-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D9epstIep68jD2/3Q7SIM96TVoxspbuUka3pzzgkp8Hw9xUnmSISVJWeL33yyi5V vpr1RrGxtcreUfj4uFFTLQ== 0000950152-96-003574.txt : 19960726 0000950152-96-003574.hdr.sgml : 19960726 ACCESSION NUMBER: 0000950152-96-003574 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960725 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOODYEAR TIRE & RUBBER CO /OH/ CENTRAL INDEX KEY: 0000042582 STANDARD INDUSTRIAL CLASSIFICATION: TIRES AND INNER TUBES [3011] IRS NUMBER: 340253240 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01927 FILM NUMBER: 96598690 BUSINESS ADDRESS: STREET 1: 1144 E MARKET ST CITY: AKRON STATE: OH ZIP: 44316 BUSINESS PHONE: 2167962121 MAIL ADDRESS: STREET 1: 1144 E MARKET ST CITY: AKRON STATE: OH ZIP: 44316 10-Q 1 GOODYEAR TIRE & RUBBER 10-Q 1 ============================================================================== FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 COMMISSION FILE NUMBER: 1-1927 THE GOODYEAR TIRE & RUBBER COMPANY (Exact name of registrant as specified in its charter) OHIO 34-0253240 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1144 EAST MARKET STREET, AKRON, OHIO 44316-0001 (Address of principal executive offices) (Zip Code) (330) 796-2121 (Registrant's telephone number, including area code) ----------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- ----------------------------------- Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Number of Shares of Common Stock, Without Par Value, Outstanding at June 30, 1996: 155,220,358 ============================================================================== 2 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Unaudited
(Dollars in millions, except per share) Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 -------- -------- -------- -------- NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1 Cost of Goods Sold 2,559.8 2,550.6 5,041.0 5,038.0 Selling, Administrative and General Expense 469.1 478.1 940.1 961.6 Interest Expense 35.4 36.3 67.4 68.3 Other (Income) Expense (24.3) 6.7 (10.3) 9.6 Foreign Currency Exchange 4.7 3.0 6.6 27.9 Minority Interest in Net Income of Subsidiaries 11.3 8.7 23.2 16.2 -------- -------- -------- -------- Income before Income Taxes 273.5 267.4 507.0 472.5 United States and Foreign Taxes on Income 85.6 93.6 167.3 165.4 -------- -------- -------- -------- NET INCOME $ 187.9 $ 173.8 339.7 307.1 ======== ======== Retained Earnings at Beginning of Period 2,661.0 2,194.5 CASH DIVIDENDS 77.4 68.2 -------- -------- Retained Earnings at End of Period $2,923.3 $2,433.4 ======== ======== PER SHARE OF COMMON STOCK: Net Income $ 1.22 $ 1.15 $ 2.20 $ 2.03 ======== ======== ======== ======== Cash Dividends $ 0.25 $ 0.25 $ 0.50 $ 0.45 ======== ======== ======== ======== AVERAGE SHARES OUTSTANDING 155,099,068 151,741,845 154,642,859 151,613,546
The accompanying notes are an integral part of this financial statement. - 1 - 3 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET Unaudited
(Dollars in millions) June 30, December 31, 1996 1995 --------- --------- ASSETS Current Assets: Cash and cash equivalents $ 278.7 $ 268.3 Accounts and notes receivable, less allowance (1996-$60.6, 1995-$56.2) 2,028.5 1,615.0 Inventories: Raw materials 314.1 309.8 Work in process 82.1 75.4 Finished product 1,560.3 1,380.0 --------- --------- 1,956.5 1,765.2 Prepaid expenses and other current assets 180.6 193.1 --------- --------- TOTAL CURRENT ASSETS 4,444.3 3,841.6 Investments in Affiliates, at equity 132.1 183.8 Long Term Accounts and Notes Receivable 224.9 252.0 Deferred Charges 829.9 793.3 Other Assets 161.0 157.7 Properties and Plants, less accumulated depreciation (1996-$4,953.0, 1995-$4,788.7) 4,723.8 4,561.2 --------- --------- TOTAL ASSETS $10,516.0 $ 9,789.6 ========= ========= LIABILITIES Current Liabilities: Accounts payable - trade $ 1,052.3 $ 1,170.7 Compensation and benefits 731.3 711.9 Other current liabilities 282.0 263.9 United States and foreign taxes 373.3 363.1 Notes payable to banks 683.7 211.1 Long term debt due within one year 19.9 15.6 --------- --------- TOTAL CURRENT LIABILITIES 3,142.5 2,736.3 Long Term Debt and Capital Leases 1,292.0 1,320.0 Compensation and Benefits 2,004.3 1,976.5 Other Long Term Liabilities 286.6 312.2 Minority equity in subsidiaries 223.4 162.9 --------- --------- TOTAL LIABILITIES 6,948.8 6,507.9 SHAREHOLDERS' EQUITY Preferred Stock, no par value: Authorized 50,000,000 shares, unissued -- -- Common Stock, no par value: Authorized 300,000,000 shares Outstanding shares 155,220,358 (153,524,311 in 1995) after deducting 40,458,310 treasury shares (42,154,357 in 1995) 155.2 153.5 Capital Surplus 1,027.2 975.2 Retained Earnings 2,923.3 2,661.0 Foreign Currency Translation Adjustment (513.8) (481.7) Minimum Pension Liability Adjustment (24.7) (26.3) --------- --------- TOTAL SHAREHOLDERS' EQUITY 3,567.2 3,281.7 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,516.0 $ 9,789.6 ========= =========
The accompanying notes are an integral part of this financial statement. - 2 - 4 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited
(Dollars in millions) Six Months Ended June 30, 1996 1995 Cash Flows from Operating Activities: ------ ------ NET INCOME $ 339.7 $ 307.1 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 226.0 212.8 Accounts and notes receivable (425.4) (346.9) Inventories (187.0) (359.0) Accounts payable - trade (114.3) (8.8) Other assets and liabilities 98.0 (46.5) ------- ------- Total adjustments (402.7) (548.4) ------- ------- NET CASH USED IN OPERATING ACTIVITIES (63.0) (241.3) Cash Flows from Investing Activities: Capital expenditures (267.9) (225.1) Other transactions (75.0) 14.6 ------- ------- NET CASH USED IN INVESTING ACTIVITIES (342.9) (210.5) Cash Flows from Financing Activities: Short term debt incurred 595.2 617.1 Short term debt paid (102.8) (178.2) Long term debt incurred 6.3 84.3 Long term debt and capital leases paid (33.2) (29.1) Common stock issued 53.7 17.8 Dividends paid (77.4) (68.2) ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 441.8 443.7 Effect of Exchange Rate Changes on Cash and Cash Equivalents (25.5) (1.8) ------- ------- Net Change in Cash and Cash Equivalents 10.4 (9.9) Cash and Cash Equivalents at Beginning of the Period 268.3 250.9 ------- ------- Cash and Cash Equivalents at End of the Period $ 278.7 $ 241.0 ======= =======
The accompanying notes are an integral part of this financial statement. - 3 - 5 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ADJUSTMENTS - ----------- All adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of these unaudited interim periods have been included. PER SHARE OF COMMON STOCK - ------------------------- Per share amounts have been computed based on the average number of common shares outstanding. INFORMATION ABOUT NONCASH INVESTING AND FINANCING ACTIVITIES - ------------------------------------------------------------ In 1995 the Company acquired, for cash, 32.7 percent of the outstanding shares of a Polish tire manufacturer from the Polish government and agreed to purchase original issue shares. The investment was accounted for using the equity method. In the first quarter of 1996, the Company purchased original issue shares of this tire manufacturer, bringing its ownership to 50.8 percent. This investment is now accounted for as a consolidated subsidiary. Information in the Consolidated Statement of Cash Flows is presented net of the effects of the consolidation. - 4 - 6 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES SEGMENT INFORMATION Unaudited
(Dollars in millions) Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 -------- -------- -------- -------- INDUSTRY SEGMENTS Sales to Unaffiliated Customers: Tires $2,526.5 $2,532.3 $5,042.8 $5,025.4 Related products and services 302.5 329.7 560.0 575.6 -------- -------- -------- -------- Total Tires 2,829.0 2,862.0 5,602.8 5,601.0 General products 466.2 457.5 906.0 931.2 Oil transportation 34.3 31.3 66.2 61.9 -------- -------- -------- -------- NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1 ======== ======== ======== ======== Income: Tires $ 248.4 $ 262.2 $ 500.8 $ 508.9 General products 51.3 51.5 93.0 94.3 Oil transportation 18.7 14.9 35.4 22.8 -------- -------- -------- -------- TOTAL OPERATING INCOME 318.4 328.6 629.2 626.0 Exclusions from operating income (44.9) (61.2) (122.2) (153.5) -------- -------- -------- -------- INCOME BEFORE INCOME TAXES $ 273.5 $ 267.4 $ 507.0 $ 472.5 ======== ======== ======== ======== GEOGRAPHIC SEGMENTS Sales to Unaffiliated Customers: United States $1,788.1 $1,857.6 $3,518.8 $3,667.6 Europe 766.2 715.2 1,530.0 1,388.1 Latin America 390.4 395.0 771.8 802.0 Asia 215.2 212.1 418.2 393.4 Canada 169.6 170.9 336.2 343.0 -------- -------- -------- -------- NET SALES $3,329.5 $3,350.8 $6,575.0 $6,594.1 ======== ======== ======== ======== Operating Income: United States $ 131.8 $ 162.1 $ 260.3 $ 284.6 Europe 87.3 84.5 166.7 152.7 Latin America 67.2 53.9 138.4 131.0 Asia 25.7 18.7 51.2 42.1 Canada 6.4 9.4 12.6 15.6 -------- -------- -------- -------- TOTAL $ 318.4 $ 328.6 $ 629.2 $ 626.0 ======== ======== ======== ========
- 5 - 7 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS --------------------- CONSOLIDATED - ------------ SECOND QUARTER: Sales were $3.33 billion, compared to $3.35 billion in the 1995 period. Net income was $187.9 million or $1.22 per share, increasing 8.1 percent from $173.8 million or $1.15 per share in the 1995 period. Sales reflected increased tire unit volume in Europe and Asia, but were adversely affected by reduced sales to original equipment vehicle manufacturers in North America (U.S. and Canada) and Latin America, competitive pricing pressures in the North American replacement market and unfavorable translation due to the strengthening of the U.S. dollar versus various foreign currencies. Worldwide tire unit sales increased 4.5 percent from the 1995 period. Cost of goods sold increased to 76.9 percent of sales from 76.1 percent in the 1995 period, due primarily to the inclusion of expenses totaling $25.5 million ($17.5 million after tax or $.11 per share) resulting from the closure of the Greece tire manufacturing facility, the discontinuance of PVC production at Niagara Falls and workforce reductions. Costs were favorably impacted by lower raw material prices, although reductions in production schedules in North America to align inventory with market requirements also adversely affected comparisons with prior periods. Selling, administrative and general expense (SAG) decreased $9.0 million, to 14.1 percent of sales from 14.3 percent in the 1995 period, primarily as a result of ongoing cost containment measures. SAG included $5.7 million ($3.9 million after tax or $.03 per share) of expenses related to consolidation of distribution and other facilities in North America. Other income and expense included a gain of $32.8 million ($21.3 million after tax or $.14 per share) resulting from the sale of business property in Asia. Net income benefitted from a reduction in the estimated annual effective tax rate, due primarily to lower U.S. taxes on foreign source income. SIX MONTHS: Sales were $6.57 billion, compared to $6.59 billion in the 1995 period. Net income was $339.7 million or $2.20 per share, increasing 10.6 percent from $307.1 million or $2.03 per share in the 1995 period. Sales reflected increased tire unit volume in Europe and Asia, - 6 - 8 but were adversely affected by reduced sales to original equipment vehicle manufacturers in North America and Latin America, competitive pricing pressures in the North American replacement market and unfavorable translation due to the strengthening of the U.S. dollar versus various foreign currencies. Worldwide tire unit sales increased 3.4 percent from the 1995 period. Cost of goods sold increased to 76.7 percent of sales from 76.4 percent in the 1995 period, due primarily to the inclusion of the previously mentioned $25.5 million of expenses. Costs were favorably impacted by lower raw material prices. SAG decreased $21.5 million, to 14.3 percent of sales from 14.6 percent in the 1995 period, primarily as a result of ongoing cost containment measures. SAG included the previously mentioned $5.7 million of facility consolidation expenses. Other income and expense included the previously mentioned gain of $32.8 million. Foreign currency exchange expense decreased significantly compared to the 1995 period, during which period European currencies had strengthened versus the U.S. dollar. SEGMENT INFORMATION - ------------------- SECOND QUARTER: Segment operating income of $318.4 million decreased 3.1 percent from $328.6 million in the 1995 period, due primarily to the inclusion in the 1996 period of the previously mentioned expenses totaling $31.2 million and the effects of reductions in production schedules in North America. Segment operating margin decreased to 9.6 percent of sales from 9.8 percent in the 1995 period. SIX MONTHS: Segment operating income was $629.2 million, compared to $626.0 million in the 1995 period. Segment operating margin increased to 9.6 percent of sales from 9.5 percent in the 1995 period. INDUSTRY SEGMENTS - ----------------- Tires - ----- SECOND QUARTER: Sales of $2.83 billion decreased 1.2 percent from $2.86 billion in the 1995 period. Operating income of $248.4 million decreased 5.2 percent from $262.2 million in the 1995 period. Sales reflected increased tire unit volume in Europe and Asia, but were adversely affected by reduced sales to original equipment vehicle manufacturers in North America and Latin America, competitive pricing pressures in the North American replacement market and unfavorable translation due to the strengthening of the U.S. dollar versus various foreign currencies. Competitive pricing pressures are expected to continue during 1996. - 7 - 9 The following table presents changes in tire unit sales: Increase (Decrease) in Company Tire Unit Sales - - Second Quarter - -----------------------------------------------------------------
