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Goodrich Corp – ‘10-Q’ for 6/30/01 – EX-10.HH

On: Wednesday, 8/1/01, at 4:23pm ET · For: 6/30/01 · Accession #: 950144-1-505036 · File #: 1-00892

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/01/01  Goodrich Corp                     10-Q        6/30/01    3:121K                                   Bowne of Atlanta Inc/FA

Quarterly Report — Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Goodrich Corporation                                  31    166K 
 2: EX-3.C      Amendment/Restated Certificate of Incorporation        3      9K 
 3: EX-10.HH    2001-2003 Long-Term Incentive Summary Plan            12     37K

EX-10.HH — 2001-2003 Long-Term Incentive Summary Plan

EX-10.HH 1st Page of 12 TOC ↑Top Previous Next ↓Bottom Just 1st
 
                                                                  EXHIBIT 10(HH)

SUMMARY PLAN DESCRIPTION

 2001 - 2003
LONG-TERM INCENTIVE PLAN

THE BFGOODRICH COMPANY

APRIL 2001

EX-10.HH 2nd Page of 12 TOC 1st Previous Next ↓Bottom Just 2nd

SUMMARY PLAN DESCRIPTION

2001 - 2003 LONG-TERM INCENTIVE PLAN

 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
 SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933.

The Long-Term Incentive Plan is designed to provide long-term incentive         
compensation to key executives who are in positions to influence the performance
of the Company, and thereby enhance shareholder value over time. The Plan       
provides a significant additional financial opportunity and complements other   
parts of the Company's total compensation program for executives (base salary,  
Management Incentive Program, stock options and benefits).                      

The following is a summary of the main provisions of the Long-Term Incentive    
Plan. The official and controlling provisions of the Plan are contained in the  
text of the 2001 Stock Option Plan and the Long-Term Incentive Plan. In case of 
any discrepancies, the Plan documents will govern. In this summary, BFGoodrich  
is referred to as the "Company", and the Long-Term Incentive Plan is referred to
as the "LTIP" or the "Plan".                                                    

The benefits described in this summary have been structured to be in compliance 
with current tax law. Any change in legislation or the interpretation of tax    
laws which affect the tax nature of the benefits provided may necessitate       
revisions in the Plan.                                                          

The Company reserves the right to amend, modify, suspend or partially or        
completely terminate the Plan at any time, unless there has been a Change in    
Control.                                                                        

2 

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PLAN OVERVIEW                                                                   

o    Participation in the LTIP will be approved by the Compensation Committee of
the Board of Directors.                                               

o    The LTIP will provide for annual grants of Performance Shares with         
multi-year overlapping cycles. Every year, a separate multi-year      
performance cycle will begin.                                         

o    At the beginning of each Plan cycle, a grant of Performance Shares will be 
  made to each participant. Grants will be credited as phantom Performance
Shares in a book-entry account for each participant. Each phantom     
Performance Share will be equivalent to one share of BFGoodrich common
stock.                                                                

o    With respect to each Plan cycle, the Compensation Committee of the Board of
   Directors will establish multi-year performance goals for the Company and
each segment. The performance goals will include Total Business Return
 ("TBR") for the Company and each Segment and Relative Total Shareholder
  Return ("RTSR") for the Company using the manufacturing component of the
S&P 500 as the benchmark. The performance goals applicable to each    
participant will be set forth in his or her award agreement.          

o    During the Plan cycle, dividend equivalents will be accrued on all phantom 
Performance Shares. Such dividend equivalents will be credited to each
    participant's account in the form of additional phantom Performance Shares
at the same time and in the same amount as actual dividend payments on
BFGoodrich common stock.                                              

o    Participants will be entitled to a payout of shares at the end of each Plan
     cycle only if a threshold performance standard is met. The number of shares
   to be received free of further restrictions will range from 0% to 200% of
the total phantom Performance Share account (including shares credited
     through dividend equivalents), based on attainment against goals set by the
Committee.                                                            

o    Payments from the Plan, if any, at the end of the Plan cycle, will be made 
    in actual shares of BFG common stock, less the number of shares to satisfy
applicable withholding taxes.                                         

o    Participants may elect to defer all or a portion of their award until      
  termination of employment as described in the Performance Share Deferred
Compensation Plan.                                                    

o    The Compensation Committee of the Board of Directors retains the right in  
   its sole discretion to reduce any award which would otherwise be payable,
 unless there has been a Change in Control, as defined in the 2001 Stock
Option Plan.                                                          

3 

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PLAN PROVISIONS                                                                 

ELIGIBILITY                                                                     

Eligibility to participate in the LTIP will be determined by the Compensation   
Committee of the Board of Directors.                                            

AWARD GRANTS                                                                    

The LTIP rewards financial performance for multi-year overlapping cycles. Every 
year, a separate multi-year performance cycle will begin.                       

