture provides
that the Holders of a majority in principal amount of Outstanding Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of such
series, provided that the Trustee may decline to act if such direction is
contrary to law or the Indenture. (Section 5.12)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless: (1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series, (2) the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, (3) the Trustee shall have failed to institute such proceeding within
60 days and (4) the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series a
direction inconsistent with such request during such 60-day period. (Section
5.07) However, the Holder of any Debt Security will have an absolute right to
receive payment of the principal of (and premium, if any) and any interest on
such Debt Security on or after the due dates expressed in such Debt Security and
to institute suit for the enforcement of any such payment. (Section 5.08)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default as to certain provisions of the
Indenture, or specifying any default that exists. (Section 10.08)
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply
to the Offered Debt Securities.
DEFEASANCE AND DISCHARGE. The Indenture provides that, if applicable, the
Company will be discharged from any and all obligations in respect of the Debt
Securities of any series (except for certain obligations to register the
transfer or exchange of Debt Securities of such series, to replace stolen, lost
or mutilated Debt Securities of such series, to maintain paying agencies and to
hold monies for payment in trust) upon the deposit with the Trustee, in trust,
of money or U.S. Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will provide
money in an amount sufficient to pay (1) the principal of (and premium, if any)
and each installment of interest on the Debt Securities of such series on the
Stated Maturity of such payments and (2) installments of any sinking fund
payments applicable to the Debt Securities of such series, in accordance with
the terms of the Indenture and the Debt Securities of such series. Such a trust
may only be established if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel (who may be an employee of or counsel for the
Company) to the effect that (1) that Holders of the Debt Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the same
times, as would have been the case if
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<PAGE> 17
such deposit, defeasance and discharge had not occurred, or, in lieu of such
opinion, the Company delivers to the Trustee a ruling of the Internal Revenue
Service to the same effect, and (2) the Debt Securities, if then listed on a
national securities exchange under the Exchange Act, would not be delisted as a
result of such defeasance. (Sections 13.02 and 13.04)
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT. The
Indenture provides that, if applicable, the Company may omit to comply with
certain restrictive covenants in Sections 10.05 and 10.06, and the occurrence
and continuance of an Event of Default under Section 5.01(d) (described in
clause (4) under "Events of Default") shall not be deemed to be an Event of
Default under the Indenture and the Debt Securities of any series, upon the
deposit with the Trustee, in trust, of money or U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
(1) the principal of (and premium, if any) and each installment of interest on
the Debt Securities of such series on the Stated Maturity of such payments and
(2) installments of any sinking fund payments applicable to the Debt Securities
of such series, in accordance with the terms of the Indenture and the Debt
Securities of such series. The obligations of the Company under the Indenture
and the Debt Securities of such series other than the covenants referred to
above and the Events of Default other than the Events of Default referred to
above shall remain in full force and effect. Such a trust may only be
established if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel (who may be an employee of or counsel for the Company) to the
effect that (1) the Holders of the Debt Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance of certain covenants and Events of Default and will
be subject to federal income tax on the same amount and in the same manner and
at the same times, as would have been the case if such deposit and defeasance
had not occurred and (2) the Debt Securities of such series, if then listed on a
national securities exchange under the Exchange Act, would not be delisted as a
result of such defeasance. (Sections 13.03 and 13.04)
DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT. In the event the Company
exercises its option not to comply with certain covenants of the Indenture with
respect to the Debt Securities of any series as described above and the Debt
Securities of such series are declared due and payable because of the occurrence
of any Event of Default other than an Event of Default described in clause (4)
under "Events of Default," the amount of money and U.S. Government Obligations
on deposit with the Trustee will be sufficient to pay amounts due on the Debt
Securities of such series at the time of their stated maturity, but may not be
sufficient to pay amounts due on the Debt Securities of such series at the time
of the acceleration resulting from such Event of Default. However, the Company
shall remain liable for such payments.
MODIFICATIONS AND WAIVERS OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in principal amount
of Outstanding Debt Securities of each series affected thereby, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or modifying the rights of the Holders of
Outstanding Debt Securities of such series, except that no such supplemental
indenture may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (1) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (2) reduce
the principal amount of (or premium, if any) or any interest on any Debt
Security or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon acceleration, (3) change the place
or currency of payment of principal of (or premium, if any) or interest on any
Debt Security, (4) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date), (5)
reduce the aforesaid percentage in principal amount of Outstanding Debt
Securities of any series, the consent of the Holders of which is required for
any such supplemental indenture or for
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waiver of compliance with certain provisions of the Indenture or certain
defaults thereunder, or (6) effect certain other changes. (Section 9.02)
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of such series waive, insofar as such series is concerned, compliance
by the Company with certain restrictive provisions of the Indenture. (Section
10.09) The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
such series waive any past default under the Indenture with respect to such
series, except a default in the payment of the principal of (or premium, if any)
or any interest on any Debt Security of such series or in respect of a provision
or covenant which under the Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of such series affected
thereby. (Section 5.13)
BOOK-ENTRY SYSTEM
The provisions set forth below in this section headed "Book-Entry System"
will apply to the Debt Securities of any series if the Prospectus Supplement
relating to such series so indicates.
The Debt Securities of such series will be represented by one or more
global securities (collectively, a "Global Security") registered in the name of
a depositary (the "Depositary") or a nominee of the Depositary identified in the
Prospectus Supplement relating to such series. Except as set forth below, a
Global Security may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with the Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters, dealers or agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that may hold interests
through participants. Ownership of interests in such Global Security will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depositary (with respect to participants'
interests) and such participants (with respect to the owners of beneficial
interests in such Global Security). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary, or its nominee, is the registered holder and
owner of such Global Security, the Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the related Debt Securities
for all purposes of such Debt Securities and for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in a Global
Security will not be entitled to have Debt Securities represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities in definitive form and will not be
considered to be the owners or holders of any Debt Securities under the
Indenture or such Global Security.
