{"id":43366,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/company-stock-option-agreement-bfgoodrich-co-and-coltec.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"company-stock-option-agreement-bfgoodrich-co-and-coltec","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/company-stock-option-agreement-bfgoodrich-co-and-coltec.html","title":{"rendered":"Company Stock Option Agreement &#8211; BFGoodrich Co. and Coltec Industries Inc."},"content":{"rendered":"<pre>\n                         COMPANY STOCK OPTION AGREEMENT\n\n         This COMPANY STOCK OPTION AGREEMENT, dated as of November 22, 1998 (the\n'Company  Stock  Option  Agreement')  is between  THE  B.F.GOODRICH  COMPANY,  a\ncorporation formed under the laws of the State of New York ('Parent') and COLTEC\nINDUSTRIES  INC, a  corporation  formed  under the laws of the  Commonwealth  of\nPennsylvania (the 'Company').\n\n                                    RECITALS\n\n         Parent and the  Company  are  entering  into an  Agreement  and Plan of\nMerger (the 'Merger Agreement').  As a condition and inducement to entering into\nthe Merger  Agreement,  the Company and Parent are entering  into certain  stock\noption  agreements  dated as of the date  hereof  (of which this  Company  Stock\nOption  Agreement  is one)  pursuant  to which the  parties  grant each other an\noption with respect to certain  shares of each other's common stock on the terms\nand subject to the conditions set forth therein (referred to collectively as the\n'Cross Stock Option Agreements').\n\n         NOW,  THEREFORE,  to induce Parent to enter into the Merger  Agreement,\nand  in  consideration  of  the  representations,   warranties,   covenants  and\nagreements  set  forth  in the  Merger  Agreement  and the  Cross  Stock  Option\nAgreements, the parties agree as follows:\n\n         1.       GRANT OF OPTION.\n\n         (a) Subject to the terms and conditions  set forth herein,  the Company\nhereby grants to Parent an  irrevocable  option (the 'Option') to purchase up to\n12,550,638  shares,  subject   to  adjustment  as  provided  in  Section 11 (the\n'Company  Shares'),  of common stock,  $.01 par value per share,  of the Company\n(the  'Company  Common  Stock ')  (being  19.9% of the  number  of shares of the\nCompany  Common Stock  (excluding  any shares of Company  Common Stock held by a\nsubsidiary of the Company) outstanding as of November 20, 1998 in the manner set\nforth below,  at a price per Company Share of $20.125,  subject to adjustment as\nprovided  in Section 11 (the  'Exercise  Price').  The  Exercise  Price shall be\npayable in cash in accordance with Section 4.\n\n(b) Notwithstanding  the foregoing,  in no event shall the number of the Company\nShares for which the Option is exercisable  exceed 19.9% of the number of issued\nand outstanding  shares of Company Common Stock (excluding any shares of Company\nCommon Stock held by a subsidiary of the Company).\n\n(c) Capitalized terms used herein but not defined herein shall have the meanings\nset forth in the Merger Agreement. 'Acquisition Proposal' shall have the meaning\nset forth in Section 9.2(b) of the Merger Agreement.\n\n\n\n\n         2.       EXERCISE OF OPTION.\n\n         (a) The Option may be exercised by Parent,  in whole,  but not in part,\nat any time after the Merger  Agreement is terminated and the Company has become\nobligated to pay the Termination Fee ('Trigger Event').\n\n(b) (i) The Company shall notify Parent promptly in writing of the occurrence of\nany Trigger  Event,  it being  understood  that the giving of such notice by the\nCompany shall not be a condition to the right of Parent to exercise the Option.\n\n(ii) In the event Parent wishes to exercise the Option,  Parent shall deliver to\nthe Company written notice thereof (the 'Exercise Notice').\n\n(iii) Upon the giving by Parent to the  Company of the  Exercise  Notice and the\ntender of the aggregate Exercise Price, Parent,  provided that the conditions to\nthe  Company's  obligation to issue the Company  Shares to Parent  hereunder set\nforth in  Section 3 have been  satisfied  or  waived,  shall be deemed to be the\nholder  of  record  of  the  Company   Shares   issuable  upon  such   exercise,\nnotwithstanding  that the stock  transfer  books of the  Company  shall  then be\nclosed or that  certificates  representing  the Company Shares shall not then be\nactually delivered to Parent.\n\n(iv) The closing of the purchase of Company Shares (the  'Closing')  shall occur\nat a place, on a date, and at a time designated by Parent in the Exercise Notice\ndelivered at least two business days prior to the date of the Closing.\n\n         (c) The  Option  shall  terminate upon the earliest to occur of:\n\n(i)      the Effective Date of the Merger;\n\n(ii) the  termination  of the Merger  Agreement  pursuant to Section 9.1 thereof\nother than pursuant to (x) Section 9.1(g) thereof,  (y) 9.1(j) thereof or (z) if\nan Acquisition  Proposal with respect to the Company has been publicly disclosed\nto the  shareholders  of the Company (and not withdrawn or terminated)  prior to\nthe Company Meeting, Section 9.1(c) thereof;\n\n(iii) to the extent that (x) an Acquisition Proposal with respect to the Company\nhas  been  publicly  disclosed  to the  shareholders  of the  Company  (and  not\nwithdrawn or terminated) prior to the Company Meeting,  (y) the Merger Agreement\nis terminated  pursuant to Section  9.1(c)  thereof and (z) the Company does not\nenter  into any  agreement  providing  for the  consummation  of an  Acquisition\nProposal   with   respect  to  the   Company  (it  being   understood   that  no\nconfidentiality   agreement  with  respect  to  an  Acquisition  Proposal  shall\nconstitute  such an agreement) and no  Acquisition  Proposal with respect to the\nCompany  shall  have been  consummated,  in each case,  during the twelve  month\nperiod  following the termination of the Merger  Agreement,  twelve months after\nthe date of such termination; and\n\n                                      - 2 -\n\n\n\n\n(iv) 30 days  following a Trigger Event (or if, at the expiration of such 30 day\nperiod,  the Option  cannot be exercised by reason of any  applicable  judgment,\ndecree,  order,  law or regulation,  ten business days after such  impediment to\nexercise  shall have been  removed or shall have become final and not subject to\nappeal,  but in no event under this  clause  (iv) later than 180 days  following\nsuch Trigger Event).\n\n(d)  Notwithstanding  the  foregoing,  the Option may not be exercised and shall\nterminate if (x) any of the  representations  and warranties of Parent contained\nin this  Company  Stock  Option  Agreement  or the Merger  Agreement,  which are\nqualified as to materiality,  were or shall be inaccurate in any respect, or any\nof the  representations  and warranties of Parent  contained  herein or therein,\nwhich are not so qualified, were or shall be inaccurate in any material respect,\nin each case, (1) when made, (2) as of the date of any termination of the Merger\nAgreement and (3) as of the date of any purported exercise of the Option, in the\ncase of clauses  (2) and (3), as if made as of the date of such  termination  or\npurported exercise, respectively (except for representations and warranties that\nby their express provisions are made as of a specific date or dates, which shall\nonly be deemed  inaccurate  to the  extent  that  they  were or shall  have been\ninaccurate at such times as stated  therein),  or (y) at the time of termination\nof the Merger  Agreement or any purported  exercise of the Option,  Parent is in\nmaterial breach of any of its covenants  contained in the Merger Agreement or in\nthis Company Stock Option Agreement.\n\n         3.  CONDITIONS TO CLOSING.  The  obligation of the Company to issue the\nCompany Shares to Parent hereunder is subject to the conditions that:\n\n         (a) the waiting  periods,  if any,  applicable  to the  issuance of the\nCompany  Shares under the HSR Act and the  Competition  Act (Canada)  shall have\nexpired or been  terminated and all other Company  Required  Consents and Parent\nRequired  Consents in each case relating to this Company Stock Option  Agreement\nand required to be obtained  prior to issuance of the Company  Shares shall have\nbeen  obtained,  except where the failure to obtain such other Company  Required\nConsents or Parent Required Consents would not have a Material Adverse Effect on\nthe Company or Parent, as the case may be;\n\n         (b) the Company  Shares shall have been  authorized  for listing on the\nNYSE upon official notice of issuance; and\n\n         (c) no preliminary or permanent  injunction or other order by any court\nor other  Governmental  Entity of  competent  jurisdiction  (i)  prohibiting  or\npreventing  such issuance or (ii) having any of the effects set forth in Section\n8.1(f)(ii) of the Merger Agreement shall have been issued and remain in effect.