Document:

exv10w3

 

PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE
SECURITIES ACT OF 1933.

     THIS PERFORMANCE UNIT AWARD AGREEMENT (hereinafter, the “Agreement”) made as of the ___day of
                    , ___, between Goodrich Corporation, a New York corporation (the “Company”), and
                     (the “Employee”). For purposes of this Agreement, all capitalized terms not
defined herein shall have the meanings ascribed thereto under the terms of the Goodrich Corporation
2001 Equity Compensation Plan (as amended, the “Plan”), unless otherwise noted.

     WHEREAS, the Employee is employed by the Company or its subsidiaries; and

     WHEREAS, the Company wishes to grant to the Employee an award of performance units under the
Plan, subject to the conditions and restrictions set forth in the Plan and this Agreement.

     NOW THEREFORE, in consideration of the mutual covenants contained in this agreement, the
Company and the Employee agree as follows:

	1.	 	Grant of Units. The Company hereby grants to the Employee                      performance units
(the “Units”). If the Company declares a dividend payment on the Company’s common stock, par
value $5.00 per share (“Common Stock”) during the Term, as defined below, then the number of
Units covered by this Agreement shall be increased as of the dividend payment date by the
number of shares, if any, of the Common Stock that could be purchased on such date by such
dividend payment. For purposes of determining the number of shares of the Common Stock that
could be purchased by such dividend payment as of the dividend payment date, the amount of
            shares of the Common Stock that could be purchased shall be determined by reference to the
fair market value of the Common Stock, as calculated pursuant to Section 14 of the Plan, as of
such date.
	 
	2.	 	Term of Units. The term of the Units (the “Term”) will begin on January 2, 2007 and
will end on December 31, 2009.
	 
	3.	 	Unit Value Measurement. Except as otherwise provided in section 7 below, the
aggregate value of the Participant’s Units (the “Benefit Amount”) shall be determined as of
the last day of the Term, and shall be equal to the product of the number of Units then
covered under this Agreement and the fair market value of one share of the Common Stock, as
calculated pursuant to Section 14 of the Plan, as of the last day of the Term.
	 
	4.	 	Earned Percentage. Except as otherwise provided in Section 6 and Section 7 below,
the Employee shall be entitled to a benefit payment under this Agreement equal to the
specified percentage (the “Earned Percentage”) of the Benefit Amount. The Earned Percentage
of an amount equal to one-half of the Units covered by this Agreement (the “ROIC Units”) shall
be determined in accordance with the provisions of subsection (a) of this Section 4, and the
Earned Percentage of an amount equal to the other one-half of the

 

 

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

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

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

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

     (b) Relative Total Shareholder Return. The Earned Percentage of the RTSR Units
shall be determined by reference to the Relative Total Shareholder Return (as defined below)
and will be calculated in accordance with the following schedule:

	 	 	 
	Relative Total Shareholder Return	 	Earned Percentage
	Percentile	 	 
	25th or Less
	 	    0%
	50th
	 	100%
	95th or Higher
	 	200%

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With respect to levels of Relative Total Shareholder Return that fall within the percentiles
specified above, the Earned Percentage of the RTSR Units will be interpolated on a straight
line basis. For purposes of this Agreement, the term “Relative Total Shareholder Return”
means the percentage calculated using the Total Shareholder Return (“TSR”) for Common Stock
for each year of the Term (using the dividend reinvestment approach to calculating
shareholder return) divided by the Total Shareholder Return for the Aerospace Peer Group (as
defined below) (using the dividend reinvestment approach to calculating shareholder return).
TSR is calculated for each year of the Term and then used to calculate TSR for the Term as
follows: (1+TSR1)(1+TSR2)(1+TSR3) 1/3. The TSR
for Goodrich is then divided by the TSR for the Aerospace Peer Group, the product of which
will be the Relative Total Stock Value for the Term. The overall performance of the
Aerospace Peer Group is then analyzed to identify the 25th, 50th and
75th percentile performance. The Earned Percentage of RTSR Units will be
determined based on the Company’s Relative Total Stock Value and its placement between the
three identified performance points.

