tentwo.htm


    
 

    Exhibit
      10.2


    Notice
      of Grant of Stock Options

    and
      Option Agreement

    


    Non-Qualified
      Stock Options

     

    
      
        

      

 

    
      	 «Fname»
              «Lname» 	 Option
              No.:«	 NQ_No»
	 «Addr1» 	 Plan:	 2007
	 «Addr2»	 ID:	 «EMPID»
	 «Addr3» 	 Location:	 «Location»
	 «City»,
              «State»  «Zip»	 	                                                             
	 «Country»	 	 


    

       

                              

    
      
        

      
                  

    Effective
      (“Date of Grant”), pursuant to the 2007 Long-Term Incentive Plan (the “Plan”)
      you have been granted a Non-Qualified Stock Option to buy
«NQ_Shares» shares of Textron Inc. (the
“Company”) stock at <price> per share.  The
      total option price of the shares granted is
«NQ_Value».  This grant is subject to the
      Non-Qualified Stock Option Terms and Conditions (5/2007 version) and the Plan
      which are available on the Textron Enterprise Intranet and the Stock Option
      Non-Competition Agreement (5/2007 version) attached hereto.

    


    This
      Option will become exercisable with respect to the Shares, and will expire
      on
      the dates, shown below, subject to earlier expiration or termination as provided
      in the Terms and Conditions:

    


    
      	
              Shares

            	
              Date
                Exercisable

            	
              Expiration
                Date

            
	
              «NQ_Shares_V1»

            	
            	
            
	
              «NQ_Shares_V2»

            	
            	
            
	
              «NQ_Shares_V3»

            	
            	
            
	
              «NQ_Shares»

            	 	 


    

    


    


    By
      your
      signature and the Company’s signature below, you and the Company agree that
      these options are governed by Textron’s Non-Qualified Stock Option Terms and
      Conditions (5/2007 version) and the Plan which are available on the Textron
      Enterprise Intranet.  In addition, you agree that this grant is
      subject to the Stock Option Non-Competition Agreement (5/2007 version), which
      is
      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

    NON-QUALIFIED
      STOCK OPTION TERMS AND CONDITIONS

    


    (5/2007)

     

      
        

      

    

    


    


    1.  
Grant
      of
      Options.  Pursuant to instructions of the Organization and
      Compensation Committee (the "Committee") of the Board and pursuant to the 2007
      Long-Term Incentive Plan (the “Plan”), Textron has granted to Optionee the right
      and option (the "Option") to purchase all or any part of the number of shares
      of
      Common Stock (the "Option Shares") set forth on the applicable Notice of Grant
      signed by Textron and Optionee (the “Notice of Grant”) on the terms and
      conditions herein set forth.

    


    2.   
Purchase
      Price. The purchase price of the Option Shares shall be the price set forth
      on the Notice of Grant, which is the fair market value of a share of Common
      Stock on the Date of Grant.

    


    3.  
Term
      of Option and
      Period of Exercise.  The Option shall expire on the date set
      forth on the Notice of Grant (ten years from the Date of Grant), subject to
      earlier expiration or termination as hereinafter provided.  Except as
      provided in Section 6(c) or (d) or Section 9 hereof, the Option may not be
      exercised for one year from the Date of Grant; after one year from the Date
      of
      Grant, the Option may be exercised for up to one-third of the Option Shares;
      after two years from the Date of Grant, the Option may be exercised for up
      to
      two-thirds of the Option Shares; and after three years from the Date of Grant,
      the Option may be exercised as to all remaining Option Shares.  The
      Option shall not be exercisable for less than 50 Option Shares (or the remaining
      number of Option Shares if that number is less than 50) or after it shall have
      expired or terminated.

    


    4.  
Exercise
      of
      Option.  

    


