Document:

donnellyhangeragreement.htm

Exhibit 10.1

 

 

 

AGREEMENT

 

 

This Agreement (the “Agreement”), made and entered
into as of the 1st day of May, 2009, by and between Textron Inc. (hereinafter called “Textron”) and Scott C. Donnelly (hereinafter called “Licensee”) and their respective successors and assigns,

 

WITNESSETH:

 

WHEREAS, Textron leases approximately 85,390 square feet
of space from the Rhode Island Airport Corporation (“RIAC”) pursuant to a Lease dated June 19, 1996 (the “Prime Lease”); and

 

WHEREAS, Licensee desires to store his Cessna 206 aircraft
in a portion of the space covered by the Prime Lease, and Textron is willing to permit same;

 

NOW, THEREFORE, in consideration of the premises and the
agreements contained herein, and intending to be legally bound hereby, Textron and Licensee agree as follows:

 

1.           DESCRIPTION OF PROPERTY

 

1.1           Description
of Property.  Textron, in consideration of the fees, covenants and agreements to be paid, kept and performed by Licensee as hereinafter provided, and subject to the terms and conditions set forth in this Agreement, does hereby permit Licensee to store his Cessna 206 piston-engined aircraft and equipment and other items necessary for the support of the operation of such aircraft, within the hangar commonly known as “Hangar 1” (the “Premises”) in the City of Warwick, Rhode
Island, located at T.F. Green Airport, Rhode Island and the improvements thereon, together with the use, in common with Textron and others, of any road, driveway, or passage way open or proposed, in front of or adjoining or giving access to said tract piece or parcel of land. Licensee acknowledges that the aircraft described above shall be placed in such area in the Premises as Textron personnel shall direct.

 

1.2           No
Representations.  Licensee hereby acknowledges that Textron has made no representations as to the condition of the Premises or any facilities thereon and is licensing the Premises as is.  Licensee further acknowledges that he has inspected the Premises for normal defects and that Licensee relies solely on said inspection.

 

2.           TERM

 

The term of this Agreement shall commence on May 1,
2009 (the "Commencement Date"), and shall continue on a month-to-month basis until terminated by 30 day written notice by either Textron or Licensee to the other (the “Term”).  Textron shall further have the right to terminate this Agreement for default as provided herein.

 

3.           RENT

 

3.1           Monthly
Fee.  Licensee will pay to Textron as a fee (the “Monthly Fee”) for the use of the Premises during the Term the sum of $450 each month.

 

3.2           Payment
of Fees.  Textron shall invoice Licensee at the beginning of each calendar month for the Monthly Fee, which shall be due and payable by the 25th day of such month, provided however that at Licensee’s option to be exercised from time to time by notice to Textron, Textron shall invoice Licensee in advance for up to six months of Monthly Fees.  Checks shall be made payable to Textron Inc. and forwarded
to Textron 

 

 

 

 

 

 

 

 

Inc., 40 Westminster Street, Providence, RI 02903, Attention: Wendy Doyle, Real Estate Administrator, or to such other address or addresses as Textron may hereafter advise Licensee in writing, without deduction or set-off.  Upon termination of this Agreement by Licensee other than at the end of a month, no refund of any portion
of the applicable Monthly Fee shall be made by Textron.

3.3           Delinquency
Charges.  If Textron has not received the full amount of any Monthly Fees, or other charges due and payable to Textron under this Agreement, by the end of 25 calendar days after the date it first became due, Licensee shall pay interest equal to one (1%) percent per month or the maximum rate permitted by law, whichever is less, with respect to such unpaid amounts.

 

4.           USE

 

The Premises are licensed for use solely by Licensee to
house his aircraft and for no other purpose.  This use may not vary without the prior written consent of Textron.  Said consent shall not be unreasonably withheld.  No aircraft maintenance and no charter operation shall be permitted on the Premises.

 

5.           UTILITIES

 

  Textron shall pay all costs for water, gas,
electricity, sewer charges, telephone and other utilities used or consumed upon the Premises as and when the charges for the same become due and payable.  Further, Textron shall maintain, at its sole cost and expense the water, gas, boiler, sewer and electric system on or about the Premises.