\n\nThe  condition  set forth in paragraph  (b) above may be waived by Parent in its\nsole discretion.\n\n         4.       CLOSING.  At the Closing,\n\n         (a) The  Company  shall  deliver  to  Parent  a single  certificate  in\ndefinitive  form  representing  the  Company  Shares,  such  certificate  to  be\nregistered in the name of Parent and to bear the legend set forth in Section 12;\nand\n\n                                      - 3 -\n\n\n\n         (b) Parent shall  deliver to the Company the aggregate  Exercise  Price\nfor the Company  Shares by wire transfer of  immediately  available  funds to an\naccount to be designated in writing by the Company.\n\n         (c) The Company  shall pay all expenses  that may be payable in respect\nof the  preparation,  issuance  and  delivery of stock  certificates  under this\nSection 4.\n\n         5.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company\nrepresents and warrants to Parent that:\n\n         (a) the Company has taken all necessary  corporate  action to authorize\nand reserve for issuance and (subject to the  satisfaction of the conditions set\nforth in Section 3) to permit it to issue, upon exercise of the Option,  and, at\nall times from the date hereof  through the  expiration  of the Option will have\nreserved,  authorized and unissued shares of Company Common Stock sufficient for\nthe  exercise  of the Option and the  Company  Shares,  upon  issuance  pursuant\nhereto, will be duly and validly issued, fully paid and nonassessable; and\n\n         (b) upon delivery of the Company  Shares to Parent upon the exercise of\nthe Option, Parent will acquire the Company Shares free and clear of all claims,\nliens, charges, encumbrances and security interests of any nature whatsoever.\n\n         6.  REPRESENTATIONS  AND  WARRANTIES OF PARENT.  Parent  represents and\nwarrants to the Company that:\n\n         (a) any Company  Shares  acquired by Parent upon exercise of the Option\nwill be acquired for Parent's own account, for investment purposes only and will\nnot be,  and the  Option is not  being,  acquired  by Parent  with a view to the\npublic  distribution  of the Company  Shares,  in  violation  of any  applicable\nprovision of the Securities Act; and\n\n         (b) any Company  Shares  acquired by Parent upon exercise of the Option\nwill not be  transferred  or  otherwise  disposed  of  except  in a  transaction\nregistered, or exempt from registration,  under the Securities Act and otherwise\nin accordance with this Company Stock Option Agreement.\n\n         7.       CERTAIN REPURCHASES.\n\n         (a) At the request of Parent by written notice (the 'Cash-Out  Notice')\nat any time during  which the Option is  exercisable  pursuant to Section 2, the\nCompany (or any successor  entity  thereof)  shall,  to the extent  permitted by\napplicable  law and  subject  to the  receipt  by it of any  consent  or  waiver\nrequired  by it  under  the  terms  of any  indenture,  loan  document  or other\ncontract,  pay to Parent,  in  consideration  of the redelivery and cancellation\nwithout  exercise  of the Option  (in whole and not in part),  an amount in cash\n(the 'Cash-Out Amount') equal to the difference between the 'Market\/Offer Price'\n(as defined  below) for shares of the Company Common Stock as of the date Parent\ndelivers the Cash-Out  Notice and the Exercise  Price,  multiplied  by the total\n\n                                      - 4 -\n\n\n\n\nnumber of the Company Shares, but only if the Market\/Offer Price is greater than\nthe Exercise  Price.  For purposes of this Section 7, the  'Market\/Offer  Price'\nshall mean, as of any date,  the higher of (x) the price per share offered as of\nsuch date  pursuant to any tender or exchange  offer or other  public offer with\nrespect to the highest  Acquisition  Proposal  with respect to the Company which\nwas made prior to such date and not terminated or withdrawn as of such date (the\n'Offer  Price') and (y) Fair Market Value (as defined below) as of such date. As\nused herein, 'Fair Market Value' shall be the average of the daily closing sales\nprice for a share of the  Company  Common  Stock on the NYSE during the ten NYSE\ntrading days prior to the fifth NYSE trading day immediately  preceding the date\nsuch Fair Market Value is to be determined.  In the event that the consideration\noffered pursuant to any Acquisition  Proposal includes any  consideration  other\nthan  cash,  such  consideration  shall be valued as  follows  for  purposes  of\ncalculating  the Offer Price:  (i) any  securities  that are either  listed on a\nnational  securities  exchange (as defined under the  Securities  Act) or on any\ndesignated  offshore  securities  market (as defined in  Regulation  S under the\nSecurities  Act) or  included  in a  national  securities  quotation  system (as\ndefined in the Securities  Act)  (collectively,  'Listed  Securities')  shall be\nvalued  based on the  average of the daily  closing  sale  price of such  Listed\nSecurities  for the ten  trading  days on  such  national  securities  exchange,\ndesignated offshore  securities market or national  securities  quotation system\nprior to the fifth trading day immediately preceding the date of delivery of the\nCash-Out Notice; and (ii) any consideration other than cash or Listed Securities\nshall be valued based on the written  opinion of an  investment  banking firm of\nnationally  recognized  reputation selected by Parent,  which firm is reasonably\nacceptable to the Company. The costs and fees of such investment banking firm in\nconnection with such valuation shall be borne equally by Parent and the Company.\n\n         (b) In the event Parent  exercises  its right under this Section 7, the\nCompany shall,  within ten business days thereafter,  pay the required amount to\nParent in immediately  available funds and Parent shall surrender to the Company\nthe Option, and Parent shall warrant that it owns the Option and that the Option\nis then free and clear of all liens, claims,  damages,  charges and encumbrances\nof any kind or nature whatsoever.\n\n         8. VOTING OF SHARES.  Following  the date hereof and prior to the fifth\nanniversary of the date hereof (the  'Expiration  Date'),  Parent shall vote any\nshares of capital  stock of the  Company  acquired  by Parent  pursuant  to this\nCompany  Stock  Option  Agreement or otherwise  beneficially  owned  (within the\nmeaning of Rule 13d-3 promulgated under the Securities  Exchange Act of 1934, as\namended (the 'Exchange  Act')),  by Parent on each matter submitted to a vote of\nshareholders  of the Company for and against such matter in the same  proportion\nas the vote of all other shareholders of the Company are voted (whether by proxy\nor otherwise) for and against such matter.\n\n         9.       RESTRICTIONS ON TRANSFER.\n\n         (a)  The  Company  Shares  shall  not be  directly  or  indirectly,  by\noperation of law or otherwise, sold, assigned, pledged, or otherwise disposed of\nor transferred, other than in accordance with Section 9(b) or Section 10.\n\n                                      - 5 -\n\n\n\n         (b) Parent shall be permitted to sell,  assign,  transfer or dispose of\nany Company Shares beneficially owned by it if such sale is made (i) pursuant to\na transaction that has been approved or recommended,  or otherwise determined to\nbe fair to and in the best interests of the  shareholders  of the Company,  by a\nmajority of the members of the Board of Directors of the Company, which majority\nshall  include  a  majority  of  directors  who  were  directors  prior  to  the\nannouncement  of such  transaction  or (ii) to any purchaser or  transferee  who\nwould not, to Parent's knowledge after reasonable inquiry, immediately following\nsuch sale, assignment, transfer or disposal beneficially own more than 1% of the\nCompany  Common Stock on a fully diluted basis  (excluding any shares of Company\nCommon Stock held by a subsidiary of the Company).\n\n         10.      REGISTRATION RIGHTS.\n\n         (a) On or  prior  to the  second  anniversary  of the  exercise  of the\nOption, Parent may by written notice (the 'Registration  Notice') to the Company\nrequest the Company to register  under the Securities Act all or any part of the\nCompany  Shares  beneficially  owned by Parent  (the  'Registrable  Securities')\npursuant to a bona fide firm commitment  underwritten public offering,  in which\nParent  and  the  underwriters  shall  effect  as  wide a  distribution  of such\nRegistrable  Securities  as is reasonably  practicable  and shall use their best\nefforts to prevent any person  (including any group (as used in Rule 13d-5 under\nthe Exchange  Act)) and its  affiliates  from  purchasing  through such offering\nCompany Shares  representing  more than 1% of the outstanding  shares of Company\nCommon Stock  on  a  fully diluted basis (excluding any shares of Company Common\nStock held by a subsidiary of the Company) (a 'Permitted Offering').