     (c) Aerospace Peer Group. The Aerospace Peer Group is a group of aerospace
companies selected, from time to time, by the Company’s Compensation Committee. The
Aerospace Peer Group must be set by the Compensation Committee within 90 days of the
beginning of a Term. If during the Term there is any change in the corporate capitalization
of any aerospace company in the Aerospace Peer Group, such as a stock split, a corporate
transaction (any merger, consolidation, separation including a spin-off or other
distribution of stock or property of such aerospace company, or reorganization (whether or
not such reorganization comes within the definition of such term in Section 368 of the
Internal Revenue Code)) or any partial or complete liquidation of any such aerospace
company, the Compensation Committee, to the extent it deems it necessary and/or appropriate,
in its sole discretion, shall take such change into account in determining the TSR of such
aerospace company in the Aerospace Peer Group for purposes of subsection (b) of Section 4
(including, without limitation, by making such determination as if the change had not
occurred or by eliminating such aerospace company from the Aerospace Peer Group for the
Term).

     (d) Responsibility for Calculations. All calculations of (i) the Company’s
Return on Invested Capital and Relative Total Shareholder Return and (ii) the Earned
Percentages of the ROIC Units and the RTSR Units shall be determined by the Committee in the
exercise of its sole discretion, and any such calculations shall be final.

	5.	 	Benefit Payment. The benefit payment due to the Employee under this Agreement
shall be paid to the Employee (or, if the Employee is deceased, the Employee’s beneficiary, as
defined in Section 8) in a lump sum cash payment, subject to the provisions of Section 9
below. Except as otherwise provided in Section 7 below, such payment shall be paid by the
Company as soon as practicable after the last date of the Term but, in any event, on or before
March 15 of the year immediately following the end of the Term.

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	6.	 	Termination of Employment

     (a) Retirement, Death or Disability. If the Employee’s employment with the
Company terminates due to retirement, death or permanent and total disability, then the
amount of benefit otherwise payable to the Employee (or, if the Employee is deceased, the
Employee’s beneficiary, as defined in Section 8) hereunder shall be reduced by multiplying
such amount by a fraction, the numerator of which shall be the number of months (rounded
upward to the nearest month) of employment that the Employee has completed with the Company
during the Term and the denominator shall be 36. For the purpose of this Section 6(a), the
Employee shall be treated as having retired if the Employee terminates employment with the
Company at any time after the Employee is eligible for early retirement as provided under
the terms of the Goodrich Corporation Employees’ Pension Plan (or would be eligible for
early retirement under such plan if the Employee was a participant in such plan or as
provided in a subsidiary company’s salaried pension plan in the event the Employee’s pension
benefits are received solely from the subsidiary’s plan) in effect at the time of such
termination.

     (b) Other Termination of Employment. Except as provided in Section 7 below, if
the Employee’s employment is terminated prior to the last day of the Term for any reasons
other than retirement, death or permanent and total disability, then the Employee will not
be entitled to the payment of any benefit under this Agreement.

     (c) Cause. Notwithstanding any provisions of this Agreement to the contrary,
if the Employee’s employment with the Company or any of its subsidiaries is terminated for
“cause”, as defined in this Section 6(c), the Committee may, in its sole discretion,
immediately cancel the Units granted under this Agreement. For the purpose of this
Agreement, other than for the purpose of Section 7, “cause” shall mean a termination of
employment by the Company due to (i) the violation by the Employee of any rule, regulation,
or policy of the Company, including the Company’s Business Code of Conduct; (ii) the failure
by the Employee to meet any requirement reasonably imposed upon such employee by the Company
as a condition of continued employment; (iii) the violation by the Employee of any federal,
state or local law or regulation; (iv) the commission by the Employee of an act of fraud,
theft, misappropriation of funds, dishonesty, bad faith or disloyalty; (v) the failure by
the Employee to perform consistently the duties of the position held by such employee in a
manner which satisfies the expectations of the Company after such Employee has been provided
written notice of performance deficiencies and a reasonable opportunity to correct those
deficiencies; or (vi) the dereliction or neglect by the Employee in the performance of such
employee’s job duties.

