Document:

EX-10.4  Stock Option Grant Agreement

 

EXHIBIT 10.4

PART I

The Goodyear Tire & Rubber Company

Stock Option Grant Agreement

Name

Title

The Directors of The Goodyear Tire & Rubber Company (the “Company”) desire to
encourage and facilitate ownership of the Common Stock of the Company (the
“Common Stock”) by key employees and to provide for additional compensation
based on appreciation of the Common Stock, thereby providing incentive to
promote continued growth and success of the Company’s business. Accordingly,
the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company (the
“Plan”) was adopted effective April 14, 1997. A copy of the Plan is attached.

	 	 	 	 	 
	 	 	
Granted to:
	 	Name
	 	 	
SSN:
	 	SS Number
	 	 	
Grant Date:
	 	December 3, 2001
	 	 	
Options Granted:	 	 
	 	 	
Option Type:
	 	Incentive
	 	 	Option Price per Share:
	 	$22.05
	 	 	
Expiration Date:
	 	December 3, 2011
	 	 	 	 	 
	 	 	Vesting Schedule:
	 	25% on 12/03/2002
	 	 	 	 	25% on 12/03/2003
	 	 	 	 	25% on 12/03/2004
	 	 	 	 	25% on 12/03/2005

	 	 
	 	

	 	The Goodyear Tire & Rubber Company

December 3, 2001

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and
conditions of the Plan. I further acknowledge receipt of the copy of the Plan
and agree to conform to all of the terms and conditions of the Option and the
Plan.

	 	 	 	 	 	 	 
	Signature:	 	 	 	Date:
	 	
	 	 	

	 	 	
	 

X-10.4-1

 

	 	 	 
	ISO Grant Agreement (Cont’d)	 	
December 3, 2001

Part I — INCENTIVE STOCK OPTIONS

1.     These Incentive Stock Options for the number of shares of Common Stock
indicated on the preceding page (the “Incentive Stock Options”) are granted to
you under and are governed by the terms and conditions of the Plan and this
Grant Agreement. Your execution and return of the enclosed copy of page one of
this Grant Agreement acknowledging receipt of the Incentive Stock Options
granted herewith 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 this Grant Agreement.

2.     You may exercise the Incentive Stock Options granted pursuant to this Grant
Agreement through (1) a cash payment in the amount of the full option exercise
price of the shares being purchased (a “cash exercise”), (2) a payment in full
shares of Common Stock having a Fair Market Value (as defined in the Plan) on
the date of exercise equal to the full option exercise price of the shares of
Common Stock being purchased (a “share swap exercise”), or (3) a combination of
the cash exercise and share swap exercise methods. Any exercise of these
Incentive Stock Options shall be by notice stating the number of shares of
Common Stock to be purchased and the exercise method, accompanied with the
payment, or proper proof of ownership if the share swap exercise method is
used. You shall be required to meet the tax withholding obligations arising
from any exercise of Incentive Stock Options.

3.     As further consideration for the Incentive Stock Options granted to you
hereunder, you must remain in the continuous employ of the Company or one or
more of its subsidiaries from the Date of Grant to the date or dates the
Incentive Stock Options become exercisable as set forth on page one of this
Grant Agreement before you will be entitled to exercise the Incentive Stock
Options granted. The Incentive Stock Options you have been granted shall not
in any event be exercisable after your termination of employment except for
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), death, 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).

PART II — NON-QUALIFIED STOCK INVESTMENT OPTIONS

4.     A Non-Qualified Stock Investment Option will be automatically granted to
you, immediately upon any satisfaction by you of the conditions specified
below, on the following terms and conditions:

	 	 	 
	Date of Grant:	 	
The date of your exercise, at any time prior to January 1, 2009, of an Incentive Stock option granted
herein by tendering shares of Common Stock in payment of all or a portion of the exercise price of such
Incentive Stock Option.
	 	 	 
	Number of Common Shares
Subject to Option:	 	
The number of shares of Common Stock you tendered in the
exercise of such Incentive Stock Option.
	 	 	 
	Option Price Per Share:	 	
The Fair Market Value (as defined in the Plan) of the Common Stock on the date you exercised such
Incentive Stock Option by tendering shares of Common Stock.
	 	 	 
