exhibit10-3.htm


    Exhibit
      10.3

     

    Textron
      Inc.

     

    1999
      LONG-TERM INCENTIVE PLAN FOR TEXTRON EMPLOYEES

    (Amended
      and Restated Effective July 25, 2007)

     

    The
      1999
      Long-Term Incentive Plan for Textron Employees (the “1999 LTIP” or the “Plan”)
      was adopted by the Board of Directors on February 24, 1999 for the purpose
      of
      attracting, retaining, and motivating selected employees.  The Plan
      was approved by Textron shareholders on April 28, 1999.  The Plan has
      been amended several times since that date with the approval of Textron
      shareholders.

     

    Effective
      April 25, 2007, this 1999 LTIP has been replaced by the 2007 Long-Term Incentive
      Plan for Textron Employees (“2007 LTIP”).  The terms of this 1999 LTIP
      will continue to govern any awards made under the 1999 LTIP; any awards made
      on
      or after April 25, 2007, will be governed by the 2007 LTIP.

     

    The
      1999
      LTIP is hereby amended and restated, effective July 25, 2007, to incorporate
      those terms necessary or advisable to ensure that existing awards under the
      1999
      LTIP are exempt from or comply with Section 409A of the Code.

     

    The
      text
      of the Plan is hereby amended, restated and integrated to read in its entirety
      as follows:

     

    Article
      I  - General

     

    1.1  Purpose.  This
      Plan authorizes the grant of stock options (“Options”) and restricted stock
      (“Restricted Stock”) to officers and other selected employees of Textron Inc.
      (“Textron”) and its related companies to induce them to continue as Textron
      employees and to reward them for improvement in Textron’s long-term
      performance.

     

    1.2  Administration.  (a)
      The Board of Directors of Textron (the “Board”) shall appoint from among its
      members a committee (the “Committee”) consisting of no fewer than three
      directors, none of whom shall be eligible, and none of whom shall have been
      eligible at any time within one year prior to or after exercising discretion
      in
      administering the Plan, for any award under the Plan or under any other employee
      benefit plan of Textron or any related company, and all of whom shall certify
      that they are “outside directors” as defined by the Code.  Unless
      otherwise specified by the Board, the Committee, for purpose hereof, shall
      mean
      the Organization and Compensation Committee of the Board.

     

    (b)           The
      Committee shall have the power subject to and within the limits of the
      Plan:

    


    (1)  to
      determine from time to time which eligible persons shall be granted Options
      under the Plan, which Options shall be “Incentive Options” and which shall be
“Non-Qualified Options,” as each is hereafter defined, the term of each Option
      within which all or portions of the Option may be exercised and the number
      of
      shares covered by each Option;

     

    (2)  to
      determine from time to time which eligible persons shall be granted shares
      of
      Restricted Stock under the Plan, to fix the number of shares of Restricted
      Stock
      covered by each grant and the conditions of the grant;

     

    (3)  to
      construe and interpret the Plan and to establish, amend and revoke rules and
      regulations for its administration.  The Committee, in exercise of
      this power, shall generally determine all questions of policy and expediency
      that may arise and may correct any defect, omission or inconsistency in the
      Plan
      or in any agreement evidencing an award hereunder in a manner and to the extent
      it shall deem necessary or expedient to make the Plan fully
      effective;

     

    (4)  to
      prescribe the terms and provisions of any award under an Option or share of
      Restricted Stock granted pursuant to this Plan;

     

    (5)  generally,
      to exercise such powers and to perform such acts in connection with the Plan
      as
      are deemed necessary or expedient to promote the best interests of
      Textron.

     

    (c)           The
      Board at any time may designate one or more officers or committees of Textron
      to
      act in place of the Committee in making any determination or taking any action
      under the Plan.  The Benefits Committee of Textron shall have the
      authority to adopt one or more sub-plans of the Plan applicable to employees
      located in countries other than the United States for the purpose of complying
      with applicable laws and regulations of such
      countries.  Notwithstanding the above, all decisions concerning the
      Plan relate to persons who are Directors or Corporate Officers of Textron shall
      be made by the Committee.

