Document:

<PAGE>   1
                                  EXHIBIT 10.3

                                     PART I

                       THE GOODYEAR TIRE & RUBBER COMPANY

                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT

[Name]
[Title_1]
[Title_2]

Dear [Nickname]:

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

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

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

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

Grant Agreement received and agreed to:

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

                                    X-10-3-1
<PAGE>   2

                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

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

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

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

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

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

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

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

                                                                     Page 2 of 6

                                    X-10.3-2
<PAGE>   3

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

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

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

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

                                                                     Page 3 of 6

                                    X-10.3-3
<PAGE>   4

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

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

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

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

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

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

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

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

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

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

                                                                     Page 5 of 6
                                    X-10.3-5

<PAGE>   6

                                     ANNEX A

                               PERFORMANCE MEASURE

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

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

                              PAYOUT SCHEDULE
<TABLE>
<CAPTION>

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

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

12%                   100%                     50th Percentile or Greater                   100%

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

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

                                   EXHIBIT 10.3

                                     PART II

                       THE GOODYEAR TIRE & RUBBER COMPANY

                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT

[Name]
[Title_1]
[Title_2]

Dear [Nickname]:

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

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

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

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

Grant Agreement received and agreed to:

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

                                    X-10.3-7
<PAGE>   8

                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                                                     Page 4 of 6
                                    X-10.3-10

<PAGE>   11

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

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

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

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

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

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

                                     ANNEX A

                               PERFORMANCE MEASURE

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

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

                                             PAYOUT SCHEDULE

<TABLE>
<CAPTION>

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

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

12%                   100%                     50th Percentile or Greater                    100%

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

</TABLE>

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

                              EXHIBIT 10.3 PART III

                       THE GOODYEAR TIRE & RUBBER COMPANY

                                 GRANT AGREEMENT
                       PERFORMANCE EQUITY PLAN UNIT GRANT

[Name]
[Title_1]
[Title_2]

Dear [Nickname]:

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

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

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

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

Grant Agreement received and agreed to:

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

                                   X-10.3-13
<PAGE>   14

                                 GRANT AGREEMENT
                                   (Continued)

GENERAL TERMS AND CONDITIONS

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

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

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

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

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

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

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

                                                                     Page 2 of 6
                                    X-10.3-14

<PAGE>   15

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

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

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

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

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

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

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

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

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

                                                                     Page 4 of 6

                                   X-10.3-16
<PAGE>   17

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

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

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

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

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

                                                                     Page 5 of 6
                                    X-10.3-17

<PAGE>   18

                                     ANNEX A

                               PERFORMANCE MEASURE

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

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

                                             PAYOUT SCHEDULE
<TABLE>
<CAPTION>

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

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

</TABLE><PAGE>   1
                                                                    Exhibit 10.1

                SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT

                  SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT, dated as of
February 28, 2001 (this "Forbearance Agreement"), among

                  (i) GENESIS WORLDWIDE, INC. (formerly THE MONARCH MACHINE TOOL
         COMPANY (the "Borrower");

                  (ii) each of the guarantors which are signatories hereto (each
         a "Guarantor", collectively, the "Guarantors");

                  (iii) ING (U.S.) CAPITAL LLC (in its capacity as
         administrative agent for the Lenders referenced below, the
         "Administrative Agent"); and

                  (iv) the lenders party to the Credit Agreement referenced
         below (the "Lenders"),

in respect of the Credit Agreement referenced below.