	Exercise Period:	 	
100% exercisable at any time during the period beginning on the first anniversary of its date of grant
and ending on December 3, 2011.

Page 2 of 4

X-10.4-2

 

	 	 	 
	SO Grant Agreement (Cont’d)	 	
December 3, 2001

5.     The Non-Qualified Stock Investment Options are granted under and are
governed by the terms and conditions of the Plan and this Grant Agreement. The
number of shares of Common Stock subject to each grant is determined by the
number of shares of Common Stock you tender to the Company in your exercise of
an Incentive Stock Option granted pursuant to this Agreement. The Option price
per share of the Non-Qualified Stock Investment Option shall be the Fair Market
Value (as defined in the Plan) of Common Stock on the date you exercise an
Incentive Stock Option as aforesaid. In order to accept this Option grant, you
must tender shares of Common Stock in the exercise of an Incentive Stock Option
prior to January 1, 2009.

6.     You may exercise the Non-Qualified Stock Investment Options granted
pursuant to this Grant Agreement through (1) a cash payment in the amount of
the full option exercise price of the shares being purchased (a “cash
exercise”), (2) a payment in full shares of Common Stock having a Fair Market
Value (as defined in the Plan) on the date of exercise equal to the full option
exercise price of the shares of Common Stock being purchased (a “share swap
exercise”), or (3) a combination of the cash exercise and share swap exercise
methods. Any exercise of these Non-Qualified Stock Investment Options shall be
by notice stating the number of shares of Common Stock to be purchased and the
exercise method, accompanied with the payment, or proper proof of ownership if
the share swap exercise method is used. You shall be required to meet the tax
withholding obligations arising from any exercise of Non-Qualified Stock
Investment Options.

7.     As further consideration for each Non-Qualified Stock Investment Option
granted to you hereunder, you must remain in the continuous employ of the
Company or one or more of its subsidiaries for twelve months following the Date
of Grant in respect thereof (as defined at paragraph 4 above) before you will
be entitled to exercise such Non-Qualified Stock Investment Option. Any
Non-Qualified Stock Investment Option granted shall not in any event be
exercisable after your termination of employment except for Retirement, death,
or Disability.

Part III — GENERAL PROVISIONS

8.     In the event of your Retirement, the Incentive Stock Options, to the extent
they are exercisable, or they become exercisable pursuant hereof, shall remain
exercisable for the first three months following the date of your Retirement as
Incentive Stock Options and the remainder of the exercise period as
Non-Qualified Stock Options. The Options terminate automatically and shall not
be exercisable by you from and after the date on which you cease to be an
employee of the Company or one of its subsidiaries for any reason other than
your death, Retirement or Disability. In the event of your death, Retirement
or Disability while an employee of the Company or one of its subsidiaries (and
having been an employee continuously since the Date of Grant) during the
exercise period on any date which is more than six (6) months after the Date of
Grant of the Incentive Stock Options specified on the first page of this Grant
Agreement or more than six (6) months after the Date of Grant of Non-Qualified
Stock Investment Options specified at paragraph 4 of this Grant Agreement, the
Options shall become immediately exercisable and, except as provided below in
the event of your death, shall be exercisable by you for the remainder of the
term of the Option grant. In the event of your death, the Options may be
exercised up to three years after date of death by the person or persons to
whom your rights in the options passed by your will or according to the laws of
descent and distribution. 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.

Page 3 of 4

X-10.4-3

 

	 	 	 
	ISO Grant Agreement (Cont’d)	 	
December 3, 2001

9.     The Options shall not in any event be exercisable after the expiration of
ten years from the Date of Grant specified on the first page of this Grant
Agreement and, to the extent not exercised, shall automatically terminate at
the end of such ten-year period.

10.     Certificates for the shares of Common Stock purchased will be deliverable
to you or your agent, duly accredited to the satisfaction of the Company, at
the principal office of the Company in Akron, Ohio, or at such other place
acceptable to the Company as may be designated by you.