    


    (d)           The
      Board at any time may revest administration of the Plan, including all powers
      and duties of the Committee, in the Board, provided that in any matter relating
      to administration of the Plan, a majority of the Board and a majority of the
      directors acting on such matter shall not be eligible, and shall not have been
      eligible at any time within one year prior thereto, for a grant under the Plan
      or under any other employee benefit plan of Textron or any related
      company.  In such all references herein to the Committee shall be
      deemed to refer to the Board.

    


    (e)           All
      actions of the Board, the Committee or any designate under Section 1.2 in
      connection with the Plan shall be final, conclusive and binding.  No
      member of the Board, the Committee or any designated committee, nor any
      designated officer, shall be liable for any action taken or decision made in
      good faith relating to the Plan or any grant or award hereunder.

    


    1.3  Eligibility.  The
      Committee may grant options or shares of Restricted Stock under the Plan to
      any
      full-time employee of Textron or any related company (determined at the date
      of
      grant) who is a corporate, division, segment or subsidiary officer,
      administrative or professional employee, or other selected employee capable
      of
      making a substantial contribution to the success of Textron.  Options
      and shares of Restricted Stock may be granted to full-time employees who are
      also members of the Board.  Stock option awards may be granted to
      non-employee directors.  In making grants and determining their form
      and amount, the Committee shall consider functions and responsibilities of
      the
      employee, the employee’s potential contributions to profitability and sound
      growth of Textron and such other factors, as the Committee deems
      relevant.

     

    1.4  Grants.  Grants
      under the Plan may be comprised of any of the following:

     

    
      	
              (a)  

            	
              Options
                as described in Article II; and

            


    

     

    
      	
              (b)  

            	
              Restricted
                Stock as described in Article III.

            


    

     

    
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    1.5  Effective
      Date of Plan.  The Plan shall be submitted to Textron
      shareholders for approval at the annual meeting on April 28, 1999, or at any
      adjournment of such meeting, and shall become effective immediately following
      its approval by the affirmative vote of the holders of a majority of the shares
      present and entitled to vote at such meeting.

     

    1.6  Aggregate
      Limitation on Grants.  (a) Shares of Common Stock, which
      may be issued pursuant to grants under the Plan may be either authorized and
      unissued shares of Common Stock or authorized and issued shares of Common Stock
      purchased or acquired Textron for this or any other purpose.  Subject
      to Section 6.9(a) (relating to adjustments upon changes in stock), the maximum
      number of shares of Common Stock which may be subject to Options under the
      Plan
      shall be 17,500,000 and the maximum number of shares of Restricted Stock which
      may be granted under the Plan shall be 2,000,000.

     

    (b)           In
      the event that (1) any Option granted under the Plan expires unexercised or
      is
      terminated or cancelled for any reason without having been exercised in full
      or
      (2) any grant of Restricted Stock under the Plan are terminated or does not
      vest
      for any reason, the number of shares of Common Stock therefore subject to such
      Option, or grant of Restricted Stock, or the unexercised, terminated or
      cancelled or unearnable portion thereof, shall be added to the remaining number
      of shares of Common Stock or Restricted Stock, respectively, available for
      grant
      under the Plan.

    


    1.7  Additional
      Definitions.  For purposes of this Plan, the following
      terms shall have the meaning specified in this Section 1.7:

     

            (a)  “Award
      Period” shall mean the period during which Performance Targets or Performance
      Measures are to be accomplished.

     

            (b)  “Cause”
      shall mean a degree of less than acceptable performance as is determined by
      the
      Committee.

     

            (c)  “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to
      time.

     

            (d)  “Common
      Stock” shall mean shares of Textron common stock

     

            (e)  “Corporate
      Officer” shall mean corporate officers of Textron who are not assistant
      corporate officers.

     

            (f)  “Director”
      shall mean a member of the Board of Directors of Textron.

     

    (g)  “Early
      Retirement” shall mean the attainment of any of the following
      requirements:  age 55 with 10 years of Vesting Service, age 60, or 20
      years of Vesting
      Service.  For the purposes of this Plan, “Vesting Service” shall have
      the meaning ascribed to it in Addendum A of the Textron Master Retirement Plan
      (January 1, 1998 Restatement).