                                   WITNESSETH:

                  WHEREAS, the Borrower, the Lenders and the Administrative
Agent have entered into that certain Credit Agreement, dated as of June 30, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement");

                  WHEREAS, the Guarantors are party to that certain Guarantee,
dated as of June 30, 1999 (as amended, supplemented or otherwise modified from
time to time, the "Guarantee"), in favor of the Administrative Agent for the
benefit of the Lenders;

                  WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent are parties to the Amended and Restated Forbearance
Agreement, dated as of December 22, 2000 (the "Existing Forbearance Agreement");

                  WHEREAS, (i) certain events and circumstances have occurred
and are continuing that have had a Material Adverse Effect and resulted in a
material adverse change from the financial condition of the Borrower as of
December 31, 1998 (the "MAC"); (ii) certain Defaults and Events of Default exist
under Section 10(c) of the Credit Agreement for the periods ending September 30,
2000 and December 31, 2000, respectively, based upon the failure of the Borrower
to comply with each of the financial covenants contained in Section 9.1 of the
Credit Agreement for the periods ending September 30, 2000 and December 31,
2000, respectively (the "Covenant Defaults") and (iii) the Borrower failed to
make scheduled payments of interest and principal which were due on or after
December 22, 2000 (the "Payment Defaults"; together with the MAC and the
Covenant Defaults, the "Specified Events of Default");

                  WHEREAS, it is a condition precedent to continued funding of
Revolving Credit Loans pursuant to the Credit Agreement that (i) no event or
circumstance shall have occurred that has had a Material Adverse Effect, (ii)
all representations and warranties made by the

<PAGE>   2

Borrower and the Guarantors shall be true and correct (including, without
limitation, representations regarding the absence of a material adverse change)
and (iii) no Default or Event Default shall exist, and such conditions precedent
are not satisfied as of the date hereof;

                  WHEREAS, the Administrative Agent and the Lenders are
unwilling to waive the Specified Events of Default; and

                  WHEREAS, notwithstanding the foregoing, subject to the terms
and conditions hereof, the Administrative Agent and the Lenders are willing,
during the period (the "Forbearance Period") commencing on February 16, 2001 and
ending on the earlier of (i) April 30, 2001 and (ii) the date on which a
Forbearance Event of Default shall occur (the "Forbearance Termination Date"),
to (A) continue to fund Revolving Credit Loans, subject to the terms and
conditions hereof and (B) forbear in the enforcement of the remedies set forth
in the Loan Documents (as defined in the Credit Agreement) including the
Guarantee as set forth herein and (C) defer payments of principal and interest
scheduled during the Forbearance Period until the Forbearance Termination Date;
provided, that the rights of the Administrative Agent and the Lenders shall not
be otherwise waived or impaired.

                  NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower, the Guarantors, the
Administrative Agent and the Lenders hereby agree that the Existing Forbearance
Agreement is amended and restated in its entirety as set forth above and as
follows:

                  1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Credit Agreement.

                  2. Acknowledgments.

                           (a) Each of the Borrower and each Guarantor
         acknowledges and affirms that, as of the date hereof, the Borrower is
         indebted to the Lenders (i) in respect of the Tranche A Term Loans and
         the Tranche A Term Notes in an aggregate outstanding principal amount
         equal to $26,800,000 plus interest thereon, (ii) in respect of the
         Tranche B Term Loans and the Tranche B Term Notes in an aggregate
         outstanding principal amount equal to $19,750,000 plus interest
         thereon, (iii) in respect of the Revolving Credit Loans and the
         Revolving Credit Notes in an aggregate outstanding principal amount
         equal to $27,600,000 plus interest thereon and (iv) in respect of
         Letters of Credit in an aggregate outstanding face amount equal to
         $6,030,075.77.

                           (b) Each of the Borrower and each Guarantor
         acknowledges and affirms that, as of the date hereof, (i) there exists
         no defense to the repayment by the Borrower of all amounts owing under
         the Credit Agreement and (ii) neither the Borrower nor any Guarantor
         has any claim against any Lender or the Administrative Agent in respect
         of any matter relating to or arising under the Loan Documents or this
         Forbearance Agreement and the transactions contemplated thereby or
         hereby.

                                       2
<PAGE>   3

                           (c) Each of the Borrower and each Guarantor
         acknowledges and reaffirms the effectiveness and continuing validity of
         the Credit Agreement, the Guarantee and each other Loan Document to
         which it is a party.