11.     In the event you Retire or otherwise terminate your employment with the
Company or a subsidiary and within 18 months after such termination date you
accept employment with a competitor of, or otherwise engage in competition
with, the Company, the Committee, in its sole discretion, may require you to
return, or (if not received) to forfeit, to the Company the economic value of
the Options granted hereunder which you have realized or obtained by your
exercise at any time on or after the date which is six months prior to the date
of your termination of employment with the Company. Additionally, if you have
retired from the Company, all Options granted to you hereunder which you have
not exercised prior to your competitive engagement shall be automatically
cancelled.

12.     Each Option granted is not transferable by you otherwise than by will or
the laws of descent and distribution, and is exercisable during your lifetime
only by you.

13.     All rights conferred upon you under the provisions of this Grant Agreement
are personal and, except under the provisions of paragraph 12 of this Grant
Agreement, 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.

14.     Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed to you at the address on record in
the Executive Compensation Department. Any notice to the Company under this
agreement shall be sufficient if 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. This agreement shall
be construed and shall take effect in accordance with the laws of the State of
Ohio.

15.     Each Option may be exercised only at the times and to the extent, and is
subject to all of the terms and conditions, set forth in this Grant Agreement,
and in the Plan, including any rule or regulation adopted by the Committee.

	 	Page 4 of 4

X-10.4-4

 

EXHIBIT 10.4

PART II

The Goodyear Tire & Rubber Company

Stock Option Grant Agreement

Name

Title

The Directors of The Goodyear Tire & Rubber Company (the “Company”) desire to
encourage and facilitate ownership of the Common Stock of the Company (the
“Common Stock”) by key employees and to provide for additional compensation
based on appreciation of the Common Stock, thereby providing incentive to
promote continued growth and success of the Company’s business. Accordingly,
the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company (the
“Plan”) was adopted effective April 14, 1997. A copy of the Plan is attached.

	 	 	 
	Granted to:	 	
Name
	SSN:	 	
SS Number
	Grant Date:	 	
December 3, 2001
	Options Granted:	 	 
	Option Type:	 	
Non-Qualified
	Option Price per Share:	 	
$22.05
	Expiration Date:	 	
December 3, 2011
	 
	Vesting Schedule:	 	
25% 12/3/2002
	 	 	
25% 12/3/2003
	 	 	
25% 12/3/2004
	 	 	
25% 12/3/2005

	 	 
	 	The Goodyear Tire & Rubber Company

December 3, 2001

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and
conditions of the Plan. I further acknowledge receipt of the copy of the Plan
and agree to conform to all of the terms and conditions of the Option and the
Plan.

	 	 	 	 	 	 	 
	Signature:	 	 	 	Date:
	 	
	 	 	

	 	 	
	 

X-10.4-5

 

	 	 	 
	NQ Grant Agreement (Cont’d)	 	
December 3, 2001

PART I — NON-QUALIFIED STOCK OPTIONS

1.     These Non-Qualified Stock Options for the number of shares of Common Stock
indicated on the preceding page (the “Non-Qualified Stock Options”) are granted
to you under and are governed by the terms and conditions of the Plan and this
Grant Agreement. Your execution and return of the enclosed copy of page one of
this Grant Agreement acknowledging receipt of the Non-Qualified Stock Options
granted herewith 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 this Grant Agreement.

2.     You may exercise the Non-Qualified Stock Options granted pursuant to this
Grant Agreement through (1) a cash payment in the amount of the full option
exercise price of the shares being purchased (a “cash exercise”), (2) a payment
in full shares of Common Stock having a Fair Market Value (as defined in the
Plan) on the date of exercise equal to the full option exercise price of the
shares being purchased (a “share swap exercise”), or (3) a combination of the
cash exercise and share swap exercise methods. Any exercise of these
Non-Qualified Stock Options shall be by notice stating the number of shares of
Common Stock to be purchased and the exercise method, accompanied with the
payment, or proper proof of ownership if the share swap exercise method is
used. You shall be required to meet the tax withholding obligations arising
from any exercise of Non-Qualified Stock Options.

