exv10w1h






Exhibit 10.1 H









Notice of Grant of Performance Share Units 

and Performance Share Unit Agreement




 





	 	 	 
	«First» «Last»

	 	PSU No.: «PSU_Grant_»
	«Addr1»

	 	Plan: 2007
	«Addr2»

	 	ID: «EMPID»
	«City», «State» «ZIP» «Country»

	 	Location: Corporate





 




Effective «Grant_Date», pursuant to the 2007 Long-Term Incentive Plan (the “Plan”), you have been
granted «PSU» Performance Share Units, which constitute the right to receive, if earned pursuant to
their terms, the cash equivalent of a number of shares of Common Stock of Textron Inc. determined
by a formula and valued as provided in the Performance Share Unit Terms and Conditions (2/2009).



This grant is governed by the Performance Share Unit Terms and Conditions (2/2009) and the Plan
(both of which are available on the Textron Enterprise Intranet) and is subject to the Performance
Share Unit Non-Competition Agreement (2/2009 version) attached hereto.



The Performance Period is the period beginning with Fiscal Year 2009 and ending with Fiscal Year
2011. Separate performance measures will be established for each fiscal year within the
Performance Period, and the performance measures for each fiscal year will apply to one third of
the Performance Share Units granted for the Performance Period. The Committee has discretion to
reduce the number of units earned for annual performance in each fiscal year. In determining
whether to reduce the number of units earned for annual performance in each fiscal year, the
Committee expects to apply guidelines based on cumulative performance for all three fiscal years in
the Performance Period; but the Committee has discretion to make a downward adjustment that is
larger or smaller than the reduction indicated in the guidelines.



The attached document «PSU_Grant_» shows the performance measures and units you can earn based on
annual performance for Fiscal Year 2009, which apply to one third of the Performance Share Units
granted to you in this award. Performance measures and units you can earn for Fiscal Year 2010 and
Fiscal Year 2011 will be established and communicated to you during the first 90 days of each
fiscal year.



The attached document also shows the guidelines that the Committee expects to follow in determining
whether to reduce the number of units earned each year based on performance for all three fiscal
years in the Performance Period. If the Committee elects to make a reduction, the reduction would
apply at the end of the Performance Period to all of the units you have earned in each fiscal year
during the Performance Period. As a result, any payout you receive at the end of the Performance
Period would be based in part on annual performance and in part on performance for the entire
Performance Period. The Committee has discretion to make a downward adjustment larger or smaller
than the reduction indicated in the attached guidelines.




 









 







The cash value of all PSUs will be paid (to the extent earned) following the end of the Performance
Period, before March 15. Accordingly, PSUs earned based on annual performance in the first or
second year of the Performance Period will be reduced, at the Committee’s discretion, at the end of
the third year of the Performance Period, and will not be paid until the 21/2 month period following
the third year of the Performance Period. All PSUs, including PSUs earned based on annual
performance in the first or second year of the Performance Period, remain subject to forfeiture
until the end of the Performance Period as provided in the Performance Share Unit Terms and
Conditions (2/2009).



By your signature and the Company’s signature below, you and the Company agree that this grant is
governed by the attached Performance Share Unit Terms and Conditions (2/2009) and the Plan, both of
which are available on the Textron Enterprise Intranet. In addition, you agree that this grant is
subject to the Performance Share Unit Non-Competition Agreement (2/2009 version) attached hereto,
the terms of which are fully incorporated herein.




TEXTRON INC.

 





	 	 	 	 	 
	By:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	Date
	 
	 	 	 	 
	Agreed by:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	Date






Please retain a copy of this signed agreement and return the original to

your Human Resources Department within 30 days of receipt of this document.




 









 








Performance Share Units

2009 — 2011 Award Period

«PSU_Grant_»




Annual Performance Measures for Fiscal Year 20[ ]: 

Applicable to One Third of Performance Share Units




Detail of Fiscal Year 20[ ] Performance Measures for each Component




	 	 	 	 	 	 	 	 	 
	 	 	 	 	Performance	 	% of Units	 	Units for
	Measure	 	Weighting	 	vs. Target	 	Earned	 	Component
	 

	 	 
	 	 
	 	 	 	 






	•	 	Intermediate performance between the minimum and maximum levels specified earns a
corresponding percentage of Performance Share Units (PSUs) for each component.
	 
	•	 	PSUs earned for the fiscal year equal one third of the units granted times the percentage
earned based on performance and targets identified above.
	 
	•	 	PSUs earned for the fiscal year are subject to reduction, at the Committee’s discretion,
based on performance for all three fiscal years in the Performance Period.
	 
	•	 	All PSUs are paid in cash, to the extent earned, following the end of the Performance
Period, before March 15. Accordingly, PSUs earned (subject to reduction) in the first or
second year of the Performance Period will not be paid until the 21/2 month period following the
third year of the Performance Period.
	 