     

    (h)  “Fair
      Market Value” shall mean (except as may be required by Section 422 or any other
      applicable law) the simple average of the high and low prices of 

     

     

    
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    the
      Common Stock on the New York Stock Exchange Composite Transactions Listing
      on a
      particular date.

     

            (i)  “Incentive
      Options” shall mean Options, which are incentive stock options under section 422
      of the Code.

     

            (j)  “Non-Qualified
      Options” shall mean Options which are not Incentive Options.

     

            (k)  “Options”
      shall mean options to purchase shares of Common Stock, which are granted
      pursuant to this Plan.

     

            (l)  “Performance-Based
      Exception” shall mean the performance-based exception from the tax deductibility
      limitations of Code section 162(m).

     

            (m)   “Performance
      Targets” shall mean the performance standards described in Article V of this
      Plan.

     

    (n)  “Period
      of Restriction” shall mean the period during which the transfer of shares of
      Restricted Stock (RS) is limited in some way (based upon the passage of time,
      the achievement of performance goals, or upon the occurrence of other events
      as
      determined by the Board, at its discretion), and during which the shares of
      Restricted Stock are subject to a substantial risk forfeiture, as provided
      in
      Article III herein.  Restricted Stock Awards (RSA) without any other
      performance-based qualification criteria other than the passage of time must
      have a minimum period of restriction of three (3) years.

     

            (o)  “Plan”
      shall mean the 1999 Long-Term Incentive Plan for Textron Employees.

     

            (p)  “Restricted
      Stock” shall mean an award of Common Stock granted under Article III of the
      Plan.

     

            (q)  “Total
      Disability” shall mean a permanent mental or physical disability as determined
      by the Committee.

     

    Article
      II - Options

     

    2.1  Grant
      of Options.  The Committee may from time to time,
      subject to the provisions of the Plan and such other terms and conditions as
      it
      may prescribe, grant to eligible employees one or more Options to purchase
      shares of Common Stock under the Plan.  A maximum of 150,000 Options
      can be granted to any eligible employee during any calendar year, in each case
      subject to adjustments
      provided in Section 6.9 of this Plan.  Options granted hereunder may
      be Incentive Options under Section 422 of the Code (Section
      422).  Options granted hereunder which are not Incentive Options are
      referred to as “Non-Qualified Options.”

     

    2.2  Option
      Agreements.  The grant of an Option shall be evidenced
      by a written Option Agreement, executed by Textron and the optionee, stating
      the
      number of shares of Common 

     

    
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    Stock
      subject to the Option, designating whether and to what extent the Option is
      an
      Incentive Option and containing such investment representations and other terms
      and conditions as the Committee may from time to time determine, or as may
      be
      required by Section 422 or any other applicable law.

     

    2.3  Option
      Price.  The purchase price for the Common Stock covered
      by any Option granted under the Plan shall in no case be less than 100% of
      the
      Fair Market Value of such Common Stock at the time the Option is
      granted.  The purchase price of the shares as to which an Option shall
      be exercised shall be paid in full at the time of exercise at the election
      of
      the optionee (1) in cash, (2) by tendering to Textron Shares of Common Stock
      then owned by the optionee having a Fair Market Value equal to such purchase
      price, or (3) partly cash and partly in shares of Common Stock valued at Fair
      Market Value.  The Committee may also allow cashless exercise as
      permitted under the Federal Reserve Board’s Regulation T, subject to applicable
      securities law restrictions, or by any other means which the Committee
      determines to be consistent with the Plan’s purpose and applicable
      law.

     

    2.4  Term
      of Option.  The term of each Option granted under the
      Plan shall be for such period, as the Committee shall determine but no more
      than
      10 years from the date of grant thereof, for both Incentive Options and
      Non-Qualified Options.  Each Option shall be subject to earlier
      termination as provided in Section 2.6 or 2.7, if applicable.

