THE GOODYEAR TIRE & RUBBER COMPANY GRANT AGREEMENT CASH PERFORMANCE UNIT GRANT
Exhibit 10.2
THE GOODYEAR TIRE & RUBBER COMPANY
GRANT AGREEMENT
CASH PERFORMANCE UNIT GRANT
CASH PERFORMANCE UNIT GRANT
You have been awarded a Cash Performance Unit Grant pursuant to the 2008 Performance Plan of
The Goodyear Tire & Rubber Company (the “Company”), adopted effective April 8, 2008, as amended
(the “Plan”), as follows:
| Date of Grant: | ||||
| Number of Units Granted: | (to be divided by thirds (1/3) for each Performance Period) | |||
| 20___ Performance Period: | 1-1-___ through 12-31-___ | |||
| 20___ Performance Period: | 1-1-___ through 12-31-___ | |||
| 20___ Performance Period: | 1-1-___ through 12-31-___ | |||
| 20___ Unit Value | $0.00 to $ | |||
| 20___ Unit Value | To be determined | |||
| 20___ Unit Value | To be determined |
The value of the Cash Performance Units specified above which you will earn at the end of the
respective Performance Periods specified above will be determined and contingent upon the extent to
which Performance Goals for the Performance Period are achieved. The Unit Value may be adjusted
depending on the level of achievement of the Performance Goals. Payment of the Units will be made
as provided under the General Terms and Conditions. The Performance Measures, Performance Goals
and Unit Value schedule for the 20___Performance Period for your Cash Performance Unit Grant are
described in Annex A. The Performance Measures, Performance Goals and Unit Value schedule for the
subsequent Performance Periods will be determined by the Committee at a later date.
GRANT AGREEMENT
(Continued)
(Continued)
General Terms and Conditions
1. The Cash Performance Unit Grant for the number of Units specified above is granted to you
under, and governed by the terms and conditions of, the Plan and this Grant Agreement. Since your
awards are conveyed and managed online, your online acceptance constitutes your agreement to, and
acceptance of, all terms and conditions of the Plan and this Grant Agreement. You also agree that
you have read and understand the provisions of the Plan, this Grant Agreement and Annex A. All
defined terms used in this Grant Agreement have the meanings set forth in the Plan.
2. All rights conferred upon you under the provisions of this Grant Agreement are personal to
you and no assignee, transferee or other successor in interest shall acquire any rights or
interests whatsoever under this Grant Agreement, which is made exclusively for the benefit of you
and the Company, except by will or the laws of descent and distribution.
3. The Number of Units Granted with respect to a Performance Period will be multiplied by the
related Unit Value to determine the dollar amount of the Performance Award (the “Performance
Award”) to be earned, subject to Section 4 of this Grant Agreement, after the end of that
Performance Period and paid as provided in Section 8 of this Grant Agreement. All Performance
Awards will be paid in cash.
4. As further consideration for the Units granted to you hereunder, except as otherwise
provided in this Section 4 or in Section 5, you must remain in the continuous employ of the Company
or one or more of its Subsidiaries until December 31, 20___(the “Vesting Date”). The Number of
Units Granted with respect to a Performance Period will be prorated in the event of your death or
termination of employment at any age after 30 or more years, or at age 55 or older with at least 10
years, of continuous service with the Company and its Subsidiaries prior to completion of the
Performance Period. Pro-rata units are calculated by dividing the number of months worked by the
number of months in the Performance Period and multiplying the result by the Number of Units
Granted with respect to the Performance Period. For purposes of the pro-rata unit calculation, if
any portion of a month is worked, credit will be provided for the full month. The Performance
Award will be determined by multiplying the prorated Number of Units Granted by the Unit Value for
the Performance Period, earned after the end of the Performance Period and paid as provided in
Section 8 of this Grant Agreement. In the event of your death or termination of employment at any
age after 30 or more years, or at age 55 or older with at least 10 years, of continuous service
with the Company and its Subsidiaries on or prior to the Vesting Date but after completion of a
Performance Period, you will receive the number of Units earned with respect to the completed
Performance Period as determined by the Committee following the end of the Performance Period,
which will be payable as provided in Section 8. Further, in the event that you incur a Severance
during the Performance Period, the related Units shall be deemed to have been fully earned at the
target amount of the award opportunity specified in Annex A, and in the event that you incur a
Severance on or prior to the Vesting Date but after completion of a Performance Period, the Units
with respect to the completed Performance Period shall be deemed to have been fully earned in the
amount determined by the Committee following the end of the Performance Period, and in each case
shall be paid as provided in Section 8 of this Grant Agreement. Nothing contained herein shall
restrict the right
Page 2 of 7
GRANT AGREEMENT
(Continued)
(Continued)
of the Company or any of its subsidiaries to terminate your employment at any time, with or
without cause.