1996 vs. 1995 ------------- U.S. (2.2) % International 12.6 % Worldwide 4.5 %
Although original equipment tire unit sales increased in Europe and Asia, worldwide original equipment tire unit sales were lower. Worldwide replacement tire unit sales were higher, increasing in the United States, Europe, Latin America and Asia. Operating income decreased due primarily to the inclusion of $26.9 million of the previously mentioned expenses and reductions in production schedules in North America. Operating income was favorably impacted by improved results in Europe, Latin America and Asia, lower raw material costs and lower SAG. SIX MONTHS: Sales were $5.60 billion, unchanged from the 1995 period. Operating income of $500.8 million decreased 1.6 percent from $508.9 million in the 1995 period. Sales reflected increased tire unit volume in Europe and Asia, but were adversely affected by reduced sales to original equipment vehicle manufacturers in North America and Latin America, competitive pricing pressures in the North American replacement market and unfavorable translation due to the strengthening of the U.S. dollar versus various foreign currencies. The following table presents changes in tire unit sales: Increase (Decrease) in Company Tire Unit Sales - - Six Months -------------------------------------------------------------
1996 vs. 1995 ------------- U.S. (3.5) % International 11.7 % Worldwide 3.4 %
Although original equipment tire unit sales increased in Europe and Asia, worldwide original equipment tire unit sales were lower. Worldwide replacement tire unit sales were higher, increasing in the United States, Europe, Latin America and Asia. Operating income decreased due primarily to the inclusion of $32.5 million of the previously mentioned expenses (including a first quarter charge of $5.6 million). Operating income was favorably impacted by improved results in Europe, Latin America and Asia, lower raw material costs and lower SAG. - 8 - 10 General Products - ---------------- SECOND QUARTER: Sales of $466.2 million increased 1.9 percent from $457.5 million in the 1995 period. Operating income was $51.3 million, compared to $51.5 million in the 1995 period. Sales and operating income in engineered products increased due primarily to increased sales volume of industrial rubber products. Sales and operating income in chemical products decreased due to both lower selling prices and reduced sales volume. Operating income in the 1996 period also was reduced by a $4.3 million charge related to the discontinuance of PVC production at Niagara Falls. SIX MONTHS: Sales of $906.0 million decreased 2.7 percent from $931.2 million in the 1995 period. Operating income of $93.0 million decreased 1.4 percent from $94.3 million in the 1995 period. Sales in engineered products decreased and operating income was adversely affected by reduced sales to original equipment vehicle manufacturers in North America. Operating income increased due primarily to ongoing cost containment measures. Sales and operating income in chemical products decreased due to both lower selling prices and reduced sales volume. Operating income in the 1996 period also was reduced by the previously mentioned charge of $4.3 million and a first quarter charge of $.9 million. Oil Transportation - ------------------ SECOND QUARTER: Sales of $34.3 million and operating income of $18.7 million were recorded in the second quarter of 1996, compared to $31.3 million and $14.9 million, respectively, in the 1995 period. Improved trading results, higher average tariffs and ongoing cost containment measures contributed to the improvement. SIX MONTHS: Sales of $66.2 million and operating income of $35.4 million were recorded in the first six months of 1996, compared to $61.9 million and $22.8 million, respectively, in the 1995 period. Operating income in the 1995 period was adversely affected by a charge of $5.0 million for the writedown of surplus pipe and equipment. Improved trading results, higher average tariffs and ongoing cost containment measures contributed to the improvement. GEOGRAPHIC SEGMENTS - ------------------- U.S. Operations - --------------- SECOND QUARTER: Sales of $1.79 billion decreased 3.7 percent from $1.86 billion in the 1995 period. Operating income of $131.8 - 9 - 11 million decreased 18.9 percent from $162.1 million in the 1995 period. Sales and operating income decreased due primarily to reduced sales to original equipment vehicle manufacturers and competitive tire pricing pressures in the replacement market, although sales of engineered products increased. Operating income was also reduced by $12.6 million of the previously mentioned expenses and the effects of reductions in production schedules in North America. Operating income was favorably impacted by improved results in engineered products and oil transportation activities, lower raw material costs and lower SAG. U.S. operations accounted for 53.7 percent of consolidated sales and 41.3 percent of consolidated operating income, compared to 55.4 percent and 49.3 percent, respectively, in the 1995 period. SIX MONTHS: Sales of $3.52 billion decreased 4.1 percent from $3.67 billion in the 1995 period. Operating income of $260.3 million decreased 8.6 percent from $284.6 million in the 1995 period. Sales and operating income decreased due primarily to reduced sales to original equipment vehicle manufacturers and competitive tire pricing pressures in the replacement market. Operating income also was reduced by $12.6 million of the previously mentioned expenses. Operating income was favorably impacted by lower raw material costs, lower SAG and improved results in oil transportation activities (which in the 1995 period were affected by the aforesaid $5.0 million charge). U.S. operations accounted for 53.5 percent of consolidated sales and 41.4 percent of consolidated operating income, compared to 55.6 percent and 45.5 percent, respectively, in the 1995 period. International Operations - ------------------------ SECOND QUARTER: Sales of $1.54 billion increased 3.2 percent from $1.49 billion in the 1995 period. Operating income of $186.6 million increased 12.2 percent from $166.5 million in the 1995 period. Operating income in the 1996 period was reduced by $18.6 million of the previously mentioned expenses. In Europe, sales of $766.2 million increased 7.1 percent from $715.2 million in the 1995 period. Operating income of $87.3 million increased 3.3 percent from $84.5 million in the 1995 period. Operating income in the 1996 period was reduced by a $15.0 million charge related to the closure of the Greece tire manufacturing facility. - 10 - 12 Sales and operating income in Europe increased due primarily to higher tire unit sales and the acquisition of a majority ownership interest in a tire manufacturing facility in Poland, but sales were adversely affected by the strengthening of the U.S. dollar versus European currencies. Operating income was favorably impacted by lower raw material costs, productivity improvements and the effects of cost containment measures. In Latin America, sales of $390.4 million decreased 1.2 percent from $395.0 million in the 1995 period. Operating income of $67.2 million increased 24.9 percent from $53.9 million in the 1995 period. Operating income in the 1996 period was reduced by $3.6 million of the previously mentioned workforce reduction expenses. Sales in Latin America decreased and operating income was adversely affected by difficult economic conditions and lower original equipment tire unit sales in Brazil. Operating income increased due primarily to improved mix and volume in the region, lower SAG and raw material costs and improved productivity. In Asia, sales of $215.2 million increased 1.5 percent from $212.1 million in the 1995 period. Operating income of $25.7 million increased 38.2 percent from $18.7 million in the 1995 period. Sales in Asia increased due primarily to higher tire unit sales, but were adversely affected by the strengthening of the U.S. dollar versus Asian currencies. Operating income increased due to the higher tire unit sales, lower SAG and raw material costs and improved productivity. In Canada, sales were $169.6 million, compared to $170.9 million in the 1995 period. Operating income of $6.4 million decreased 31.2 percent from $9.4 million in the 1995 period. Sales and operating income in Canada decreased due primarily to reduced sales to original equipment vehicle manufacturers. International operations accounted for 46.3 percent of consolidated sales and 58.7 percent of consolidated operating income, compared to 44.6 percent and 50.7 percent, respectively, in the 1995 period. SIX MONTHS: Sales of $3.05 billion increased 4.4 percent from $2.92 billion in the 1995 period. Operating income of $368.9 million increased 8.1 percent from $341.4 million in the 1995 period. Operating income in the 1996 period was reduced by the previously mentioned expenses totaling $25.1 million (including a first quarter charge of $6.5 million.) In Europe, sales of $1.53 billion increased 10.2 percent from - 11 - 13 $1.39 billion in the 1995 period. Operating income of $166.7 million increased 9.2 percent from $152.7 million in the 1995 period. Operating income in the 1996 period was reduced by a $15.0 million charge related to the closure of the Greece tire manufacturing facility. Sales and operating income in Europe increased due primarily to higher tire unit sales and the acquisition of a majority ownership interest in a tire manufacturing facility in Poland, but sales were adversely affected by the strengthening of the U.S. dollar versus European currencies. Operating income was favorably impacted by lower raw material costs, productivity improvements and the effects of cost containment measures. In Latin America, sales of $771.8 million decreased 3.8 percent from $802.0 million in the 1995 period. Operating income of $138.4 million increased 5.7 percent from $131.0 million in the 1995 period. Operating income in the 1996 period was reduced by $10.1 million of the previously mentioned expenses (including a first quarter charge of $6.5 million). Sales in Latin America decreased and operating income was adversely affected by difficult economic conditions and lower tire unit sales in Brazil. Operating income increased due primarily to improved mix, lower SAG and raw material costs and improved productivity. In Asia, sales of $418.2 million increased 6.3 percent from $393.4 million in the 1995 period. Operating income of $51.2 million increased 21.8 percent from $42.1 million in the 1995 period. Sales in Asia increased due primarily to higher tire unit sales, but were adversely affected by the strengthening of the U.S. dollar versus Asian currencies. Operating income increased due to the higher tire unit sales, lower SAG and raw material costs and improved productivity. In Canada, sales of $336.2 million decreased 2.0 percent from $343.0 million in the 1995 period. Operating income of $12.6 million decreased 19.3 percent from $15.6 million in the 1995 period. Sales and operating income in Canada decreased due primarily to reduced sales to original equipment vehicle manufacturers. International operations accounted for 46.5 percent of consolidated sales and 58.6 percent of consolidated operating income, compared to 44.4 percent and 54.5 percent, respectively, in the 1995 period. - 12 - 14 LIQUIDITY AND CAPITAL RESOURCES ------------------------------- Net cash used in operating activities was $63.0 million during the first six months of 1996. Working capital requirements increased for accounts receivable, reflecting a worldwide shift in sales mix towards replacement tires and longer average terms in Europe. Working capital requirements also increased due to higher quantities of finished goods inventories. Net cash used in investing activities was $342.9 million during the first six months of 1996. Capital expenditures were $267.9 million, of which amount $157.5 million was used on projects to increase capacity and improve productivity and the balance was used for tire molds and various other projects. Capital expenditures are expected to total $650 million in 1996. Other investing activities in the period included the purchase of tire manufacturing assets in the Philippines, the acquisition of a lightweight conveyor belting manufacturer in the United States and an investment in a retail tire chain in Sweden. Net cash provided by financing activities was $441.8 million during the first six months of 1996, primarily to support the previously mentioned operating and investing activities. Consolidated debt at June 30, 1996 was $1,995.6 million and amounted to 35.9 percent of debt and equity, compared to $1,546.7 million and 32.0 percent, respectively, at the end of 1995. The Company enters into interest rate contracts domestically in order to manage the impact of fluctuations in interest rates on consolidated results of operations and future cash outflows for interest. During the second quarter, the Company entered into floating rate contracts with notional principal amounts totaling $20 million, which increase its exposure to fluctuations in short term interest rates. A summary of contracts in place and related weighted average interest rates follows:
