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EXHIBIT 10.1
PERFORMANCE RECOGNITION PLAN
of
THE GOODYEAR TIRE & RUBBER COMPANY
Effective January 1, 1996
(hereinafter called the "Plan")
I. PURPOSE AND POLICY
It is the declared policy of the Board of Directors of The Goodyear
Tire & Rubber Company ("Goodyear"), in order to provide incentive for extra
effort, that key personnel of the Company shall be compensated in addition to
their fixed compensation by participation in a performance recognition plan.
Such key personnel shall be selected, as hereinafter provided, from the elected
officers and other key employees of the Company.
The Plan is designed to reinforce participant effort and responsibility
towards achieving the total Company business objectives, the objectives of
specific business units and objectives established for individual participants.
Awards to participants provided under this Plan will vary to the extent these
goals and objectives are attained. The basic intent is to tie awards directly
to results that reflect Company growth and success achieved through customer
satisfaction, quality products and enhanced shareholder value.
The Plan shall be subject to discontinuance, or amendment by the Board
of Directors, at any time.
II. DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings:
A) Award. Cash payments approved by the Committee and made
pursuant to the objectives established pursuant to the Plan in respect
of any Plan year.
B) Company. The Goodyear Tire & Rubber Company or any of its
subsidiaries and affiliates.
C) Participant. With respect to any Plan year, a salaried
employee of the Company who has been selected by the Committee to
receive an award under the Plan for such Plan year subject to the
attainment of the established goals and objectives.
D) Plan Year. Each period of one year beginning January 1 and
ending December 31, commencing January 1, 1996.
III. THE COMMITTEE
The "Committee," hereinafter referred to, is the Compensation Committee
of the Board of Directors of Goodyear and shall from time to time be comprised
of all persons who then are members of the Board of Directors and who are not
participants in the Plan; and no member of the Committee shall be eligible for
participation in the Plan while he is serving on the Committee. Action by the
Committee pursuant to any provision of the Plan may be taken at any meeting
held upon not less than five days' notice of its time, place and purpose given
to each member, at which meeting a quorum of not less than four members is
present. If less than a majority of the whole Committee is present, such action
must be by the unanimous vote of those present, otherwise by a majority vote.
The minutes of such meeting (signed by its secretary) evidencing such action,
shall constitute authority for Goodyear to proceed in accordance therewith.
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IV. TARGET BONUS
Each participant in a Plan year is granted a target bonus with respect
to such Plan year which is subject to adjustment between zero percent and 150
percent, depending upon the extent to which the business goal or goals
established for the participant for such Plan year are achieved.
V. SELECTION OF PARTICIPANTS
A) With respect to each Plan year, after consultation with the Chief
Executive Officer of Goodyear (or, if he be unavailable, with the next ranking
officer of Goodyear who may be available), the Committee shall determine the
participants and establish their respective target bonuses for such Plan year.
The Committee shall also review and approve the goals established for the
participants for such Plan year. As to such determination, the Committee may
rely, to the extent it deems available, upon any information and
recommendations obtained from the officer so consulted. As soon as practicable
after the selection of participants for a Plan year, Goodyear shall notify them
of their participation and target bonuses for such Plan year. Participants are
not eligible for any other annual Company bonus or incentive plan during such
Plan year.
B) A list, certified by the Committee (or by the officers as to action
pursuant to subparagraph A above), shall evidence the determination of those
persons who are participants in the Plan for such Plan year and their
respective target bonuses and goals therein.
C) With respect to employees who are not officers of Goodyear, the
Chairman of the Board of Goodyear may add such employees as participants in the
Plan during a Plan year and report such additional participants to the
Committee from time to time.
VI. PAYMENT
The Committee, at its sole discretion, shall determine if a payment
shall be made to participants in respect of any Plan year notwithstanding the
fact that the established goals and objectives may have been achieved. If the
Committee determines that there will be a payment in respect of a Plan year,
payment of awards due participants with respect to the Plan will be made after
the close of such Plan year once the achievement of the performance goals have
been determined. All awards are contingent upon the achievement of the stated
performance goals for the Plan year and a determination by the Committee that a
payment shall be distributed to participants in respect of such Plan year. All
awards shall be in cash. There shall be deducted from each award under the Plan
the amount of any tax required by governmental authority to be withheld and
paid over by the Company to such government for the account of a participant
entitled to an award.
VII. CHANGE IN PARTICIPANT'S STATUS
A) Any participant who is not an employee of the Company on December 31
of a Plan year forfeits his or her participation for such Plan year unless
employment termination was due to the employee's death or retirement (other
than pursuant to a deferred vested pension) under the Retirement Plan for
Salaried Employees (or a comparable plan of a Goodyear subsidiary or
affiliate).
B) Any participant whose employment terminates during a Plan year due to
retirement shall be entitled only to a pro rata portion of the target bonus for
such Plan year, subject to the adjustment as provided for in Section IV hereof.
Such pro rata bonus is calculated by multiplying the percentage of days
actually worked of the year (ie, number of days worked divided by 365) by the
target bonus. Notwithstanding the above, a participant who, after retirement,
enters into a relationship either as an employee, consultant, agent or in any
manner whatsoever with an entity that sells products in competition with
products sold by Goodyear and its subsidiaries, forfeits the right to receive a
distribution under this Plan in respect of such Plan year. In the event such
participant enters into such a relationship with a competitor within six months
from a distribution under this Plan during such Plan year, the participant
agrees to refund to The Goodyear Tire & Rubber Company any such distribution
the participant had received.
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C) Any participant whose employment status changes during a Plan year
due to layoff, leave of absence or disability shall be entitled only to a pro
rata portion of the target bonus, subject to the adjustment as provided for in
Section IV hereof. Such pro rata bonus is calculated by multiplying the
percentage of days actually worked during the Plan year (ie, number of days
worked divided by 365) by the target bonus for such Plan year.
D) A participant whose employment terminates during a Plan year due to
death shall be entitled only to a pro rata portion of a target bonus for such
Plan year and the target bonus shall not be adjusted under Section IV hereof.
Such pro rata bonus is based on days actually worked during such Plan year and
calculated in the same manner as if the participant had retired and
distribution of the bonus shall be made to the participating employee's
executors, administrators, or such other person or persons as shall, by
specific bequest under the last will and testament of the participating
employee, be entitled thereto.
VIII. MISCELLANEOUS CONDITIONS
The Plan and all participation therein shall be subject to the
following conditions:
A) For all purposes of the Plan, termination of a participant's
employment shall be deemed to have occurred whenever he or she is no longer
employed by the Company.
B) Nothing in the Plan shall obligate the Company with respect to
tenure of office or duration of employment of any participant or to provide for
or continue participation in the Plan by any participant in the Plan for any
Plan year in respect of any subsequent Plan year.
C) All right, title and interest in the Plan shall be personal to the
participant and not subject to voluntary or involuntary alienation,
hypothecation, assignment or transfer, except that participation is subject to
forfeiture as provided in Section VII hereof.
D) The Committee shall have power finally to interpret any of the
provisions of the Plan and to lay down any regulations not inconsistent
herewith for its administration.
E) Nothing in the Plan shall prevent or interfere with any
recapitalization or reorganization of Goodyear or its merger or consolidation
with any corporation. In any such case, the recapitalized, reorganized, merged,
or consolidated company shall assume the obligations of Goodyear under the Plan
or such modification hereof as, in the judgment of the Board of Directors,
shall be necessary to adapt it to the changed situation and shall provide
substantially equivalent benefits to the participants.
F) Goodyear may terminate, suspend, amend, modify or otherwise act in
respect of the Plan at any time and from time to time.
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