    (a) 
Subject
      to these terms and
      conditions and the Stock Option Non-Competition Agreement entered into in
      consideration of  this Option, the Option may be exercised by written
      notice to Textron, at its principal office, at 40 Westminster Street,
      Providence, Rhode Island 02903, Attention:  Stock Plan Lead, Executive
      Rewards.  Such notice shall state the election to exercise the Option
      and the number of Option Shares in respect of which it is being exercised,
      and
      shall be signed by the person or person so exercising the
      Option.  Such notice shall be accompanied by payment of the full
      purchase price of said Option Shares, upon the receipt of which Textron shall
      issue and deliver as soon as practicable a certificate or certificates
      representing said Option Shares. The certificate or certificates for said Option
      Shares shall be registered in the name of the person or persons so exercising
      the Option  (or, if the Option shall be exercised by Optionee and if
      Optionee shall so request in  the notice exercising the Option, shall
      be registered in the name of Optionee and another person jointly, with right
      of
      survivorship) and shall be delivered as aforesaid to or upon the written order
      of the person or persons exercising the Option.  During the life of
      the optionee, an option shall be exercisable only by the optionee or by the
      optionee’s guardian or legal representative.  In the event the Option
      is being exercised pursuant to Section 6(d) by any person or persons other
      than
      Optionee, the notice shall be accompanied by appropriate proof of the right
      of
      such person or persons to exercise the Option.  All Option Shares
      issued as provided herein will be fully paid and
      nonassessable.  Textron shall pay all original issue taxes, if any,
      with respect to the issuance thereof.

    


    (b) 
The
      purchase price of the
      Option Shares shall be paid in full at the time of exercise at the election
      of
      Optionee (1) in cash, (2) by tendering to Textron shares of Common Stock then
      owned by Optionee having a fair market value equal to such purchase price on
      the
      date of exercise or (3) partly in cash and partly in shares of Common Stock
      valued at fair market value on the date of exercise.  To the extent
      that payment is made in shares of Common Stock, the number of shares shall
      be
      determined by dividing the amount of such payment by the fair market value
      of a
      share of Common Stock on the date of payment.  Except as provided in
      Section 6, the Option may not be exercised unless Optionee was an optionee
      of
      either Textron or a Subsidiary at all times from the Date of Grant through
      the
      date of exercise. Optionee
      shall have no rights as a shareholder of Textron unless and until a certificate
      for shares of Common Stock shall have been issued to Optionee.

    


    5.  
Non-Assignability
      of Option.  The Option shall not be assignable or transferable by
      Optionee except by will or the laws of descent and distribution.

    


    6.  
Termination
      of
      Employment.  

    


    (a) 
If
      Optionee's employment
      with Textron or a Subsidiary shall terminate for cause, all Option(s) held
      by
      the Optionee shall expire immediately.

    


    (b) 
If
      Optionee's employment
      with Textron or a Subsidiary shall terminate after Optionee has become eligible
      for normal or early retirement, and if Section 6(a) does not apply,
      Optionee shall have the right to exercise the Option within 36 months after
      termination to the extent the Option is exercisable at the time of
      exercise.  Early Retirement with Textron is defined as attainment of
      age 60, 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.

    


    (c) 
If
      Optionee's employment
      with Textron or a Subsidiary shall terminate as a result of Optionee's total
      disability, Optionee shall have the right to exercise the Option as to all
      unexercised Option Shares (whether or not the Option was fully exercisable
      at
      the time of termination of employment) until the expiration of its
      term.  For purposes of the foregoing sentence, "total disability"
      shall mean 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 Optionee 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.

    


    (d) 
If
      Optionee shall die while
      employed by Textron or a Subsidiary or while the Option is still exercisable
      under Section 6(b), (c) or (e), the Option may be exercised as to all
      unexercised Option Shares (whether or not the Option was fully exercisable
      at
      the time of death) within a period of one year from the date of Optionee's
      death
      by the executor or administrator of Optionee's estate or by the person or
      persons to whom Optionee shall have transferred such right by will or by the
      laws of descent and distribution.

    


    (e) 
If
      Optionee's employment
      with Textron and its related companies shall terminate for any reason not
      specified in Sections 6(a), (b), (c) or (d), Optionee shall have the right
      to
      exercise each Option granted to the Optionee within three months after
      Optionee's termination (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.  In no
      event, however, shall an option be exercisable under this Section 6(e) for
      six
      months from the Date of Grant.

    


    (f) 
Notwithstanding
      anything to
      the contrary in this Section 6, in no event shall the Option be exercisable
      after the expiration of its term.

    


    7.  
No
      Right to
      Employment.  Nothing in this document shall confer upon Optionee
      the right to continue in the employment of Textron or a Subsidiary or affect
      any
      right which Textron or a Subsidiary may have to terminate the employment of
      Optionee.

    


    8.  
Corporate
      Changes.  The number of Option Shares and the purchase price
      thereof shall both 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 Optionee.

