Exhibit 10.1 H
(TEXTRON LOGO) [b74351tib7435108.gif]
Notice of Grant of Performance Share Units
and Performance Share Unit Agreement
 

     
«First» «Last»
  PSU No.: «PSU_Grant_»
«Addr1»
  Plan: 2007
«Addr2»
  ID: «EMPID»
«City», «State» «ZIP» «Country»
  Location: Corporate

 
Effective «Grant_Date», pursuant to the 2007 Long-Term Incentive Plan (the
“Plan”), you have been granted «PSU» Performance Share Units, which constitute
the right to receive, if earned pursuant to their terms, the cash equivalent of
a number of shares of Common Stock of Textron Inc. determined by a formula and
valued as provided in the Performance Share Unit Terms and Conditions (2/2009).
This grant is governed by the Performance Share Unit Terms and Conditions
(2/2009) and the Plan (both of which are available on the Textron Enterprise
Intranet) and is subject to the Performance Share Unit Non-Competition Agreement
(2/2009 version) attached hereto.
The Performance Period is the period beginning with Fiscal Year 2009 and ending
with Fiscal Year 2011. Separate performance measures will be established for
each fiscal year within the Performance Period, and the performance measures for
each fiscal year will apply to one third of the Performance Share Units granted
for the Performance Period. The Committee has discretion to reduce the number of
units earned for annual performance in each fiscal year. In determining whether
to reduce the number of units earned for annual performance in each fiscal year,
the Committee expects to apply guidelines based on cumulative performance for
all three fiscal years in the Performance Period; but the Committee has
discretion to make a downward adjustment that is larger or smaller than the
reduction indicated in the guidelines.
The attached document «PSU_Grant_» shows the performance measures and units you
can earn based on annual performance for Fiscal Year 2009, which apply to one
third of the Performance Share Units granted to you in this award. Performance
measures and units you can earn for Fiscal Year 2010 and Fiscal Year 2011 will
be established and communicated to you during the first 90 days of each fiscal
year.
The attached document also shows the guidelines that the Committee expects to
follow in determining whether to reduce the number of units earned each year
based on performance for all three fiscal years in the Performance Period. If
the Committee elects to make a reduction, the reduction would apply at the end
of the Performance Period to all of the units you have earned in each fiscal
year during the Performance Period. As a result, any payout you receive at the
end of the Performance Period would be based in part on annual performance and
in part on performance for the entire Performance Period. The Committee has
discretion to make a downward adjustment larger or smaller than the reduction
indicated in the attached guidelines.

 

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The cash value of all PSUs will be paid (to the extent earned) following the end
of the Performance Period, before March 15. Accordingly, PSUs earned based on
annual performance in the first or second year of the Performance Period will be
reduced, at the Committee’s discretion, at the end of the third year of the
Performance Period, and will not be paid until the 21/2 month period following
the third year of the Performance Period. All PSUs, including PSUs earned based
on annual performance in the first or second year of the Performance Period,
remain subject to forfeiture until the end of the Performance Period as provided
in the Performance Share Unit Terms and Conditions (2/2009).
By your signature and the Company’s signature below, you and the Company agree
that this grant is governed by the attached Performance Share Unit Terms and
Conditions (2/2009) and the Plan, both of which are available on the Textron
Enterprise Intranet. In addition, you agree that this grant is subject to the
Performance Share Unit Non-Competition Agreement (2/2009 version) attached
hereto, the terms of which are fully incorporated herein.
TEXTRON INC.
 

         
By:
       
 
       
 
      Date
 
       
Agreed by:
       
 
       
 
      Date

Please retain a copy of this signed agreement and return the original to
your Human Resources Department within 30 days of receipt of this document.

