Document:

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                                                                    Exhibit 10.3

                              2005 PERFORMANCE PLAN

                                       OF

                       THE GOODYEAR TIRE & RUBBER COMPANY

1. PURPOSE.

      The purposes of the 2005 Performance Plan of The Goodyear Tire & Rubber
Company (the "Plan") are to advance the interests of the Company and its
shareholders by strengthening the ability of the Company to attract, retain and
reward highly qualified officers and other employees, to motivate officers and
other selected employees to achieve business objectives established to promote
the long term growth, profitability and success of the Company, and to encourage
ownership of the Common Stock of the Company by participating officers and other
selected employees. The Plan authorizes performance based stock and cash
incentive compensation in the form of stock options, stock appreciation rights,
restricted stock, performance grants and awards, and other stock-based grants
and awards.

2. DEFINITIONS.

      For the purposes of the Plan, the following terms shall have the following
meanings:

      (a) "ADJUSTED NET INCOME" means, with respect to any calendar or other
fiscal year of the Company, the amount reported as "Net Income" in the audited
Consolidated Income Statement of the Company and Subsidiaries for such year (as
set forth in the Company's Annual Report to Shareholders for such year),
adjusted to exclude any of the following items: (i) extraordinary items (as
described in Accounting Principles Board Opinion No. 30); (ii) gains or losses
on the disposition of discontinued operations; (iii) the cumulative effects of
changes in accounting principles; (iv) the writedown of any asset; and (v)
charges for restructuring and rationalization programs.

      (b) "ANNUAL NET INCOME PER SHARE" means, with respect to any calendar or
other fiscal year of the Company in respect of which a determination thereof is
being or to be made, the Adjusted Net Income for such year divided by the
average number of shares of Common Stock outstanding during such year.

      (c) "AWARD" means any payment or settlement in respect of a grant made
pursuant to the Plan, whether in the form of shares of Common Stock or in cash,
or in any combination thereof.

      (d) "BOARD OF DIRECTORS" means the Board of Directors of the Company.

      (e) "CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute thereto, together with the
published rulings, regulations and interpretations duly promulgated thereunder.

      (f) "COMMITTEE" means the committee of the Board of Directors established
and constituted as provided in Section 5 of the Plan.

      (g) "COMMON STOCK" means the common stock, without par value, of the
Company, or any security issued by the Company in substitution or exchange
therefor or in lieu thereof.

      (h) "COMMON STOCK EQUIVALENT" means a Unit (or fraction thereof, if
authorized by the Committee) substantially equivalent to a hypothetical share of
Common Stock, credited to a Participant and having a value at any time equal to
the Fair Market Value of a share of Common Stock (or such fraction thereof) at
such time.

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      (i) "COMPANY" means The Goodyear Tire & Rubber Company, an Ohio
corporation, or any successor corporation.

      (j) "COVERED EMPLOYEE" means any person who is a "covered employee" within
the meaning of Section 162(m) of the Code.

      (k) "CUMULATIVE NET INCOME" means, in respect of any Performance Period,
the aggregate cumulative amount of the Adjusted Net Income for the calendar or
other fiscal years of the Company during such Performance Period.

      (l) "CUMULATIVE NET INCOME PER SHARE" means, in respect of any Performance
Period, the aggregate cumulative amount of the Annual Net Income Per Share for
the calendar or other fiscal years of the Company during such Performance
Period.

      (m) "DIVIDEND EQUIVALENT" means, in respect of a Common Stock Equivalent
and with respect to each dividend payment date for the Common Stock, an amount
equal to the cash dividend on one share of Common Stock payable on such dividend
payment date.

      (n) "EMPLOYEE" means any individual, including any officer of the Company,
who is on the active payroll of the Company or a Subsidiary at the relevant
time.

      (o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, including all rules and regulations promulgated
thereunder.

      (p) "FAIR MARKET VALUE" 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 reported on the New York Stock
Exchange Composite Transactions tape on such date, or, if the Common Stock was
not traded on such date, on the next preceding day on which sales of shares of
the Common Stock were reported on the New York Stock Exchange Composite
Transactions tape.

      (q) "INCENTIVE STOCK OPTION" means any option to purchase shares of Common
Stock granted pursuant to the provisions of Section 6 of the Plan that is
intended to be and is specifically designated as an "incentive stock option"
within the meaning of Section 422(b) of the Code.

      (r) "NON-QUALIFIED STOCK OPTION" means any option to purchase shares of
Common Stock granted pursuant to the provisions of Section 6 of the Plan that is
not an Incentive Stock Option.

      (s) "PARTICIPANT" means any Employee of the Company or a Subsidiary who
receives a grant or Award under the Plan.

      (t) "PERFORMANCE GRANT" means a grant made pursuant to Section 9 of the
Plan, the Award of which is contingent on the achievement of specific
Performance Goals during a Performance Period, determined using a specific
Performance Measure, all as specified in the grant agreement relating thereto.

      (u) "PERFORMANCE GOALS" mean, with respect to any applicable grant made
pursuant to the Plan, the one or more targets, goals or levels of attainment
required to be achieved in terms of the specified Performance Measure during the
specified Performance Period, all as set forth in the related grant agreement.

      (v) "PERFORMANCE MEASURE" means, with respect to any applicable grant made
pursuant to the Plan, one or more of the criteria identified at Section 9(c) of
the Plan selected by the Committee for the purpose of establishing, and
measuring attainment of, Performance Goals for a Performance Period in respect
of such grant, as provided in the related grant agreement.

      (w) "PERFORMANCE PERIOD" means, with respect to any applicable grant made
pursuant to the Plan, the one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select

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during which the attainment of one or more Performance Goals will be measured to
determine whether, and the extent to which, a Participant is entitled to receive
payment of an Award pursuant to such grant.

      (x) "PLAN" means this 2005 Performance Plan of the Company, as set forth
herein and as hereafter amended from time to time in accordance with the terms
hereof.

      (y) "RESTRICTED STOCK" means shares of Common Stock issued pursuant to a
Restricted Stock Grant under Section 8 of the Plan so long as such shares remain
subject to the restrictions and conditions specified in the grant agreement
pursuant to which such Restricted Stock Grant is made.

      (z) "RESTRICTED STOCK GRANT" means a grant made pursuant to the provisions
of Section 8 of the Plan.

      (aa) "STOCK APPRECIATION RIGHT" means a grant in the form of a right to
benefit from the appreciation of the Common Stock made pursuant to Section 7 of
the Plan.

      (bb) "STOCK OPTION" means and includes any Non-Qualified Stock Option and
any Incentive Stock Option granted pursuant to Section 6 of the Plan.

      (cc) "SUBSIDIARY" means any corporation or entity in which the Company
directly or indirectly owns or controls 50% or more of the equity securities
issued by such corporation or entity having the power to vote for the election
of directors.

      (dd) "UNIT" means a bookkeeping entry used by the Company to record and
account for the grant, settlement or, if applicable, deferral of an Award until
such time as such Award is paid, canceled, forfeited or terminated, as the case
may be, which, except as otherwise specified by the Committee, shall be equal to
one Common Stock Equivalent.

3. EFFECTIVE DATE; TERM.

      (a) EFFECTIVE DATE. The Plan shall be effective on April 26, 2005, upon
approval by the shareholders of the Company at the 2005 annual meeting of
shareholders or any adjournments thereof.

      (b) TERM. The Plan shall remain in effect until April 26, 2008, unless
sooner terminated by the Board of Directors. Termination of the Plan shall not
affect grants and Awards then outstanding.

4. SHARES OF COMMON STOCK SUBJECT TO PLAN.

      (a) MAXIMUM NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN. The
maximum aggregate number of shares of Common Stock which may be issued pursuant
to the Plan, subject to adjustment as provided in Section 4(b) of the Plan,
shall be twelve million, plus any shares of Common Stock issued under the Plan
that are forfeited back to the Company or are canceled. The shares of Common
Stock which may be issued under the Plan may be authorized and unissued shares
or issued shares reacquired by the Company. No fractional share of the Common
Stock shall be issued under the Plan. Awards of fractional shares of the Common
Stock, if any, shall be settled in cash.

      (b) ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event of any
change in the capital structure, capitalization or Common Stock of the Company
such as a stock dividend, stock split, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Stock, such proportionate adjustments, if
any, as the Board of Directors in its discretion may deem appropriate to reflect
such change shall be made with respect to: (i) the maximum number of shares of
Common Stock which may be (1) issued pursuant to the Plan, (2) the subject of
any type of grant or Award under the Plan, and (3) granted, awarded or issued to
any Participant pursuant to any provision of the Plan; (ii) the number of shares
of Common Stock subject to any outstanding Stock Option, Stock Appreciation
Right or other grant or Award made to any Participant under the Plan; (iii) the
per share exercise price in respect of any

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outstanding Stock Options and Stock Appreciation Rights; (iv) the number of
shares of Common Stock and the number of Units or the value of such Units, as
the case may be, which are the subject of other grants and Awards then
outstanding under the Plan; and (v) any other term or condition of any grant
affected by any such change.

5. ADMINISTRATION.

      (a) THE COMMITTEE. The Plan shall be administered by the Committee to be
appointed from time to time by the Board of Directors and comprised of not less
than three of the then members of the Board of Directors who qualify as
"non-employee directors" within the meaning of Rule 16(b)-3 promulgated under
the Exchange Act and as "outside directors" within the meaning of Section 162(m)
of the Code. Members of the Committee shall serve at the pleasure of the Board
of Directors. The Board of Directors may from time to time remove members from,
or add members to, the Committee. A majority of the members of the Committee
shall constitute a quorum for the transaction of business and the acts of a
majority of the members present at any meeting at which a quorum is present
shall be the acts of the Committee. Any one or more members of the Committee may
participate in a meeting by conference telephone or similar means where all
persons participating in the meeting can hear and speak to each other, which
participation shall constitute presence in person at such meeting. Action
approved in writing by a majority of the members of the Committee then serving
shall be fully as effective as if the action had been taken by unanimous vote at
a meeting duly called and held. The Company shall make grants and effect Awards
under the Plan in accordance with the terms and conditions specified by the
Committee, which terms and conditions shall be set forth in grant agreements
and/or other instruments in such forms as the Committee shall approve.

