<PAGE>   1
                                  EXHIBIT 10.3

                                     PART I

                       THE GOODYEAR TIRE & RUBBER COMPANY

                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT


[Name]
[Title_1]
[Title_2]


Dear [Nickname]:

     The 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company
(the "Company") was adopted effective April 14, 1997 (the "Plan"). A copy of the
Plan is attached. At the December 5, 2000 meeting of the Compensation Committee
of the Board of Directors, you were awarded a Performance Equity Plan Unit Grant
(each Unit equivalent in value to one share of Common Stock of the Company) as
follows:

           Date of Grant                           December 5, 2000
           Number of Units Granted
           Performance Period                      1-1-01 through 12-31-01

     The number of Performance Equity Plan Units specified above (the "Units")
which you will earn at the end of the one-year Performance Period specified
above (the "Performance Period") will be determined by and contingent upon the
extent to which Performance Goals are achieved. The number of Units actually
earned may be adjusted between 0 and 150% of the number of Units stated above,
depending on the level of achievement of Performance Goals. Payment of the Units
earned will be made as provided under the General Terms and Conditions. The
Performance Measure, Performance Goals and Distribution Schedule for the
Performance Period for your Performance Equity Plan Unit Grant are described at
Annex A.


----------------------------------
The Goodyear Tire & Rubber Company
        December 5, 2000


Grant Agreement received and agreed to:


-----------------------------                               -------------
          Grantee                                                Date




                                    X-10-3-1
<PAGE>   2



                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

     1. The Performance Equity Plan Unit Grant for the number of Units specified
above is granted to you under, and governed by the terms and conditions of, the
Plan and this Grant Agreement. Your execution and return of the enclosed copy of
this Grant Agreement constitutes your agreement to, and acceptance of, all terms
and conditions of the Plan and this Grant Agreement. You also agree that you
have read and understand the provisions of the Plan, this Grant Agreement and
Annex A.

     2. All rights conferred upon you under the provisions of this Grant
Agreement are personal to you and, no assignee, transferee or other successor in
interest shall acquire any rights or interests whatsoever under this Grant
Agreement, which is made exclusively for the benefit of you and the Company
except by will or the laws of descent and distribution.

     3. As further consideration for the Units granted to you hereunder, you
must remain in the continuous employ of the Company or one or more of its
subsidiaries until December 31, 2001, the end of the Performance Period. Any
Units earned will be prorated in the event of your death, Retirement (defined as
termination of employment at any age after 30 or more years, or at age 55 or
older with at least 10 years of continuous service with the Company and its
subsidiaries) or Disability (defined as termination of employment while
receiving benefits under a long-term disability income plan maintained by the
Company or one of its subsidiaries) prior to completion of the Performance
Period. Any proration is based on the last day you worked. Nothing contained
herein shall restrict the right of the Company or any of its subsidiaries to
terminate your employment at any time, with or without cause.

     4. You will forfeit the right to receive any distribution or payment under
this Grant if you enter into a relationship either as an employee, consultant,
agent or in any manner whatsoever with an entity that sells products in
competition with products sold by the Company and its subsidiaries within six
months after the earlier of (1) the date you receive your distribution of Units
earned or (2) the date you cease to be an employee of the Company or one of its
subsidiaries.

     5. The number of Units earned will be paid as follows:

          (a) Each Unit earned will be valued at a dollar amount equal to the
     Fair Market Value of the Common Stock (as defined below) on December 31,
     2001, (the "Unit Value").

          (b) The Company will pay to you an amount equal to 50% of the Unit
     Value multiplied by the total number of Units earned in cash and an amount
     equal to 50% of the total number of units earned in shares of the Common
     Stock of the Company (the "Common Stock") less such withholding and payroll
     taxes as the Company shall determine to be necessary or appropriate
     (withholding and payroll taxes to be deducted from the cash portion of the
     payment) in February of 2002; provided, however, that notwithstanding the
     foregoing, you may elect, by delivering












                                                                     Page 2 of 6

                                    X-10.3-2
<PAGE>   3

     a written notice of your election to the Company not later than March 30,
     2001, to defer all or a specified whole percentage of the aforesaid Units
     earned until the Optional Deferral Date (as defined below), in which event
     the amount you elect to defer (which shall be equal to the product of UE x
     PDE, where UE equals the number of Units earned and PDE equals the
     percentage, expressed as a decimal, of the Units earned you elect to defer)
     will be credited in February of 2002 to an account maintained in the
     records of the Company (the "Optional Deferred Amount") and will be
     converted into Deferral Units. The amount of such deferral will be reduced,
     if necessary, to pay such tax, payroll and other withholding obligations as
     the Company shall determine to be necessary or appropriate.


          (c) Notwithstanding the foregoing, the Compensation Committee of the
     Board of Directors may, at its sole election, at any time and from time to
     time require that the payment of the entire, or any portion of the, Unit
     Value of any number of the Units earned shall be deferred until the
     Optional Deferral Date, or such later date as it shall deem appropriate, in
     order for the Company to conform to the requirements of Section 162(m) of
     the Internal Revenue Code (the "Required Deferral Amount"). Any Required
     Deferral Amount so deferred will be credited to an account maintained in
     the records of the Company and will be converted into Deferral Units, the
     number of which shall be determined by dividing each amount so deferred by
     the Fair Market Value of the Common Stock on the date of such deferral.

