Performance Unit Award Agreement

 

Exhibit 10(P)

PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED UNDER THESECURITIES ACT OF 1933.

THIS PERFORMANCE UNIT AWARDAGREEMENT (hereinafter, the “Agreement”) made as of the ______ day of____________, ______, between Goodrich Corporation, a New York corporation (the “Company”), and____________ (the “Employee”). For purposes of this Agreement, all capitalized terms notdefined herein shall have the meanings ascribed thereto under the terms of the Goodrich Corporation2001 Stock Option Plan (as amended, the “Plan”), unless otherwise noted.

WHEREAS, the Employee is employed by the Company or its subsidiary corporations; and

WHEREAS, the Company wishes to grant to the Employee an award of performance units under the Plan,subject to the conditions and restrictions set forth in the Plan and this Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained in this agreement, the Companyand the Employee agree as follows:

1.   Grant of Units. The Company herebygrants to the Employee ______ performance units(the “Units”). If the Company declares a dividend payment on the Company’s common stock, parvalue $5.00 per share (“Common Stock”) during the Term, as defined below, then the number ofUnits covered by this Agreement shall be increased as of the dividend payment date by thenumber of shares, if any, of the Common Stock that could be purchased on such date by suchdividend payment. For purposes of determining the number of shares of the Common Stock thatcould be purchased by such dividend payment as of the dividend payment date, the amount of            shares of the Common Stock that could be purchased shall be determined by reference to thefair market value of the Common Stock, as calculated pursuant to Section 14 of the Plan, as ofsuch date.
 
2.   Term of Units. The term of the Units (the“Term”) will begin on January 1, ______ andwill end on December 31, ______.
 
3.   Unit Value Measurement. The aggregate value of the Participant’s Units (the “BenefitAmount”) shall be determined as of the last day of the Term, and shall be equal to the productof the number of Units then covered under this Agreement and the fair market value of oneshare of the Common Stock, as calculated pursuant to Section 14 of the Plan, as of the lastday of the Term.
 
4.   Earned Percentage. Except as otherwise provided in Section 6 below, the Employeeshall be entitled to a benefit payment under this Agreement equal to the specified percentage(the “Earned Percentage”) of the Benefit Amount. The Earned Percentage of an amount equal toone-half of the Units covered by this Agreement (the “ROIC Units”)

 


 

    shall be determined in accordance with the provisions of subsection (a) of this Section 4,and the Earned Percentage of an amount equal to the other one-half of the Units covered bythis Agreement (the “RTSR Units”) shall be determined in accordance with the provisions ofsubsection (b) of this Section 4.
 
        (a) Return on Invested Capital. The Earned Percentage of the ROIC Units shallbe determined by reference to the Return on Invested Capital (as defined below) and will becalculated in accordance with the following schedule:
         
2004-2006 Goals   Return On Invested Capital   Earned Percentage
 
Threshold   ___% or Less   0 %
 
Target   ___%   100 %
 
Maximum   ___% or More   200 %
 
    With respect to levels of the Company’s Return on Invested Capital that fall within thethreshold, target and maximum levels specified above, the Earned Percentage of the ROICUnits will be interpolated on a straight line basis. For purposes of this Agreement, theterm “Return on Invested Capital” means net income excluding special items, divided by theaverage invested capital (measured at the company level). Special items includemerger-related and consolidation costs, certain gains and losses on the sale of businesses,results of discontinued operations, cumulative effects of changes in accounting, assetimpairment charges and other restructuring costs.
 