 

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Performance Share Units
2009 — 2011 Award Period
«PSU_Grant_»
Annual Performance Measures for Fiscal Year 20[ ]:
Applicable to One Third of Performance Share Units
Detail of Fiscal Year 20[ ] Performance Measures for each Component

                          Performance   % of Units   Units for Measure  
Weighting   vs. Target   Earned   Component
 
               

•   Intermediate performance between the minimum and maximum levels specified
earns a corresponding percentage of Performance Share Units (PSUs) for each
component.   •   PSUs earned for the fiscal year equal one third of the units
granted times the percentage earned based on performance and targets identified
above.   •   PSUs earned for the fiscal year are subject to reduction, at the
Committee’s discretion, based on performance for all three fiscal years in the
Performance Period.   •   All PSUs are paid in cash, to the extent earned,
following the end of the Performance Period, before March 15. Accordingly, PSUs
earned (subject to reduction) in the first or second year of the Performance
Period will not be paid until the 21/2 month period following the third year of
the Performance Period.   •   All PSUs, including PSUs earned (subject to
reduction) in the first or second year of the Performance Period, remain subject
to forfeiture until the end of the Performance Period as provided in the
Performance Share Unit Terms and Conditions (2/2009).   •   The cash-out value
of each PSU earned is equal to the average closing share price of Textron common
stock during the first 10 trading days of the fiscal year immediately following
the end of the Performance Period. Thus, PSU payouts are correlated to both
financial and share price performance over the measurement period.

 

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Performance Share Units
2009 — 2011 Award Period
«PSU_Grant_»
Guidelines for Discretionary Performance Reduction
for 2009 — 2011 Award Period:
Applicable to All Performance Share Units
PSU Reduction Factor Based on Performance for 2009 — 2011

        Performance for 2009 - 2011:       3-Year Performance Measure[s]    
Award Adjustment
 
     

•   Intermediate performance between the minimum and maximum levels specified
might earn a corresponding reduction.   •   The Committee may make a
discretionary reduction in the Performance Share Units (PSUs) earned based on
annual performance for each fiscal year in the Performance Period. The Committee
expects to reduce the PSUs using the guidelines shown above; but the Committee
has discretion to make a larger or smaller downward adjustment.   •   All PSUs
are paid in cash, to the extent earned, following the end of the Performance
Period, before March 15. Accordingly, PSUs earned (subject to reduction) in the
first or second year of the Performance Period will not be paid until the 21/2
month period following the third year of the Performance Period.   •   All PSUs,
including PSUs earned (subject to reduction) in the first or second year of the
Performance Period, remain subject to forfeiture until the end of the
Performance Period as provided in the Performance Share Unit Terms and
Conditions (2/2009).   •   The cash-out value of each PSU earned is equal to the
average closing share price of Textron common stock during the first 10 trading
days of the fiscal year immediately following the end of the Performance Period.
Thus, PSU payouts are correlated to both financial and share price performance
over the measurement period.

 

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TEXTRON INC.
TEXTRON 2007 LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE UNIT TERMS AND CONDITIONS
(2/2009)
____________________

•   Pursuant to the 2007 Long-Term Incentive Plan (the “Plan”), Textron has
awarded to executive the number of Performance Share Units set forth on the
applicable Notice of Grant signed by Textron and Grantee on the terms and
conditions herein set forth. Each Performance Share Unit constitutes the right
to receive cash equal to the fair market value of one share of Common Stock of
Textron Inc. for each Performance Share Unit earned by the executive, as
determined in accordance with the Plan, the Notice of Grant, the Performance
Share Unit Non-Competition Agreement (2/2009), and these Performance Share Unit
Terms and Conditions (2/2009). Performance Share Units earned for the
Performance Period are based on annual performance for each fiscal year in the
Performance Period and may be reduced based on performance for the entire
Performance Period. The earned Performance Share Units payable to the executive
in accordance with the provisions of this agreement shall be paid solely in cash
based on the fair market value of the Common Stock (determined based on the
average of the closing prices of Textron’s common stock, as reported on the New
York Stock Exchange, for the first ten trading days immediately following the
end of the Performance Period).   •   When the applicable Performance Period
ends, Textron will issue to the executive cash equal to the aggregate value of
the Performance Share Units earned by the executive, reduced by the amount
needed to satisfy required statutory minimum withholding taxes. The cash payment
shall be made following the end of the Performance Period, before March 15.   •
  If the executive’s employment with Textron shall terminate for “Cause,” all
Performance Share Units awarded to the executive for which the applicable
Performance Period has not ended shall be forfeited (including, but not limited
to, Performance Share Units that have already been earned based on annual
performance during a fiscal year in the Performance Period).   •   Except as
otherwise provided herein, the executive shall forfeit outstanding Performance
Share Units (including, but not limited to, Performance Share Units that have
already been earned based on annual performance during a fiscal year in the
Performance Period) if the executive’s employment with Textron ends for any
reason prior to the end of the Performance Period applicable to such Performance
Share Units, provided that if the executive’s employment ends (other than for
Cause) prior to such date because of “Disability,” death or after the executive
has become eligible for “Early or Normal Retirement,” and if the executive has
been employed by Textron for at least one year after the beginning of the
Performance Period, the executive or the executive’s estate will receive a cash
payment (subject to tax withholding) at the end of the Performance Period for
(1) the Performance Share Units actually earned for any fiscal year that is
completed before the executive’s employment ends, and (2) a “Pro-Rata Portion”
of the Performance Share Units for the fiscal year in which the executive’s
employment ends (to the extent that the financial performance goals applicable
to the Performance Share Units have been