\n\n         (b) The  Registration  Notice shall include a  certificate  executed by\nParent and its proposed  managing  underwriter,  which  underwriter  shall be an\ninvestment  banking firm of  nationally  recognized  standing  (the  'Manager'),\nstating that\n\n(i)  they have a good faith intention to commence promptly a Permitted Offering,\nand\n\n(ii) the  Manager  in good faith  believes  that,  based on the  then-prevailing\nmarket conditions,  it will be able to sell the Registrable  Securities at a per\nshare price equal to at least 80% of the then Fair Market Value of such shares.\n\n         (c) The Company  (and\/or any person  designated  by the Company)  shall\nthereupon have the option  exercisable by written notice delivered to the Parent\nwithin  ten  business  days  after  the  receipt  of  the  Registration  Notice,\nirrevocably to agree to purchase all or any part of the  Registrable  Securities\nproposed  to be so sold for cash at a price (the  'Option  Price')  equal to the\nproduct of (i) the number of  Registrable  Securities  to be so purchased by the\nCompany and (ii) the then Fair Market Value of such shares.\n\n         (d) Any  purchase  of  Registrable  Securities  by the  Company (or its\ndesignee)  under  Section  10(c) shall take place at a closing to be held at the\nprincipal  executive  offices of the Company or at the offices of its counsel at\nany reasonable  date and time  designated by the Company and\/or such designee in\nsuch notice within twenty  business days after delivery of such notice,  and any\npayment for the shares to be so purchased  shall be made by delivery at the time\nof such closing in immediately available funds.\n\n                                      - 6 -\n\n\n\n\n         (e) If the Company  does not elect to exercise  its option  pursuant to\nthis Section 10 with  respect to all  Registrable  Securities,  it shall use its\nreasonable  efforts  to effect,  as  promptly  as  reasonably  practicable,  the\nregistration under the Securities Act of the unpurchased  Registrable Securities\nproposed to be so sold; provided, however, that\n\n(i)  Parent  shall  not  be  entitled to more than an aggregate of two effective\nregistration statements hereunder, and\n\n(ii) the Company  will not be required to file any such  registration  statement\nduring any period of time (not to exceed 180 days after such request) when:\n\n(A) the Company is in possession  of material  non-public  information  which it\nreasonably  believes  would be  detrimental to be disclosed at such time and, in\nthe  opinion  of  counsel  to the  Company,  such  information  would have to be\ndisclosed if a registration statement were filed at that time;\n\n(B) the  Company  is  required  under  the  Securities  Act to  include  audited\nfinancial  statements  for any period in such  registration  statement  and such\nfinancial  statements  are not yet available for inclusion in such  registration\nstatement; or\n\n(C) the Company determines,  in its reasonable judgment,  that such registration\nwould  interfere with any financing,  acquisition or other material  transaction\ninvolving the Company or any of its affiliates.\n\n         (f) The  Company  shall use its  reasonable  best  efforts to cause any\nRegistrable  Securities  registered  pursuant to this Section 10 to be qualified\nfor sale under the securities or Blue Sky laws of such  jurisdictions  as Parent\nmay reasonably  request and shall continue such registration or qualification in\neffect in such jurisdiction;  provided,  however,  that the Company shall not be\nrequired to qualify to do business in, or consent to general  service of process\nin, any jurisdiction by reason of this provision.\n\n         (g) The registration rights set forth in this Section 10 are subject to\nthe condition that Parent shall provide the Company with such  information  with\nrespect to its Registrable  Securities,  the plans for the distribution thereof,\nand such other  information  with  respect to such holder as, in the  reasonable\njudgment  of counsel  for the  Company,  is  necessary  to enable the Company to\ninclude  in such  registration  statement  all  material  facts  required  to be\ndisclosed with respect to a registration thereunder.\n\n         (h) A registration  effected under this Section 10 shall be effected at\nthe Company's expense, except for underwriting discounts and commissions and the\nfees and the expenses of counsel to Parent, and the Company shall provide to the\nunderwriters such documentation (including certificates, opinions of counsel and\n'comfort' letters from auditors) as is customary in connection with underwritten\npublic offerings as such underwriters may reasonably require.\n\n                                      - 7 -\n\n\n\n         (i) In connection with any registration effected under this Section 10,\nthe parties agree\n\n(i)      to indemnify each other and the underwriters in the customary manner,\n\n(ii) to enter into an underwriting agreement in form and substance customary for\ntransactions  of  such  type  with  the  Manager  and  the  other   underwriters\nparticipating in such offering, and\n\n(iii) to take  further  reasonable  actions  which are  necessary to effect such\nregistration and sale.\n\n         (j)  The  Company  shall  be  entitled  to  include  (at  its  expense)\nadditional  shares of its common stock in a  registration  effected  pursuant to\nthis  Section  10 only if and to the  extent the  Manager  determines  that such\ninclusion will not adversely affect the prospects for success of such offering.\n\n         11. ADJUSTMENT UPON CHANGES IN  CAPITALIZATION.  Without  limitation to\nany restriction on the Company  contained in this Company Stock Option Agreement\nor in the Merger  Agreement,  in the event of any change in Company Common Stock\nby  reason  of stock  dividends,  splitups,  mergers  (other  than the  Merger),\nrecapitalizations,  combinations,  exchange of shares or the like,  the type and\nnumber of shares or  securities  subject to the Option  and the  Exercise  Price\nshall  be  adjusted  appropriately  and  proper  provision  will  be made in the\nagreements governing such transaction, so that Parent will receive upon exercise\nof the Option the number  and class of shares or other  securities  or  property\nthat Parent would have received in respect of Company Common Stock if the Option\nhad been exercised  immediately prior to such event or the record date therefor,\nas applicable.  Subject to Section 1, and without limiting the parties' relative\nrights and obligations under the Merger  Agreement,  if any additional shares of\nCompany  Common  Stock are issued  after the date of this  Company  Stock Option\nAgreement  (other than pursuant to an event  described in the first  sentence of\nthis  Section  11(a)),  the number of Company  Shares  will be adjusted so that,\nafter such  issuance,  it equals 19.9% of the number of shares of Company Common\nStock  (excluding any shares of Company Common Stock held by a subsidiary of the\nCompany)  then  issued  and  outstanding,  without  giving  effect to any shares\nsubject to the Option.\n\n         12. RESTRICTIVE  LEGENDS.  Each certificate  representing shares of the\nCompany  Common  Stock  issued to  Parent  hereunder  shall  include a legend in\nsubstantially the following form:\n\n                                      - 8 -\n\n\n\nTHE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER\nTHE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE  SECURITIES OR BLUE SKY\nLAWS, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM\nSUCH  REGISTRATION IS AVAILABLE.  SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL\nRESTRICTIONS  ON TRANSFER AS SET FORTH IN THE COMPANY  STOCK  OPTION  AGREEMENT,\nDATED AS OF NOVEMBER 22,  1998, A COPY OF WHICH MAY BE OBTAINED  FROM THE ISSUER\nUPON REQUEST.\n\nIt is understood and agreed that:\n\n(i) the reference to the resale  restrictions  of the  Securities  Act and state\nsecurities  or Blue Sky laws in the above legend shall be removed by delivery of\nsubstitute certificate(s) without such reference, if Parent shall have delivered\nto the  Company  a copy of a letter  from the  staff  of the  Commission,  or an\nopinion of counsel,  in form and substance  satisfactory to the Company,  to the\neffect that such legend is not required for  purposes of the  Securities  Act or\nsuch laws;\n\n(ii) the reference to the  provisions to this Company Stock Option  Agreement in\nthe above  legend  shall be removed by  delivery  of  substitute  certificate(s)\nwithout such reference if the shares have been sold or transferred in compliance\nwith  the   provisions  of  this  Company  Stock  Option   Agreement  and  under\ncircumstances that do not require the retention of such reference; and\n\n(iii) the legend  shall be  removed in its  entirety  if the  conditions  in the\npreceding clauses (i) and (ii) are both satisfied.