EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of this 10th day
of March 2000 by and between Textron Inc. (the "Company"), a Delaware
corporation having its principal office at 40 Westminster Street, Providence,
Rhode Island 02903 and Terrence O'Donnell residing at 5133 Yuma Street, N.W.,
Washington, DC 20016 (the "Executive").

W I T N E S S E T H

:

WHEREAS, the Company desires to employ the Executive and the Executive is
willing to be employed by the Company; and

WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of such 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 employ the Executive and the Executive hereby
accepts employment, in accordance with the terms and conditions set forth
herein, for a term (the "Employment Term") commencing on the date hereof (the
"Effective Date") and terminating, unless otherwise terminated earlier in
accordance with Section 5 hereof, on the third anniversary of the Effective Date
(the "Original Employment Term"), 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 Original Employment
Term or 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 Executive Vice
President and General Counsel of the Company or in such higher capacity as
agreed by the Company and the Executive. The Executive shall also serve as a
member of the Management Committee (or any equivalent committee or group as may
replace the Management Committee from time to time). The Executive shall report
exclusively to the Chief Executive Officer and 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 and the organizational
structure of the Company. Except as provided in the next succeeding sentence,
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 Chief Executive Officer or 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 or as a partner
in the law firm of Williams & Connolly LLP, provided in each case that these
activities do not materially interfere with the performance of his duties
hereunder or create a potential business conflict or the appearance thereof. In
particular, Executive (a) may continue to serve as a part-time partner at
Williams & Connolly LLP, and (b) may serve on the board of directors of each of
(i) The Gerald R. Ford Foundation, (ii) the Air Force Academy Falcon Foundation,
(iii) IGI, Inc. and (iv) ePlus, Inc., in each case retaining any compensation or
emoluments therefrom.

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 an initial base salary (the "Base Salary")
at a rate of $425,000.00. 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 by the O&C Committee (or as otherwise
designated by the Board) 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 55% 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.

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. In particular, the Executive shall participate in (a)
the Textron Key Executive Benefits Program (which shall include (i) the Deferred
Income Plan, (ii) the Supplemental Benefits Plan, and (iii) the Survivor Benefit
Plan), (b) the Supplemental Retirement Plan, and (c) the Executive Supplemental
Retirement Plan.

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 Company shall provide to the Executive, at the Company's cost, all
perquisites to which other senior executives of the Company are generally
entitled to receive and such other perquisites which are suitable to the
character of the Executive's position with the Company and adequate for the
performance of his duties hereunder. To the extent legally permissible, the
Company shall not treat such amounts 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     Special Provisions

. The Company shall provide to the Executive the special provisions set forth on
Exhibit B hereto, which Exhibit B is incorporated herein.

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 in performing his duties under this Agreement including, but not limited
to, travel, entertainment, professional dues and subscriptions, and all dues,
fees, and expenses associated with membership in various professional, business,
and civic associations and societies in which the Executive participates in
accordance with the Company's policies in effect from time to time.

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:

> (a)     Automatically on the date of the Executive's death.
> 
> (b)     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. The term "Disability" shall mean, for purposes of
> this Agreement, the inability of the Executive, due to injury, illness,
> disease or bodily or mental infirmity, 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 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. In no event shall compensation
> cease by reason of a termination for Disability prior to that date on which
> the Executive shall commence his eligibility for payments pursuant to the
> Company's disability benefits program.
> 
> (c)     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).
> 
> (d)     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 or the Chief Executive Officer of the Cause
> event and has been approved by the O&C Committee 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 that with respect to such
> vicarious liability 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.
> 
> (e)     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 such date.
> 
> (f)     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 (including membership on the
> Management Committee or its equivalent) or reporting lines or a material
> reduction (other than temporarily while Disabled or otherwise incapacitated)
> in his then status, authorities, duties or responsibilities (or, should the
> Company be reorganized such that it becomes a subsidiary or controlled party
> of any other entity, the Executive's not holding authorities, duties,
> responsibilities, status, offices, titles or reporting lines in such parent or
> controlling party at least commensurate with those held by him at the Company
> immediately prior to such reorganization) 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 but shall not cover a relocation to the principal office prior to a
> Change in Control; (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.
> 
> (g)     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 any notice date). 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.

Section 6.  Consequences of a Termination of Employment

6.1     Termination Due to Death or Retirement.

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").

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 (but subject to the last sentence of such Section 5(b)), to any Accrued
Obligations.

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:

> > (a)     Payment of the Prorated Portion (as determined in the next sentence)
> > of the earned annual incentive compensation award for the fiscal year in
> > which the Executive's termination occurs, payable promptly after the end of
> > such fiscal year. "Prorated Portion" shall be determined by multiplying such
> > amount by a fraction, the numerator of which is the number of days during
> > the fiscal year of termination that the Executive is employed by the
> > Company, and the denominator of which is, 365.
> > 
> > (b)     Continued payment off payroll for two years (in approximately equal
> > monthly installments) of an amount equal to two times the sum of (i) the
> > Executive's Base Salary and (ii) the higher of (x) the Executive's target
> > incentive compensation established for the fiscal year in which the
> > Executive's termination occurs or (y) a multiple thereof equal to the
> > product of such target amount and the multiple of target earned by the
> > Executive for the prior fiscal year (whether or not deferred).
> > 
> > (c)     Payment of the premium for COBRA continuation health coverage
> > (whether under the Company's health plans or those of Williams & Connolly
> > LLP, but in no event at a premium rate higher than the premiums payable
> > under COBRA to the Company for the continuation of such health care coverage
> > as the Executive had in effect with respect to himself and his family
> > immediately prior to his termination) for the Executive and the Executive's
> > dependents until the earliest of (i) eighteen (18) months after such
> > termination, (ii) until no longer eligible for COBRA continuation benefit
> > coverage or (iii) the Executive commences other substantially full-time
> > employment.