      (b) COMMITTEE POWERS. The Committee shall have full power and authority to
operate and administer the Plan in accordance with its terms. The powers of the
Committee include, but are not limited to, the power to: (i) select Participants
from among the Employees of the Company and Subsidiaries; (ii) establish the
types of, and the terms and conditions of, all grants and Awards made under the
Plan, subject to any applicable limitations set forth in, and consistent with
the express terms of, the Plan; (iii) make grants and pay or otherwise effect
Awards subject to, and consistent with, the express provisions of the Plan; (iv)
establish Performance Goals, Performance Measures and Performance Periods,
subject to, and consistent with, the express provisions of the Plan; (v) reduce
the amount of any grant or Award; (vi) prescribe the form or forms of grant
agreements and other instruments evidencing grants and Awards under the Plan;
(vii) pay and to defer payment of Awards on such terms and conditions, not
inconsistent with the express terms of the Plan, as the Committee shall
determine; (viii) direct the Company to make conversions, accruals and payments
pursuant to the Plan; (ix) construe and interpret the Plan and make any
determination of fact incident to the operation of the Plan; (x) promulgate,
amend and rescind rules and regulations relating to the implementation,
operation and administration of the Plan; (xi) adopt such modifications,
procedures and subplans as may be necessary or appropriate to comply with the
laws of other countries with respect to Participants or prospective Participants
employed in such other countries; (xii) delegate to other persons the
responsibility for performing administrative or ministerial acts in furtherance
of the Plan; (xiii) engage the services of persons and firms, including banks,
consultants and insurance companies, in furtherance of the Plan's activities;
and (xiv) make all other determinations and take all other actions as the
Committee may deem necessary or advisable for the administration and operation
of the Plan.

      (c) COMMITTEE'S DECISIONS FINAL. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration or application of the Plan, and of any grant agreement, shall be
final, conclusive and binding upon all Participants, and all persons claiming
through Participants, affected thereby.

      (d) ADMINISTRATIVE ACCOUNTS. For the purpose of accounting for Awards
deferred as to payment, the Company shall establish bookkeeping accounts
expressed in Units bearing the name of each Participant receiving such Awards.
Each account shall be unfunded, unless otherwise determined by the Committee in
accordance with Section 15(d) of the Plan.

      (e) CERTIFICATIONS. In respect of each grant under the Plan to a Covered
Employee which the Committee intends to be "performance based compensation"
under Section 162(m) of the Code, the provisions of the Plan and the related
grant agreement shall be construed to confirm such intent, and to conform to the
requirements of Section 162(m) of the Code, and the Committee shall certify in
writing (which writing may include approved minutes of a

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meeting of the Committee) that the applicable Performance Goal(s), determined
using the Performance Measure specified in the related grant agreement, was
attained during the relevant Performance Period at a level that equaled or
exceeded the level required for the payment of such Award in the amount proposed
to be paid and that such Award does not exceed any applicable Plan limitation.

6. STOCK OPTIONS.

      (a) IN GENERAL. Options to purchase shares of Common Stock may be granted
under the Plan and may be Incentive Stock Options or Non-Qualified Stock
Options. All Stock Options shall be subject to the terms and conditions of this
Section 6 and shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall
determine. Stock Options may be granted in addition to, or in tandem with or
independent of, Stock Appreciation Rights or other grants and Awards under the
Plan. The Committee may grant Stock Options that provide for the automatic grant
of a replacement Stock Option if payment of the exercise price and/or any
related withholding taxes is made by tendering (whether by physical delivery or
by attestation) shares of Common Stock or by having shares of Common Stock
withheld by the Company. The replacement Stock Option would cover the number of
shares of Common Stock tendered or withheld, would have a per share exercise
price equal to at least 100% of the Fair Market Value of a share of Common Stock
on the date of the exercise of the original Stock Option, and would have such
other terms and conditions as may be specified by the Committee and set forth in
the related grant agreement.

      (b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
employee of the Company or a Subsidiary may be granted Stock Options. The
Committee shall determine, in its discretion, the Employees to whom Stock
Options will be granted, the timing of such grants, and the number of shares of
Common Stock subject to each Stock Option granted; provided, that (i) the
maximum aggregate number of shares of Common Stock which may be issued and
delivered upon the exercise of Non-Qualified Stock Options granted under the
Plan shall be ten million, (ii) the maximum aggregate number of shares of Common
Stock which may be issued and delivered upon the exercise of Incentive Stock
Options shall be five million, (iii) the maximum number of shares of Common
Stock in respect of which Stock Options may be granted to any Employee during
any calendar year shall be 500,000, and (iv) in respect of Incentive Stock
Options, the aggregate Fair Market Value (determined as of the date the
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which an Incentive Stock Option becomes exercisable for the first time by a
Participant during any calendar year shall not exceed $100,000, or such other
limit as may be required by the Code, except that, if authorized by the
Committee and provided for in the related grant agreement, any portion of any
Incentive Stock Option that cannot be exercised as such because of this
limitation may be converted into and exercised as a Non-Qualified Stock Option.
In no event shall any Stock Option or Stock Appreciation Right be granted to a
Participant in exchange for the Participant's agreement to the cancellation of
one or more Stock Options or Stock Appreciation Rights then held by such
Participant if the exercise price of the new grant is lower than the exercise
price of the grant to be cancelled and in no event shall any Stock Option or
Stock Appreciation Right be amended to reduce the option price, except as
contemplated by Section 4(b) of the Plan.

      (c) OPTION EXERCISE PRICE. The per share exercise price of each Stock
Option granted under the Plan shall be determined by the Committee prior to or
at the time of grant, but in no event shall the per share exercise price of any
Stock Option be less than 100% of the Fair Market Value of the Common Stock on
the date of the grant of such Stock Option.

      (d) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee; except that in no event shall the term of any Stock Option exceed ten
years after the date such Stock Option is granted.

      (e) EXERCISABILITY. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the date of grant; provided, however, that no Stock Option shall be
exercisable during the first six months after the date such Stock Option is
granted. No Stock Option may be exercised unless the holder thereof is at the
time of such exercise an Employee and has been continuously an Employee since
the date such Stock Option was granted, except that the Committee may permit the
exercise of any Stock Option for any period following the Participant's
termination of employment not in excess of the original term of the Stock Option
on such terms and conditions as it shall deem appropriate and specify in the
related grant agreement.

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      (f) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the number
of shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, plus any required withholding taxes, in
cash or, if permitted by the terms of the related grant agreement or otherwise
approved in advance by the Committee, in shares of Common Stock already owned by
the Participant valued at the Fair Market Value of the Common Stock on the date
of exercise. The Committee may also permit Participants, either on a selective
or aggregate basis, to simultaneously exercise Stock Options and sell the shares
of Common Stock thereby acquired pursuant to a brokerage or similar arrangement
approved in advance by the Committee and to use the proceeds from such sale to
pay the exercise price and withholding taxes.

7. STOCK APPRECIATION RIGHTS.

      (a) IN GENERAL. Stock Appreciation Rights in respect of shares of Common
Stock may be granted under the Plan alone, in tandem with, in addition to or
independent of a Stock Option or other grant or Award under the Plan. A Stock
Appreciation Right entitles a Participant to receive an amount equal to the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise over the Fair Market Value of a share of Common Stock on the date of
grant of the Stock Appreciation Right, or such other higher price as may be set
by the Committee, multiplied by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised.

      (b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
Employee of the Company or a Subsidiary selected by the Committee may be granted
Stock Appreciation Rights. The Committee shall determine, in its discretion, the
Employees to whom Stock Appreciation Rights will be granted, the timing of such
grants and the number of shares of Common Stock in respect of which each Stock
Appreciation Right is granted; provided that (i) the maximum aggregate number of
shares of Common Stock in respect of which Stock Appreciation Rights may be
granted shall be 2.5 million, (ii) the maximum aggregate number of shares of
Common Stock which may be issued and delivered in payment or settlement of Stock
Appreciation Rights shall be two million, and (iii) the maximum number of shares
of Common Stock in respect of which Stock Appreciation Rights may be granted to
any Employee during any calendar year shall be 100,000.

      (c) EXERCISABILITY; EXERCISE; FORM OF PAYMENT. A Stock Appreciation Right
may be exercised by a Participant at such time or times and in such manner as
shall be authorized by the Committee and set forth in the related grant
agreement, except that in no event shall a Stock Appreciation Right be
exercisable within the first six months after the date of grant. The Committee
may provide that a Stock Appreciation Right shall be automatically exercised on
one or more specified dates. No Stock Appreciation Right may be exercised unless
the holder thereof is at the time of exercise an Employee and has been
continuously an Employee since the date the Stock Appreciation Right was
granted, except that the Committee may permit the exercise of any Stock
Appreciation Right for any period following the Participant's termination of
employment not in excess of the original term of the Stock Appreciation Right on
such terms and conditions as it shall deem appropriate and specify in the
related grant agreement. A Stock Appreciation Right may be exercised, in whole
or in part, by giving the Company a written notice specifying the number of
shares of Common Stock in respect of which the Stock Appreciation Right is to be
exercised. Stock Appreciation Rights may be paid upon exercise in cash, in
shares of Common Stock, or in any combination of cash and shares of Common Stock
as determined by the Committee.

8. RESTRICTED STOCK GRANTS AND AWARDS.

      (a) IN GENERAL. A Restricted Stock Grant is the issue of shares of Common
Stock in the name of an Employee, which issuance is subject to such terms and
conditions as the Committee shall deem appropriate, including, without
limitation, restrictions on the sale, assignment, transfer or other disposition
of such shares and the requirement that the Employee forfeit such shares back to
the Company (i) upon termination of employment for specified reasons within a
specified period of time, or (ii) if any specified Performance Goals are not
achieved during a specified Performance Period, or (iii) if such other
conditions as the Committee may specify are not satisfied.

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      (b) ELIGIBILITY AND LIMITATIONS. Any officer of the Company and any other
key Employee of the Company or a Subsidiary selected by the Committee may
receive a Restricted Stock Grant. The Committee, in its sole discretion, shall
determine whether a Restricted Stock Grant shall be made, the Employee to
receive the Restricted Stock Grant, and the conditions and restrictions imposed
on the Restricted Stock Grant. The maximum number of shares of Common Stock
which may be issued as Restricted Stock under the Plan shall be 500,000. The
maximum number of shares of Common Stock which may be issued to any Employee as
Restricted Stock during any calendar year shall not exceed 100,000. The maximum
amount any Employee may receive as a Restricted Stock Grant in any calendar year
shall not exceed $8 million, determined using the Fair Market Value of such
Restricted Stock Grant as at the date of the grant thereof.

      (c) RESTRICTION PERIOD. Restricted Stock Grants shall provide that in
order for a Participant to receive shares of Common Stock free of restrictions,
the Participant must remain in the employment of the Company or its
Subsidiaries, subject to such exceptions as the Committee may deem appropriate
and specify in the related grant agreement, for a period of not less than three
years commencing on the date of the grant and ending on such later date or dates
as the Committee may designate at the time of the grant (the "Restriction
Period"). The Committee, in its sole discretion, may provide for the lapse of
restrictions in installments during the Restriction Period. The Committee may
also establish one or more Performance Goals that are required to be achieved
during one or more Performance Periods within the Restriction Period as a
condition to the lapse of the restrictions.

      (d) RESTRICTIONS. The following restrictions and conditions shall apply to
each Restricted Stock Grant during the Restriction Period: (i) the Participant
shall not be entitled to delivery of the shares of the Common Stock; (ii) the
Participant may not sell, assign, transfer, pledge, hypothecate, encumber or
otherwise dispose of or realize on the shares of Common Stock subject to the
Restricted Stock Grant; and (iii) the shares of the Common Stock issued as
Restricted Stock shall be forfeited to the Company if the Participant for any
reason ceases to be an Employee prior to the end of the Restriction Period,
except due to circumstances specified in the related grant agreement or
otherwise approved by the Committee. The Committee may, in its sole discretion,
include such other restrictions and conditions as it may deem appropriate.