     

    2.5  Exercise
      of Option.  Each Option granted under the Plan shall be
      exercisable on such date or dates during the term thereof and for such number
      of
      shares of Common Stock as may be provided in the Option Agreement evidencing
      its
      grant provided that an Option shall not be exercisable for less than 50 shares
      (or the remaining number of shares subject to the Option if that number is
      less
      than 50).  No option shall be exercisable for at least six months
      after the date of its issuance, except as otherwise provided in this
      Plan.  To exercise an Option as to all or part of the shares covered
      thereby, an optionee shall furnish to the Secretary of Textron at Textron’s
      principal office written notice of such exercise together with the purchase
      price for the shares.  The notice shall specify the number of shares
      then being purchased.  In the discretion of the Committee, the Option
      Agreement may provide that shares may be issued in the name of the optionee
      and
      another person jointly with rights of survivorship.  During the life
      of an optionee, an Option shall be exercisable only by the optionee or by the
      optionee’s guardian or legal representative.

     

    2.6  Termination
      of Employment.  (a) If an optionee’s employment with
      Textron or a related company shall terminate for Cause, as determined by the
      Committee, all Options held by the optionee shall expire
      immediately.

     

    (b)           If
      the employment with Textron and its related companies of an optionee who is
      not
      described in Section 2.6(a) shall end after the optionee has become eligible
      for
      Early Retirement, the
      optionee shall have the right to exercise each Option granted to the optionee
      within 36 months after the end of the optionee’s employment (or within such
      shorter period as may be specified in the related Option Agreement) to the
      extent the Option is exercisable at the time of exercise.

     

    
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    (c)           If
      an optionee’s employment with Textron and its related companies shall end as a
      result of the optionee’s Total Disability, the optionee shall have the right to
      exercise each Option granted to the optionee as to all unexercised shares until
      the expiration of its term.

    


    (d)           If
      an optionee shall die while employed by Textron or a related company or while
      any option granted to the optionee is still exercisable under section 2.6(b),
      (c) or (e), any such Option may be exercised as to all unexercised shares within
      a period of one year from the date of the optionee’s death by the executor or
      administrator of the optionee’s estate or by the person or persons whom the
      optionee shall have transferred such right by will or by the laws of descent
      or
      distribution.

    


    (e)           If
      an optionee’s employment with Textron and its related companies shall end for
      any reason not specified in Sections 2.6(a), (b) or (d), the optionee shall
      have
      the right to exercise each Option granted to the optionee within three months
      after his or her termination of employment (or within such later time, up to
      36
      months after his or her termination of employment, as the Committee may
      determine) but, unless otherwise determined by the Committee, only to the extent
      the Option is exercisable at the time of such termination of
      employment.

    


    (f)           Notwithstanding
      anything in the contrary in this Section 2.6, in no event shall an Option be
      exercisable after the expiration of its term.

    


    2.7  Incentive
      Options.  (a) Incentive Options shall be subject to the
      additional terms and conditions of this Section 2.7.

     

    (b)           No
      Incentive Option shall be issued hereunder to any individual who, at the time
      the Incentive Option is granted, owns stock processing more than ten percent
      of
      the total combined voting power of all classes of stock of Textron or any
      related company.

    


    (c)           To
      the extent that the aggregate Fair Market Value (determined as of the time
      the
      Incentive Option is granted) of the Common Stock with respect to which any
      Incentive Stock Options granted are exercisable for the first time by an
      optionee during any calendar year (under all employee benefit plans of Textron
      and its related companies) exceeds $100,000 (or such larger maximum as may
      be
      permitted under the Code for Incentive Stock Options granted to an individual
      employee at the time the Incentive Option is granted), such options shall be
      treated as Non-Qualified Options.

    


    (d)           Any
      optionee who disposes of shares of Common Stock acquired by or pursuant to
      exercise of an Incentive Option by sale, exchange, gift or other disposition
      described in Section 424 (c) of the Code, either (1) within two years after
      the date of the grant of the Incentive Option under which the shares were
      acquired, or (2) within one year of the acquisition of such shares, shall notify
      the Secretary of Textron at Textron’s principal office of such disposition, the
      amount realized,
      the exercise price and the date of exercise of such shares.  Textron
      shall have the right to withhold from other sums which it may owe to the
      optionee, or to accept remittance by the optionee of the sums in lieu of, an
      amount sufficient to satisfy any federal, state and local withholding tax
      requirements to such a disposition.

     

    
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    (e)           The
      Option Agreement with respect to Incentive Options shall contain such other
      provisions as may be required by Section 422 or any other applicable
      law.