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.

Section 7.    No Mitigation/No Offset/Release

> (a)     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, defense or other right which the Company may
> have against the Executive or others, except as specifically set forth in
> Section 9 hereof or upon obtaining by the Company of a final unappealable
> judgement against the Executive.
> 
> (b)     Any amounts payable and benefits or additional rights provided
> pursuant to Section 6.3 or Section 8.1 beyond any Accrued Obligations and
> 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 of indemnification under the Company's
> organizational documents) with regard to the Company, its subsidiaries and
> related entities and their respective past or present officers, directors and
> employees in such form as reasonably requested by the Company.
> 
> (c)     Upon any termination of employment, upon the request of the Company,
> the Executive shall deliver to the Company a resignation from all offices and
> directorships and fiduciary positions of the Executive in which the Executive
> is serving with, or at the request of, the Company or its subsidiaries,
> affiliates or benefit plans.
> 
> (d)     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 to the extent they are
> duplicative.

8.     Change in Control

8.1     Employment Termination in Connection with a Change in Control.

In the event of a Qualifying Termination (as defined below) during the period
commencing one-hundred eighty (180) days prior to the effective date of a Change
in Control and terminating on the second anniversary of the effective date of a
Change in Control (the "Change in Control Protection Period"), then in lieu of
the benefits provided to the Executive under Section 6.3 of this Agreement, the
Company shall pay the Executive the following amounts within (except as
otherwise provided) thirty (30) business days of the Qualifying Termination (or,
if later, the effective date of the Change in Control; in which case any amounts
or benefits previously paid pursuant to Section 6 shall be setoff against those
under this Section 8) and provide the following benefits:

> > (a)     Any Accrued Obligations.
> > 
> > (b)     A lump-sum cash payment equal to three (3) times the highest rate of
> > the Executive's Base Salary rate in effect at any time up to and including
> > the date of the Executive's termination.
> > 
> > (c)     A lump-sum cash payment equal to the Prorated Portion of the greater
> > of: (i) the Executive's target annual incentive compensation award
> > established for the fiscal year during which the Executive's award
> > termination occurs, or (ii) the Executive's earned annual incentive award
> > for the fiscal year prior to the fiscal year in which the Change in Control
> > occurs (whether or not deferred).
> > 
> > (d)     A lump-sum cash payment equal to three (3) times the greater of: (i)
> > the Executive's highest annual incentive compensation earned over the three
> > (3) fiscal years ending prior to the Change in Control (whether or not
> > deferred); or (ii) the Executive's target incentive compensation established
> > for the fiscal year in which the Executive's date of termination occurs.
> > 
> > (e)     To the extent the Executive is eligible, was eligible prior or after
> > the Change in Control or if the Executive would be eligible with credit for
> > an additional three (3) years of age and service credit, coverage under all
> > applicable retiree health and other retiree welfare plans for the Executive
> > and the Executive's eligible dependents (including an adjustment to the
> > extent necessary to put the Executive on the same after tax basis as if the
> > Executive had been eligible for such coverage).
> > 
> > (f)     To the extent eligible prior or after the Change in Control,
> > continued participation, (coordinated with (e) above to the extent
> > duplicative), at no additional after tax cost to the Executive than the
> > Executive would have as an employee, in all welfare plans, until three (3)
> > 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 similar or improved benefit under such plan
> > shall immediately cease. To the extent such coverage cannot be provided
> > under the Company's welfare benefit plans without jeopardizing the tax
> > status of such plans, for underwriting reasons or because of the tax impact
> > on the Executive, the Company shall pay the Executive an amount such that
> > the Executive can purchase such benefits separately at no greater after tax
> > cost to him than he would have had if the benefits were provided to him as
> > an employee.
> > 
> > (g)     A lump-sum cash payment of the actuarial present value equivalent
> > (as determined in accordance with the most favorable (to the Executive)
> > overall actuarial assumptions and subsidies in any of the Company's
> > tax-qualified or nonqualified type defined benefit pension plans in which
> > the Executive then participates) of the accrued benefits accrued by the
> > Executive as of the date of termination under the terms of any nonqualified
> > defined benefit type retirement plan, including but not limited to, the
> > Amended and Restated Supplemental Executive Retirement Plan for Textron Inc.
> > Key Executives and the Supplemental Benefits Plan and assuming the benefit
> > was fully vested without regard to any minimum age or service requirements.
> > For this purpose, such benefits shall be calculated under the assumption
> > that the Executive's employment continued following the date of termination
> > for three (3) full years (i.e., three (3) additional years of age
> > (including, but not limited to, for purposes of determining the actuarial
> > present value), compensation and service credits shall be added).
> > 
> > (h)     Three (3) times the amount of the maximum Company contribution or
> > match to any defined contribution type plan in which the Executive
> > participates.
> > 
> > (i)     A lump-sum cash payment of the product of (i) the Interest Factor
> > (as determined in the next sentence) multiplied by (ii) the Executive's
> > entire account balance under the Deferred Income Plan (or any replacement
> > therefor), plus an additional amount equal to three (3) times the match
> > which the Company made for the Executive to such plan for the fiscal year
> > ending immediately prior to the Change in Control. The "Interest Factor"
> > shall be equal to one (1) plus three (3) times the rate of earnings of the
> > Executive's account under such plan for the fiscal year ending immediately
> > prior to his termination.
> > 
> > (j)     Immediate full vesting of any outstanding stock options, performance
> > share units and other equity awards (and lapse of any forfeiture provisions)
> > to the extent permitted under the plan or grant, or if full vesting is not
> > permitted with regard to stock options, a cash payment equal to the
> > difference between the fair market value of the shares covered by the
> > unvested options and the exercise price of such unvested options on such
> > unvested options on the date of termination (or, if later, the date of the
> > Change in Control).
> > 
> > (k)     Outplacement services at a level commensurate with the Executive's
> > position, including use of an executive office and secretary, for a period
> > of one (1) year commencing on the date of termination but in no event
> > extending beyond the date on which the Executive commences other full time
> > employment.
> > 
> > (l)     Continuation of participation for three (3) additional years in the
> > Company's programs with regard to tax preparation assistance and financial
> > planning assistance, club dues and automobile (but based on the automobile
> > then being used and no new one), in accordance with the Company's programs
> > in effect at the time of the Change in Control.