\n\nIn addition, such certificates shall bear any other legend as may be required by\nlaw.  Certificates  representing  shares sold in a  registered  public  offering\npursuant  to  Section 10 shall not be  required  to bear the legend set forth in\nthis Section 12.\n\n         13.   BINDING EFFECT: NO ASSIGNMENT: NO THIRD PARTY BENEFICIARIES.  (a)\nThis  Company  Stock  Option Agreement shall be binding upon and inure solely to\nthe benefit of each party hereto and their respective successors  and  permitted\nassigns.\n\n         (b) Except as  expressly  provided  for in this  Company  Stock  Option\nAgreement,  neither  this  Company  Stock  Option  Agreement  nor the  rights or\nobligations  of either  party  hereto are  assignable  except  with the  written\nconsent of the other party.\n\n         (c) Nothing contained in this Company Stock Option  Agreement,  express\nor implied,  is intended to confer upon any person other than the parties hereto\nand their respective permitted assigns any rights or remedies hereunder.\n\n                                      - 9 -\n\n\n\n         (d) Any Company Shares sold by Parent in compliance with the provisions\nof Section 10 shall, upon consummation of such sale, be free of the restrictions\nimposed with respect to such shares by this Company Stock Option Agreement.\n\n         14.  SPECIFIC  PERFORMANCE.  The parties hereto agree that  irreparable\nharm would occur in the event that any of the  provisions  of this Company Stock\nOption  Agreement were not performed in accordance with their specified terms or\nwere otherwise breached.  It is accordingly agreed that the parties hereto shall\nbe entitled to an injunction or injunctions to prevent  breaches of this Company\nStock Option  Agreement  and to enforce  specifically  the terms and  provisions\nhereof in any court of the United States or any state having jurisdiction,  this\nbeing in  addition to any other  remedy to which they are  entitled at law or in\nequity.\n\n         15. VALIDITY.  (a) The invalidity or  unenforceability of any provision\nof this  Company  Stock  Option  Agreement  shall not  affect  the  validity  or\nenforceability  of the other provisions of this Company Stock Option  Agreement,\nwhich shall remain in full force and effect.\n\n         (b) In the  event  any  court or other  competent  authority  holds any\nprovision  of  this  Company  Stock  Option   Agreement  to  be  null,  void  or\nunenforceable,  the parties  hereto shall  negotiate in good faith the execution\nand delivery of an amendment to this Company Stock Option Agreement in order, as\nnearly as possible, to effectuate, to the extent permitted by law, the intent of\nthe parties  hereto with  respect to such  provision  and the  economic  effects\nthereof.\n\n         (c) Each  party  agrees  that,  should  any  court  or other  competent\nauthority  hold any  provision  of this Company  Stock Option  Agreement or part\nhereof to be null, void or unenforceable,  or order any party to take any action\ninconsistent  herewith,  or not take any action required herein, the other party\nshall not be entitled to specific  performance  of such provision or part hereof\nor to any other remedy,  including but not limited to money damages,  for breach\nhereof or of any other provision of this Company Stock Option  Agreement or part\nhereof as the result of such holding or order.\n\n         16. NOTICES.  All notices and other  communications  under this Company\nStock  Option  Agreement  shall be in  writing  and shall be given (and shall be\ndeemed to have been duly given  upon  receipt)  by  delivery  in person,  if (a)\ndelivered  personally,  by  overnight  courier,  telecopy  or by  registered  or\ncertified mail, postage prepaid, return receipt requested addressed as follows:\n\n         A.       If to Parent, to:\n\n                  The B.F.Goodrich Company\n                  4020 Kinross Lakes Pkwy.\n                  Richfield, OH  44286-9368\n\n                  Attention:  Terrence G. Linnert\n                              Sr. Vice President and General Counsel\n                              Fax:  (330) 659-7737\n\n                                      - 10 -\n\n\n\n                  with a copy to:\n\n                  Squire, Sanders &amp; Dempsey L.L.P.\n                  4900 Key Tower\n                  127 Public Square\n                  Cleveland, Ohio  44114-1304\n\n                  Attention:  Gordon S. Kaiser, Esq.\n                              Fax: (216) 479-8780\n\n         B.       If to the Company, to:\n\n                  Coltec Industries Inc\n                  3 Coliseum Centre\n                  2550 West Tyvola Road\n                  Charlotte, NC  28217\n\n                  Attention:  Corporate Secretary\n                              Fax:  (704) 423-7011\n\n                  with a copy to:\n\n                  Cravath, Swaine &amp; Moore\n                  825 Eighth Avenue\n                  New York, New York 10019\n\n                  Attention:   George W. Bilicic, Jr., Esq. and\n                               Allen Finkelson, Esq.\n                               Fax: (212) 474-3700\n\nor to such other  address as either party may have  furnished to the other party\nin writing in accordance with this Section.\n\n         17. GOVERNING LAW: CHOICE OF FORUM. This Company Stock Option Agreement\nshall be governed in all respects, including validity, interpretation and effect\nby and construed in accordance with the laws of the Commonwealth of Pennsylvania\nwithout giving effect to the provisions  thereof relating to conflicts of law to\nthe extent that the  application  of the laws of another  jurisdiction  would be\nrequired thereby.\n\n         18.      INTERPRETATION.\n\n         (a) When  reference is made in this Company  Stock Option  Agreement to\nArticles,  Sections,  Schedules  or  Exhibits,  such  reference  shall  be to an\nArticle, Section, Schedule or Exhibit of this Company Stock Option Agreement, as\nthe case may be, unless otherwise indicated.\n\n                                      - 11 -\n\n\n\n         (b) The headings  contained in this Company Stock Option  Agreement are\nfor  reference  purposes  only and shall not  affect in any way the  meaning  or\ninterpretation of the Company Stock Option Agreement.\n\n         (c) Whenever the words  'include,'  'includes,' or 'including' are used\nin this  Company  Stock  Option  Agreement  and are not  followed  by the  words\n'without limitation',  they shall be deemed to be followed by the words 'without\nlimitation.'  The words 'hereof',  'herein' and 'hereunder' and words of similar\nimport when used in this  Company  Stock  Option  Agreement  shall refer to this\nCompany Stock Option Agreement as a whole and not to any particular provision of\nthis Company Stock Option Agreement.\n\n         (d)  Whenever  'or' is used in this Company  Stock Option  Agreement it\nshall be construed in the nonexclusive sense.\n\n         19.  COUNTERPARTS;  EFFECT.  This Company Stock Option Agreement may be\nexecuted  in one or more  counterparts,  each of which  shall be deemed to be an\noriginal,  but all of which shall constitute one and the same agreement and each\nof which shall only become  effective  when one or more  counterparts  have been\nsigned by each party and delivered to the other party.\n\n         20.  AMENDMENTS;  WAIVER.  This Company  Stock Option  Agreement may be\namended by the parties hereto and the terms and conditions  hereof may be waived\nbut, in the case of an amendment,  only by an  instrument  in writing  signed on\nbehalf  of each of the  parties  hereto,  or,  in the  case of a  waiver,  by an\ninstrument signed on behalf of the party waiving compliance.\n\n         21.  LOSS OR  MUTILATION.  Upon  receipt  by the  Company  of  evidence\nreasonably  satisfactory to it of the loss, theft,  destruction or mutilation of\nthis  Company  Stock  Option  Agreement,  and (in the  case of  loss,  theft  or\ndestruction) of reasonably satisfactory indemnification,  and upon surrender and\ncancellation of this Company Stock Option Agreement,  if mutilated,  the Company\nwill execute and deliver a new Company Stock Option  Agreement of like tenor and\ndate.\n\n         IN WITNESS  WHEREOF,  the parties hereto have caused this Company Stock\nOption Agreement to be executed by their respective duly authorized  officers as\nof the date first above written.\n\n                                THE B.F.GOODRICH COMPANY\n\n\n                                By:  \n                                    Name:  David L. Burner\n                                    Title: Chairman and Chief Executive Officer\n\n\n                                COLTEC INDUSTRIES INC\n\n\n                                By:\n                                    Name:  John W. Guffey, Jr.