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EXHIBIT 10(Z)
FORM OF MANAGEMENT CONTINUITY AGREEMENT
Goodrich Corporation ("Goodrich") entered
into a Management Continuity Agreement
identical to the form attached hereto with
each of the following Goodrich
executive officers on the dates indicated.
Each of the agreements with the
executive officers provides for a "Payment
Period" (as defined in Section 3(c)
of the Management Continuity Agreement) of
thirty-six (36) months.
Date
Name
----
----
10/18/99
Marshall O. Larsen
10/18/99
Terrence G. Linnert
10/01/00
Ulrich Schmidt
10/18/99
Stephen R. Huggins
08/01/00
Jerry S. Lee
03/27/00
John J. Carmola
05/01/02
Cynthia M. Egnotovich
03/01/02
John
J. Grisik
10/18/99
Robert D. Koney, Jr.
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MANAGEMENT CONTINUITY AGREEMENT
THIS AGREEMENT dated as of this [
] day of [
], 199[ ] between
[
](the "Executive") and The B.F. Goodrich Company, a New York
corporation (the "Company").
WHEREAS, the Executive and the Company desire to set forth
certain
compensation and benefits that the
Executive shall receive upon the happening of
certain events affecting the Executive and
the Company, and
WITNESSETH:
NOW, THEREFORE, in consideration of the foregoing and the
mutual
promises herein contained, the parties
agree as follows:
1. TERM. This Agreement shall commence on the date hereof and
shall
continue until the Date of Termination as
set forth in Section 8 hereof.
2. PERIOD OF EMPLOYMENT. Executive's "Period of Employment"
shall
commence on the date on which a Change in
Control occurs and shall end on the
date that is 24 months after the date on
which such Change in Control occurs.
Notwithstanding the foregoing, however,
Executive's Period of Employment shall
not extend beyond any Mandatory Retirement
Date (as hereinafter defined in
Section 3) applicable to Executive.
3. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) A "Change in Control" shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding Shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (A) any
acquisition directly from the Company (other than by exercise
of a conversion privilege), (B) any acquisition by the Company
or any of its subsidiaries, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (D)
any acquisition by any company with respect to which,
following such acquisition, more than 70% of, respectively,
the then outstanding Shares of
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common stock of such company and the combined voting power of
the then outstanding voting securities of such company
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to
such acquisition in substantially the
same proportions as their ownership, solely in their capacity
as Shareholders of the Company, immediately prior to such
acquisition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; or
(ii) Individuals who, as of the beginning of such
period, constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the beginning of such period whose election, or
nomination for election by the Company's Shareholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms is used
in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(iii) Consummation of a reorganization, merger or
consolidation, in each case, with respect to which all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or
consolidation, do not, following such reorganization, merger
or consolidation, beneficially own, directly or indirectly,
solely in their
capacity as Shareholders of the Company, more
than 70% of, respectively, the then outstanding Shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the company
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; or
(iv) Consummation of (A) a complete liquidation or
dissolution of the Company or (B) a sale or other disposition
of all or substantially all of the assets of the Company,
other than to a company, with respect to which following such
sale or other disposition, more than 70% of, respectively, the
then outstanding Shares of common stock of such company and
the combined voting power of the then outstanding voting
securities of such company entitled to vote generally in the
election of directors is then
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beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities, solely in
their capacity as Shareholders of the Company, who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be.
(b) The term "Mandatory Retirement Date" shall mean the
compulsory retirement date, if any,
established by the Company for those
executives of the Company who, by reason of
their positions and the size of
their nonforfeitable annual retirement
benefits under the Company's pension,
profit-sharing, and deferred compensation
plans, are exempt from the provisions
of the Age Discrimination in Employment
Act, 29 U.S.C. Sections 621, et seq,
which date shall not in any event be
earlier for any executive than the last day
of the month in which such Executive
reaches age 65.
(c) The term "Payment Period" shall mean [twenty-four (24)]
[thirty-six (36)] months.