For purposes of this Section 8, a Qualifying Termination shall mean any
termination of the Executive's employment (i) by the Company without Cause, or
(ii) by the Executive for Good Reason.

8.2     Definition of "Change in Control."

A Change in Control of the Company shall be deemed to have occurred as of the
first day any one or more of the following conditions shall have been satisfied:

> > (a)     Any "person" or "group" (within the meaning of Section 13(d) and
> > 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
> > Act")) other than the Company, any trustee or other fiduciary holding
> > Company common stock under an employee benefit plan of the Company or a
> > related company, or any corporation which is owned, directly or indirectly,
> > by the stockholders of the Company in substantially the same proportions as
> > their ownership of the Company's common stock, is or becomes the beneficial
> > owner (as defined in Rule 13d-3 under the Exchange Act) of more than thirty
> > percent (30%) of the then outstanding voting stock;
> > 
> > (b)     During any period of two (2) 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 for election was previously so
> > approved, cease for any reason to constitute at least a majority of the
> > Board;
> > 
> > (c)     The consummation of 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 being
> > converted into voting securities of the surviving entity) more than fifty
> > percent (50%) of the combined voting securities of the Company or such
> > surviving entity outstanding immediately after such merger or consolidation;
> > or
> > 
> > (d)     The approval of the stockholders of the Company of 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 its assets.

8.3     Excise Tax Equalization Payment.

In the event that the Executive becomes entitled to payments and/or benefits
which would constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Code, the provisions of Exhibit A will apply.

9.     Noncompetition, Confidentiality and Nondisparagement

9.1     Agreement Not to Compete

.

> > (a)     The Executive agrees that for a period of two (2) years after the
> > termination of the Executive's employment, the Executive will not engage in
> > Competition with the Company with the Listed Companies, provided that after
> > the Executive's termination of employment the Listed Companies shall be
> > limited to those effectively listed at the time of his termination and still
> > on such list at the time of any alleged activity of the Executive,
> > including, but not limited to, (i) soliciting customers, business or orders
> > for, or selling any products and services in, Competition with the Company
> > for such Listed Companies or (ii) diverting, enticing, or otherwise taking
> > away customers, business or orders of the Company, or attempting to do so,
> > in either case in Competition with the Company for such Listed Companies.
> > 
> > (b)     The Executive agrees that if, while he is receiving severance pay
> > from the Company pursuant to Section 6.3(b), the Executive: (i) violates (a)
> > above, or (ii) otherwise engages in Competition in the Restricted Territory,
> > whether or not with the Listed Companies, Section 9.6(b) hereof shall apply.
> > 
> > (c)     The Executive agrees that the restrictions contained in this Section
> > 9 are necessary for the protection of the business and goodwill of the
> > Company because of the trade secrets within the Executive's knowledge and
> > are considered by the Executive to be reasonable for such purpose.

