Exhibit
10.1
TEXTRON INC.
2007 LONG-TERM INCENTIVE PLAN
(AMENDED AND RESTATED AS OF MAY 1, 2007)
The
purposes of the Plan are to (a) promote the long-term
success of the Company and its Subsidiaries and to increase
stockholder value by providing Eligible Individuals with
incentives to contribute to the long-term growth and
profitability of the Company and (b) assist the Company
in attracting, retaining and motivating highly qualified
individuals who are in a position to make significant
contributions to the Company and its
Subsidiaries.
Upon
the Effective Date, no further Awards will be granted under
the Prior Plan.
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2. Definitions and Rules of
Construction
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(a)
Definitions. For purposes of the Plan, the
following capitalized words shall have the meanings set forth
below:
“
Affiliate ” means any Parent
or Subsidiary and any person that directly or indirectly
through one or more intermediaries, controls, is controlled
by, or is under common control with, the Company.
“
Award ” means an Option,
Restricted Stock, Restricted Stock Unit, Stock Appreciation
Right, Performance Stock, Performance Share Unit or Other
Award granted by the Committee pursuant to the terms of the
Plan.
“
Award Document ” means an
agreement, certificate or other type or form of document or
documentation approved by the Committee that sets forth the
terms and conditions of an Award. An Award Document may be in
paper, electronic or other media, may be limited to a notation
on the books and records of the Company and, unless the
Committee requires otherwise, need not be signed by a
representative of the Company or a Participant.
“
Beneficial Owner ” and “
Beneficially Owned ” have the
meaning set forth in Rule 13d-3 under the Exchange
Act.
“
Board ” means the Board of
Directors of the Company, as constituted from time to
time.
“
Change of Control ”
means:
(i)
Any “person” or “group” (within the
meaning of Sections 13 (d) and 14 (d)(2) of the
Exchange Act other than the Company, any “person”
who on the Effective Date was a director or officer of the
Company, any trustee or other fiduciary holding Common Stock
under an employee benefit plan of the Company or a Subsidiary,
or any corporation which is owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of Common Stock, is or becomes
the “beneficial owner” (as defined in
Rule 13d-3 under the Act) of more than thirty percent
(30%) of the then outstanding voting stock of the Company,
or
(ii)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for
election by the Company’s stockholders was approved by a
vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the
two-year period (or whose election or nomination was
previously so approved) cease for any reason to constitute a
majority of the Board, or !
(iii)
the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or
(iv)
the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets.
If
an Award is subject to Section 409A of the Code, the
payment or settlement of the Award shall accelerate upon a
Change of Control only if the event also constitutes a
“change in ownership,” “change in effective
control,” or “change in the ownership of a
substantial portion of the Company’s assets” as
defined under Section 409A of the Code. Any
adjustment to the Award that does not affect the Award’s
status under Section 409A (including, but not limited to,
accelerated vesting or adjustment of the amount of the Award)
may occur upon a Change in Control as defined in the Plan,
regardless of whether the event also constitutes a change in
control under Section 409A.
“
Code ” means the Internal
Revenue Code of 1986, as amended, and the applicable rulings
and regulations promulgated thereunder.
“
Committee ” means the
Organization and Compensation Committee of the Board, any
successor committee thereto or any other committee appointed
from time to time by the Board to administer the Plan, which
committee shall meet the requirements of
Section 162(m) of the Code,
Section 16(b) of the Exchange Act and the applicable
rules of the NYSE; provided , however ,
that, if any Committee member is found not to have met the
qualification requirements of Section 162(m) of the
Code and Section 16(b) of the Exchange Act, any
actions taken or Awards granted by the Committee shall not be
invalidated by such failure to so qualify.
“
Common Stock ” means the
common stock of the Company, par value $0.125 per share, or
such other class of share or other securities as may be
applicable under Section 13 of the Plan.
“
Company ” means Textron Inc.,
a Delaware corporation, or any successor to all or
substantially all of the Company’s business that adopts
the Plan.
“
Early Retirement ” means the
attainment of age 60, or age 55 with 10 years of service, or
20 years of service.
“
Effective Date ” means April
25, 2007, the date on which the Plan was approved by the
shareholders of the Company.
