Exhibit 10.2

 

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NOTICE OF AWARD OF PERFORMANCE SHARE
UNITS AND PERFORMANCE SHARE UNIT
AGREEMENT

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Pursuant to the Textron Inc. 2015 Long-Term Incentive Plan (the “Plan”), you
(the “executive”) have been awarded Performance Share Units (“PSUs”), each of
which constitutes the right to receive, if earned pursuant to the terms of this
award,  a  cash payment equal to the fair market value of a share of Common
Stock of Textron Inc.  (a “Share”).  The number of PSUs which you earn will be
determined based on a formula tied to performance measures (subject to the
discretion of the Committee, to the extent provided in the Plan), and fair
market value will be as provided in the Performance Share Unit Terms and
Conditions (the “Terms and Conditions”) attached hereto. This award is governed
by the Terms and Conditions and the Plan (available on the Administrator’s
website) and is subject to the Performance Share Unit Non-Competition Agreement
(the “Non-Competition Agreement”) attached hereto.

The Performance Period is the three (3) year period beginning on the first day
of the fiscal year in which the PSUs are awarded. Performance measures for the
three-year Performance Period were established by the Committee at the beginning
of the Performance Period and will be communicated to you separately from this
notice.

Except as otherwise provided in the Terms and Conditions, the cash value of all
PSUs will be paid (to the extent earned) during the month of March following the
end of the Performance Period. All PSUs remain subject to forfeiture until the
end of the Performance Period as provided in the Terms and Conditions.

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You must log into your account on the Administrator’s website to view the number
of units awarded, as well as to accept your award. If you do not accept your
award prior to the end of the Performance Period (or prior to the date your
employment terminates for any reason, if earlier), your award will be forfeited.
Although Textron has completed the steps necessary to grant you this award, you
cannot receive any payment under the award unless you accept the award before
the deadline.

By your acceptance of this award, you agree that this award is governed by the
Terms and Conditions attached hereto and the Plan. In addition, you agree that
this award is subject to the Non-Competition Agreement, the terms of which are
fully incorporated herein. You acknowledge that you have read and understand
these documents as they apply to your awards.

Please be sure to log into your account and accept your award as soon as
possible to avoid the risk that your award will be forfeited for non-acceptance.

TEXTRON INC.

 

 

 

By:

/s/Julie G. Duffy

 

Julie G. Duffy

 

Executive Vice President, Human Resources

 

 

 

 

TEXTRON INC.

TEXTRON INC. 2015 LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE UNIT
TERMS AND CONDITIONS

(3/2020)

 

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1.          Award of PSUs. Pursuant to the Textron Inc. 2015 Long-Term Incentive
Plan (the “Plan”), Textron has awarded to the executive Performance Share Units
(“PSUs”), subject to the Terms and Conditions set forth herein. The number of
PSUs payable under this award will be determined by Textron based on achievement
of predefined performance measures or targets over the three-year Performance
Period.

2.          Settlement.  Each PSU earned by the executive constitutes the right
to receive a  cash payment equal to the fair market value of one Share.  Except
as otherwise provided in Sections 3 (Termination of Employment) or 4 (Change of
Control):

(a)         The fair market value of a Share equals the average of the per-share
closing prices of Textron’s  Common Stock, as reported on the New York Stock
Exchange, on the first ten trading days immediately following the end of the
Performance Period; and

(b)        Textron will pay the executive (or the executive’s Beneficiary in the
event of the executive’s death prior to payment) the cash amount for the PSUs
earned by the executive during the month of March following the end of the
Performance Period.

3.          Termination of Employment.  If the executive’s employment with
Textron and its Subsidiaries ends for any reason before the end of the
Performance Period, the executive shall forfeit all PSUs, subject to the
following:

(a)         If the executive’s employment with Textron terminates for Cause, the
executive shall forfeit all PSUs.

(b)        If the executive’s employment terminates (other than for Cause) after
the executive has become eligible for Retirement, the executive will remain
eligible to earn PSUs (and receive payment for such PSUs) as if the executive’s
employment had not terminated (but subject to forfeiture in accordance with the
Non-Competition Agreement); provided, however, that if the executive’s
employment terminates within two years after a Change of Control, the payment
schedule set forth in subsection (d), below, shall apply.