 

6.           TERMINATION; REMOVAL OF LICENSEE’S
PROPERTY

 

Upon the termination or expiration of this Agreement for
whatsoever cause, Licensee shall have the privilege and right to remove and upon request of Textron shall remove, at his own expense, Licensee’s aircraft.    Any damage to the Premises caused by such removal shall be repaired at Licensee’s expense.  Licensee shall have thirty (30) days after termination to remove his property and/or repair any damage.

 

7.           REPAIRS; LIENS

 

7.1           Maintenance
of Premises.  Textron shall maintain the Premises in good order, repair and condition and shall make all repairs (structural and non-structural, including repair or replacement of the roof), as may be necessary to keep the Premises in good condition. Licensee shall reimburse Textron for the cost of any repairs made necessary by the negligence or intentional misconduct of Licensee or his invitees.

 

7.2.           Liens.  Licensee
shall promptly pay all amounts owing to his contractors and materialmen, so as to minimize the possibility of a lien attaching to the Premises, and should any such lien be made or filed, Licensee shall bond or indemnify against or discharge the same within ten (10) days after written request by Textron.

 

8.           ACCESS TO PREMISES

 

No keys or cards for access to Hangar 1 will be issued to
guests or invitees of Licensee, except as may be determined by Textron, in its sole discretion.  Access to the Premises will be provided during normal business hours based on requests by Licensee to designated employees of Textron.  The primary designated employee of Textron shall be Mick Chagnon.  To the extent that Textron is required to pay overtime to Textron employees to enable Licensee to have access to the Premises at such times as he 

 

 

 

 

 

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requests, Licensee shall reimburse Textron for such hours of overtime as Textron is obligated to pay its employees at the applicable overtime rate actually paid by Textron.  Licensee shall return any keys and cards promptly upon Textron’s request at any time.

 

9.           COMPLIANCE WITH LAWS AND AIRPORT
REGULATIONS

 

9.1           Compliance
with Laws.  During the term of this Agreement, Textron and Licensee, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions, boards and officers, including but not limited to all environmental laws, any regulations national or local Board of Fire Underwriters, or any other body exercising functions similar to those of any of the foregoing, and all rules and
regulations of Textron which may be applicable to the Premises and Textron’s and Licensee’s respective use thereof.   Textron and Licensee shall each likewise comply with the requirements of all policies of insurance at any time in force with respect to the Premises and Textron’s and Licensee’s respective operations thereon.

 

9.2           Hazardous
Substances.  Neither Textron nor Licensee shall cause or permit the presence, use, discharge, disposal, storage, release, or threatened release of any Hazardous Substances, pollutants or contaminants on or in the Premises and adjoining area (the “Property”), except in compliance with applicable law and in quantities necessary to the operation and maintenance of the Premises, or in the case of Licensee, maintenance or operation of his aircraft.  Neither Textron nor Licensee
shall do anything affecting the Property that is in violation of any Environmental Law, nor shall either Textron or Licensee allow anyone else to do anything affecting the Premises that is in violation of any Environmental Law.

 

9.3           Notice
of Investigations.  Each of Textron and Licensee shall promptly give the other written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which such party has knowledge.  If either Textron or Licensee learns, or is notified by any governmental regulatory authority, that any removal or other remediation of any Hazardous Substance affecting
the Property is necessary, the party responsible for causing or permitting the presence, use, discharge, disposal, storage, release, or threatened release of such Hazardous Substance shall promptly take all necessary remedial actions in accordance with Environmental Law.

 

9.4           Definition
of “Hazardous Substances.”  As used in this paragraph “Hazardous Substances” are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or urea, formaldehyde, polychlorinated biphenyls, and radioactive materials.  As used in this paragraph, “Environmental
Law” means federal laws, , rules, regulations, ordinances, orders, permits, licenses, judgments or decrees, or the laws, rules, regulations, ordinances, orders, permits, licenses, judgments or decrees of the jurisdiction where the Property is located that relate to health, safety, wastes, Hazardous Substances or environmental protection.