      (e) PAYMENT. Upon expiration of the Restriction Period and if all
conditions have been satisfied and any applicable Performance Goals attained,
the shares of the Restricted Stock will be made available to the Participant,
subject to satisfaction of applicable withholding tax requirements, free of all
restrictions; provided, that the Committee may, in its discretion, require (i)
the further deferral of any Restricted Stock Grant beyond the initially
specified Restriction Period, (ii) that the Restricted Stock be retained by the
Company, and (iii) that the Participant receive a cash payment in lieu of
unrestricted shares of Common Stock.

      (f) RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect to
shares of Restricted Stock, all of the rights of a shareholder of the Company,
including the right to vote the shares and receive any cash dividends paid
thereon. Stock dividends distributed with respect to shares of Restricted Stock
shall be treated as additional shares under the Restricted Stock Grant and shall
be subject to the restrictions and other terms and conditions set forth therein.

9. PERFORMANCE GRANTS AND AWARDS.

      (a) ELIGIBILITY AND TERMS. The Committee may grant to officers of the
Company and other key Employees of the Company and its Subsidiaries the
prospective contingent right, expressed in Units, to receive payments of shares
of Common Stock, cash or any combination thereof, with each Unit equivalent in
value to one share of Common Stock, or equivalent to such other value or
monetary amount as may be designated or established by the Committee
("Performance Grants"), based upon Company performance over a specified
Performance Period. The Committee shall, in its sole discretion, determine the
officers of the Company and other key Employees eligible to receive Performance
Grants. At the time each Performance Grant is made, the Committee shall
establish the Performance Period, the Performance Measure and the targets to be
attained relative to such Performance Measure (the "Performance Goals") in
respect of such Performance Grant. The number of shares of Common Stock and/or
the amount of cash earned and payable in settlement of a Performance Grant shall
be determined at the end of the Performance Period (a "Performance Award").

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      (b) LIMITATIONS ON GRANTS AND AWARDS. The maximum number of shares of
Common Stock which may be issued pursuant to Performance Grants shall be 3.75
million. The maximum number of shares which may be the subject of Performance
Grants made to any Participant in respect of any Performance Period or during
any calendar year shall be 200,000. The maximum amount any Participant may
receive during any calendar year as Performance Awards pursuant to Performance
Grants shall not exceed $10 million, determined using the Fair Market Value of
such Performance Awards as at the last day of the applicable Performance Period
or Periods or as at date or dates of the payment thereof, whichever is higher.

      (c) PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS. Each
Performance Grant shall provide that, in order for a Participant to receive an
Award of all or a portion of the Units subject to such Performance Grant, the
Company must achieve certain Performance Goals over a designated Performance
Period having a minimum duration of one year, with attainment of the Performance
Goals determined using a specific Performance Measure. The Performance Goals and
Performance Period shall be established by the Committee in its sole discretion.
The Committee shall establish a Performance Measure for each Performance Period
for determining the portion of the Performance Grant which will be earned or
forfeited based on the extent to which the Performance Goals are achieved or
exceeded. In setting Performance Goals, the Committee may use a Performance
Measure based on any one, or on any combination, of the following Company
performance factors as the Committee deems appropriate: (i) Cumulative Net
Income Per Share; (ii) Cumulative Net Income; (iii) return on sales; (iv) total
shareholder return; (v) return on assets; (vi) economic value added; (vii) cash
flow; (viii) return on equity; (ix) cumulative operating income (which shall
equal consolidated sales minus cost of goods sold and selling, administrative
and general expense); (x) operating income before depreciation and amortization;
and (xi) return on invested capital. Performance Goals may include minimum,
maximum and target levels of performance, with the size of Performance Award
based on the level attained. Once established by the Committee and specified in
the grant agreement, and if and to the extent provided in or required by the
grant agreement, the Performance Goals and the Performance Measure in respect of
any Performance Grant (or any Restricted Stock Grant or Stock-Based Grant that
requires the attainment of Performance Goals as a condition to the Award) shall
not be changed. The Committee may, in its discretion, eliminate or reduce (but
not increase) the amount of any Performance Award (or Restricted Stock or
Stock-Based Award) that otherwise would be payable to a Participant upon
attainment of the Performance Goal(s).

      (d) FORM OF GRANTS. Performance Grants may be made on such terms and
conditions not inconsistent with the Plan, and in such form or forms, as the
Committee may from time to time approve. Performance Grants may be made alone,
in addition to, in tandem with, or independent of other grants and Awards under
the Plan. Subject to the terms of the Plan, the Committee shall, in its
discretion, determine the number of Units subject to each Performance Grant made
to a Participant and the Committee may impose different terms and conditions on
any particular Performance Grant made to any Participant. The Performance Goals,
the Performance Period or Periods, and the Performance Measure(s) applicable to
a Performance Grant shall be set forth in the relevant grant agreement.

      (e) PAYMENT OF AWARDS. Each Participant shall be entitled to receive
payment in an amount equal to the aggregate Fair Market Value (if the Unit is
equivalent to a share of Common Stock), or such other value as the Committee
shall specify, of the Units earned in respect of such Performance Award. Payment
in settlement of a Performance Award may be made in shares of Common Stock, in
cash, or in any combination of Common Stock and cash, and at such time or times,
as the Committee, in its discretion, shall determine.

10. OTHER STOCK-BASED GRANTS AND AWARDS.

      (a) IN GENERAL. The Committee may make other grants and Awards pursuant to
which Common Stock is, or in the future may be, acquired by Participants, and
other grants and Awards to Participants denominated in Common Stock Equivalents
or other Units ("Stock-Based Grants"). Such Stock-Based Grants may be granted
alone or in addition to, in tandem with, or independent of any other grant made
or Award effected under the Plan.

      (b) ELIGIBILITY AND TERMS. The Committee may make Stock-Based Grants to
officers of the Company and other key Employees of the Company and its
Subsidiaries. Subject to the provisions of the Plan, the Committee shall have
authority to determine the Employees to whom, and the time or times at which,
Stock-Based Grants will

<PAGE>

be made, the number of shares of Common Stock, if any, to be subject to or
covered by each Stock-Based Grant, and any and all other terms and conditions of
each Stock-Based Grant.

      (c) LIMITATIONS. The aggregate number of shares of Common Stock issued to
Participants pursuant to Stock-Based Grants made and Awards effected pursuant to
this Section 10 shall not exceed 500,000. No Participant shall receive more than
50,000 shares of Common Stock in settlement of Stock-Based Awards during any
calendar year. The maximum amount any Participant may receive in Stock-Based
Awards during any calendar year shall not exceed $4 million, determined using
the Fair Market Value of any shares of Common Stock delivered in payment of the
Stock-Based Awards on the date or dates of the payment thereof.

      (d) FORM OF GRANTS; PAYMENT OF AWARDS. Stock-Based Grants may be made in
such form or forms and on such terms and conditions, including the attainment of
specific Performance Goals, as the Committee, in its discretion, shall approve.
Payment of Stock-Based Awards may be made in cash, in shares of Common Stock, or
in any combination of cash and shares of Common Stock, and at such time or
times, as the Committee shall determine.

11. DEFERRALS.

      The Committee may, whether at the time of grant or at anytime thereafter
prior to payment or settlement, require a Participant to defer, or permit
(subject to such conditions as the Committee may from time to time establish) a
Participant to elect to defer, receipt of all or any portion of any payment of
cash or shares of Common Stock that would otherwise be due to such Participant
in payment or settlement of any Award under the Plan. If any such deferral is
required by the Committee (or is elected by the Participant with the permission
of the Committee), the Committee shall establish rules and procedures for such
payment deferrals. The Committee may provide for the payment or crediting of
interest, at such rate or rates as it shall in its discretion deem appropriate,
on such deferred amounts credited in cash and the payment or crediting of
dividend equivalents in respect of deferred amounts credited in Common Stock
Equivalents. Deferred amounts may be paid in a lump sum or in installments in
the manner and to the extent permitted, and in accordance with rules and
procedures established, by the Committee.

12. NON-TRANSFERABILITY OF GRANTS AND AWARDS.

      No grant or Award under the Plan, and no right or interest therein, shall
be (i) assignable, alienable or transferable by a Participant, except by will or
the laws of descent and distribution, or (ii) subject to any obligation, or the
lien or claims of any creditor, of any Participant, or (iii) subject to any
lien, encumbrance or claim of any party made in respect of or through any
Participant, however arising. During the lifetime of a Participant, Stock
Options and Stock Appreciation Rights are exercisable only by, and shares of
Common Stock issued upon the exercise of Stock Options and Stock Appreciation
Rights or in settlement of other Awards will be issued only to, and other
payments in settlement of any Award will be payable only to, the Participant or
his or her legal representative. The Committee may, in its sole discretion,
authorize written designations of beneficiaries and authorize Participants to
designate beneficiaries with the authority to exercise Stock Options and Stock
Appreciation Rights granted to a Participant in the event of his or her death.
Notwithstanding the foregoing, the Committee may, in its sole discretion and on
and subject to such terms and conditions as it shall deem appropriate, which
terms and conditions shall be set forth in the related grant agreement: (i)
authorize a Participant to transfer all or a portion of any grant or Award made
to such Participant; provided, that in no event shall any transfer be made to
any person or persons other than such Participant's spouse, children or
grandchildren, or a trust or partnership (or other legal entity which the
Committee may approve) for the exclusive benefit of one or more such persons,
which transfer must be made as a gift and without any consideration; and (ii)
provide for the transferability of a particular grant or Award pursuant to a
qualified domestic relations order. All other transfers and any retransfer by
any permitted transferee are prohibited and any such purported transfer shall be
null and void. Each grant or Award which becomes the subject of permitted
transfer (and the Participant to whom it was granted by the Company) shall
continue to be subject to the same terms and conditions as were in effect
immediately prior to such permitted transfer. The Participant shall remain
responsible to the Company for the payment of all withholding taxes incurred as
a result of any exercise of such grant or Award. In no event shall any permitted
transfer of a grant or Award create any right in any party in respect of

<PAGE>

any grant or Award, other than the rights of the qualified transferee in respect
of such grant or Award specified in the related grant agreement.

13. CHANGE IN CONTROL.

      (a) EFFECT ON GRANTS. In the event of a Change in Control (as defined
below) of the Company, except as the Board of Directors comprised of a majority
of Independent Directors may expressly provide otherwise, and notwithstanding
any other provision of the Plan to the contrary: (i) all Stock Options and Stock
Appreciation Rights then outstanding shall become fully exercisable as of the
date of the Change in Control, whether or not then exercisable; (ii) all
restrictions and conditions in respect of all Restricted Stock Grants then
outstanding shall be deemed satisfied as of the date of the Change in Control;
and (iii) all Performance Grants and Stock-Based Grants shall be deemed to have
been fully earned, at the maximum amount of the award opportunity specified in
the grant agreement, as of the date of the Change in Control.