	7.	 	Change in Control.

     (a) Change in Control Payment. Anything to the contrary notwithstanding, in
the event a Change in Control, as that term is defined in the Plan, of the Company shall
occur, then a benefit payment (the “CIC Payment”) shall be made to the Employee within five
business days following the occurrence of the Change in Control. The CIC Payment

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shall be equal to the product of the number of Units then covered under this Agreement
and the greatest of (i) the product of an Earned Percentage of 100% (Target) and the fair
market value of one share of the Common Stock, as calculated pursuant to Section 14 of the
Plan, as of the date of the Change in Control or (ii) the quotient of the Benefit Amount
most recently paid to the Employee pursuant to a Performance Unit Award Agreement between
the Company and the Employee (the “Recent PUP Award”) and the number of Units granted to the
Employee under the Recent PUP Award. The amount of such CIC Payment shall be reduced by
multiplying such amount by a fraction, the numerator of which shall be the number of months
(rounded upward to the nearest month) of employment that the Employee has completed with the
Company during the Term up to the date of the Change in Control and the denominator shall be
36.

     (b) Termination of Employment Payment.  If the Employee’s employment
with the Company terminates, other than for “cause” as defined in this Section 7(b), during
the Term as a result of a Change in Control, then an additional benefit payment (the
“Termination Payment”) shall be made to the Employee within five business days following the
termination of employment. The Termination Payment shall be equal to the unreduced CIC
Payment as calculated in Section 7(a) less the CIC Payment made or to be made to the
Employee as provided in Section 7(a). For the purpose of Section 7, “cause” shall mean a
termination of employment by the Company due to (i) the willful and continued failure by the
Employee to substantially perform the Employee’s duties with the Company, which failure
causes material and demonstrable injury to the Company (other than any such failure
resulting from the Employee’s incapacity due to physical or mental illness), after a demand
for substantial performance is delivered to the Employee which specifically identifies the
manner in which the Employee has not substantially performed the Employee’s duties, and
after the Employee has been given a period of at least thirty (30) days to correct the
Employee’s performance, or (ii) the willful engaging by the Employee in other gross
misconduct materially and demonstrably injurious to the Company. For purposes of the
foregoing definition of “cause”, no act, or failure to act, on the Employee’s part shall be
considered “willful” unless conclusively demonstrated to have been done, or omitted to be
done, by the Employee not in good faith and without reasonable belief that the Employee’s
action or omission was in the best interests of the Company.

     (c) Other. Notwithstanding the foregoing, in no event shall the
Employee be required to refund to the Company, or have offset against any other payment due
the Employee from or on behalf of the Company, all or any portion of a CIC Payment or
Termination Payment.

	8.	 	Assignability/Beneficiary. The rights of the Employee contingent or otherwise in the
Units cannot and shall not be sold, assigned, pledged or otherwise transferred or encumbered
other than by will or by the laws of descent and distribution. The Employee may designate a
beneficiary or beneficiaries to receive any payments that are due under Section 5 following
the Employee’s death. To be effective, such designation must be made in accordance with such
rules and on such form as prescribed by the Company’s corporate compensation group for such
purpose which completed form must be received by the Company’s corporate compensation group or
its designee before the Employee’s

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	 	 	death. If the Employee fails to designate a beneficiary, or if no designated beneficiary
survives the Employee’s death, the Employee’s estate shall be deemed the Employee’s
beneficiary.
	 
	9.	 	Tax Withholding. At the time any payment to the Employee is made under this
Agreement, the aggregate amount of such payment shall be reduced by the amount of any federal,
state and local tax withholding requirements imposed on such payment.
	 
	10.	 	Changes in Capital Structure. The number of Units covered under this Agreement will
be adjusted appropriately in the event of any stock split, stock dividend, combination of
            shares, merger, consolidation, reorganization, or other change in the nature of the shares of
Common Stock of the Company in the same manner in which other outstanding shares of Common
Stock not subject to the Plan are adjusted; provided, that the number of Units subject to this
Agreement shall always be a whole number.
	 
	11.	 	Continued Employment. Nothing contained herein shall be construed as conferring upon
the Employee the right to continue in the employ of the Company or any of its subsidiaries as
an executive or in any other capacity.
	 