“
Eligible Individuals ” means
the individuals described in Section 4(a) of the
Plan who are eligible for Awards under the Plan.
“
Exchange Act ” means the
Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated
thereunder.
“
Fair Market Value ” means,
with respect to a share of Common Stock, the closing selling
price of a share of Common Stock on the relevant date of
determination as reported on the composite tape for securities
listed on the NYSE, or such national securities exchange as
may be designated by the Committee. If there were no sales on
the relevant date, the fair market value shall equal the
closing share price on the most recent day preceding the
relevant date during which a sale occurred.
“Family Member” means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, and any person
sharing the Participant’s household (other than a tenant or
employee).
“
Incentive Stock Option ” means
an Option that is intended to comply with the requirements of
Section 422 of the Code or any successor provision
thereto.
“
Non-Employee Director ” means
any member of the Board who is not an officer or employee of
the Company or any Subsidiary.
“
Nonqualified Stock Option ”
means an Option that is not intended to comply with the
requirements of Section 422 of the Code or any successor
provision thereto.
“
NYSE ” means the New York
Stock Exchange.
“
Option ” means an Incentive
Stock Option or Nonqualified Stock Option granted pursuant to
Section 7 of the Plan.
“
Other Award ” means any form
of Award other than an Option, Restricted Stock, Restricted
Stock Unit, Performance Stock, Performance Share Unit, or
Stock Appreciation Right granted pursuant to Section 11
of the Plan.
“
Parent ” means a corporation
which owns or beneficially owns a majority of the outstanding
voting stock or voting power of the Company. Notwithstanding
the above, with respect to an Incentive Stock Option, Parent
shall have the same meaning as “parent
corporation” set forth in Section 424(e) of
the Code.
“
Participant ” means an
Eligible Individual who has been granted an Award under the
Plan.
“
Performance Period ” means the
period established by the Committee and set forth in the
applicable Award Document over which Performance Targets are
measured.
“
Performance Stock ” means a
Target Number of Shares granted pursuant to
Section 10(b) of the Plan.
“
Performance Target ” means the
performance measures established by the Committee, from among
the performance criteria provided in Section 6(g), and
set forth in the applicable Award Document.
“
Performance Share Unit ” means
a right to receive a Target Number of Shares or cash in the
future granted pursuant to Section 10(c) of the
Plan.
“
Permitted Transferees ” means
(i) a Participant’s Family Member, (ii) one or
more trusts in which Family Members have more than fifty
percent of the beneficial interest, (iii) a foundation in
which the Participant or Family Members control the management
of assets; or (iv) any other entity in which the Participants
or Family Members own more than fifty percent of the voting
interests.
“
Plan ” means this Textron Inc.
2007 Long-Term Incentive Plan, as amended or restated from
time to time.
“
Plan Limit ” means the maximum
aggregate number of Shares that may be issued for all purposes
under the Plan as set forth in Section 5(a) of the
Plan.
“
Prior Plan ” means the 1999
Long-Term Incentive Plan, as amended and restated from time to
time.
“
Restricted Stock ” means one
or more Shares granted pursuant to Section 8(b) of the
Plan.
“
Restricted Stock Unit ”
means a right to receive one
or more Shares (or cash, if applicable) in the future granted
pursuant to Section 8(c) of the
Plan.
“
Shares ” means shares of
Common Stock, as may be adjusted pursuant to
Section 13(b).
“
Stock Appreciation Right ”
means a right to receive all or some portion of the
appreciation on Shares granted pursuant to Section
9 of
the Plan.
“
Subsidiary ” means (i) a
corporation or other entity with respect to which the Company,
directly or indirectly, has the power, whether through the
ownership of voting securities, by contract or otherwise, to
elect at least a majority of the members of such
corporation’s board of directors or analogous governing
body, or (ii) any other corporation or other entity in
which the Company, directly or indirectly, has an equity or
similar interest greater than 50% and which the Committee
designates as a Subsidiary for purposes of the
Plan. For purposes of determining eligibility for
the grant of Incentive Stock Options under the Plan, the term
“Subsidiary” shall be defined in the manner
required by Section 424(f) of the Code.