(Dollars in millions) Fixed Rate Floating Rate Contracts Contracts ---------- ------------- At June 30, 1996: - Notional principal amount $ 175.0 $180.0 - Pay fixed rate 9.05 % - - Receive variable LIBOR 5.56 % - - Pay variable LIBOR - 5.46 % - Receive fixed rate - 6.44 % - Average years to maturity 1.1 6.7 - Fair value: (unfavorable) $ (5.4) $ (2.9) Second quarter - Rate paid 8.95 % 5.41 % - Rate received 5.59 % 6.44 % Six months - Rate paid 8.95 % 5.45 % - Rate received 5.75 % 6.44 %
- 13 - 15 Fixed rate contracts with notional principal amounts totaling $100 million matured in the second quarter of 1996. Substantial short term and long term credit sources are available to the Company globally under normal commercial practices. At June 30, 1996 the Company had short term uncommitted credit arrangements totaling $1.8 billion, of which $422.7 million were unused. The Company also had available long term credit arrangements at June 30, 1996 totaling $1.9 billion, of which $1.2 billion were unused. In July 1996, the Company's revolving credit facility agreements, consisting of a $900 million five year revolving credit facility and a $294 million 364-day revolving credit facility, were renegotiated primarily to extend maturities and lower commitment and usage fees. Effective July 15, 1996, each facility agreement is with 28 domestic and international banks. The $900 million five year revolving credit facility agreement provides that the Company may borrow at any time until July 15, 2001, when the commitment terminates and any outstanding loans mature. The commitment fee paid on the entire amount of the commitment (whether or not borrowed) has been lowered to a range of 7.5 to 15 basis points. The usage fee on amounts borrowed (other than on a competitive bid or prime rate basis) has been lowered to a range of 15 to 30 basis points. The commitment and usage fees may fluctuate within these ranges quarterly based upon the Company's performance as measured by defined ranges of leverage, and currently are 10 and 20 basis points, respectively. Commitments under the $294 million 364-day credit facility agreement have been increased to $300 million and are available until July 14, 1997, on which date this facility commitment terminates, except as it may be extended on a bank by bank basis. If a bank does not extend its commitment if requested to do so, the Company may obtain from such bank a two year term loan up to the amount of such bank's commitment. The commitment fee paid on the entire amount of the commitment (whether or not borrowed) has been lowered to 8 basis points. The usage fee on amounts borrowed (other than on a competitive bid or prime rate basis) has been lowered to 22 basis points. Funds generated by operations, together with funds available under existing credit arrangements, are expected to be sufficient to meet currently anticipated funding requirements. - 14 - 16 PART II. OTHER INFORMATION -------------------------- ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- Reference is made to the Annual Report of The Goodyear Tire & Rubber Company (the "Registrant") on Form 10-K for the year ended December 31, 1995 (the "Annual Report"), wherein at Item 3, pages 14, 15, 16 and 17, Registrant reported certain legal proceedings. Registrant also reported certain developments in respect of a legal proceeding at Item 1 of Part II of its Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. Registrant reports the following developments in respect of one of the legal proceedings described at Item 3 of the Annual Report. As reported at paragraph (E) of Item 3, at pages 15 and 16, of the Annual Report, a civil action, Taylor Tire Company, et al. vs. Goodyear, was filed in the United States District Court for the Southern District of California against Registrant on behalf of a class of plaintiffs consisting of four named tire dealers who are customers of Registrant and 253 other retailers located in the State of California who are, or were on or at any time after December 31, 1991, contract dealers or franchisees of Registrant. On June 24, 1996, the Court, in response to Registrant's motions, dismissed all claims made on behalf of 189 of the 257 members of the class, all but two of the claims made on behalf of 36 of the class members and all but one of the claims made by 32 members of the class. The claims remaining relate to the failure of Registrant to file for an available exemption from registration as a franchisor under the California Franchise Investment Law and a claim that Registrant breached certain pricing provisions of the franchise agreements between Registrant and 36 members of the class. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------- --------------------------------------------------- The Annual Meeting of Shareholders of Registrant was held on April 15, 1996 (the "Annual Meeting"). Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Act"), there was no solicitation in opposition to the four nominees of the Board of Directors listed in the Proxy Statement of Registrant, dated February 27, 1996, for the Annual Meeting (the "Proxy Statement"), filed with the Securities and Exchange Commission, and said four nominees were elected. The following matters were acted upon by the shareholders of Registrant at the Annual Meeting, at which 136,686,313 shares of the Common Stock, without par - 15 - 17 value, of Registrant (the "Common Stock", the only class of voting securities of Registrant outstanding), or approximately 88.49 percent of the 154,470,955 shares of Common Stock outstanding and entitled to vote at the Annual Meeting, were present in person or by proxies: 1. ELECTION OF DIRECTORS. Four persons were nominated by the Board of Directors of Registrant for election as directors of Registrant. Samir G. Gibara, William J. Hudson, Jr., and William C. Turner were nominated as Class I directors, each to hold office for a three year term expiring at the 1999 Annual Meeting of Shareholders and until his successor shall have been duly elected and qualified. Gertrude G. Michelson was nominated as a Class III director, to hold office for a one year term expiring at the 1997 Annual Meeting of Shareholders and until her successor shall have been duly elected and qualified. Each nominee was an incumbent director. No other person was nominated. Each nominee was elected. The votes cast for, or withheld or abstained with respect to, each nominee were as follows:
Shares of Common Shares of Common Stock Name of Director Stock Voted For Withheld or Abstained ---------------- --------------- --------------------- Class I Directors ----------------- Samir G. Gibara 134,980,347 1,705,966 William J. Hudson, Jr. 134,999,475 1,686,838 William C. Turner 134,828,937 1,857,376 Class III Director ------------------ Gertrude G. Michelson 134,981,167 1,705,146
The seven directors whose terms of office continue after the Annual Meeting are: (A) Thomas H. Cruikshank, Steven A. Minter and Agnar Pytte, whose terms expire in 1997; and (B) John G. Breen, William E. Butler, Stanley C. Gault and George H. Schofield, whose terms expire in 1998. 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS. A resolution proposed by the Board of Directors of Registrant that the shareholders ratify the action of the Board of Directors in selecting and appointing Price Waterhouse LLP as independent accountants for Registrant for the year ending December 31, 1996 was submitted to, and voted upon by, the shareholders of Registrant. There were 135,701,758 shares of Common Stock voted in favor of, and 606,755 shares of Common Stock voted against, said resolution. The holders of 377,800 shares of Common Stock abstained. There were no "broker non-votes". The resolution, having received the affirmative vote of the holders of a majority of the shares of - 16 - 18 Common Stock outstanding and entitled to vote at the Annual Meeting, was adopted and the appointment of Price Waterhouse LLP as the independent accountants for Registrant for 1996 was ratified by the shareholders. The resolution and related information are set forth under the caption "Ratification of Appointment of Independent Accountants" at page 7 of the Proxy Statement. 3. SHAREHOLDER PROPOSAL. A resolution submitted by a shareholder requesting the Registrant to prepare a report describing its programs, progress, and future plans relative to the environment and the Coalition of Environmentally Responsible Economies ("CERES") Principles and using the standard CERES Report Form as a guide was submitted to the shareholders. There were 10,594,668 shares of Common Stock voted in favor of, and 107,553,561 shares of Common Stock voted against, said resolution. In addition, the holders of 8,998,143 shares of Common Stock abstained from voting on said resolution and there were "broker non-votes" in respect of 9,539,941 shares of Common Stock. The resolution, having failed to receive the affirmative vote of at least a majority of the shares of Common Stock entitled to vote at the Annual Meeting, was not adopted. The resolution and related statements in support thereof and in opposition thereto are set forth under the captions "Shareholder Proposal" and "Statement of Board of Directors Opposing The Shareholder Proposal" at pages 7, 8 and 9 of the Proxy Statement. [The information set forth above in this Item 4 was also set forth at Item 4 of Part II of Registrant's Quarterly Report on Form 10-Q for its fiscal quarter ended March 31, 1996.] Mr. Gault retired from the Board of Directors of Registrant on June 30, 1996. Effective July 1, 1996, Mr. Samir G. Gibara was elected Chairman of the Board, Chief Executive Officer and President of Registrant. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) A list of the exhibits required to be filed as a part of this Quarterly Report on Form 10-Q is set forth at the Index of Exhibits beginning at page E-1, which is by specific reference incorporated into and made a part of this Quarterly Report on Form 10-Q. (b) Registrant filed a Current Report on Form 8-K, dated June 4, 1996, which contained at Item 5 (Other Events) information concerning the adoption by Registrant of a Preferred Stock Purchase Rights Plan and included Exhibit 4(a), a copy of the Rights Agreement, dated June 4, 1996, between Registrant and First Chicago Trust Company of New York, Rights Agent, and Exhibit 99(a), Registrant's Press Release dated June 4, 1996. - 17 - 19 S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE GOODYEAR TIRE & RUBBER COMPANY (Registrant) Date: July 24, 1996 By /s/ Robert W. Tieken --------------------------- Robert W. Tieken, Executive Vice President (Signing on behalf of Registrant as a duly authorized officer of Registrant and as the Principal Financial Officer of Registrant.) - 18 - 20 THE GOODYEAR TIRE & RUBBER COMPANY QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 INDEX OF EXHIBITS (1)
EXHIBIT EXHIBIT ------- ------- Table Item No.* Description of Exhibit Number Page - --------------- ------------------------------------------------------------- ------ ---- 3 ARTICLES OF INCORPORATION AND BY-LAWS ------------------------------------------------------------- Certificate of Amended Articles of Incorporation 3.1 X-3.1-1 of Registrant, dated December 20, 1954, and Certificate of Amendment to Amended Articles of Incorporation of Registrant, dated April 6, 1993, and certificate of Amendment to Amended Articles of Incorporation of Registrant dated June 4, 1996, three documents comprising Registrant's Articles of Incorporation as amended. Code of Regulations of The Goodyear Tire & 3.2 Rubber Company, adopted November 22, 1955, as amended April 5, 1965, April 7, 1980, April 6, 1981 and April 13, 1987 (incorporated by reference, filed as Exhibit 4.1(B) to Registrant's Registration Statement on Form S-3, File No. 333- 1955). 4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES ------------------------------------------------------------- Conformed copy of Rights Agreement, dated as 4.1 of July 2, 1986, between Registrant and Manufacturers Hanover Trust Company, Rights Agent, and a copy of the Appointment of Successor Rights Agent, dated March 21, 1990, whereunder Registrant appointed First Chicago Trust Company of New York as the Successor Rights Agent under the Rights Agreement, as amended by that certain Amendment to Rights Agreement dated as of April 6, 1993 between - ---------- *Pursuant to Item 601 of Regulation S-K.