	12.	 	Parties to Agreement. This Agreement and the terms and conditions herein set forth
are subject in all respects to the terms and conditions of the Plan, which are controlling.
All decisions or interpretations of the Board and of the Committee referred to herein shall be
binding and conclusive upon the Employee or upon the Employee’s executors or administrators or
beneficiaries with respect to any question arising hereunder or under the Plan. This
Agreement will constitute an agreement between the Company and the Employee as of the date
first above written, which shall bind and inure to the benefit of their respective executors,
administrators, beneficiaries, successors and assigns.
	 
	13.	 	Modification. No change, termination, waiver or modification of this Agreement will
be valid unless in writing and signed by all of the parties to this Agreement.
	 
	14.	 	Consent to Jurisdiction. The Employee hereby consents to the jurisdiction of any
state or federal court located in the county in which the principal executive office of the
Company is then located for purposes of the enforcement of this Agreement and waives personal
service of any and all process upon the Employee. The Employee waives any objection to venue
of any action instituted under this Agreement.
	 
	15.	 	Notices. All notices, designations, consents, offers or any other communications
provided for in this Agreement must be given in writing, personally delivered, or by facsimile
transmission with an appropriate written confirmation of receipt, by nationally recognized
overnight courier or by U.S. mail. Notice to the Company is to be addressed to its then
principal office. Notice to the Employee or any transferee is to be addressed to his/her/its
respective address as it appears in the records of the Company, or to such other address as
may be designated by the receiving party by notice in writing to the Secretary of the Company.
	 
	16.	 	Further Assurances. At any time, and from time to time after executing this
Agreement, the Employee will execute such additional instruments and take such actions

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	 	 	as may be reasonably requested by the Company to confirm or perfect or otherwise to carry
out the intent and purpose of this Agreement.

	17.	 	Provisions Severable. If any provision of this Agreement is invalid or
unenforceable, it shall not affect the other provisions, and this Agreement shall remain in
effect as though the invalid or unenforceable provisions were omitted. Upon a determination
that any term or other provision is invalid or unenforceable, the Company shall in good faith
modify this Agreement so as to effect the original intent of the parties as closely as
possible.
	 
	18.	 	Captions. Captions herein are for convenience of reference only and shall not be
considered in construing this Agreement.
	 
	19.	 	Entire Agreement. This Agreement represents the parties’ entire understanding and
agreement with respect to the issuance of the Units, and each of the parties acknowledges that
it has not made any, and makes no promises, representations or undertakings, other than those
expressly set forth or referred to therein.
	 
	20.	 	Governing Law. This Agreement is subject to the condition that this award will
conform with any applicable provisions of any state or federal law or regulation in force
either at the time of grant. The Committee and the Board reserve the right pursuant to the
condition mentioned in this paragraph to terminate all or a portion of this Agreement if in
the opinion of the Committee and Board, this Agreement does not conform with any such
applicable state or federal law or regulation and such nonconformance shall cause material
harm to the Company.
	 
	 	 	This Agreement shall be construed in accordance with and governed by the laws of the State
of New York.
	 
	21.	 	409A Compliance. Notwithstanding any provisions of the Plan or this Agreement to the
contrary and, to the extent applicable, the Plan and this Agreement shall be interpreted,
construed and administered (including with respect to any amendment, modification or
termination of the Plan or this Agreement) in such a manner so as to comply with the
provisions of Section 409A of the Internal Revenue Code, as amended, and any related Internal
Revenue Service guidance promulgated thereunder, including, if required, delayed distribution
of the benefit payment for six months following separation from service for any specified
employee as defined under Section 409A.

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	GOODRICH CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Vice President	 	 
	Accepted by:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
 

	 	 	 	 	 	 	 	 
	(Employee’s name)
	 	 	 	 	 	 	 	 

7exv10w4

 

AMENDMENT TO PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE
SECURITIES ACT OF 1933.

     THIS FIRST AMENDMENT made as of the                      day of                     , 200            
         is made to the Performance
Unit Award Agreement dated            
         , 200     
                and the Performance Unit Award Agreement dated                    , 200    
                 (collectively, the “Agreement”) by and between Goodrich Corporation, a New
York corporation (the “Company”), and                      (the “Employee”). For purposes of this
Amendment, all capitalized terms not defined herein shall have the meanings ascribed thereto under
the terms of the Goodrich Corporation 2001 Equity Compensation Plan (as amended, the “Plan”) or the
Agreement, unless otherwise noted.