At the beginning of each Plan cycle, a grant of Performance Shares will be made 
to each participant. Grants will be credited as phantom Performance Shares in a 
book-entry account for each participant. Each phantom Performance Share will be 
equivalent to one share of BFGoodrich common stock.                             

The Company will maintain a phantom Performance Share account for each          
participant for each separate Plan cycle. The account will be used solely for   
record keeping purposes. No actual BFGoodrich common shares will be registered  
in participants' names.                                                         

DIVIDENDS                                                                       

Dividend equivalents will be accrued on all phantom Performance Shares in each  
participant's account for each Plan cycle. Such dividend equivalents will be    
credited to each participant's account in the form of additional phantom        
Performance Shares at the same time and in the same amount as actual dividend   
payments on BFGoodrich common stock.                                            

4 

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PERFORMANCE GOALS                                                               

With respect to each Plan cycle, the Compensation Committee of the Board of     
Directors will establish multi-year performance goals for the Company and each  
segment. The performance goals will include Total Business Return ("TBR") for   
the Company and each Segment and Relative Total Shareholder Return ("RTSR") for 
the Company using the manufacturing component of the S&P 500 as the benchmark.  
The performance goals applicable to each participant will be set forth in his or
her award agreement.                                                            

The determination of whether the performance goals have been met will be made by
the Compensation Committee following the end of the plan cycle. For Plan        
purposes, TBR will be calculated with the following adjustments:                

o    Adjust for the short-term EBITDA and TBR cash flow impact of long-cycle    
  investments to the Segment or the Company for those investments that are
discussed with the Board of Directors.                                

o    Exclude the EBITDA impact of externally reported special items that are    
   one-time events not associated with the normal operation of the business.
   One-time events are defined as infrequent and not recurrent in nature and
  are limited in their financial impact to a specific time period. Special
  items may include, but are not limited to, accounting principle changes,
restructuring charges, merger costs, natural disasters or discontinued
   operations. The TBR cash flow impact of special items will be included in
the TBR measurement.                                                  

o    Adjust for the EBITDA and TBR cash flow impact of significant acquisitions 
   and divestitures during the year of the activity in a TBR neutral manner.

PLAN PAYOUTS                                                                    

Payments from the Plan, if any, at the end of the Plan cycle, will be made in   
actual shares of BFG common stock, less the number of shares to satisfy         
applicable withholding taxes.                                                   

At the end of each Plan cycle, if a participant is still employed by the        
Company, he or she will receive a payment from the Plan after the Compensation  
Committee determines the final payout based upon specific financial performance 
goals established for participants.                                             

Participants will be entitled to a payout of shares at the end of each Plan     
cycle only if a threshold performance standard is met. If threshold performance 
is achieved, the number of shares to be received free of further restrictions   
will range from 0% to 200% of a participant's total phantom Performance Share   
account (including shares credited                                              

5 

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through dividend equivalents) for that Plan cycle, based on attainment against  
goals set by the Committee.                                                     

TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT                  

If a participant dies, becomes totally disabled under the Company's Long-Term   
Disability Plan, or retires under the Company's Retirement Program for Salaried 
Employees (or a similar pension plan maintained by a subsidiary) during a Plan  
cycle, the participant (or his or her estate) will receive a pro rata payout at 
the end of the Plan cycle, based upon the time portion of the cycle during which
he or she was employed. The actual payout will not occur until after the end of 
the Plan cycle, at which time the financial performance for the entire Plan     
cycle will be used to determine the size of the award in that event.            