E-1 21
EXHIBIT EXHIBIT ------- ------- Table Item No.* Description of Exhibit Number Page - --------------- ------------------------------------------------------------- ------ ---- between Registrant and First Chicago Trust Company of New York (incorporated by reference, filed as Exhibit 4.3 to Registrant's Registration Statement on Form S-8, File No. 33-65187). Conformed copy of Rights Agreement, dated as 4.2 of June 4, 1996, between Registrant and First Chicago Trust Company of New York, Rights Agent (incorporated by reference, filed as Exhibit 1 to Registrant's Registration Statement on Form 8-A dated June 11, 1996 and as Exhibit 4(a) to Registrant's Current Report on Form 8-K dated June 4, 1996). Specimen nondenominational Certificate for 4.3 shares of the Common Stock, Without Par Value, of Registrant; one certificate, First Chicago Trust Company of New York as transfer agent and registrar (incorporated by reference, filed as Exhibit 4.2 to Registrant's Registration Statement on Form S-8, File No. 33-65187). Conformed copy of Revolving Credit Facility 4.4 Agreement, dated as of July 15, 1994, among Registrant, the Lenders named therein and Chemical Bank, as Agent (incorporated by reference, filed as Exhibit A to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, File No. 1-1927). Conformed copy of Replacement and Restate- 4.5 X-4.5-1 ment Agreement, dated as of July 15, 1996, among Registrant, the Lenders named therein and The Chase Manhattan Bank, as Agent. - ---------- *Pursuant to Item 601 of Regulation S-K.
E-2 22
EXHIBIT EXHIBIT ------- ------- Table Item No.* Description of Exhibit Number Page - --------------- ------------------------------------------------------------- ------ ---- No other instrument defining the rights of holders of long-term debt which relates to securities having an aggregate principal amount in excess of 10% of the consolidated assets of Registrant and its subsidiaries was entered into during the quarter ended June 30, 1996. In accordance with paragraph (iii) to Part 4 of Item 601 of Regulation S-K, agreements and instruments defining the rights of holders of long term debt entered into during the quarter ended June 30, 1996 which relate to securities having an aggregate principal amount less than 10% of the consolidated assets of Registrant and its Subsidiaries are not filed herewith. The Registrant hereby agrees to furnish a copy of any such agreements or instruments to the Securities and Exchange Commission upon request. 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS ------------------------------------------------------------- Statement setting forth the computation of 11 X-11-1 per share earnings. 27 FINANCIAL DATA SCHEDULE 27 X-27-1 ------------------------------------------------------------- 28 ADDITIONAL EXHIBITS ------------------------------------------------------------- Registrant's definitive Proxy Statement, dated 28 February 27, 1995 (incorporated by reference, filed with the Securities and Exchange Commission, File No. 1-1927). - ---------- *Pursuant to Item 601 of Regulation S-K.
E-3 EX-3.1 2 EXHIBIT 3.1 1 EXHIBIT 3.1 ----------- CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION OF THE GOODYEAR TIRE & RUBBER COMPANY E. J. Thomas, President, and Arden E. Firestone, Secretary, of The Goodyear Tire & Rubber Company, an Ohio corporation, with its principal office located at Akron, Ohio, do hereby certify that a meeting of the holders of the shares of Common Stock of said corporation (being the only class of shares outstanding) entitled to vote on the proposal to adopt the Amended Articles of Incorporation as contained in the following resolution was duly called and held on the 20th day of December, 1954, at which meeting a quorum of such shareholders was present in person or by proxy, and that by the affirmative vote of the holders of shares entitled under the Articles to exercise at least two-thirds of the voting power of the corporation on such proposal (the Articles not requiring a greater proportion of such voting power) the following resolution was adopted: RESOLVED, That The Goodyear Tire & Rubber Company hereby adopts the following Amended Articles of Incorporation and that the President or a Vice President and the Secretary or an Assistant Secretary of this Corporation are hereby authorized and directed, on behalf of this Corporation, to sign and file in the Office of the Secretary of State of the State of Ohio, so as to make such Amended Articles of Incorporation become effective, a certificate containing a copy of the resolution adopting such Amended Articles of Incorporation and a statement of the manner of the adoption thereof: AMENDED ARTICLES OF INCORPORATION OF THE GOODYEAR TIRE & RUBBER COMPANY --------------- The Goodyear Tire & Rubber Company, a Corporation for profit heretofore organized under the General Incorporation Laws of the State of Ohio, adopts these Amended Articles of Incorporation: FIRST: The name of said Corporation shall be The Goodyear Tire & Rubber Company. SECOND: Said Corporation is to be located at Akron in Summit County, Ohio, and its principal business there transacted. THIRD: Said Corporation is formed for the following purposes: (a) To produce, manufacture, purchase, import, or otherwise acquire, to own, process, operate, develop and use, to sell, lease, exchange, export or otherwise dispose of or turn to account, and to generally deal in, and to render any service in respect of: rubber, both natural and synthetic, compounds thereof, substitutes therefor, substances having properties or X-3.1-1 2 2 uses similar thereto, and articles produced in whole or in part therefrom, including without limitation tires and tubes of all types and kinds, belts, and mechanical goods, cotton, rayon and other fibrous materials and articles of which cotton, rayon or other fibrous materials are a component part, metals, rims and automotive parts and accessories, guns, ammunition and other articles useful in the national defense, aircraft and parts and accessories therefor, and, in general, goods, commodities, and articles of personal property of whatever nature, and to carry on and conduct the general business of manufacturing and merchandising. (b) To establish, maintain, and operate chemical, physical, and other laboratories and to carry on chemical, physical, and industrial research of every kind and character as may be necessary, useful or convenient in connection with any business of the Corporation, and to produce, manufacture, construct, import, purchase or otherwise acquire, to own, process, develop and use, to sell, lease, exchange, export or otherwise dispose of or turn to account and generally to deal in and with articles or substances invented or developed thereby. (c) To manufacture, construct, mine, produce, import, purchase, lease or otherwise acquire, hold, own, use, process, maintain, operate, export, mortgage, sell, convey, assign and otherwise dispose of, distribute, deal in and turn to account machinery, apparatus, tools, implements, equipment, materials, supplies, and other personal property of every kind and character which can or may be advantageously used, consumed or dealt in by the Corporation in connection with any business it is authorized to conduct; and, in general, to buy, sell, produce, manufacture, process, use, export, import, trade in, deal with and turn to account goods, wares, and merchandise of every class and description. (d) To purchase, lease or otherwise acquire, own, hold, use, maintain, operate, cultivate, develop, sell, lease, convey, exchange or otherwise dispose of real estate, leaseholds, and other interests in real estate, and to construct, equip, occupy, improve, use, operate, sell, lease, exchange or otherwise dispose of buildings, factories, hangars, mills, workshops, machineshops, laboratories, storehouses, offices, residences, stores, hotels, facilities, and structures of all kinds, necessary, useful or convenient in connection with any of the businesses or operations of the Corporation. (e) To secure, register, purchase, lease, license, or otherwise to acquire, and to hold, own, use, operate, develop, improve, introduce, grant licenses in respect of, sell, assign, and otherwise dispose of and turn to account, letters patent of the United States or any foreign country, patent rights, licenses, privileges, inventions, devices, improvements, formulas, concessions, processes, secret or otherwise, copyrights, trademarks, trade names and rights analogous thereto granted by, recognized or otherwise existing under the laws of the United States or any foreign country. (f) To borrow money or otherwise use its credit for its corporate purposes, to issue bonds, debentures, notes and other obligations, secured or unsecured, from time to time, for moneys borrowed or for property acquired, or for any other of the purposes of the Corporation, and to secure the same by mortgage, deed of trust, pledge, or other lien upon any or all of the properties, rights, privileges or franchises of the Corporation. (g) To purchase, by subscription or otherwise, or acquire in any manner, and to sell, negotiate, guarantee, assign, deal in, exchange, transfer, pledge or otherwise dispose of, shares of the capital stock, scrip, bonds, coupons, mortgages, debentures, debenture stock, acceptances, drafts, securities, and any other evidences of indebtedness of, or interest in, other corporations, joint stock companies or associations, whether public, private or municipal, or of any corporate body, domestic or foreign, and while the owner thereof, to X-3.1-2 3 3 possess and exercise in respect thereof all the rights, powers, and privileges of ownership, including but not limited to the right to vote thereon. (h) To aid, in any manner whatsoever, any corporation, association, copartnership or individual in whose business the Corporation may be in any way interested or any of whose properties, including shares of capital stock, bonds or other obligations or securities, are held by the Corporation or in which it is in any way interested, and to do any acts or things which are or which may appear necessary, useful, convenient or appropriate for the preservation, protection, improvement or enhancement of the value of any such business or property, or for the promotion of any interests of the Corporation. (i) To lend money or credit, with or without security, and to guarantee and become surety for payment of money and the performance of contracts or obligations of any and all kinds, provided it shall not carry on the business of an indemnity or a surety company. (j) To purchase or otherwise acquire the whole or any part of the property, assets, business, good will, and rights, and to undertake or assume the whole or any part of the bonds, mortgages, franchises, leases, contracts, indebtedness, guarantees, liabilities, and obligations of any person, firm or corporation, and to pay therefor in whole or in part with shares of its own capital stock, cash, bonds, debentures, notes or other obligations, or evidences of indebtedness of the Corporation or otherwise; and to hold or in any manner dispose of any part or all of the property, assets, business, good will, and right so acquired, and to conduct in any lawful manner the whole or any part of the business so acquired, and to exercise all the powers necessary or convenient in and about the management and conduct of such business. (k) In general, to carry on any lawful business whatsoever in connection with or incidental to the foregoing, or which has for its object the promotion, directly or indirectly, of the general interests of the Corporation, or the protection, improvement, preservation or enhancement of the value of its properties and rights, and to do whatever it may deem necessary, convenient or proper for the accomplishment of any one or more of the purposes of the Corporation, and, to the same extent and as fully as any natural person might lawfully or could do, to do all and every lawful act and thing, and to enter into and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government, or subdivision thereof, without limitation as to amount, necessary, suitable or convenient for the accomplishment of any of the purposes of the Corporation or incident to any of the powers hereinbefore enumerated, the enumeration of specific powers not being a limitation or restriction in any manner of the general powers of the Corporation. (l) To do all or any of such acts and things and exercise any of such acts in any state of the United States, in any district, territory, colony, protectorate or possession thereof, and in any and all foreign countries, and to maintain such offices, branches, plants, properties, plantations, mines, and establishments in any or all thereof that may be deemed advisable by the Corporation. FOURTH: The number of shares which the Corporation is authorized to have outstanding is 15,000,000, all of which shall be Common Stock with a par value of $5 each (being the shares heretofore authorized as shares with a par value of $10 each) having the terms and provisions set forth in these Amended Articles of Incorporation. Each holder of record of Common Stock shall be entitled to one vote for each share of said Common Stock standing in his name on the books of the Corporation. X-3.1-3 4 4 No holder of Common Stock, present, past, or future, shall be