Exhibit 10.4

Notice of Grant of Restricted Stock Units
and
Restricted Stock Unit Agreement

«Fname» «Lname»
«Addr1»
«Addr2»
«Addr3»
«City», «State»  «Zip»
«Country»
RS No.:                   «RS_No»
Plan:                        07RS
ID:                           «EMPID»
Location:                «Location»
 

Effective, <date> pursuant to the 2007 Long-Term Incentive Plan (the “Plan”) you
have been granted <> Restricted Stock Units which constitute the right to
receive <> shares (the “Shares”) of Common Stock of Textron Inc.  This grant is
governed by the Restricted Stock Unit Terms and Conditions (5/2007)  and the
Plan, both of which are available on the Textron Enterprise Intranet and is
subject to the Restricted Stock Unit Non-Competition Agreement (5/2007 version)
attached hereto.
The Shares will become vested and issuable to you on the dates shown below,
subject to earlier expiration or termination of your Restricted Stock Units as
provided in the Restricted Stock Unit Terms and Conditions (5/2007):
 
Shares
 Vested Date
«Shares_V1»
 
«Shares_V2»
 
«Shares_V3»
 
«Shares»
 

 

--------------------------------------------------------------------------------

 
By your signature and the Company’s signature below, you and the Company agree
that this grant is governed by the Restricted Stock Unit Terms and Conditions
(5/2007)  and the Plan, both of which are available on the Textron Enterprise
Intranet.  In addition, you agree that this grant is subject to the Restricted
Stock Unit Non-Competition Agreement (5/2007 version) attached hereto, the terms
of which are fully incorporated herein.

TEXTRON INC.

By:
/s/Frederick K. Butler
 
 <date>
   
Date
     
Agreed by:
       
«Fname» «Lname»
 
Date

Please retain a copy of this signed agreement and return the original to
your Human Resources Department within 60 days of receipt of this grant
 

 

TEXTRON INC.
TEXTRON 2007 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT TERMS AND CONDITIONS
 (5/2007A)

·  
Pursuant to the 2007 Long-Term Incentive Plan (the “Plan”), Textron has awarded
to executive the number of Restricted Stock Units set forth on the applicable
Notice of Grant signed by Textron and Grantee on the terms and conditions herein
set forth. Each Restricted Stock Unit constitutes the right to receive one share
(a “Share”) of Common Stock.  As the applicable “Period of Restriction” lapses,
Textron will issue to the executive that number of Shares less the number of
Shares needed to satisfy required statutory withholding. Shares may be issued in
the form of a certificate or a notification to the executive that the Shares are
held in a book-entry account on the executive’s behalf.

·  
If the executive’s employment with Textron shall terminate for “Cause,” all
Shares which may be issued pursuant to the Restricted Stock Units awarded to the
executive that are still subject to the applicable “Period of Restriction" shall
be forfeited.

·  
Except as otherwise provided herein, the executive shall not be entitled to
receive Shares if the executive’s employment with Textron ends for any reason
prior to the end of the Period of Restriction applicable to such Shares,
provided that if the executive’s employment ends prior to such date and at least
three years after the date of grant because of “Disability,” death or after the
executive has become eligible for “Early or Normal Retirement,” the executive or
the executive’s estate will receive a certificate for a “Pro-Rata Portion” of
such Shares.

·  
Notwithstanding the above, the applicable Period of Restriction for the Shares
which may be issued pursuant to this Award shall end immediately upon a “Change
in Control” of Textron, as defined in the Plan. In such instance, Textron shall
issue the Shares to the executive (or to the executive’s estate in the event of
the executive’s death prior to payment) as soon as administratively practical
after the Change in Control. Note: Sale of a business unit usually does not
constitute a Change in Control as defined in the Plan. If executive’s employment
with Textron is involuntarily terminated due to the sale of a business that does
not constitute a Change in Control as defined in the Plan, executive’s
then-unissued Shares will be forfeited.

·  
The number of Shares which may be issued pursuant to the Restricted Stock 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 Restricted Stock Units shall not be assignable or transferable by the
executive.  The Shares, once issued to the executive, shall be freely
transferable.