 

10.           INDEMNIFICATION; INSURANCE

 

10. 1       Indemnification.  Licensee
shall indemnify, defend and hold Textron harmless from and against any and all loss, cost, damage and expense, including reasonable attorneys' fees, resulting from any claim for damage or injury to any person or property arising out of or in any way connected with (a) Licensee's use of, and ingress to and egress from, the Premises and adjoining areas, (b) Licensee’s aircraft operations,

 

 

 

 

 

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or (c) any act or omission of Licensee, his  guests or invitees with respect to this Agreement.  In the event any action or proceeding is brought against Textron by reason of any such claim, Licensee, upon notice from Textron, shall defend the same at Licensee's expense.  Subject to the provisions of Section
17 (Notices), Textron shall indemnify and hold Licensee harmless from and against any and all loss, cost, damage and expense, including reasonable attorneys' fees, resulting from any claim for damage or injury to any person or property arising out of or in any way connected with (a) Textron’s use and occupancy of, and ingress to and egress from, the Premises and adjoining areas,  (b) Textron’s aircraft operations, or (c) any act or omission of Textron, its employees, agents, guests or invitees
with respect to this Agreement.  In the event any action or proceeding is brought against Licensee by reason of any such claim, Textron, upon notice from Licensee, shall defend the same at Textron’s expense.

 

10.2           Insurance
to be Maintained by Licensee.  During the Term, Licensee shall, at his expense, carry and maintain (a) a general liability insurance policy or policies or other, similar form of public liability insurance with a combined single limit of not less than $1,000,000 insuring against all liability of Licensee arising out of or in connection with Licensee's use or occupancy of the Premises; (b) Automobile Liability Insurance with a combined single limit of not less than $1,000,000; (c) aircraft liability
and airport liability insurance with a combined single limit of not less than $5,000,000; and (d) aircraft hull coverage in an amount not less than the value of his aircraft housed at the Premises.  The insurance policy required by clause (a) of the first sentence of this Section 10.2 shall contain contractual liability coverage which specifically insures Licensee's indemnities contained in this Lease.  The insurance policy or policies required by clause (b) of the first sentence of this Section
10.2 shall name Textron as an additional insured.  The insurance policy or policies required by clause (d) of the first sentence of this Section 10.2 shall name Textron as an additional insured with respect to personal injury, bodily injury, including death, and property damage claims arising from Licensee’s aircraft operations. Each policy shall provide that (1) not less than thirty (30) days' prior written notice shall be given to Textron in the event of any material modification in the terms
of such policy or of the cancellation or non-renewal thereof with respect to any liability or loss created by or associated with Licensee or his aircraft.  Such insurance coverage may, however, be afforded by a "blanket" policy or policies maintained by Licensee with respect to all or a portion of Licensee's activities on leased or owned properties. The amount of such required insurance coverage shall not limit Licensee's obligations under this Lease.  Textron makes no representation whatsoever
that the amount of such insurance coverage is adequate to protect Licensee from any liability or damage to which Licensee may become exposed.  Licensee shall provide to Textron a certificate of insurance including any necessary endorsements to Licensee’s insurance policies prior to commencement of the Term hereof , and shall furnish Textron with evidence of renewal of the policies not less than twenty (20) days before expiration of the terms of the policies.  In the event Licensee provides
a certificate of insurance, such certificate shall contain sufficient information for Textron to determine if the underlying policy complies with provisions of this Lease.  Licensee shall assume the risk of loss or damage to his property on the Premises, and at all times during the Term, Licensee shall insure his personal property on the Premises against loss or damage by fire, including extended coverage, and theft.

 

10.3           Insurance
to be Maintained by Textron. During the Term, Textron shall, at its expense, carry and maintain (a) Workers Compensation and Employer's Liability Insurance; (b) a commercial general liability insurance policy or policies or other, similar form of public liability insurance with a combined single limit of not less than $1,000,000 insuring against all liability of Textron, its employees and representatives, arising out of or in connection with Textron's use or occupancy of the Premises; (c) Automobile Liability
Insurance with a combined single limit of not less than $1,000,000; (d) aircraft liability

 

 

 

 

 

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insurance with a combined single limit of not less than $100,000,000; (e) aircraft hull coverage in an amount not less than the value of Textron’s aircraft housed at the Premises. The insurance policy required by clause (b) of the first sentence of this Section 10.3 shall contain contractual liability coverage, which specifically
insures Textron’s indemnities contained in this Lease.  Such insurance coverage may be afforded by a "blanket" policy or policies maintained by Textron with respect to all or a portion of Textron's activities on leased or owned properties. Textron shall provide a certificate of insurance to Licensee prior to commencement of the Term hereof.

