This excerpt taken from the GT DEF 14A filed Mar 7, 2008.
In 2006, in order to more closely align executive compensation to the performance of our Common Stock and to better manage concerns about stockholder dilution, and in response to new accounting rules with respect to stock options under Statement of Financial Accounting Standards No. 123R, Share-Based Payments (SFAS 123R), we introduced performance shares as a new component of long-term compensation for named executive officers and other key personnel.
Performance shares are granted under the 2005 Performance Plan and generally have the following terms:
The number of performance shares awarded annually to each named executive officer, measured by the percentage of total long-term compensation represented by such shares, is based on a number of considerations, including market data for comparable long-term incentive compensation and the CEOs recommendations, which are based in part on certain subjective factors, including the CEOs evaluation of the performance of each named executive officer, our recent performance, share availability under our equity compensation plans, retention considerations, and general economic and competitive conditions.
2007 Performance Share Grants
In 2007, the Compensation Committee awarded an aggregate of 1,222,426 performance shares. The vesting period for these shares is 2007-2009 and the performance criteria over this period are cumulative net income and cumulative total cash flow, net of debt, each weighted equally, as described above under Cash-Based Awards Under the Executive Performance Plan. The aggregate value of the performance shares granted to the named executive officers in 2007 (measured at grant date fair value) was $1,563,989. This represented approximately 13% of total long-term compensation awarded to the named executive officers in 2007. In February 2007, target grants of 20,000, 15,850, 9,750 and 10,300 performance shares were made to Messrs. Keegan, Kramer, Harvie and de Bok, respectively, having the terms described above. On August 7, 2007, Mr. Schmitz received a target grant of 7,000 performance shares, having the terms described above, in connection with his hiring.