·  
The executive shall not have voting rights nor will the executive qualify for
dividends with respect to the Shares which may be issued pursuant to the
Restricted Stock Units during the Period of Restriction.

·  
The Restricted Stock 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 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.
 
 
“Period of Restriction”
 

For the purposes of this grant, the Period of Restriction means, for any Share
which may be issued pursuant to a Restricted Stock Unit, the period prior to the
date on which such Share becomes issuable.

“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 required
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
executive’s active service to Textron during the Period of Restriction divided
by the number of months in the Period of Restriction.  An employee must be
employed by Textron for a minimum of three years after the grant date before
pro-rata Shares may be issued.

Example: On July 16, 2003, an executive was granted 2,500 Restricted Stock Units
constituting the right to receive 2,500 Shares to be issued in accordance with
the following vesting schedule:
 

Shares
Vest Dates
834
July 16, 2006
833
July 16, 2007
833
July 16, 2008

The executive terminates employment with Textron on August 30, 2006 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 executive was employed by Textron for three years after the grant date, the
executive is eligible for the issuance of a pro-rata portion of the Shares. The
number of Shares earned would be calculated as follows:

Vest Date
Shares Issuable
 
Number of Complete or Partial Months Employed by Textron During the Period of
Restriction (1)
 
Number of Months in the Period of Restriction
=
Pro-Rata Shares
7/16/06
834
X
38
÷
36 (2)
 
834 shares distributed July 16, 2006
 
7/16/07
833
X
38
÷
48 (3)
 
659.4583
7/16/08
833
X
38
÷
60 (4)
 
527.5666
         
Pro-Rata Shares Earned:
 
1,187.0249*

(1) July 16, 2003 – August 30, 2006 (37 completed plus 1 partial month)
(2) July 16, 2003 – July 16, 2006
(3) July 16, 2003 – July 16, 2007
(4) July 16, 2003 – July 16, 2008

*Fractional Shares will be paid in cash. For instance, if the share price is $90
on the date that the Shares are issued, then Textron would pay the executive
$2.24 (.0249 X $90 = $2.24)

TEXTRON INC.
 
 RESTRICTED STOCK UNIT NON-COMPETITION AGREEMENT
 
(5/2007)
 
You have been granted Restricted Stock Units (“RSUs”) pursuant to the Textron
2007 Long-Term Incentive Plan (the “Plan”).  Textron grants Restricted Stock
Units to attract, retain and reward employees, to increase stock ownership and
identification with Textron’s interests, and to provide incentive for remaining
with and enhancing the value of Textron over the long-term.  In consideration
for granting Restricted Stock Units to you, please acknowledge that you have
read and agree to this Restricted Stock Unit Non-Competition Agreement by
signing the attached Notice of Grant of Restricted Stock Unit and Restricted
Stock Unit Agreement.

Agreement regarding YourRestricted Stock Units

 
1.     Forfeiture of RSU Shares and required repayment if you engage in certain
competitive activities

If at any time during the Period of Restriction (as defined in the Notice of
Grant of Restricted Stock Unit and Restricted Stock 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  shares (“RSU Shares”) issuable pursuant to your
Restricted Stock 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 fair
market value of any RSU Shares issued to you on 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.  The Organization and
Compensation Committee of the Board of Directors (or its duly appointed agent)
may require, in its discretion, that you return any RSU Shares that you hold
rather than paying the cash equivalent of the gain realized on that investment.
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

 
(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 RSU Shares 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 RSU Shares shall be forfeited
effective the date you enter into such activity and you will be required to
repay Textron an amount equal to the fair market value of any RSU Shares issued
to you on 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.  The Organization and Compensation Committee of the Board
of Directors (or its duly appointed agent) may require, in its discretion, that
you return any RSU Shares that you hold rather than paying the cash equivalent
of the gain realized on that investment.
 
5.        Forfeiture of RSU Shares 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 RSU Shares shall be forfeited
effective the date you enter into such activity and you will be required to
repay Textron an amount equal to the fair market value of any RSU Shares issued
to you on 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.  The Organization and Compensation Committee of the Board
of Directors (or its duly appointed agent) may require, in its discretion, that
you return any RSU Shares that you hold rather than paying the cash equivalent
of the gain realized on that investment.
 
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.