     WHEREAS, the Company and the Employee desire to mutually amend the Agreement.

     NOW THEREFORE, in consideration of the mutual covenants contained in this agreement, the
Company and the Employee agree as follows:

I.

     Section 3 of the Agreement is hereby deleted and the following inserted in lieu thereof:

	 	3.	 	Unit Value Measurement. Except as otherwise provided in section 7
below, the aggregate value of the Participant’s Units (the “Benefit Amount”) shall be
determined as of the last day of the Term, and shall be equal to the product of the
number of Units then covered under this Agreement and the fair market value of one
share of the Common Stock, as calculated pursuant to Section 14 of the Plan, as of the
last day of the Term.

II.

     The first sentence of Section 4 of the Agreement is hereby deleted and the following inserted
in lieu thereof:

	 	 	 	Except as otherwise provided in Section 6 and Section 7 below, the Employee shall be
entitled to a benefit payment under this Agreement equal to the specified percentage
(the “Earned Percentage”) of the Benefit Amount.

III.

     Section 5 of the Agreement is hereby deleted and the following inserted in lieu thereof:

	 	5.	 	Benefit Payment. The benefit payment due to the Employee under this
Agreement shall be paid to the Employee (or, if the Employee is deceased, the
Employee’s beneficiary, as defined in Section 8) in a lump sum cash payment, subject to
the provisions of Section 9 below. Except as otherwise provided in

 

 

	 	 	 	Section 7 below, such payment shall be paid by the Company as soon as practicable
after the last date of the Term but, in any event, on or before March 15 of the year
immediately following the end of the Term.

IV.

Section 6(a) of the Agreement is hereby deleted and the following inserted in lieu thereof:

     (a) Retirement, Death or Disability. If the Employee’s employment with the
Company terminates due to retirement, death or permanent and total disability, then the
amount of benefit otherwise payable to the Employee (or, if the Employee is deceased, the
Employee’s beneficiary, as defined in Section 8) hereunder shall be reduced by multiplying
such amount by a fraction, the numerator of which shall be the number of months (rounded
upward to the nearest month) of employment that the Employee has completed with the Company
during the Term and the denominator shall be 36. For the purpose of this Section 6(a), the
Employee shall be treated as having retired if the Employee terminates employment with the
Company at any time after the Employee is eligible for early retirement as provided under
the terms of the Goodrich Corporation Employees’ Pension Plan (or would be eligible for
early retirement under such plan if the Employee was a participant in such plan or as
provided in a subsidiary company’s salaried pension plan in the event the Employee’s pension
benefits are received solely from the subsidiary’s plan) in effect at the time of such
termination.

V.

Section 6(b) of the Agreement is hereby deleted and the following inserted in lieu thereof:

     (b) Other Termination of Employment. Except as provided in Section 7 below, if
the Employee’s employment is terminated prior to the last day of the Term for any reasons
other than retirement, death or permanent and total disability, then the Employee will not
be entitled to the payment of any benefit under this Agreement.

VI.

Section 6(c) of the Agreement is hereby deleted and the following inserted in lieu thereof:

     (c) Cause. Notwithstanding any provisions of this Agreement to the contrary,
if the Employee’s employment with the Company or any of its subsidiaries is terminated for
“cause”, as defined in this Section 6(c), the Committee may, in its sole discretion,
immediately cancel the Units granted under this Agreement. For the purpose of this
Agreement, other than for the purpose of Section 7, “cause” shall mean a termination of
employment by the Company due to (i) the violation by the Employee of any rule, regulation,
or policy of the Company, including the Company’s Business Code of Conduct; (ii) the failure
by the Employee to meet any requirement reasonably imposed upon such employee by the Company
as a condition of continued employment; (iii) the violation by the Employee of any federal,
state or local law or regulation; (iv) the commission by the Employee of an act of fraud,
theft, misappropriation of funds, dishonesty, bad faith or disloyalty; (v) the failure by
the Employee to perform

2

 

consistently the duties of the position held by such employee in a manner which
satisfies the expectations of the Company after such Employee has been provided written
notice of performance deficiencies and a reasonable opportunity to correct those
deficiencies; or (vi) the dereliction or neglect by the Employee in the performance of such
employee’s job duties.

