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AMENDED
AND RESTATED
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT, was entered into as of the 23rd day of July, 1998
by and between Textron Inc. (the "Company"), a Delaware
corporation having its principal office at 40 Westminster
Street, Providence, Rhode Island 02903 and Lewis B. Campbell
(the "Executive"). The Agreement was amended on
May 6, 2005, and on May 4, 2006. The Agreement was
amended and restated as of February 26, 2008, in order to
comply with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”),
and to make certain other changes.
W
I T N E S S E T H:
WHEREAS, the Executive is
presently employed by the Company;
WHEREAS, the Company
desires to continue to employ the Executive and the Executive
is willing to continue to be employed by the Company;
and
WHEREAS, the Company and
the Executive desire to set forth the terms and conditions of
such continued employment.
NOW THEREFORE, in
consideration of the foregoing and of the mutual covenants
and agreements of the parties set forth in this Agreement,
and of other good and valuable consideration, the adequacy
and receipt of which is acknowledged, the parties hereto
agree as follows:
1. Term
of Employment
The
Company hereby agrees to continue to employ the Executive and
the Executive hereby accepts continued employment, in
accordance with the terms and conditions set forth herein, for
a term (the "Employment Term") commencing on July 23, 1998
(the "Effective Date") and terminating, unless otherwise
terminated earlier in accordance with Section 5 hereof, on the
third anniversary of the Effective Date, provided that the
Employment Term shall be automatically extended, subject to
earlier termination as provided in Section 5 hereof, for
successive additional one (1) year periods (the "Additional
Terms"), unless, at least ninety (90) days prior to the end of
the then Additional Term, the Company or the Executive has
notified the other in writing that the Employment Term shall
terminate at the end of the then current term.
2. Position
and Responsibilities
During
the Employment Term, the Executive shall serve as the Chief
Executive Officer of the Company or in such higher capacity as
agreed by the Company and the Executive. The
Executive shall report exclusively to the Board of Directors
of the Company (the "Board"). The Executive shall,
to the extent appointed or elected, serve on the Board as a
director and as a member of any committee of the Board, in
each case, without additional compensation. The
Executive shall, to the extent appointed or elected, serve as
a director or as a member of any committee of the board (or
the equivalent bodies in a non-corporate subsidiary or
affiliate) of any of the Company's subsidiaries or affiliates
and as an officer or employee (in a capacity commensurate with
his position with the Company) of any such subsidiaries or
affiliates, in all cases, without additional compensation or
benefits and any compensation paid to the Executive, or
benefits provided to the Executive, in such capacities shall
be a credit with regard to the amounts due hereunder from the
Company. The Executive shall have duties,
authorities and responsibilities generally commensurate with
the duties, authorities and responsibilities of persons in
similar capacities in similarly sized companies subject to the
By-laws of the Company. The Executive shall devote
substantially all of his business time, attention and energies
to the performance of his duties hereunder, provided the
foregoing will not prevent the Executive from participating in
charitable, community or industry affairs, from managing his
and his family's personal passive investments, and (with the
consent of the Organization and Compensation Committee (or its
successor) of the Board (the "O&C Committee"), which
consent will not be unreasonably withheld, conditioned or
delayed) serving on the board of directors of other companies,
provided that these activities do not materially interfere
with the performance of his duties hereunder or create a
potential business conflict or the appearance
thereof. The Company has consented to the
Executive's services on the boards of directors, if any, on
which the Executive currently serves, which boards the
Executive has disclosed in writing to the O&C
Committee. The Executive may retain any
compensation or benefits received as a result of consented to
service as a director of entities not related to the
Company.
3. Compensation
and Benefits
During the Employment Term,
the Company shall pay and provide the Executive the
following:
3.1 Base
Salary. The Company shall pay the Executive a base
salary (the "Base Salary") in an amount which shall be
established from time to time by the O&C Committee (or as
otherwise designated by the Board), provided, however, that
such base salary rate shall not be less than his current rate
of base salary. Base Salary shall be paid to the
Executive in accordance with the Company's normal payroll
practices for executives. Base Salary shall be
reviewed at least annually to ascertain whether, in the
judgment of the reviewing committee, such Base Salary should
be increased. If so increased, Base Salary shall
not be thereafter decreased and shall thereafter, as
increased, be the Base Salary hereunder.