Accordingly, each person owning a beneficial interest in a Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder of Debt Securities under the
Indenture or such Global Security. The Indenture permits the Depositary to
authorize participants, as its agents, to take any action which the Depositary,
as the holder of a Global Security, is entitled to take under the Indenture or
such Global Security. The Company understands that under existing industry
practice, in the event the Company requests any action of holders of Debt
Securities or an owner of a beneficial interest in a Global Security desires to
take any action that the Depositary, as the holder of such Global Security is
entitled to take, the Depositary would authorize the participants to take such
action, and that the participants would authorize beneficial owners owning
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through such participants to take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities represented by a Global Security will be made to the Depositary or
its nominee, as the case may be, as the registered owner and holder of such
Global Security.
Upon receipt of any payment of principal, premium, if any, or interest, if
any, in respect of a Global Security, the Depositary will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of the Depositary. Payments by participants to owners of
beneficial interests in a Global Security held through such participants will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such participants. The Company
will not have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in a
Global Security for any Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depositary and its participants or
the relationship between such participants and the owners of beneficial
interests in such Global Security owning through such participants.
Unless and until it is exchanged in whole or in part for Debt Securities in
definitive form, a Global Security may not be transferred except as a whole by
the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Debt Securities represented by a Global Security are exchangeable for Debt
Securities in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company in its discretion at any time
determines not to have all of the Debt Securities represented by a Global
Security and notifies the Trustee thereof, or (iii) an Event of Default has
occurred and is continuing with respect to the Debt Securities. Any Debt
Security that is exchangeable pursuant to the preceding sentence is exchangeable
for Debt Securities issuable in authorized denominations and registered in such
names as the Depositary shall direct. Subject to the foregoing, a Global
Security is not exchangeable, except for a Global Security or Global Securities
of the same aggregate denominations to be registered in the name of the
Depositary or its nominee.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement by the purchasers of the Notes will be made in immediately
available funds. All payments by the Company to the Depositary of principal and
interest will be made in immediately available funds.
The Notes will trade in the Depositary's Same-Day Funds Settlement System
until maturity, and therefore the Depositary will require secondary trading
activity in the Notes to be settled in immediately available funds. Secondary
trading in long-term notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading activity
in the Notes.
REGARDING THE TRUSTEE
The Chase Manhattan Bank (formerly Chemical Bank) is the Trustee under the
Indenture. The Company maintains various banking relationships with the Trustee.
The Chase Manhattan Bank is the agent and a lender under (i) a Revolving Credit
Facility Agreement, as amended by a Replacement and Restatement Agreement dated
July 15, 1996 and a First Amendment to Replacement and Restatement Agreement
dated as of March 31, 1997, whereunder The Chase Manhattan Bank and 27 other
domes-
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tic and international banks have agreed to lend up to $900 million to the
Company at any time and from time to time through July 15, 2001, and (ii) a
Credit Agreement [364-Day Facility], as amended by a Replacement and Restatement
Agreement dated as of July 15, 1996, whereunder The Chase Manhattan Bank and 27
other domestic and international banks have agreed to lend up to $300 million to
the Company at any time and from time to time until July 13, 1998, when the
commitment of each participating bank terminates unless extended for 364 days on
a bank by bank basis or, if not so extended, the Company may obtain a two year
loan from any non-extending bank. The Chase Manhattan Bank is also the
counterparty to certain interest rate exchange transactions and performs various
other banking services for the Company in the ordinary course of business. The
Chase Manhattan Bank has received and will receive fees and other compensation
in connection with the aforesaid credit agreements and for such other
transactions and services.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, dealers or
agents or directly to other purchasers.
The distribution of Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Underwriters may sell Debt
Securities to or through dealers.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such underwriter or agent will be identified, and
any such compensation to be received from the Company will be described, in the
Prospectus Supplement.
Under agreements that may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. Underwriters, dealers and agents
may engage in transactions with, or perform services for, the Company and its
subsidiaries in the ordinary course of business and receive fees in connection
therewith.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Offered Debt Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Offered Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
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<PAGE> 21
Each series of Debt Securities will be a new issue of securities with no
established trading market. Unless otherwise specified in a Prospectus
Supplement relating to a series of Debt Securities, the Debt Securities will not
be listed on any securities exchange. Any underwriters to whom Debt Securities
are sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given that any underwriter will make a market in the Debt Securities of any
series or as to the existence or liquidity of a trading market for the Debt
Securities of any series.
VALIDITY OF DEBT SECURITIES
Unless otherwise indicated in an accompanying Prospectus Supplement
relating to Offered Debt Securities, the validity of the Debt Securities will be
passed upon for the Company by C. Thomas Harvie, Esq., a Vice President and the
General Counsel of the Company, and for the underwriters or agents by Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, OTHER THAN
THE SECURITIES TO WHICH THEY RELATE, OR ANY OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
The Company............................... S-2
Use of Proceeds........................... S-3
Description of Notes...................... S-3
Underwriting.............................. S-7
Validity of the Notes..................... S-7
PROSPECTUS
Available Information..................... 2
Incorporation of Certain Documents by
Reference............................... 2
The Company............................... 3
Use of Proceeds........................... 3
Ratio of Earnings to Fixed Charges........ 3
Description of Debt Securities............ 4
Plan of Distribution...................... 12
Validity of Debt Securities............... 13
Experts................................... 13
</TABLE>
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$100,000,000
THE GOODYEAR TIRE &
RUBBER COMPANY
6 3/8% NOTES DUE 2008
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(LOGO)
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GOLDMAN, SACHS & CO.
CITICORP SECURITIES, INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
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