VII.

     Sections 7 through 19 of the Performance Unit Award Agreement dated January 3, 2006 are hereby
renumbered as Sections 8 through 20, respectively.

VIII.

     Sections 7 through 20 of the Performance Unit Award Agreement dated January 3, 2007 are hereby
renumbered as Sections 8 through 21, respectively.

IX.

     A new Section 7 shall be added to the Agreement and shall read as follows:

     7. Change in Control.

     (a) Change in Control Payment. Anything to the contrary notwithstanding, in
the event a Change in Control, as that term is defined in the Plan, of the Company shall
occur, then a benefit payment (the “CIC Payment”) shall be made to the Employee within five
business days following the occurrence of the Change in Control. The CIC Payment shall be
equal to the product of the number of Units then covered under this Agreement and the
greatest of (i) the product of an Earned Percentage of 100% (Target) and the fair market
value of one share of the Common Stock, as calculated pursuant to Section 14 of the Plan, as
of the date of the Change in Control or (ii) the quotient of the Benefit Amount most
recently paid to the Employee pursuant to a Performance Unit Award Agreement between the
Company and the Employee (the “Recent PUP Award”) and the number of Units granted to the
Employee under the Recent PUP Award. The amount of such CIC Payment shall be reduced by
multiplying such amount by a fraction, the numerator of which shall be the number of months
(rounded upward to the nearest month) of employment that the Employee has completed with the
Company during the Term up to the date of the Change in Control and the denominator shall be
36.

     (b) Termination of Employment Payment.  If the Employee’s employment
with the Company terminates, other than for “cause” as defined in this Section 7(b), during
the Term as a result of a Change in Control, then an additional benefit payment (the
“Termination Payment”) shall be made to the Employee within five business days following the
termination of employment. The Termination Payment shall be equal to the unreduced CIC
Payment as calculated in Section 7(a) less the CIC Payment made or to be made to the
Employee as provided in Section 7(a). For the purpose of Section 7, “cause” shall mean a
termination of employment by the Company due to (i) the willful and continued failure by the
Employee to substantially perform the Employee’s duties with the Company, which failure
causes material and demonstrable injury to the Company

3

 

(other than any such failure resulting from the Employee’s incapacity due to physical
or mental illness), after a demand for substantial performance is delivered to the Employee
which specifically identifies the manner in which the Employee has not substantially
performed the Employee’s duties, and after the Employee has been given a period of at least
thirty (30) days to correct the Employee’s performance, or (ii) the willful engaging by the
Employee in other gross misconduct materially and demonstrably injurious to the Company.
For purposes of the foregoing definition of “cause”, no act, or failure to act, on the
Employee’s part shall be considered “willful” unless conclusively demonstrated to have been
done, or omitted to be done, by the Employee not in good faith and without reasonable belief
that the Employee’s action or omission was in the best interests of the Company.

     (c) Other. Notwithstanding the foregoing, in no event shall the Employee be
required to refund to the Company, or have offset against any other payment due the Employee
from or on behalf of the Company, all or any portion of a CIC Payment or Termination
Payment.

IX.

     Section 21 of the Performance Unit Award Agreement dated January 3, 2007 is hereby deleted and
the following inserted in lieu thereof:

	21.	 	409A Compliance. Notwithstanding any provisions of the Plan or this Agreement to the
contrary and, to the extent applicable, the Plan and this Agreement shall be interpreted,
construed and administered (including with respect to any amendment, modification or
termination of the Plan or this Agreement) in such a manner so as to comply with the
provisions of Section 409A of the Internal Revenue Code, as amended, and any related Internal
Revenue Service guidance promulgated thereunder, including, if required, delayed distribution
of the benefit payment for six months following separation from service for any specified
employee as defined under Section 409A.

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

	 	 	 	 	 
	 	GOODRICH CORPORATION

 	 
	 	By:  	 	 
	 	 	Vice President 	 
	 	 	 	 
	 

	 	 	 
	Accepted by:

	 	 
	 
	 	 
	 

(Employee’s name)

	 	 

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