3.2 Annual
Bonus. The Company shall provide the Executive
with the opportunity to earn an annual cash bonus under the
Company's current annual incentive compensation plan for
executives or a replacement plan therefor at a level
commensurate with his position, provided that the minimum
annual target award payable upon the achievement of
reasonably attainable objective performance goals shall be at
least seventy percent (70%) of Base Salary.
3.3 Long-Term
Incentives. The Company shall provide the
Executive the opportunity to earn long-term incentive awards
under the current equity and cash based plans and programs or
replacements therefor at a level commensurate with the
current aggregate opportunity being provided to the
Executive.
3.4 Employee
Benefits. The Executive shall, to the extent eligible, be
entitled to participate at a level commensurate with his
position in all employee benefit welfare and retirement plans
and programs, as well as equity plans, generally provided by
the Company to its senior executives in accordance with the
terms thereof as in effect from time to time. Such plans and
programs currently include, without limitation, the Amended
and Restated Supplemental Retirement Plan for Textron Inc.
Key Executives (the "SERP"), the 2007 Long-Term Incentive
Plan, the Key Executive Program (including the Deferred
Income Plan, the Spillover Pension Plan, the Spillover
Savings Plan, and the Survivor Benefit Plan), group term life
insurance plan, comprehensive health, major medical, vision
and dental insurance plans and short-term and long-term
disability plans.
For
purposes of determining the Executive's benefit under the
SERP, the definition of "Compensation" under the SERP shall be
revised as follows: (i) performance share units granted to the
Executive after January 1, 2005 shall not be included in
determining "Compensation"; and (ii) the amount of performance
share units includible in "Compensation" attributable to
performance share units accrued for the 2003-2005 and
2004-2006 performance cycles shall not, on average, exceed the
amount that would be included if each cycle's payment was
based on a share price appreciation of 10% since the closing
share price on December 31, 2004 of $73.80 and financial and
discretionary performance components combined to yield an
earned performance share unit payout of 80%.
In
addition, in lieu of the schedule provided in Section 2.03 of
the SERP, the Executive's benefits under the SERP shall be
based on the Executive's age in accordance with the following
schedule:
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Age at Retirement
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Percent of
Benefit
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62
or above
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100%
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61
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80%
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60
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60%
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59
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40%
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3.5 Vacation. The Executive shall be
entitled to paid vacation in accordance with the standard
written policies of the Company with regard to vacations of
executives, but in no event less than four (4) weeks per
calendar year.
3.6 Perquisites. The Executive shall
not be required to pay the cost of personal travel on Company
aircraft by the Executive and members of the
Executive’s immediate family (although the cost shall
be imputed as income to the Executive to the extent required
by applicable tax laws). The Executive shall pay
the cost (as reasonably determined by the Company) of any
other person who travels with the Executive for non-business
reasons. To the extent legally permissible, the
Company shall not treat perquisites provided to the Executive
as income to the Executive.
3.7 Right to
Change Plans. The Company shall not be obligated
by reason of this Section 3 to institute, maintain, or
refrain from changing, amending, or discontinuing any benefit
plan, program, or perquisite, so long as such changes are
similarly applicable to executive employees
generally.
3.8 Existing
Awards. The parties agree that the
dividend-payment provision of the restricted stock awards
granted on June 1, 1999, and January 1, 2001, shall be
amended as provided in Exhibit B to ensure that the awards
comply with Section 409A of the Code.
3.9 Performance
Bonus. The Company shall pay the Executive a lump
sum cash payment equal to $2,500,000 (the "Performance Bonus")
after satisfaction of the following: (i) the Executive's
attainment of age sixty five (65) while employed by the
Company or his earlier termination as a result of a
termination by the Company without Cause or by the Executive
for Good Reason (a "Protected Termination"); (ii) earnings per
share growth of the Company at a cumulative annual average of
at least 10% over the three (3) year period commencing January
1, 2009 and ending December 31, 2011, as reported in the
Company's audited financial statements (or, in the case of a
Protected Termination, through the date of termination if
after January 1, 2009, and without any requirement (but
subject to pro-ration in accordance with the next paragraph as
if the Executive's date of termination was his date of death)
if before January 1, 2009); and (iii) if the Executive's
employment terminated as a result of the Executive's voluntary
retirement (other than for Good Reason) at or after age sixty
five (65) and before January 1, 2012, the prior designation of
a successor Chief Executive Officer. The
Performance Bonus shall be paid ten (10) days after the
conditions in the preceding sentence are satisfied (or, if
later, ten (10) days after the earlier of (A) the end of the
six-month period following the Executive’s Protected
Termination and (B) the date of the Executive’s death
following his Protected Termination).