4. COMPENSATION DURING PERIOD OF EMPLOYMENT. For so long during
Executive's period of Employment as
Executive is an employee of the Company, the
Company shall be obligated to compensate
Executive as follows:
(a) Executive shall continue to receive Executive's full base
salary at the rate in effect immediately
prior to the Change in Control.
Executive's base salary shall be increased
annually, with each such increase due
on the anniversary date of Executive's most
recent previous increase. Each such
increase shall be no less than an amount
which at least equals on a percentage
basis the mean of the annualized percentage
increases in base salary for all
elected officers of the Company during the
two full calendar years immediately
preceding the Change in Control.
(b) Executive shall continue to participate in all benefit and
compensation plans (including but not
limited to the Stock Option Plan,
Long-Term Incentive Plan, Management
Incentive Program, Non-Qualified Benefit
Security Plan, Executive Life Insurance
Program, Savings Benefit Restoration
Plan, Performance Share Deferred
Compensation Plan, pension plan, savings plan,
flexible benefits plan, life insurance
plan, health and accident plan or
disability plan) in which Executive was
participating immediately prior to the
Change in Control, or in plans providing
substantially similar benefits, in
either case upon terms and conditions and
at levels at least as favorable as
those provided to Executive under the plans
in which Executive was participating
immediately prior to the Change in
Control;
(c) Executive shall continue to receive all fringe benefits,
perquisites, and similar arrangements which
Executive was entitled to receive
immediately prior to the Change in Control;
and
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(d) Executive shall continue to receive annually the number of
paid vacation days and holidays Executive
was entitled to receive immediately
prior to the Change in Control.
5. COMPENSATION UPON TERMINATION OF EMPLOYMENT. If, during the
Period
of Employment, the Company shall terminate
Executive's employment for any reason
(other than for a reason and as expressly
provided in Section 6 hereof), or if
Executive shall terminate Executive's
employment for "Good Reason" (as
hereinafter defined in Section 6(b)) then
the Company shall be obligated to
compensate Executive as follows and no
payments or benefits received pursuant to
this Section 5 shall be reduced or
terminated as a result of Executive reaching
the Mandatory Retirement Date:
(a) In lieu of any salary payments that the Executive would
have received if he had continued in the
employment of the Company during the
Payment Period, the Company shall pay to
Executive in a lump sum, by not later
than the fifth business day following the
Date of Termination (as hereinafter
defined in Section 8), an amount equal to
one-twelfth of Executive's annualized
base salary in effect immediately prior to
the Date of Termination, multiplied
by the number of months in the Payment
Period.
(b) By not later than the fifth day following the Date of
Termination, the Company shall pay
Executive in a lump sum an amount equal to
the product of (x) the number of months in
the Payment Period and (y) the sum of
(i) under the Company's Management Incentive Program
(the "MIP"), and in lieu of any further grants under
the MIP that the Executive would have received if he
had continued in the employment of the Company during
the
Payment Period, the greatest of one-twelfth of :
(A) the amount most recently paid to Executive for a
full calendar year; (B) Executive's "target incentive
amount" for the calendar year in which his Date of
Termination occurs; or (C) Executive's "target
incentive amount" in effect prior to the Change in
Control for the calendar year in which the Change in
Control occurs; plus, if applicable,
(ii) under the Company's Long-Term Incentive Plan
(the "LTIP"), and in lieu of any further grants under
the LTIP that the Executive would have received if he
had continued in the employment of the Company during
the Payment Period, the greatest of (A) with respect
to the most recently completed Plan Cycle commencing
with the 1998-2000 Plan Cycle (if completed),
one-twelfth of the "calculated market value" of the
Performance Shares actually awarded to Executive
(including the value of any Performance Shares
Executive may have elected to defer under the
Performance Share Deferred Compensation Plan); (B)
with respect to the most recently commenced Plan
Cycle under the Long-Term Incentive Plan (if
Executive is a participant in such Plan Cycle) prior
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to your Date of Termination, one-twelfth of the
"calculated market value" of the phantom Performance
Shares, if any, awarded to Executive; or (C) with
respect to the most recently commenced Plan Cycle
prior to the date of the occurrence of the Change in
Control, one-twelfth of the "calculated market value"
of the phantom Performance shares, if any, awarded to
Executive. Any payment received pursuant to this
Section 5 (b)(ii) shall be in addition to and not in
lieu of any payments required to be made to Executive
as the result of the happening of an event that would
constitute a change in control pursuant to the
provisions of the LTIP