entitled as such as a matter of right to subscribe for or purchase any part of not exceeding 500,000 shares of such Common Stock which may, subsequent to October 31, 1954 be allotted and sold to employees of the Corporation or any of its subsidiaries, pursuant to such plan or plans for such allotment and sale as the Board of Directors has determined or may from time to time determine, whether any such shares of Common Stock shall be issued for cash, property, services or otherwise. FIFTH: The total stated capital of the Corporation at the time of adopting these Amended Articles of Incorporation is $45,532,000.00. SIXTH: These Amended Articles of Incorporation supersede and take the place of the heretofore existing Amended Articles of Incorporation, adopted March 31, 1952, and filed in the Office of the Secretary of the State of Ohio on April 3, 1952, including all Certificates of Amendment to Amended Articles of Incorporation subsequently filed in the Office of the Secretary of the State of Ohio. IN WITNESS WHEREOF, said E. J. Thomas, President, and Arden E. Firestone, Secretary, of The Goodyear Tire & Rubber Company, acting for and on behalf of said corporation, have hereunto subscribed their names and caused the seal of said corporation to be hereunto affixed this 20th day of December, 1954. BY E. J. THOMAS President (CORPORATE SEAL) BY ARDEN E. FIRESTONE Secretary UNITED STATES OF AMERICA, ) STATE OF OHIO, ) OFFICE OF THE SECRETARY OF STATE. ) I, Ted W. Brown, Secretary of State of the State of Ohio, do hereby certify that the foregoing is an exemplified copy, carefully compared by me with the original record now in my official custody as Secretary of State, and found to be true and correct, of the CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION OF THE GOODYEAR TIRE & RUBBER COMPANY filed in this office on the 30th day of December A. D. 1954 and recorded in Volume 696, Page 255, of the Records of Incorporations. WITNESS my hand and official seal, at Columbus, Ohio, this 30th day of December A-D. 1954. TED W. BROWN Secretary of State X-3.1-4 5 Exhibit 3.1 (Continued) ----------------------- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE GOODYEAR TIRE & RUBBER COMPANY Hoyt M. Wells, President, and James Boyazis, Secretary, of The Goodyear Tire & Rubber Company, an Ohio Corporation, with its principal office located at Akron, Summit County, Ohio, do hereby certify that a meeting of the holders of the shares of Common Stock of said corporation (being the only class of shares outstanding) entitling them to vote on the proposal to amend the Amended Articles of Incorporation thereof, as Contained in the following resolution, was duly called and held on the 5th day of April, 1993, at which meeting a quorum of such shareholders was present in person or by proxy, and that by the affirmative vote of the holders of shares entitled under the Amended Articles of Incorpora- tion to exercise at least two-thirds of the voting power of the corporation on such proposal (the Amended Articles of Incorporation not requiring a greater proportion of such voting power) the following resolution was adopted: RESOLVED, that The Goodyear Tire & Rubber Company hereby adopts the following amendment to its Amended Articles of Incorporation and that the President or a Vice President and the Secretary or an Assistant Secretary of The Goodyear Tire & Rubber Company are hereby authorized and directed to sign and file in the office of the Secretary of State of the State of Ohio a certificate containing a copy of the resolution adopting the amendment and a statement of the manner of its adoption: The Amended Articles of Incorporation are hereby amended by striking out in its entirety Article FOURTH and substituting in lieu thereof the following: FOURTH: The maximum number of shares which the Corporation is authorized to have outstanding is 350,000,000, consisting of 300,000,000 shares of Common Stock without par value (hereinafter referred to as "Common Stock") and 50,000,000 shares of Preferred Stock without par value (hereinafter referred to as "Preferred Stock"). The express terms of the shares of each class are as follows: PART A EXPRESS TERMS OF THE COMMON STOCK Section 1. General. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Each share of Common Stock shall be equal to each other share of Common Stock. Each holder of record of Common Stock shall be entitled to one vote for each share of said Common Stock standing in his or her name on the books of the Corporation upon all matters presented to the shareholders. Section 2. Preemptive Rights. No holder of Common Stock, present, past or future, shall be entitled as such as a matter of right to subscribe for or purchase any part of any new or additional issue of stock or of securities of the Corporation convertible into stock of any class whatsoever, whether now or hereafter authorized, and whether issued for cash, property, services or otherwise. 1 X-3.1-5 6 Section 3. Purchase of Shares by Corporation. The Corporation is authorized to purchase shares of Common Stock at such times, in such manner, for such reasons and on such terms and conditions as shall be deemed appropriate by the Board of Directors. PART B EXPRESS TERMS OF THE PREFERRED STOCK Section 1. Series. The Preferred Stock may be issued from time to time in one or more series. All shares of Preferred Stock shall be of equal rank and the express terms thereof shall be identical, except in respect of the terms that may be fixed by the Board of Directors as hereinafter provided, and each share of each series shall be identical with all other shares of such series, except as to the date from which dividends are cumulative. Subject to the provisions of Sections 2 through 8, inclusive, of this Part B, which shall apply to all Preferred Stock, the Board of Directors is hereby authorized to cause shares of Preferred Stock to be issued in one or more series and with respect to each such series to determine and fix: (a) The designation of the series, which may be by distinguishing number, letter or title. (b) The authorized number of shares constituting the series, which number the Board of Directors may, except to the extent otherwise provided in the creation of the series, from time to time increase or decrease, but not below the number of shares thereof then outstanding. (c) The rate at which dividends shall be payable on shares of such series. (d) The dates on which dividends, if declared, shall be payable on shares of such series and the dates from which dividends shall be cumulative. (e) The redemption rights and price or prices, if any, for shares of the series. (f) The amount, terms, conditions and manner of operation of any retirement or sinking fund to be provided for the purchase or redemption of shares of the series. (g) The amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. (h) Whether the shares of the series shall be convertible into shares of any other class or series, and, if so, the specification of such other class or series, the conversion price or prices or rate or rates, any adjustments thereof, the date or dates as of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made. (i) The conditions or restrictions, if any, upon the issue of any additional shares of the same series or of any other class or series. The Board of Directors is authorized to adopt from time to time amendments to the Amended Articles of Incorporation fixing, with respect to each series, the matters described in clauses (a) to (i), inclusive, of this Section 1. Section 1-A. Series A $10.00 Preferred Stock, Without Par Value. A series of Preferred Stock is hereby created having the following terms: 1. Designation. The shares of such series are designated as: "Series A $10.00 Preferred Stock, without par value." 2 X-3.1-6 7 2. Authorized Number of Shares - Fractional Shares. The authorized number of shares constituting the Series A $10.00 Preferred Stock is 3,000,000. Series A $10.00 Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A $10.00 Preferred Stock. 3. Dividends and Distributions. (A) Subject to any prior and superior rights of the holders of any series of Preferred Stock ranking prior and superior to the shares of Series A $10.00 Preferred Stock with respect to dividends that may be authorized by the Amended Articles of Incorporation, the holders of shares of Series A $10.00 Preferred Stock shall be entitled prior to the payment of any dividends on shares ranking junior to the Series A $10.00 Preferred Stock to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A $10.00 Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) subject to the provisions for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A $10.00 Preferred Stock. In the event the Corporation shall at any time after July 28, 1986 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the Outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A $10.00 Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A $10.00 Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Payment Date, a dividend of $10.00 per share on the Series A $10.00 Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A $10.00 Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A $10.00 Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A $10.00 Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. 3 X-3.1-7 8 (D) Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A $10.00 Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A $10.00 Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. (E) Dividends in full shall not be declared or paid or set apart for payment on the Series A $10.00 Preferred Stock for a dividend period terminating on the Quarterly Dividend Payment Date unless dividends in full have been declared or paid or set apart for payment on the Preferred Stock of all series (other than series with respect to which dividends are not cumulative from a date prior to such dividend date) for the respective dividend periods terminating on such dividend date. When the dividends are not paid in full on all series of the Preferred Stock, the shares of all series shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on said shares if all dividends were declared and paid in full. 4. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A $10.00 Preferred Stock unless, prior thereto, the holders of shares of Series A $10.00 Preferred Stock shall have received $10.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A $10.00 Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii) is hereinafter referred to as the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A $10.00 Preferred Stock and Common Stock, respectively, holders of Series A $10.00 Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series A $10.00 Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock that were 4 X-3.1-8 9 outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 5. Conversion on Merger, Consolidation, etc. In case the Corporation shall enter into any merger, consolidation, combination or other transaction in which the shares of Common Stock are exchanged or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A $10.00 Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A $10.00 Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 6. Redemption. The outstanding shares of Series A $10.00 Preferred Stock shall not be redeemable. 