Document:

Exhibit 10.26

 

Exhibit 10.26

GOODRICH CORPORATION

MANAGEMENT INCENTIVE PROGRAM

1. PURPOSE

The Goodrich Corporation Management Incentive Program (the “Program”) has been established to
provide opportunities for certain key employees to receive incentive compensation as a reward for
high levels of personal performance that exceed the ordinary performance standards compensated by
base salary, and for their contributions to strong performance of Goodrich Corporation (the
“Company”). The Program is designed to provide competitive awards when relevant performance
objectives are achieved and reduced or no awards when such objectives are not achieved.

2. ELIGIBILITY

Participation in the Program will be limited to those key employees who have the potential to
influence significantly and positively the performance of the Company or the business unit to which
they are assigned. Participants will be selected by the appropriate business unit president or
corporate functional head and approved by a senior executive who reports directly to the Company’s
Chief Executive Officer (“Senior Executive”). Inclusion of a key employee as a Participant,
however, does not assure that an incentive award will be paid to the Participant for any Program
Year (as defined below) since actual awards are determined at the sole discretion of the
Compensation Committee of the Board of Directors of the Company (the “Committee”).

To be eligible for participation in a Program Year, the key employee must have assumed the duties
of an incentive-eligible position and must have been selected for participation in the Program .
To receive an award, the Participant must remain employed by the Company through December 15 of the
Program Year, except to the extent set forth in Sections 9 and 10.

3. INCENTIVE CATEGORIES

Each Program Year each Participant is assigned to an incentive category based on organizational
level and potential impact on important Company or business unit results. The incentive categories
define the target level of incentive opportunity, stated as a percentage of base salary, which will
be available to the Participant if the Company’s target performance levels are met for the Program
Year (the “Target Incentive Amount”). Incentive category assignments are initiated on the
recommendation of the appropriate business unit president and approved by the Company’s corporate
compensation group and a Senior Executive.

4. THRESHOLD AND MAXIMUM AWARDS

Each Participant will be assigned threshold and maximum award levels. Threshold award level
represents the level above which an incentive award will be paid to a Participant. An incentive
award will not be paid for performance at or below threshold level. Maximum award level represents
the maximum amount of incentive award that may be paid to a Participant. A Participant’s maximum
award level will be 200% of such Participant’s Target Incentive Amount.

 

 

5. PERFORMANCE MEASURES

Performance measures that may be used under the Program include one or more of the following
criteria: operating income; net income; earnings (including earnings before interest, taxes,
depreciation and/or amortization); earnings per share; sales; costs; profitability of an
identifiable business unit or product; maintenance or improvement of profit margins; cost reduction
goals; operating cash flow; free cash flow (operating cash flow less capital expenditures); working
capital; improvements in capital structure; debt reduction; credit ratings; return on assets;
return on equity; return on invested capital; stock price; total shareholder return; completion of
joint ventures, divestitures, acquisitions or other corporate transactions; new business or
expansion of customers or clients; strategic plan development and implementation; succession plan
development and implementation; customer satisfaction indicators; employee metrics; or other
objective individual or team goals.

The performance measures may relate to the Company, on an absolute basis and/or relative to one or
more peer group companies or indices, or to a particular participant, subsidiary, division or
operating unit, or any combination of the foregoing, all as the Committee shall determine. In
addition, the Committee may adjust, modify or amend the above criteria, either in establishing any
performance measure or in determining the extent to which any performance measure has been
achieved. Without limiting the generality of the foregoing, the Committee shall have the
authority, at the time it establishes the performance measures for the applicable Program Year, to
make equitable adjustments in the criteria in recognition of unusual or non-recurring events, in
response to changes in applicable laws or regulations, or to account for items of gain, loss or
expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related
to the disposal of a business or related to a change in accounting principles, or as the Committee
determines to be appropriate to reflect a true measurement of the performance of the Company or any
subsidiary, division or operating unit, as applicable, and to otherwise satisfy the objectives of
the Program.

6. PERFORMANCE GOALS

The Committee will designate, prior to or within 90 days of the beginning of each Program Year, (a)
the incentive category and percentage of base salary for each Participant to determine such
Participant’s Target Incentive Amount; (b) the performance measures and calculation methods to be
used for the Program Year; (c) a schedule for each performance measure relating achievement levels
for the performance measure to incentive award levels as a percentage of each Participant’s Target
Incentive Amount; and (d) the relative weightings of the performance measures for the Program Year.