3.     As further consideration for the Non-Qualified Stock Options granted to you
hereunder, you must remain in the continuous employ of the Company or one or
more of its subsidiaries from the Date of Grant to the date or dates the
Non-Qualified Stock Options become exercisable as set forth on page one of this
Grant Agreement before you will be entitled to exercise the Non-Qualified Stock
Options granted. The Non-Qualified Stock Options you have been granted shall
not in any event be exercisable after your termination of employment except for
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), death, 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).

PART II — NON-QUALIFIED STOCK INVESTMENT OPTIONS

4.     A Non-Qualified Stock Investment Option will be automatically granted to
you, immediately upon any satisfaction by you of the conditions specified
below, on the following terms and conditions:

	 	 	 
	Date of Grant:	 	
The date of your exercise, at any time prior to January 1, 2009, of
a Non-Qualified Stock Option granted herein by tendering shares of Common Stock in payment of all or a
portion of the exercise price of such Non-Qualified Stock Option.
	 	 	 
	Number of Common Shares
Subject to Option:	 	
The number of shares of Common Stock you tendered in the
exercise of such Non-Qualified Stock Option.
	 	 	 
	Option Price Per Share:	 	
The Fair Market Value (as defined in the Plan) of the Common
Stock on the date you exercised such Non-Qualified Stock Option by tendering shares of Common Stock.
	 	 	 
	Exercise Period:	 	
100% exercisable at any time during the period beginning on the first anniversary of its date of grant
and ending on December 3, 2011

Page 2 of 4

X-10.4-6

 

	 	 	 
	4NQ Grant Agreement (Cont’d)	 	
December 3, 2001

PART II — NON-QUALIFIED STOCK INVESTMENT OPTIONS (Cont’d)

5.     The Non-Qualified Stock Investment Options are granted under and are
governed by the terms and conditions of the Plan and this Grant Agreement. The
number of shares of Common Stock subject to each grant is determined by the
number of shares of Common Stock you tender to the Company in your exercise of
a Non-Qualified Stock Option granted pursuant to this Agreement. The Option
price per share of the Non-Qualified Stock Investment Option shall be the Fair
Market Value (as defined in the Plan) of the Common Stock on the date you
exercise a Non-Qualified Stock Option as aforesaid. In order to accept this
Non-Qualified Stock Investment Option Grant, you must tender shares of Common
Stock in the exercise of a Non-Qualified Stock Option prior to January 1, 2009.

6.     You may exercise the Non-Qualified Stock Investment Options granted
pursuant to this Grant Agreement through (1) a cash payment in the amount of
the full option exercise price of the shares being purchased (a “cash
exercise”), (2) a payment in full shares of Common Stock having a Fair Market
Value (as defined in the Plan) on the date of exercise equal to the full option
exercise price of the shares of Common Stock being purchased (a “share swap
exercise”), or (3) a combination of the cash exercise and share swap exercise
methods. Any exercise of these Non-Qualified Stock Investment Options shall be
by notice stating the number of shares of Common Stock to be purchased and the
exercise method, accompanied with the payment, or proper proof of ownership if
the share swap exercise method is used. You shall be required to meet the tax
withholding obligations arising from any exercise of Non-Qualified Stock
Investment Options.

7.     As further consideration for each Non-Qualified Stock Investment Option
granted to you hereunder, you must remain in the continuous employ of the
Company or one or more of its subsidiaries for twelve months following the Date
of Grant in respect thereof (as defined at paragraph 4 above) before you will
be entitled to exercise such Non-Qualified Stock Investment Option. The
Non-Qualified Stock Investment Options you have been granted shall not in any
event be exercisable after your termination of employment except for
Retirement, death, or Disability.

III — GENERAL PROVISIONS

8.     The Options terminate automatically and shall not be exercisable by you
from and after the date on which you cease to be an employee of the Company or
one of its subsidiaries for any reason other than your death, Retirement or
Disability. In the event of your death, Retirement or Disability while an
employee of the Company or one of its subsidiaries (and having been an employee
continuously since the Date of Grant) during the exercise period on any date
which is more than six (6) months after the Date of Grant of the Non-Qualified
Stock Options specified on the first page of this Grant Agreement or more than
six (6) months after the Date of Grant of Non-Qualified Stock Investment
Options specified at paragraph 4 of this Grant Agreement, the Options shall
become immediately exercisable and, except as provided below in the event of
your death, shall be exercisable by you for the remainder of the term of the
Option grant. In the event of your death, the Options may be exercised up to
three years after date of death by the person or persons to whom your rights in
the options passed by your will or according to the laws of descent and
distribution. 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.