     6. As used herein, the term: (1) "Deferral Unit" means an equivalent to a
hypothetical share of the Common Stock; (2) "Fair Market Value of the Common
Stock" means, in respect of any date on or as of which a determination thereof
is being or to be made, the average of the high and low per share sale prices of
the Common Stock on the New York Stock Exchange Composite Transactions Tape on
such date or, if the Common Stock was not traded on such date, the next
preceding day on which the Common Stock was traded on the New York Stock
Exchange; (3) "Dividend Equivalent" means, with respect to each dividend payment
date for the Common Stock, an amount equal to the cash dividend per share of
Common Stock which is payable on such dividend payment date; (4) "Optional
Deferral Date" means the first business day of the twelfth month following the
month during which you cease to be employed by the Company, or one of its
subsidiary companies, for any reason (whether Retirement, Disability, death,
voluntary termination or otherwise; (5) "Optional Deferral Unit" means each
Deferral Unit resulting from any Optional Deferred Amount, including Dividend
Equivalents credited in respect thereof; and (6) "Required Deferral Unit" means
each Deferral Unit resulting from any Required Deferred Amount, including
Dividend Equivalents credited in respect thereof. All computations relating to
Deferral Units, fractions of shares of Common Stock and Dividend Equivalents
will be rounded, if necessary, to the fourth decimal place.

     7. Each Deferral Unit will be credited with one Dividend Equivalent on each
date on which cash dividends are paid on shares of the Common Stock (and each
fraction of a Deferral Unit shall be credited with a like fraction of a Dividend
Equivalent). Dividend Equivalents (and fractions thereof, if any) will be
automatically translated into Deferral Units by dividing the dollar amount of
such Dividend Equivalents by the Fair Market Value of the Common Stock on the
date the relevant Dividend Equivalents are accrued to your account. The number
of Deferral









                                                                     Page 3 of 6

                                    X-10.3-3
<PAGE>   4


Units (and any fractions thereof) resulting will be credited to your account (in
lieu of the dollar amount of such Dividend Equivalent) and shall continually be
denominated in Deferral Units until converted for payment as provided in this
Grant Agreement.

     8. If you have duly elected to receive payment of all or a specified
percentage of your Deferral Units on the Optional Deferral Date (or if payment
of any of the Deferral Units has been deferred until the Optional Deferral Date
pursuant to the conversion thereof into Required Deferral Units), you may elect,
at the time and in the manner specified below, to receive such Deferral Units in
(1) a lump sum on the fifth business day following the Optional Deferral Date,
or (2) in a series of not less than five (5) or more than ten (10) annual
installments commencing on the fifth business day following the Optional
Deferral Date, or (3) a specified percentage of your Deferral Units on the fifth
business day following the Optional Deferral Date and the balance of your
Deferral Units in installments as specified in clause (2) of this sentence.

     9. On the Optional Deferral Date (to the extent you have not elected to
receive payment in installments), the whole Deferral Units then in your account
(which have not been designated for payment in installments) will be converted
at your election (which election shall be made in writing on or before the last
day of the seventh month prior to the month during which the Optional Deferral
Date occurs), into (1) a like number of shares of the Common Stock, or (2) a
dollar amount determined by multiplying the number of whole Deferral Units
credited to your account by the Fair Market Value of the Common Stock on the
Optional Deferral Date, or (3) a combination of shares of the Common Stock and
cash in accordance with your election (which shall be expressed as a percentage
of the Deferral Units to be paid in shares of the Common Stock). In accordance
with your election, within five business days following the Optional Deferral
Date you will be paid (a) such number of shares of the Common Stock, (b) such
amount of cash, or (c) the elected combination of shares of Common Stock and
cash, the amounts of which shall be determined in accordance with the preceding
sentence. If you did not make an election as to the form of payment on or before
the required date, you will receive payment in shares of the Common Stock. Any
fraction of a Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.

     10. If you desire to receive payment of your Deferral Units or a portion
thereof in annual installments, you may elect (by delivering to the Company a
written notice of your election, which shall specify the number of annual
installments, not later than December 31 of the calendar year which is two
calendar years prior to the year during which the Optional Deferral Date occurs)
to receive all, or a specified whole percentage of, the Deferral Units in your
account (which would otherwise be scheduled for distribution on the Optional
Deferral Date) in not less than five (5) or more than ten (10) annual
installments, payable commencing on the fifth business day following the
Optional Deferral Date and thereafter on the fifth business day following each
anniversary thereof until paid in full. You may also elect (in writing on or
before the last day of the seventh month prior to the month during which the
Optional Deferral Date occurs) to receive payment in shares of the Common Stock,
cash or any combination of Common Stock and cash (expressed as a percentage of
the Deferral Units to be paid in shares of the Common Stock. Each installment
shall be in an amount equal to the total number of Deferral Units credited to
your account on the Optional Deferral Date, or on the anniversary thereof which
is the fifth business day prior to the






                                                                     Page 4 of 6
                                    X-10.3-4
<PAGE>   5


date such installment is due and payable, as the case may be, divided by the
number of annual installments remaining (including the annual installment then
being calculated for payment) to be paid. In respect of each installment, the
number of Deferral Units payable shall, in accordance with your election, be
converted into (1) a like number of shares of the Common Stock, (2) a dollar
amount determined by multiplying the number of whole Deferral Units credited to
your account by the Fair Market Value of the Common Stock on the relevant
anniversary of the Optional Deferral Date (or the Optional Deferral Date in the
case of the first installment), or (3) the elected combination of shares of the
Common Stock and cash, the amounts of which shall be determined in the manner
specified above. Any fraction of Deferral Unit will be paid to you on the
relevant date in cash, the amount of which shall be calculated in the manner
specified above.