9.2     Definitions.

> > (a)     "Competition" shall mean engaging in, as an employee, director,
> > partner, principal, shareholder, consultant, advisor, independent contractor
> > or similar capacity, with (a) the Listed Companies or (b) in any business,
> > activity or conduct which directly competes with the business of the
> > Company, provided that, with regard to the period after termination of the
> > Executive's employment, Section 9.1(b)(ii) shall only apply to business
> > lines in which the Company is engaged both at the time of termination of
> > employment and at the time of the determination and which during the last
> > fiscal year ending prior to the date of such termination represented at
> > least five percent (5%) of the Company's revenues (the "Prohibited Lines").
> > Notwithstanding anything else in this Section 9, Competition shall not
> > include: (A) (i) holding five percent (5%) or less of an interest in the
> > equity or debt of any publicly traded company, (ii) engaging in any activity
> > with the prior written approval of the Chief Executive Officer or the O&C
> > Committee, (iii) the practice of law in a law firm that represents entities
> > in Competition with the Company, provided that the Executive does not
> > personally represent such entities, or (iv) the employment by, or provision
> > of services to, an investment banking firm or consulting firm that provides
> > services to entities that are in Competition with the Company provided that
> > the Executive does not personally represent or provide services to such
> > entities that are Listed Companies or otherwise with regard to businesses in
> > Competition with the Prohibited Lines, or (B) with regard to Section
> > 9.1(b)(ii), (i) being employed by, or consulting for, a non-Competitive
> > division or business unit of an entity which is in Competition with the
> > Company (and participating in such entity's employee equity plans), (ii)
> > being employed by, or consulting for, an entity which had annual revenues in
> > the last fiscal year prior to the Executive being employed by, or consulting
> > for, the entity generated through business lines in Competition with the
> > Prohibited Lines of the Company that do not exceed five percent (5%) of such
> > entity's total annual revenues, provided that revenues within the
> > Executive's area of responsibility or authority are not more than ten
> > percent (10%) composed of the revenues from the businesses in Competition
> > with the Prohibited Lines, or (iii) any activities conducted after a Change
> > in Control of the Company.
> > 
> > (b)     The Restricted Territory shall mean any geographic area in which the
> > Company with regard to the Prohibited Lines did more than nominal business.
> > 
> > (c)     Listed Companies shall mean those entities which are within the
> > "peer group" established by the Company for the performance graphs in its
> > proxy statement pursuant to Item 402(l) of Regulation S-K under the Exchange
> > Act and which are in a list of no more than five (5) entities established by
> > the Company from time to time and available from the Chief Human Resources
> > Officer, provided that the addition of any entity to the list shall not be
> > effective until sixty (60) days after it is so listed.
> > 
> > (d)     For purposes of this Section 9, "Company" shall mean the Company and
> > its subsidiaries and affiliates.

9.3     Agreement Not to Engage in Certain Solicitation

. The Executive agrees that the Executive will not, during the Executive's
employment with the Company or during the two (2) year period thereafter,
directly or indirectly, solicit or induce, or attempt to solicit or induce, any
non-clerical employee(s), sales representative(s), agent(s), or consultant(s) of
the Company to terminate such person's employment, representation or other
association with the Company for the purpose of affiliating with any entity with
which the Executive is associated ("Solicitation").

9.4     Confidential Information

.

> > (a)     The Executive specifically acknowledges that any trade secrets or
> > confidential business and technical information of the Company or its
> > vendors, suppliers or customers, whether reduced to writing, maintained on
> > any form of electronic media, or maintained in mind or memory and whether
> > compiled by the Executive or the Company (collectively, "Confidential
> > Information"), derives independent economic value from not being readily
> > known to or ascertainable by proper means by others; 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 vendors,
> > suppliers, or customers and that any retention, use or disclosure of such
> > information by the Executive during the Employment Term (except in the
> > course of performing duties and obligations of employment with the Company)
> > or any time after termination thereof, shall constitute misappropriation of
> > the trade secrets of the Company or its vendors, suppliers, or customers,
> > provided that Confidential Information shall not include: (i) information
> > that is at the time of disclosure public knowledge or generally known within
> > the industry, (ii) information deemed in good faith by the Executive, while
> > employed by the Company, desirable to disclose in the course of performing
> > the Executive's duties, (iii) information the disclosure of which the
> > Executive in good faith deems necessary in defense of the Executive's rights
> > provided such disclosure by the Executive is limited to only disclose as
> > necessary for such purpose, or (iv) information disclosed by the Executive
> > to comply with a court, or other lawful compulsory, order compelling him to
> > do so, provided the Executive gives the Company prompt notice of the receipt
> > of such order and the disclosure by the Executive is limited to only
> > disclosure necessary for such purpose.
> > 
> > (b)     The Executive acknowledges that the Company from time to time may
> > have agreements with other persons or with the United States Government, or
> > agencies thereof, that impose obligations or restrictions on the Company
> > regarding inventions made during the course of work under such agreements or
> > regarding the confidential nature of such work. If the Executive's duties
> > hereunder will require disclosures to be made to him subject to such
> > obligations and restrictions, the Executive agrees to be bound by them.

9.5     Scope of Restrictions

. If, at the time of enforcement of this Section 9, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by law.

9.6     Remedies

.

> > (a)     In the event of a material breach or threatened material breach of
> > Section 9.1(a), Section 9.3, Section 9.4 or Section 9.10, the Company, in
> > addition to its other remedies at law or in equity, shall be entitled to
> > injunctive or other equitable relief in order to enforce or prevent any
> > violations of the provisions of this Section 9. Except as specifically
> > provided with regard to Listed Companies, the Company agrees that it will
> > not assert to enjoin or otherwise limit the Executive's activities based on
> > an argument of inevitable disclosure of confidential information.
> > 
> > (b)     In the event Section 9.1(b) applies, the Company may immediately
> > cease payment to the Executive of all future amounts due under Sections
> > 6.3(a) or (b) as well as otherwise specifically provided in any other plan,
> > grant or program.
> > 
> > (c)     Upon written request of the Executive, the Company shall within
> > thirty (30) days notify the Executive in writing whether or not in good
> > faith it believes any proposed activities would be in Competition and, if it
> > so determines or does not reply within thirty (30) days, it shall be deemed
> > to waive any right to treat such activities as Competition unless the facts
> > are otherwise than as presented by the Executive or there is a change
> > thereafter in such activities. The Executive shall promptly provide the
> > Company with such information as it may reasonably request to evaluate
> > whether or not such activities are in Competition.

9.7 Uniformity.

In no event shall any definitions of Competition or Solicitation (or a similar
provision) as it applies to the Executive with regard to any plan of program or
grant of the Company be interpreted to be any broader than as set forth in this
Section 9.