 

10.4           Insurance
Policy Deductible.  Notwithstanding any other provisions of this Agreement, in the event of any loss caused by the negligence or misconduct of Licensee, Licensee shall be obligated for and Licensee shall pay to Textron the deductible portion of any insured recovery Textron otherwise would have been entitled to receive but for such deductible feature of the applicable insurance policy.

 

11.           DESTRUCTION OF PREMISES

 

In the event of fire or other casualty occurring during the Term which results in damage or destruction to the Premises, Textron or Licensee may terminate this Agreement by notice in writing to the other as of the date on which such fire or other casualty or taking occurs.

 

12.           SUBLETTING AND ASSIGNMENT

 

Licensee shall not assign nor in any manner transfer this
Agreement or any estate or interest therein, nor permit any use of the same other than by Licensee nor sublet the Premises or any part thereof, nor grant any license, concession or other right of occupancy of any portion of the Premises.

 

13.           LICENSEE’S COVENANTS

 

Licensee covenants and agrees as follows:

 

13.1           Payment
and Performance.  To perform promptly all of the obligations of Licensee set forth in this Agreement; to pay when due all fees and all charges which by the terms of this Agreement are to be paid by Licensee.

 

13.2           Cleanliness
of Premises.  To the extent his guests or invitees are present on the Premises, to clean up any mess caused by any such individual, to place all refuse, rubbish and debris in covered containers furnished by Textron and to comply with Textron’s reasonable rules in effect from time to time relating to maintenance and operation of the Premises.

 

13. 3          No
Waste.  Not to cause, suffer or permit strip or waste.

 

 14.           BREACH OR DEFAULT

 

14.1           Default.  If
Licensee shall be in default in the payment of fees or any part thereof or of other sums payable by Licensee hereunder at the times and places herein fixed for the payment thereof and said default shall continue ten (10) days (whether or not the payment of said fees shall have been demanded), or if default shall be made in any other of the covenants or provisions herein contained on the part of Licensee to be kept and performed and if such default shall continue for a period of ten (10) days after notice to Licensee
(or if such default cannot be cured within such 10 day period, Licensee has not commenced to cure default within such 10 day period), or if Licensee shall make

 

 

 

 

 

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an assignment for the benefit of creditors, or file a voluntary petition in bankruptcy or insolvency, or shall be adjudged bankrupt, or if the estate hereby created shall be deserted or vacated, then and in any of the said cases, not withstanding any license or waiver of any former breach of covenant or consent in a former instance, it
shall be lawful for Textron thereupon or at any time thereafter, during which such default, assignment, insolvency, legal proceedings, desertion, vacancy or neglect shall continue, or be in effect to terminate this Agreement and all of Licensee’s interest hereunder by giving written notice to Licensee of such termination and of the effective date thereof (and such notice having been given, this Agreement shall cease and expire on the date named therein), and/or, at Textron’s option, without demand
or notice, and without process of law to enter upon and into the Premises or any part thereof in the name of the whole, and to declare this Agreement at an end and in such case expel Licensee without being guilty of any manner of trespass without prejudice, however, to Textron’s claims for rent or other claims for breach of covenant hereunder, it being expressly understood and agreed that this Agreement shall not continue or inure to the benefit of any assignee, receiver or trustee in bankruptcy, excepting
at the option of Textron.

 

14.2           No
Relief from Obligations.  No such expiration or termination of this Agreement shall relieve Licensee of his liability and obligations under this Agreement, and such liability and obligations shall survive any such expiration or termination.

 

14.3           Interest,
Costs and Fees.  If Licensee shall breach or fail to perform any of the covenants or provisions of this Agreement, and such breach shall continue beyond the period as specified in 14.1, and such failure or breach shall cause Textron to incur any damages or expenses whatsoever, then and in that event such damages or expenses so incurred by Textron, with interest at the rate of one (1) percent per month, costs and reasonable attorney's fees shall be deemed to be additional fees hereunder and shall
be due from Licensee to Textron on the first (1st) day of the month following the incurring of such respective expenses.