      (b) CHANGE IN CONTROL DEFINED. A "Change in Control" of the Company shall
occur when: (i) any Person (or group of Persons acting together or in concert)
becomes the Beneficial Owner, directly or indirectly, of twenty percent (20%) or
more of the combined voting power of the Company's securities (including its
Common Stock and any other voting securities) then outstanding; or (ii) the
shareholders of the Company approve a definitive agreement for a merger
involving the Company and/or any of its direct or indirect subsidiaries which
would result in the Common Stock outstanding immediately prior to such merger
continuing to represent less than fifty percent of the voting power of the
Company outstanding immediately after such merger, or approve a merger,
consolidation or other similar transaction which would result in the Common
Stock then outstanding being converted into or exchanged for the securities of
any other entity; or (iii) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or other
disposition of all or substantially all of the assets of the Company; or (iv)
the Independent Directors no longer constitute a majority of the Board of
Directors. "Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act. "Independent Director" means any individual who is a
member of the Board of Directors on the date the Plan becomes effective and any
new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to, a consent solicitation relating to the election of directors of the
Company, or a director who is a Person, or represents a Person or Group of
Persons acting together, who is, or who publicly announces the intention to
become, the Beneficial Owner, directly or indirectly, of 20% or more of the
voting power of the Company's outstanding voting securities) whose election to
the Board of Directors, or nomination for election to the Board of Directors by
the Company's shareholders, was approved or recommended by the affirmative vote
of a majority of the directors then in office who either (i) were directors on
the date the Plan becomes effective or (ii) were elected or nominated for
election as a director by a Board of Directors comprised of a majority of
directors in office on the date this Plan becomes effective and/or their
successors whose election, or nomination for election by the Company's
shareholders, was previously so approved or recommended by a Board of Directors
comprised of a majority of Independent Directors. "Persons" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i)
the Company and its Affiliates, (ii) the trustee or other fiduciary holding
securities under an employee benefit plan sponsored by the Company or any of its
subsidiaries, or (iii) underwriters temporarily holding securities pursuant to
an offering of such securities by the Company.

14. AMENDMENT AND TERMINATION.

      The Board of Directors may terminate the Plan at any time, except with
respect to grants then outstanding. The Board of Directors may amend the Plan at
any time and from time to time in such respects as the Board of Directors may
deem necessary or appropriate without approval of the shareholders, unless such
approval is necessary in order to comply with applicable laws, including the
Exchange Act and the Code. In no event may the Board of Directors amend the Plan
without the approval of the shareholders to (i) increase the maximum number of
shares of Common Stock which may be issued pursuant to the Plan, (ii) increase
any limitation set forth in the Plan on the number of shares of Common Stock
which may be issued, or the aggregate value of Awards which may be made, in
respect of any type of grant to all Participants during the term of the Plan or
to any Participant during any specified period, (iii)

<PAGE>

reduce the minimum exercise price for Stock Options and Stock Appreciation
Rights, or (iv) change the Performance Measure criteria identified at Section
9(c) of the Plan.

15. MISCELLANEOUS.

      (a) WITHHOLDING TAXES. All Awards under the Plan will be made subject to
any applicable withholding for taxes of any kind. The Company shall have the
right to deduct from any amount payable under the Plan, including delivery of
shares of Common Stock to be made under the Plan, all federal, state, city,
local or foreign taxes of any kind required by law to be withheld with respect
to such payment and to take such other actions as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
If shares of Common Stock are used to satisfy withholding taxes, such shares
shall be valued based on the Fair Market Value thereof on the date when the
withholding for taxes is required to be made. The Company shall have the right
to require a Participant to pay cash to satisfy withholding taxes as a condition
to the payment of any amount (whether in cash or shares of Common Stock) under
the Plan.

      (b) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the
making of any grant or Award shall confer upon any Employee any right to
continued employment with the Company or any Subsidiary, nor shall it interfere
in any way with the right of the Company or any Subsidiary to terminate the
employment of any Employee at any time, with or without cause.

      (c) UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under the Plan. Any liability of the Company to any person with respect to any
Award under the Plan shall be based solely upon any contractual obligations that
may be effected pursuant to the Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.

      (d) PAYMENTS TO TRUST. The Committee is authorized to cause to be
established a trust agreement or several trust agreements whereunder the
Committee may make payments of amounts due or to become due to Participants in
the Plan.

      (e) ENGAGING IN COMPETITION WITH COMPANY. In the event a Participant
terminates his or her employment with the Company or a Subsidiary for any reason
whatsoever, and within eighteen (18) months after the date thereof accepts
employment with any competitor of, or otherwise engages in competition with, the
Company, the Committee, in its sole discretion, may require such Participant to
return, or (if not received) to forfeit, to the Company the economic value of
any Award which is realized or obtained (measured at the date of exercise,
vesting or payment) by such Participant (i) at any time after the date which is
six months prior to the date of such Participant's termination of employment
with the Company or (ii) during such other period as the Committee may
determine. The provisions of this Section 15(e) shall cease to have any force or
effect whatsoever immediately upon the occurrence of any Change in Control
described at Section 13 hereof.

      (f) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of any termination indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any pension or other employee benefit plan or similar arrangement
provided by the Company or any Subsidiary, unless (i) expressly so provided by
such other plan or arrangement or (ii) the Committee expressly determines that
an Award or a portion thereof should be included as recurring compensation.
Nothing contained in the Plan shall prohibit the Company or any Subsidiary from
establishing other special awards, incentive compensation plans, compensation
programs and other similar arrangements providing for the payment of
performance, incentive or other compensation to Employees. Payments and benefits
provided to any Employee under any other plan, including, without limitation,
any stock option, stock award, restricted stock, deferred compensation, savings,
retirement or other benefit plan or arrangement, shall be governed solely by the
terms of such other plan.

      (g) SECURITIES LAW RESTRICTIONS. In no event shall the Company be
obligated to issue or deliver any shares of Common Stock if such issuance or
delivery shall constitute a violation of any provisions of any law or

<PAGE>

regulation of any governmental authority or securities exchange. No shares of
Common Stock shall be issued under the Plan unless counsel for the Company shall
be satisfied that such issuance will be in compliance with all applicable
Federal and state securities laws and regulations and all requirements of any
securities exchange on which the Common Stock is listed.

      (h) GRANT AGREEMENTS. Each Participant receiving a grant under the Plan
shall enter into a grant agreement with the Company in a form specified by the
Committee agreeing to the terms and conditions of the grant and such related
matters as the Committee shall, in its sole discretion, determine.

      (i) SEVERABILITY. In the event any provision of the Plan shall be held to
be invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the remaining provisions of the Plan.

      (j) GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Ohio.<PAGE>

                                                                    Exhibit 10.4

                              2002 PERFORMANCE PLAN

                                       OF

                       THE GOODYEAR TIRE & RUBBER COMPANY

1.   PURPOSE.

     The purposes of the 2002  Performance  Plan of The  Goodyear  Tire & Rubber
Company  (the  "Plan")  are to advance  the  interests  of the  Company  and its
shareholders by strengthening the ability of the Company to attract,  retain and
reward highly qualified  officers and other employees,  to motivate officers and
other selected employees to achieve business  objectives  established to promote
the long term growth, profitability and success of the Company, and to encourage
ownership of the Common Stock of the Company by participating officers and other
selected  employees.  The  Plan  authorizes  performance  based  stock  and cash
incentive  compensation in the form of stock options, stock appreciation rights,
restricted stock,  performance  grants and awards,  and other stock-based grants
and awards.

2.   DEFINITIONS.

     For the purposes of the Plan, the following  terms shall have the following
meanings:

     (a)  "ADJUSTED  NET INCOME"  means,  with  respect to any calendar or other
fiscal year of the Company,  the amount  reported as "Net Income" in the audited
Consolidated  Income Statement of the Company and Subsidiaries for such year (as
set  forth in the  Company's  Annual  Report  to  Shareholders  for such  year),
adjusted to exclude any of the  following  items:  (i)  extraordinary  items (as
described in Accounting  Principles  Board Opinion No. 30); (ii) gains or losses
on the disposition of discontinued  operations;  (iii) the cumulative effects of
changes in  accounting  principles;  (iv) the  writedown  of any asset;  and (v)
charges for restructuring and rationalization programs.

     (b) "ANNUAL NET INCOME PER SHARE"  means,  with  respect to any calendar or
other fiscal year of the Company in respect of which a determination  thereof is
being or to be made,  the  Adjusted  Net  Income  for such year  divided  by the
average number of shares of Common Stock outstanding during such year.

     (c)  "AWARD"  means any  payment or  settlement  in respect of a grant made
pursuant to the Plan,  whether in the form of shares of Common Stock or in cash,
or in any combination thereof.

     (d) "BOARD OF DIRECTORS" means the Board of Directors of the Company.

     (e) "CODE"  means the  Internal  Revenue  Code of 1986,  as amended  and in
effect from time to time, or any successor  statute  thereto,  together with the
published rulings, regulations and interpretations duly promulgated thereunder.

     (f) "COMMITTEE"  means the committee of the Board of Directors  established
and constituted as provided in Section 5 of the Plan.

     (g)  "COMMON  STOCK"  means the common  stock,  without  par value,  of the
Company,  or any  security  issued by the  Company in  substitution  or exchange
therefor or in lieu thereof.

     (h)  "COMMON  STOCK  EQUIVALENT"  means a Unit  (or  fraction  thereof,  if
authorized by the Committee) substantially equivalent to a hypothetical share of
Common Stock,  credited to a Participant and having a value at any time equal to
the Fair Market Value of a share of Common Stock (or such  fraction  thereof) at
such time.

     (i)  "COMPANY"  means  The  Goodyear  Tire  &  Rubber   Company,   an  Ohio
corporation, or any successor corporation.

     (j) "COVERED  EMPLOYEE" means any person who is a "covered employee" within
the meaning of Section 162(m) of the Code.

     (k) "CUMULATIVE  NET INCOME" means,  in respect of any Performance  Period,
the aggregate  cumulative  amount of the Adjusted Net Income for the calendar or
other fiscal years of the Company during such Performance Period.

                                       A-1

<PAGE>

     (l)  "CUMULATIVE NET INCOME PER SHARE" means, in respect of any Performance
Period,  the aggregate  cumulative amount of the Annual Net Income Per Share for
the  calendar  or other  fiscal  years of the Company  during  such  Performance
Period.

     (m) "DIVIDEND  EQUIVALENT"  means, in respect of a Common Stock  Equivalent
and with respect to each dividend  payment date for the Common Stock,  an amount
equal to the cash dividend on one share of Common Stock payable on such dividend
payment date.

     (n) "EMPLOYEE" means any individual,  including any officer of the Company,
who is on the active  payroll of the  Company or a  Subsidiary  at the  relevant
time.