	•	 	All PSUs, including PSUs earned (subject to reduction) in the first or second year of the
Performance Period, remain subject to forfeiture until the end of the Performance Period as
provided in the Performance Share Unit Terms and Conditions (2/2009).
	 
	•	 	The cash-out value of each PSU earned is equal to the average closing share price of
Textron common stock during the first 10 trading days of the fiscal year immediately following
the end of the Performance Period. Thus, PSU payouts are correlated to both financial and
share price performance over the measurement period.




 









 











Performance Share Units

2009 — 2011 Award Period

«PSU_Grant_»




Guidelines for Discretionary Performance Reduction

for 2009 — 2011 Award Period: 

Applicable to All Performance Share Units




PSU Reduction Factor Based on Performance for 2009 — 2011




	 	 	 	 
	Performance for 2009 - 2011:	 	 	 
	3-Year Performance Measure[s]	 	 	Award Adjustment
	 
	 	 	 






	•	 	Intermediate performance between the minimum and maximum levels specified might earn a
corresponding reduction.
	 
	•	 	The Committee may make a discretionary reduction in the Performance Share Units (PSUs)
earned based on annual performance for each fiscal year in the Performance Period. The
Committee expects to reduce the PSUs using the guidelines shown above; but the Committee has
discretion to make a larger or smaller downward adjustment.
	 
	•	 	All PSUs are paid in cash, to the extent earned, following the end of the Performance
Period, before March 15. Accordingly, PSUs earned (subject to reduction) in the first or
second year of the Performance Period will not be paid until the 21/2 month period following the
third year of the Performance Period.
	 
	•	 	All PSUs, including PSUs earned (subject to reduction) in the first or second year of the
Performance Period, remain subject to forfeiture until the end of the Performance Period as
provided in the Performance Share Unit Terms and Conditions (2/2009).
	 
	•	 	The cash-out value of each PSU earned is equal to the average closing share price of
Textron common stock during the first 10 trading days of the fiscal year immediately following
the end of the Performance Period. Thus, PSU payouts are correlated to both financial and
share price performance over the measurement period.




 









 











TEXTRON INC.

TEXTRON 2007 LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE UNIT TERMS AND CONDITIONS

(2/2009)

____________________





	•	 	Pursuant to the 2007 Long-Term Incentive Plan (the “Plan”), Textron has awarded to
executive the number of Performance Share Units set forth on the applicable Notice of Grant
signed by Textron and Grantee on the terms and conditions herein set forth. Each Performance
Share Unit constitutes the right to receive cash equal to the fair market value of one share
of Common Stock of Textron Inc. for each Performance Share Unit earned by the executive, as
determined in accordance with the Plan, the Notice of Grant, the Performance Share Unit
Non-Competition Agreement (2/2009), and these Performance Share Unit Terms and Conditions
(2/2009). Performance Share Units earned for the Performance Period are based on annual
performance for each fiscal year in the Performance Period and may be reduced based on
performance for the entire Performance Period. The earned Performance Share Units payable to
the executive in accordance with the provisions of this agreement shall be paid solely in cash
based on the fair market value of the Common Stock (determined based on the average of the
closing prices of Textron’s common stock, as reported on the New York Stock Exchange, for the
first ten trading days immediately following the end of the Performance Period).
	 
	•	 	When the applicable Performance Period ends, Textron will issue to the executive cash equal
to the aggregate value of the Performance Share Units earned by the executive, reduced by the
amount needed to satisfy required statutory minimum withholding taxes. The cash payment shall
be made following the end of the Performance Period, before March 15.
	 
	•	 	If the executive’s employment with Textron shall terminate for “Cause,” all Performance
Share Units awarded to the executive for which the applicable Performance Period has not ended
shall be forfeited (including, but not limited to, Performance Share Units that have already
been earned based on annual performance during a fiscal year in the Performance Period).
	 
	•	 	Except as otherwise provided herein, the executive shall forfeit outstanding Performance
Share Units (including, but not limited to, Performance Share Units that have already been
earned based on annual performance during a fiscal year in the Performance Period) if the
executive’s employment with Textron ends for any reason prior to the end of the Performance
Period applicable to such Performance Share Units, provided that if the executive’s employment
ends (other than for Cause) prior to such date because of “Disability,” death or after the
executive has become eligible for “Early or Normal Retirement,” and if the executive has been
employed by Textron for at least one year after the beginning of the Performance Period, the
executive or the executive’s estate will receive a cash payment (subject to tax withholding)
at the end of the Performance Period for (1) the Performance Share Units actually earned for
any fiscal year that is completed before the executive’s employment ends, and (2) a “Pro-Rata
Portion” of the Performance Share Units for the fiscal year in which the executive’s
employment ends (to the extent that the financial performance goals applicable to the
Performance Share Units have been