\n                                    Title: Chairman and Chief Executive Officer\n\n                                      - 12 -\n\n\n\n\n                          PARENT STOCK OPTION AGREEMENT\n\n         This PARENT STOCK OPTION AGREEMENT,  dated as of November 22, 1998 (the\n'Parent  Stock  Option  Agreement')  is  between  THE  B.F.GOODRICH  COMPANY,  a\ncorporation formed under the laws of the State of New York ('Parent') and COLTEC\nINDUSTRIES  INC, a  corporation  formed  under the laws of the  Commonwealth  of\nPennsylvania (the 'Company').\n\n                                    RECITALS\n\n         Parent and the  Company  are  entering  into an  Agreement  and Plan of\nMerger (the 'Merger Agreement').  As a condition and inducement to entering into\nthe Merger  Agreement,  the Company and Parent are entering  into certain  stock\noption agreements dated as of the date hereof (of which this Parent Stock Option\nAgreement is one)  pursuant to which the parties grant each other an option with\nrespect to certain  shares of each other's common stock on the terms and subject\nto the  conditions  set forth therein  (referred to  collectively  as the 'Cross\nStock Option Agreements').\n\n         NOW,  THEREFORE,  to  induce  the  Company  to enter  into  the  Merger\nAgreement,  and in consideration of the representations,  warranties,  covenants\nand  agreements  set forth in the Merger  Agreement  and the Cross Stock  Option\nAgreements, the parties agree as follows:\n\n         1.       GRANT OF OPTION.\n\n         (a) Subject to the terms and conditions set forth herein, Parent hereby\ngrants to the Company an  irrevocable  option (the  'Option')  to purchase up to\n14,792,612  shares,  subject  to  adjustment  as  provided  in  Section  11 (the\n'Parent  Shares'),  of common  stock,  $5 par value per  share,  of Parent  (the\n'Parent  Common  Stock')  (being 19.9% of the number of shares of Parent  Common\nStock outstanding as of November 18,  1998  in  the manner set forth below, at a\nprice per Parent Share of $35.9375, subject to adjustment as provided in Section\n11 (the 'Exercise  Price').  The Exercise Price  shall  be  payable  in  cash in\naccordance with Section 4.\n\n(b)  Notwithstanding  the foregoing,  in no event shall the number of the Parent\nShares for which the Option is exercisable  exceed 19.9% of the number of issued\nand outstanding shares of Parent Common Stock.\n\n(c) Capitalized terms used herein but not defined herein shall have the meanings\nset forth in the Merger Agreement.\n\n         2.       EXERCISE OF OPTION.\n\n         (a) The Option may be exercised by the  Company,  in whole,  but not in\npart, at any time after the Merger Agreement is terminated and Parent has become\nobligated to pay the Termination Fee ('Trigger Event').\n\n\n\n\n\n(b) (i) Parent shall notify the Company promptly in writing of the occurrence of\nany Trigger Event, it being  understood that the giving of such notice by Parent\nshall not be a condition to the right of the Company to exercise the Option.\n\n(ii) In the event the Company  wishes to exercise the Option,  the Company shall\ndeliver to Parent written notice thereof (the 'Exercise Notice').\n\n(iii) Upon the giving by the  Company to Parent of the  Exercise  Notice and the\ntender  of  the  aggregate  Exercise  Price,  the  Company,  provided  that  the\nconditions  to  Parent's  obligation  to issue the Parent  Shares to the Company\nhereunder set forth in Section 3 have been satisfied or waived,  shall be deemed\nto be the holder of record of the Parent  Shares  issuable  upon such  exercise,\nnotwithstanding  that the stock transfer books of Parent shall then be closed or\nthat  certificates  representing  the Parent  Shares  shall not then be actually\ndelivered to the Company.\n\n(iv) The closing of the purchase of Parent Shares (the 'Closing') shall occur at\na place,  on a date,  and at a time  designated  by the Company in the  Exercise\nNotice delivered at least two business days prior to the date of the Closing.\n\n         (c) The  Option  shall  terminate upon the earliest to occur of:\n\n(i)      the Effective Date of the Merger;\n\n(ii) the  termination  of the Merger  Agreement  pursuant to Section 9.1 thereof\nother than pursuant to (x) Section 9.1(i) thereof,  (y) 9.1(k) thereof or (z) if\nan  Acquisition  Proposal with respect to Parent has been publicly  disclosed to\nthe shareholders of Parent (and not withdrawn or terminated) prior to the Parent\nMeeting, Section 9.1(d) thereof;\n\n(iii) to the extent that (x) an Acquisition  Proposal with respect to Parent has\nbeen  publicly  disclosed to the  shareholders  of Parent (and not  withdrawn or\nterminated) prior to the Parent Meeting,  (y) the Merger Agreement is terminated\npursuant  to  Section  9.1(d)  thereof  and (z)  Parent  does not enter into any\nagreement providing for the consummation of an Acquisition Proposal with respect\nto Parent (it being understood that no confidentiality agreement with respect to\nan Acquisition  Proposal shall  constitute such an agreement) and no Acquisition\nProposal  with  respect  to Parent  shall have been  consummated,  in each case,\nduring  the  twelve  month  period  following  the  termination  of  the  Merger\nAgreement, twelve months after the date of such termination; and\n\n(iv) 30 days  following a Trigger Event (or if, at the expiration of such 30 day\nperiod,  the Option  cannot be exercised by reason of any  applicable  judgment,\ndecree,  order,  law or regulation,  ten business days after such  impediment to\nexercise  shall have been  removed or shall have become final and not subject to\nappeal,  but in no event under this  clause  (iv) later than 180 days  following\nsuch Trigger Event).\n\n                                      - 2 -\n\n\n\n(d)  Notwithstanding  the  foregoing,  the Option may not be exercised and shall\nterminate  if (x)  any of the  representations  and  warranties  of the  Company\ncontained in this Parent Stock Option Agreement or the Merger  Agreement,  which\nare qualified as to materiality,  were or shall be inaccurate in any respect, or\nany of the  representations  and warranties of the Company  contained  herein or\ntherein, which are not so qualified, were or shall be inaccurate in any material\nrespect,  in each case, (1) when made, (2) as of the date of any  termination of\nthe Merger  Agreement  and (3) as of the date of any  purported  exercise of the\nOption,  in the case of clauses  (2) and (3),  as if made as of the date of such\ntermination or purported exercise,  respectively (except for representations and\nwarranties  that by their express  provisions  are made as of a specific date or\ndates,  which  shall only be deemed  inaccurate  to the extent that they were or\nshall have been inaccurate at such times as stated therein),  or (y) at the time\nof termination of the Merger Agreement or any purported  exercise of the Option,\nthe  Company is in  material  breach of any of its  covenants  contained  in the\nMerger Agreement or in this Parent Stock Option Agreement.\n\n         3. CONDITIONS TO CLOSING.  The obligation of Parent to issue the Parent\nShares to the Company hereunder is subject to the conditions that:\n\n         (a) the waiting  periods,  if any,  applicable  to the  issuance of the\nParent  Shares under the HSR Act and the  Competition  Act  (Canada)  shall have\nexpired or been  terminated  and all other  Company  Required  Consents  and the\nParent  Required  Consents in each case  relating to this  Parent  Stock  Option\nAgreement  and  required to be obtained  prior to issuance of the Parent  Shares\nshall have been obtained,  except where the failure to obtain such other Company\nRequired  Consents  or the Parent  Required  Consents  would not have a Material\nAdverse Effect on the Company or Parent, as the case may be;\n\n         (b) the Parent  Shares  shall have been  authorized  for listing on the\nNYSE upon official notice of issuance; and\n\n         (c) no preliminary or permanent  injunction or other order by any court\nor other  Governmental  Entity of  competent  jurisdiction  (i)  prohibiting  or\npreventing  such issuance or (ii) having any of the effects set forth in Section\n8.1(f)(ii) of the Merger Agreement shall have been issued and remain in effect.\n\nThe  condition  set forth in paragraph (b) above may be waived by the Company in\nits sole discretion.\n\n         4.       CLOSING.  At the Closing,\n\n         (a)  Parent  shall  deliver  to the  Company  a single  certificate  in\ndefinitive  form  representing  the  Parent  Shares,   such  certificate  to  be\nregistered  in the name of the  Company  and to bear  the  legend  set  forth in\nSection 12; and\n\n                                      - 3 -\n\n\n\n         (b) The Company shall deliver to Parent the  aggregate  Exercise  Price\nfor the Parent  Shares by wire  transfer of  immediately  available  funds to an\naccount to be designated in writing by Parent.