Exhibit 10.20
PERFORMANCE UNIT AWARD AGREEMENT
THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED
UNDER THE SECURITIES ACT OF 1933.
     THIS PERFORMANCE UNIT AWARD AGREEMENT (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 not defined herein shall have the
meanings ascribed thereto under the terms of the Goodrich Corporation 2001
Equity Compensation Plan (as amended, the “Plan”), unless otherwise noted.
     WHEREAS, the Employee is employed by the Company or its subsidiaries; 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 Company and the Employee agree as follows:

1.   Grant of Units. The Company hereby grants to the Employee _________
performance units (the “Units”). If the Company declares a dividend payment on
the Company’s common stock, par value $5.00 per share (“Common Stock”) during
the Term, as defined below, then the number of Units covered by this Agreement
shall be increased as of the dividend payment date by the number of shares, if
any, of the Common Stock that could be purchased on such date by such dividend
payment. For purposes of determining the number of shares of the Common Stock
that could 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 the fair market value of the
Common Stock, as calculated pursuant to Section 14 of the Plan, as of such date.

2.   Term of Units. The term of the Units (the “Term”) will begin on January 2,
2007 and will end on December 31, 2009.

3.   Unit Value Measurement. The aggregate value of the Participant’s Units (the
“Benefit Amount”) shall be determined as of the last day of the Term, and shall
be equal to the product of the number of Units then covered under this Agreement
and the fair market value of one share of the Common Stock, as calculated
pursuant to Section 14 of the Plan, as of the last day of the Term.

4.   Earned Percentage. Except as otherwise provided in Section 6 below, the
Employee shall 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 to one-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

 

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    by this Agreement (the “RTSR Units”) shall be determined in accordance with
the provisions of subsection (b) of this Section 4.

     (a) Return on Invested Capital. The Earned Percentage of the ROIC Units
shall be determined by reference to the Return on Invested Capital (as defined
below) and will be calculated in accordance with the following schedule:

          2007-2009 Goals   Return On Invested Capital   Earned Percentage
Threshold   TBD      0 % Target   TBD   100 % Maximum   TBD   200 %

With respect to levels of the Company’s Return on Invested Capital that fall
within the threshold, target and maximum levels specified above, the Earned
Percentage of the ROIC Units will be interpolated on a straight line basis. For
purposes of this Agreement, the term “Return on Invested Capital” means
“Earnings Before Interest and Taxes (“EBIT”) after tax” excluding Special Items
(as defined below) divided by average invested capital (determined at the total
Company level). EBIT shall be equal to the EBIT amount used for the Goodrich
Corporation Management Incentive Program and the Goodrich Corporation Senior
Executive Management Incentive Plan calculations. The tax rate applied to EBIT
shall be the Company’s effective tax rate, except when management determines
that certain discrete items should be excluded from the tax rate. In those
instances, the effective tax rate shall be the Company’s effective tax rate
excluding the impact of the discrete items. Invested capital is defined as the
sum of: accounts receivable (excluding accounts receivable securitization);
inventory (net); deferred tax assets (current and noncurrent); goodwill; other
intangible assets (net of accumulated amortization); property, plant & equipment
(net of accumulated depreciation); other current assets (including prepaids);
and other noncurrent assets minus the sum of: accounts payable; accrued
expenses; other current liabilities; taxes payable; deferred tax liabilities
(current and noncurrent); other noncurrent liabilities; and the cumulative
translation account. Special Items include all items deemed by management to
have occurred during the Term that are not representative of the true underlying
results of the Term. Examples of Special Items include, but are not limited to,
significant tax litigation/settlements; debt issuance/exchange costs; and gains
and losses from the sale of a business. In all cases, the exclusion of Special
Items will be subject to the approval of the Compensation Committee.
     (b) Relative Total Shareholder Return. The Earned Percentage of the RTSR
Units shall 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 %