        (b) Relative Total Shareholder Return. The Earned Percentage of the RTSR Unitsshall be determined by reference to the Relative Total Shareholder Return (as defined below)and will be calculated in accordance with the following schedule:
     
Relative Total Shareholder Return Percentile   Earned Percentage
   
25th or Less   0 %
   
50th   100 %
   
95th or Higher   200 %
   
    With respect to levels of Relative Total Shareholder Return that fall within the percentilesspecified above, the Earned Percentage of the RTSR Units will be interpolated on a straightline basis. For purposes of this Agreement, the term “Relative Total Shareholder Return”means the percentage calculated using the Total Shareholder Return (“TSR”) for Common Stockfor each year of the Term (using the dividend reinvestment approach to calculatingshareholder return) divided by the Total Shareholder Return for the Aerospace Peer Group(using the dividend reinvestment approach to calculating shareholder return). The AerospacePeer Group is a group of aerospace companies selected, from time to time, by the Company’sCompensation Committee. The Aerospace Peer Group must be set by the Compensation Committeewithin 90 days of the beginning of a Term. TSR is calculated for each year of the Term andthen used to calculate TSR for the Term as

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    follows: (1+TSR1)(1+TSR2)(1+TSR3) 1/3. The TSRfor Goodrich is then divided by the TSR for the Aerospace Peer Group, the product of whichwill be the Relative Total Stock Value for the Term. The overall performance of theAerospace Peer Group is then analyzed to identify the 25th, 50th and75th percentile performance. The Earned Percentage of RTSR Units will bedetermined based on the Company’s Relative Total Stock Value and its placement between thethree identified performance points.
 
        (c) Responsibility for Calculations. All calculations of (i) the Company’sReturn on Invested Capital and Relative Total Shareholder Return and (ii) the EarnedPercentages of the ROIC Units and the RTSR Units shall be determined by the Committee in theexercise of its sole discretion, and any such calculations shall be final.
 
5.   Benefit Payment. The benefit payment due to the Employee under this Agreementshall be paid to the Employee in a lump sum cash payment, subject to the provisions of Section8 below. Such payment shall be paid by the Company as soon as practicable after the last dateof the Term.
 
6.   Termination of Employment
 
        (a) Retirement, Death or Disability. If the Employee’s employment with theCompany terminates due to retirement, death or permanent and total disability, then theamount of benefit otherwise payable to the Employee hereunder shall be reduced bymultiplying such amount by a fraction, the numerator of which shall be the number of fullmonths of employment that the Employee has completed with the Company during the Term andthe denominator shall be 36. For the purpose of this Section 6(a), the Employee shall betreated as having retired if the Employee terminates employment with the Company at any timeafter the Employee is eligible for early retirement as provided under the terms of theGoodrich Corporation Employees’ Pension Plan (or as provided in a subsidiary company’ssalaried pension plan in the event the Employee’s pension benefits are received solely fromthe subsidiary’s plan) in effect at the time of such termination.
 
        (b) Other Termination of Employment. If the Employee’s employment isterminated prior to the last day of the Term for any reasons other than retirement, death orpermanent and total disability, then the Employee will not be entitled to the payment of anybenefit under this Agreement.
 
        (c) Cause. Notwithstanding any provisions of this Agreement to the contrary,if the Employee’s employment with the Company or any of its subsidiary corporations isterminated for Cause, as defined herein, the Committee may, in its sole discretion,immediately cancel the Units granted under this Agreement. For the purpose of thisAgreement, “Cause” shall mean a termination of employment by the Company due to (i) thecommission by the Employee of an act of fraud or embezzlement against the Company or any ofits subsidiary corporations, (ii) a conviction of the Employee (or a plea of nolocontendere in lieu thereof) for any crime involving fraud, dishonesty or

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    moral turpitude; or (iii) intentional violation by the Employee of written policies ofthe Company or specific directions of the Board, which misconduct or violation results inmaterial damage to the Company and continues after written notice thereof and a reasonableopportunity to cure.
 
7.   Assignability. The rights of the Employee contingent or otherwise in the Units cannotand shall not be sold, assigned, pledged or otherwise transferred or encumbered other than bywill or by the laws of descent and distribution.
 
8.   Tax Withholding. At the time any payment to the Employee is made under thisAgreement, the aggregate amount of such payment shall be reduced by the amount of any federal,state and local tax withholding requirements imposed on such payment.
 