     

    9.  
Change
      in
      Control.  In the event of a change in control of Textron as
      defined in Section 2(a) of the Plan, and except as otherwise determined by
      the
      Committee prior to the change in control, each unexpired Option shall be
      exercisable, beginning immediately, as to all remaining Option Shares subject
      to
      the Option. 

    


    10. 
Definition
      of Certain
      Terms.  Terms used but not defined herein shall have the meanings
      set forth in the Plan.

    


    11. 
Option
      Subject to
      Plan.  The Option is in all respects subject to the terms and
      conditions of the Plan as in effect from time to time; provided, however, that
      termination or amendment of the Plan (except amendments as required by technical
      corrections of the Code) shall not, without the consent of Optionee, adversely
      affect Optionee's rights under the Option.

    


    12. 
Non-Qualified
      Option.  The Option is a "Non-Qualified Option" as defined in the
      Plan and not an "incentive stock option" under Section 422A of the Internal
      Revenue Code of 1986, as it may be amended.

    


    13. 
      Administration.  Pursuant to Section 3(d) of the Plan, the
      Board at any time may designate one or more officers or committees of Textron
      to
      act in place of the Committee in making certain determinations under the
      Plan.

    


    14. 
Withholding
      Taxes.  Whenever Textron proposes or is required to issue or
      transfer Option Shares, Textron shall have the right to withhold or to require
      the optionee to remit to Textron an amount sufficient to satisfy any Federal,
      state and local withholding tax 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.

    


              15.  
      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 in 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. 

    



    TEXTRON
      INC.

     

     STOCK
      OPTION NON-COMPETITION AGREEMENT

     

    (5/2007)

     

    You
      have
      been granted a stock option (“Option”) pursuant to the Textron 2007 Long-Term
      Incentive Plan (“the Plan”).  Textron grants stock options 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 this Option to you, please acknowledge that you have read and agree
      to
      this Stock Option Non-Competition Agreement by signing the attached Notice
      of
      Grant of Stock Options and Option Agreement.

    Agreement
      regarding Your Stock Option Grant

    


    
      	
              1.

            	
              Forfeiture
                of unexercised options and required repayment if you engage in certain
                competitive activities

            


    

    If
      at any
      time during the term of this Option 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  (i)
      this Option shall terminate effective the date you enter into such activity,
      unless terminated sooner by operation of another term or condition of this
      Option or the Plan and (ii) provided this Option has been held by you for less
      than 5 years at the time of exercise, you are required to repay Textron an
      amount equal to any gains realized in any option exercise which occurs on the
      date beginning 180 days prior to the earlier of (a) your termination of
      employment or (b) the termination of this Option, or at any time after such
      date.  For purposes of this Agreement, the gain realized shall be
      equal to the difference between the fair market value of the stock on the date
      of the exercise and the Option strike price. 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 unexercised options and required repayment if you engage in certain
                solicitation
                activities

            


    

    If
      either
      during or any time after your employment with the Company, 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  (i) this Option shall terminate effective the date you enter
      into such activity, unless terminated sooner by operation of another term or
      condition of this Option or the Plan and (ii) provided this Option has been
      held
      by you for less than 5 years at the time of exercise, you are required to repay
      Textron an amount equal to any gains realized in any Option exercise which
      occurs on the date beginning 180 days prior to the earlier of (a) your
      termination of employment or (b) the termination of this Option, or at any
      time
      after such date.  For purposes of this Agreement, the gain realized
      shall be equal to the difference between the fair market value of the stock
      on
      the date of the exercise and the Option exercise price.

     

    
      	
              5.

            	
              Forfeiture
                of unexercised options 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, either during or any time after
      your employment with the Company, you directly or indirectly misappropriate
      any
      such trade secrets, then  (i) this Option shall terminate effective
      the date you enter into such activity, unless terminated sooner by operation
      of
      another term or condition of this Option or the Plan and (ii) provided this
      Option has been held by you for less than 5 years at the time of exercise,
      you
      are required to repay Textron an amount equal to any gains realized in any
      Option exercise which occurs on the date beginning 180 days prior to the earlier
      of (a) your termination of employment or (b) the termination of this Option,
      or
      at any time after such date.  For purposes of this Agreement, the gain
      realized shall be equal to the difference between the fair market value of
      the
      stock on the date of the exercise and the Option exercise price.

     

    
      	
              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.