(c)         If the executive becomes Disabled or dies before the end of the
Performance Period (and while the executive is eligible to earn PSUs),  Textron
will make a cash payment to the executive (or, in the case of death, to the
executive’s Beneficiary) within 30 days after the executive’s Disability or
death or as soon as administratively feasible (i.e., after Textron is notified
of the Disability or death).  Such cash payment shall equal the closing price
for a Share, as reported on the New York Stock Exchange, on the first business
day after the executive’s Disability or death, times a Pro-Rata Portion of the
PSUs that the executive would have earned, assuming target performance to the
end of the Performance Period, based upon the date of the executive’s Disability
or death (unless the Disability or death occurs on the last day of the
Performance Period, in which case the number of

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PSUs awarded would be the number actually earned).  The amount payable shall not
be adjusted for any delay caused by time needed to validate the executive’s
status as Disabled or dead, or to authenticate a Beneficiary.

(d)        If, within two years after a Change of Control, the executive’s
employment ends due to involuntary termination without Cause or resignation for
Good Reason, the applicable Performance Period for the PSUs shall end
immediately.  In such instance, Textron shall make a cash payment to the
executive (or, in the case of death, to the executive’s Beneficiary) on the
Six-Month Pay Date equal to the fair market value of the PSUs based on target
performance for the Performance Period.  For this purpose, fair market value of
a PSU shall equal the per-share closing price of Textron’s Common Stock (or the
successor thereto) on the last business day of the last calendar month that ends
before the Six-Month Pay Date; provided, however, that if it is not feasible to
calculate the closing price as of the last business day of such month, the
amount of cash shall be determined based on the last price available.

Note: Sale of a business unit usually does not constitute a Change of Control as
defined in the Plan.

4.          Change of Control.  If a Change of Control occurs, a successor to
Textron shall either assume Textron’s obligations with respect to the PSUs or
replace this PSU award with  a cash or equity-based award that materially
preserves the PSU award’s value and incentive opportunity, and has vesting and
payment schedules (including acceleration events) that are no less favorable to
the executive than the schedules in effect immediately before the Change of
Control.  If this PSU award is not assumed or replaced in accordance with the
immediately preceding sentence, the PSUs shall be fully vested, non-forfeitable,
and payable based on target performance through the Performance Period, based on
the Share value as of the Change of Control; provided that payment shall not be
accelerated if accelerating payment would violate a requirement of Section 409A
of the Internal Revenue Code.

5.          Corporate Changes.  The number of PSUs awarded to the executive
hereunder shall be equitably adjusted at the sole discretion of the Committee in
the event of a stock split, reverse stock split, stock dividend,
recapitalization, reorganization, partial or complete liquidation,
reclassification, merger, consolidation, separation, extraordinary cash
dividend, split-up, spin-off, combination, exchange of Shares, warrants, or
rights offering to purchase Shares, or any other corporate event or distribution
of stock or property of the Company affecting the Common Stock, in order to
preserve the benefits or potential benefits intended to be made available to the
executive.

6.          No Right to Employment.  Nothing in these Terms and Conditions shall
confer upon the executive the right to continue in the employment of Textron or
any Subsidiary or affect any right that Textron or any Subsidiary may have to
terminate the employment of the executive.

7.          Non-Assignability of PSUs.  The PSUs shall not be assignable or
transferable by the executive, except to the extent expressly permitted by the
Plan.  Tax withholding with respect to any PSU that is transferred or assigned
shall be determined by Textron in accordance with applicable law (which may
require the executive to pay taxes with respect to a transferred PSU).

8.          Voting and Dividends.  The executive shall not have voting rights,
the right to any dividends, or any other shareholder rights with respect to the
PSUs.

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9.          Clawback. The PSUs shall be subject to the clawback provision set
forth in the Plan and/or any other clawback procedure of Textron, as in effect
and as amended from time to time.

10.        Administration. In accordance with the Plan, the Committee may, from
time to time, delegate some or all of its authority under the Plan to a
subcommittee or to one or more officers or employees of Textron.

11.        Withholding Taxes. All payments with respect to PSUs shall be subject
to tax withholding.  Textron shall have the right to withhold from any payment
an amount that Textron determines is necessary to satisfy any Federal, state and
local withholding tax requirements.