5. In the event your employment status changes during the Performance Period due to layoff,
leave of absence or termination of employment while receiving benefits for a period of not less
than one year under a long-term disability income plan provided by a government or sponsored by the
Company or one of its Subsidiaries, the Number of Units Granted with respect to a Performance
Period will be prorated. Pro-rata units are calculated by dividing the number of months worked by
the number of months in the Performance Period and multiplying the result by the Number of Units
Granted with respect to the Performance Period. For purposes of the pro-rata unit calculation, if
any portion of a month is worked, credit will be provided for the full month. The Performance
Award will be determined by multiplying the prorated Number of Units Granted by the Unit Value for
the Performance Period, earned after the end of the Performance Period and paid as provided in
Section 8 of this Grant Agreement. In the event your employment status changes on or prior to the
Vesting Date but after completion of a Performance Period due to layoff, leave of absence or
termination of employment while receiving benefits for a period of not less than one year under a
long-term disability income plan provided by a government or sponsored by the Company or one of its
Subsidiaries, you will receive the number of Units earned with respect to the completed Performance
Period as determined by the Committee following the end of the Performance Period, which will be
payable as provided in Section 8.
6. In the event you retire or otherwise terminate your employment with the Company or a
Subsidiary and within 18 months after such termination date you accept employment with a competitor
of, or otherwise engage in competition with, the Company, the Committee, in its sole discretion,
may require you to return, or (if not received) to forfeit, to the Company the payments made (or to
be made) hereunder which you have received (or will receive) at any time on or after the date which
is six months prior to the date of your termination of employment with the Company. Additionally,
all Units granted to you hereunder which are outstanding prior to your competitive engagement shall
be automatically cancelled.
7. You will be required to satisfy all federal, state and local tax and payroll withholding
obligations arising in respect of any distribution of cash to you or deferral of the Units. Such
withholding obligations will be deducted from your Units.
8. (a) Except as provided in Section 8(b), any payment of a Performance Award shall be made
(i) after the Vesting Date but in no event later than March 15, 20___; or (ii) in the event of your
earlier Severance, within 30 days after your Severance.
(b) Notwithstanding the foregoing, you may elect on a form provided by the Company (the
“Deferral Election”) to defer all or a specified whole percentage of the Units earned in accordance
with the parameters specified in Section 8(c)(4), in which event the amount you elect to defer will
be credited by March 15, 20___to an account maintained in the records of the Company and will be
invested as provided in Section 8(d). The Deferral Election must be filed with the Company by, and
shall become irrevocable as of, December 31 (or such earlier date as specified by the Company on
the Deferral Election) of the calendar year next preceding the first day of the first Performance
Period for which such Units would otherwise be earned. If
Page 3 of 7
GRANT AGREEMENT
(Continued)
(Continued)
you first become eligible to defer the Units after the beginning of the first Performance
Period (within the meaning of Section 409A of the Code and after applying the plan aggregation
rules for voluntary deferral plans), the Deferral Election must be filed with the Company by, and
shall become irrevocable as of, the thirtieth (30th) day following the Date of Grant (or such
earlier date as specified by the Company on the Deferral Election) and shall only apply to the
Units earned after the Deferral Election becomes irrevocable using the procedures set forth under
Section 409A of the Code. Once irrevocable, a Deferral Election shall not be amended or terminated
and payment of earned Units subject to a Deferral Election shall not be affected by a subsequent
Severance.
(c) A Performance Award deferred pursuant to the terms of this Grant Agreement (“Deferred
Compensation”) shall be payable as follows:
(1) In the event that your employment with the Company or a Subsidiary is terminated by reason
of voluntary termination, layoff due to job elimination or job relocation, involuntary termination
for any reason or any other termination for any other reason other than your death, Disability
(defined as receiving benefits for a period of not less than one year under a long-term disability
income plan provided by a government or sponsored by the Company or one of its Subsidiaries that
determines eligibility in conformity with Treasury Regulation §1.409A-3(i)(4)) or Retirement
(defined as termination of employment at age 55 or older with at least 10 years of continuous
service with the Company and its subsidiaries), the entire amount of your Deferred Compensation
shall be paid on the first business day following the six-month anniversary of such termination of
employment.