 

15.           NO WAIVER

 

The failure of Textron to seek redress for violation of,
or to insist upon the strict performance of, any covenant or condition of this Agreement shall not be deemed a waiver of such violation nor prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of any original violation.  The receipt by Textron of fees with knowledge of the breach of any provision of this Agreement shall not be deemed to have been a waiver by Textron of such breach, or by Licensee, any such waiver shall not be valid unless
such waiver by in writing, signed by the party to be charged.  No consent or waiver, express or implied, by Textron to or of any breach of this Agreement or of any other agreement or duty between the parties shall be construed as a waiver or consent to or of any later breach of the same of any breach of any other provisions of this Agreement or other agreement or duty.

 

 

 

 

 

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16.           INSPECTIONS/MAINTENANCE

The parties acknowledge that Licensee intends to perform
inspections on the aircraft referred to in Section 1 above from time to time during the Term.  Licensee shall use his own contracted maintenance personnel for such purpose.   No Textron personnel shall perform repairs or maintenance on Licensee’s aircraft.  In addition, Licensee may from time to time use the flight planning facilities located in Hangar 1.  Notwithstanding any other provision of this Agreement to the contrary, Licensee agrees not to bring any
action against Textron based on any theory of liability, whether in tort or contract, based upon Licensee’s use of the aforementioned Textron facilities (including any gratuitous services that may from time to time be performed by Textron employees or agents); and Licensee shall indemnify, defend and hold Textron harmless from and against any and all loss, cost, damage and expense, including reasonable attorneys' fees, resulting from any claim for damage or injury to any person or property arising out of
or in any way connected with Licensee's use of such Textron facilities.  In the event any action or proceeding is brought against Textron by reason of any such claim, Licensee, upon notice from Textron, shall defend the same at Licensee's expense.

 

17.           NOTICES

 

17.1           Notices
to Licensee.  All notices to Licensee shall be in writing and shall be effective upon receipt after being sent by certified mail (return receipt requested) addressed to Licensee at 40 Westminster Street, Providence, RI 02903.

 

17.2           Notices
to Textron.  All notices to Textron shall be in writing and shall be effective upon receipt after being sent by certified mail (return receipt requested) addressed to Textron (Attention Textron Real Estate) at its business offices at 40 Westminster Street, Providence, Rhode Island 02903 or at such other address as Textron shall designate in writing to Licensee.

 

17.3           Other
Forms of Notices.  Notices may also be sent by overnight courier service or delivered by hand, in which case any such notice shall be effective upon receipt by the addressee.

 

17.4           Changes
of Address.  Notwithstanding any provisions in this Agreement to the contrary concerning modifications, a change in address may be effected by certified mail (return receipt requested) sent by either party to the other.

 

18.           ENTIRE AGREEMENT AND MODIFICATION

 

18.1           Entire
Agreement.  Neither Textron nor Licensee nor any of their agents have made any statement, promise or agreements verbally or in writing in conflict with the terms of this Agreement.  Any and all representations by either of the parties or their agents made during negotiations prior to execution of this Agreement and which representations are not contained in the provisions hereof shall not be binding upon either of the parties hereto.  It is further agreed that this Agreement
constitutes the entire, full and complete agreement between Textron and Licensee with respect to the Premises.

 

18.2           Amendments.  No
modification, alteration or amendment of this Agreement shall be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing.

 

19.           MISCELLANEOUS

 

 

 

 

 

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19.1           Reserved
Rights of RIAC.  Licensee acknowledges that pursuant to the Prime Lease there was reserved to RIAC, its successors and assigns for the use and benefit of the public, a free and unrestricted right of flight for the passage of aircraft in the air space above the surface of the Airport including the Premises, together with a right to cause in said air space such noise, dust and fumes as may be inherent in the operation of aircraft now known or hereafter used, or navigation of or right in the air,
using said air space for landing, taking off or operating on or above same Airport; and Licensee consents to be bound by such reservation of rights by RIAC.

 

19.2           No
Partnership or Joint Venture; Notice Concerning RIAC. Neither a partnership nor a joint venture is created by this Agreement.  Licensee acknowledges that Textron has notified Licensee that Textron has no authority to bind RIAC and that this Agreement must be submitted to RIAC and to Federal and State authorities for review and approval in accordance with applicable law and provisions of this Agreement.