                           (d) Each of the Borrower and each Guarantor
         acknowledges that as of the date hereof, the conditions precedent to
         the borrowing of Revolving Credit Loans set forth in Section 7.2 of the
         Credit Agreement are not satisfied and, but for the effectiveness of
         this Forbearance Agreement, the Borrower is not presently entitled to
         borrow additional Revolving Credit Loans under the Credit Agreement.

                           (e) Each of the Borrower and each Guarantor
         acknowledges and affirms that the Specified Events of Default have
         occurred and that, pursuant to Section 10 of the Credit Agreement, but
         for the effectiveness of this Forbearance Agreement, the Administrative
         Agent is entitled, with the consent of the Required Lenders, to
         terminate the Commitments and to declare the outstanding indebtedness
         and the other amounts owing under the Credit Agreement to be due and
         payable and to exercise all remedies available under the Loan Documents
         and at law.

                           (f) Each Guarantor acknowledges and consents to this
         Forbearance Agreement and to the terms hereof, this Forbearance
         Agreement and the terms hereof to be without prejudice to such
         Guarantor's liability pursuant to the Guarantee and the other Loan
         Documents to which it is a party.

                           (g) Each of the Borrower and each Guarantor
         acknowledges and affirms that it has been advised by its legal counsel
         in connection with the negotiation and execution and delivery of this
         Forbearance Agreement.

                  3. Forbearance and Payment Deferral.

                           (a) Subject to the terms and conditions set forth
         herein, none of the Administrative Agent nor any Lender shall exercise
         any of the remedies set forth in the Credit Agreement or in any of the
         other Loan Documents in respect of the Specified Events of Default
         during the Forbearance Period.

                           (b) Subject to the terms and conditions set forth
         herein and after giving effect to Section 5(a) hereof, the
         Administrative Agent and the Lenders may, in their sole discretion,
         continue to fund Revolving Credit Loans from time to time during the
         Forbearance Period in accordance with the terms of the Credit
         Agreement, notwithstanding the fact that certain conditions precedent
         have not been satisfied relating solely to the existence of the
         Specified Events of Default and the occurrence of events or
         circumstances which have had a Material Adverse Effect which have been
         disclosed to the Administrative Agent on or prior to the date hereof;
         provided, that no such funding shall be deemed to be a waiver of the
         Specified Events of Default.

                           (c) Subject to the terms and conditions set forth
         herein, the Administrative Agent and the Lenders agree that any
         payments of principal or interest which are scheduled to become due and
         payable during the Forbearance Period shall be deferred until the
         Forbearance Termination Date; provided, that the provisions of Section

                                       3
<PAGE>   4

         5.1(c) shall apply without regard to any forbearance or deferral of
         payments contemplated by this Forbearance Agreement.

                  4. Termination. This Forbearance Agreement shall terminate on
the Forbearance Termination Date, unless earlier terminated upon the occurrence
of a Forbearance Event of Default (as hereinafter defined).

                  5. Amendments and Covenants.

                           (a) The Temporary Increase Commitment Period shall be
         extended to terminate on the Forbearance Termination Date. The maximum
         amount of Revolving Credit Commitments shall be increased to
         $35,500,000 from $30,000,000 with the entire amount of such increase
         constituting Temporary Increase Loans. The Borrower acknowledges that
         the aggregate Revolving Credit Commitments shall automatically be
         reduced to $30,000,000 on the Forbearance Termination Date.

                           (b) No later than Wednesday of each week, the
         Borrower shall deliver to the Administrative Agent an updated 4-week
         cash flow forecast, in form and substance satisfactory to the
         Administrative Agent, which describes the Borrower's projected cash
         flow, liquidity position and borrowing availability under the Revolving
         Credit Commitments for such period, which provides a detailed
         accounting of accounts receivable and accounts payable aging at such
         time and which contains a comparison of actual results for the
         immediately preceding calendar week to each of the earlier cash flow
         forecasts for such week and describes changes in the current forecast
         for each week from previously delivered forecasts for the same week.