If
the Executive's employment is terminated before the
Executive’s sixty-fifth (65 th
) birthday as a result of his death or Disability, the Company
shall pay the Executive a lump sum cash payment equal to the
Performance Bonus multiplied by a fraction, the numerator of
which is the number of days the Executive was employed by the
Company since May 1, 2005, and the denominator of which is the
number of days between May 1, 2005 and the Executive's
sixty-fifth (65 th
) birthday. If the Executive’s employment is
terminated for death, the lump-sum payment shall be made ten
(10) days after the Executive’s death. If the
Executive’s employment is terminated for Disability, the
lump-sum payment shall be made ten (10) days after the earlier
of (A) the end of the six-month period following
the Executive’s termination for Disability and (B) the
date of the Executive’s death following his termination
for Disability.
The
Performance Bonus shall not be considered in determining any
benefits payable to the Executive under the SERP or any other
retirement plan maintained by the Company.
4. Expenses
Upon submission of
appropriate documentation, in accordance with its policies in
effect from time to time, the Company shall pay, or
reimburse, the Executive for all ordinary and necessary
expenses, in a reasonable amount, which the Executive incurs
during the Employment Term in performing his duties under
this Agreement including, but not limited to, travel,
entertainment, and professional dues and
subscriptions. To the extent that any
reimbursement under this paragraph would be includable in the
Executive’s gross income for federal income tax
purposes, the Executive shall submit the necessary
documentation and shall receive the reimbursement no later
than March 15 following the calendar year in which the
expense is incurred.
5. Termination
of Employment
The Executive's employment
with the Company (including but not limited to any subsidiary
or affiliate or the Company) and the Employment Term shall
terminate upon the occurrence of the first of the following
events:
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(a)
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Automatically
on the date of the Executive's death.
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(b)
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Except
as provided in the following sentence, upon thirty (30) days
written notice by the Company to the Executive of a termination due
to Disability, provided such notice is delivered during the period
of Disability. If the Executive’s Disability
results in a “separation from service” within the
meaning of Section 409A of the Code (for example, because there is
no reasonable expectation that the Executive will return to perform
services for the Company, or because the permitted time period
under Section 409A for a bona fide leave of absence expires), and
if the Employment Term has not terminated pursuant to the preceding
sentence on or before the date of the Executive’s separation
from service, the Employment Term shall terminate automatically
when the separation from service occurs, without any requirement
for written notice by the Company. The term "Disability"
shall mean, for purposes of this Agreement, the inability of the
Executive, due to any medically determinable physical or mental
impairment, to engage in the performance of his material duties of
employment with the Company as contemplated by Section 2 herein for
a period of more than one hundred eighty (180) consecutive days or
for a period that is reasonably expected to exist for a period of
more than one hundred eighty (180) consecutive days, provided that
interim returns to work of less than ten (10) consecutive business
days in duration shall not be deemed to interfere with a
determination of consecutive absent days if the reason for absence
before and after the interim return are the same. The
existence or non-existence of a Disability shall be determined by a
physician agreed upon in good faith by the Executive (or his
representatives) and the Company. It is expressly
understood that the Disability of the Executive for a period of one
hundred eighty (180) consecutive days or less shall not constitute
a failure by him to perform his duties hereunder and shall not be
deemed a breach or default; and, as long as the Executive’s
employment has not been terminated pursuant to this paragraph, the
Executive shall receive full compensation for any such period of
Disability or for any other temporary illness or incapacity during
the term of this Agreement.
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(c)
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Immediately
upon written notice by the Company to the Executive of a
termination due to his retirement at or after the Executive's
attainment of age sixty-five (65).