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With respect to levels of Relative Total Shareholder Return that fall within the
percentiles specified above, the Earned Percentage of the RTSR Units will be
interpolated on a straight line basis. For purposes of this Agreement, the term
“Relative Total Shareholder Return” means the percentage calculated using the
Total Shareholder Return (“TSR”) for Common Stock for each year of the Term
(using the dividend reinvestment approach to calculating shareholder return)
divided by the Total Shareholder Return for the Aerospace Peer Group (as defined
below) (using the dividend reinvestment approach to calculating shareholder
return). TSR is calculated for each year of the Term and then used to calculate
TSR for the Term as follows: (1+TSR1)(1+TSR2)(1+TSR3) 1/3. The TSR for Goodrich
is then divided by the TSR for the Aerospace Peer Group, the product of which
will be the Relative Total Stock Value for the Term. The overall performance of
the Aerospace Peer Group is then analyzed to identify the 25th, 50th and 75th
percentile performance. The Earned Percentage of RTSR Units will be determined
based on the Company’s Relative Total Stock Value and its placement between the
three identified performance points.
     (c) Aerospace Peer Group. The Aerospace Peer Group is a group of aerospace
companies selected, from time to time, by the Company’s Compensation Committee.
The Aerospace Peer Group must be set by the Compensation Committee within
90 days of the beginning of a Term. If during the Term there is any change in
the corporate capitalization of any aerospace company in the Aerospace Peer
Group, such as a stock split, a corporate transaction (any merger,
consolidation, separation including a spin-off or other distribution of stock or
property of such aerospace company, or reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Internal Revenue Code)) or any partial or complete liquidation of any such
aerospace company, the Compensation Committee, to the extent it deems it
necessary and/or appropriate, in its sole discretion, shall take such change
into account in determining the TSR of such aerospace company in the Aerospace
Peer Group for purposes of subsection (b) of Section 4 (including, without
limitation, by making such determination as if the change had not occurred or by
eliminating such aerospace company from the Aerospace Peer Group for the Term).
     (d) Responsibility for Calculations. All calculations of (i) the Company’s
Return on Invested Capital and Relative Total Shareholder Return and (ii) the
Earned Percentages of the ROIC Units and the RTSR Units shall be determined by
the Committee in the exercise of its sole discretion, and any such calculations
shall be final.

5.   Benefit Payment. The benefit payment due to the Employee under this
Agreement shall be paid to the Employee (or, if the Employee is deceased, the
Employee’s beneficiary, as defined in Section 7) in a lump sum cash payment,
subject to the provisions of Section 8 below. Such payment shall be paid by the
Company as soon as practicable after the last date of the Term.

6. Termination of Employment
     (a) Retirement, Death or Disability. If the Employee’s employment with the
Company terminates due to retirement, death or permanent and total disability,
then the amount of benefit otherwise payable to the Employee (or, if the
Employee is deceased, the Employee’s beneficiary, as defined in Section 7)
hereunder shall be reduced by multiplying such amount by a fraction, the
numerator of which shall be the number of full months of employment that the
Employee has completed with the

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Company during the Term and the denominator shall be 36. For the purpose of this
Section 6(a), the Employee shall be treated as having retired if the Employee
terminates employment with the Company at any time after the Employee is
eligible for early retirement as provided under the terms of the Goodrich
Corporation Employees’ Pension Plan (or as provided in a subsidiary company’s
salaried pension plan in the event the Employee’s pension benefits are received
solely from the subsidiary’s plan) in effect at the time of such termination.
     (b) Other Termination of Employment. If the Employee’s employment is
terminated prior to the last day of the Term for any reasons other than
retirement, death or permanent and total disability, then the Employee will not
be entitled to the payment of any benefit 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
subsidiaries is terminated for Cause, as defined herein, the Committee may, in
its sole discretion, immediately cancel the Units granted under this Agreement.
For the purpose of this Agreement, “Cause” shall mean a termination of
employment by the Company due to (i) the violation by the Employee of any rule,
regulation, or policy of the Company, including the Company’s Business Code of
Conduct; (ii) the failure by the Employee to meet any requirement reasonably
imposed upon such employee by the Company as a condition of continued
employment; (iii) the violation by the Employee of any federal, state or local
law or regulation; (iv) the commission by the Employee of an act of fraud,
theft, misappropriation of funds, dishonesty, bad faith or disloyalty; (v) the
failure by the Employee to perform consistently the duties of the position held
by such employee in a manner which satisfies the expectations of the Company
after such Employee has been provided written notice of performance deficiencies
and a reasonable opportunity to correct those deficiencies; or (vi) the
dereliction or neglect by the Employee in the performance of such employee’s job
duties.