     11. You will be required to satisfy all Federal, state and local tax and
payroll withholding obligations, and any other withholding obligations, arising
in respect of any distribution of shares of the Common Stock or cash to you. To
the extent there is sufficient cash available, such withholding obligations will
be deducted from your distribution. To the extent the amount of cash to be
distributed is not sufficient to satisfy all withholding obligations, you may
elect in writing on or before the last day of the seventh month prior to the
month during which the Optional Deferral Date occurs to pay such withholding
obligations as a condition of your receipt of any distribution of shares of the
Common Stock or to have the number of shares of the Common Stock reduced by the
number of shares equivalent to the required tax withholding obligation based on
the Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date if payment is in installments or on the Optional Deferral
Date in the case of the first installment or payment in the form of a lump sum.

     12. In the event of your death at any time prior to the Optional Deferral
Date, your account balance will be paid in cash in a lump sum on the fifth
business day following the Optional Deferral Date. In the event of your death at
any time following the Optional Deferral Date and prior to the distribution of
your account, the entire balance of your account shall be paid in cash on the
anniversary of the Optional Deferral Date next following your date of death.

     13. In the event of any stock dividend, stock split, recapitalization,
merger, split-up, spinoff or other change affecting the Common Stock of the
Company, the Deferral Units in your account shall be adjusted in the same manner
and proportion as the change to the Common Stock.

     14. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed by registered mail directed to you at
the address on record in the Executive Compensation Department. Any notice to
the Company under this Grant Agreement shall be sufficient in writing and if
delivered to the Executive Compensation Department of the Company in Akron,
Ohio, or mailed by registered mail directed to the Company for the attention of
the Executive Compensation Department at 1144 East Market Street, Akron, Ohio
44316-0001. Either you or the Company may, by written notice, change the
address.









                                                                     Page 5 of 6
                                    X-10.3-5

<PAGE>   6

                                     ANNEX A

                               PERFORMANCE MEASURE



The Performance Measure for 50% of the units granted is Total Shareholder Return
(TSR). Unit distributions may range from 0 to 150% of 50% of the units granted
based on the average annual TSR performance for the one-year performance period
relative to the selected peer companies (the "S&P Auto Parts & Equipment
Companies"). TSR will be calculated for each year of the performance period as
the stock price appreciation plus dividends divided by the stock price at the
beginning of the year. The stock price used for the calculation will be the
closing average for the ten business days prior to the end of 2000 and 2001,
respectively.

The Performance Measure for 50% of the units granted is Return on Invested
Capital (ROIC). Unit distributions may range from 0 to 150% of 50% of the units
granted based on the annual ROIC performance for the one-year performance
period. ROIC will be calculated as the Company's EBIT divided by its Total
Investment with Total Investment consisting of debt plus equity.






                              PAYOUT SCHEDULE
<TABLE>
<CAPTION>

    RETURN ON INVESTED CAPITAL (50%)                             TOTAL SHAREHOLDER RETURN (50%)

ROIC                  PAYOUT                   ACHIEVEMENT                                  PAYOUT
---                   ------                   -----------                                  ------
<S>                  <C>                      <C>                                          <C>
15%                   150%
                                               75th Percentile or Greater                   150%
14%                   135%
                                               60th Percentile or Greater                   120%
13%                   120%

12%                   100%                     50th Percentile or Greater                   100%

11%                   90%
                                               40th Percentile or Greater                    80%
10%                   80%
                                               30th Percentile or Greater                    60%
9%                    70%
                                               Less Than 30th Percentile                      0%
<9%                   0%
</TABLE>


                                                                     Page 6 of 6
                                    X-10.3-6
<PAGE>   7


                                   EXHIBIT 10.3

                                     PART II

                       THE GOODYEAR TIRE & RUBBER COMPANY

                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT


[Name]
[Title_1]
[Title_2]


Dear [Nickname]:

     The 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company
(the "Company") was adopted effective April 14, 1997 (the "Plan"). A copy of the
Plan is attached. At the December 5, 2000 meeting of the Compensation Committee
of the Board of Directors, you were awarded a Performance Equity Plan Unit Grant
(each Unit equivalent in value to one share of Common Stock of the Company) as
follows:

         Date of Grant                                    December 5, 2000
         Number of Units Granted
         Performance Period                        1-1-01 through 12-31-02

     The number of Performance Equity Plan Units specified above (the "Units")
which you will earn at the end of the two-year Performance Period specified
above (the "Performance Period") will be determined by and contingent upon the
extent to which Performance Goals are achieved. The number of Units actually
earned may be adjusted between 0 and 150% of the number of Units stated above,
depending on the level of achievement of Performance Goals. Payment of the Units
earned will be made as provided under the General Terms and Conditions. The
Performance Measure, Performance Goals and Distribution Schedule for the
Performance Period for your Performance Equity Plan Unit Grant are described at
Annex A.


----------------------------------
The Goodyear Tire & Rubber Company
         December 5, 2000


Grant Agreement received and agreed to:


-------------------------                                  ------------
        Grantee                                                Date



                                    X-10.3-7
<PAGE>   8


                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

     1. The Performance Equity Plan Unit Grant for the number of Units specified
above is granted to you under, and governed by the terms and conditions of, the
Plan and this Grant Agreement. Your execution and return of the enclosed copy of
this Grant Agreement constitutes your agreement to, and acceptance of, all terms
and conditions of the Plan and this Grant Agreement. You also agree that you
have read and understand the provisions of the Plan, this Grant Agreement and
Annex A.