    


    Article
      III - Restricted
      Stock

     

    3.1  Grant
      of Restricted Stock.  Subject to the terms and
      provisions of the Plan, the Committee, at any time and from time to time, may
      grant Shares of Restricted Stock to eligible employees in such amounts, as
      the
      Board shall determine.  A maximum of 200,000 shares of Restricted
      Stock may be granted to any eligible employee in any one calendar year, in
      each
      case subject to adjustment as provided in Section 6.9 of this Plan.

     

    3.2  Restricted
      Stock Agreement.  Each Restricted Stock grant shall be
      evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
      of Restriction, the number of Shares Restricted Stock granted, and such other
      provisions as the Committee shall determine.

     

    3.3  Transferability.  Except
      as provided in this Article III, the Shares of Restricted Stock granted herein
      may not be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated until the end of the applicable Period of Restriction established
      by the Committee in its sole discretion and set forth in the Restricted Stock
      Award Agreement.  All rights with respect to the Restricted Stock
      granted to an eligible employee under the Plan shall be available during his
      or
      her lifetime only to such eligible employee.

     

    3.4  Other
      Restrictions.  The Committee shall impose such other
      conditions and/or restrictions on any Shares of Restricted Stock granted
      pursuant to the Plan as it may deem advisable including, without limitation,
      continued employment with Textron, a requirement that eligible employees pay
      a
      stipulated purchase price for each Share of Restricted Stock, restrictions
      based
      upon the achievement of specific performance goals (company-wide, divisional,
      and/or individual), time-based restrictions on vesting following the attainment
      of performance goals, and/or restrictions under applicable federal or state
      securities laws.  With respect to awards of Restricted Stock based on
      Performance Targets, the Committee will establish Performance Targets in
      accordance with the standards set forth in Article IV of this Plan.

     

    Textron
      may retain the certificates representing Shares of Restricted Stock in its
      possession until such time as all conditions and/or restrictions applicable
      to
      such Shares have been satisfied.

     

    Except
      as
      otherwise provided in this Article III or pursuant to Section 6.2 of the Plan,
      or as restricted by applicable law, Shares of Restricted Stock covered by each
      Restricted Stock grant made under the Plan shall become freely transferable
      by
      the eligible employee after the last day of the applicable Period of
      Restriction.

     

    3.5  Voting
      Rights.  Eligible employees holding Shares of Restricted
      Stock granted hereunder may be granted the right to exercise full voting rights
      with respect to those Shares during the Period of Restriction.

     

    3.6  Dividends
      and Other Distributions.  During the Period of
      Restriction, eligible employees holding Shares of Restricted Stock granted
      hereunder may be credited with regular cash dividends paid with respect to
      the
      underlying Shares while they are so held.  The Committee may


     

    
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    apply
      any
      restrictions to the dividends that the Committee deems
      appropriate.  Without limiting the generality of the preceding
      sentence, if the grant or vesting of Restricted Shares granted to an eligible
      employee is designated to comply with requirements of the Performance-Based
      Exception, the Committee may apply any restrictions it deems appropriate to
      the
      payment of dividends declared with respect to such Restricted Shares, such
      that
      the dividends and/or the Restricted Shares maintain eligibility for the
      Performance-Based Exception.  No Restricted Stock Awards that were
      granted under the 1999 LTIP, and that remained outstanding and unvested on
      or
      after January 1, 2005, included the right to be credited with dividends during
      the Period of Restriction as permitted under this Section 3.6.

     

    3.7  Termination
      of Employment/Directorship.  Each Restricted Stock Award
      Agreement shall set forth the extent to which the eligible employee shall have
      the right to receive unvested Restricted Stock following termination of the
      eligible employee’s employment or directorship with Textron.  Such
      provisions shall be determined in the sole discretion of the Committee, shall
      be
      included in the Award Agreement entered into with each eligible employee, need
      not be uniform among all Shares of Restricted Stock issued pursuant to the
      Plan,
      and may reflect distinctions based on the reasons for termination; provided,
      however that, except in the cases of terminations connected with a Change in
      Control and terminations by reason or death or Total Disability, and certain
      terminations without Cause, the vesting of shares of Restricted Stock which
      qualify for the Performance-Based Exception and which are held by eligible
      employees shall occur at the time they otherwise would have, but for the
      termination.