 

19.3           Assistance
to RIAC.  Licensee shall cooperate and assist RIAC in dealing with the Federal Aviation Administration and all other Federal, State and local agencies in all matters relating to the operation of the Airport.

 

19.4           Cooperation
With RIAC. RIAC may, from time to time, employ various planning and engineering consultants in connection with RIAC's ownership and operation of the Airport; and Licensee shall cooperate with and reasonably assist such consultants as requested by RIAC.

 

19.5           Airport
Communications. Licensee shall not, by either his activities upon or use of the Premises, interfere with radio communications, instrument landing systems, navigational aides or flight operations of the Airport.

 

19.6           National
Emergency.  During time of war or national emergency, RIAC shall have the right to lease the Airport area of any part thereof, including the Premises, to the United States Government for military use and, if such lease is executed, the provisions of this Agreement, insofar as they are inconsistent with the provisions of the lease to the Government, shall be subordinate to said lease.  Textron shall not be obliged to make any adjustment in Licensee’s fees hereunder in the event
if such lease is executed.

 

19.7           Federal
Aviation Act Compliance.  Licensee agrees to comply with provisions of the Federal Aviation Act of 1958 (49 U.S.C. 1349(a)), and any future amendments or revisions thereto, or any rules or regulations promulgated thereunder and any provision of any agreements providing Federal assistance for the development of Airports entered into by Textron and the United States of America or its agencies.  Notwithstanding the foregoing, if Section 19.7 is invoked against Licensee, Licensee may terminate
this Agreement without further liability if in Licensee's reasonable discretion such invocation materially increases Licensee's obligations or materially decreases Licensee's rights under this Agreement.

 

19.8           Protection
of Airport Operations. Licensee covenants and agrees that he will neither erect structures not permit nor operate equipment nor store material on the Premises, in such a manner as to create any obstruction to air navigation and radar operations according to the criteria or standards as prescribed in Part 77 of the Federal Aviation Regulations or to create electrical interference with radio communications, radar or electromagnetic equipment between the Airport and aircraft, or to make it difficult for a
flier to distinguish between same Airport lights and others, or to cause a glare in the eyes of fliers using same airport, or to impair visibility in the vicinity of same Airport by lights, smoke, or otherwise endanger the landing, taking-off or maneuvering of aircraft. 

 

 

 

 

 

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If Licensee is in default of this provision, Licensee shall remedy the cause immediately after notification by Textron.

 

19.9           Regulated
Services.  In the event Licensee wishes to perform services which are regulated by the Federal Aviation Administration (“FAA”), Licensee will promptly supply Textron with copies of certificates issued by the FAA.  Licensee will also supply copies of all such certificates when they are renewed along with any notices of cancellation or termination of said certificates.

 

19.10         Time
of Essence.  It is expressly agreed that time is of the essence in the performance of each and every provision and covenant of this Agreement.

 

19.11         Original
Copies.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts together shall constitute but one and the same agreement.

 

19.12         Captions.  The
captions appearing in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit or construe or describe the scope or intent of any provisions of this Agreement nor in any way affect this Agreement.

 

19.13         Binding
Effect.  The terms, covenants and conditions contained in this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns and any person or persons, natural or corporate, claiming through or under them, or any of them.

 

19.14         Taking
Effect.  This Agreement shall take effect only upon its proper execution by both Textron and Licensee.

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as a sealed instrument, as of the date first written above.

 

 

 

TEXTRON INC.

 

By:          /s/
Michael G. Chagnon

Title:        Director of Aviation

 

 

 

LICENSEE

 

/s/Scott Donnelly

               Scott C. Donnelly

 

 

 

 

 

9exhibittentwo.htm

EXHIBIT 10.2

 

 

Notice of Grant of Performance Cash Units

and Performance Cash Unit Agreement

 

	
Name:

Address:

City, State ZIP:

Country:

 
	
PCU No.:

Plan:                   2007

ID:

Location:

 

Effective [], pursuant to the 2007 Long-Term Incentive Plan (the “Plan”), you have been granted ###,### Performance Cash Units (PCUs), which constitute the right to receive, if earned pursuant to their terms, a cash payment determined by a formula as provided in the Performance
Cash Unit Terms and Conditions (2/2009).