12.        Section 409A.  The terms and conditions of the PSUs shall be
interpreted in a manner consistent with the intent to be exempt from or comply
with the requirements of Section 409A of the Internal Revenue Code.  For
example, the phrase “as soon as practicable” and similar phrases with respect to
payment dates shall be interpreted and administered consistent with the intent
that, subject to the executive (or Beneficiary) providing all required
information, payment shall not be delayed beyond the latest date permitted by
Section 409A.  For purposes of Section 409A, each installment in any series of
installment payments shall be treated as a separate payment.

13.        PSUs Subject to Plan.  The PSUs shall be subject to the terms and
conditions of the Plan in all respects.  In the case of PSUs awarded under a
long-term incentive plan other than the Textron Inc. 2015 Long-Term Incentive
Plan, the term “Plan” as used in these Terms and Conditions shall refer to the
plan under which the PSUs were awarded.  Each term that is used but not defined
herein shall have the meaning set forth in the Plan.

 

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DEFINITIONS

“Administrator”

“Administrator” shall mean the third-party administrator appointed by Textron.
As of the date of grant of this award, the Administrator is Fidelity Stock Plan
Services.

“Beneficiary”

“Beneficiary” shall mean the beneficiary, if any, designated by the executive on
a form that (i) is acceptable to Textron, (ii) references the PSUs or the Plan,
and (iii) is delivered to Textron or its designee before the executive’s death,
or, if none, the executive’s estate.

“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 her 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 or her 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 Subsidiaries, 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 of Control, the size of Textron, taken as a whole,
shall be a relevant factor in determining materiality and material adverse
impact.

“Committee”

“Committee” has the meaning set forth in the Plan.  Subject to any amendment to
the Plan, the Committee refers to the Organization and Compensation Committee of
the Board, any successor committee thereto or any other committee appointed from
time to time by the Board to administer the Plan.

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“Disability”

“Disability” shall mean the inability of the executive to engage in any
substantial gainful activity due to injury, illness, disease, or bodily or
mental infirmity which can be expected to result in death or is expected to be
permanent, and which results in the executive’s being “disabled” within the
meaning of Section 409A(a)(2)(C) of the Internal Revenue Code.  An individual
shall not be considered disabled unless the executive furnishes proof of the
existence thereof. Textron may require the existence or non-existence of a
disability to be determined by a physician whose selection is mutually agreed
upon by the executive (or his or her representatives) and Textron.

“Good Reason”

“Good Reason” shall mean the existence of one of the following conditions:

(a)  a material diminution in the executive’s base salary;

(b)  a material diminution in the executive’s authority, duties,
responsibilities, or status (including offices, titles, and reporting
requirements);

(c)  a material diminution in the authority, duties, responsibilities, or status
of the supervisor to whom the executive is required to report, including a
requirement that the executive report to a corporate officer or employee instead
of reporting directly to the Board;

(d)  a material diminution in the budget over which the executive has authority;

(e)  a material change in the geographic location at which the executive must
perform services;

(f)   a material change in the aggregate level of participation in any of
Textron’s short and/or long-term incentive compensation plans, or employee
benefit or retirement plans, policies, practices, or arrangements;

(g)  failure, after a Change of Control, of a successor company to satisfy its
obligations under Section 4 (Change of Control);

(h)  failure, after a Change of Control, of a successor company to assume the
employer’s obligations under any agreement or letter pursuant to which the
executive provides services (the “Employment Agreement”); or

(i)   any other action or inaction that constitutes a material breach by Textron
(including its successor) or a Subsidiary of the executive’s Employment
Agreement.

A resignation for Good Reason shall occur only if (x) the executive provides
notice of the existence of a condition described in the preceding sentence
within 90 days after the initial existence of the condition, (y) after receipt
of the notice, Textron (or its successor) has a period of 30 days during which
it may remedy the condition, and (z) the executive’s resignation is effective as
soon as practicable after the end of the cure period described in the preceding
clause (and no later than two years after the Change of Control).

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“Performance Period”

For the purposes of this award, the “Performance Period” means the period of
three fiscal years identified in the Notice of Award.

“Pro-Rata Portion”

“Pro-Rata Portion” shall mean the number of complete or partial months of the
executive’s active service to Textron during the fiscal year divided by 12.

“Retirement”

The executive is eligible for “Retirement” if the executive has attained age 55
and has 10 years of service, as recorded in Textron’s Human Resources
Information System of record.