9.8 Delivery of Documents.

Upon termination of this Agreement or at any other time upon request by the
Company, the Executive shall promptly deliver to the Company all records, files,
memoranda, notes, designs, data, reports, price lists, customer lists, drawings,
plans, computer programs, software, software documentation, sketches, laboratory
and research notebooks and other documents (and all copies or reproductions of
such materials in his possession or control) belonging to the Company.
Notwithstanding the foregoing, the Executive may retain his rolodex and similar
phone directories (collectively, the "Rolodex") to the extent the Rolodex does
not contain information other than name, address, telephone number and similar
information, provided that, at the request of the Company, the Executive shall
provide the Company with a copy of the Rolodex.

> > 9.9 Nondisparagement.
> > 
> > (a)     During the Employment Term and thereafter, the Executive shall not
> > with willful intent to damage economically or as to reputation or
> > vindictively disparage the Company, its subsidiaries or their respective
> > past or present officers, directors or employees (the "Protected Group"),
> > provided that the foregoing shall not apply to (i) actions or statements
> > taken or made by the Executive while employed by the Company in good faith
> > as fulfilling the Executive's duties with the Company or otherwise at the
> > request of the Company, (ii) truthful statements made in compliance with
> > legal process or governmental inquiry, (iii) as the Executive in good faith
> > deems necessary to rebut any untrue or misleading public statements made
> > about him or any other member of the Protected Group, (iv) statements made
> > in good faith by the Executive to rebut untrue or misleading statements made
> > about him or any other member of the Protected Group by any member of the
> > Protected Group, and (v) normal commercial puffery in a competitive business
> > situation. No member of the Protected Group shall be a third party
> > beneficiary of this Section 9.9(a).
> > 
> > (b)     During the Employment Term and thereafter, neither the Company
> > officially nor any then member of the Executive Leadership Team (or the
> > equivalent) of the Company, as such term is currently used within the
> > Company, shall with willful intent to damage the Executive economically or
> > as to reputation or otherwise vindictively disparage the Executive, provided
> > the foregoing shall not apply to (i) actions or statements taken or made in
> > good faith within the Company in fulfilling duties with the Company, (ii)
> > truthful statements made in compliance with legal process, governmental
> > inquiry or as required by legal filing or disclosure requirements, (iii) as
> > in good faith deemed necessary to rebut any untrue or misleading statements
> > by the Executive as to any member of the Protected Group, or (iv) normal
> > commercial puffery in a competitive business situation.
> > 
> > (c)     In the event of a material breach or threatened material breach of
> > clauses (a) or (b) above, the Company or the Executive, as the case may be,
> > in addition to its or the Executive's other remedies at law or in equity,
> > shall be entitled to injunctive or other equitable relief in order to
> > enforce or prevent any violations of this Section 9.9.

9.10

     Pooling of Interests. If the Company is involved in any proposed business
combination that is contemplated to be accounted for as a pooling of interests,
the Executive agrees to cooperate with the reasonable requests of the Company
with regard to the exercise of stock options, the sale of Company stock or other
matters that could affect the ability of the combination to be accounted for as
a pooling of interests.

10.     Liability Insurance

The Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent, if any, as the
Company covers its then current officers and directors.

11.     Assignment

11.1     Assignment by the Company

. This Agreement may and shall be assigned or transferred to, and shall be
binding upon and shall inure to the benefit of, any successor of the Company,
and any such successor shall be deemed substituted for all purposes of the
"Company" under the terms of this Agreement. As used in this Agreement, the term
"successor" shall mean any person, firm, corporation or business entity which at
any time, whether by merger, purchase, or otherwise, acquires all or
substantially all of the assets of the Company. Notwithstanding such assignment,
the Company shall remain, with such successor, jointly and severally liable for
all its obligations hereunder. Except as herein provided, this Agreement may not
otherwise be assigned by the Company.

11.2     Assignment by the Executive

. This Agreement is not assignable by the Executive. This Agreement shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, and administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive should die while any amounts payable to
the Executive hereunder remain outstanding, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee, or other designee or, in the absence of such
designee, to the Executive's estate.

12.     Legal Remedies

12.1     Payment of Legal Fees

. The Company shall pay the Executive's reasonable legal fees and costs
associated with entering into this Agreement. To the fullest extent permitted by
law, the Company shall promptly pay upon submission of statements all legal and
other professional fees, costs of litigation, prejudgment interest, and other
expenses incurred in connection with any dispute arising hereunder; provided,
however, the Company shall be reimbursed by the Executive for (i) the fees and
expenses advanced in the event the Executive's claim is in a material manner in
bad faith or frivolous and the arbitrator or court, as applicable, determines
that the reimbursement of such fees and expenses is appropriate, or (ii) to the
extent that the arbitrator or court, as appropriate, determines that such legal
and other professional fees are clearly and demonstrably unreasonable.

12.2     Arbitration

. All disputes and controversies arising under or in connection with this
Agreement, other than the seeking of injunctive or other equitable relief
pursuant to Section 9 hereof, shall be settled by arbitration conducted before a
panel of three (3) arbitrators sitting in New York City, New York, or such other
location agreed by the parties hereto, in accordance with the rules for
expedited resolution of commercial disputes of the American Arbitration
Association then in effect. The determination of the majority of the arbitrators
shall be final and binding on the parties. Judgment may be entered on the award
of the arbitrator in any court having proper jurisdiction. All expenses of such
arbitration, including the fees and expenses of the counsel of the Executive,
shall be borne by the Company and the Executive shall be entitled to
reimbursement of his expenses as provided in Section 12.1 hereof.