OTHER TERMINATION OF EMPLOYMENT                                                 

If a participant terminates employment prior to the end of a Plan cycle for     
reasons other than death, disability or retirement, he or she will forfeit all  
Performance Shares, unless the Compensation Committee determines otherwise.     

NEW HIRES OR PROMOTIONS INTO ELIGIBLE POSITIONS                                 

Participants will become eligible for participation in the Plan at their new    
position level beginning with the Plan cycle which begins on the January 1      
immediately following their hire or promotion date. No new Performance Share    
awards or adjustments to Performance Share awards for Plan cycles that commenced
prior to a participant's hire or promotion date will be made.                   

CHANGE IN POSITION                                                              

The performance factors and weightings applicable to a participant's award vary 
depending upon the participant's position with the Company. In calculating a    
participant's award, the Compensation Committee will take into account any      
changes in position during the Plan cycle.                                      

CHANGE IN CONTROL                                                               

Generally, participants will not receive a payout under the Plan until the end  
of a Plan cycle. An exception will occur, however, if there is a Change in      
Control of the Company. A Change in Control is defined in the 2001 Stock Option 
Plan. The effect of a Change in Control on a participant's ability to receive   
Performance Shares is                                                           

6 

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described in the Long-Term Incentive Plan. Generally, that Plan provides that,  
as of the date of the Change in Control, a participant will become entitled to a
prorated portion of the shares originally awarded to him or her, based upon     
financial performance for the portion of the cycle which ends on the date of the
Change in Control. A participant's entitlement to additional shares will be     
based upon financial performance for the portion of the Plan cycle that occurs  
after the Change in Control.                                                    

DEFERRAL OF PAYOUTS                                                             

Participants may elect to defer all or a portion of Performance Shares that may 
be earned and payable at the end of a Plan cycle as described in the Performance
Share Deferred Compensation Plan. A deferral election must be made before the   
Plan cycle begins, using a form provided by the Company.                        

A description of the terms and conditions of the Performance Share Deferred     
Compensation Plan is contained in the related Summary Plan Description, a copy  
of which has been provided to each participant. Participants are encouraged to  
review the Summary Plan Description before making an election to defer          
Performance Shares.                                                             

PLAN ADMINISTRATION                                                             

The Plan is administered by the Compensation Committee of the Board of          
Directors. The Committee has full power and authority to construe, interpret and
administer the Plan. All decisions, actions or interpretations of the Committee 
shall be final, conclusive and binding on all parties.                          

The Committee retains the right in its sole discretion to reduce any award which
would otherwise be payable, unless there has been a Change in Control.          

The Committee reserves the right to amend, modify, suspend or partially or      
completely terminate the Plan, unless there has been a Change in Control.       

TAX INFORMATION                                                                 

Generally, participants are not taxed on Performance Shares until the date on   
which they become entitled to a payout of their Performance Shares. Under       
current tax law, on the date participants become entitled to receive the shares 
following completion of a Plan cycle, the market value of the shares (net of any
shares deferred) at that time is considered to be ordinary income and they will 
be taxed on that amount. If participants hold the shares and later sell them,   
any appreciation over the market value of the shares when they received them at 
the end of the Plan cycle will be taxed based on capital gains tax rules.       

7 

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At the end of the Plan cycle, the number of actual BFGoodrich common shares     
participants will receive will be net of an amount of shares sufficient to      
satisfy any federal, state and local withholding tax requirements or other      
payroll tax requirements with which the Company must comply.                    

The tax consequences of deferring Performance Shares under the Performance Share
Deferred Compensation Plan are described in the related Summary Plan            
Description, a copy of which has been provided to each participant.             

Each participant should consult his or her tax advisor for a complete           
explanation of the tax impact of participation in the Long-Term Incentive Plan  
and the Performance Share Deferred Compensation Plan.                           

EARNINGS FOR BENEFIT PURPOSES                                                   

Any income participants derive from Performance Share payouts will not be       
considered eligible earnings for Company or subsidiary pension plans, savings   
plans, profit sharing plans or any other benefit plans.                         

8 

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 2001-2003
 BFGOODRICH LONG-TERM INCENTIVE PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
 COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
 SECURITIES ACT OF 1933.