7. PERFORMANCE CERTIFICATION

As soon as practicable following the end of each Program Year, the Committee will certify the
Company’s performance with respect to each performance measure used in that Program Year. All such
certifications will be made by the Committee acting in its sole discretion, and such certifications
will be final.

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8. AWARD CALCULATION AND PAYMENT

Individual incentive awards will be calculated and, for United States employees, paid in a single
lump sum cash payment following the Committee’s certification of performance for each Program Year
and, in any event, on or before the March 15 immediately following the Program Year for which the
individual incentive award was earned. The amount of a Participant’s incentive award to be paid
based on each individual performance measure will be calculated based on the following formula (the
“Formula”):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Participant’s base
salary

	 	X
	 	Participant’s
Target Incentive
Amount
	 	X
	 	Percentage of
target award to be
paid for
achievement against
performance measure
(above threshold
level)
	 	X
	 	Relative weighting
of performance
measure
	 	=
	 	Amount of incentive
award based on
performance measure

The incentive amounts to be paid to the Participant based on each performance measure will be
summed to arrive at the Participant’s total incentive award payment for the Program Year.

9. PARTIAL PROGRAM YEAR PARTICIPATION

Except as provided in Section 10, incentive awards to Participants who terminate during the Program
Year for reasons of death or disability or at such time when eligible for retirement at the Early
Retirement Date or Normal Retirement Date, as such terms are defined in the Goodrich Corporation
Employees’ Pension Plan (or as defined in a subsidiary company’s salaried pension plan in the event
the Participant’s pension benefits are received solely from the subsidiary’s plan), will be
calculated as specified above and will be paid pro rata based on a fraction, the numerator of which
is the number of full and partial months of the Program Year during which the Participant was
employed by the Company, and the denominator of which is the total number of months of the Program
Year. Except as provided in Section 10, Participants who terminate during a Program Year for
reasons other than death or disability or at a time when eligible for retirement at the Early
Retirement Date or Normal Retirement Date will receive no incentive award payments for such Program
Year.

Incentive awards to Participants who have worked in a position for less than the full Program Year
or who work in multiple positions during the Program Year will be paid pro rata based on a
fraction, the numerator of which is the number of full and partial months of the Program Year
during which the Participant was employed by the Company in the Participant’s position, and the
denominator of which is the total number of months of the Program Year.

10. PAYMENT UPON CHANGE IN CONTROL

(a) Notwithstanding any provisions of this Program to the contrary, within five days following the
occurrence of a Change in Control, the Company shall pay to each Participant an interim lump-sum
cash payment (the “Interim Payment”) with respect to his or her participation in the Program. The
amount of the Interim Payment shall equal the product of (i) the number of months, including
fractional months, that have elapsed until the occurrence of the Change in Control in the Program
Year in which the Change of Control occurs and (ii) one-twelfth of the greater of (1) the amount

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most recently paid to each Participant for a full Program Year under the Program, or (2) the Target
Incentive Amount for each Participant in effect prior to the Change in Control for the Program Year
in which the Change in Control occurs, under the Program. The Interim Payment shall not reduce the
obligation of the Company to make a final payment under the terms of the Program, but any Interim
Payment made shall be offset against any later payment, if any, required under the terms of the
Program for the Program Year in which a Change in Control occurs. Notwithstanding the foregoing,
in no event shall any Participant be required to refund to the Company, or have offset against any
other payment due any Participant from or on behalf of the Company, all or any portion of the
Interim Payment.

(b) For purposes of the Program, 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 (1) the then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (2) 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 corporation with respect to which, following such
acquisition, more than 70% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting securities of such
corporation 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 Company Voting
Securities immediately prior to such acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be; or

     (ii) During any period of two consecutive years, 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 are 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, more than 70%
of, respectively, the then outstanding shares of common stock and the combined

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voting power of the then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation 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 (1) a complete liquidation or dissolution of the Company or (2) a sale or
other disposition of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition, more than 70% of,
respectively, the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation 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 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.

11. PROGRAM YEAR

The Program Year shall be the fiscal year of the Company.