                           (c) The Borrower shall cooperate with the
         Administrative Agent and any independent consultant that is hired by
         the Administrative Agent or its counsel to evaluate the Borrower's
         business and financial condition.

                           (d) The Borrower shall cooperate with the
         Administrative Agent in appointing a "turnaround manager or
         consultant", such manager or consultant to be appointed by the Board of
         Directors of the Borrower and granted such powers and authority as the
         Board of Directors of the Borrower shall designate, in each case after
         consultation with and approval by the Administrative Agent.

                           (e) The Borrower shall cooperate with the
         Administrative Agent in exploring potential strategic alternatives in
         respect of the Borrower's business and financial condition.

                           (f) The Borrower shall promptly pay all outstanding
         invoices or additional invoices delivered to the Borrower from time to
         time for reasonable expenses incurred by the Administrative Agent
         (including, without limitation, attorneys' fees and expenses).

                  6. Representations and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Forbearance Agreement,
the Borrower and each Guarantor hereby represents and warrants to the
Administrative Agent and to each Lender that:

                                       4

<PAGE>   5

                           (a) SALEM INTERNATIONAL SERVICES, INC., a Guarantor,
         and WLT CORPORATION, a Guarantor, have both been dissolved or otherwise
         cease to have corporate existence.

                           (b) Other than Section 6.2 of the Credit Agreement
         and as otherwise set forth in Section 6(c) hereof, each of the
         representations and warranties made by the Borrower and each of the
         Guarantors in each Loan Document to which it is a party is true and
         correct in all material respects as of the date hereof.

                           (c) Other than the Specified Events of Default, no
         Default or Event of Default has occurred and is continuing as of the
         date hereof.

                  7. Conditions Precedent to Effectiveness of Forbearance
Agreement. This Forbearance Agreement shall not become effective unless and
until:

                           (a) the Administrative Agent has received this
         Forbearance Agreement, executed and delivered by a duly authorized
         officer of the Borrower, each Guarantor, the Lenders and the
         Administrative Agent;

                           (b) the Administrative Agent has received, in form
         and substance satisfactory to the Administrative Agent, evidence that
         SALEM INTERNATIONAL SERVICES, INC. and WLT CORPORATION, respectively,
         have both been dissolved or otherwise cease to have corporate
         existence; and

                           (c) the Administrative Agent has received such other
         documents and information as the Administrative Agent may reasonably
         require, which documents and information shall be satisfactory to the
         Administrative Agent in its sole discretion.

                  8. Forbearance Events of Default. The Forbearance Period shall
immediately terminate and the forbearance set forth in Section 3 of this
Forbearance Agreement shall be of no further force and effect upon the
occurrence of any of the following (each, a "Forbearance Event of Default"):

                           (a) the occurrence of one or more Defaults or Events
         of Default under the Credit Agreement (other than a Specified Event of
         Default); or

                           (b) any representation or warranty made or deemed
         made by the Borrower or any Guarantor herein or which is contained in
         any certificate, document or financial or other statement created
         and/or delivered at any time under or in connection with this
         Forbearance Agreement or on or subsequent to the date hereof under or
         in connection with any other Loan Document shall prove to have been
         incorrect in any material respect on or as of the date made or deemed
         made; or

                           (c) the Borrower or any Subsidiary shall default in
         the observance or performance of any agreement contained herein.

                  9. Absence of Waiver. The parties hereto agree that the
agreements set forth herein shall not be deemed to:

                                       5
<PAGE>   6

                           (a) be a consent to cure, or waiver of, any Default
         or Event of Default;

                           (b) except as expressly set forth herein, modify or
         limit any other term or condition of the Credit Agreement or any other
         Loan Document;

                           (c) impose upon any Lender or the Administrative
         Agent any commitment or obligation, express or implied, to consent to
         any amendment or further modification of the Credit Agreement or other
         Loan Documents;

                           (d) impose upon any Lender or the Administrative
         Agent any commitment or obligation, express or implied, to grant or
         extend any financial accommodations to the Borrower or the Guarantors
         (other than as expressly set forth herein) or to modify or extend this
         Forbearance Agreement; or

                           (e) prejudice any right or remedy that the
         Administrative Agent or the Lenders may now have or may in the future
         have under the Credit Agreement or under or in connection with the
         other Loan Documents or any instrument or agreement referred to therein
         including, without limitation, any right or remedy resulting from any
         Default or Event of Default.