     

    3.8  Exchange
      of Restricted Stock Units.  In 2003, the Board granted
      restricted stock units which are payable only in cash to Textron’s executive and
      certain other officers.  Authorization has been given for the exchange
      of those previously granted restricted stock units for shares of Restricted
      Stock.

     

    Article
      IV - Performance-Based
      Exception

     

    Unless
      and until the Committee proposes for shareholders to vote and shareholders
      approve a change in the general Performance Targets set forth in this Article
      IV, the attainment of which may determine the degree of payout and/or vesting
      with respect to awards to eligible employees which are designed to qualify
      for
      the Performance-Based Exception (such as Restricted Stock under Article III
      of
      this Plan if the Committee so determines), the Performance Targets to be used
      for purposes of such grants shall be chosen from among:

     

                (a)  Textron’s
      earnings per share;

                

                (b)  Net
      operating profit;

     

                (c)  After-tax
      profit;

                

               (d)  Return
      on
      equity;

     

                (e)  Return
      on
      invested capital;

     

                (f)  Economic
      profit;

     

    
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                (g)  Margins;

                

                (h)  Cash
      flow; and

     

                (i)  Shareholder
      value.

     

    The
      Committee shall have the discretion to adjust the determinations of the degree
      of attainment of the pre-established Performance Targets; provided, however,
      that awards which are designed to qualify for the Performance-Based Exception,
      and which are held by eligible employees, may not be adjusted upward (the
      Committee shall retain the discretion to adjust such awards
      downward).

     

    In
      the
      event that applicable tax and/or securities laws change to permit Committee
      discretion to alter the governing Performance Targets without obtaining
      shareholder approval of such changes, the Committee shall have sole discretion
      to make such changes without obtaining shareholder approval.  In
      addition, in the event that the Committee determines that it is advisable to
      grant awards, which shall not qualify for the Performance-Based Exception,
      the
      Committee may make such grants without satisfying the requirements of Code
      Section 162(m).

     

    Article
      V - Beneficiaries

     

    5.1  A
      Participant may designate one or more Beneficiaries to receive Plan benefits
      payable on the Participant’s account after his or her death.  A
      Beneficiary may designate one or more Beneficiaries to receive any unpaid Plan
      benefits to the extent this designation does not contravene any designation
      filed by the deceased Participant through whom the Beneficiary himself or
      herself claims under this Plan.  Beneficiaries shall be designated
      only upon forms made available by or satisfactory to the Benefits Committee
      or
      its designee, and filed by the Participant or Beneficiary with that committee
      or
      designee.

     

    5.2  At
      any
      time prior to his or her death, a Participant or Beneficiary may change his
      own
      designation of Beneficiary by filing a substitute designation of Beneficiary
      with the Benefits Committee or its designee.

     

    5.3  In
      the
      absence of an effective designation of Beneficiary, or if all persons so
      designated shall have predeceased the Participant or shall have died before
      the
      complete distribution of Plan benefits, the balance of Plan benefits shall
      be
      paid to the Participant’s surviving spouse or, if none, to the Participant’s
      issue per stirpes or, if no issue, to the executor or administrator of the
      Participant’s or Beneficiary’s estate, or as otherwise determined by the
      Benefits Committee in its sole discretion.

     

    5.4  If
      a
      Participant’s Compensation or a Plan benefit is community property, any
      designation of Beneficiary shall be valid or effective only as permitted under
      applicable law.

     

    5.5  If
      a Plan
      benefit is payable to a minor or person declared incompetent or to a person
      incapable of handling the disposition of his property, the Benefits Committee
      may direct Textron to pay such Plan benefit to the guardian, legal
      representative or person having the care and custody of such minor, incompetent
      or person.  The Benefits Committee may require proof of incompetency,
      minority, incapacity or guardianship as it deems appropriate prior to
      distribution 

     

    
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    of
      the
      Plan benefit.  Such distribution shall completely discharge the
      Benefits Committee and any Textron Company from all liability with respect
      to
      such benefit.