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(d)
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Immediately
upon written notice by the Company to the Executive of a
termination for Cause, provided such notice is given within ninety
(90) days after the discovery by the Board of the Cause event and
has been approved by at least two-thirds of the Board at a meeting
at which the Executive and his counsel had the right to appear and
address such meeting after receiving at least five (5) business
days written notice of the meeting and reasonable detail of the
facts and circumstances claimed to provide a basis for such
termination. The term "Cause" shall mean, for purposes
of this Agreement: (i) an act or acts of willful misrepresentation,
fraud or willful dishonesty (other than good faith expense account
disputes) by the Executive which in any case is intended to result
in his or another person or entity's substantial personal
enrichment at the expense of the Company; (ii) any willful
misconduct by the Executive with regard to the Company, its
business, assets or employees that has, or was intended to have, a
material adverse impact (economic or otherwise) on the Company;
(iii) any material, willful and knowing violation by the Executive
of (x) the Company's Business Conduct Guidelines, or (y) any of his
fiduciary duties to the Company which in either case has, or was
intended to have, a material adverse impact (economic or otherwise)
on the Company; (iv) the willful or reckless behavior of the
Executive with regard to a matter of a material nature which has a
material adverse impact (economic or otherwise) on the Company; (v)
the Executive's willful failure to attempt to perform his duties
under Section 2 hereof or his willful failure to attempt to follow
the legal written direction of the Board, which in either case is
not remedied within ten (10) days after receipt by the Executive of
a written notice from the Company specifying the details thereof;
(vi) the Executive's conviction of, or pleading nolo contendere or
guilty to, a felony (other than (x) a traffic infraction or (y)
vicarious liability solely as a result of his position provided the
Executive did not have actual knowledge of the actions or inactions
creating the violation of the law or the Executive relied in good
faith on the advice of counsel with regard to the legality of such
action or inaction (or the advice of other specifically qualified
professionals as to the appropriate or proper action or inaction to
take with regard to matters which are not matters of legal
interpretation)); or (vii) any other material breach by the
Executive of this Agreement that is not cured by the Executive
within twenty (20) days after receipt by the Executive of a written
notice from the Company of such breach specifying the details
thereof. No action or inaction should be deemed willful
if not demonstrably willful and if taken or not taken by the
Executive in good faith as not being adverse to the best interests
of the Company. Reference in this paragraph (d) to the
Company shall also include direct and indirect subsidiaries of the
Company, and materiality and material adverse impact shall be
measured based on the action or inaction and the impact upon, and
not the size of, the Company taken as a whole, provided that after
a Change in Control, the size of the Company, taken as a whole,
shall be a relevant factor in determining materiality and material
adverse impact.
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(e)
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Upon
written notice by the Company to the Executive of an involuntary
termination without Cause. A notice by the Company of
non-renewal of the Employment Term pursuant to Section 1 above
shall be deemed an involuntary termination of the Executive by the
Company without Cause as of the end of the Employment Term, but the
Executive may terminate at any time after the receipt of such
notice and shall be treated as if he was terminated without Cause
as of his termination date.
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(f)
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Upon
twenty (20) days written notice by the Executive to the Company of
a termination for Good Reason (which notice sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for such termination) unless the Good Reason event is cured
within such twenty (20) day period. The term "Good
Reason" shall mean, for purposes of this Agreement, without the
Executive's express written consent, the occurrence of any one or
more of the following: (i) the assignment to the Executive of
duties materially inconsistent with the Executive's then
authorities, duties, responsibilities, and status (including
offices, titles, and reporting requirements), or any reduction in
the Executive's then title, position, reporting lines or a material
reduction (other than temporarily while Disabled or otherwise
incapacitated) in his then status, authorities, duties, or
responsibilities including but not limited to holding his then
position in the Company while the Company is a subsidiary of
another entity (holding stock in the Company entitled to at least
fifty percent (50%) of the vote for the election of directors) and
not holding the same or equivalent position in the ultimate parent
entity or, if then a director of the Company, failure to be
nominated or reelected as a director of the Company or removal as
such; (ii) relocation of the Executive from the principal office of
the Company (excluding reasonable travel on the Company's business
to an extent substantially consistent with the Executive's business
obligations) or relocation of the principal office of the Company
to a location which is at least fifty (50) miles from the Company's
current headquarters, provided, however, if the Executive at the
time of the relocation is not located at the principal office, such
relocation provision shall apply based on his then location; (iii)
a reduction by the Company in the Executive's Base Salary; (iv) a
reduction in the Executive's aggregate level of participation in
any of the Company's short and/or long-term incentive compensation
plans, or employee benefit or retirement plans, policies,
practices, or arrangements in which the Executive participated as
of the Effective Date, or, after a Change in Control, participated
immediately prior to the Change in Control; (v) the failure of the
Company to obtain and deliver to the Executive a satisfactory
written agreement from any successor to the Company to assume and
agree to perform this Agreement; or (vi) any other material breach
by the Company of this Agreement.