\n\n         (c) Parent shall pay all expenses that may be payable in respect of the\npreparation, issuance and delivery of stock certificates under this Section 4.\n\n         5.  REPRESENTATIONS  AND  WARRANTIES OF PARENT.  Parent  represents and\nwarrants to the Company that:\n\n         (a) Parent has taken all  necessary  corporate  action to authorize and\nreserve for issuance  and (subject to the  satisfaction  of the  conditions  set\nforth in Section 3) to permit it to issue, upon exercise of the Option,  and, at\nall times from the date hereof  through the  expiration  of the Option will have\nreserved,  authorized and unissued shares of Parent Common Stock  sufficient for\nthe exercise of the Option and the Parent Shares, upon issuance pursuant hereto,\nwill be duly and validly issued, fully paid and nonassessable; and\n\n         (b) upon delivery of the Parent Shares to the Company upon the exercise\nof the Option,  the Company will acquire the Parent Shares free and clear of all\nclaims,  liens,  charges,  encumbrances  and  security  interests  of any nature\nwhatsoever.\n\n         6.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company\nrepresents and warrants to Parent that:\n\n         (a) any Parent  Shares  acquired  by the Company  upon  exercise of the\nOption will be acquired for the Company's own account,  for investment  purposes\nonly and will not be, and the Option is not being,  acquired by the Company with\na view to the public  distribution  of the Parent  Shares,  in  violation of any\napplicable provision of the Securities Act; and\n\n         (b) any Parent  Shares  acquired  by the Company  upon  exercise of the\nOption will not be transferred or otherwise  disposed of except in a transaction\nregistered, or exempt from registration,  under the Securities Act and otherwise\nin accordance with this Parent Stock Option Agreement.\n\n         7.       CERTAIN REPURCHASES.\n\n         (a) At the  request of the  Company by written  notice  (the  'Cash-Out\nNotice') at any time during which the Option is exercisable  pursuant to Section\n2, Parent (or any successor  entity thereof)  shall, to the extent  permitted by\napplicable  law and  subject  to the  receipt  by it of any  consent  or  waiver\nrequired  by it  under  the  terms  of any  indenture,  loan  document  or other\ncontract,   pay  to  the  Company,   in  consideration  of  the  redelivery  and\ncancellation  without  exercise  of the  Option  (in whole and not in part),  an\namount in cash (the  'Cash-Out  Amount')  equal to the  difference  between  the\n'Market\/Offer  Price' (as defined below) for shares of Parent Common Stock as of\nthe date the  Company  delivers  the  Cash-Out  Notice and the  Exercise  Price,\nmultiplied  by  the  total  number  of  the  Parent  Shares,  but  only  if  the\n\n                                      - 4 -\n\n\n\n\nMarket\/Offer  Price is greater  than the  Exercise  Price.  For purposes of this\nSection 7, the  'Market\/Offer  Price' shall mean, as of any date,  the higher of\n(x) the price per  share  offered  as of such  date  pursuant  to any  tender or\nexchange  offer or other public  offer with  respect to the highest  Acquisition\nProposal  with  respect  to  Parent  which  was made  prior to such date and not\nterminated or withdrawn as of such date (the 'Offer  Price') and (y) Fair Market\nValue (as defined  below) as of such date.  As used herein,  'Fair Market Value'\nshall be the  average  of the daily  closing  sales  price for a share of Parent\nCommon  Stock on the NYSE  during the ten NYSE  trading  days prior to the fifth\nNYSE trading day immediately  preceding the date such Fair Market Value is to be\ndetermined.  In  the  event  that  the  consideration  offered  pursuant  to any\nAcquisition   Proposal  includes  any   consideration   other  than  cash,  such\nconsideration  shall be valued as follows for purposes of calculating  the Offer\nPrice:  (i) any  securities  that are  either  listed on a  national  securities\nexchange (as defined under the  Securities  Act) or on any  designated  offshore\nsecurities  market (as  defined in  Regulation  S under the  Securities  Act) or\nincluded in a national securities quotation system (as defined in the Securities\nAct) (collectively, 'Listed Securities') shall be valued based on the average of\nthe daily closing sale price of such Listed  Securities for the ten trading days\non such national securities  exchange,  designated offshore securities market or\nnational securities  quotation system prior to the fifth trading day immediately\npreceding  the  date  of  delivery  of  the  Cash-Out   Notice;   and  (ii)  any\nconsideration  other than cash or Listed Securities shall be valued based on the\nwritten  opinion  of  an  investment  banking  firm  of  nationally   recognized\nreputation  selected by the  Company,  which firm is  reasonably  acceptable  to\nParent.  The costs and fees of such  investment  banking firm in connection with\nsuch valuation shall be borne equally by Parent and the Company.\n\n         (b) In the event the Company  exercises its right under this Section 7,\nParent shall,  within ten business days  thereafter,  pay the required amount to\nthe Company in immediately  available  funds and the Company shall  surrender to\nParent the Option,  and the Company  shall  warrant  that it owns the Option and\nthat the Option is then free and clear of all liens,  claims,  damages,  charges\nand encumbrances of any kind or nature whatsoever.\n\n         8. VOTING OF SHARES.  Following  the date hereof and prior to the fifth\nanniversary of the date hereof (the 'Expiration  Date'),  the Company shall vote\nany shares of capital stock of Parent  acquired by the Company  pursuant to this\nParent  Stock  Option  Agreement or  otherwise  beneficially  owned  (within the\nmeaning of Rule 13d-3 promulgated under the Securities  Exchange Act of 1934, as\namended (the 'Exchange Act')), by the Company on each matter submitted to a vote\nof  shareholders of Parent for and against such matter in the same proportion as\nthe vote of all other  shareholders  of Parent  are voted  (whether  by proxy or\notherwise) for and against such matter.\n\n         9.       RESTRICTIONS ON TRANSFER.\n\n         (a) The Parent Shares shall not be directly or indirectly, by operation\nof law or  otherwise,  sold,  assigned,  pledged,  or  otherwise  disposed of or\ntransferred, other than in accordance with Section 9(b) or Section 10.\n\n                                      - 5 -\n\n\n\n         (b) The Company shall be permitted to sell, assign, transfer or dispose\nof any Parent Shares  beneficially owned by it if such sale is made (i) pursuant\nto a transaction that has been approved or recommended,  or otherwise determined\nto be fair to and in the best  interests  of the  shareholders  of Parent,  by a\nmajority  of the members of the Board of  Directors  of Parent,  which  majority\nshall  include  a  majority  of  directors  who  were  directors  prior  to  the\nannouncement  of such  transaction  or (ii) to any purchaser or  transferee  who\nwould not, to the Company's  knowledge  after  reasonable  inquiry,  immediately\nfollowing such sale, assignment, transfer or disposal beneficially own more than\n1% of Parent Common Stock on a fully diluted basis.\n\n         10.      REGISTRATION RIGHTS.\n\n         (a) On or  prior  to the  second  anniversary  of the  exercise  of the\nOption, the Company may by written notice (the 'Registration  Notice') to Parent\nrequest  Parent  to  register  under the  Securities  Act all or any part of the\nParent Shares  beneficially owned by the Company (the 'Registrable  Securities')\npursuant to a bona fide firm commitment  underwritten public offering,  in which\nthe Company and the  underwriters  shall effect as wide a  distribution  of such\nRegistrable  Securities  as is reasonably  practicable  and shall use their best\nefforts to prevent any person  (including any group (as used in Rule 13d-5 under\nthe Exchange  Act)) and its  affiliates  from  purchasing  through such offering\nParent  Shares  representing  more than 1% of the  outstanding  shares of Parent\nCommon Stock on a fully diluted basis (a 'Permitted Offering').\n\n         (b) The Registration Notice shall include a certificate executed by the\nCompany and its proposed  managing  underwriter,  which  underwriter shall be an\ninvestment  banking firm of  nationally  recognized  standing  (the  'Manager'),\nstating that\n\n(i)  they have a good faith intention to commence promptly a Permitted Offering,\nand\n\n(ii) the  Manager  in good faith  believes  that,  based on the  then-prevailing\nmarket conditions,  it will be able to sell the Registrable  Securities at a per\nshare price equal to at least 80% of the then Fair Market Value of such shares.