“
Substitute Award ” means any
Award granted upon assumption of, or in substitution or
exchange for, outstanding employee equity awards previously
granted by a company or other entity acquired by the Company
or with which the Company combines pursuant to the terms of an
equity compensation plan that was approved by the stockholders
of such company or other entity.
“
Target Number ” means, if
applicable, the target number of Shares or cash value
established by the Committee and set forth in the applicable
Award Document.
(b)
Rules of Construction. The masculine
pronoun shall be deemed to include the feminine pronoun, and
the singular form of a word shall be deemed to include the
plural form, unless the context requires otherwise. Unless the
text indicates otherwise, references to sections are to
sections of the Plan.
(a) Committee. The
Plan shall be administered by the Committee, which shall have
full power and authority, subject to the express provisions
hereof, to:
(i)
select the Participants from the Eligible
Individuals;
(ii)
grant Awards in accordance with the Plan;
(iii)
determine the number of Shares subject to each Award or the
cash amount payable in connection with an Award;
(iv)
determine the terms and conditions of each Award, including,
without limitation, those related to term, permissible methods
of exercise, vesting, cancellation, payment, settlement,
exercisability, Performance Periods, Performance Targets, and
the effect, if any, of a Participant’s termination of
employment with the Company or any of its Subsidiaries or,
subject to Section 6(d), a Change of Control of the
Company;
(v)
subject to Sections 6(g), 16 and 17(e)
of the Plan, amend the terms and conditions of an Award after
the granting thereof;
(vi)
specify and approve the provisions of the Award Documents
delivered to Participants in connection with their
Awards;
(vii) construe
and interpret any Award Document delivered under the
Plan;
(viii)
make factual determinations in connection with the
administration or interpretation of the Plan;
(ix)
adopt, prescribe, amend, waive and rescind administrative
regulations, rules and procedures relating to the
Plan;
(x)
employ such legal counsel, independent auditors and
consultants as it deems desirable for the administration of
the Plan and to rely upon any advice, opinion or computation
received therefrom;
(xi)
vary the terms of Awards to Participants in non-US
jurisdictions to take account of local tax and securities law
and other regulatory requirements or to procure favorable tax
treatment for Participants;
(xii)
correct any defects, supply any omission or reconcile any
inconsistency in any Award Document or the Plan;
and
(xiii)
make all other determinations and take any other action
desirable or necessary to interpret, construe
or implement properly the provisions of the Plan or any
Award Document.
(b)
Plan Construction and Interpretation. The
Committee shall have full power and authority, subject to the
express provisions hereof, to construe and interpret the
Plan.
(c)
Determinations of Committee Final and Binding.
All determinations by the Committee in carrying out and
administering the Plan and in construing and interpreting the
Plan shall be made in the Committee’s sole discretion
and shall be final, binding and conclusive for all purposes
and upon all persons interested herein.
(d)
Delegation of Authority. To the extent not
prohibited by applicable laws, rules and regulations, the
Committee may, from time to time, delegate some or all of its
authority under the Plan to a subcommittee or subcommittees
thereof or other persons or groups of persons as it deems
necessary, appropriate or advisable under such conditions or
limitations as it may set at the time of such delegation or
thereafter; provided , however , that the
Committee may not delegate its authority (i) to make
Awards to employees (A) who are subject on the date of
the Award to the reporting rules under
Section 16(a) of the Exchange Act, (B) who are
executive officers whose compensation may be subject to the
limit on deductible compensation pursuant to
Section 162(m) of the Code, or (C) who are
officers of the Company who are delegated authority by the
Committee hereunder, or (ii) pursuant to Section 16
of the Plan. For purposes of the Plan, reference to the
Committee shall be deemed to refer to any subcommittee,
subcommittees, or other persons or groups of persons to whom
the Committee delegates authority pursuant to this
Section 3(d). In addition, notwithstanding the foregoing,
an independent Committee of the Board is required to approve
any grants under this plan to non-employee
directors.
