EXHIBIT 10(K)
THE B.F.GOODRICH COMPANY
KEY EMPLOYEES' STOCK OPTION PLAN
The purpose of the Plan is to enable the Company to be competitive in
encouraging key employees, who in the opinion of the Board of Directors perform
services of special importance to the management, operation and the development
of the business of the Company or its subsidiaries, to remain in its service, to
attract others to it, and to provide such employees with an additional incentive
to contribute to the prosperity of the Company.
The Board may in its discretion from time to time, grant to key employees of the
Company and its subsidiaries (including officers whether or not Directors)
options to purchase, at a cash price not less than 100% of the fair market value
on the date of grant (the "option price"), treasury shares or authorized but
unissued shares of common stock of the Company, subject to the conditions set
forth in this Plan. The aggregate number of shares which may be issued pursuant
to options granted under this Plan shall not exceed 1,000,000 shares plus such
number of additional shares available for allotment under this Plan on April 15,
1991 and from any options granted under this Plan prior to April 15, 1991 which
shall thereafter expire, terminate, or be cancelled for any reason without being
exercised and from Stock Awards which are forfeited. To the extent permitted by
law the Board may delegate any or all of its powers under this Plan to a
Committee of not less than three Directors, who are not Officers or employees of
the Company, and who are not eligible to participate in the Plan. The Board or
the Committee may delegate to the chief executive officer and to other senior
officers of the Company its duties under the Plan, with respect to not more than
10% of the shares authorized under this Plan, pursuant to such conditions or
limitations as the Committee may establish, except that only the Committee may
select Participants and grant options, appreciation rights and Stock Awards to
Participants who are subject to Section 16 of the Securities Exchange Act of
1934.
The Board, at the time of granting to any employees an option to purchase shares
or any related stock appreciation right or limited stock appreciation right
under the Plan, shall fix the terms and conditions upon which such option or
appreciation right may be exercised, and may designate options incentive stock
options pursuant to Section 422 of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code") or any other statutory stock option that may be
permitted under the Internal Revenue Code from time to time, provided, however
that (i) the date on which such options and related appreciation rights shall
expire, if not exercised, may not be later than ten years after the date of
grant of the option, (ii) in the case of options designated as incentive stock
options (as defined in Section 422 of the Internal Revenue Code), the aggregate
fair market value of stock optioned to an employee (determined at time of grant)
under this plan or any other plan of this Company and its subsidiaries with
respect to which incentive stock options are exercisable for the first time by
such employee during any calendar year shall be limited to $100,000 (unless such
Section 422 limit is revised, then in conformance with such revision) and (iii)
in case of any other statutory stock option permitted under the Internal Revenue
Code, then in accordance with such provisions as in effect from time to time.
Within the foregoing limitations, the Board shall have the authority in its
discretion to specify all other terms and conditions, including but not limited
to provisions for the exercise of options in installments, the time limits
during which options may be exercised, and in lieu of payment in cash, the
exercise in whole or in part of options by tendering common stock of the Company
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owned by the employee, valued at the fair market value on the date of exercise
or other acceptable forms of consideration equal in value to the option price.
The Board may, in its discretion, issue rules or conditions with respect to
utilization of common stock for all or part of the option price.