For purposes of establishing whether you have terminated, hence had a separation of service
within the meaning of Section 409A of the Code, you will be deemed to have a separation of service
on the date of your termination, if after the date of your termination you are not reasonably
anticipated to provide a level of bona fide services to the Company or any affiliate that exceeds
25% of the average level of bona fide services provided by you in the immediately preceding 36
months (or, if less, the full period of services to the Company or any affiliate).
(2) In the event of your death (whether before or after your Retirement or Disability), the
entire amount of your Deferred Compensation shall be paid in a lump sum within sixty (60) days
after the date of your death to any person or entity (including a trust or your estate) last
designated in writing by you on the form provided by the Company and delivered to the Committee
prior to your death.
(3) In the event you terminate after meeting the requirements for Retirement or Disability,
the distribution of your Deferred Compensation shall be made in accordance with your election made
in accordance with paragraph 4 below.
For purposes of establishing whether you have retired, hence had a separation of service
within the meaning of Section 409A of the Code, you will be deemed to have a separation of service
on the date of your Retirement, if after the date of your Retirement you are not reasonably
anticipated to provide a level of bona fide services to the Company or any affiliate that exceeds
25% of the average level of bona fide services provided by you in the
Page 4 of 7
GRANT AGREEMENT
(Continued)
(Continued)
immediately preceding 36 months (or, if less, the full period of services to the Company or
any affiliate).
(4) If your Deferred Compensation has not been paid pursuant to paragraphs (1) or (2) above,
then it shall be paid pursuant to the time and form of the elections made pursuant to this
paragraph (4). You must at the time of your election to defer Units earned, specify the time and
form of payment of such Deferred Compensation only in one of the following times and forms:
(i) In a lump sum on the 15th day of January following the specified anniversary of the
Vesting Date where you specify an anniversary of between 2 and 20 years at the time of election to
defer; or
(ii) In a lump sum on the later of (1) six (6) months following Retirement or Disability or
(2) on the 15th day of January of the year following the year of your termination due to Retirement
or Disability, or
(iii) In annual installments over a period specified by you at the time of the Deferral
Election of no more than fifteen (15) years, commencing in each case on the later of (1) six (6)
months following Retirement or Disability or (2) on the 15th day of January of the year following
the date of your Retirement or Disability, each installment to equal the aggregate amount of all
your Deferred Compensation then remaining in your account subject to such election, determined as
at the close of the business day immediately prior to such distribution date, divided by the number
of installments then remaining to be made (including the installment to be paid on such
distribution date); or
(iv) In annual installments over a period specified by you at the time of the Deferral
Election of no more than fifteen (15) years, commencing in each case on the 15th day of January
following the specified anniversary of the Vesting Date where you specify an anniversary of
between 2 and 20 years at the time of election to defer, each installment to equal the aggregate
amount of all Deferred Compensation then remaining in your account subject to such election,
determined as at the close of the business day immediately prior to such distribution date, divided
by the number of installments then remaining to be made (including the installment to be paid on
such distribution date).
(5) With respect to an attempted deferral by a Participant for which no effective election as
to time of payment has been filed with the Committee, such Performance Award will be paid in
accordance with Section 8(a) and the attempted deferral will be null and void.
(d) At the time you make your election to defer Units, you must choose from the Reference
Investment Fund or Funds attached hereto and allocate your Performance Award among one or more such
Reference Investment Funds which as of March 15, 20___will be established as your Cash Performance
Unit Account with respect to your Performance Award. You can make changes to your Reference
Investments in your Cash Performance Unit Account at any time online. The Committee shall have
absolute discretion in the selection of Reference Investment Funds available and may, from time to
time, change the available Reference
Page 5 of 7
GRANT AGREEMENT
(Continued)
(Continued)
Investment Funds as it deems appropriate. Any such change of Reference Investment Funds will
be communicated to you in accordance with procedures adopted by the Committee.
9. Any notice to you under this Grant Agreement shall be sufficient if in writing and if
delivered to you or mailed by registered mail directed to you at the address on record in the
Executive Compensation Department. Any notice to the Company under this Grant Agreement shall be
sufficient if in writing and if delivered to the Executive Compensation Department of the Company
in Akron, Ohio, or mailed by registered mail directed to the Company for the attention of the
Executive Compensation Department at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx 00000-0000. Either you
or the Company may, by written notice, change the address. This Grant Agreement shall be construed
and shall take effect in accordance with the laws of the State of Ohio.