12.3     Notice

. Any notices, requests, demands, or other communications provided for by this
Agreement shall be sufficient if in writing and if delivered personally, sent by
telecopier, sent by an overnight service or sent by registered or certified
mail. Notice to the Executive not delivered personally (or by telecopy where the
Executive is known to be) shall be sent to the last address on the books of the
Company, and notice to the Company not delivered personally (or by telecopy to
the known personal telecopy of the person it is being sent to) shall be sent to
it at its principal office. All notices to the Company shall be delivered to the
Chief Executive Officer with a copy (not itself constituting notice) to the
Executive Vice President, Human Relations. A copy (not itself constituting
notice) of any notice to the Executive shall be delivered to Jerry L. Shulman,
Williams & Connolly LLP, 725 12th Street, N.W., Washington, D.C. 20005. Delivery
shall be deemed to occur on the earlier of actual receipt or tender and
rejection by the intended recipient.

12.4     Continued Payments

. In the event after a Change in Control either party files for arbitration to
resolve any dispute as to whether a termination is for Cause or Good Reason,
until such dispute is determined by the arbitrators, the Executive shall
continue to be treated economically and benefit wise in the manner asserted by
him in the arbitration effective as of the date of the filing of the
arbitration, subject to the Executive's promptly refunding any amounts paid to
him, paying the cost of any benefits provided to him and paying to the Company
the profits in any stock option or other equity awards exercised or otherwise
realized by him during the pendency of the arbitration which he is ultimately
held not to be entitled to; provided the arbitrators may terminate such payments
and benefits in the event that they determine at any point that the Executive is
intentionally delaying conclusion of the arbitration.]

13.     Miscellaneous

13.1     Entire Agreement

. This Agreement and each Exhibit hereto, except to the extent specifically
provided otherwise herein or therein, supersedes any prior agreements or
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof and constitutes the entire agreement of the parties with
respect to the subject matter hereof. In the event of any discrepancy or
conflict between this Agreement and either Exhibit, the provisions of the
Exhibit shall prevail. To the extent any severance plan or program of the
Company that would apply to the Executive is more generous to the Executive than
the provisions hereof, the Executive shall be entitled to any additional
payments or benefits that are not duplicative, but shall otherwise not be
eligible for such plan or program.

13.2     Modification

. This Agreement shall not be varied, altered, modified, canceled, changed, or
in any way amended, nor any provision hereof waived, except by mutual agreement
of the parties in a written instrument executed by the parties hereto or their
legal representatives.

13.3     Severability

. In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect.

13.4     Counterparts

. This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one
and the same Agreement.

13.5     Tax Withholding

. The Company may withhold from any benefits payable under this Agreement all
federal, state, city, or other taxes as may be required pursuant to any law or
governmental regulation or ruling.

13.6     Beneficiaries

. The Executive may designate one or more persons or entities as the primary
and/or contingent beneficiaries of any amounts to be received under this
Agreement. Such designation must be in the form of a signed writing acceptable
to the Board or the Board's designee. The Executive may make or change such
designation at any time.

13.7     Representation

. The Executive represents that the Executive's employment by the Company and
the performance by the Executive of his obligations under this Agreement do not,
and shall not, breach any agreement that obligates him to keep in confidence any
trade secrets or confidential or proprietary information of his or of any other
party, to write or consult to any other party or to refrain from competing,
directly or indirectly, with the business of any other party. The Executive
shall not disclose to the Company, and the Company shall not request that the
Executive disclose, any trade secrets or confidential or proprietary information
of any other party.

14.     Governing Law

The provisions of this Agreement shall be construed and enforced in accordance
with the laws of the state of Delaware, without regard to any otherwise
applicable principles of conflicts of laws.

IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement,
as of the day and year first above written.

 

s\Terrence O'Donnell

 

TERRENCE O'DONNELL

         

TEXTRON INC.

     

By: s\John D. Butler

 

     JOHN D. BUTLER 

 

     Executive Vice President & Chief Human
     Resources Officer

Exhibit A

Parachute Gross Up

(a)     In the event that the Executive shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the "nature of
compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code (and any similar tax that may
hereafter be imposed by any taxing authority) the Company shall pay to the
Executive at the time specified in subsection (d) below an additional amount
(the "Gross-up Payment") such that the net amount retained by the Executive,
after deduction of any Excise Tax on the Company Payments and any U.S. federal,
state, and for local income or payroll tax upon the Gross-up Payment provided
for by this paragraph (a), but before deduction for any U.S. federal, state, and
local income or payroll tax on the Company Payments, shall be equal to the
Company Payments.

(b)     For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and the amount of such Excise Tax, (x) the Total Payments shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Code Section 280G(b)(3) of the Code) shall be treated as subject to the
Excise Tax, unless and except to the extent that, in the opinion of the
Company's independent certified public accountants appointed prior to any change
in ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected
by such accountants (the "Accountants") such Total Payments (in whole or in
part) either do not constitute "parachute payments," represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the "base amount" or are otherwise not
subject to the Excise Tax, and (y) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code.