Page 3 of 4

X-10.4-7

 

	 	 	 
	NQ Grant Agreement (Cont’d)	 	
December 3, 2001

PART III — GENERAL PROVISIONS (Cont’d)

9.     The Options shall not in any event be exercisable after the expiration of
ten years from the Date of Grant specified on the first page of this Grant
Agreement and, to the extent not exercised, shall automatically terminate at
the end of such ten-year period.

10.     Certificates for the shares of Common Stock purchased will be deliverable
to you or your agent, duly accredited to the satisfaction of the Company, at
the principal office of the Company in Akron, Ohio, or at such other place
acceptable to the Company as may be designated by you.

11.     In the event you Retire or otherwise terminate your employment with the
Company or a subsidiary and within 18 months after such termination date you
accept employment with a competitor of, or otherwise engage in competition
with, the Company, the Committee, in its sole discretion, may require you to
return, or (if not received) to forfeit, to the Company the economic value of
the Options granted hereunder which you have realized or obtained by your
exercise at any time on or after the date which is six months prior to the date
of your termination of employment with the Company. Additionally, if you have
retired from the Company, all Options granted to you hereunder which you have
not exercised prior to your competitive engagement shall be automatically
cancelled.

12.     Each Option granted is not transferable by you otherwise than by will or
the laws of descent and distribution, and is exercisable during your lifetime
only by you.

13.     All rights conferred upon you under the provision of this Grant Agreement
are personal and, except under the provisions of paragraph 12 of this Grant
Agreement, 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.

14.     Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed to you at the address on record in
the Executive Compensation Department. Any notice to the Company under this
agreement shall be sufficient if 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. This agreement shall be
construed and shall take effect in accordance with the laws of the State of
Ohio.

15.     Each Option may be exercised only at the times and to the extent, and is
subject to all of the terms and conditions, set forth in this Grant Agreement,
and in the Plan, including any rule or regulation adopted by the Committee.

Page 4 of 4

X-10.4-8

 

EXHIBIT 10.4

PART III

The Goodyear Tire & Rubber Company

Stock Option Grant Agreement

Name

Title

The Directors of The Goodyear Tire & Rubber Company (the “Company”) desire to
encourage and facilitate ownership of the Common Stock of the Company (the
“Common Stock”) by key employees and to provide for additional compensation
based on appreciation of the Common Stock, thereby providing incentive to
promote continued growth and success of the Company’s business. Accordingly,
the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company (the
“Plan”) was adopted effective April 14, 1997. A copy of the Plan is attached.

	 	 	 
	Granted to:	 	
Name
	SSN:	 	
SS Number
	Grant Date:	 	
December 3, 2001
	Options Granted:	 	 
	Option Type:	 	
Non-Qualified/SAR
	Option Price per Share:	 	
$22.05
	Expiration Date:	 	
December 3, 2011
	 
	Vesting Schedule:	 	
25% 12/3/2002
	 	 	
25% 12/3/2003
	 	 	
25% 12/3/2004
	 	 	
25% 12/3/2005

	 	 
	 	The Goodyear Tire & Rubber Company

December 3, 2001

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and
conditions of the Plan. I further acknowledge receipt of the copy of the Plan
and agree to conform to all of the terms and conditions of the Option and the
Plan.

	 	 	 	 	 	 	 
	Signature:	 	 	 	Date:
	 	
	 	 	

	 	 	
	 

X-10.4-9

 

	 	 	 
	NQ/SAR Grant Agreement (Cont’d)	 	
December 3, 2001

1.     These Non-Qualified Stock Options for the number of shares of Common Stock
indicated on the preceding page (the “Options”) and the Stock Appreciation
Rights granted in tandem with the Options (the “SARs”) are granted to you under
and are governed by the terms and conditions of the Plan and this Grant
Agreement. Your execution and return of the enclosed copy of page 1 of this
Grant Agreement acknowledging receipt of the Options and SARs granted herewith
constitutes your agreement to and acceptance of all terms and conditions of the
Plan and this Grant Agreement, including a recognition of the Company’s right
to specify whether or not you may exercise either the Options or the SARs at
the time you notify the Company of your intent to exercise. You also agree
that you have read and understand this Grant Agreement.