     2. All rights conferred upon you under the provisions of this Grant
Agreement are personal to you and, no assignee, transferee or other successor in
interest shall acquire any rights or interests whatsoever under this Grant
Agreement, which is made exclusively for the benefit of you and the Company
except by will or the laws of descent and distribution.

     3. As further consideration for the Units granted to you hereunder, you
must remain in the continuous employ of the Company or one or more of its
subsidiaries until December 31, 2002, the end of the Performance Period. Any
Units earned will be prorated in the event of your death, Retirement (defined as
termination of employment at any age after 30 or more years, or at age 55 or
older with at least 10 years of continuous service with the Company and its
subsidiaries) or Disability (defined as termination of employment while
receiving benefits under a long-term disability income plan maintained by the
Company or one of its subsidiaries) prior to completion of the Performance
Period. Any proration is based on the last day you worked. Nothing contained
herein shall restrict the right of the Company or any of its subsidiaries to
terminate your employment at any time, with or without cause.

     4. You will forfeit the right to receive any distribution or payment under
this Grant if you enter into a relationship either as an employee, consultant,
agent or in any manner whatsoever with an entity that sells products in
competition with products sold by the Company and its subsidiaries within six
months after the earlier of (1) the date you receive your distribution of Units
earned or (2) the date you cease to be an employee of the Company or one of its
subsidiaries.

     5. The number of Units earned will be paid as follows:

          (a) Each Unit earned will be valued at a dollar amount equal to the
     Fair Market Value of the Common Stock (as defined below) on December 31,
     2002, (the "Unit Value").

          (b) The Company will pay to you an amount equal to 50% of the Unit
     Value multiplied by the total number of Units earned in cash and an amount
     equal to 50% of the total number of units earned in shares of the Common
     Stock of the Company (the "Common Stock") less such withholding and payroll
     taxes as the Company shall determine to be necessary or appropriate
     (withholding and payroll taxes to be deducted from the cash portion of the
     payment) in February of 2003; provided, however, that notwithstanding the
     foregoing, you may elect, by delivering






                                                                     Page 2 of 6
                                    X-10.3-8
<PAGE>   9

     a written notice of your election to the Company not later than March 30,
     2002, to defer all or a specified whole percentage of the aforesaid Units
     earned until the Optional Deferral Date (as defined below), in which event
     the amount you elect to defer (which shall be equal to the product of UE x
     PDE, where UE equals the number of Units earned and PDE equals the
     percentage, expressed as a decimal, of the Units earned you elect to defer)
     will be credited in February of 2003 to an account maintained in the
     records of the Company (the "Optional Deferred Amount") and will be
     converted into Deferral Units. The amount of such deferral will be reduced,
     if necessary, to pay such tax, payroll and other withholding obligations as
     the Company shall determine to be necessary or appropriate.

          (c) Notwithstanding the foregoing, the Compensation Committee of the
     Board of Directors may, at its sole election, at any time and from time to
     time require that the payment of the entire, or any portion of the, Unit
     Value of any number of the Units earned shall be deferred until the
     Optional Deferral Date, or such later date as it shall deem appropriate, in
     order for the Company to conform to the requirements of Section 162(m) of
     the Internal Revenue Code (the "Required Deferral Amount"). Any Required
     Deferral Amount so deferred will be credited to an account maintained in
     the records of the Company and will be converted into Deferral Units, the
     number of which shall be determined by dividing each amount so deferred by
     the Fair Market Value of the Common Stock on the date of such deferral.

     6. As used herein, the term: (1) "Deferral Unit" means an equivalent to a
hypothetical share of the Common Stock; (2) "Fair Market Value of the Common
Stock" means, in respect of any date on or as of which a determination thereof
is being or to be made, the average of the high and low per share sale prices of
the Common Stock on the New York Stock Exchange Composite Transactions Tape on
such date or, if the Common Stock was not traded on such date, the next
preceding day on which the Common Stock was traded on the New York Stock
Exchange; (3) "Dividend Equivalent" means, with respect to each dividend payment
date for the Common Stock, an amount equal to the cash dividend per share of
Common Stock which is payable on such dividend payment date; (4) "Optional
Deferral Date" means the first business day of the twelfth month following the
month during which you cease to be employed by the Company, or one of its
subsidiary companies, for any reason (whether Retirement, Disability, death,
voluntary termination or otherwise; (5) "Optional Deferral Unit" means each
Deferral Unit resulting from any Optional Deferred Amount, including Dividend
Equivalents credited in respect thereof; and (6) "Required Deferral Unit" means
each Deferral Unit resulting from any Required Deferred Amount, including
Dividend Equivalents credited in respect thereof. All computations relating to
Deferral Units, fractions of shares of Common Stock and Dividend Equivalents
will be rounded, if necessary, to the fourth decimal place.

     7. Each Deferral Unit will be credited with one Dividend Equivalent on each
date on which cash dividends are paid on shares of the Common Stock (and each
fraction of a Deferral Unit shall be credited with a like fraction of a Dividend
Equivalent). Dividend Equivalents (and fractions thereof, if any) will be
automatically translated into Deferral Units by dividing the dollar amount of
such Dividend Equivalents by the Fair Market Value of the Common Stock on the
date the relevant Dividend Equivalents are accrued to your account. The number
of Deferral






                                                                     Page 3 of 6
                                    X-10.3-9
<PAGE>   10


Units (and any fractions thereof) resulting will be credited to your account (in
lieu of the dollar amount of such Dividend Equivalent) and shall continually be
denominated in Deferral Units until converted for payment as provided in this
Grant Agreement.