10. The obligations of the Company under this Grant Agreement will be merely that of an
unfunded and unsecured promise of the Company to deliver cash in the future, and your rights will
be no greater than that of an unsecured general creditor. No assets of the Company will be held or
set aside as security for the obligations of the Company under this Grant Agreement.
11. It is intended that this Grant Agreement shall either be exempt from the application of,
or comply with, the requirements of Section 409A of the Code. This Grant Agreement shall be
construed, administered and governed in a manner that effects such intent, and the Committee shall
not take any action that would be inconsistent with such intent. Without limiting the foregoing,
the Units shall not be deferred, accelerated, extended, paid out, settled, adjusted, substituted,
exchanged or modified in a manner that would cause the award to fail to satisfy the conditions of
an applicable exception from the requirements of Section 409A of the Code or otherwise would
subject you to the additional tax imposed under Section 409A of the Code.
Notwithstanding anything contained in this Grant Agreement to the contrary, if you are a
“specified employee,” within the meaning of Section 409A of the Code, with December 31 being the
specified employee identification date and the following January 1 being the specified employee
effective date, on the date you incur a separation from service, then to the extent required in
order to comply with Section 409A of the Code, all payments under this Grant Agreement that
constitute a “deferral of compensation” within the meaning of Section 409A of the Code, that are
provided as a result of a separation from service and that would otherwise be paid during the first
six months following such separation from service shall be accumulated through and paid (together
with interest on any cash amounts at the applicable federal rate under Section 7872(f)(2)(A) of the
Code in effect on the date of termination), on the first business day that is more than six months
following your separation from service (or, if you die during such six-month period, within 90 days
after your death).
12. The Board of Directors may only terminate the provisions of this Grant Agreement with
respect to compensation deferred hereunder (referred to in this Section 12 as the “plan”) pursuant
to the following conditions:
(a) The Company may terminate and liquidate the plan within 12 months of a corporate
dissolution taxed under Section 331, or with the approval of a bankruptcy court pursuant to 11
U.S.C. §503(b)(1)(A), provided that the amounts deferred under the plan are
Page 6 of 7
GRANT AGREEMENT
(Continued)
(Continued)
included in your gross income in the latest of the following years (or, if earlier, the
taxable year in which the amount is actually or constructively received): (1) the calendar year in
which the plan termination and liquidation occurs; (2) the first calendar year in which the amount
is no longer subject to a substantial risk of forfeiture; or (3) the first calendar year in which
the payment is administratively practicable.
(b) The Company may terminate and liquidate the plan pursuant to irrevocable action taken by
the Board of Directors within the 30 days preceding or the 12 months following a change in control
event (as defined in Treasury Regulation §1.409A-3(i)(5)), provided that this paragraph will only
apply to a payment under the plan if all agreements, methods, programs and other arrangements
sponsored by the Company immediately after the time of the change in control event with respect to
which deferrals of compensation are treated as having been deferred under a single plan under
Treasury Regulation §1.409A-1(c) are terminated and liquidated with respect to each participant
that experienced the change in control event, so that under the terms of the termination and
liquidation all such participants are required to receive all amounts of compensation deferred
under the terminated agreements, methods, programs and other arrangements within 12 months of the
date the Company irrevocably takes all necessary action to terminate and liquidate the agreements,
methods, programs and other arrangements.
(c) The Company may terminate and liquidate the plan, provided that (1) the termination and
liquidation does not occur proximate to a downturn in the financial health of the Company; (2) the
Company terminates and liquidates all agreements, methods, programs and other arrangements
sponsored by the Company that would be aggregated with any terminated and liquidated agreements,
methods, programs and other arrangements under Treasury Regulation §1.409A-1(c) if any participant
had deferrals of compensation under all of the agreements, methods, programs and other arrangements
that are terminated and liquidated; (3) no payments in liquidation of the plan are made within 12
months of the date the Company takes all necessary action to irrevocably terminate and liquidate
the plan other than payments that would be payable under the terms of the plan if the action to
terminate and liquidate the plan had not occurred; (4) all payments are made within 24 months of
the date the Company takes all necessary action to irrevocably terminate and liquidate the plan;
and (5) the Company does not adopt a new plan that would be aggregated with any terminated and
liquidated plan under Treasury Regulation §1.409A-1(c) if the same service provider participated in
both plans, at any time within three years following the date the Company takes all necessary
action to irrevocably terminate and liquidate the plan.
Page 7 of 7