     (o) "EXCHANGE  ACT" means the  Securities  Exchange Act of 1934, as amended
and in effect from time to time, including all rules and regulations promulgated
thereunder.

     (p) "FAIR MARKET VALUE"  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  reported  on the New York  Stock
Exchange  Composite  Transactions tape on such date, or, if the Common Stock was
not traded on such date,  on the next  preceding day on which sales of shares of
the  Common  Stock  were  reported  on the New  York  Stock  Exchange  Composite
Transactions tape.

     (q) "INCENTIVE  STOCK OPTION" means any option to purchase shares of Common
Stock  granted  pursuant  to the  provisions  of  Section  6 of the Plan that is
intended to be and is  specifically  designated as an  "incentive  stock option"
within the meaning of Section 422(b) of the Code.

     (r)  "NON-QUALIFIED  STOCK OPTION"  means any option to purchase  shares of
Common Stock granted pursuant to the provisions of Section 6 of the Plan that is
not an Incentive Stock Option.

     (s)  "PARTICIPANT"  means any Employee of the Company or a  Subsidiary  who
receives a grant or Award under the Plan.

     (t)  "PERFORMANCE  GRANT"  means a grant made  pursuant to Section 9 of the
Plan,  the  Award  of  which  is  contingent  on  the  achievement  of  specific
Performance  Goals  during a  Performance  Period,  determined  using a specific
Performance Measure, all as specified in the grant agreement relating thereto.

     (u)  "PERFORMANCE  GOALS" mean,  with respect to any applicable  grant made
pursuant to the Plan,  the one or more  targets,  goals or levels of  attainment
required to be achieved in terms of the specified Performance Measure during the
specified Performance Period, all as set forth in the related grant agreement.

     (v) "PERFORMANCE  MEASURE" means, with respect to any applicable grant made
pursuant to the Plan, one or more of the criteria  identified at Section 9(c) of
the  Plan  selected  by the  Committee  for the  purpose  of  establishing,  and
measuring  attainment of,  Performance Goals for a Performance Period in respect
of such grant, as provided in the related grant agreement.

     (w) "PERFORMANCE  PERIOD" means,  with respect to any applicable grant made
pursuant to the Plan,  the one or more periods of time,  which may be of varying
and  overlapping  durations,  as the  Committee  may  select  during  which  the
attainment  of one or more  Performance  Goals  will be  measured  to  determine
whether,  and the extent to which, a Participant is entitled to receive  payment
of an Award pursuant to such grant.

     (x) "PLAN" means this 2002  Performance  Plan of the Company,  as set forth
herein and as hereafter  amended from time to time in accordance  with the terms
hereof.

     (y)  "RESTRICTED  STOCK" means shares of Common Stock issued  pursuant to a
Restricted Stock Grant under Section 8 of the Plan so long as such shares remain
subject to the  restrictions  and  conditions  specified in the grant  agreement
pursuant to which such Restricted Stock Grant is made.

     (z) "RESTRICTED  STOCK GRANT" means a grant made pursuant to the provisions
of Section 8 of the Plan.

     (aa)  "STOCK  APPRECIATION  RIGHT"  means a grant in the form of a right to
benefit from the  appreciation of the Common Stock made pursuant to Section 7 of
the Plan.

     (bb) "STOCK OPTION" means and includes any  Non-Qualified  Stock Option and
any Incentive Stock Option granted pursuant to Section 6 of the Plan.

                                       A-2

<PAGE>

     (cc)  "SUBSIDIARY"  means any  corporation  or entity in which the  Company
directly or  indirectly  owns or controls  50% or more of the equity  securities
issued by such  corporation  or entity having the power to vote for the election
of directors.

     (dd)  "UNIT"  means a  bookkeeping  entry used by the Company to record and
account for the grant, settlement or, if applicable,  deferral of an Award until
such time as such Award is paid, canceled,  forfeited or terminated, as the case
may be, which, except as otherwise specified by the Committee, shall be equal to
one Common Stock Equivalent.

3.   EFFECTIVE DATE; TERM.

     (a)  EFFECTIVE  DATE.  The Plan shall be effective on April 15, 2002,  upon
approval  by the  shareholders  of the  Company  at the 2002  annual  meeting of
shareholders or any adjournments thereof.

     (b) TERM.  The Plan shall  remain in effect  until April 15,  2005,  unless
sooner  terminated by the Board of Directors.  Termination of the Plan shall not
affect grants and Awards then outstanding.

4.   SHARES OF COMMON STOCK SUBJECT TO PLAN.

     (a) MAXIMUM  NUMBER OF SHARES  AVAILABLE FOR ISSUANCE  UNDER THE PLAN.  The
maximum  aggregate number of shares of Common Stock which may be issued pursuant
to the Plan,  subject to  adjustment  as provided  in Section  4(b) of the Plan,
shall be twelve  million,  plus (i) any shares of Common  Stock issued under the
Plan that are forfeited back to the Company or are canceled, and (ii) any shares
of  Common  Stock  that  are  tendered,  whether  by  physical  delivery  or  by
attestation,  to the Company by a Participant as full or partial  payment of the
exercise price of any Stock Option  granted  pursuant to the Plan, in connection
with the payment or  settlement of any other grant or Award made pursuant to the
Plan, or in payment of any  applicable  withholding  for federal,  state,  city,
local or foreign income,  payroll or other taxes incurred in connection with the
exercise of any Stock Option or Stock  Appreciation Right granted under the Plan
or the receipt or  settlement  of any other  grant or Award under the Plan.  The
shares of Common Stock which may be issued under the Plan may be authorized  and
unissued shares or issued shares reacquired by the Company.  No fractional share
of the Common Stock shall be issued under the Plan.  Awards of fractional shares
of the Common Stock, if any, shall be settled in cash.

     (b)  ADJUSTMENTS  UPON  CHANGES IN CAPITAL  STRUCTURE.  In the event of any
change in the capital  structure,  capitalization or Common Stock of the Company
such as a stock dividend, stock split, recapitalization,  merger, consolidation,
split-up, combination or exchange of shares or other form of reorganization,  or
any other change affecting the Common Stock, such proportionate adjustments,  if
any, as the Board of Directors in its discretion may deem appropriate to reflect
such change shall be made with  respect to: (i) the maximum  number of shares of
Common  Stock which may be (1) issued  pursuant to the Plan,  (2) the subject of
any type of grant or Award under the Plan, and (3) granted, Awarded or issued to
any Participant pursuant to any provision of the Plan; (ii) the number of shares
of Common Stock  subject to any  outstanding  Stock Option,  Stock  Appreciation
Right or other grant or Award made to any Participant  under the Plan; (iii) the
per share exercise price in respect of any  outstanding  Stock Options and Stock
Appreciation Rights; (iv) the number of shares of Common Stock and the number of
Units or the value of such Units,  as the case may be,  which are the subject of
other grants and Awards then outstanding  under the Plan; and (v) any other term
or condition of any grant affected by any such change.

5.   ADMINISTRATION.

     (a) THE COMMITTEE.  The Plan shall be  administered  by the Committee to be
appointed  from time to time by the Board of Directors and comprised of not less
than  three  of the then  members  of the  Board of  Directors  who  qualify  as
"non-employee  directors"  within the meaning of Rule 16(b)-3  promulgated under
the Exchange Act and as "outside directors" within the meaning of Section 162(m)
of the Code.  Members of the Committee  shall serve at the pleasure of the Board
of Directors.  The Board of Directors may from time to time remove members from,
or add members  to, the  Committee.  A majority of the members of the  Committee
shall  constitute  a quorum for the  transaction  of business  and the acts of a
majority  of the  members  present  at any  meeting at which a quorum is present
shall be the acts of the Committee. Any one or more members of the Committee may
participate  in a meeting by  conference  telephone  or similar  means where all
persons  participating  in the meeting  can hear and speak to each other,  which
participation  shall  constitute  presence  in  person at such  meeting.  Action
approved in writing by a majority of the members of the Committee then serving

                                       A-3

<PAGE>

shall be fully as effective as if the action had been taken by unanimous vote at
a meeting duly called and held.  The Company shall make grants and effect Awards
under the Plan in  accordance  with the terms and  conditions  specified  by the
Committee,  which terms and  conditions  shall be set forth in grant  agreements
and/or other instruments in such forms as the Committee shall approve.

     (b) COMMITTEE POWERS.  The Committee shall have full power and authority to
operate and administer the Plan in accordance with its terms.  The powers of the
Committee include, but are not limited to, the power to: (i) select Participants
from among the  Employees of the Company and  Subsidiaries;  (ii)  establish the
types of, and the terms and  conditions of, all grants and Awards made under the
Plan,  subject to any applicable  limitations  set forth in, and consistent with
the express  terms of, the Plan;  (iii) make grants and pay or otherwise  effect
Awards subject to, and consistent with, the express provisions of the Plan; (iv)
establish  Performance  Goals,  Performance  Measures and  Performance  Periods,
subject to, and consistent with, the express  provisions of the Plan; (v) reduce
the  amount  of any grant or Award;  (vi)  prescribe  the form or forms of grant
agreements and other  instruments  evidencing  grants and Awards under the Plan;
(vii)  pay and to defer  payment  of Awards on such  terms and  conditions,  not
inconsistent  with  the  express  terms  of the  Plan,  as the  Committee  shall
determine; (viii) direct the Company to make conversions,  accruals and payments
pursuant  to the  Plan;  (ix)  construe  and  interpret  the  Plan  and make any
determination  of fact  incident to the operation of the Plan;  (x)  promulgate,
amend  and  rescind  rules  and  regulations  relating  to  the  implementation,
operation  and  administration  of the  Plan;  (xi)  adopt  such  modifications,
procedures  and subplans as may be necessary or  appropriate  to comply with the
laws of other countries with respect to Participants or prospective Participants
employed  in  such  other  countries;   (xii)  delegate  to  other  persons  the
responsibility for performing  administrative or ministerial acts in furtherance
of the Plan;  (xiii) engage the services of persons and firms,  including banks,
consultants and insurance  companies,  in furtherance of the Plan's  activities;
and  (xiv)  make all other  determinations  and take all  other  actions  as the
Committee may deem necessary or advisable for the  administration  and operation
of the Plan.

     (c) COMMITTEE'S  DECISIONS FINAL. Any determination,  decision or action of
the   Committee   in   connection   with   the   construction,   interpretation,
administration or application of the Plan, and of any grant agreement,  shall be
final,  conclusive and binding upon all  Participants,  and all persons claiming
through Participants, affected thereby.

     (d)  ADMINISTRATIVE  ACCOUNTS.  For the  purpose of  accounting  for Awards
deferred  as to  payment,  the  Company  shall  establish  bookkeeping  accounts
expressed in Units bearing the name of each  Participant  receiving such Awards.
Each account shall be unfunded,  unless otherwise determined by the Committee in
accordance with Section 15(d) of the Plan.