     8. If you have duly elected to receive payment of all or a specified
percentage of your Deferral Units on the Optional Deferral Date (or if payment
of any of the Deferral Units has been deferred until the Optional Deferral Date
pursuant to the conversion thereof into Required Deferral Units), you may elect,
at the time and in the manner specified below, to receive such Deferral Units in
(1) a lump sum on the fifth business day following the Optional Deferral Date,
or (2) in a series of not less than five (5) or more than ten (10) annual
installments commencing on the fifth business day following the Optional
Deferral Date, or (3) a specified percentage of your Deferral Units on the fifth
business day following the Optional Deferral Date and the balance of your
Deferral Units in installments as specified in clause (2) of this sentence.

     9. On the Optional Deferral Date (to the extent you have not elected to
receive payment in installments), the whole Deferral Units then in your account
(which have not been designated for payment in installments) will be converted
at your election (which election shall be made in writing on or before the last
day of the seventh month prior to the month during which the Optional Deferral
Date occurs), into (1) a like number of shares of the Common Stock, or (2) a
dollar amount determined by multiplying the number of whole Deferral Units
credited to your account by the Fair Market Value of the Common Stock on the
Optional Deferral Date, or (3) a combination of shares of the Common Stock and
cash in accordance with your election (which shall be expressed as a percentage
of the Deferral Units to be paid in shares of the Common Stock). In accordance
with your election, within five business days following the Optional Deferral
Date you will be paid (a) such number of shares of the Common Stock, (b) such
amount of cash, or (c) the elected combination of shares of Common Stock and
cash, the amounts of which shall be determined in accordance with the preceding
sentence. If you did not make an election as to the form of payment on or before
the required date, you will receive payment in shares of the Common Stock. Any
fraction of a Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.

     10. If you desire to receive payment of your Deferral Units or a portion
thereof in annual installments, you may elect (by delivering to the Company a
written notice of your election, which shall specify the number of annual
installments, not later than December 31 of the calendar year which is two
calendar years prior to the year during which the Optional Deferral Date occurs)
to receive all, or a specified whole percentage of, the Deferral Units in your
account (which would otherwise be scheduled for distribution on the Optional
Deferral Date) in not less than five (5) or more than ten (10) annual
installments, payable commencing on the fifth business day following the
Optional Deferral Date and thereafter on the fifth business day following each
anniversary thereof until paid in full. You may also elect (in writing on or
before the last day of the seventh month prior to the month during which the
Optional Deferral Date occurs) to receive payment in shares of the Common Stock,
cash or any combination of Common Stock and cash (expressed as a percentage of
the Deferral Units to be paid in shares of the Common Stock. Each installment
shall be in an amount equal to the total number of Deferral Units credited to
your account on the Optional Deferral Date, or on the anniversary thereof which
is the fifth business day prior to the date such installment is due and payable,
as the case may be, divided by the number of annual







                                                                     Page 4 of 6
                                    X-10.3-10

<PAGE>   11

installments remaining (including the annual installment then being calculated
for payment) to be paid. In respect of each installment, the number of Deferral
Units payable shall, in accordance with your election, be converted into (1) a
like number of shares of the Common Stock, (2) a dollar amount determined by
multiplying the number of whole Deferral Units credited to your account by the
Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date (or the Optional Deferral Date in the case of the first
installment), or (3) the elected combination of shares of the Common Stock and
cash, the amounts of which shall be determined in the manner specified above.
Any fraction of Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.

     11. You will be required to satisfy all Federal, state and local tax and
payroll withholding obligations, and any other withholding obligations, arising
in respect of any distribution of shares of the Common Stock or cash to you. To
the extent there is sufficient cash available, such withholding obligations will
be deducted from your distribution. To the extent the amount of cash to be
distributed is not sufficient to satisfy all withholding obligations, you may
elect in writing on or before the last day of the seventh month prior to the
month during which the Optional Deferral Date occurs to pay such withholding
obligations as a condition of your receipt of any distribution of shares of the
Common Stock or to have the number of shares of the Common Stock reduced by the
number of shares equivalent to the required tax withholding obligation based on
the Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date if payment is in installments or on the Optional Deferral
Date in the case of the first installment or payment in the form of a lump sum.

     12. In the event of your death at any time prior to the Optional Deferral
Date, your account balance will be paid in cash in a lump sum on the fifth
business day following the Optional Deferral Date. In the event of your death at
any time following the Optional Deferral Date and prior to the distribution of
your account, the entire balance of your account shall be paid in cash on the
anniversary of the Optional Deferral Date next following your date of death.

     13. In the event of any stock dividend, stock split, recapitalization,
merger, split-up, spinoff or other change affecting the Common Stock of the
Company, the Deferral Units in your account shall be adjusted in the same manner
and proportion as the change to the Common Stock.

     14. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed by registered mail directed to you at
the address on record in the Executive Compensation Department. Any notice to
the Company under this Grant Agreement shall be sufficient in writing and if
delivered to the Executive Compensation Department of the Company in Akron,
Ohio, or mailed by registered mail directed to the Company for the attention of
the Executive Compensation Department at 1144 East Market Street, Akron, Ohio
44316-0001. Either you or the Company may, by written notice, change the
address.