     

    Article
      VI -  Miscellaneous

     

    6.1  General
      Restriction.  Each grant or award under the Plan shall
      be subject to the requirement that, if at any time the Committee shall determine
      that any listing or registration of the shares of Common Stock or any consent
      or
      approval of any governmental body, or any other agreement or consent, is
      necessary or desirable as a condition of a grant, an award or issuance of Common
      Stock or cash in satisfaction thereof, such grant or award may not be
      consummated unless each such requirement is satisfied in a manner acceptable
      to
      the Committee.

     

    6.2  Restrictions
      on Share Transferability.  The Committee may impose such
      restrictions on any shares of Common Stock acquired pursuant to this Plan as
      it
      may seem advisable, including, without limitation, restrictions under federal
      securities laws, under the requirements of any stock exchange or market upon
      which such shares are then listed or traded, and under any blue sky or state
      securities laws applicable to such shares.

     

    6.3  Non-Assignability.  No
      award under the Plan shall be assignable or transferable by the recipient
      thereof, except by will or by laws of descent and distribution.

     

    6.4  Withholding
      Taxes.  Whenever Textron proposes to or is required to
      issue or transfer shares of Common Stock under the Plan, Textron shall have
      the
      right to withhold or to require the participant to remit to Textron an amount
      sufficient to satisfy any federal, state and local withholding tax
      requirements.  A participant may elect to use company shares to
      satisfy tax withholding obligations on the exercise of non-qualified options
      and
      the vesting of restricted stock to meet the minimum statutory tax withholding
      requirements.  Whenever under the Plan payments by Textron are to be
      made in cash, such payments shall be net of an amount sufficient to satisfy
      any
      federal, state and local withholding tax requirements.

     

    6.5  No
      Right to Employment. Nothing in the Plan or in any agreement
      entered into pursuant to it shall confer upon any participant the right to
      continue in the employment of Textron or a related company or affect any right
      which Textron or a related company may have to terminate the employment of
      such
      participant.

     

    6.6  Non-Uniform
      Determination.  The determinations under the Plan of the
      Committee or of any designate (including without limitation its determinations
      of the persons to receive grants or awards, the form, amount, timing and payment
      of such grants or awards, the terms and provisions of such grants or awards,
      and
      the establishment of Performance Measures or Performance Targets) need not
      be
      uniform and may be made by it selectively among persons who receive, or are
      eligible to receive, awards under the Plan, whether or not such persons are
      similarly situated.

     

    6.7  No
      Rights as Shareholders.  Recipients of grants or awards
      under the Plan shall have no rights as shareholders of Textron unless and until
      certificates for shares of Common Stock are issued to them, except for such
      voting rights and dividend rights as may be provided for in a Restricted Stock
      Award Agreement.

     

    
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    6.8  Related
      Company.  As used in the Plan, “related company” means
      any corporation in which Textron at the time in question owns, directly or
      indirectly, stock possessing 50 percent or more of the total combined voting
      power of all classes of stock and any corporation which at the time in question
      owns, directly or indirectly, a similar interest in Textron.

     

    6.9  Adjustments
      for Certain Changes.  (a) The aggregate number of shares
      of Common Stock and of Restricted Stock available for grant under the Plan,
      the
      number of shares of Common Stock covered by each outstanding Option or award
      of
      Restricted Stock and the price per share thereof, and the maximum number of
      Options or shares of Restricted Stock that can be awarded to any eligible
      employee shall all be proportionately adjusted for an increase or decrease
      in
      the number of issued shares of Common Stock resulting from a stock split, stock
      dividend or any other increase or decrease in such shares effective without
      receipt of consideration by Textron.

     

    (b)           The
      Committee may, in its discretion and for purposes of determining whether
      Performance Measures or Performance Targets have been met, equitably restate
      Textron’s earnings per share, net operating profit, return on equity or any
      other standard utilized in establishing the Performance Measures or Performance
      Targets in order to take into account the effect, if any, of (1) acquisitions
      or
      dispositions of businesses by Textron, (2) extraordinary and non-recurring
      events, (3) a change in capitalization described in Section 6.9 (a), or (4)
      any
      change in accounting practices, tax laws or other laws or regulations that,
      in
      the opinion of the Committee, significantly affects the financial performance
      of
      Textron.