 









 






	 	 	achieved upon the completion of such fiscal year), subject to a discretionary reduction, in
each case, based on performance for all three fiscal years in the Performance Period.
	•	 	Notwithstanding the above, the applicable Performance Period for the Performance Share
Units which may be paid pursuant to this Award shall end immediately upon a “Change in
Control” of Textron, as defined in the Plan. In such instance, Textron shall pay to the
executive (or to the executive’s estate in the event of the executive’s death prior to
payment), subject to tax withholding, (1) the value of any Performance Share Units actually
earned for any fiscal year that has already ended, and (2) the full value (assuming annual
performance at target levels) of the unearned Performance Share Units outstanding for any
fiscal year that has not yet ended, without discretionary reduction in either case for
performance in all three fiscal years in the Performance Period. The payment shall be made
within 30 days after the Change in Control, provided that the accelerated payment does not
violate Section 409A of the Internal Revenue Code. If the accelerated payment of the Award
would violate Section 409A of the Internal Revenue Code, the payment shall be made on the date
when the Performance Share Unit would have been paid if no Change in Control had occurred.
Note: Sale of a business unit usually does not constitute a Change in Control as defined in
the Plan.
	 
	•	 	The number of Performance Share Units awarded to the executive hereunder shall be equitably
adjusted in the event of a stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, or any other corporate event affecting the Common
Stock, as provided in the Plan, in order to preserve the benefits or potential benefits
intended to be made available to the Grantee.
	 
	•	 	Nothing in this document shall confer upon the executive the right to continue in the
employment of Textron or affect any right that Textron may have to terminate the employment of
the executive.
	 
	•	 	The Performance Share Units shall not be assignable or transferable by the executive.
	 
	•	 	The executive shall not have voting rights nor will the executive qualify for dividends
with respect to the Performance Share Units during the Performance Period.
	 
	•	 	The Performance Share Units shall be subject to the terms and conditions of the Plan in all
respects.





DEFINITIONS

“Cause” 



“Cause” shall mean: (i) an act or acts of willful misrepresentation, fraud or willful dishonesty
(other than good faith expense account disputes) by the executive which in any case is intended to
result in his or another person or entity’s substantial personal enrichment at the expense of
Textron; (ii) any willful misconduct by the executive with regard to Textron, its business, assets
or employees that has, or was intended to have, a material adverse impact (economic or otherwise)
on Textron; (iii) any material, willful and knowing violation by the executive of (x) Textron’s
Business Conduct Guidelines, or (y) any of his or her fiduciary duties to Textron which in either
case has, or was intended to


 









 






have, a material adverse impact (economic or otherwise) on Textron; (iv) the willful or reckless
behavior of the executive with regard to a matter of a material nature which has a material adverse
impact (economic or otherwise) on Textron; (v) the executive’s willful failure to attempt to
perform his or her duties or his or her willful failure to attempt to follow the legal written
direction of the Board, which in either case is not remedied within ten (10) days after receipt by
the executive of a written notice from Textron specifying the details thereof; or (vi) the
executive’s conviction of, or pleading nolo contendere or guilty to, a felony (other than (x) a
traffic infraction or (y) vicarious liability solely as a result of his position provided the
executive did not have actual knowledge of the actions or in actions creating the violation of the
law or the executive relied in good faith on the advice of counsel with regard to the legality of
such action or inaction (or the advice of other specifically qualified professionals as to the
appropriate or proper action or inaction to take with regard to matters which are not matters of
legal interpretation); No action or inaction should be deemed willful if not demonstrably willful
and if taken or not taken by the executive in good faith as not being adverse to the best interests
of Textron. Reference in this paragraph to Textron shall also include direct and indirect
subsidiaries of Textron, and materiality and material adverse impact shall be measured based on the
action or inaction and the impact upon, and not the size of, Textron taken as a whole, provided
that after a Change in Control, the size of Textron, taken as a whole, shall be a relevant factor
in determining materiality and material adverse impact.




“Performance Period” 



For the purposes of this grant, the Performance Period means the period of three fiscal years
identified in the Notice of Grant.




“Early or Normal Retirement” 



“Early retirement” with Textron is defined as attainment of age 60 or the completion of 20 years of
vesting service or the attainment of age 55 with the completion of 10 years of vesting service.
“Normal retirement” with Textron is age 65.




“Disability” 



“Disability” shall mean, for purposes of this Award, the inability of the executive to engage in
any substantial gainful activity due to injury, illness, disease, bodily or mental infirmity which
can be expected to result in death or is expected to be permanent. An individual shall not be
considered disabled unless executive furnishes proof of the existence thereof. Textron may 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.