9.   Changes in Capital Structure. The number of Units covered under this Agreement willbe adjusted appropriately in the event of any stock split, stock dividend, combination of            shares, merger, consolidation, reorganization, or other change in the nature of the shares ofCommon Stock of the Company in the same manner in which other outstanding shares of CommonStock are affected; provided, that the number of Units subject to this Agreement shall alwaysbe a whole number.
 
10.   Continued Employment. Nothing contained herein shall be construed as conferring uponthe Employee the right to continue in the employ of the Company or any of its subsidiaries asan executive or in any other capacity.
 
11.   Parties to Agreement. This Agreement and the terms and conditions herein set forthare subject in all respects to the terms and conditions of the Plan, which are controlling.All decisions or interpretations of the Board and of the Committee referred to herein shall bebinding and conclusive upon the Employee or upon the Employee’s executors or administratorswith respect to any question arising hereunder or under the Plan. This Agreement willconstitute an agreement between the Company and the Employee as of the date first abovewritten, which shall bind and inure to the benefit of their respective executors,administrators, successors and assigns.
 
12.   Modification. No change, termination, waiver or modification of this Agreement willbe valid unless in writing and signed by all of the parties to this Agreement.
 
13.   Consent to Jurisdiction. The Employee hereby consents to the jurisdiction of anystate or federal court located in the county in which the principal executive office of theCompany is then located for purposes of the enforcement of this Agreement and waives personalservice of any and all process upon the Employee. The Employee waives any objection to venueof any action instituted under this Agreement.
 
14.   Notices. All notices, designations, consents, offers or any other communicationsprovided for in this Agreement must be given in writing, personally delivered, or by facsimiletransmission with an appropriate written confirmation of receipt, by nationally

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    recognized overnight courier or by U.S. mail. Notice to the Company is to be addressed toits then principal office. Notice to the Employee or any transferee is to be addressed tohis/her/its respective address as it appears in the records of the Company, or to such otheraddress as may be designated by the receiving party by notice in writing to the Secretary ofthe Company.
 
15.   Further Assurances. At any time, and from time to time after executing thisAgreement, the Employee will execute such additional instruments and take such actions as maybe reasonably requested by the Company to confirm or perfect or otherwise to carry out theintent and purpose of this Agreement.
 
16.   Provisions Severable. If any provision of this Agreement is invalid orunenforceable, it shall not affect the other provisions, and this Agreement shall remain ineffect as though the invalid or unenforceable provisions were omitted. Upon a determinationthat any term or other provision is invalid or unenforceable, the Company shall in good faithmodify this Agreement so as to effect the original intent of the parties as closely aspossible.
 
17.   Captions. Captions herein are for convenience of reference only and shall not beconsidered in construing this Agreement.
 
18.   Entire Agreement. This Agreement represents the parties’ entire understanding andagreement with respect to the issuance of the Units, and each of the parties acknowledges thatit has not made any, and makes no promises, representations or undertakings, other than thoseexpressly set forth or referred to therein.
 
19.   Governing Law. This Agreement is subject to the condition that this award willconform with any applicable provisions of any state or federal law or regulation in forceeither at the time of grant. The Committee and the Board reserve the right pursuant to thecondition mentioned in this paragraph to terminate all or a portion of this Agreement if inthe opinion of the Committee and Board, this Agreement does not conform with any suchapplicable state or federal law or regulation and such nonconformance shall cause materialharm to the Company .
 
    This Agreement shall be construed in accordance with and governed by the laws of the Stateof New York.

     IN WITNESS WHEREOF, the parties agree to the terms and conditions stated herein by signing andreturning to the Company the attached copy hereof.

         
  GOODRICH CORPORATION
 
       
  By:    
       
      Vice President
Accepted by:
       
 
       
 
       
 
       
(Employee’s name)
       

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