The Board may, in its discretion, grant stock appreciation rights and limited
stock appreciation rights (as hereinafter described) in connection with any
stock option, either at the time of grant of such stock option or any time
thereafter during the term of such stock option, except that limited stock
appreciation rights may be granted in connection with stock options granted
prior to June 7, 1988, only if stock appreciation rights were granted in
connection with such stock options prior to June 7, 1988. Except for the terms
of this Plan with respect to limited stock appreciation rights, each such
appreciation right shall be subject to the same terms and conditions as the
related stock option and shall be exercisable at such times and to such extent
as the Board shall determine, but only so long as the related option is
exercisable. The number of stock appreciation rights or limited stock
appreciation rights granted shall not exceed the number of shares which may be
purchased upon exercise of a related option. The number of both stock
appreciation rights and limited stock appreciation rights shall be reduced not
only by the number of appreciation rights exercised but also by the number of
shares purchased upon the exercise of a related option. A related stock option
shall cease to be exercisable to the extent surrendered for the exercise of an
appreciation right. Upon surrender to the Company of the unexercised related
stock option, or any portion thereof, a stock appreciation right shall entitle
the optionee to receive from the Company in exchange therefor (a) a payment in
stock as determined below, or (b) to the extent determined by the Board, the
cash equivalent of the fair market value of such payment in stock on the
exercise date had the employee been awarded a payment in stock instead of cash,
or any combination of stock and cash. The number of shares which shall be issued
pursuant to the exercise of stock appreciation rights shall be determined by
dividing (1) the total number of stock appreciation rights being exercised
multiplied by the amount by which the fair market value of a share of common
stock of the Company on the exercise date exceeds the option price of the
related option, by (2) the fair market value of a share of common stock of the
Company on the exercise date. No fractional shares shall be issued.
For all purposes of this Plan the fair market value of a share of stock shall be
the mean of the high and low prices of the Company's common stock on the
relevant date as reported on the New York Stock Exchange -- Composite
Transactions listing (or similar report), or, if no sale was made on such date,
then on the next preceding day on which such a sale was made.
Upon the termination of employment of any employee for any reason, his or her
options and any related appreciation rights shall terminate at that time with
respect to all shares which were not then purchasable by him or her, provided,
however, that if the termination of employment is by reason of death, disability
or retirement the Board may in its sole discretion provide that such options and
related appreciation rights shall not terminate upon death, disability or
retirement and may become immediately exercisable or continue to become
exercisable in accordance with the terms of the original grant.
Any shares in respect of which options and any related appreciation rights shall
be terminated by reason of death, termination of employment, passage of time or
for any other reason, may again
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be the subject of options granted to employees in accordance with the provisions
of the Plan. However, upon surrender of a stock option on exercise of the
related appreciation right, the number of shares subject to the surrendered
option shall be charged against the maximum number of shares issuable under the
Plan and shall not be available for future options.
Options and any related appreciation rights and other awards granted under this
Plan shall not be transferable other than by will or the laws of descent and
distribution and such options and any related appreciation rights shall be
exercisable during the employee's lifetime only by the employee or by the
employee's guardian or legal representative.
The number and kind of shares authorized for delivery under this Plan and, if
appropriate, the purchase price per share, may be adjusted appropriately in the
event of any stock split, stock dividend, combination of shares, merger,
consolidation, reorganization, or other change in the nature of the shares of
the Company (any one or more of the foregoing hereinafter a "corporate
reorganization"). The determination of what adjustments, if any, are appropriate
shall be made by the Board.
In the event of a dissolution or liquidation of the Company or a merger,
consolidation, sale of all or substantially all of its assets, or other
corporate reorganization in which the Company is not the surviving corporation
or any merger in which the Company is the surviving corporation but the holders
of its common stock receive securities of another corporation, any outstanding
options hereunder shall terminate, provided that each optionee shall, in such
event, have the right immediately prior to such dissolution, liquidation,
merger, consolidation, sale of assets or reorganization in which the Company is
not the surviving corporation or any merger in which the Company is the
surviving corporation but the holders of its common stock receive securities of
another corporation, to exercise any unexpired option and/or stock appreciation
right in whole or in part without regard to the exercise date contained in such
option. Nothing herein contained shall prevent the assumption and continuation
of any outstanding option or the substitution of a new option by the surviving
corporation. Options and any related appreciation rights that are not
exercisable shall become immediately exercisable in the event of a Change in
Control. For purposes of the Plan, a Change in Control shall mean
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d) (3) or 14(d) (2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock")
or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change
of Control: (A) any acquisition directly from the Company (other than
by exercise of a conversion privilege), (B) any acquisition by the
Company or any of its subsidiaries, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries or (D) any acquisition by any corporation
with respect to which, following such acquisition, more than 70% of,
respectively, the then outstanding shares of common stock of such
corporation and the
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combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Company Voting Securities immediately prior to such
acquisition in substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may
be; or
(ii) During any period of two consecutive years,
individuals who, as of the beginning of such period, constitute the
Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the beginning of such period whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-1 1 of Regulation 14A promulgated
under the Exchange Act); or
(iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such reorganization, merger or consolidation, do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 70% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may
be; or
(iv) approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) a sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which following
such sale or other disposition, more than 70% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition,
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of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be.