7. Condition to Issuance of any other Series. The Articles of Incorporation of the Corporation shall not be further amended to provide for the issuance of any other series of Preferred Stock without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A $10.00 Preferred Stock, voting separately as one voting group. Section 2. Dividends. (a) The holders of Preferred Stock of each series, in preference of the holders of shares of Common Stock and of any other class of shares ranking junior to the Preferred Stock, shall be entitled to receive out of any funds legally available and when and as declared by the Board of Directors dividends in cash at the rate for such series fixed in accordance with the provisions of Section 1 of this Part B and no more, payable on the dividend payment dates fixed for such series. Such dividends shall be cumulative, in the case of shares of each particular series, from and after the date or dates fixed with respect to such series. No dividend may be paid upon or declared or set apart for any series of the Preferred Stock at any time unless at the same time a like proportionate dividend for the dividend periods terminating on the same date or any earlier date, ratably in proportion to the respective annual dividend rates, shall have been paid upon or declared or funds therefor set apart for all shares of Preferred Stock of all series then issued and outstanding and entitled to receive such dividend. (b) So long as any Preferred Stock shall be outstanding, no dividend, except a dividend payable in Common Stock or other shares ranking junior to the Preferred Stock, shall be paid or declared or any distribution be made except as aforesaid on the Common Stock or any other shares ranking junior to the Preferred Stock, nor shall any shares of Common Stock or any other shares ranking junior to the Preferred Stock be purchased, retired or otherwise acquired by the Corporation (except out of the proceeds of the sale of Common Stock or other shares ranking junior to the Preferred Stock received by the Corporation on or subsequent to the date on which shares of Preferred Stock are first issued), unless (i) all accrued and unpaid dividends upon all Preferred Stock then outstanding payable on all dividend payment dates occurring on or prior to the date of such 5 X-3.1-9 10 action shall have been declared and paid or funds sufficient therefor, set apart, and (ii) at the date of such action there shall be no arrearages with respect to the redemption of Preferred Stock of any series from any sinking fund provided for shares of such series in accordance with the provisions of Section 1 of this Part B. Section 3. Redemption. (a) Subject to the express terms of each series, the Corporation may from time to time redeem all or any part of the Preferred Stock of any series at the time outstanding (i) at the option of the Board of Directors at the applicable redemption price for such series fixed in accordance with the provisions of Section 1 of this Part B or (ii) in fulfillment of the requirements of any sinking fund provided for shares of such series at the applicable sinking fund redemption price fixed in accordance with the provisions of Section 1 of this Part B, together in each case with (1) all then unpaid dividends upon such shares payable on all dividend payment dates for such series occurring on or prior to the redemption date, plus (2) if the redemption date is not a dividend payment date for such series, a proportionate dividend, based on the number of elapsed days, for the period from the day following the most recent such dividend payment date through the redemption date. (b) Notice of every such redemption shall be mailed, postage prepaid, to the holders of record of the Preferred Stock to be redeemed at their respective addresses then appearing on the books of the Corporation, not less than 30 days nor more than 60 days prior to the date fixed for such redemption. At any time after notice has been given as above provided and before the date of redemption specified in such notice the Corporation may deposit the aggregate redemption price of the shares of Preferred Stock to be redeemed, together with an amount equal to the aggregate amount of dividends payable upon such redemption, with any bank or trust company in New York, New York, having capital and surplus of more than $100,000,000, named in such notice, and direct that such deposited amount be paid to the respective holders of the shares of Preferred Stock so to be redeemed upon surrender of the stock certificate or certificates held by such holders. After the mailing of such notice and the making of such deposit of money, such holders shall cease to be shareholders with respect to such shares and shall have no interest in or claim against the Corporation with respect to such shares, except only the right to receive such money from such bank or trust company without interest or to exercise, before the redemption date, any unexpired privileges of conversion. (c) In the event less than all of the outstanding shares of any series of Preferred Stock are to be redeemed, the Corporation shall select pro rata or by lot the shares so to be redeemed in such manner as shall be prescribed by the Board of Directors. (d) If the holders of shares of Preferred Stock which shall have been called for redemption shall not, within six years after such deposit, claim the amount deposited for the redemption thereof, any such bank or trust company shall, upon demand, pay over to the Corporation such unclaimed amounts and thereupon such bank or trust company and the Corporation shall be relieved of all responsibility in respect thereof and to such holders. (e) Any shares of Preferred Stock (i) redeemed by the Corporation pursuant to the provisions of this Section 3, (ii) purchased and delivered in satisfaction of any sinking fund requirements provided for shares of any series of Preferred Stock, (iii) converted in accordance with the express terms of any such series, or (iv) otherwise acquired by the Corporation, shall resume the status of authorized and unissued shares of Preferred Stock without serial designation. Section 4. Liquidation. (a) The holders of Preferred Stock of any series shall, in case of voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, be 6 X-3.1-10 11 entitled to receive in full out of the assets of the Corporation, including its capital, before any amount shall be paid or distributed among the holders of shares of Common Stock or any other shares ranking junior to the Preferred Stock, the amounts fixed with respect to shares of such series in accordance with Section 1 of this Part B, plus an amount equal to (i) all then unpaid dividends upon such shares payable on all dividend payment dates for such series occurring on or prior to the date of payment of the amount due pursuant to such liquidation, dissolution or winding up, plus (ii) if such date is not a dividend payment date for such series, a proportionate dividend, based on the number of elapsed days, for the period from the day following the most recent such dividend payment date through such date of payment of the amount due pursuant to such liquidation, dissolution or winding up. In case the net assets of the Corporation legally available therefor are insufficient to permit the payment upon all outstanding shares of Preferred Stock of the full preferential amount to which they are respectively entitled, then such net assets shall be distributed ratably upon outstanding shares of Preferred Stock in proportion to the full preferential amount to which each such share is entitled. After payment to holders of Preferred Stock of the full preferential amounts as aforesaid, holders of Preferred Stock as such shall have no right or claim to any of the remaining assets of the Corporation. (b) The merger or consolidation of the Corporation into or with any other corporation, or the merger of any other corporation into it, or the sale, lease or conveyance of all or substantially all the property or business of the Corporation shall not be deemed to be a dissolution, liquidation or winding up for the purposes of this Section 4. Section 5. Voting. (a) The holders of Preferred Stock shall not be entitled to vote upon matters presented to the shareholders, except as provided in this Section 5 or as required by law. (b) Whenever, and so long as, the Corporation shall be in default in the payment of the equivalent of six full quarterly dividends (whether or not consecutive) on any series of Preferred Stock at the time outstanding, whether or not earned or declared, the holders of Preferred Stock of all series, voting separately as a class without regard to series, shall be entitled to elect, as herein provided, two members of the Board of Directors of the Corporation; provided, however, that the holders of shares of Preferred Stock shall not have or exercise such special class voting rights except at meetings of such shareholders for the election of directors at which the holders of not less than a majority of the outstanding shares of Preferred Stock of all series then outstanding are present in person or by proxy; and provided further that the special class voting rights provided for in this paragraph, when the same shall have become vested, shall remain so vested until all accrued and unpaid dividends on the Preferred Stock of all series then outstanding shall have been paid, whereupon the holders of Preferred Stock shall be divested of this special class voting rights in respect of subsequent elections of directors, subject to the revesting of such special class voting rights in the event of the occurrence of the default hereinabove specified in this Subsection (b). In the event of a default entitling the holders of Preferred Stock to elect two Directors as specified in this Subsection (b), a special meeting of such holders for the purpose of electing such directors shall be called by the Secretary of the Corporation upon written request of, or may be called by, the holders of record of at least 10% of the shares of Preferred Stock of all series at the time outstanding, and notice thereof shall be given in the same manner as that required for the annual meeting of shareholders; provided, however, that the Corporation shall not be required to call such special meeting if the annual meeting of shareholders shall be held within 120 days after the date of receipt of the foregoing written request from the holders of Preferred Stock. At any meeting at which the holders of Preferred Stock shall be entitled to elect Directors, the holders of a majority of the then outstanding shares of Preferred Stock of all series, present 7 X-3.1-11 12 in person or by proxy, shall be sufficient to constitute a quorum, and the vote of the holders of a majority of such shares so present at any such meeting at which there shall be such a quorum shall be sufficient to elect the members of the Board of Directors which the holders of Preferred Stock are entitled to elect as hereinabove provided. Notwithstanding any provision of these Amended Articles of Incorporation or the Code of Regulations of the Corporation or any action taken by the holders of any class of shares fixing the number of Directors of the Corporation, the two Directors who may be elected by the holders of Preferred Stock pursuant to this Subsection (b) shall serve in addition to any other Directors then in office or proposed to be elected otherwise than pursuant to this Subsection (b). Nothing in this Subsection (b) shall prevent any change otherwise permitted in the total number of Directors of the Corporation or require the resignation of any Director elected otherwise than pursuant to this Subsection (b). Notwithstanding any classification of the other Directors of the Corporation, the two Directors elected by the holders of Preferred Stock shall be elected annually for terms expiring at the next succeeding annual meeting of shareholders. (c) The affirmative vote or consent of the holders of at least two-thirds of the shares of Preferred Stock at the time outstanding, voting or consenting separately as a class, given in person or by proxy either in writing or at a meeting called for the purpose, shall be necessary to effect any one or more of the following (but so far as the holders of Preferred Stock are concerned, such action may be effected with such vote or consent): (1) Any amendment, alteration or repeal of any of the provisions of the Amended Articles of Incorporation or of the Code of Regulations of the Corporation which adversely affects the preferences or voting or other rights of the holders of Preferred Stock; provided, however, that for the purpose of this Subsection (c) only, neither the Amendment of the Amended Articles of Incorporation so as to authorize, create or change the authorized or outstanding amount of Preferred Stock or of any shares of any class ranking on a parity with or junior to the Preferred Stock nor the amendment of the provisions of the Code of Regulations so as to change the number of directors of the Corporation shall be deemed to affect adversely the preferences or voting or other rights of the holders of Preferred Stock; and provided further, that if such amendment, alteration or repeal affects adversely the preferences or voting or other rights of one or more but not all series of Preferred Stock at the time outstanding, only the affirmative vote or consent of the holders of at least two-thirds of the number of the shares at the time outstanding of the series so affected shall be required; (2) The purchase or redemption (for sinking fund purposes or otherwise) of less than all of the Preferred Stock then outstanding except in accordance with a stock purchase offer made to all holders of record of Preferred Stock, unless all dividends on all Preferred Stock then outstanding for all previous dividend periods shall have been declared and paid for funds therefor set apart and all accrued sinking fund obligations applicable thereto shall have been complied with; or (3) The authorization, creation or the increase in the authorized amount of any shares of any class or any security convertible into shares of any class, in either case ranking prior to the Preferred Stock. (d) The affirmative vote or consent of the holders of at least a majority of the shares of Preferred Stock at the time outstanding, voting or consenting separately as a class, given in person or by proxy either in writing or at a meeting called for the purpose, shall be necessary to effect any one or more of the following (but so far as the holders of Preferred Stock are concerned, such action may be effected with such vote or consent): (1) The sale, lease or conveyance by the Corporation of all or substantially all of its property or business; 8 X-3.1-12 13 (2) The consolidation of the Corporation with or its merger into any other corporation, unless the corporation resulting from such consolidation or surviving such merger will not have after such consolidation or merger any class of shares either authorized or outstanding ranking prior to or on a parity with the Preferred Stock except the same number of shares ranking prior to or on a parity with the Preferred Stock and having the same rights and preferences as the shares of the Corporation authorized and outstanding immediately preceding such consolidation or merger (and each holder of Preferred Stock immediately preceding such consolidation or merger shall receive the same number of shares with the same rights and preferences of the resulting or surviving corporation); or (3) The authorization of any shares ranking on a parity with the Preferred Stock or an increase in the authorized number of shares of Preferred Stock. (e) Neither the vote, consent nor any adjustment of the voting rights of holders of shares of Preferred Stock shall be required for an increase in the number of shares of Common Stock authorized or issued or for stock splits of the Common Stock or for stock dividends on any class of stock payable solely in Common Stock; and none of the foregoing actions shall be deemed to affect adversely the preferences or voting or other rights of Preferred Stock within the meaning and for the purpose of this Part B. Section 6. Convertible Series. If and to the extent that there are created series of Preferred Stock which are convertible (hereinafter referred to as "convertible series") into shares of Common Stock or into shares of any other class or series of the Corporation (hereinafter collectively called "conversion shares"), the following terms and provisions shall be applicable to all convertible series, except as may be otherwise expressly provided in the terms of any such series. (a) The holder of each share of a convertible series may exercise the conversion privilege in respect thereof by delivering to any transfer agent for the respective series the certificate for the share to be converted and written notice that the holder elects to convert such share. Conversion shall be deemed to have been effected immediately prior to the close of business on the date when such delivery is made, and such date is referred to in this Section as the "conversion date". On the conversion date or as promptly thereafter as practicable, the Corporation shall deliver to the holder of the stock surrendered for conversion, or as otherwise directed by him in writing, a certificate for the number of full conversion shares deliverable upon the conversion of such stock and a check or cash in respect of any fraction of a share as provided in Subsection (b) of this Section 6. The person in whose name the stock certificate is to be registered shall be deemed to have become a holder of the conversion shares of record on the conversion date. No adjustment shall be made for any dividends on shares of stock surrendered for conversion or for dividends on the conversion shares delivered on conversion. (b) The Corporation shall not be required to deliver fractional shares upon conversion of shares of a convertible series. If more than one share shall be surrendered for conversion at one time by the same holder, the number of full conversion shares deliverable upon conversion thereof shall be computed on the basis of the aggregate number of shares so surrendered. If any fractional interest in a conversion share would otherwise be deliverable upon the conversion, the Corporation shall in lieu of delivering a fractional share therefor make an adjustment therefor in cash at the current market value thereof, computed (to the nearest cent) on the basis of the closing price of the conversion share on the last business day before the conversion date. For the purpose of this Section, the "closing price of the conversion share" on any business day shall be the last reported sales price regular way per share on such day, or, in 9 X-3.1-13 14 case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or, if the conversion shares are not then listed or admitted to trading on such Exchange, on the principal national securities exchange on which the conversion shares are listed or admitted to trading as determined by the Board of Directors, or if not so listed or admitted, the mean between the average bid and asked prices per conversion shares in the over-the-counter market as furnished by any member of the National Association of Securities Dealers or other nationally recognized organization of securities dealers selected from time to time by the Board of Directors for that purpose; and "business day" shall be each day on which the New York Stock Exchange or other national securities exchange or over-the-counter market used for purposes of the above calculation is open for trading. (c) Upon conversion of shares of any convertible series, the stated capital of the conversion shares delivered upon such conversion shall be the aggregate par value of the shares so delivered having par value, or, in the case of shares without par value, shall be an amount equal to the stated capital represented by each such share outstanding at the time of such conversion multiplied by the number of such shares delivered upon such conversion. The stated capital of the Corporation shall be correspondingly increased or reduced to reflect the difference between the stated capital of the shares of the convertible series so converted and the stated capital of the shares delivered upon such conversion. (d) In the event of any reclassification or change of outstanding conversion shares (except a split or combination, or a change in par value, or a change from par value to no par value, or a change from no par value to par value), provision shall be made as part of the terms of such reclassification or change that the holder of each share of each convertible series then outstanding shall have the right to receive upon the conversion of such share, at the conversion rate or price which otherwise would be in effect at the time of conversion, with substantially the same protection against dilution as is provided in the terms of such convertible series, the same kind and amount of stock and other securities and property as he would have owned or have been entitled to receive upon the happening of any of the events described above had such share been converted immediately prior to the happening of the event. (e) In the event the Corporation shall be consolidated with or shall merge into any other corporation, provision shall be made as a part of the terms of such consolidation or merger whereby the holder of each share of each convertible series outstanding immediately prior to such event shall thereafter be entitled to such rights with respect to securities of the Corporation resulting from such consolidation or merger so that rights of such holders as specified in the terms of such convertible series shall not be substantially prejudiced; provided, however, that the provisions of this Subsection (e) shall be inapplicable if such consolidation or merger shall be approved by the holders of two-thirds of the outstanding shares of such convertible series of Preferred Stock. (f) The Corporation hereby reserves and shall at all times reserve and keep available free from preemptive rights, out of its authorized but unissued shares or treasury shares, for the purpose of delivery upon conversion of shares of each convertible series, such number of conversion shares as shall from time to time be sufficient to permit the conversion of all outstanding shares of all convertible series of Preferred Stock. Section 7. Preemptive Rights - Purchase of Shares by Corporation. (a) No holder of Preferred Stock, present, past or future, shall be entitled as such as a matter of right to subscribe for or purchase any part of any new or additional stock of any series or class or of securities of the Corporation convertible into stock of any class whatsoever, whether now or hereafter authorized, and whether issued for cash, property, services or otherwise. 10 X-3.1-14 15 (b) The Corporation is authorized to purchase any shares of any series of Preferred Stock from time to time and at such times, in such manner, for such reasons and on such terms and conditions as shall be deemed appropriate by the Board of Directors. Section 8. Definitions. For the purpose of this Part B: Whenever reference is made to shares "ranking prior to the Preferred Stock", such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof either as to the payment of dividends or as to distribution in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation are given preference over the right of the holders of Preferred Stock; whenever reference is made to shares "on a parity with the Preferred Stock", such reference shall mean and include all shares of the Corporation in respect of which the right of the holders thereof (i) are not given preference over the rights of the holders of Preferred Stock either as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation and (ii) either as to the payment of dividends or as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, or as to both, rank on an equality (except as to the amounts fixed therefor) with the rights of the holders of Preferred Stock; and whenever reference is made to shares "ranking junior to the Preferred Stock" such reference shall mean and include all shares of the Corporation in respect of which the rights of the holders thereof both as to the payment of dividends and as to distributions in the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation are junior and subordinate to the rights of the holders of the Preferred Stock. IN WITNESS WHEREOF, said Hoyt M. Wells, President, and James Boyazis, Secretary, of THE GOODYEAR TIRE & RUBBER COMPANY, acting for and on behalf of said corporation, have hereunto subscribed their names and caused the seal of said corporation to be hereunto affixed this 6th day of April, 1993. By /s/ HOYT M. WELLS -------------------------------- HOYT M. WELLS, PRESIDENT [SEAL] By /s/ JAMES BOYAZIS -------------------------------- JAMES BOYAZIS, SECRETARY 11 X-3.1-15 16 EXHIBIT 3.1 (CONTINUED) ----------------------- CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF INCORPORATION OF THE GOODYEAR TIRE & RUBBER COMPANY Samir F. Gibara, President, and James Boyazis, Secretary, of The Goodyear Tire & Rubber Company, an Ohio corporation, with its principal office located at Akron, Summit County, Ohio, do hereby certify that, pursuant to the authority conferred upon the Board of Directors of said corporation by Section 1 of Part B of ARTICLE FOURTH of the Amended Articles of Incorporation of the said corporation and by the Ohio General Corporation Law, at a meeting of the Board of Directors of said corporation duly called and held on the 4th day of June, 1996, at which meeting a quorum of the Board of Directors was at all times present, the Board of Directors was without shareholder action, which shareholder action was not required, the following resolution: RESOLVED, that The Goodyear Tire & Rubber Company hereby adopts the following amendment to its Amended Articles of Incorporation, as amended to date, and that the Chairman of the Board, the President or a Vice President and the Secretary or an Assistant Secretary of the Company are hereby authorized and directed to sign and file in the office of the Secretary of State of the State of Ohio a certificate containing a copy of the resolution adopting the amendment and a statement of the manner of its adoption: The Amended Articles of Incorporation of the Company are hereby amended to create a new series of Preferred Stock by adding a new Section 1-B to PART B of ARTICLE FOURTH as follows: Section 1-B. Series B Preferred Stock, Without Par Value. A series of Preferred Stock is hereby created having the following terms: 1. Designation. The shares of such series are designated as: "Series B Preferred Stock, without par value." 2. Authorized Number of Shares - Fractional Shares. The authorized number of shares constituting the Series B Preferred Stock is 7,000,000. Series B Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Preferred Stock. 3. Dividends and Distributions. (A) Subject to any prior and superior rights of the holders of any series of X-3.1-16 17 Preferred Stock ranking prior and superior to the shares of Series B Preferred Stock with respect to dividends that may be authorized by the Amended Articles of Incorporation, the holders of shares of Series B Preferred Stock shall be entitled prior to the payment of any dividends on shares ranking junior to the Series B Preferred Stock to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $25.00 or (b) subject to the provisions for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Preferred Stock. In the event the Corporation shall at any time after July 29, 1996 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $25.00 per share on the Series B Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. (D) Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B X-3.1-17 18 Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. (E) Dividends in full shall not be declared or paid or set apart for payment on the Series B Preferred Stock for a dividend period terminating on the quarterly Dividend Payment Date unless dividends in full have been declared or paid or set apart for payment on the Preferred Stock of all series (other than series with respect to which dividends are not cumulative from a date prior to such dividend date) on such dividend date. When the dividends are not paid in full on all series of the Preferred Stock, the shares of all series shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on said shares if all dividends were declared and paid in full. 4. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received $25.