2.     If the Company approves the exercise of an Option, you may exercise the
Non-Qualified Stock Options granted pursuant to this Grant Agreement through
(1) a cash payment in the amount of the full option exercise price of the
shares being purchased (a “cash exercise”), (2) a payment in full shares of
Common Stock having a Fair Market Value (as defined in the Plan) on the date of
exercise equal to the full option exercise price of the shares being purchased
(a “share swap exercise”), or (3) a combination of the cash exercise and share
swap exercise methods. Any exercise of these Non-Qualified Stock Options shall
be by notice stating the number of shares of the Common Stock to be purchased
and the exercise method, accompanied with the payment, or proper proof of
ownership if the share swap exercise method is used. You shall be required to
meet the tax withholding obligations arising from any exercise of Non-Qualified
Stock Options.

3.     If the Company approves the exercise of the SARs, written notice must be
given to the Company stating the number of shares in the Options in respect of
which the SARs are being exercised. In due course, you will receive payment in
cash in an amount equal to the difference between the Fair Market Value (as
defined in the Plan) of one share of the Common Stock on the date of exercise
of the SARs and the Option Exercise Price per Share specified in respect of the
Options times the number of shares in respect of which the SARs shall have been
exercised. Such payment shall be subject to reduction for withholding taxes.

4.     As further consideration for the Non-Qualified Stock Options and SARs
granted to you hereunder, you must remain in the continuous employ of the
Company or one or more of its subsidiaries from the Date of Grant to the date
or dates the Non-Qualified Stock Options and SARs become exercisable as set
forth on page one of this Grant Agreement before you will be entitled to
exercise the Non-Qualified Stock Options and SARs granted. The Non-Qualified
Stock Options and SARs you have been granted shall not in any event be
exercisable after your termination of employment except for 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), death, or Disability (defined as termination of employment while
receiving benefits under a long-term disability income plan provided by a
government or sponsored by the Company or one of its subsidiaries).

Page 2 of 4

X-10.4-10

 

	 	 	 
	NQ/SAR Grant Agreement (Cont’d)	 	
December 3, 2001

5.     The Options and SARs terminate automatically and shall not be exercisable by
you from and after the date on which you cease to be an employee of the Company
or one of its subsidiaries for any reason other than your death, Retirement or
Disability. In the event of your death, Retirement or Disability while an
employee of the Company or one of its subsidiaries (and having been an employee
continuously since the Date of Grant) during the exercise period on any date
which is more than six (6) months after the Date of Grant specified on the
first page of this Grant Agreement, the Options and SARs shall become
immediately exercisable and, except as provided below in the event of your
death, shall be exercisable by you for the remainder of the term of the
Option/SAR grant. In the event of your death, the Options and SARs may be
exercised up to three years after date of death by the person or persons to
whom your rights in the options passed by your will or according to the laws of
descent and distribution. 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.

6.     The Options and SARs you have been granted shall not in any event be
exercisable after the expiration of ten years from the Date of Grant specified
on the first page of this Grant Agreement and, to the extent not exercised,
shall automatically terminate at the end of such ten-year period.

7.     Certificates for shares of the Common Stock purchased will be deliverable
to you or your agent, duly accredited to the satisfaction of the Company, at
the principal office of the Company in Akron, Ohio, or at such other place
acceptable to the Company as may be designated by you.

8.     In the event you Retire or otherwise terminate your employment with the
Company or a subsidiary and within 18 months after such termination date you
accept employment with a competitor of, or otherwise engage in competition
with, the Company, the Committee, in its sole discretion, may require you to
return, or (if not received) to forfeit, to the Company the economic value of
the Options or SARs which you have realized or obtained by your exercise of
the Options or SARs granted hereunder at any time on or after the date which
is six months prior to the date of your termination of employment with the
Company. Additionally, if you have retired from the Company, all Options or
SARs which are granted to you hereunder and which you have not exercised prior
to your competitive engagement shall be automatically cancelled.