                                                                     Page 5 of 6
                                    X-10.3-11
<PAGE>   12


                                     ANNEX A

                               PERFORMANCE MEASURE



The Performance Measure for 50% of the units granted is Total Shareholder Return
(TSR). Unit distributions may range from 0 to 150% of 50% of the units granted
based on the average annual TSR performance for the two-year performance period
relative to the selected peer companies (the "S&PAuto Parts & Equipment
Companies"). TSR will be calculated for each year of the performance period as
the stock price appreciation plus dividends divided by the stock price at the
beginning of the year. The stock price used for the calculation will be the
closing average for the ten business days prior to the beginning and the end of
each year of the performance period.

The Performance Measure for 50% of the units granted is Return on Invested
Capital (ROIC). Unit distributions may range from 0 to 150% of 50% of the units
granted based on the annual average ROIC performance for the two-year
performance period. ROIC will be calculated as the Company's EBIT divided by its
Total Investment with Total Investment consisting of debt plus equity.





                                             PAYOUT SCHEDULE

<TABLE>
<CAPTION>

    RETURN ON INVESTED CAPITAL (50%)                             TOTAL SHAREHOLDER RETURN (50%)

ROIC                  PAYOUT                   ACHIEVEMENT                                  PAYOUT
----                  ------                   -----------                                  ------
<S>                  <C>                      <C>                                          <C>
15%                   150%
                                               75th Percentile or Greater                    150%
14%                   135%
                                               60th Percentile or Greater                    120%
13%                   120%

12%                   100%                     50th Percentile or Greater                    100%

11%                   90%
                                               40th Percentile or Greater                     80%
10%                   80%
                                               30th Percentile or Greater                     60%
9%                    70%
                                               Less Than 30th Percentile                       0%
<9%                   0%

</TABLE>



                                                                     Page 6 0f 6
                                   X-10.3-12
<PAGE>   13

                              EXHIBIT 10.3 PART III


                       THE GOODYEAR TIRE & RUBBER COMPANY


                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT


[Name]
[Title_1]
[Title_2]


Dear [Nickname]:

     The 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company
(the "Company") was adopted effective April 14, 1997 (the "Plan"). A copy of the
Plan is attached. At the December 5, 2000 meeting of the Compensation Committee
of the Board of Directors, you were awarded a Performance Equity Plan Unit Grant
(each Unit equivalent in value to one share of Common Stock of the Company) as
follows:


         Date of Grant                                    December 5, 2000
         Number of Units Granted
         Performance Period                        1-1-01 through 12-31-03


     The number of Performance Equity Plan Units specified above (the "Units")
which you will earn at the end of the three-year Performance Period specified
above (the "Performance Period") will be determined by and contingent upon the
extent to which Performance Goals are achieved. The number of Units actually
earned may be adjusted between 0 and 150% of the number of Units stated above,
depending on the level of achievement of Performance Goals. Payment of the Units
earned will be made as provided under the General Terms and Conditions. The
Performance Measure, Performance Goals and Distribution Schedule for the
Performance Period for your Performance Equity Plan Unit Grant are described at
Annex A.


----------------------------------
The Goodyear Tire & Rubber Company
        December 5, 2000


Grant Agreement received and agreed to:


--------------------------                                     -----------
          Grantee                                                 Date



                                   X-10.3-13
<PAGE>   14

                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

     1. The Performance Equity Plan Unit Grant for the number of Units specified
above is granted to you under, and governed by the terms and conditions of, the
Plan and this Grant Agreement. Your execution and return of the enclosed copy of
this Grant Agreement constitutes your agreement to, and acceptance of, all terms
and conditions of the Plan and this Grant Agreement. You also agree that you
have read and understand the provisions of the Plan, this Grant Agreement and
Annex A.

     2. All rights conferred upon you under the provisions of this Grant
Agreement are personal to you and, no assignee, transferee or other successor in
interest shall acquire any rights or interests whatsoever under this Grant
Agreement, which is made exclusively for the benefit of you and the Company
except by will or the laws of descent and distribution.

     3. As further consideration for the Units granted to you hereunder, you
must remain in the continuous employ of the Company or one or more of its
subsidiaries until December 31, 2003, the end of the Performance Period. Any
Units earned will be prorated in the event of your death, Retirement (defined as
termination of employment at any age after 30 or more years, or at age 55 or
older with at least 10 years of continuous service with the Company and its
subsidiaries) or Disability (defined as termination of employment while
receiving benefits under a long-term disability income plan maintained by the
Company or one of its subsidiaries) prior to completion of the Performance
Period. Any proration is based on the last day you worked. Nothing contained
herein shall restrict the right of the Company or any of its subsidiaries to
terminate your employment at any time, with or without cause.

     4. You will forfeit the right to receive any distribution or payment under
this Grant if you enter into a relationship either as an employee, consultant,
agent or in any manner whatsoever with an entity that sells products in
competition with products sold by the Company and its subsidiaries within six
months after the earlier of (1) the date you receive your distribution of Units
earned or (2) the date you cease to be an employee of the Company or one of its
subsidiaries.

     5. The number of Units earned will be paid as follows:

          (a) Each Unit earned will be valued at a dollar amount equal to the
     Fair Market Value of the Common Stock (as defined below) on December 31,
     2003, (the "Unit Value").