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(g)
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Upon
written notice by the Executive to the Company of the Executive's
voluntary termination of employment without Good Reason (which the
Company may, in its sole discretion, make effective earlier than
the effective date specified in the Executive’s
notice). A notice by the Executive of non-renewal of the
Employment Term pursuant to Section 1 above shall be deemed a
voluntary termination by the Executive without Good Reason as of
the end of the Employment Term.
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To the extent that any
payment would be made or any benefit would be provided under
this Agreement as a result of the Executive’s
termination of employment under paragraph (b), (c), (d), (e),
(f), or (g) of this Section 5, the payment or benefit shall
be provided only if the Executive has also incurred a
“separation from service” within the meaning of
Section 409A of the Code; and any timing requirements
associated with the payment or benefit (such as, for example,
a requirement that a payment be delayed for six months
following the Executive’s termination) shall be applied
in relation to the date on which the “separation from
service” occurs for purposes of Section
409A. The preceding sentence shall apply solely to
determine the timing of payments under the Agreement in
compliance with Section 409A. The Agreement is not
intended, and shall not be construed, to require that the
Executive incur a “separation from service”
within the meaning of Section 409A before the Executive or
the Company shall have grounds to terminate the
Executive’s employment under paragraph (b), (c), (d),
(e), (f), or (g) of this Section 5.
6. Consequences
of a Termination of Employment
6.1 Termination
Due to Death or Retirement.
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(a)
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If
the Employment Term ends on account of the Executive's termination
due to death pursuant to Section 5(a) above or retirement pursuant
to Section 5(c) above, the Executive (or the Executive's surviving
spouse, or other beneficiary as so designated by the Executive
during his lifetime, or to the Executive's estate, as appropriate)
shall be entitled, in lieu of any other payments or benefits, to
(i) payment promptly of any unpaid Base Salary, unpaid annual
incentive compensation (for the preceding fiscal year) and any
accrued vacation, (ii) reimbursement for any unreimbursed
business expenses incurred prior to the date of termination, and
(iii) any amounts, benefits or fringes due under any equity,
benefit or fringe plan, grant or program in accordance with the
terms of said plan, grant or program but without duplication
(collectively, the "Accrued Obligations"). The
Accrued Obligations described in clauses (i) and (ii) of the
preceding sentence shall be paid on the first regular payroll date
after the Executive’s termination (or, if earlier, 45 days
after the Executive’s termination).
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(b)
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The
Executive shall be entitled to the Performance Bonus, subject to,
and in accordance with, Section 3.9 of this Agreement.
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6.2 Termination
Due to Disability. If the Employment Term ends as
a result of Disability pursuant to Section 5(b) above, the
Executive shall be entitled, in lieu of any other payments or
benefits, subject to Section 7(b) hereof, to any Accrued
Obligations and the following:
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(a)
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The
Executive shall be deemed to have satisfied the definition of
"total disability" under the 1994 Long-Term Incentive Plan or the
equivalent definition under any successor plan
thereto.
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(b)
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The
Executive shall be entitled to the Performance Bonus, subject to,
and in accordance with, Section 3.9 of this Agreement.