“Six-Month Pay Date”

The “Six-Month Pay Date” is a date determined by Textron that is during the
seventh month that starts after the executive’s termination of employment or, if
earlier, within 90 days after the executive’s death (or as soon as
administratively feasible after Textron is notified of the death).

“Termination of Employment”

“Termination of employment” and similar terms shall mean “separation from
service” within the meaning of Section 409A of the Internal Revenue Code.

 

 

 

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TEXTRON INC.

PERFORMANCE SHARE UNIT NON-COMPETITION AGREEMENT

 

You have been awarded Performance Share Units (“PSUs”) under, and subject to the
terms of, the Textron Inc. 2015 Long-Term Incentive Plan (the “Plan”).  Your
PSUs are valuable consideration for your service to Textron over the long-term,
including your compliance with the terms of this Performance Share Unit
Non-Competition Agreement (the “Agreement”), and Textron’s decision to grant the
PSUs to you is conditioned on your agreement to comply with the terms of this
Agreement.  By accepting the PSUs, you agree that the PSUs are sufficient
consideration for the restrictions imposed by this Agreement.

Agreement regarding Your Performance Share Units

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

If at any time during the Performance Period (as defined in the Notice of Award
of Performance Share Unit and Performance Share Unit Agreement) while you are a
Company employee, or during the Post-Employment Restricted Period (as defined in
Paragraph 2), you do any of the following activities:

(a)      engage in any business which competes with the Company’s business (as
defined in Paragraph 3) within the Restricted Territory (as defined in Paragraph
4); 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 any payment in respect of Performance Share Units
shall be forfeited effective the date you enter into such activity, and you will
be required to repay Textron an amount equal to the value of any PSU paid to you
from and after the date beginning 180 days prior to the earlier of (a) your
termination of employment or (b) the date you engage in such activity, or at any
time after such date. You will be in violation of Paragraph 1 if you engage in
any or all of the activities discussed in this Paragraph directly as an
individual or indirectly as an employee, representative, consultant or in any
other capacity on behalf of any firm, corporation or other entity.

 

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2.    Post-Employment Restricted Period – Defined for the purpose of Paragraph
1, the Post-Employment Restricted Period means the period from termination of
your employment with the Company until the second anniversary of your
termination; provided that if an applicable statute specifies a shorter period,
the Post-Employment Restricted Period will end at the time specified by that
statute.

3.    Company’s business – 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.

4.    Restricted Territory – For the purpose of this Agreement, 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.

5.    Forfeiture of PSUs and required repayment if you engage in certain
solicitation activities

If you directly or indirectly solicit or induce or attempt to solicit or induce
any employee(s), sales representative(s), agent(s) or consultant(s) of the
Company to terminate their employment, representation or other association with
the Company, then your right to receive any payment in respect of PSUs shall be
forfeited effective the date you enter into such activity and you will be
required to repay Textron an amount equal to the value of any PSU paid to you
from and after the date beginning 180 days prior to the earlier of (a) your
termination of employment or (b) the date you engage in such activity, or at any
time after such date.

6.    Forfeiture  of  PSUs  and  required  repayment  if  you  disclose  confidential  information

You specifically acknowledge that any trade secrets or confidential business and
technical information of the Company or its suppliers or customers, whether
reduced to writing, maintained on any form of electronic media, or maintained in
your mind or memory and whether compiled by you or the Company, derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from its disclosure or use;
that reasonable efforts have been made by the Company to

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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. However, nothing
in this Agreement prohibits you from truthfully disclosing information expressly
protected or permitted by state or federal law or cooperating in ongoing
investigations conducted by any governmental agency or entity.

If you directly or indirectly misappropriate any such trade secrets, then your
right to receive any payment in respect of PSUs shall be forfeited effective the
date you enter into such activity and you will be required to repay Textron an
amount equal to the value of any PSU paid to you from and after the date
beginning 180 days prior to the earlier of (a) your termination of employment or
(b) the date you engage in such activity, or at any time after such date.

7.    Organization and Compensation Committee Discretion

You may be released from your obligations under Paragraphs  1, 5  and 6  above
only if the Organization and Compensation Committee of the Board of Directors
(or its delegate) determines in its sole discretion that such action is in the
best interests of Textron.

8.    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.

9.    Right to Consult with Counsel

You have a right to consult with counsel before signing this Agreement.

 

 

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