          (b) The Company will pay to you an amount equal to 50% of the Unit
     Value multiplied by the total number of Units earned in cash and an amount
     equal to 50% of the total number of units earned in shares of the Common
     Stock of the Company (the "Common Stock") less such withholding and payroll
     taxes as the Company shall determine to be necessary or appropriate
     (withholding and payroll taxes to be deducted from the cash portion of the
     payment) in February of 2004; provided, however, that notwithstanding the
     foregoing, you may elect, by delivering






                                                                     Page 2 of 6
                                    X-10.3-14

<PAGE>   15

     a written notice of your election to the Company not later than March 30,
     2003, to defer all or a specified whole percentage of the aforesaid Units
     earned until the Optional Deferral Date (as defined below), in which event
     the amount you elect to defer (which shall be equal to the product of UE x
     PDE, where UE equals the number of Units earned and PDE equals the
     percentage, expressed as a decimal, of the Units earned you elect to defer)
     will be credited in February of 2004 to an account maintained in the
     records of the Company (the "Optional Deferred Amount") and will be
     converted into Deferral Units. The amount of such deferral will be reduced,
     if necessary, to pay such tax, payroll and other withholding obligations as
     the Company shall determine to be necessary or appropriate.

          (c) Notwithstanding the foregoing, the Compensation Committee of the
     Board of Directors may, at its sole election, at any time and from time to
     time require that the payment of the entire, or any portion of the, Unit
     Value of any number of the Units earned shall be deferred until the
     Optional Deferral Date, or such later date as it shall deem appropriate, in
     order for the Company to conform to the requirements of Section 162(m) of
     the Internal Revenue Code (the "Required Deferral Amount"). Any Required
     Deferral Amount so deferred will be credited to an account maintained in
     the records of the Company and will be converted into Deferral Units, the
     number of which shall be determined by dividing each amount so deferred by
     the Fair Market Value of the Common Stock on the date of such deferral.

     6. As used herein, the term: (1) "Deferral Unit" means an equivalent to a
hypothetical share of the Common Stock; (2) "Fair Market Value of the Common
Stock" means, in respect of any date on or as of which a determination thereof
is being or to be made, the average of the high and low per share sale prices of
the Common Stock on the New York Stock Exchange Composite Transactions Tape on
such date or, if the Common Stock was not traded on such date, the next
preceding day on which the Common Stock was traded on the New York Stock
Exchange; (3) "Dividend Equivalent" means, with respect to each dividend payment
date for the Common Stock, an amount equal to the cash dividend per share of
Common Stock which is payable on such dividend payment date; (4) "Optional
Deferral Date" means the first business day of the twelfth month following the
month during which you cease to be employed by the Company, or one of its
subsidiary companies, for any reason (whether Retirement, Disability, death,
voluntary termination or otherwise; (5) "Optional Deferral Unit" means each
Deferral Unit resulting from any Optional Deferred Amount, including Dividend
Equivalents credited in respect thereof; and (6) "Required Deferral Unit" means
each Deferral Unit resulting from any Required Deferred Amount, including
Dividend Equivalents credited in respect thereof. All computations relating to
Deferral Units, fractions of shares of Common Stock and Dividend Equivalents
will be rounded, if necessary, to the fourth decimal place.

     7. Each Deferral Unit will be credited with one Dividend Equivalent on each
date on which cash dividends are paid on shares of the Common Stock (and each
fraction of a Deferral Unit shall be credited with a like fraction of a Dividend
Equivalent). Dividend Equivalents (and fractions thereof, if any) will be
automatically translated into Deferral Units by dividing the dollar amount of
such Dividend Equivalents by the Fair Market Value of the Common Stock on the
date the relevant Dividend Equivalents are accrued to your account. The number
of Deferral






                                                                     Page 3 of 6
                                    X-10.3-15
<PAGE>   16

Units (and any fractions thereof) resulting will be credited to your account (in
lieu of the dollar amount of such Dividend Equivalent) and shall continually be
denominated in Deferral Units until converted for payment as provided in this
Grant Agreement.

     8. If you have duly elected to receive payment of all or a specified
percentage of your Deferral Units on the Optional Deferral Date (or if payment
of any of the Deferral Units has been deferred until the Optional Deferral Date
pursuant to the conversion thereof into Required Deferral Units), you may elect,
at the time and in the manner specified below, to receive such Deferral Units in
(1) a lump sum on the fifth business day following the Optional Deferral Date,
or (2) in a series of not less than five (5) or more than ten (10) annual
installments commencing on the fifth business day following the Optional
Deferral Date, or (3) a specified percentage of your Deferral Units on the fifth
business day following the Optional Deferral Date and the balance of your
Deferral Units in installments as specified in clause (2) of this sentence.

     9. On the Optional Deferral Date (to the extent you have not elected to
receive payment in installments), the whole Deferral Units then in your account
(which have not been designated for payment in installments) will be converted
at your election (which election shall be made in writing on or before the last
day of the seventh month prior to the month during which the Optional Deferral
Date occurs), into (1) a like number of shares of the Common Stock, or (2) a
dollar amount determined by multiplying the number of whole Deferral Units
credited to your account by the Fair Market Value of the Common Stock on the
Optional Deferral Date, or (3) a combination of shares of the Common Stock and
cash in accordance with your election (which shall be expressed as a percentage
of the Deferral Units to be paid in shares of the Common Stock). In accordance
with your election, within five business days following the Optional Deferral
Date you will be paid (a) such number of shares of the Common Stock, (b) such
amount of cash, or (c) the elected combination of shares of Common Stock and
cash, the amounts of which shall be determined in accordance with the preceding
sentence. If you did not make an election as to the form of payment on or before
the required date, you will receive payment in shares of the Common Stock. Any
fraction of a Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.