(c)     For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay U.S. federal income taxes at the highest
marginal rate of U.S. federal income taxation in the calendar year in which the
Gross-up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive's residence
for the calendar year in which the Company Payment is to be made, net of the
maximum reduction in U.S. federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year. In the event that
the Excise Tax is subsequently determined by the Accountants to be less than the
amount taken into account hereunder at the time the Gross-up Payment is made,
the Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the prior Gross-up
Payment attributable to such reduction (plus the portion of the Gross-up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax
imposed on the portion of the Gross-up Payment being repaid by the Executive if
such repayment results in a reduction in Excise Tax or a U.S. federal, state and
local income tax deduction), plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Gross-up Payment to be refunded to
the Company has been paid to any U.S. federal, state and local tax authority,
repayment thereof (and related amounts) shall not be required until actual
refund or credit of such portion has been made to the Executive, and interest
payable to the Company shall not exceed the interest received or credited to the
Executive by such tax authority for the period it held such portion. The
Executive and the Company shall mutually agree upon the course of action to be
pursued (and the method of allocating the expense thereof) if the Executive's
claim for refund or credit is denied.

In the event that the Excise Tax is later determined by the Accountant or the
Internal Revenue Service to exceed the amount taken into account hereunder at
the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.

(d)     The Gross-up Payment or portion thereof provided for in subsection (c)
above shall be paid not later than the thirtieth (30th) day following an event
occurring which subjects the Executive to the Excise Tax; provided, however,
that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Accountant, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code),
subject to further payments pursuant to subsection (c) hereof, as soon as the
amount thereof can reasonably be determined, but in no event later than the
ninetieth day after the occurrence of the event subjecting the Executive to the
Excise Tax. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth day after demand by
the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).

(e)     In the event of any controversy with the Internal Revenue Service (or
other taxing authority) with regard to the Excise Tax, the Executive shall
permit the Company to control issues related to the Excise Tax (at its expense),
provided that such issues do not potentially materially adversely affect the
Executive, but the Executive shall control any other issues. In the event the
issues are interrelated, the Executive and the Company shall in good faith
cooperate so as not to jeopardize resolution of either issue, but if the parties
cannot agree the Executive shall make the final determination with regard to the
issues. In the event of any conference with any taxing authority as to the
Excise Tax or associated income taxes, the Executive shall permit the
representative of the Company to accompany the Executive, and the Executive and
the Executive's representative shall cooperate with the Company and its
representative.

(f)     The Company shall be responsible for all charges of the Accountant.

(g)     The Company and the Executive shall promptly deliver to each other
copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Exhibit A.

EXHIBIT B TO EMPLOYMENT AGREEMENT

OF TERRENCE O'DONNELL

DATED AS OF MARCH 10, 2000 (the "Employment Agreement")

     The following constitute special compensation provisions to be provided to
the Executive by the Company. All initially capitalized terms not otherwise
defined in this Exhibit B shall have the same meanings as in the Employment
Agreement. This Exhibit B shall be deemed incorporated by reference into and to
be part of the Employment Agreement, provided, however, that to the extent, if
any, that there is a discrepancy or conflict between the text of the Employment
Agreement and this Exhibit B, the provisions of this Exhibit B shall prevail.

1)     Hiring Bonus:          

The Executive shall receive a special hiring bonus in the amount of $200,000,
payable not later than April 1, 2000, subject to withholding and other
deductions in accordance with the Company's usual compensation policies.

2)     Performance Share Units:          

The Executive is hereby granted initial Performance Share Units ("PSU's") as
follows:

> > a)     Cycle 2000    4,000 PSU's
> > 
> > b)     Cycle 2000-01     6,000 PSU's
> > 
> > c)     Cycle 2000-02     7,500 PSU's

3)     Stock Options:

The Executive is to receive an initial grant of non-qualified options to acquire
20,000 shares of voting common stock of the Company, such grant to be pursuant
to an agreement in the form of the Company's normal non-qualified stock option
agreement for key executives.

4)     Special Pension Calculations

> 

a)     All long term incentive compensation earned by the Executive (whether or
not deferred) pursuant to any long term incentive plan (including without
limitation the Performance Share Units) shall be included in measuring the
Executive's compensation for purposes of any of the Company's pension plans.

b)     There shall be no deduction from or offset to any pension payment or
death benefit otherwise due to the Executive from the Company or any affiliated
entity (collectively, the "Textron Group") or pursuant to any employee benefit
plan, program or policy provided by the Textron Group as a result of or in
connection with any amounts available or paid to the Executive that are derived
or paid from any defined benefit plan, defined contribution plan or unfunded
retirement, withdrawal or death benefit plan of Williams & Connolly LLP ("W&C").

c)     In the event that the Executive is involuntarily terminated without Cause
or terminates his employment with Good Reason (as such term is defined in the
Employment Agreement), in either case prior to reaching age 60, the Executive
shall nevertheless be entitled to payment of a pension pursuant to the Executive
Supplemental Pension Plan equal to 25% of the pension to which he would have
been entitled thereunder upon retirement at age 65.

5)     Deferred Income Plan

In the event of (a) a Qualified Termination following a Change in Control, (b)
an involuntary termination of the Executive by the Company without Cause or (c)
a termination by the Executive for Good Reason, any otherwise unvested premium
payable by the Company with respect to any deferred income under the Deferred
Income Plan shall be fully vested as of such date.