The grant of a limited stock appreciation right will permit a grantee to
exercise such limited stock appreciation right for cash during a sixty-day
period commencing on the date on which any of the events described in the
definition of Change of Control occurs, each of which events shall hereinafter
be known as a "Change in Control Event." Notwithstanding the foregoing, however,
if the Change in Control Event occurs within six months after the date on which
a limited stock appreciation right was granted, then the sixty-day period during
which such limited stock appreciation right may be exercised for cash shall
commence six months after the date on which the limited stock appreciation right
was granted. The amount of cash received upon the exercise of any limited stock
appreciation right under either of the preceding two sentences shall equal the
excess, if any, of the fair market value of a share of the Company's common
stock on the date of exercise of the limited stock appreciation right, over the
option price of the stock option to which the limited stock appreciation right
relates.
The Board in lieu of or in addition to granting options under this Plan, may
make awards ("Stock Awards") in Common Stock or denominated in units of Common
Stock. All or part of any stock award may be subject to conditions established
by the Board, which may include, but are not limited to, continuous service with
the Company and attainment of specific performance objectives. Stock Awards may
include the awarding of additional shares upon attainment of performance
objectives. If shares of Common Stock are awarded subject to attainment of
performance objectives or continued service with the Company, the shares may be
registered in the Participant's names when initially awarded, but possession of
the certificates for the shares shall be retained by the Secretary of the
Company for the benefit of Participants, subject to the conditions of the Stock
Awards. In such event, each Participant shall have the right to receive all
dividends and other distributions made with respect to Stock Awards registered
in his or her name and shall have the right to vote or execute proxies with
respect to such registered shares. Stock Awards with respect to which the
restrictions are not removed in accordance with the provision of the Stock
Awards shall be forfeited and shall revert to the treasury of the Company.
Notwithstanding any other provisions of the Plan, the issuance or delivery of
any shares may be postponed for such period as may be required to comply with
any applicable requirements of any national securities exchange or any
requirements under any other law or regulation applicable to the issuance or
delivery of such shares, and the Company shall not be obligated to issue or
deliver any such shares if the issuance or delivery thereof shall constitute a
violation of any provision of any law or any regulation of any governmental
authority or any national securities exchange.
The Board shall have the power to interpret the provisions of this Plan and of
all options granted hereunder and to amend this Plan from time to time,
provided, however, that no amendment shall be made without the approval of
shareholders which has the effect of increasing the number of shares of stock
subject to this Plan (other than in connection with a corporate reorganization),
changing the class of employees eligible to participate, reducing the purchase
price of shares to an amount less than 100% of the fair market value on the date
of grant or extending the time during which options may be granted hereunder, or
otherwise materially increasing the benefits
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accruing to participants under this Plan. The Board shall have the authority to
amend the terms of any option or stock appreciation right subject to the
foregoing limitations and provided that no such amendment shall deprive any
optionee of any rights thereunder without his written consent unless such
amendment or rescission is required by law.
The Board of Directors may in its discretion elect not to proceed with this Plan
after its approval by the shareholders or may subsequently terminate this Plan
with respect to any shares for which options have not theretofore been granted.
Unless the time for granting options shall be extended with the approval of
shareholders, no options shall be granted under this Plan after April 15, 1997.
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