\n\n         (c) Parent (and\/or any person designated by the Parent) shall thereupon\nhave the option  exercisable by written  notice  delivered to the Company within\nten business days after the receipt of the Registration  Notice,  irrevocably to\nagree to purchase all or any part of the Registrable  Securities  proposed to be\nso sold for cash at a price (the 'Option Price') equal to the product of (i) the\nnumber of Registrable  Securities to be so purchased by Parent and (ii) the then\nFair Market Value of such shares.\n\n         (d) Any purchase of Registrable  Securities by Parent (or its designee)\nunder  Section  10(c) shall take place at a closing to be held at the  principal\nexecutive  offices of Parent or at the offices of its counsel at any  reasonable\ndate and time  designated  by Parent  and\/or such designee in such notice within\ntwenty  business  days after  delivery of such  notice,  and any payment for the\nshares to be so purchased  shall be made by delivery at the time of such closing\nin immediately available funds.\n\n                                      - 6 -\n\n\n\n         (e) If Parent  does not elect to exercise  its option  pursuant to this\nSection  10  with  respect  to all  Registrable  Securities,  it  shall  use its\nreasonable  efforts  to effect,  as  promptly  as  reasonably  practicable,  the\nregistration under the Securities Act of the unpurchased  Registrable Securities\nproposed to be so sold; provided, however, that\n\n(i) The Company shall not be entitled to more than an aggregate of two effective\nregistration statements hereunder, and\n\n(ii) Parent will not be required to file any such registration  statement during\nany period of time (not to exceed 180 days after such request) when:\n\n(A)  Parent  is in  possession  of  material  non-public  information  which  it\nreasonably  believes  would be  detrimental to be disclosed at such time and, in\nthe opinion of counsel to Parent, such information would have to be disclosed if\na registration statement were filed at that time;\n\n(B) Parent is required  under the Securities  Act to include  audited  financial\nstatements  for any period in such  registration  statement  and such  financial\nstatements are not yet available for inclusion in such  registration  statement;\nor\n\n(C) Parent determines,  in its reasonable judgment, that such registration would\ninterfere  with  any  financing,   acquisition  or  other  material  transaction\ninvolving Parent or any of its affiliates.\n\n         (f)  Parent  shall  use  its  reasonable  best  efforts  to  cause  any\nRegistrable  Securities  registered  pursuant to this Section 10 to be qualified\nfor sale  under the  securities  or Blue Sky laws of such  jurisdictions  as the\nCompany  may  reasonably   request  and  shall  continue  such  registration  or\nqualification in effect in such  jurisdiction;  provided,  however,  that Parent\nshall not be  required  to  qualify  to do  business  in, or  consent to general\nservice of process in, any jurisdiction by reason of this provision.\n\n         (g) The registration rights set forth in this Section 10 are subject to\nthe condition that the Company shall provide Parent with such  information  with\nrespect to its Registrable  Securities,  the plans for the distribution thereof,\nand such other  information  with  respect to such holder as, in the  reasonable\njudgment of counsel for Parent, is necessary to enable Parent to include in such\nregistration  statement all material facts required to be disclosed with respect\nto a registration thereunder.\n\n         (h) A registration  effected under this Section 10 shall be effected at\nParent's expense, except for underwriting discounts and commissions and the fees\nand the  expenses of counsel to the  Company,  and Parent  shall  provide to the\nunderwriters such documentation (including certificates, opinions of counsel and\n'comfort' letters from auditors) as is customary in connection with underwritten\npublic offerings as such underwriters may reasonably require.\n\n                                      - 7 -\n\n\n\n         (i) In connection with any registration effected under this Section 10,\nthe parties agree\n\n(i)  to indemnify each other and the underwriters in the customary manner,\n\n(ii) to enter into an underwriting agreement in form and substance customary for\ntransactions  of  such  type  with  the  Manager  and  the  other   underwriters\nparticipating in such offering, and\n\n(iii) to take  further  reasonable  actions  which are  necessary to effect such\nregistration and sale.\n\n         (j) Parent  shall be entitled to include  (at its  expense)  additional\nshares of its common stock in a registration  effected  pursuant to this Section\n10 only if and to the extent the Manager determines that such inclusion will not\nadversely affect the prospects for success of such offering.\n\n         11. ADJUSTMENT UPON CHANGES IN  CAPITALIZATION.  Without  limitation to\nany restriction on Parent  contained in this Parent Stock Option Agreement or in\nthe  Merger  Agreement,  in the event of any  change in Parent  Common  Stock by\nreason  of  stock  dividends,   splitups,   mergers  (other  than  the  Merger),\nrecapitalizations,  combinations,  exchange of shares or the like,  the type and\nnumber of shares or  securities  subject to the Option  and the  Exercise  Price\nshall  be  adjusted  appropriately  and  proper  provision  will  be made in the\nagreements  governing  such  transaction,  so that the Company will receive upon\nexercise  of the Option the  number and class of shares or other  securities  or\nproperty  that the Company would have received in respect of Parent Common Stock\nif the Option had been exercised  immediately  prior to such event or the record\ndate  therefor,  as applicable.  Subject to Section 1, and without  limiting the\nparties'  relative rights and  obligations  under the Merger  Agreement,  if any\nadditional  shares of Parent  Common  Stock  are  issued  after the date of this\nParent Stock Option  Agreement (other than pursuant to an event described in the\nfirst  sentence  of this  Section  11(a)),  the number of Parent  Shares will be\nadjusted so that,  after such issuance,  it equals 19.9% of the number of shares\nof Parent Common Stock then issued and outstanding, without giving effect to any\nshares subject to the Option.\n\n         12. RESTRICTIVE LEGENDS. Each certificate representing shares of Parent\nCommon  Stock  issued  to the  Company  hereunder  shall  include  a  legend  in\nsubstantially the following form:\n\nTHE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER\nTHE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE  SECURITIES OR BLUE SKY\nLAWS, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM\nSUCH  REGISTRATION IS AVAILABLE.  SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL\nRESTRICTIONS  ON TRANSFER  AS SET FORTH IN THE PARENT  STOCK  OPTION  AGREEMENT,\nDATED AS OF NOVEMBER 22,  1998, A COPY OF WHICH MAY BE OBTAINED  FROM THE ISSUER\nUPON REQUEST.\n\n                                      - 8 -\n\n\n\nIt is understood and agreed that:\n\n(i) the reference to the resale  restrictions  of the  Securities  Act and state\nsecurities  or Blue Sky laws in the above legend shall be removed by delivery of\nsubstitute  certificate(s)  without such  reference,  if the Company  shall have\ndelivered to Parent a copy of a letter from the staff of the  Commission,  or an\nopinion of counsel, in form and substance  satisfactory to Parent, to the effect\nthat such legend is not  required  for  purposes of the  Securities  Act or such\nlaws;\n\n(ii) the reference to the  provisions  to this Parent Stock Option  Agreement in\nthe above  legend  shall be removed by  delivery  of  substitute  certificate(s)\nwithout such reference if the shares have been sold or transferred in compliance\nwith  the   provisions   of  this  Parent  Stock  Option   Agreement  and  under\ncircumstances that do not require the retention of such reference; and\n\n(iii) the legend  shall be  removed in its  entirety  if the  conditions  in the\npreceding clauses (i) and (ii) are both satisfied.\n\nIn addition, such certificates shall bear any other legend as may be required by\nlaw.  Certificates  representing  shares sold in a  registered  public  offering\npursuant  to  Section 10 shall not be  required  to bear the legend set forth in\nthis Section 12.\n\n         13.   BINDING EFFECT: NO ASSIGNMENT: NO THIRD PARTY BENEFICIARIES.  (a)\nThis Parent Stock Option Agreement shall be binding upon and inure solely to the\nbenefit  of  each  party  hereto  and  their respective successors and permitted\nassigns.