6)     Perquisites

The Executive shall be entitled to:

> a)     An executive automobile and related expenses in accordance with normal
> Company policy for key executives
> 
> b)     Financial Planning and Tax Preparation services generally accorded key
> executives
> 
> c)     Club membership (both initiation fees and regular dues) in accordance
> with normal Company policy for key executives
> 
> d)     Payment of or reimbursement for all bar review course fees, bar
> examination fees, annual dues or similar fees or expenses incurred by the
> Executive for the purpose of becoming licensed or qualified as an attorney
> eligible to practice within the State of Rhode Island or in any other
> jurisdiction in which the Executive in good faith determines he should be so
> licensed or qualified
> 
> e)     Payment or reimbursement for (i) up to six (6) months temporary housing
> in a furnished "executive suites" or comparable housing in the Providence,
> Rhode Island metropolitan area, (ii) all local travel, food and entertainment
> expenses within such metropolitan area while the Executive is housed in such
> temporary housing, and (iii) reasonable travel, housing, food and other
> househunting expenses actually incurred by the Executive or members of his
> immediate family in traveling to, from and within the Providence, Rhode Island
> metropolitan area in search of long-term housing for the Executive and his
> family

7)     Travel between Providence, Rhode Island and Washington, DC

The parties to the Employment Agreement acknowledge that (a) the Executive will
maintain residences in each of the Providence, Rhode Island and Washington, DC
metropolitan areas, and (b) the Executive will, in addition to his position with
the Company, continue on a limited-time basis as a partner in W&C. The Executive
will, therefore, travel frequently between such metropolitan areas. In
recognition of such understandings, and in order to clarify the allocation of
expenses for such travel, the parties have agreed to the following:

> a)     To the extent that the Executive uses transportation equipment or
> facilities owned or operated by or for any member of the Textron Group, which
> equipment or facilities are not being diverted from another corporate use to
> accommodate the Executive, and without regard to the purpose of the
> Executive's travel, the Executive may utilize such equipment or facilities at
> no cost to him, provided, however, that to the extent required by any law, the
> Company shall report appropriate charges for any travel thereupon by the
> Executive as additional income to the Executive in accordance with such law
> and normal Company policy.
> 
> b)     The parties acknowledge and agree that the Executive will conduct
> Textron-Group related business in both Providence, Rhode Island and
> Washington, DC. To the extent that the Executive travels between such
> metropolitan areas on Textron Group-related business using commercial travel
> facilities, all such reasonable travel expenses shall be paid for or
> reimbursed by the Company in accordance with its normal policies for key
> executives.
> 
> c)     To the extent that such travel utilizes commercial travel facilities
> but is for non-Textron Group related purposes, the Executive shall be
> responsible for paying for or reimbursing the Company for all such expenses.

8)     Special Relationship with W&C

In further recognition of (a) the Executive's continuing relationship with W&C,
and (b) the attorney-client relationship between the Company and W&C, the
parties have agreed as follows:

> a)     The Executive may simultaneously serve the Company as provided for in
> Section 2 of the Employment Agreement and remain as a part-time partner in
> W&C, all as set forth in such Section 2.
> 
> b)     Any legal services performed by the Executive, whether directly or as a
> supervisor, on behalf of any member of the Textron Group, regardless of where
> it is performed, shall be considered as having been performed in his capacity
> as an officer and employee of the Company and not as a partner of W&C.
> 
> c)     Any legal services performed or supervised by any other partner,
> associate or staff at W&C for any member of the Textron Group, whether or not
> subject to supervision by the Executive, shall be considered as having been
> performed by the firm as outside counsel to the Textron Group.
> 
> d)     W&C shall not bill the Company for any time spent by the Executive with
> respect to any matter relating to any member of the Textron Group, nor will it
> bill the Company for any travel expenses incurred by the Executive in the
> course of such representation (all of which will be treated as
> employment-related expenses of the Executive subject to his Employment
> Agreement). W&C shall bill the Company, however, for all travel expenses of
> any other partner or employee of W&C, and for all messenger, photocopying and
> similar office services, all in accordance with its normal billing practices,
> without regard to whether the Executive directed the incurrence of such
> services on behalf of any member of the Textron Group or supervised the matter
> with respect to which such travel or services were ordered.
> 
> e)     W&C shall remain free to represent and to provide any services to or on
> behalf of any other clients to the same extent as if the Executive had no
> personal affiliation with the Company. The Executive shall timely inform W&C
> of any matter from which he should, in his good faith judgment, be screened,
> and W&C may rely in good faith on such determination by the Executive.
> 
> f)     The Company will indemnify, defend and hold harmless W&C and its
> partners, associates and staff from and against any liability, loss, cost or
> expense (a "Loss") incurred or suffered by any of them, in whatever capacity,
> in connection with or as a result of any investigation or proceeding of any
> sort to the extent relating to or arising out of any legal services performed
> by the Executive (including his supervision of any legal services provided by
> the firm for or on behalf of any member of the Textron Group) in his capacity
> as an employee of the Company, provided, however, no such indemnity shall
> apply if and to the extent that such Loss relates to or arises out of services
> deemed hereunder to have been performed by the firm for or on behalf of any
> member of the Textron Group (whether or not such services were supervised by
> the Executive).
> 
> g)     W&C and each other indemnified party under this Section 8 shall be a
> third party beneficiary thereof, with rights to enforce the provisions thereof
> to the extent related to such indemnified party.

9)     Approvals

To the extent that any commitment or covenant of the Company contained in either
the Employment Agreement or this Exhibit B, including without limitation the
provisions of Sections 4 and 5 of this Exhibit B, shall constitute an exception
to normal compensation or benefit policies of the Company for its key
executives, the Organization and Compensation Committee of the Board of
Directors of the Company shall promptly and expressly approve such exceptions.