7.   Assignability/Beneficiary. The rights of the Employee contingent or
otherwise in the Units cannot and shall not be sold, assigned, pledged or
otherwise transferred or encumbered other than by will or by the laws of descent
and distribution. The Employee may designate a beneficiary or beneficiaries to
receive any payments that are due under Section 5 following the Employee’s
death. To be effective, such designation must be made in accordance with such
rules and on such form as prescribed by the Company’s corporate compensation
group for such purpose which completed form must be received by the Company’s
corporate compensation group or its designee before the Employee’s death. If the
Employee fails to designate a beneficiary, or if no designated beneficiary
survives the Employee’s death, the Employee’s estate shall be deemed the
Employee’s beneficiary.

8.   Tax Withholding. At the time any payment to the Employee is made under this
Agreement, 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 will be 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

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    of Common Stock of the Company in the same manner in which other outstanding
shares of Common Stock not subject to the Plan are adjusted; provided, that the
number of Units subject to this Agreement shall always be a whole number.

10.   Continued Employment. Nothing contained herein shall be construed as
conferring upon the Employee the right to continue in the employ of the Company
or any of its subsidiaries as an executive or in any other capacity.

11.   Parties to Agreement. This Agreement and the terms and conditions herein
set forth are 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 be binding and conclusive upon the Employee
or upon the Employee’s executors or administrators or beneficiaries with respect
to any question arising hereunder or under the Plan. This Agreement will
constitute an agreement between the Company and the Employee as of the date
first above written, which shall bind and inure to the benefit of their
respective executors, administrators, beneficiaries, successors and assigns.

12.   Modification. No change, termination, waiver or modification of this
Agreement will be 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 any state or federal court located in the county in which the principal
executive office of the Company is then located for purposes of the enforcement
of this Agreement and waives personal service of any and all process upon the
Employee. The Employee waives any objection to venue of any action instituted
under this Agreement.

14.   Notices. All notices, designations, consents, offers or any other
communications provided for in this Agreement must be given in writing,
personally delivered, or by facsimile transmission with an appropriate written
confirmation of receipt, by nationally recognized overnight courier or by U.S.
mail. Notice to the Company is to be addressed to its then principal office.
Notice to the Employee or any transferee is to be addressed to his/her/its
respective address as it appears in the records of the Company, or to such other
address as may be designated by the receiving party by notice in writing to the
Secretary of the Company.

15.   Further Assurances. At any time, and from time to time after executing
this Agreement, the Employee will execute such additional instruments and take
such actions as may be reasonably requested by the Company to confirm or perfect
or otherwise to carry out the intent and purpose of this Agreement.

16.   Provisions Severable. If any provision of this Agreement is invalid or
unenforceable, it shall not affect the other provisions, and this Agreement
shall remain in effect as though the invalid or unenforceable provisions were
omitted. Upon a determination that any term or other provision is invalid or
unenforceable, the Company shall in good faith modify this Agreement so as to
effect the original intent of the parties as closely as possible.

17.   Captions. Captions herein are for convenience of reference only and shall
not be considered in construing this Agreement.

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18.   Entire Agreement. This Agreement represents the parties’ entire
understanding and agreement with respect to the issuance of the Units, and each
of the parties acknowledges that it has not made any, and makes no promises,
representations or undertakings, other than those expressly set forth or
referred to therein.

19.   Governing Law. This Agreement is subject to the condition that this award
will conform with any applicable provisions of any state or federal law or
regulation in force either at the time of grant. The Committee and the Board
reserve the right pursuant to the condition mentioned in this paragraph to
terminate all or a portion of this Agreement if in the opinion of the Committee
and Board, this Agreement does not conform with any such applicable state or
federal law or regulation and such nonconformance shall cause material harm to
the Company.

This Agreement shall be construed in accordance with and governed by the laws of
the State of New York.

20.   409A Compliance. Notwithstanding any provisions of the Plan or this
Agreement to the contrary and, to the extent applicable, the Plan and this
Agreement shall be interpreted, construed and administered (including with
respect to any amendment, modification or termination of the Plan or this
Agreement) in such a manner so as to comply with the provisions of Section 409A
of the Internal Revenue Code, as amended, and any related Internal Revenue
Service guidance promulgated thereunder.

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

            GOODRICH CORPORATION
      By:           Vice President             

Accepted by:

     
 
   
 
(Employee’s name)
   

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