“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. An executive must be employed by Textron
for a minimum of one year after the beginning of the Performance Period before pro-rata Performance
Share Units may be paid. The Pro-Rata Portion shall apply to one third of the Performance Share
Units granted to the executive, shall be payable to an executive only to the extent that the
financial performance goals for


 









 






the fiscal year are satisfied, and shall be subject to a discretionary reduction at the end of the
Performance Period based on performance for all three fiscal years in the Performance Period.



Example: On March 1, 2009, an executive was granted 6,000 Performance Share Units constituting the
right to receive the cash equivalent value of 6,000 shares to be paid (to the extent earned)
following completion of the 2009-2011 Performance Period. The annual performance goals for each
fiscal year during the Performance Period are applicable to 2,000 of the executive’s Performance
Share Units.



The performance during 2009 was sufficient to earn 100% of the applicable Performance Share Units
for that fiscal year. The executive terminates employment with Textron on August 16, 2010, after
having attained age 55 with the completion of 10 years of vesting service.



Because the executive’s age and years of service qualify as ‘early retirement’ and the executive
was employed by Textron for one year after the beginning of the performance period, the executive
is eligible to receive the cash equivalent of the 2,000 Performance Share Units actually earned in
2009, plus a pro-rata portion of the 2,000 Performance Share Units available for 2010 (provided
that the Performance Share Units for 2010 are earned pursuant to their terms), subject to a
discretionary reduction based on performance for the entire Performance Period. Assuming that the
financial performance goals for 2010 are also satisfied at the 100% level, the number of
Performance Share Units earned for 2010 would be calculated as follows:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Number of Complete	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	or Partial Months	 	 	 	 	 	 	 	 
	Fiscal Year	 	PSUs Available for	 	 	 	Employed by Textron	 	 	 	 	 	 	 	 
	of	 	2010 (one third of	 	 	 	During the 2010	 	 	 	Number of Months in	 	 	 	 
	Termination	 	total grant)	 	 	 	Fiscal Year	 	 	 	the Fiscal Year	 	 	 	Pro-Rata Portion
	2010

	 	 	2,000	 	 	x
	 	 	8	 	 	÷
	 	 	12	 	 	=
	 	1,333 units
(subject to
adjustment — paid,
to the extent
earned, in early
2012)





At the end of 2011, the cumulative performance for the entire 2009-2011 Performance Period
indicates a 17% reduction in the executive’s performance units under the discretionary reduction
guidelines. In these circumstances, the Committee expects to reduce the executive’s 3,333 PSUs by
17%, although the Committee has discretion to make a larger or smaller downward adjustment. If the
Committee elects to make a 17% reduction in the executive’s PSUs, the executive will be entitled to
receive a cash payment (during the first 21/2 months of 2012) equal to the value of 2,766 shares of
Textron common stock.




 









 








TEXTRON INC.

PERFORMANCE SHARE UNIT NON-COMPETITION AGREEMENT

(2/2009)



You have been granted Performance Share Units (“PSUs”) pursuant to the Textron 2007 Long-Term
Incentive Plan (the “Plan”). Textron grants Performance Share Units to attract, retain and reward
employees, to increase identification with Textron’s interests and the interests of Textron’s
shareholders, and to provide incentive for remaining with and enhancing the value of Textron over
the long-term. In consideration for granting Performance Share Units to you, please acknowledge
that you have read and agree to this Performance Share Unit Non-Competition Agreement by signing
the attached Notice of Grant of Performance Share Unit and Performance Share Unit 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 Grant of Performance
Share Unit and Performance Share Unit Agreement) while you are a Company employee, or within
two years after the termination of your employment, you do any of the following activities:






	 	(a)	 	engage in any business which competes with the Company’s business (as defined in
Paragraph 2) within the Restricted Territory (as defined in Paragraph 3); or
	 
	 	(b)	 	solicit customers, business or orders or sell any products and services (i) in
competition with the Company’s business within the Restricted Territory or (ii) for any
business, wherever located, that competes with the Company’s business within the
Restricted Territory; or
	 
	 	(c)	 	divert, entice or otherwise take away customers, business or orders of the
Company within the Restricted Territory, or attempt to do so; or
	 
	 	(d)	 	promote or assist, financially or otherwise, any firm, corporation or other
entity engaged in any business which competes with the Company’s business within the
Restricted Territory;






	 	 	then your right to receive all 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 earned and 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.
	 
	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 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 all 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 earned and 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.
	 
	5.	 	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 maintain the secrecy of such
information; that such information is the sole property of the Company or its suppliers or
customers and that any retention, use or disclosure of such information by you during your
employment (except in the course of performing your duties and obligations of employment with
the Company) or after termination thereof, shall constitute a misappropriation of the trade
secrets of the Company or its suppliers or customers. If you directly or indirectly
misappropriate any such trade secrets, then your right to receive all 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 earned and 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.	 	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.