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6.3 Involuntary
Termination by the Company Without Cause or Termination by
the Executive for Good Reason. If the Executive is
involuntarily terminated by the Company without Cause in
accordance with Section 5(e) above or the Executive
terminates his employment for Good Reason in accordance with
Section 5(f) above, the Executive shall be entitled, in lieu
of any other payments or benefits, subject to Section 7(b)
hereof, to any Accrued Obligations and the
following:
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(a)
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Payment
in a lump sum, on March 1 of the calendar year following the date
of the Executive's termination, of an amount equal to the
Executive's annual bonus for the calendar year of the
Executive’s termination (to the extent that the applicable
corporate performance goals are achieved) multiplied by a fraction,
the numerator of which is the number of days during the fiscal year
of the Executive's termination that the Executive was employed by
the Company and the denominator is three hundred sixty-five
(365).
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(b)
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An
amount equal to two (2) times the sum of: (i) the
Executive's Base Salary, and (ii) the greater of: (x)
the Termination Year Target Bonus, or (y) the average of the
Executive's annual incentive compensation awards earned during the
last three (3) fiscal years ending prior to the fiscal year of
termination (whether or not deferred) (the sum of (i) and (ii)
being hereinafter referred to as “Final Annual
Compensation”). An amount equal to one and
one half (1½) times the Final Annual Compensation shall be
paid in a lump sum on the first regular payroll date after the end
of the six-month period following the Executive’s
termination. An amount equal to the remaining one
(½) times the Final Annual Compensation shall be calculated
as equal monthly installments payable over a period of two (2)
years; provided, however, that the monthly installments for the
first six months following the Executive’s termination shall
be paid in a lump sum, without interest, on the first regular
payroll date after the end of the six-month period, and the
remaining monthly installments shall commence on the first regular
payroll date after the end of the sixth month following the
Executive’s termination and shall be paid for the remainder
of the two (2) year period. For purposes of this
Agreement, the Executive’s "Termination Year Target Bonus"
shall mean the Executive’s target annual incentive
compensation award established for the fiscal year during which the
Executive's termination occurs.
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(c)
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Coverage
under all applicable retiree health and other retiree welfare plans
for the Executive and his dependents, on the same terms that apply
to other salaried retirees of the Company and their
dependents.
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(d)
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To
the extent eligible on the date of termination, continued
participation, at no additional cost (before tax) to the Executive
than the Executive would have as an employee, in the
Company’s Survivor Benefit Plan for Textron Key Executives,
accidental death and dismemberment insurance coverage, and
dependent life insurance coverage until two (2) years after the
date of termination; provided, however, that in the event the
Executive obtains other employment that offers substantially
similar or improved benefits, as to any particular welfare plan,
such continuation of coverage by the Company for such benefits
under such plan shall immediately cease. The Company
shall also reimburse the Executive for the cost (before tax) of
purchasing (under the Company’s group insurance policy, or
under an individual policy if coverage under the Company’s
policy is not available), for the continuation period described in
the preceding sentence, the level of Company-paid term life
insurance coverage and long-term disability insurance coverage that
the Executive received on the date of termination. The
Company shall reimburse the cost of coverage for the first six
months following the Executive’s termination in a lump sum,
without interest, on the first regular payroll date after the end
of the six-month period, and the Company shall reimburse the cost
monthly thereafter for the remainder of the continuation
period.
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(e)
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Two
and one-half (2½) additional years of service (including age
as if such service was completed) and compensation credit (at the
Executive's "Then Compensation Level") for benefit purposes under
any defined benefit type retirement plan, including but not limited
to the SERP and the Spillover Pension Plan if then in effect, and,
if the Executive is not eligible to receive benefits under any such
plan on the date of termination, two and one-half (2½)
additional years of age for determining eligibility to receive such
benefits; provided that benefits under any such plan will not
commence until the Executive actually attains the required
distribution age (taking into account only the Executive’s
actual service) under the plan or the Executive's spouse qualifies
for death benefits under such plan, and will be paid in accordance
with the terms of such plan; and further provided that, with regard
to any plan qualified under Section 401(a) of the Code, the
additional amounts may be provided on a nonqualified plan basis.