(e)
Liability of Committee. Subject to applicable
laws, rules and regulations: (i) no
member of the Board or Committee (or its delegates) shall be
liable for any good faith action or determination made in
connection with the operation, administration or
interpretation of the Plan and (ii) the members of the
Board or the Committee (and its delegates) shall be entitled
to indemnification and reimbursement in the manner provided in
the Company’s Certificate of Incorporation as it may be
amended from time to time. In the performance of its
responsibilities with respect to the Plan, the Committee shall
be entitled to rely upon information and/or advice furnished
by the Company’s officers or employees, the
Company’s accountants, the Company’s counsel and
any other party the Committee deems necessary, and no member
of the Committee shall be liable for any action taken or not
taken in reliance upon any such information and/or
advice.
(f)
Action by the Board. Anything in the Plan to
the contrary notwithstanding, subject to applicable laws,
rules and regulations, any authority or responsibility
that, under the terms of the Plan, may be exercised by the
Committee may alternatively be exercised by the
Board.
(a)
Eligible Individuals. Awards may be granted to
employees and Non-Employee Directors of the Company or any of
its Subsidiaries; provided , however , that
only employees of the Company or a Parent or Subsidiary may be
granted Incentive Stock Options. The Committee
shall have the authority to select the persons to whom Awards
may be granted and to determine the type, number and terms of
Awards to be granted to each such Participant. Under the Plan,
references to “employment” or
“employed” include service of Participants who are
Non-Employee Directors, except for purposes of determining
eligibility to be granted Incentive Stock
Options.
(b)
Grants to Participants. The Committee shall
have no obligation to grant any Eligible Individual an Award
or to designate an Eligible Individual as a Participant solely
by reason of such Eligible Individual having received a prior
Award or having been previously designated as a Participant.
The Committee may grant more than one Award to a Participant
and may designate an Eligible Individual as a Participant for
overlapping periods of time.
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5. Shares Subject to the Plan
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(a)
Plan Limit. Subject to adjustment in accordance
with Section 13 of the Plan, the maximum aggregate number
of Shares that may be issued for all purposes under the Plan
shall be 6,000,000 plus any Shares that become available for
issuance upon cancellation, forfeiture, or expiration of
awards granted under the Prior Plan without having been
exercised or settled. Shares to be issued under the
Plan may be authorized and unissued shares, issued shares that
have been reacquired by the Company (in the open-market or in
private transactions) and that are being held in treasury, or
a combination thereof. No more than 6,000,000
Shares may be issued pursuant to Incentive Stock
Options.
(b)
Rules Applicable to Determining Shares Available for
Issuance. The number of Shares remaining available
for issuance will be reduced by the number of Shares subject
to outstanding Awards that are both denominated and intended
to be settled in Shares and, for all other awards, by the
number of Shares actually delivered upon settlement or payment
of the Award. For purposes of determining the number of Shares
that remain available for issuance under the Plan,
(i) the number of Shares that are tendered by a
Participant or withheld by the Company to pay the exercise
price of an Award or to satisfy the Participant’s tax
withholding obligations in connection with the exercise or
settlement of an Award and (ii) all of the Shares covered
by a stock-settled Stock Appreciation Right to the extent
exercised, will not be added back to the Plan Limit. In
addition, for purposes of determining the number of Shares
that remain available for issuance under the Plan, the number
of Shares corresponding to Awards that are both denominated
and intended to be settled in Shares under the Plan that are
forfeited or cancelled or otherwise expire for any reason
without having been exercised or settled or that is settled
through issuance of consideration other than Shares
(including, without limitation, cash) shall be added back to
the Plan Limit and again be available for the grant of Awards;
provided , however , that this provision
shall not be applicable with respect to (i) the
cancellation of a Stock Appreciation Right granted in tandem
with an Option upon the exercise of the Option or
(ii) the cancellation of an Option granted in tandem with
a Stock Appreciation Right upon the exercise of the Stock
Appreciation Right.
(c)
Special Limits. Anything to the contrary in
Section 5(a) above notwithstanding, but subject to
adjustment under Sections 5(b) and 13 of the Plan, the
following special limits shall apply to Shares available for
Awards under the Plan:
(i)
the maximum number of Shares that may be issued pursuant to
awards of Restricted Stock, Restricted Stock Units,
Performance Stock, Performance Share Units and Other Awards
that are payable in Shares granted under the Plan shall equal
1,500,000 Shares in the aggregate.