     (e)  CERTIFICATIONS.  In respect of each grant  under the Plan to a Covered
Employee  which the Committee  intends to be  "performance  based  compensation"
under  Section  162(m) of the Code,  the  provisions of the Plan and the related
grant agreement shall be construed to confirm such intent, and to conform to the
requirements  of Section 162(m) of the Code, and the Committee  shall certify in
writing  (which  writing  may  include  approved  minutes  of a  meeting  of the
Committee)  that  the  applicable  Performance  Goal(s),  determined  using  the
Performance  Measure  specified  in the related  grant  agreement,  was attained
during the relevant  Performance  Period at a level that equaled or exceeded the
level  required for the payment of such Award in the amount  proposed to be paid
and that such Award does not exceed any applicable Plan limitation.

6.   STOCK OPTIONS.

     (a) IN GENERAL.  Options to purchase  shares of Common Stock may be granted
under  the  Plan and may be  Incentive  Stock  Options  or  Non-Qualified  Stock
Options.  All Stock Options shall be subject to the terms and conditions of this
Section  6  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent  with the express  provisions of the Plan,  as the Committee  shall
determine.  Stock  Options may be granted in  addition  to, or in tandem with or
independent of, Stock  Appreciation  Rights or other grants and Awards under the
Plan. The Committee may grant Stock Options that provide for the automatic grant
of a  replacement  Stock  Option if payment  of the  exercise  price  and/or any
related  withholding taxes is made by tendering (whether by physical delivery or
by  attestation)  shares of Common  Stock or by  having  shares of Common  Stock
withheld by the Company.  The replacement Stock Option would cover the number of
shares of Common  Stock  tendered or withheld,  would have a per share  exercise
price equal to at least 100% of the Fair Market Value of a share of Common Stock
on the date of the exercise of the original  Stock  Option,  and would have such
other terms and conditions as may be specified by the Committee and set forth in
the related grant agreement.

                                       A-4

<PAGE>

     (b) ELIGIBILITY AND  LIMITATIONS.  Any officer of the Company and any other
Employee  of the  Company or a  Subsidiary  may be granted  Stock  Options.  The
Committee  shall  determine,  in its  discretion,  the  Employees  to whom Stock
Options will be granted,  the timing of such grants, and the number of shares of
Common  Stock  subject  to each Stock  Option  granted;  provided,  that (i) the
maximum  aggregate  number of shares of  Common  Stock  which may be issued  and
delivered  upon the exercise of  Non-Qualified  Stock Options  granted under the
Plan shall be ten million, (ii) the maximum aggregate number of shares of Common
Stock which may be issued and  delivered  upon the exercise of  Incentive  Stock
Options  shall be five  million,  (iii) the  maximum  number of shares of Common
Stock in respect of which Stock  Options may be granted to any  Employee  during
any  calendar  year shall be  500,000,  and (iv) in respect of  Incentive  Stock
Options,  the  aggregate  Fair  Market  Value  (determined  as of the  date  the
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which an Incentive  Stock  Option  becomes  exercisable  for the first time by a
Participant  during any calendar year shall not exceed  $100,000,  or such other
limit  as may be  required  by the  Code,  except  that,  if  authorized  by the
Committee  and provided for in the related grant  agreement,  any portion of any
Incentive  Stock  Option  that  cannot  be  exercised  as such  because  of this
limitation may be converted into and exercised as a Non-Qualified  Stock Option.
In no event shall any Stock Option or Stock  Appreciation  Right be granted to a
Participant in exchange for the  Participant's  agreement to the cancellation of
one or more  Stock  Options  or  Stock  Appreciation  Rights  then  held by such
Participant  if the  exercise  price of the new grant is lower than the exercise
price of the grant to be  cancelled  and in no event  shall any Stock  Option or
Stock  Appreciation  Right be  amended to reduce  the  option  price,  except as
contemplated by Section 4(b) of the Plan.

     (c)  OPTION  EXERCISE  PRICE.  The per share  exercise  price of each Stock
Option  granted under the Plan shall be determined by the Committee  prior to or
at the time of grant,  but in no event shall the per share exercise price of any
Stock  Option be less than 100% of the Fair Market  Value of the Common Stock on
the date of the grant of such Stock Option.

     (d)  OPTION  TERM.  The  term of each  Stock  Option  shall be fixed by the
Committee; except that in no event shall the term of any Stock Option exceed ten
years after the date such Stock Option is granted.

     (e)  EXERCISABILITY.  A Stock Option shall be  exercisable  at such time or
times and subject to such terms and  conditions  as shall be  determined  by the
Committee at the date of grant; provided, however, that no Stock Option shall be
exercisable  during  the first six months  after the date such  Stock  Option is
granted.  No Stock Option may be exercised  unless the holder  thereof is at the
time of such exercise an Employee and has been  continuously  an Employee  since
the date such Stock Option was granted, except that the Committee may permit the
exercise  of any  Stock  Option  for  any  period  following  the  Participant's
termination of employment not in excess of the original term of the Stock Option
on such terms and  conditions  as it shall deem  appropriate  and specify in the
related grant agreement.

     (f) METHOD OF  EXERCISE.  A Stock Option may be  exercised,  in whole or in
part, by giving written notice of exercise to the Company  specifying the number
of shares of Common Stock to be purchased.  Such notice shall be  accompanied by
payment in full of the purchase price, plus any required  withholding  taxes, in
cash or, if permitted by the terms of the related  grant  agreement or otherwise
approved in advance by the Committee, in shares of Common Stock already owned by
the Participant  valued at the Fair Market Value of the Common Stock on the date
of exercise.  The Committee may also permit Participants,  either on a selective
or aggregate basis, to simultaneously exercise Stock Options and sell the shares
of Common Stock thereby acquired pursuant to a brokerage or similar  arrangement
approved in advance by the  Committee  and to use the proceeds from such sale to
pay the exercise price and withholding taxes.

7.   STOCK APPRECIATION RIGHTS.

     (a) IN GENERAL.  Stock  Appreciation  Rights in respect of shares of Common
Stock may be granted  under the Plan alone,  in tandem  with,  in addition to or
independent  of a Stock  Option or other grant or Award under the Plan.  A Stock
Appreciation  Right  entitles a  Participant  to receive an amount  equal to the
excess  of the  Fair  Market  Value of a share  of  Common  Stock on the date of
exercise  over the Fair Market  Value of a share of Common  Stock on the date of
grant of the Stock Appreciation  Right, or such other higher price as may be set
by the  Committee,  multiplied  by the  number of shares  of Common  Stock  with
respect to which the Stock Appreciation Right shall have been exercised.

     (b) ELIGIBILITY AND  LIMITATIONS.  Any officer of the Company and any other
Employee of the Company or a Subsidiary selected by the Committee may be granted
Stock Appreciation Rights. The Committee shall determine, in its discretion, the
Employees to whom Stock Appreciation Rights will be granted, the timing of

                                       A-5

<PAGE>

such  grants and the  number of shares of Common  Stock in respect of which each
Stock  Appreciation  Right is granted;  provided that (i) the maximum  aggregate
number of shares of Common Stock in respect of which Stock  Appreciation  Rights
may be granted  shall be four  million,  (ii) the  maximum  aggregate  number of
shares of  Common  Stock  which  may be  issued  and  delivered  in  payment  or
settlement  of Stock  Appreciation  Rights shall be two  million,  and (iii) the
maximum number of shares of Common Stock in respect of which Stock  Appreciation
Rights may be granted to any Employee during any calendar year shall be 100,000.

     (c) EXERCISABILITY;  EXERCISE;  FORM OF PAYMENT. A Stock Appreciation Right
may be  exercised by a  Participant  at such time or times and in such manner as
shall  be  authorized  by the  Committee  and set  forth  in the  related  grant
agreement,  except  that  in no  event  shall  a  Stock  Appreciation  Right  be
exercisable  within the first six months after the date of grant.  The Committee
may provide that a Stock Appreciation Right shall be automatically  exercised on
one or more specified dates. No Stock Appreciation Right may be exercised unless
the  holder  thereof  is at the  time of  exercise  an  Employee  and  has  been
continuously  an  Employee  since  the date the  Stock  Appreciation  Right  was
granted,  except  that the  Committee  may  permit  the  exercise  of any  Stock
Appreciation  Right for any period  following the  Participant's  termination of
employment not in excess of the original term of the Stock Appreciation Right on
such  terms and  conditions  as it shall  deem  appropriate  and  specify in the
related grant agreement.  A Stock Appreciation Right may be exercised,  in whole
or in part,  by giving the  Company a written  notice  specifying  the number of
shares of Common Stock in respect of which the Stock Appreciation Right is to be
exercised.  Stock  Appreciation  Rights may be paid upon  exercise  in cash,  in
shares of Common Stock, or in any combination of cash and shares of Common Stock
as determined by the Committee.

8.   RESTRICTED STOCK GRANTS AND AWARDS.

     (a) IN GENERAL.  A Restricted  Stock Grant is the issue of shares of Common
Stock in the name of an  Employee,  which  issuance is subject to such terms and
conditions  as  the  Committee  shall  deem  appropriate,   including,   without
limitation,  restrictions on the sale, assignment, transfer or other disposition
of such shares and the requirement that the Employee forfeit such shares back to
the Company (i) upon  termination of employment  for specified  reasons within a
specified  period of time,  or (ii) if any specified  Performance  Goals are not
achieved  during  a  specified  Performance  Period,  or  (iii)  if  such  other
conditions as the Committee may specify are not satisfied.

     (b) ELIGIBILITY AND  LIMITATIONS.  Any officer of the Company and any other
key  Employee  of the Company or a  Subsidiary  selected  by the  Committee  may
receive a Restricted Stock Grant. The Committee,  in its sole discretion,  shall
determine  whether a  Restricted  Stock  Grant  shall be made,  the  Employee to
receive the Restricted Stock Grant, and the conditions and restrictions  imposed
on the  Restricted  Stock  Grant.  The maximum  number of shares of Common Stock
which may be issued as  Restricted  Stock under the Plan shall be  500,000.  The
maximum  number of shares of Common Stock which may be issued to any Employee as
Restricted Stock during any calendar year shall not exceed 100,000.  The maximum
amount any Employee may receive as a Restricted Stock Grant in any calendar year
shall not exceed $8  million,  determined  using the Fair  Market  Value of such
Restricted Stock Grant as at the date of the grant thereof.

     (c) RESTRICTION PERIOD. Restricted Stock Grants shall provide that in order
for a Participant  to receive shares of Common Stock free of  restrictions,  the
Participant  must remain in the  employment of the Company or its  Subsidiaries,
subject to such exceptions as the Committee may deem  appropriate and specify in
the  related  grant  agreement,  for a  period  of not  less  than  three  years
commencing  on the date of the grant and  ending on such  later date or dates as
the Committee may designate at the time of the grant (the "Restriction Period").
The Committee, in its sole discretion, may provide for the lapse of restrictions
in installments  during the Restriction Period. The Committee may also establish
one or more  Performance  Goals that are  required to be achieved  during one or
more  Performance  Periods within the  Restriction  Period as a condition to the
lapse of the restrictions.