Executive's "target incentive amount" under the
Management Incentive Program is determined
by multiplying Executive's salary
range midpoint by the incentive target
percentage, which is applicable to
Executive's incentive category under such
Program. For purposes of this Section
5, the "calculated market value" of
Performance Shares, shares deferred under
the Performance Share Deferred Compensation
Plan, phantom Performance Shares
under the LTIP or stock options under the
Stock Option Plan shall be the mean of
the high and low prices of the Company's
common stock on the relevant date as
reported on the New York Stock Exchange
Composites Transactions listing (or
similar report), or, if no sale was made on
such date, then on the next
preceding day on which a sale was made
multiplied by the number of shares
involved in the calculation. The relevant
date for clauses 5(b)(ii)(B) and
5(b)(ii)(C) is the date upon which the
Compensation Committee ("Committee") of
the Board of Directors awarded the shares
of stock in question; for clause
5(b)(ii)(A) is the date on which the
Committee made a determination of
attainment of financial objectives and
awarded Performance Shares (including any
Performance Shares Executive may have
elected to defer under the Performance
Share Deferred Compensation Plan).
Any payment received pursuant to Section 5 (b)(i)
shall be in addition to and not in lieu of
any payments required to be made to
Executive as the result of the happening of
an event that would constitute a
change in control pursuant to the
provisions of the MIP.
(c) If Executive is under age 55, or over the age of 55 but
not eligible to retire, at the Date of
Termination the Company shall maintain in
full force and effect, for Executive's
continued benefit, for the Payment
Period, all health and welfare benefit
plans and programs or arrangements in
which Executive was entitled to participate
immediately prior to the Date of
Termination (or such other comparable
plans, programs or arrangements that
provide, in the aggregate, benefits which
have an economic value at least as
favorable to the Executive as those plans,
programs and arrangements in which
Executive participated prior to the Date of
Termination, as long as Executive's
continued participation is possible under
the general terms and provisions of
such plans and programs. In the event that
Executive's participation in any such
plan or program is barred [or modified],
the Company shall provide Executive
with benefits substantially similar to
those to which Executive would have been
entitled to receive under such plans and
programs, had Executive continued to
participate in them as an Executive of
the
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Company plus an amount in cash equal to the
amount necessary to cause the amount
of the aggregate after-tax compensation and
employee benefits Executive receive
pursuant to this provision to be equal to
the aggregate after-tax value of the
benefits which Executive would have
received if Executive continued to receive
such benefits as an employee. If Executive
is age 55 or over and eligible to
retire on the Date of Termination, the
Company shall provide Executive with
those health and welfare benefits to which
Executive would be entitled under the
Company's general retirement policies if
Executive retired on the Termination
Date with the Company paying that
percentage of the premium cost of the plans
which it would have paid under the terms of
the plans in effect immediately
prior to the Change of Control with respect
to individuals who retire at age 65,
regardless of Executive's actual age on the
Termination Date, provided such
benefits would be at least equal to those
which would have been payable if
Executive had been eligible to retire and
had retired immediately prior to the
Change in Control;
(d) The Company shall for the Payment Period continue, and
Executive shall be entitled to receive
fringe benefit programs, perquisites, and
similar arrangements (which, by way of
illustration and not limitation, shall
include: company car, health, dining and
country club memberships, financial
planning services, telecommunications
services, home security systems and the
like) which in the aggregate have an
economic value at least as favorable to the
Executive as those the Executive was
entitled to receive or participate in
immediately prior to the Date of
Termination; and
(e) In lieu of further grants of stock options that would have
been received by the Executive if he had
remained employed by the Company during
the Payment Period, the Company shall pay
to the Executive a sum equal to one
twelfth of the number of stock options in
the last annual grant of stock options
made by the Company to the Executive
("stock option grant"), multiplied by the
number of months in the Payment Period,
multiplied by the calculated market
value of the Common Stock of the Company on
the date of the stock option grant,
multiplied by a factor used by the Company
in valuing fully vested options with
a 10 year life in the Company's most recent
Annual Report on Form 10-K for
options held by senior executives pursuant
to the Black-Scholes method of
valuing stock options, or, if such
valuation was not made in the Form 10-K, then
under the Black-Scholes method assuming
options would be outstanding for 10
years.