    


    6.10  Change
      in Control.  (a) Not withstanding any other provision of
      this Plan, in the event of a change in control as defined in Section
      6.10(b):

     

    (1)  each
      unexpired Option shall be exercisable, beginning immediately, as to all
      remaining shares subject to the Option and

     

    (2)  each
      share of Restricted Stock subject to an outstanding grant shall become
      immediately vested and all restrictions on transferability (except those as
      shall be imposed by applicable law) shall be removed.

     

    (b)           For
      purposes of this Plan, a “Change in Control” shall occur if (i) any “person” or
“group” (within the meaning of Sections 13 (d) and 14 (d)(2) of the Securities
      Exchange Act of 1934, as amended (the “Act”)) other than Textron, any “person”
who on April 27, 1994 was a director or officer of Textron, any trustee or
      other
      fiduciary holding Common Stock under an employee benefit plan of Textron, or
      related company, or any corporation which is owned, directly or indirectly,
      by
      the stockholders of Textron in substantially the same proportions as their
      ownership of Common Stock, is or becomes the “beneficial owner” (as defined in
      Rule 13d-3 under the Act) of more than thirty percent (30%) of the then
      outstanding voting stock of Textron, or (ii) during any period of two
      consecutive years, individuals who at the beginning of such
      period constitute the Board (and any new director whose election by the Board
      or
      whose nomination for election by Textron’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 a majority thereof, or (iii) the shareholders of Textron approve
      a
      merger or 

    
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    consolidation
      of Textron with any other corporation, other than a merger or consolidation
      which would result in the voting securities of Textron outstanding immediately
      prior thereto continuing to represent (either by remaining outstanding or by
      being converted into voting securities of the surviving entity) more than fifty
      percent (50%) of the combined voting power of the voting securities of Textron
      or such surviving entity outstanding immediately after such merger or
      consolidation, or (iv) the shareholders of Textron approve a plan of complete
      liquidation of Textron or an agreement for the sale or disposition by Textron
      of
      all or substantially all of Textron’s assets.

    


    6.11  Amendment
      or Termination of the Plan.  The Board, without further
      approval of the shareholders, may at any time terminate the Plan or any part
      thereof and may from time to time amend the Plan as it may deem advisable
      including with respect to Incentive Options any changes deemed necessary or
      desirable to comply with Section 422 and any regulations thereunder; provided,
      however, that without shareholder approval, the Board may not (a) increase
      the
      aggregate number of shares of Common Stock which may be issued under the Plan
      (other than increases permitted under Section 6.9(a)) or (b) extend the period
      during which an Incentive Option may be exercised beyond ten
      years.  Termination or amendment of the Plan shall not, without the
      consent of the individual, affect any right of such individual (including
      without limitation any right under Section 6.10) under an award previously
      granted.

     

    6.12  Compliance
      with Code Section 162(m).  At all times when Code
      Section 162(m) is applicable, all awards under this Plan shall comply with
      the
      requirements of Code Section 162(m); provided, however, that in the event the
      Committee determines that such compliance is not desired with respect to any
      award or grant under the Plan, then compliance with Code Section 162(m) shall
      not be required.  In addition, in the event that changes are made to
      Section 162(m) to permit greater flexibility with respect to awards or grants
      available under the Plan, the Committee may, subject to this Article VI, make
      adjustments it deems appropriate.

     

    6.13  Compliance
      with Code Section 409A.  The Plan is intended, and shall
      be interpreted, to provide compensation that is exempt from Code Section 409A
      under the short-term deferral rule (unless a participant makes a valid deferral
      election under a separate plan).  Textron does not warrant that the
      Plan will comply with Code Section 409A with respect to any participant or
      with
      respect to any payment, however.  In no event shall Textron; any
      related company; any director, officer, or employee of Textron or a related
      company; or any member of the Committee be liable for any additional tax,
      interest, or penalty incurred by a participant as a result of the Plan’s failure
      to satisfy the requirements of Code Section 409A, or as a result of the Plan’s
      failure to satisfy any other requirements of applicable tax laws.

     

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