(ii)
the maximum number of Shares that may be made subject to
Options and Stock Appreciation Rights granted to any Eligible
Individual in any calendar year shall equal
200,000 Shares, and if any Option or Stock Appreciation
Right is forfeited, cancelled or otherwise expires for any
reason without having been exercised, the Shares subject to
such Option or Stock Appreciation Right shall be included in
the determination of the aggregate number of Shares issued to
such employee under the Plan.
(iii)
the maximum amount of Awards (other than those Awards set
forth in Section 5(c)(ii)) that may be (1) awarded
to any Eligible Individual in any calendar year (with respect
to Awards settled in Shares) is 200,000 Shares measured as of
the date of grant, or (2) paid to any Eligible Individual
in any calendar year (with respect to Awards settled in cash)
is $15 million; and
(iv)
A maximum of five percent (5%) of the aggregate number of
Shares available for issuance under the Plan may be issued as
Restricted Stock, Restricted Stock Units, Performance Stock,
or Performance Share Units, having no minimum vesting period
as specified in Sections 8(a) and 10(a).
(d)
Any Shares underlying Substitute Awards shall not be counted
against the number of Shares remaining for issuance and shall
not be subject to Section 5(c).
(a)
Types of Awards . Awards under the Plan may
consist of Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Stock, Performance
Share Units and Other Awards. Any Award described in Sections
7 through 11 of the Plan may be granted singly or in
combination or tandem with any other Award, as the Committee
may determine. Awards under the Plan may be made in
combination with, in replacement of, or as alternatives to
awards or rights under any other compensation or benefit plan
of the Company, including the plan of any acquired
entity.
(b)
Terms Set Forth in Award Document . The terms
and conditions of each Award shall be set forth in an Award
Document in a form approved by the Committee for such Award,
which Award Document shall contain terms and conditions not
inconsistent with the Plan. Notwithstanding the foregoing, and
subject to applicable laws, the Committee may accelerate
(i) the vesting or payment of any Award, (ii) the
lapse of restrictions on any Award or (iii) the date on
which any Award first becomes exercisable. The Committee shall
exercise this discretion only in the event of death,
disability, Change of Control, retirement, or termination
without cause. If an Award is subject to Section 409A of
the Code, or if an Award is intended to qualify as
“performance-based compensation” for purposes of
Section 409A or Section 162(m) of the Code, the Committee
shall have discretion to alter the terms of the Award only to
the extent that the alteration would not cause the Award to
fail to satisfy the requirements of Section 409A or the
“performance-based compensation” exemption under
Section 162(m), respectively. The terms of Awards
may vary among Participants, and the Plan does not impose upon
the Committee any requirement to make Awards subject to
uniform terms. Accordingly, the terms of individual Award
Documents may vary.
(c)
Termination of Employment . The Committee shall
specify at or after the time of grant of an Award the
provisions governing the disposition of an Award in the event
of a Participant’s termination of employment with the
Company or any of its Subsidiaries. Subject to applicable
laws, rules and regulations, in connection with a
Participant’s termination of employment, the Committee
shall have the discretion to accelerate the vesting,
exercisability or settlement of, eliminate the restrictions
and conditions applicable to, alter the form of payment, or
extend the post-termination exercise period of an outstanding
Award. Such provisions may be specified in the applicable
Award Document or determined at a subsequent
time. If an Award is subject to Section 409A
of the Code, or if an Award is intended to qualify as
“performance-based compensation” for purposes of
Section 409A or Section 162(m) of the Code, the Committee
shall have discretion to alter the terms of the Award only to
the extent that the alteration would not cause the Award to
fail to satisfy the requirements of Section 409A or the
“performance-based compensation” exemption under
Section 162(m), respectively.
(d)
Change of Control . (i) The Committee shall
have full authority to determine the effect, if any, of a
Change of Control of the Company or any Subsidiary
on the vesting, exercisability,
settlement, payment or lapse of restrictions applicable to an
Award, which effect may be specified in the applicable Award
Document or determined at a subsequent time. Subject to
applicable laws, rules and regulations, the Board or the
Committee shall, at an
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