9.     Each Option and SAR are not transferable by you otherwise than by will or
the laws of descent and distribution, and are exercisable during your lifetime
only by you.

10.     All rights conferred upon you under the provisions of this Grant Agreement
are personal and, except under the provisions of paragraph 9 of this Grant
Agreement, 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.

Page 3 of 4

X-10.4-11

 

	 	 	 
	NQ/SAR Grant Agreement (Cont’d)	 	
December 3, 2001

11.     Any notice to you under this Grant Agreement shall be sufficient if in
writing and if delivered to you or mailed to you at the address on record in
the Executive Compensation Department. Any notice to the Company under this
agreement shall be sufficient if 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. This Grant Agreement
shall be construed and shall take effect in accordance with the laws of the
State of Ohio.

12.     Each Option and/or SAR may be exercised only at the times and to the
extent, and is subject to all of the terms and conditions, set forth in this
Grant Agreement, and in the Plan, including any rule or regulation adopted by
the Committee.

13.     Your purchase of shares of Common Stock pursuant to the Options shall
automatically reduce by a like number the shares subject to the SARs and,
conversely, your exercise of any SARs shall automatically reduce by a like
number the shares of the Common Stock available for purchase by you under the
Options.

14.     In agreeing to accept this grant, you clearly acknowledge that The
Goodyear Tire & Rubber Company assumes no responsibility for any regulatory or
tax consequences that arise from either the grant or exercise of the Options or
the SARs, whether under U.S. or foreign law, rules, regulations or
treaties.

15.     Prior to the exercise of an Option or SAR, written notice must be given to
the Company of your intent to exercise. The Company will then advise you
whether or not you may exercise a Stock Option or an SAR and upon receiving
such advice you may then exercise the Stock Option or the SAR.

Page 4 of 4

X-10.4-12EX-10.5  Grant Agreement

 

EXHIBIT 10.5

THE GOODYEAR TIRE & RUBBER COMPANY

GRANT AGREEMENT

PERFORMANCE EQUITY PLAN UNIT GRANT

Name

Title

Dear_______________:

     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 3, 2001 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 3, 2001
	
	
	
	

	Number of Units Granted	 	 
	
	
	
	

	Performance Period	 	
1-1-02 through 12-31-04

     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 3, 2001

 

Grant Agreement received and agreed to:

	 	 	 
	
	 	

	Grantee	 	Date

X-10.5-1

 

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, 2004, 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, 2004, (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 2005;
provided, however, that notwithstanding the foregoing, you may
elect, by delivering a written notice of your election to the
Company not later than

X-10.5-2

 

		
	 	March 30, 2004, 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 2005 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 Units (and any fractions thereof) resulting
will be credited to your account (in lieu of

X-10.5-3

 

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 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

X-10.5-4

 

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, spin-off 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.

X-10.5-5

 

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&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
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

Return on Invested Capital (50%)

	 	 	 	 	 	 
	ROIC		 	Payout
	
		 	

	13.6
	%	 	 	150	%
	
	
	
	

	12.6
	%	 	 	135	%
	
	
	
	

	11.6
	%	 	 	120	%
	
	
	
	

	10.6
	%	 	 	100	%
	
	
	
	

	9.6
	%	 	 	90	%
	
	
	
	

	8.6
	%	 	 	80	%
	
	
	
	

	7.6
	%	 	 	70	%
	
	
	
	

	<7.6
	%	 	 	0	%

Total Shareholder Return (50%)

	 	 	 	 	 
	Achievement	 	Payout
	
	 	

	75th Percentile or Greater
	 	 	150	%
	
	
	
	

	60th Percentile or Greater
	 	 	120	%
	
	
	
	

	50th Percentile or Greater
	 	 	100	%
	
	
	
	

	40th Percentile or Greater
	 	 	80	%
	
	
	
	

	30th Percentile or Greater
	 	 	60	%
	
	
	
	

	Less Than 30th Percentile
	 	 	0	%

X-10.5-6

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