Key Employees' Stock Option Plan Effective 4/15/91

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, th ...