 

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    achieved upon the completion of such fiscal year), subject to a
discretionary reduction, in each case, based on performance for all three fiscal
years in the Performance Period. •   Notwithstanding the above, the applicable
Performance Period for the Performance Share Units which may be paid pursuant to
this Award shall end immediately upon a “Change in Control” of Textron, as
defined in the Plan. In such instance, Textron shall pay to the executive (or to
the executive’s estate in the event of the executive’s death prior to payment),
subject to tax withholding, (1) the value of any Performance Share Units
actually earned for any fiscal year that has already ended, and (2) the full
value (assuming annual performance at target levels) of the unearned Performance
Share Units outstanding for any fiscal year that has not yet ended, without
discretionary reduction in either case for performance in all three fiscal years
in the Performance Period. The payment shall be made within 30 days after the
Change in Control, provided that the accelerated payment does not violate
Section 409A of the Internal Revenue Code. If the accelerated payment of the
Award would violate Section 409A of the Internal Revenue Code, the payment shall
be made on the date when the Performance Share Unit would have been paid if no
Change in Control had occurred. Note: Sale of a business unit usually does not
constitute a Change in Control as defined in the Plan.   •   The number of
Performance Share Units awarded to the executive hereunder shall be equitably
adjusted in the event of a stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, or any other
corporate event affecting the Common Stock, as provided in the Plan, in order to
preserve the benefits or potential benefits intended to be made available to the
Grantee.   •   Nothing in this document shall confer upon the executive the
right to continue in the employment of Textron or affect any right that Textron
may have to terminate the employment of the executive.   •   The Performance
Share Units shall not be assignable or transferable by the executive.   •   The
executive shall not have voting rights nor will the executive qualify for
dividends with respect to the Performance Share Units during the Performance
Period.   •   The Performance Share Units shall be subject to the terms and
conditions of the Plan in all respects.

DEFINITIONS
“Cause”
“Cause” shall mean: (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 Textron; (ii) any
willful misconduct by the executive with regard to Textron, its business, assets
or employees that has, or was intended to have, a material adverse impact
(economic or otherwise) on Textron; (iii) any material, willful and knowing
violation by the executive of (x) Textron’s Business Conduct Guidelines, or
(y) any of his or her fiduciary duties to Textron which in either case has, or
was intended to

 

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have, a material adverse impact (economic or otherwise) on Textron; (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
Textron; (v) the executive’s willful failure to attempt to perform his or her
duties or his or her 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 Textron
specifying the details thereof; or (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 in
actions 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); 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 Textron. Reference
in this paragraph to Textron shall also include direct and indirect subsidiaries
of Textron, and materiality and material adverse impact shall be measured based
on the action or inaction and the impact upon, and not the size of, Textron
taken as a whole, provided that after a Change in Control, the size of Textron,
taken as a whole, shall be a relevant factor in determining materiality and
material adverse impact.
“Performance Period”
For the purposes of this grant, the Performance Period means the period of three
fiscal years identified in the Notice of Grant.
“Early or Normal Retirement”
“Early retirement” with Textron is defined as attainment of age 60 or the
completion of 20 years of vesting service or the attainment of age 55 with the
completion of 10 years of vesting service. “Normal retirement” with Textron is
age 65.
“Disability”
“Disability” shall mean, for purposes of this Award, the inability of the
executive to engage in any substantial gainful activity due to injury, illness,
disease, bodily or mental infirmity which can be expected to result in death or
is expected to be permanent. An individual shall not be considered disabled
unless executive furnishes proof of the existence thereof. Textron may require
the existence or non-existence of a disability to be determined by a physician
whose selection is mutually agreed upon by the executive (or his or her
representatives) and Textron.
“Pro-Rata Portion”
“Pro-Rata Portion” shall mean the number of complete or partial months of the
executive’s active service to Textron during the fiscal year divided by 12. An
executive must be employed by Textron for a minimum of one year after the
beginning of the Performance Period before pro-rata Performance Share Units may
be paid. The Pro-Rata Portion shall apply to one third of the Performance Share
Units granted to the executive, shall be payable to an executive only to the
extent that the financial performance goals for