     10. If you desire to receive payment of your Deferral Units or a portion
thereof in annual installments, you may elect (by delivering to the Company a
written notice of your election, which shall specify the number of annual
installments, not later than December 31 of the calendar year which is two
calendar years prior to the year during which the Optional Deferral Date occurs)
to receive all, or a specified whole percentage of, the Deferral Units in your
account (which would otherwise be scheduled for distribution on the Optional
Deferral Date) in not less than five (5) or more than ten (10) annual
installments, payable commencing on the fifth business day following the
Optional Deferral Date and thereafter on the fifth business day following each
anniversary thereof until paid in full. You may also elect (in writing on or
before the last day of the seventh month prior to the month during which the
Optional Deferral Date occurs) to receive payment in shares of the Common Stock,
cash or any combination of Common Stock and cash (expressed as a percentage of
the Deferral Units to be paid in shares of the Common Stock. Each installment
shall be in an amount equal to the total number of Deferral Units credited to
your account on the Optional Deferral Date, or on the anniversary thereof which
is the fifth business day prior to the date such installment is due and payable,
as the case may be, divided by the number of annual







                                                                     Page 4 of 6

                                   X-10.3-16
<PAGE>   17

installments remaining (including the annual installment then being calculated
for payment) to be paid. In respect of each installment, the number of Deferral
Units payable shall, in accordance with your election, be converted into (1) a
like number of shares of the Common Stock, (2) a dollar amount determined by
multiplying the number of whole Deferral Units credited to your account by the
Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date (or the Optional Deferral Date in the case of the first
installment), or (3) the elected combination of shares of the Common Stock and
cash, the amounts of which shall be determined in the manner specified above.
Any fraction of Deferral Unit will be paid to you on the relevant date in cash,
the amount of which shall be calculated in the manner specified above.

     11. You will be required to satisfy all Federal, state and local tax and
payroll withholding obligations, and any other withholding obligations, arising
in respect of any distribution of shares of the Common Stock or cash to you. To
the extent there is sufficient cash available, such withholding obligations will
be deducted from your distribution. To the extent the amount of cash to be
distributed is not sufficient to satisfy all withholding obligations, you may
elect in writing on or before the last day of the seventh month prior to the
month during which the Optional Deferral Date occurs to pay such withholding
obligations as a condition of your receipt of any distribution of shares of the
Common Stock or to have the number of shares of the Common Stock reduced by the
number of shares equivalent to the required tax withholding obligation based on
the Fair Market Value of the Common Stock on the relevant anniversary of the
Optional Deferral Date if payment is in installments or on the Optional Deferral
Date in the case of the first installment or payment in the form of a lump sum.

     12. In the event of your death at any time prior to the Optional Deferral
Date, your account balance will be paid in cash in a lump sum on the fifth
business day following the Optional Deferral Date. In the event of your death at
any time following the Optional Deferral Date and prior to the distribution of
your account, the entire balance of your account shall be paid in cash on the
anniversary of the Optional Deferral Date next following your date of death.

     13. In the event of any stock dividend, stock split, recapitalization,
merger, split-up, spinoff or other change affecting the Common Stock of the
Company, the Deferral Units in your account shall be adjusted in the same manner
and proportion as the change to the Common Stock.

     14. Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed by registered mail directed to you at
the address on record in the Executive Compensation Department. Any notice to
the Company under this Grant Agreement shall be sufficient in writing and if
delivered to the Executive Compensation Department of the Company in Akron,
Ohio, or mailed by registered mail directed to the Company for the attention of
the Executive Compensation Department at 1144 East Market Street, Akron, Ohio
44316-0001. Either you or the Company may, by written notice, change the
address.












                                                                     Page 5 of 6
                                    X-10.3-17

<PAGE>   18

                                     ANNEX A

                               PERFORMANCE MEASURE



The Performance Measure for 50% of the units granted is Total Shareholder Return
(TSR). Unit distributions may range from 0 to 150% of 50% of the units granted
based on the average annual TSR performance for the three-year performance
period relative to the selected peer companies (the "S&PAuto Parts & Equipment
Companies"). TSR will be calculated for each year of the performance period as
the stock price appreciation plus dividends divided by the stock price at the
beginning of the year. The stock price used for the calculation will be the
closing average for the ten business days prior to the beginning and the end of
each year of the performance period.

The Performance Measure for 50% of the units granted is Return on Invested
Capital (ROIC). Unit distributions may range from 0 to 150% of 50% of the units
granted based on the annual average ROIC performance for the three-year
performance period. ROIC will be calculated as the Company's EBIT divided by its
Total Investment with Total Investment consisting of debt plus equity.





                                             PAYOUT SCHEDULE
<TABLE>
<CAPTION>

    RETURN ON INVESTED CAPITAL (50%)                             TOTAL SHAREHOLDER RETURN (50%)


ROIC                  PAYOUT                   ACHIEVEMENT                                  PAYOUT
----                  ------                   -----------                                  ------
<S>                  <C>                      <C>                                           <C>
15%                   150%
                                               75th Percentile or Greater                     150%
14%                   135%
                                               60th Percentile or Greater                     120%
13%                   120%
12%                   100%                     50th Percentile or Greater                     100%
11%                    90%
                                               40th Percentile or Greater                      80%
10%                    80%
                                               30th Percentile or Greater                      60%
9%                     70%
                                               Less Than 30th Percentile                        0%
<9%                     0%

</TABLE>