     (d) RESTRICTIONS.  The following restrictions and conditions shall apply to
each Restricted Stock Grant during the Restriction  Period:  (i) the Participant
shall not be entitled to  delivery of the shares of the Common  Stock;  (ii) the
Participant may not sell, assign,  transfer,  pledge,  hypothecate,  encumber or
otherwise  dispose of or realize  on the shares of Common  Stock  subject to the
Restricted  Stock  Grant;  and (iii) the  shares of the Common  Stock  issued as
Restricted  Stock shall be forfeited to the Company if the  Participant  for any
reason  ceases to be an  Employee  prior to the end of the  Restriction  Period,
except due to circumstances specified in

                                       A-6

<PAGE>

the  related  grant  agreement  or  otherwise  approved  by the  Committee.  The
Committee  may, in its sole  discretion,  include  such other  restrictions  and
conditions as it may deem appropriate.

     (e)  PAYMENT.  Upon  expiration  of  the  Restriction  Period  and  if  all
conditions  have been satisfied and any applicable  Performance  Goals attained,
the shares of the Restricted  Stock will be made  available to the  Participant,
subject to satisfaction of applicable withholding tax requirements,  free of all
restrictions;  provided, that the Committee may, in its discretion,  require (i)
the  further  deferral  of any  Restricted  Stock  Grant  beyond  the  initially
specified  Restriction Period, (ii) that the Restricted Stock be retained by the
Company,  and  (iii)  that the  Participant  receive a cash  payment  in lieu of
unrestricted shares of Common Stock.

     (f) RIGHTS AS A  SHAREHOLDER.  A  Participant  shall have,  with respect to
shares of Restricted  Stock,  all of the rights of a shareholder of the Company,
including  the right to vote the  shares and  receive  any cash  dividends  paid
thereon.  Stock dividends distributed with respect to shares of Restricted Stock
shall be treated as additional shares under the Restricted Stock Grant and shall
be subject to the restrictions and other terms and conditions set forth therein.

9.   PERFORMANCE GRANTS AND AWARDS.

     (a)  ELIGIBILITY  AND TERMS.  The  Committee  may grant to  officers of the
Company  and  other  key  Employees  of the  Company  and its  Subsidiaries  the
prospective  contingent right, expressed in Units, to receive payments of shares
of Common Stock, cash or any combination  thereof,  with each Unit equivalent in
value to one  share of  Common  Stock,  or  equivalent  to such  other  value or
monetary   amount  as  may  be  designated  or   established  by  the  Committee
("Performance  Grants"),   based  upon  Company  performance  over  a  specified
Performance  Period. The Committee shall, in its sole discretion,  determine the
officers of the Company and other key Employees eligible to receive  Performance
Grants.  At the  time  each  Performance  Grant  is made,  the  Committee  shall
establish the Performance  Period, the Performance Measure and the targets to be
attained  relative to such  Performance  Measure  (the  "Performance  Goals") in
respect of such  Performance  Grant. The number of shares of Common Stock and/or
the amount of cash earned and payable in settlement of a Performance Grant shall
be determined at the end of the Performance Period (a "Performance Award").

     (b)  LIMITATIONS  ON GRANTS AND  AWARDS.  The  maximum  number of shares of
Common  Stock which may be issued  pursuant to  Performance  Grants shall be 1.5
million.  The maximum  number of shares which may be the subject of  Performance
Grants made to any  Participant in respect of any  Performance  Period or during
any  calendar  year shall be 200,000.  The maximum  amount any  Participant  may
receive during any calendar year as Performance  Awards  pursuant to Performance
Grants shall not exceed $10 million,  determined  using the Fair Market Value of
such Performance Awards as at the last day of the applicable  Performance Period
or Periods or as at date or dates of the payment thereof, whichever is higher.

     (c) PERFORMANCE GOALS,  PERFORMANCE MEASURES AND PERFORMANCE PERIODS.  Each
Performance  Grant shall provide that, in order for a Participant  to receive an
Award of all or a portion of the Units subject to such  Performance  Grant,  the
Company must achieve  certain  Performance  Goals over a designated  Performance
Period having a minimum duration of one year, with attainment of the Performance
Goals determined using a specific Performance Measure. The Performance Goals and
Performance Period shall be established by the Committee in its sole discretion.
The Committee shall establish a Performance  Measure for each Performance Period
for  determining  the portion of the  Performance  Grant which will be earned or
forfeited  based on the extent to which the  Performance  Goals are  achieved or
exceeded.  In setting  Performance  Goals,  the  Committee may use a Performance
Measure  based on any  one,  or on any  combination,  of the  following  Company
performance  factors as the Committee  deems  appropriate:  (i)  Cumulative  Net
Income Per Share; (ii) Cumulative Net Income;  (iii) return on sales; (iv) total
shareholder  return; (v) return on assets; (vi) economic value added; (vii) cash
flow;  (viii) return on equity;  (ix) cumulative  operating  income (which shall
equal  consolidated  sales minus cost of goods sold and selling,  administrative
and general expense); (x) operating income before depreciation and amortization;
and (xi)  return on invested  capital.  Performance  Goals may include  minimum,
maximum and target levels of  performance,  with the size of  Performance  Award
based on the level attained.  Once established by the Committee and specified in
the grant  agreement,  and if and to the extent  provided  in or required by the
grant agreement, the Performance Goals and the Performance Measure in respect of
any Performance  Grant (or any Restricted Stock Grant or Stock-Based  Grant that
requires the attainment of Performance  Goals as a condition to the Award) shall
not be changed.  The Committee may, in its discretion,  eliminate or reduce (but
not  increase)  the  amount of any  Performance  Award (or  Restricted  Stock or
Stock-Based  Award)  that  otherwise  would be  payable  to a  Participant  upon
attainment of the Performance Goal(s).

                                       A-7

<PAGE>

     (d)  FORM OF  GRANTS.  Performance  Grants  may be made on such  terms  and
conditions not  inconsistent  with the Plan,  and in such form or forms,  as the
Committee may from time to time approve.  Performance  Grants may be made alone,
in addition to, in tandem with, or  independent of other grants and Awards under
the  Plan.  Subject  to the  terms of the  Plan,  the  Committee  shall,  in its
discretion, determine the number of Units subject to each Performance Grant made
to a Participant and the Committee may impose  different terms and conditions on
any particular Performance Grant made to any Participant. The Performance Goals,
the Performance Period or Periods, and the Performance  Measure(s) applicable to
a Performance Grant shall be set forth in the relevant grant agreement.

     (e)  PAYMENT OF  AWARDS.  Each  Participant  shall be  entitled  to receive
payment in an amount  equal to the  aggregate  Fair Market Value (if the Unit is
equivalent  to a share of Common  Stock),  or such other value as the  Committee
shall specify, of the Units earned in respect of such Performance Award. Payment
in settlement of a Performance  Award may be made in shares of Common Stock,  in
cash, or in any combination of Common Stock and cash, and at such time or times,
as the Committee, in its discretion, shall determine.

10.  OTHER STOCK-BASED GRANTS AND AWARDS.

     (a) IN GENERAL.  The Committee may make other grants and Awards pursuant to
which Common Stock is, or in the future may be,  acquired by  Participants,  and
other grants and Awards to Participants  denominated in Common Stock Equivalents
or other Units  ("Stock-Based  Grants").  Such Stock-Based Grants may be granted
alone or in addition to, in tandem with, or  independent of any other grant made
or Award effected under the Plan.

     (b) ELIGIBILITY  AND TERMS.  The Committee may make  Stock-Based  Grants to
officers  of the  Company  and  other  key  Employees  of the  Company  and  its
Subsidiaries.  Subject to the provisions of the Plan,  the Committee  shall have
authority to determine  the  Employees to whom,  and the time or times at which,
Stock-Based  Grants will be made, the number of shares of Common Stock,  if any,
to be subject to or covered  by each  Stock-Based  Grant,  and any and all other
terms and conditions of each Stock-Based Grant.

     (c)  LIMITATIONS.  The aggregate number of shares of Common Stock issued to
Participants pursuant to Stock-Based Grants made and Awards effected pursuant to
this Section 10 shall not exceed 500,000. No Participant shall receive more than
50,000  shares of Common Stock in settlement  of  Stock-Based  Awards during any
calendar  year. The maximum  amount any  Participant  may receive in Stock-Based
Awards  during any calendar year shall not exceed $4 million,  determined  using
the Fair Market Value of any shares of Common Stock  delivered in payment of the
Stock-Based Awards on the date or dates of the payment thereof.

     (d) FORM OF GRANTS;  PAYMENT OF AWARDS.  Stock-Based  Grants may be made in
such form or forms and on such terms and conditions, including the attainment of
specific Performance Goals, as the Committee, in its discretion,  shall approve.
Payment of Stock-Based Awards may be made in cash, in shares of Common Stock, or
in any  combination  of cash and  shares  of Common  Stock,  and at such time or
times, as the Committee shall determine.

11.  DEFERRALS.

     The Committee  may,  whether at the time of grant or at anytime  thereafter
prior to  payment  or  settlement,  require a  Participant  to defer,  or permit
(subject to such  conditions as the Committee may from time to time establish) a
Participant  to elect to defer,  receipt of all or any portion of any payment of
cash or shares of Common Stock that would  otherwise be due to such  Participant
in payment or  settlement  of any Award under the Plan.  If any such deferral is
required by the Committee (or is elected by the Participant  with the permission
of the  Committee),  the Committee shall establish rules and procedures for such
payment  deferrals.  The  Committee  may provide for the payment or crediting of
interest,  at such rate or rates as it shall in its discretion deem appropriate,
on such  deferred  amounts  credited  in cash and the  payment or  crediting  of
dividend  equivalents  in respect of deferred  amounts  credited in Common Stock
Equivalents.  Deferred  amounts may be paid in a lump sum or in  installments in
the  manner  and to the  extent  permitted,  and in  accordance  with  rules and
procedures established, by the Committee.