"Then Compensation Level" shall mean an annual rate of compensation
equal to the sum of (i) Final Annual Compensation and (ii) the
performance units and performance share units earned with respect
to the measurement periods ending at or about the end of the fiscal
year immediately preceding the year of termination (to the extent
recognized in the definition of 'Compensation' under the applicable
plan; in the case of the SERP as provided in Section 3.4 above such
that no amounts deemed earned in respect of performance share units
in 2007 (i.e. any grant after the 2004 grant) or later years shall
be included in Compensation for purposes of the SERP); provided,
however, that with respect to the year of termination, in lieu of
utilization of the amount in clause (ii) above, the Executive will
be deemed to have received in the year of termination the full
amount of performance units and performance share units earned with
respect to the measuring periods ending on or about the end of the
fiscal year immediately preceding the year of termination (whether
or not such amount is actually paid to the Executive prior to the
date of termination); provided, further, that, other than as set
forth in the immediately preceding proviso, the amounts described
in clause (ii) above shall be included in "Compensation" under the
plans referred to in this Section 6.3(e) in lieu of any amounts
actually paid to the Executive in respect of performance units and
performance share units in the year of termination and
thereafter.
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(f)
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Payment
in a lump sum, on the first regular payroll date after the end of
the six-month period following the Executive’s termination,
of two (2) times the amount of the maximum Company annual
contribution or match to any defined contribution type plan in
which the Executive participates.
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(g)
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Immediate
full vesting of any outstanding stock options that would vest
within two (2) years after such termination of employment as if the
Executive had continued employment for such two (2) year
period. The terms of the Executive's outstanding options
are deemed to be modified to the extent required by this Section
6.3(g).
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(h)
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Payment
when it would otherwise be paid in accordance with the 1994
Long-Term Incentive Plan or any successor plan of any amount due
with regard to performance share units outstanding on the date of
termination multiplied by a fraction, the numerator of which is the
number of days that the Executive was employed by the Company
during the performance period and the denominator is the total
number of days in the performance period. For purposes
of calculating the foregoing amounts, all discretionary performance
targets relating to the Executive's individual performance will be
deemed to be fully achieved and the actual level of achievement of
all financial performance targets will be determined as if the
Executive continued to be employed through the end of the
applicable measuring period.
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(i)
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Immediate
full vesting of the Executive's accounts under the Deferred Income
Plan.
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(j)
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The
Executive shall be entitled to the Performance Bonus, subject to,
and in accordance with, Section 3.9 of this Agreement.
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(k)
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If
the Executive dies after the Executive’s termination of
employment and before the end of the six-month period following the
Executive’s termination, any payment provided under this
Section 6.3 that would have been made (in the case of a lump-sum
payment) or that would have commenced (in the case of a periodic
payment) on the first regular payroll date after the end of the
six-month period shall instead be made or commence on the first
regular payroll date following the Executive’s death,
provided that the Executive’s beneficiary is otherwise
entitled to receive the payment under this Section
6.3. To the extent that any payment under this Section
6.3 is made “on the first regular payroll date”
following a date or event, the regular payroll date shall be
determined based on the Company’s payroll cycle applicable to
the Executive at the time of his separation from service (within
the meaning of Section 409A of the Code), without regard to any
change in the payroll cycle that becomes effective after the
Executive’s separation from service.
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6.4 Termination
by the Company for Cause or Termination by the Executive
without Good Reason. If the Executive is
terminated by the Company for Cause or the Executive
terminates his employment without Good Reason, the Executive
shall be entitled to receive all Accrued
Obligations.
6.5 Coordination
With Other Plans. The rules set forth in this
Section 6.5 shall apply to all amounts provided under the
Agreement.
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(a)
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To
the extent that the Executive’s Base Salary, annual incentive
compensation, or other amounts payable under this Agreement are
subject to a valid deferral election (or are deferred pursuant to a
plan provision) that had become irrevocable at the time of the
Executive’s termination of employment, the deferred amounts
shall be paid in accordance with the terms of the deferred
compensation arrangement. Any amount payable under this
Agreement that would be regarded as a substitute for an amount that
was deferred as provided in the preceding sentence (for example, a
payment made in lieu of deferred annual incentive compensation)
also shall be paid in accordance with the terms of the deferred
compensation arrangement. This Section 6.5(a) is
intended, and shall be applied, solely to prevent the
Executive’s deferral election or an automatic deferral
provision from being revocable to the extent that its revocation
would violate Section 409A of the Code.