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series B Liquidation Preference"). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii) is hereinafter referred to as the "Adjustment Number"). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B Preferred Stock and Common Stock, respectively, holders of Series B Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Series B Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series B Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding X-3.1-18 19 immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 5. Conversion on Merger, Consolidation, etc. In case the Corporation shall enter into any merger, consolidation, combination or other transaction in which the shares of Common Stock are exchanged or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Preferred Stock shall at the time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 6. Redemption. The outstanding shares of Series B Preferred Stock shall not be redeemable. 7. Condition to Issuance of any other Series. The Articles of Incorporation of the Corporation shall not be further amended to provide for the issuance of any other series of Preferred Stock without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock, voting separately as one voting group. IN WITNESS WHEREOF, said Samir F. Gibara, President, and James Boyazis, Secretary, of The Goodyear Tire & Rubber Company, acting on behalf of said corporation, have hereunto subscribed their names and caused the seal of said corporation to be hereunto affixed this 4th day of June, 1996. By: /s/ Samir F. Gibara --------------------------------- Samir F. Gibara, President By: /s/ James Boyazis --------------------------------- James Boyazis, Secretary [SEAL] X-3.1-19 20 UNITED STATES OF AMERICA, STATE OF OHIO, OFFICE OF THE SECRETARY OF STATE I, BOB TAFT, Secretary of State of the State of Ohio, do hereby certify that the foregoing is a true and correct copy, consisting of 4 pages, as taken from the original record now in my official custody as Secretary of State. WITNESS, my hand and official seal of Columbus, Ohio, this 14th day of June A.D. 1996. /s/ Bob Taft ---------------------------------------------------- BOB TAFT Secretary of State By: /s/ S Henderson ------------------------------------------------- X-3.1-20 EX-4.5 3 EXHIBIT 4.5 1 EXHIBIT 4.5 ----------- REPLACEMENT AND RESTATEMENT AGREEMENT dated as of July 15, 1996, among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Borrower"), the undersigned lenders (the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking corporation, as agent for the Lenders (in such capacity, the "Agent"). WHEREAS, the parties hereto desire to replace and restate the Revolving Credit Facility Agreement (the "Agreement"), dated as of July 15, 1994, among the Borrower, the Lenders and the Agent, on the terms and conditions set forth herein; NOW, THEREFORE, for and in consideration of the premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, on the terms and subject to the conditions set forth herein, as follows: 1. Subject to the conditions set forth in Section 7, the Agreement, including all schedules and exhibits thereto, is hereby replaced and restated as of the date hereof in the form of a new agreement (the "New Agreement") identical to the Agreement except as expressly provided herein, and all rights and obligations of the Borrower, the Lenders and the Agent under the Agreement (including accrued Fees) shall continue as rights and obligations of such parties under the New Agreement, modified as expressly provided herein. 2. The New Agreement shall be dated as of July 15, 1996 (which shall constitute the "date hereof" in respect of the New Agreement); the date "July 15, 1999" in the definition of the term "Maturity Date" in Section 1.01 of the Agreement is hereby deleted and replaced by inserting the date "July 15, 2001" in lieu thereof. 3. Effective as of July 1, 1996, the definition of "Facility Fee Percentage" in Section 1.01 of the Agreement is deleted and replaced by inserting the following definition of Facility Fee Percentage: "FACILITY FEE PERCENTAGE" shall mean, as at the date as of which any determination in respect thereof is being or to be made, the applicable percentage set forth below based upon the Leverage Ratio as of the last day of the relevant fiscal quarter:
Leverage Ratio Facility Fee Percentage - -------------- ----------------------- less than or equal to 25% 0.0750% greater than 25% but less 0.1000% than or equal to 40% greater than 40% but less 0.1250% than or equal to 55% greater than 55% 0.1500%"
The Leverage Ratio shall be determined at the end of each calendar quarter of Borrower and shall be effective in respect of the entire next succeeding calendar quarter of Borrower. The Borrower shall deliver a certificate setting forth the calculation of the X-4.5-1 2 leverage ratio with respect to the end of each calendar quarter within 60 days after the end of such calendar quarter. 4. The table in the definition of "Spread" in Section 1.01 of the Agreement is hereby deleted and replaced by inserting the following table:
Leverage Ratio Spread - -------------- ------ less than or equal to 25% 0.1500% greater than 25% but less than or equal to 40% 0.2000% greater than 40% but less than or equal to 55% 0.2500% greater than 55% 0.3000%
5. Schedule 2.01 to the Agreement is hereby deleted and replaced by Schedule 2.01 hereto. 6. The representations and warranties set forth in Article III of the Agreement shall be deemed to have been repeated in the New Agreement on and as of the date hereof, with all references therein to "this Agreement" being deemed to refer to the New Agreement, which is the Agreement as modified by this Replacement and Restatement Agreement. 7. The New Agreement shall become effective, as of the date hereof, only upon the satisfaction of the following conditions: (a) The Agent shall have received an opinion of counsel for the Borrower, dated the date hereof, in the form attached as Exhibit B to the Agreement, but with all references therein being to the New Agreement. (b) The Agent shall have received evidence reasonably satisfactory to it of the Borrower's corporate power and authority to enter into the New Agreement. (c) The Agent shall have received counterparts of this Replacement and Restatement Agreement executed on behalf of the Borrower and each Lender. 8. This Replacement and Restatement Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all which taken together will constitute one and the same agreement. X-4.5-2 3 9. THIS REPLACEMENT AND RESTATEMENT AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, by /s/ R.W. Tieken ---------------------------- Name: R. W. Tieken Title: Executive Vice President THE CHASE MANHATTAN BANK, individually and as Agent, by /s/ Julie S. Long ---------------------------- Name: Julie S. Long Title: Vice President X-4.5-3 4 BANQUE NATIONALE DE PARIS, CHICAGO BRANCH, by /s/ Arnaud Collin du Bocage ------------------------------- Name: Arnaud Collin du Bocage Title: Executive Vice President CIBC INC., by /s/ Kent Davis ------------------------------- Name: Kent Davis Title: Director THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH, by /s/ Yoshinori Kawamura ------------------------------- Name: Yoshinori Kawamura Title: Joint General Manager COMMERZBANK AKTIENGESELLSCHAFT CHICAGO BRANCH, by /s/ William J. Binder ------------------------------- Name: William J. Binder Title: Assistant Vice President by /s/ Dr. Helmut R. Tollner ------------------------------- Name: Dr. Helmut R. Tollner Title: Executive Vice President BANK OF AMERICA ILLINOIS, by /s/ Lynn W. Stetson ------------------------------- Name: Lynn W. Stetson Title: Managing Director ABN AMRO BANK N.V., BY ABN AMRO NORTH AMERICA, INC., as Agent, by /s/ Andre Nel ------------------------------- Name: Andre Nel Title: SVP and Managing Director by /s/ James M. Janovsky ------------------------------- Name: James M. Janovsky Title: GVP and Director X-4.5-4 5 BANK OF MONTREAL, by /s/ Marc R. Heyden ------------------------------- Name: Marc R. Heyden Title: Director THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, by /s/ Friedrich N. Wilms ------------------------------- Name: Friedrich N. Wilms Title: Attorney-In-Fact BARCLAYS BANK PLC, by /s/ Keith Mackie ------------------------------- Name: Keith Mackie Title: Director CITIBANK, N.A., by /s/ William G. McKnight ------------------------------- Name: William G. McKnight Title: Vice President CREDIT LYONNAIS, CHICAGO BRANCH, by /s/ Sandra E. Horwitz ------------------------------- Name: Sanda E. Horwitz Title: First Vice President Branch Manager CREDIT SUISSE, by /s/ Eileen O'Connell Fox ------------------------------- Name: Eileen O'Connell Fox Title: Member of Senior Management by /s/ Elizabeth Whalen ------------------------------- Name: Elizabeth Whalen Title: Associate THE DAI-ICHI KANGYO BANK, LTD., CHICAGO BRANCH, by /s/ Takeshi Hemmi ------------------------------- Name: Takeshi Hemmi Title: Vice President X-4.5-5 6 DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCH, by /s/ Ralf Hofmann ------------------------------- Name: Ralf Hoffmann Title: Vice President by /s/ Robert M. Wood, Jr. ------------------------------- Name: Robert M. Wood, Jr. Title: Vice President DRESDNER BANK LUXEMBOURG S.A., by /s/ M. Brunkhorst ------------------------------- Name: M. Brunkhorst Title: Authorized Signature by /s/ K. Diederich ------------------------------- Name: K. Diederich Title: Assistant Manager Loans X-4.5-6 7 THE FIRST NATIONAL BANK OF CHICAGO, by /s/ Robert L. Jackson ------------------------------- Name: Robert L. Jackson Title: Authorized Agent THE INDUSTRIAL BANK OF JAPAN, LIMITED, by /s/ Hiroaki Nakamura ------------------------------- Name: Hiroaki Nakamura Title: Joint General Manager ISTITUTO BANCARIO SAN PAOLO DI TORINO S.P.A., by /s/ Robert Wurster ------------------------------- Name: Robert Wurster Title: F.V.P. by /s/ William DeAngelo ------------------------------- Name: William DeAngelo Title: F.V.P. KEYBANK NATIONAL ASSOCIATION, by /s/ Karen A. Lee ------------------------------- Name: Karen A. Lee Title: Vice President NATIONAL CITY BANK, by /s/ Jeffrey C. Douglas ------------------------------- Name: Jeffrey C. Douglas Title: Vice President NATIONSBANK, N.A., by /s/ Philip S. Durand ------------------------------- Name: Philip S. Durand Title: Vice President X-4.5-7 8 THE NORTHERN TRUST COMPANY, by /s/ S. Bif Bowman ------------------------------- Name: S. Bif Bowman Title: Vice President ROYAL BANK OF CANADA, by /s/ Patrick K. Shields ------------------------------- Name: Patrick K. Shields Title: Manager, Corporate Banking THE SANWA BANK, LIMITED, CHICAGO BRANCH, by /s/ James P. Byrnes ------------------------------- Name: James P. Byrnes Title: Vice President SOCIETE GENERALE, CHICAGO BRANCH, by /s/ Gilles Demeulenaere ------------------------------- Name: Gilles Demeulenaere Title: Vice President & Team Leader UNION BANK OF SWITZERLAND, by /s/ James P. Kelleher ------------------------------- Name: James P. Kelleher Title: Assistant Vice President by /s/ Laurent J. Chaix ------------------------------- Name: Laurent J. Chaix Title: Vice President THE YASUDA TRUST & BANKING CO., LTD., CHICAGO BRANCH, by /s/ Koichiro Inoue ------------------------------- Name: Koichiro Inoue Title: Joint General Manager [Schedule 2.01 is omitted] X-4.5-8 EX-11 4 EXHIBIT 11 1 EXHIBIT 11 THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE Set forth below are computations, on a primary basis and on a fully diluted basis in accordance with subparagraph (b) (11) of Item 601 of Regulation S-K of the Securities and Exchange Commission, of earnings per share of the Common Stock, without par value, of Registrant. (Dollars in millions, except per share)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Primary: Net Income $ 187.9 $173.8 $339.7 $307.1 Adjusted average number of shares outstanding 157,066,067 153,773,661 156,604,045 153,240,246 PRIMARY EARNINGS PER SHARE $1.20 $1.13 $2.17 $2.00 Fully Diluted: Net Income $187.9 $173.8 $339.7 $307.1 Adjusted average number of shares outstanding 157,066,256 153,868,214 156,610,047 153,739,915 FULLY DILUTED EARNINGS PER SHARE $1.20 $1.13 $2.17 $2.00
The foregoing computations do not reflect any significant potentially dilutive effect Registrant's Preferred Stock Purchase Rights Plan could have in the event such Rights become exercisable and any such shares of either Series A Preferred Stock or Common Stock of Registrant are issued upon the exercise of such Rights. Reference is made to Note 18, captioned "Preferred Stock Purchase Rights Plan", in the Notes to Financial Statements set forth in Item 8 of the Registrant's Annual Report on form 10-K for the year ended December 31, 1995 at page 49. X - 11 - 1 EX-27 5 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION ABSTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS AND THE CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 279 0 2,089 61 1,956 4,444 9,677 4,953 10,516 3,142 1,292 155 0 0 3,412 10,516 6,575 6,575 5,041 5,041 0 0 67 507 167 340 0 0 0 340 2.20 0 THIS SCHEDULE SHALL NOT BE DEEMED FILED FOR PURPOSES OF SECTION 11 OF THE SECURITIES ACT OF 1933 OR SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934.
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