                  10. Release of Claims and Waiver. Each of the Borrower and
each Guarantor hereby releases, remises, acquits and forever discharges each
Lender and the Administrative Agent and each of their employees, agents,
representative, consultants, attorneys, officers, directors, partners,
fiduciaries, predecessors, successors and assigns, subsidiary corporations,
parent corporations and related corporate divisions (collectively, the "Released
Parties"), from any and all actions, causes of action, judgments, executions,
suits, debts, claims, demands, liabilities, obligations, damages and expenses of
any and every character, known or unknown, direct or indirect, at law or in
equity, of whatever nature or kind, whether heretofore or hereafter arising, for
or because of any matter or things done, omitted or suffered to be done by any
of the Released Parties prior to and including the date of execution hereof, and
in any way directly or indirectly arising out of any or in any way connected to
this Agreement or the Loan Documents (collectively, the "Released Matters").
Each of the Borrower and each Guarantor hereby acknowledges that the agreements
in this Section 10 are intended to be in full satisfaction of all or any alleged
injuries or damages arising in connection with the Released Matters. Each of the
Borrower and each Guarantor hereby represents and warrants to the Administrative
Agent and each Lender that it has not purported to transfer, assign or otherwise
convey any right, title or interest of the Borrower or any Guarantor in any
Released Matter to any other Person and that the foregoing constitutes a full
and complete release of all Released Matters.

         11. Miscellaneous.

                           (a) Section headings used in this Forbearance
         Agreement are for convenience of reference only and shall not affect
         the construction of this Forbearance Agreement.

                           (b) This Forbearance Agreement may be executed by one
         or more of the parties hereto by facsimile or in any number of separate
         counterparts and all of said counterparts taken together shall be
         deemed to constitute one and the same instrument.

                                       6
<PAGE>   7

                           (c) This Forbearance Agreement and the rights and
         obligations of the parties under this Forbearance Agreement shall be
         governed by, and construed and interpreted in accordance with, the law
         of the State of New York.

                           (d) This Forbearance Agreement shall be deemed a
         "Loan Document" for purposes of the Credit Agreement and the other Loan
         Documents.

                           (e) This Forbearance Agreement constitutes the entire
         agreement among the parties with respect to the subject matter hereof
         and supersedes all prior and contemporaneous oral or written agreements
         with respect to the subject matter hereof.

                           (f) Time is of the essence in this Forbearance
         Agreement.

                           (g) No amendment or modification of this Forbearance
         Agreement shall be effective unless made in writing and signed by all
         parties. Each of the Borrower and each of the Guarantors acknowledges
         and agrees that any and all future discussions with any Lender or the
         Administrative Agent shall be without prejudice to any Lender or the
         Administrative Agent and shall not be deemed to modify, waive, or amend
         any term or provision of this Forbearance Agreement or the Loan
         Documents.

                            (SIGNATURE PAGES FOLLOW)

                                       7
<PAGE>   8

                  IN WITNESS WHEREOF, the parties hereto have caused this
Forbearance Agreement to be duly executed and delivered as of the day and year
first above written.

                                         GENESIS WORLDWIDE, INC. (formerly THE
                                         MONARCH MACHINE TOOL COMPANY),
                                         as Borrower

                                         By: s/Karl Frydryk
                                             ---------------------
                                             Name:  Karl Frydryk
                                             Title:  Vice President & CFO

                                         ING (U.S.) CAPITAL LLC,
                                         as Administrative Agent and as a Lender

                                         By: s/Robert L. Fellows
                                             ---------------------
                                             Name:  Robert L. Fellows
                                             Title: Director

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