12.  NON-TRANSFERABILITY OF GRANTS AND AWARDS.

     No grant or Award under the Plan, and no right or interest  therein,  shall
be (i) assignable, alienable or transferable by a Participant, except by will or
the laws of descent and distribution,  or (ii) subject to any obligation, or the
lien or claims of any  creditor,  of any  Participant,  or (iii)  subject to any
lien, encumbrance or

                                       A-8

<PAGE>

claim  of  any  party  made  in  respect of or through any Participant,  however
arising.  During  the  lifetime  of  a  Participant,  Stock  Options  and  Stock
Appreciation  Rights are exercisable only by, and shares of Common Stock  issued
upon  the  exercise  of  Stock  Options  and  Stock  Appreciation  Rights or  in
settlement  of  other  Awards  will  be  issued  only to, and other payments  in
settlement  of any Award will be payable only to, the Participant or his or  her
legal  representative.  The  Committee  may,  in its sole discretion,  authorize
written  designations  of beneficiaries and authorize Participants to  designate
beneficiaries   with   the  authority  to  exercise  Stock  Options  and   Stock
Appreciation  Rights granted to a Participant in the event of his or her  death.
Notwithstanding the foregoing, the Committee may, in its sole discretion and  on
and  subject  to  such terms and conditions as it shall deem appropriate,  which
terms  and  conditions  shall  be set forth in the related grant agreement:  (i)
authorize a Participant to transfer all or a portion of any grant or Award  made
to  such  Participant; provided, that in no event shall any transfer be made  to
any  person  or  persons  other  than  such  Participant's  spouse, children  or
grandchildren,  or  a  trust  or  partnership  (or other legal entity which  the
Committee  may  approve) for the exclusive benefit of one or more such  persons,
which  transfer  must  be  made  as  a  gift and without any consideration;  and
(ii)  provide  for  the transferability of a particular grant or Award  pursuant
to   a  qualified  domestic  relations  order.  All  other  transfers  and   any
retransfer   by   any   permitted   transferee  are  prohibited  and  any   such
purported  transfer  shall  be null and void. Each grant or Award which  becomes
the  subject  of permitted transfer (and the Participant to whom it was  granted
by  the  Company) shall continue to be subject to the same terms and  conditions
as   were   in  effect  immediately  prior  to  such  permitted  transfer.   The
Participant  shall  remain  responsible  to  the Company for the payment of  all
withholding  taxes incurred as a result of any exercise of such grant or  Award.
In no event shall any permitted transfer of a grant or Award create any right in
any  party  in  respect  of  any  grant  or Award, other than the rights of  the
qualified transferee in respect of such grant or Award specified in the  related
grant agreement.

13.  CHANGE IN CONTROL.

     (a)  EFFECT ON  GRANTS.  In the event of a Change in  Control  (as  defined
below) of the Company,  except as the Board of Directors comprised of a majority
of Independent  Directors may expressly provide otherwise,  and  notwithstanding
any other provision of the Plan to the contrary: (i) all Stock Options and Stock
Appreciation  Rights then outstanding  shall become fully  exercisable as of the
date of the  Change  in  Control,  whether  or not  then  exercisable;  (ii) all
restrictions  and  conditions  in respect of all  Restricted  Stock  Grants then
outstanding  shall be deemed  satisfied as of the date of the Change in Control;
and (iii) all Performance  Grants and Stock-Based Grants shall be deemed to have
been fully earned, at the maximum amount of the award  opportunity  specified in
the grant agreement, as of the date of the Change in Control.

     (b) CHANGE IN CONTROL  DEFINED.  A "Change in Control" of the Company shall
occur when: (i) any Person (or group of Persons  acting  together or in concert)
becomes the Beneficial Owner,  directly or indirectly,  of fifteen percent (15%)
or more of the combined voting power of the Company's securities  (including its
Common  Stock and any other voting  securities)  then  outstanding;  or (ii) the
shareholders  of  the  Company  approve  a  definitive  agreement  for a  merger
involving the Company  and/or any of its direct or indirect  subsidiaries  which
would result in the Common Stock  outstanding  immediately  prior to such merger
continuing  to  represent  less than fifty  percent  of the voting  power of the
Company  outstanding  immediately  after  such  merger,  or  approve  a  merger,
consolidation  or other  similar  transaction  which would  result in the Common
Stock then  outstanding  being converted into or exchanged for the securities of
any other entity;  or (iii) the  shareholders  of the Company  approve a plan of
complete  liquidation  of the  Company  or an  agreement  for the  sale or other
disposition of all or  substantially  all of the assets of the Company;  or (iv)
the  Independent  Directors  no longer  constitute  a  majority  of the Board of
Directors.  "Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act.  "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.  "Independent  Director"  means any  individual who is a
member of the Board of Directors on the date the Plan becomes  effective and any
new director  (other than a director  whose  initial  assumption of office is in
connection  with an actual or  threatened  election  contest,  including but not
limited to, a consent solicitation  relating to the election of directors of the
Company,  or a  director  who is a Person,  or  represents  a Person or Group of
Persons  acting  together,  who is, or who publicly  announces  the intention to
become,  the Beneficial  Owner,  directly or  indirectly,  of 15% or more of the
voting power of the Company's  outstanding  voting securities) whose election to
the Board of Directors,  or nomination for election to the Board of Directors by
the Company's shareholders,  was approved or recommended by the affirmative vote
of a majority of the directors  then in office who either (i) were  directors on
the date the Plan  becomes  effective  or (ii) were  elected  or  nominated  for
election as a director by a Board

                                       A-9

<PAGE>

of  Directors  comprised  of a majority of  directors in office on the date this
Plan becomes effective and/or their successors whose election, or nomination for
election  by  the  Company's   shareholders,   was  previously  so  approved  or
recommended  by a Board of  Directors  comprised  of a majority  of  Independent
Directors.  Persons  shall  have the  meaning  given in  Section  3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)  thereof,  except
that such term shall not include (i) the  Company and its  Affiliates,  (ii) the
trustee or other fiduciary  holding  securities  under an employee  benefit plan
sponsored  by the  Company  or any of its  subsidiaries,  or (iii)  underwriters
temporarily holding securities pursuant to an offering of such securities by the
Company.

14.  AMENDMENT AND TERMINATION.

     The Board of  Directors  may  terminate  the Plan at any time,  except with
respect to grants then outstanding. The Board of Directors may amend the Plan at
any time and from time to time in such  respects as the Board of  Directors  may
deem necessary or appropriate without approval of the shareholders,  unless such
approval is necessary in order to comply with  applicable  laws,  including  the
Exchange Act and the Code. In no event may the Board of Directors amend the Plan
without the approval of the  shareholders  to (i) increase the maximum number of
shares of Common Stock which may be issued  pursuant to the Plan,  (ii) increase
any  limitation  set forth in the Plan on the  number of shares of Common  Stock
which may be issued,  or the  aggregate  value of Awards  which may be made,  in
respect of any type of grant to all Participants  during the term of the Plan or
to any  Participant  during any  specified  period,  (iii)  reduce  the  minimum
exercise price for Stock Options and Stock  Appreciation  Rights, or (iv) change
the Performance Measure criteria identified at Section 9(c) of the Plan.

15.  MISCELLANEOUS.

     (a)  WITHHOLDING  TAXES.  All Awards under the Plan will be made subject to
any  applicable  withholding  for taxes of any kind.  The Company shall have the
right to deduct from any amount  payable under the Plan,  including  delivery of
shares of Common  Stock to be made under the Plan,  all  federal,  state,  city,
local or foreign  taxes of any kind  required by law to be withheld with respect
to such  payment  and to take such  other  actions  as may be  necessary  in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
If shares of Common  Stock are used to satisfy  withholding  taxes,  such shares
shall be valued  based on the Fair  Market  Value  thereof  on the date when the
withholding  for taxes is required to be made.  The Company shall have the right
to require a Participant to pay cash to satisfy withholding taxes as a condition
to the payment of any amount  (whether in cash or shares of Common  Stock) under
the Plan.

     (b) NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the making
of any grant or Award shall  confer  upon any  Employee  any right to  continued
employment with the Company or any Subsidiary, nor shall it interfere in any way
with the right of the Company or any  Subsidiary to terminate the  employment of
any Employee at any time, with or without cause.

     (c) UNFUNDED  PLAN. The Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be  represented  by Awards
under the Plan.  Any  liability of the Company to any person with respect to any
Award under the Plan shall be based solely upon any contractual obligations that
may be effected pursuant to the Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other  encumbrance on, any property of
the Company.

     (d)  PAYMENTS  TO  TRUST.  The  Committee  is  authorized  to  cause  to be
established  a trust  agreement  or  several  trust  agreements  whereunder  the
Committee may make payments of amounts due or to become due to  Participants  in
the Plan.

     (e)  ENGAGING  IN  COMPETITION  WITH  COMPANY.  In the event a  Participant
terminates his or her employment with the Company or a Subsidiary for any reason
whatsoever,  and within  eighteen  (18) months  after the date  thereof  accepts
employment with any competitor of, or otherwise engages in competition with, the
Company, the Committee, in its sole discretion,  may require such Participant to
return,  or (if not received) to forfeit,  to the Company the economic  value of
any Award  which is  realized or  obtained  (measured  at the date of  exercise,
vesting or payment) by such  Participant (i) at any time after the date which is
six months prior to the date of such  Participant's  termination  of  employment
with  the  Company  or (ii)  during  such  other  period  as the  Committee  may
determine. The provisions of this Section 15(e) shall cease to have any force or
effect  whatsoever  immediately  upon the  occurrence  of any  Change in Control
described at Section 13 hereof.

                                      A-10

<PAGE>

     (f) OTHER COMPANY  BENEFIT AND  COMPENSATION  PROGRAMS.  Payments and other
benefits  received  by a  Participant  under an Award made  pursuant to the Plan
shall not be deemed a part of a Participant's  regular,  recurring  compensation
for purposes of any  termination  indemnity or severance  pay law of any country
and shall not be  included  in, nor have any effect  on,  the  determination  of
benefits under any pension or other employee benefit plan or similar arrangement
provided by the Company or any  Subsidiary,  unless (i) expressly so provided by
such other plan or arrangement or (ii) the Committee  expressly  determines that
an Award or a portion  thereof  should be  included as  recurring  compensation.
Nothing  contained in the Plan shall prohibit the Company or any Subsidiary from
establishing other special awards,  incentive  compensation plans,  compensation
programs  and  other   similar   arrangements   providing  for  the  payment  of
performance, incentive or other compensation to Employees. Payments and benefits
provided to any Employee under any other plan,  including,  without  limitation,
any stock option, stock award, restricted stock, deferred compensation, savings,
retirement or other benefit plan or arrangement, shall be governed solely by the
terms of such other plan.

     (g) SECURITIES LAW RESTRICTIONS. In no event shall the Company be obligated
to issue or deliver  any shares of Common  Stock if such  issuance  or  delivery
shall  constitute a violation of any  provisions of any law or regulation of any
governmental  authority or securities exchange.  No shares of Common Stock shall
be issued under the Plan unless  counsel for the Company shall be satisfied that
such  issuance  will be in  compliance  with all  applicable  Federal  and state
securities laws and regulations and all requirements of any securities  exchange
on which the Common Stock is listed.

     (h) GRANT  AGREEMENTS.  Each  Participant  receiving a grant under the Plan
shall enter into a grant  agreement  with the Company in a form specified by the
Committee  agreeing to the terms and  conditions  of the grant and such  related
matters as the Committee shall, in its sole discretion, determine.

     (i)  SEVERABILITY.  In the event any provision of the Plan shall be held to
be invalid or unenforceable for any reason,  such invalidity or unenforceability
shall not affect the remaining provisions of the Plan.

     (j)  GOVERNING  LAW.  The  Plan  shall  be  governed  by and  construed  in
accordance with the laws of the State of Ohio.

                                      A-11

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