OUTSIDE DIRECTOR PHANTOM SHARE PLAN
(Approved by the Board of Directors on December 7, 2004)
This plan shall be known as the Goodrich Corporation Outside Director Phantom Share Plan (thePlan).
2. Purpose and Intent.
The purpose of the Plan is to provide Outside Directors with compensation in the form of PhantomShares for their services as Outside Directors. It is the intent of the Company that amountscredited to an Outside Director under the Plan shall not be taxable to such Outside Director forincome tax purposes until the time actually received by such Outside Director. The provisions ofthe Plan shall be construed and interpreted to effectuate such intent.
3. Effective Date.
This Plan is adopted and effective for Phantom Share Awards earned for calendar years beginning onor after January 1, 2005.
For purposes of the Plan, the following terms shall have the following meanings:
“Account means an account maintained in Phantom Shares on the books of the Company to record aParticipants interest under the Plan attributable to any Phantom Share Awards to such Participantpursuant to paragraph 6(b) below, as adjusted from time to time pursuant to the terms of the Plan.
“Board means the Board of Directors of the Company.
Board Service Anniversary Date means, for each Outside Director, the date of each Annual Meetingof Shareholders.
“Common Stock means the common stock, par value $5.00 per share, of the Company.
Company means Goodrich Corporation, a New York corporation.
“Fair Market Value of a share of Common Stock on any date means the mean of the high an low pricesof a share as reflected in the report of composite trading of New York Stock Exchange listedsecurities for that day (or, if no shares were publicly traded on that day, the
immediately preceding day that shares were so traded) published in The Wall Street Journal (Eastern Edition) orin any other publication selected by the Plan Administrator; provided, however, that if the sharesare misquoted or omitted by the selected publication(s), the Plan Administrator shall directlysolicit the information from officials of the stock exchanges or from other informed independentmarket sources.
“Outside Director means an individual who is a member of the Board, but who is not (a) an employeeof the Company or any of its subsidiaries or (b) a former employee of the Company or any of itssubsidiaries whose employment with the Company or any of its subsidiaries terminated within theimmediately preceding five years.
“Participant means an Outside Director who participates in the Plan as provided in paragraph 6(a)below.
“Phantom Share means a unit having a value as of a given date equal to the Fair Market Value ofone (1) share of Common Stock on such date.
Phantom Share Award has the meaning specified in paragraph 6(b) hereof.
Plan has the meaning specified in paragraph 1 hereof.
Plan Administrator means the Company, or such other person or entity designated as the PlanAdministrator for purposes of the Plan by the Board.
Plan Year means the twelve (12) month period beginning January 1 and ending December 31.
The Plan Administrator shall be responsible for administering the Plan. The Plan Administratorshall have all of the powers necessary to enable it to properly carry out its duties under thePlan. Not in limitation of the foregoing, the Plan Administrator shall have the power to construeand interpret the Plan and to determine all questions that shall arise hereunder. The PlanAdministrator shall have such other and further specified duties, powers, authority and discretionas are elsewhere in the Plan either expressly or by necessary implication conferred upon it. ThePlan Administrator may appoint such agents as it may deem necessary for the effective performanceof its duties, and may delegate to such agents such powers and duties as the Plan Administrator maydeem expedient or appropriate that are not inconsistent with the intent of the Plan. The decisionof the Plan Administrator upon all matters within its scope of authority shall be final andconclusive on all persons, except to the extent otherwise provided by law.
(a) Eligibility. Each Outside Director shall be eligible to participate in the Plan.
(b) Phantom Share Awards. On each Board Service Anniversary Date, each Outside Director
shall receive an annual grant of Phantom Shares (each, a Phantom Share Award) equal in number to (i)$60,000, divided by (ii) the Fair Market Value of a share of Common Stock on such date. AllPhantom Shares awarded under the Plan shall be fully vested on the date of grant.
(c) Establishment of Account. The Company shall establish and maintain on its books for eachParticipant an Account for each payment option that has been elected by such Participant pursuantto paragraph 6(e) below. Each Account shall be designated by the name of the Participant for whomestablished and by the applicable payment option. Each Phantom Share Award to a Participant shallbe credited to the appropriate Account as of the date of such award.
(d) Account Adjustments. Each Account shall be credited additional full or fractional PhantomShares for cash dividends paid on the Common Stock based on the number of Phantom Shares in suchAccount on the applicable dividend record date and calculated based on the Fair Market Value of theCommon Stock on the applicable dividend payment date. Each Account shall also be equitablyadjusted as determined by the Plan Administrator in the event of any stock dividend, stock split orsimilar change in the capitalization of the Company.