12. PROGRAM ADMINISTRATION

The Program will be administered by the Committee. The Committee is empowered to set
preestablished performance targets, measure the results and determine the amounts payable according
to the Formula. The Committee retains discretionary authority to reduce or increase the amount of
compensation that would otherwise be payable to the Participants if the goals are attained. The
Committee is authorized to interpret the Program, to establish, amend and rescind any rules and
regulations relating to the Program, and to make any other determinations that it deems necessary
or desirable for the administration of the Program. The Board of Directors of the Company or the
Committee may amend, alter or terminate the Program; provided, however, that any such amendments
shall comply with the applicable requirements for exemption (to the extent necessary) under Section
162(m) and Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

13. EMPLOYMENT RIGHTS

Nothing expressed or implied in this Program shall create any obligation on the part of the Company
to continue the employment of a Participant.

14. GOVERNING LAW

The Program shall be governed by the laws of the State of North Carolina, without regard to its
conflicts of law provisions, unless such laws are preempted by the applicable provisions of the
Code.

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15. SUCCESSORS OF PARTICIPANTS

If a Participant becomes entitled to an incentive award payment, the right of such Participant to
the payment shall inure to the benefit of and be enforceable by the estate of such Participant.

16. SECTION HEADINGS

The section headings contained herein have been inserted for convenience or reference only, and
shall not modify, define, expand, or limit any of the provisions hereof.

17. EFFECTIVE DATE

The effective date of the Program, as amended and restated, shall be January 1, 2005.

IN WITNESS
WHEREOF, the undersigned has executed this document as of the _____ day of
_____, 2006.

	 	 	 	 	 
	 	GOODRICH CORPORATION 

 	 
	 	By:  	 	 
	 	 	Its:  	 	 
	 	 	 	 
	 

6Exhibit 10.28

 

EXHIBIT 10.28

AMENDMENT NUMBER ONE

TO THE

GOODRICH CORPORATION SENIOR EXECUTIVE MANAGEMENT INCENTIVE PLAN

          THIS AMENDMENT is made this 11th day of December, 2006, by Goodrich Corporation (hereinafter
referred to as the “Company”);

W I T N E S S E T H

          WHEREAS, the Company maintains the Goodrich Corporation Senior Executive Management Incentive
Plan (the “Plan”); and

          WHEREAS, pursuant to the Plan, the Compensation Committee of the Board of Directors of the
Company has maintained the right to amend the Plan from time to time; and

          WHEREAS, the Compensation Committee of the Board of Directors of the Company has taken action
authorizing this Amendment to the Plan; and

          NOW, THEREFORE, the Plan is hereby amended as follows:

I.

          Effective January 1, 2005, the first sentence of Section Award Calculation and Payment is
hereby deleted and the following inserted in lieu thereof:

“Individual incentive awards will be calculated and paid in a single lump sum cash payment
following the Committee’s certification of performance for each Plan Year and, in any
event, on or before the March 15 immediately following the Plan Year for which the
individual incentive award was earned.”

II.

          Effective January 1, 2005, the last sentence of Section Plan Administration is hereby deleted
and the following inserted in lieu thereof:

“The Board of Directors or the Committee may amend, alter or terminate the Plan at any
time; provided, however, that any such amendments shall comply with the applicable
requirements for exemption (to the extent necessary) under Section 409A of the Code.”

 

 

III.

          Effective December 11, 2006, the following Sections shall be inserted after Section Plan
Administration:

     “ Employment Rights

Nothing expressed or implied in this Plan shall create any obligation on the part of the
Company to continue the employment of a Participant.

     Governing Law

The Plan shall be governed by the laws of the State of North Carolina, without regard to
its conflicts of law provisions, unless such laws are preempted by the applicable
provisions of the Code.

     Successors of Participants

If a Participant becomes entitled to an incentive award payment, the right of such
Participant to the payment shall inure to the benefit of and be enforceable by the estate
of such Participant.

     Section Headings

The section headings contained herein have been inserted for convenience or reference
only, and shall not modify, define, expand, or limit any of the provisions hereof.”

[Remainder of the page intentionally left blank]

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          IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused this Amendment to
be executed as of the day and year first above written.

	 	 	 	 	 
	 	GOODRICH CORPORATION

 	 
	 	By: 	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 

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