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(b)
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The
amounts and benefits provided under Sections 6 and 8 hereof are
intended to be inclusive and not duplicative of the amounts and
benefits due under the Company's employee benefit plans and
programs, and this Agreement shall be applied in a manner
consistent with that intent. To the extent that a
duplicative benefit is provided under this Agreement and under
another employee benefit plan, policy, or program of the Company,
the following rules shall apply:
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(i)
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Any
benefit provided under a retirement plan that is tax-qualified
under Section 401(a) of the Code shall be paid exclusively as
provided under the tax-qualified retirement plan, and the
duplicative benefit provided under this Agreement shall be reduced
by the value of the tax-qualified retirement benefit.
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(ii)
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Any
benefit provided under a disability pay plan, death benefit plan,
bona fide vacation pay plan, or other plan or policy that is
excluded from the definition of “nonqualified deferred
compensation” under Treasury Regulations
§ 1.409A-1(a)(5) shall be paid exclusively as provided
under the plan or policy, and the duplicative benefit provided
under this Agreement shall be reduced by the value of the benefit
provided under the plan or policy.
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(iii)
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To
the extent that a provision of this Agreement makes specific
reference to another plan or program of the Company and states that
the terms of the other plan or program shall govern with respect to
the calculation, payment, or timing of payment of a particular
benefit, that benefit shall be paid as provided in the other plan
or program, as stated in this Agreement.
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(iv)
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In
all other circumstances in which any payment or benefit under this
Agreement duplicates a payment or benefit provided under another
employee benefit plan, policy, or program of the Company, or to the
extent that the payment or benefit under this Agreement is or could
be subject to offset by the benefit under another employee benefit
plan, policy, or program of the Company, the duplicative benefit
shall be paid exclusively as provided in this Agreement, and the
duplicative benefit provided under the other employee benefit plan,
policy, or program shall be reduced by the value of the benefit
provided under this Agreement.
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(v)
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The
benefit coordination provisions in this Section 6.5(b) are
intended, and shall be applied, to ensure that the payments made to
the Executive are exempt from, or comply with, Section 409A of the
Code, and that the coordination of benefits between this Agreement
and the other employee benefit plans, policies, or programs in
which the Executive participates will not result in any
acceleration or re-deferral of deferred compensation that would
violate Section 409A of the Code.
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6.6 The
Executive’s right under this Section 6 to receive any
payments in installments shall be treated as a right to a
series of separate payments for purposes of Section 409A of
the Code, as provided in Treas. Reg.
§ 1.409A-2(b)(2)(iii).
7. No
Mitigation/No Offset/Release
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(a)
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In
the event of any termination of employment hereunder, the Executive
shall be under no obligation to seek other employment and there
shall be no offset against any amounts due the Executive under this
Agreement on account of any remuneration attributable to any
subsequent employment that the Executive may obtain. The
amounts payable hereunder shall not be subject to setoff,
counterclaim, recoupment, or defense. The preceding
sentence shall not limit the Company’s right to enforce the
forfeiture provision in Section 9.6(b).
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(b)
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Any
amounts payable and benefits or additional rights provided pursuant
to Section 6.2 (other than Section 6.2(b)), Section 6.3 (other than
Section 6.3(j)) and Section 8.2 (other than Section 8.2(k)) beyond
Accrued Obligations and amounts or rights due under law, and, in
the case of Section 6.3 and Section 8.2, beyond the sum of any
amounts due (without execution of a release) under the Company
severance program then in effect, or, if greater, three (3) months
Base Salary as severance, shall only be payable if the Executive
delivers to the Company a release of all claims of the Executive
(other than those specifically payable or providable hereunder on
or upon the applicable type of termination and any rights to
indemnification, contribution, exculpation, advances, or directors
and officers liability insurance under the Company's organizational
documents, under any plan or agreement, or at law) with regard to
the Company, its subsidiaries and related entities and their
respective past or present officers, directors and employees, in
the form attached to this Agreement as Exhibit C, that has become
irrevocable before the date on which such payment or benefit is due
to be paid or provided. To the extent that options and
other equity awards are eligible for accelerated vesting pursuant
to Section 6.3(g) or the last sentence of Section 8.2(i), the
equity award shall not vest pursuant to Section 6.3(g) or Section
8.2
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