\n\n         (b)  Except as  expressly  provided  for in this  Parent  Stock  Option\nAgreement,  neither  this  Parent  Stock  Option  Agreement  nor the  rights  or\nobligations  of either  party  hereto are  assignable  except  with the  written\nconsent of the other party.\n\n         (c) Nothing contained in this Parent Stock Option Agreement, express or\nimplied, is intended to confer upon any person other than the parties hereto and\ntheir respective permitted assigns any rights or remedies hereunder.\n\n         (d) Any  Parent  Shares  sold by the  Company  in  compliance  with the\nprovisions of Section 10 shall,  upon  consummation of such sale, be free of the\nrestrictions  imposed  with  respect to such shares by this Parent  Stock Option\nAgreement.\n\n         14.  SPECIFIC  PERFORMANCE.  The parties hereto agree that  irreparable\nharm would occur in the event that any of the  provisions  of this Parent  Stock\nOption  Agreement were not performed in accordance with their specified terms or\nwere otherwise breached.  It is accordingly agreed that the parties hereto shall\nbe entitled to an injunction or injunctions  to prevent  breaches of this Parent\nStock Option  Agreement  and to enforce  specifically  the terms and  provisions\nhereof in any court of the United States or any state having jurisdiction,  this\nbeing in  addition to any other  remedy to which they are  entitled at law or in\nequity.\n\n                                      - 9 -\n\n\n\n         15. VALIDITY.  (a) The invalidity or  unenforceability of any provision\nof this  Parent  Stock  Option  Agreement  shall  not  affect  the  validity  or\nenforceability  of the other  provisions of this Parent Stock Option  Agreement,\nwhich shall remain in full force and effect.\n\n         (b) In the  event  any  court or other  competent  authority  holds any\nprovision  of  this  Parent  Stock  Option   Agreement  to  be  null,   void  or\nunenforceable,  the parties  hereto shall  negotiate in good faith the execution\nand delivery of an amendment to this Parent Stock Option  Agreement in order, as\nnearly as possible, to effectuate, to the extent permitted by law, the intent of\nthe parties  hereto with  respect to such  provision  and the  economic  effects\nthereof.\n\n         (c) Each  party  agrees  that,  should  any  court  or other  competent\nauthority  hold any  provision  of this Parent  Stock  Option  Agreement or part\nhereof to be null, void or unenforceable,  or order any party to take any action\ninconsistent  herewith,  or not take any action required herein, the other party\nshall not be entitled to specific  performance  of such provision or part hereof\nor to any other remedy,  including but not limited to money damages,  for breach\nhereof or of any other  provision of this Parent Stock Option  Agreement or part\nhereof as the result of such holding or order.\n\n         16.  NOTICES.  All notices and other  communications  under this Parent\nStock  Option  Agreement  shall be in  writing  and shall be given (and shall be\ndeemed to have been duly given  upon  receipt)  by  delivery  in person,  if (a)\ndelivered  personally,  by  overnight  courier,  telecopy  or by  registered  or\ncertified mail, postage prepaid, return receipt requested addressed as follows:\n\n         A.       If to Parent, to:\n\n                  The B.F.Goodrich Company\n                  4020 Kinross Lakes Pkwy.\n                  Richfield, OH  44286-9368\n\n                  Attention:  Terrence G. Linnert\n                              Sr. Vice President and General Counsel\n                              Fax:  (330) 659-7737\n\n                  with a copy to:\n\n                  Squire, Sanders &amp; Dempsey L.L.P.\n                  4900 Key Tower\n                  127 Public Square\n                  Cleveland, Ohio  44114-1304\n\n                  Attention:  Gordon S. Kaiser, Esq.\n                              Fax: (216) 479-8780\n\n\n                                      - 10 -\n\n\n\n         B.       If to the Company, to:\n\n                  Coltec Industries Inc\n                  3 Coliseum Centre\n                  2550 West Tyvola Road\n                  Charlotte, NC  28217\n\n                  Attention:  Corporate Secretary\n                              Fax:  (704) 423-7011\n\n                  with a copy to:\n\n                  Cravath, Swaine &amp; Moore\n                  825 Eighth Avenue\n                  New York, New York 10019\n\n                  Attention:  George W. Bilicic, Jr., Esq. and\n                              Allen Finkelson, Esq.\n                              Fax: (212) 474-3700\n\nor to such other  address as either party may have  furnished to the other party\nin writing in accordance with this Section.\n\n         17. GOVERNING LAW: CHOICE OF FORUM.  This Parent Stock Option Agreement\nshall be governed in all respects, including validity, interpretation and effect\nby and construed in accordance with the laws of the Commonwealth of Pennsylvania\nwithout giving effect to the provisions  thereof relating to conflicts of law to\nthe extent that the  application  of the laws of another  jurisdiction  would be\nrequired thereby.\n\n         18.      INTERPRETATION.\n\n         (a) When  reference is made in this Parent  Stock  Option  Agreement to\nArticles,  Sections,  Schedules  or  Exhibits,  such  reference  shall  be to an\nArticle,  Section, Schedule or Exhibit of this Parent Stock Option Agreement, as\nthe case may be, unless otherwise indicated.\n\n         (b) The headings  contained in this Parent Stock Option  Agreement  are\nfor  reference  purposes  only and shall not  affect in any way the  meaning  or\ninterpretation of the Parent Stock Option Agreement.\n\n         (c) Whenever the words  'include,'  'includes,' or 'including' are used\nin this Parent Stock Option Agreement and are not followed by the words 'without\nlimitation',  they  shall  be  deemed  to be  followed  by  the  words  'without\nlimitation.'  The words 'hereof',  'herein' and 'hereunder' and words of similar\nimport  when used in this  Parent  Stock  Option  Agreement  shall refer to this\nParent Stock Option Agreement as a whole and not to any particular  provision of\nthis Parent Stock Option Agreement.\n\n                                      - 11 -\n\n\n\n         (d)  Whenever  'or' is used in this Parent  Stock  Option  Agreement it\nshall be construed in the nonexclusive sense.\n\n         19.  COUNTERPARTS;  EFFECT.  This Parent Stock Option  Agreement may be\nexecuted  in one or more  counterparts,  each of which  shall be deemed to be an\noriginal,  but all of which shall constitute one and the same agreement and each\nof which shall only become  effective  when one or more  counterparts  have been\nsigned by each party and delivered to the other party.\n\n         20.  AMENDMENTS;  WAIVER.  This Parent  Stock Option  Agreement  may be\namended by the parties hereto and the terms and conditions  hereof may be waived\nbut, in the case of an amendment,  only by an  instrument  in writing  signed on\nbehalf  of each of the  parties  hereto,  or,  in the  case of a  waiver,  by an\ninstrument signed on behalf of the party waiving compliance.\n\n         21. LOSS OR MUTILATION.  Upon receipt b y Parent of evidence reasonably\nsatisfactory to it of the loss, theft,  destruction or mutilation of this Parent\nStock  Option  Agreement,  and (in the case of loss,  theft or  destruction)  of\nreasonably satisfactory indemnification,  and upon surrender and cancellation of\nthis Parent  Stock  Option  Agreement,  if  mutilated,  Parent will  execute and\ndeliver a new Parent Stock Option Agreement of like tenor and date.\n\n         IN WITNESS  WHEREOF,  the parties  hereto have caused this Parent Stock\nOption Agreement to be executed by their respective duly authorized  officers as\nof the date first above written.\n\n\n                              THE B.F.GOODRICH COMPANY\n\n\n                               By:\n                                    Name:   David L. Burner\n                                    Title:  Chairman and Chief Executive Officer\n\n\n                               COLTEC INDUSTRIES INC\n\n\n                               By:\n                                    Name:   John W. Guffey, Jr.\n                                    Title:  Chairman and Chief Executive Officer\n\n\n\n                                      - 12 -\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7661],"corporate_contracts_industries":[9476],"corporate_contracts_types":[9622,9626],"class_list":["post-43366","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-goodrich-corp","corporate_contracts_industries-aerospace__space","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43366"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43366"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43366"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}