The Company shall, in addition to the
benefits to which Executive is entitled
under the retirement plans or programs in
which Executive participates, pay
Executive in a lump sum in cash at
Executive's normal retirement date (or
earlier retirement date should Executive so
elect), as such date is defined in
the retirement plans or programs in which
Executive participates, an amount
equal to the actuarial equivalent of the
retirement pension to which Executive
would have been entitled under the terms of
such retirement plans or programs
had Executive accumulated additional years
of continuous service under such
plans equal in length to Executive's
Payment Period. The length of the Payment
Period will be added to total years of
continuous service for determining
vesting, the amount of benefit accrual, to
the age which Executive will be
considered to be for the purposes of
determining eligibility for normal or early
retirement calculations and the age used
for determining the amount of any
actuarial reduction. For the purposes
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of calculating benefit accrual, the amount
of compensation Executive will be
deemed to have received during each month
of Executive's Payment Period shall be
equal to the sum of Executive's annual base
salary prorated on a monthly basis
as provided for under subsection 4(a)
immediately prior to the Date of
Termination (including salary increases),
plus under the Company's Management
Incentive Program the greatest of
one-twelfth of (which amount shall reduced by
the actuarial equivalent of any amounts to
which Executive is actually entitled
pursuant to the provisions of said
retirement plans and programs):
(i) the amount
most recently paid to Executive for a full
calendar year,
(ii)
Executive's "target incentive amount" for the
calendar year in which Executive's Date of
Termination occurs, or
(iii)
Executive's "target incentive amount" in effect prior
to the Change in Control for the calendar year in
which the Change in Control occurs
Attached as Exhibit 1 is an illustration,
not intending to be exhaustive, of
examples of how inclusion of the Payment
Period may affect the calculation of
Executive's retirement benefit.
6. TERMINATION.
(a) TERMINATION WITHOUT COMPENSATION. If Executive's
employment or the term of this Agreement is
terminated for any of the following
reasons and in accordance with the
provisions of this Section 6, Executive shall
not be entitled by virtue of this Agreement
to any of the benefits provided in
the foregoing Section 5:
(i) If prior to the Commencement of the Period of
Employment, as a result of Executive's incapacity due
to physical or mental illness, Executive shall have
been absent from Executive's duties with the Company
on a full-time basis for 120 consecutive business
days, and within thirty (30) days after a written
Notice of Termination (as hereinafter defined in
Section 7) is given, Executive shall not have
returned to the full-time performance of Executive's
duties ("Incapacity Discharge");
(ii) If prior to the Commencement of the Period of
Employment, the Company shall desire to terminate
this Agreement without reason ("Convenience
Termination").
(iii) If the Company shall have Cause. For the
purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder
upon (A) the willful and continued failure by
Executive to substantially perform Executive's
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duties with the Company, which failure causes
material and demonstrable injury to the Company
(other than any such failure resulting from
Executive's incapacity due to physical or mental
illness), after a demand for substantial performance
is delivered to Executive by the Board which
specifically identifies the manner in which the Board
believes that Executive has not substantially
performed Executive's duties, and after Executive has
been given a period (hereinafter known as the "Cure
Period") of at least thirty (30)