 

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the fiscal year are satisfied, and shall be subject to a discretionary reduction
at the end of the Performance Period based on performance for all three fiscal
years in the Performance Period.
Example: On March 1, 2009, an executive was granted 6,000 Performance Share
Units constituting the right to receive the cash equivalent value of 6,000
shares to be paid (to the extent earned) following completion of the 2009-2011
Performance Period. The annual performance goals for each fiscal year during the
Performance Period are applicable to 2,000 of the executive’s Performance Share
Units.
The performance during 2009 was sufficient to earn 100% of the applicable
Performance Share Units for that fiscal year. The executive terminates
employment with Textron on August 16, 2010, after having attained age 55 with
the completion of 10 years of vesting service.
Because the executive’s age and years of service qualify as ‘early retirement’
and the executive was employed by Textron for one year after the beginning of
the performance period, the executive is eligible to receive the cash equivalent
of the 2,000 Performance Share Units actually earned in 2009, plus a pro-rata
portion of the 2,000 Performance Share Units available for 2010 (provided that
the Performance Share Units for 2010 are earned pursuant to their terms),
subject to a discretionary reduction based on performance for the entire
Performance Period. Assuming that the financial performance goals for 2010 are
also satisfied at the 100% level, the number of Performance Share Units earned
for 2010 would be calculated as follows:

                                                          Number of Complete    
                            or Partial Months                 Fiscal Year   PSUs
Available for       Employed by Textron                 of   2010 (one third of
      During the 2010       Number of Months in         Termination   total
grant)       Fiscal Year       the Fiscal Year       Pro-Rata Portion
2010
    2,000     x     8     ÷     12     =   1,333 units (subject to adjustment —
paid, to the extent earned, in early 2012)

At the end of 2011, the cumulative performance for the entire 2009-2011
Performance Period indicates a 17% reduction in the executive’s performance
units under the discretionary reduction guidelines. In these circumstances, the
Committee expects to reduce the executive’s 3,333 PSUs by 17%, although the
Committee has discretion to make a larger or smaller downward adjustment. If the
Committee elects to make a 17% reduction in the executive’s PSUs, the executive
will be entitled to receive a cash payment (during the first 21/2 months of
2012) equal to the value of 2,766 shares of Textron common stock.

 

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TEXTRON INC.
PERFORMANCE SHARE UNIT NON-COMPETITION AGREEMENT
(2/2009)
You have been granted Performance Share Units (“PSUs”) pursuant to the Textron
2007 Long-Term Incentive Plan (the “Plan”). Textron grants Performance Share
Units to attract, retain and reward employees, to increase identification with
Textron’s interests and the interests of Textron’s shareholders, and to provide
incentive for remaining with and enhancing the value of Textron over the
long-term. In consideration for granting Performance Share Units to you, please
acknowledge that you have read and agree to this Performance Share Unit
Non-Competition Agreement by signing the attached Notice of Grant of Performance
Share Unit and Performance Share Unit Agreement.
Agreement regarding Your Performance Share Units

1.   Forfeiture of PSUs and required repayment if you engage in certain
competitive activities       If at any time during the Performance Period (as
defined in the Notice of Grant of Performance Share Unit and Performance Share
Unit Agreement) while you are a Company employee, or within two years after the
termination of your employment, you do any of the following activities:

  (a)   engage in any business which competes with the Company’s business (as
defined in Paragraph 2) within the Restricted Territory (as defined in
Paragraph 3); or     (b)   solicit customers, business or orders or sell any
products and services (i) in competition with the Company’s business within the
Restricted Territory or (ii) for any business, wherever located, that competes
with the Company’s business within the Restricted Territory; or     (c)  
divert, entice or otherwise take away customers, business or orders of the
Company within the Restricted Territory, or attempt to do so; or     (d)  
promote or assist, financially or otherwise, any firm, corporation or other
entity engaged in any business which competes with the Company’s business within
the Restricted Territory;

    then your right to receive all Performance Share Units shall be forfeited
effective the date you enter into such activity, and you will be required to
repay Textron an amount equal to the value of any PSU earned and paid to you
from and after the date beginning 180 days prior to the earlier of (a) your
termination of employment or (b) the date you engage in such activity, or at any
time after such date. You will be in violation of Paragraph 1 if you engage in
any or all of the activities discussed in this Paragraph directly as an
individual or indirectly as an employee, representative, consultant or in any
other capacity on behalf of any firm, corporation or other entity.   2.  
Company’s business — Defined for the purpose of this Agreement:

  (a)   the Company shall include Textron and all subsidiary, affiliated or
related companies or operations of Textron, and

 

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  (b)   the Company’s business shall include the products manufactured, marketed
and sold and/or the services provided by any operation of the Company for which
you have worked or to which you were assigned or had responsibility (either
direct or supervisory), at the time of the termination of your employment and
any time during the two-year period prior to such termination.

3.   Restricted Territory — Defined for the purpose of Paragraph 1, the
Restricted Territory shall be defined as and limited to:

  (a)   the geographic area(s) within a one hundred (100) mile radius of any and
all Company location(s) in or for which you have worked or to which you were
assigned or had responsibility (either direct or supervisory), at the time of
the termination of your employment and at any time during the two-year period
prior to such termination; and     (b)   all of the specific customer accounts,
whether within or outside of the geographic area described in (a) above, with
which you have had any contact or for which you have had any responsibility
(either direct or supervisory), at the time of termination of your employment
and at any time during the two-year period prior to such termination.

4.   Forfeiture of PSUs and required repayment if you engage in certain
solicitation activities       If you directly or indirectly solicit or induce or
attempt to solicit or induce any employee(s), sales representative(s), agent(s)
or consultant(s) of the Company to terminate their employment, representation or
other association with the Company, then your right to receive all PSUs shall be
forfeited effective the date you enter into such activity and you will be
required to repay Textron an amount equal to the value of any PSU earned and
paid to you from and after the date beginning 180 days prior to the earlier of
(a) your termination of employment or (b) the date you engage in such activity,
or at any time after such date.   5.   Forfeiture of PSUs and required repayment
if you disclose confidential information       You specifically acknowledge that
any trade secrets or confidential business and technical information of the
Company or its suppliers or customers, whether reduced to writing, maintained on
any form of electronic media, or maintained in your mind or memory and whether
compiled by you or the Company, derives independent economic value from not
being readily known to or ascertainable by proper means by others who can obtain
economic value from its disclosure or use; that reasonable efforts have been
made by the Company to maintain the secrecy of such information; that such
information is the sole property of the Company or its suppliers or customers
and that any retention, use or disclosure of such information by you during your
employment (except in the course of performing your duties and obligations of
employment with the Company) or after termination thereof, shall constitute a
misappropriation of the trade secrets of the Company or its suppliers or
customers. If you directly or indirectly misappropriate any such trade secrets,
then your right to receive all PSUs shall be forfeited effective the date you
enter into such activity and you will be required to repay Textron an amount
equal to the value of any PSU earned and paid to you from and after the date
beginning 180 days prior to the earlier of (a) your termination of employment or
(b) the date you engage in such activity, or at any time after such date.

 

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6.   Organization and Compensation Committee Discretion       You may be
released from your obligations under Paragraph 1, 4 and 5 above only if the
Organization and Compensation Committee of the Board of Directors (or its duly
appointed agent) determines in its sole discretion that such action is in the
best interests of Textron.   7.   Severability       The parties agree that each
provision contained in this Agreement shall be treated as a separate and
independent clause, and the unenforceability of any one clause shall in no way
impair the enforceability of any of the other clauses herein. Moreover, if one
or more of the provisions contained in this Agreement shall for any reason be
held to be excessively broad as to scope, activity or subject, then such
provisions shall be construed by the appropriate judicial body by limiting and
reducing it or them, so as to be enforceable to the extent compatible with the
applicable law.