(e) Payment Options. Prior to the first day of each Plan Year, , each Participant shall begiven the opportunity to elect one of the following payment options with respect to Phantom ShareAwards earned in such Plan Year: (i) single payment, (ii) five (5) annual installments or (iii) ten(10) annual installments. The election shall be made in writing on a form provided by the PlanAdministrator and must be returned to the Plan Administrator before the date specified by the PlanAdministrator. Such election shall be effective with respect to all Phantom Share Awards earned insuch Plan Year, including any adjustments to such award amounts pursuant to paragraph 6(d) above.If a Participant fails to duly elect a payment option for a Plan Year, the method of payment shallbe the single payment. No additional payment option elections may be submitted.
(f) Single Payment. If a Participant to whom the single payment method applies terminatesservice with the Company as a member of the Board, such Participants Account for which the singlepayment method applies shall continue to be credited with adjustments under paragraph 6(d) abovethrough the last day of the calendar month in which such termination of services occurred. Thenumber of Phantom Shares in the Account as of such date shall be converted to cash based on theFair Market Value of the Common Stock on such date, and such cash shall be paid in a single paymentto the Participant (or to the Participants designated beneficiary in the case of the Participantstermination of service as the result of the Participants death) by the last day of the followingcalendar month.
(g) Annual Installments. If a Participant to whom the annual installments method appliesterminates service with the Company as a member of the Board, the amount of such annualinstallments shall be calculated and paid pursuant to the provisions of this paragraph 6(g). TheParticipants Accounts for which the annual installments method applies shall continue to becredited with adjustments under paragraph 6(d) until the Accounts are fully paid out. The firstinstallment shall be paid by January 31 of the calendar year immediately following the calendaryear in which such termination of services occurred, and each subsequent installment shall be paidby January 31 of each subsequent calendar year. In the event of the Participants death, any
remaining annual installments shall be paid to the Participants designated beneficiary. Eachpayment from an Account shall be made in cash and be equal to (x) the sum of the Participantsbalance in such Account as of December 31 of the calendar year immediately preceding the calendaryear of payment, multiplied by (y) a fraction, the numerator of which is one and the denominator isthe number of installments remaining, including the current years payment. For purposes of thepreceding sentence, the balance of an Account shall be equal to the number of Phantom Shares in theaccount as of such December 31 multiplied by the Fair Market Value of the Common Stock on suchdate.
(h) Other Payment Provisions. A Participant shall not be paid any portion of theParticipants Accounts prior to the Participants termination of service as a member of the Board.Any payment hereunder shall be subject to applicable payroll and withholding taxes. If any amountbecomes payable under the provisions of the Plan to a Participant, beneficiary or other person whois a minor or an incompetent, whether or not declared incompetent by a court, such amount may bepaid directly to the minor or incompetent person or to such persons legal representative (orattorney-in-fact in the case of an incompetent) as the Plan Administrator, in its sole discretion,may decide, and the Plan Administrator shall not be liable to any person for any such decision orany payment pursuant thereto. Each Participant shall designate a beneficiary under the Plan on aform furnished by the Plan Administrator, and if a Participant does not have a beneficiarydesignation in effect, the designated beneficiary shall be the Participants estate.
(i) Statements of Account. Each Participant shall receive an annual statement of the balancesin the Participants Accounts.
7. Amendment and Termination of the Plan.
The Board shall have the right and power at any time and from time to time to amend the Plan inwhole or in part and at any time to terminate the Plan; provided, however, that no such amendmentor termination shall reduce the amount actually credited to a Participants Accounts under the Planon the date of such amendment or termination, or further defer the due dates for the payment ofsuch amounts, without the consent of the affected Participant.
8. Applicable Law.
The Plan shall be construed, administered, regulated and governed in all respects under and by thelaws of the United States to the extent applicable, and to the extent such laws are not applicable,by the laws of the State of New York.
None of the rights or interests in the Participants Accounts shall, at any time prior to actualpayment or distribution pursuant to the Plan, be assignable or transferable in whole or in part,either voluntarily or by operation of law or otherwise, and such rights and interest shall not besubject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or inany other manner.
10. Interest of Participant.
The Company shall be under no obligation to segregate or reserve any funds or other assets forpurposes relating to the Plan and, except as set forth in the Plan, no Participant shall have anyrights whatsoever in or with respect to any funds or other assets held by the Company for purposesof the Plan or otherwise. Each Participants Accounts maintained for purposes of the Plan merelyconstitute bookkeeping entries on records of the Company, constitute the unsecured promise andobligation of the Company to make payments as provided herein, and shall not constitute anyallocation whatsoever of any cash or other assets of the Company or be deemed to create any trustor special deposit with respect to any of the Companys assets. Notwithstanding the foregoingprovisions, nothing in this Plan shall preclude the Company from setting aside funds or otherassets in trust pursuant to one or more trust agreements between a trustee and the Company.However, no Participant shall have any secured interest or claim in any assets or property of theCompany or any such trust and all funds or other assets contained in such trust shall remainsubject to the claims of the Companys general creditors.