Name:                                                                           

AWARD GRANT                                                                     

You have been granted the following Long-Term Incentive Plan shares for the     
three-year performance period 2001 through 2003:                                

_____ phantom Performance Shares

Grants are credited as phantom Performance Shares in a book-entry account for   
you. Each phantom Performance Share will be equivalent to one share of          
BFGoodrich common stock.                                                        

The terms and conditions of your award are contained in the 2001 Stock Option   
Plan and the 2001 - 2003 Long-Term Incentive Plan Summary Plan Description      
(collectively, the "Plan Documents"). If this award agreement varies from the   
terms of the Plan Documents, the Plan Documents will control.                   

PLAN GOALS                                                                      

The number of phantom Performance Shares you earn will depend on the three-year 
performance of (a) the Company or your Segment, as applicable, as measured by   
Total Business Return ("TBR"), and (b) Relative Total Shareholder Return        
("RTSR") for the Company using the manufacturing component of the S&P 500 as the
benchmark. The performance goals for the three-year period and the relative     
weightings for the Plan participants are attached as Appendix A hereto.         

The determination of whether the performance goals have been met will be made by
the Compensation Committee following the end of the plan cycle. For Plan        
purposes, TBR will be calculated with the following adjustments:                

o    Adjust for the short-term EBITDA and TBR cash flow impact of long-cycle    
  investments to the Segment or the Company for those investments that are
discussed with the Board of Directors.                                

9 

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o    Exclude the EBITDA impact of externally reported special items that are    
   one-time events not associated with the normal operation of the business.
   One-time events are defined as infrequent and not recurrent in nature and
  are limited in their financial impact to a specific time period. Special
  items may include, but are not limited to, accounting principle changes,
restructuring charges, merger costs, natural disasters or discontinued
   operations. The TBR cash flow impact of special items will be included in
the TBR measurement.                                                  

o    Adjust for the EBITDA and TBR cash flow impact of significant acquisitions 
   and divestitures during the year of the activity in a TBR neutral manner.

OTHER IMPORTANT INFORMATION                                                     

o    Dividend equivalents will be accrued on all phantom Performance Shares in  
your account during the Plan cycle. Such dividend equivalents will be 
credited to your account in the form of additional phantom Performance
    Shares at the same time and in the same amount as actual dividend payments
on BFGoodrich common stock.                                           

o    You will not earn any phantom Performance Shares if the Company's          
   performance during the 2001 - 2003 period is below threshold performance.

o    If threshold performance is achieved, the number of shares to be received  
free of further restrictions will range from 0% to 200% of your total 
phantom Performance Share account (including shares credited through  
   dividend equivalents), based on attainment against the performance goals.

o    Payments from the Plan, if any, at the end of the Plan cycle, will be made 
    in actual shares of BFG common stock, less the number of shares to satisfy
applicable withholding taxes.                                         

o    If you die, become totally disabled under the Company's Long-Term          
Disability Plan or retire under the Company's Retirement Program for  
   Salaried Employees (or a similar pension plan maintained by a subsidiary)
    during the Plan cycle, you (or your estate) will receive a pro rata payout
at the end of the Plan cycle, based upon the time portion of the cycle
during which you were employed. The actual payout will not occur until
  after the end of the Plan cycle, at which time the financial performance
   for the entire Plan cycle will be used to determine the size of the award
in that event.                                                        

o    If you terminate employment prior to the end of the Plan cycle for reasons 
other than death, disability or retirement, you will forfeit all      
Performance Shares.                                                   

10

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o    The performance factors and weightings applicable to your award are        
   determined based upon your position with the Company. In calculating your
 award, the Compensation Committee will take into account any changes in
your position during the Plan cycle.                                  

o    The Compensation Committee retains the right in its sole discretion to     
    reduce any award which would otherwise be payable, unless there has been a
Change in Control, as defined in the 2001 Stock Option Plan.          

o    Any income you derive from a payout of Performance Shares will not be      
considered eligible earnings for Company or subsidiary pension plans, 
savings plans, profit sharing plans or other benefit plans.           

FOR MORE INFORMATION                                                            

If you have questions about the Long-Term Incentive Plan or need additional     
information, contact Kevin Heslin at (704) 423-7094.                            

11

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                                                                      APPENDIX A
 2001 - 2003 BFGOODRICH LONG-TERM INCENTIVE PLAN

 PERFORMANCE GOALS

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------------------
                                                         CORPORATE STAFF                                                           
                                                      2001-2003 ANNUAL GOALS                                                       

                                                                                   ------------------------------------------------
                                                                                               PERCENT OF POOL FUNDED              
                                                                                   ------------------------------------------------
                                                                                     (Threshold)      (Target)        (Maximum)    
                                                                                         0%             100%            200%       
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
2001 TOTAL BUSINESS RETURN                                                                   2.00%          10.00%          18.00% 
2002 TOTAL BUSINESS RETURN                                                                   2.00%          10.00%          18.00% 
2003 TOTAL BUSINESS RETURN                                                                   2.00%          10.00%          18.00% 
-----------------------------------------------------------------------------------------------------------------------------------
2001-2003 TOTAL BUSINESS RETURN                                                              2.00%          10.00%          18.00% 
3-YEAR RELATIVE TOTAL SHAREHOLDER RETURN                                                       90%            100%            117% 
For attainment between the levels shown, the percent will be                                                                       
prorated on a straight-line basis.                                                                                                 
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
                                                            AEROSPACE                                                              
                                                      2001-2003 ANNUAL GOALS                                                       

                                                                                   ------------------------------------------------
                                                                                               PERCENT OF POOL FUNDED              
                                                                                   ------------------------------------------------
                                                                                     (Threshold)      (Target)        (Maximum)    
                                                                                         0%             100%            200%       
-----------------------------------------------------------------------------------------------------------------------------------
2001 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
2002 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
2003 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
-----------------------------------------------------------------------------------------------------------------------------------
2001-2003 TOTAL BUSINESS RETURN                                                              3.00%          10.00%          17.00% 
3-YEAR RELATIVE TOTAL SHAREHOLDER RETURN                                                       90%            100%            117% 
For attainment between the levels shown, the percent will be                                                                       
prorated on a straight-line basis.                                                                                                 
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
                                                  ENGINEERED INDUSTRIAL PRODUCTS                                                   
                                                      2001-2003 ANNUAL GOALS                                                       

                                                                                   ------------------------------------------------
                                                                                               PERCENT OF POOL FUNDED              
                                                                                   ------------------------------------------------
                                                                                     (Threshold)      (Target)        (Maximum)    
                                                                                         0%             100%            200%       
-----------------------------------------------------------------------------------------------------------------------------------
2001 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
2002 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
2003 TOTAL BUSINESS RETURN                                                                   3.00%          10.00%          17.00% 
-----------------------------------------------------------------------------------------------------------------------------------
2001-2003 TOTAL BUSINESS RETURN                                                              3.00%          10.00%          17.00% 
3-YEAR RELATIVE TOTAL SHAREHOLDER RETURN                                                       90%            100%            117% 
For attainment between the levels shown, the percent will be                                                                       
prorated on a straight-line basis.                                                                                                 
-----------------------------------------------------------------------------------------------------------------------------------

                                                     WEIGHTING                                                                     

------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
                                          CORPORATE           SEGMENT           SEGMENT             GROUP            BUSINESS      
              MEASURES                      STAFF               COO              STAFF              STAFF           UNIT STAFF     
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
Company RTSR                                 50%                50%               30%                20%                20%        
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
Company TBR                                  50%                                                                                   
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
Segment TBR                                                     50%               70%                80%                80%        
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
Group TBR                                                                                                                          
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------
Business Unit TBR                                                                                                                  
------------------------------------- ------------------ ------------------ ----------------- ------------------ ------------------

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Goodrich Corp – ‘10-Q’ for 6/30/01 – EX-10.HH

On: Wednesday, 8/1/01, at 4:23pm ET · For: 6/30/01 · Accession #: 950144-1-505036 · File #: 1-00892

Previous ‘10-Q’: ‘10-Q’ on 5/11/01 for 3/31/01 · Next: ‘10-Q’ on 10/31/01 for 9/30/01 · Latest: ‘10-Q’ on 4/26/12 for 3/31/12

Quarterly Report — Form 10-QFiling Table of Contents

EX-10.HH — 2001-2003 Long-Term Incentive Summary Plan

Quarterly Report — Form 10-Q
Filing Table of Contents