This grant is governed by the Performance Cash 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 Cash Unit Non-Competition Agreement (2/2009 version) attached hereto.

The Performance Period is the period beginning with Fiscal Year 20[] and ending with Fiscal Year 20[].  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 Cash Units granted for the Performance
Period.  The Committee has discretion to reduce the number of units earned for annual performance in each fiscal year.  The Committee expects to reduce the number of units by a second performance measure based on total shareholder return in relation to the S&P 500 for all three fiscal years in the Performance Period; but the Committee has discretion to make a larger or smaller downward adjustment.

The attached document PC###### shows the performance measures and units you can earn based on annual performance for Fiscal Year 20[], which apply to one third of the Performance Cash Units granted to you in this award.  Performance measures and units you can earn for Fiscal
Year 20[] and Fiscal Year 20[] will be established and communicated to you at the beginning of each fiscal year.

The attached document also shows the reduction that the Committee expects to make based on total shareholder return in relation to the S&P 500 for all three fiscal years in the Performance Period.  If the Committee elects to make this reduction, the reduction will 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 larger or smaller downward adjustment in the units you earn in each fiscal year during the Performance Period.

  

  

  

The cash value of all PCUs will be paid (to the extent earned) following the end of the Performance Period, before March 15.  Accordingly, PCUs earned based on annual performance in the first or second year of the Performance Period will be reduced, at the Committee’s discretion,
by the total shareholder return measure 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 PCUs, including PCUs 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 Cash 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 Cash 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 Cash Unit Non-Competition Agreement (2/2009 version) attached hereto, the terms of which are fully incorporated herein.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Cash Units

20[] – 20[] Award Period

PC######

Performance Measures for Fiscal Year 20[]:

Applicable to One Third of Performance Share Units

PCU Component Detail

	
Component
	
Weighting
	
Units

	
[]
	
[]%
	
###,###

	
[]
	
[]%
	
###,###

PCU Earnings Level for Each Component

	
Earnings per Share
	  	
Cash Efficiency

	
Actual vs. Target
	
Percent Earned
	  	
Actual vs. Target
	
Percent Earned

	
[]% of Target
	
[]%
	  	
[]% of Target
	
[]%

	
100% of Target
	
100%
	  	
100% of Target
	
100%

	
[] Performance
	
150% (maximum)
	  	
[]% of Target
	
150% (maximum)

Discretionary Performance Reduction for 20[] – 20[] Award Period:

Applicable to All Performance Share Units

PCU Reduction Factor Based on Total Shareholder Return 20[] – 20[]

	
Textron’s 3-Year Total Shareholder Return

Percentile Rank Against the S&P 500
	
Award

Adjustment

	
Greater than 74th
	
0%

	
69th
	
-6.4%

	
63rd
	
-12%

	
56th
	
-16%

	
50th
	
-20%

	
44th
	
-24%

	
37th
	
-28%

	
31st
	
-33.6%

	
Below 25th
	
-40%

	
·  
	
The Committee may make a discretionary reduction in the Performance Cash Units (PCUs) earned based on total shareholder return performance for the Performance Period.  The Committee expects to reduce the PCUs using the table shown above; but the Committee has discretion to make a larger or smaller downward adjustment.

	
·  
	
Intermediate performance between the minimum and maximum levels specified earns a corresponding percentage of Performance Cash Units (PCUs) for each component.

	
·  
	
PCUs earned for the fiscal year equal one third of the units granted times the percentage earned based on performance and targets identified above.

	
·  
	
PCUs earned for the fiscal year are subject to adjustment up or down based on annual performance for each fiscal year in the Performance Period.

  

  

  

	
·  
	
All PCUs are paid in cash, to the extent earned, following the end of the Performance Period, before March 15.  Accordingly, PCUs earned (subject to adjustment)  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.

	
·  
	
Each PCU earned has a value of one US dollar.

  

  

  

 

 

TEXTRON INC.

TEXTRON 2007 LONG-TERM INCENTIVE PLAN

PERFORMANCE CASH 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 Cash Units (PCUs) set forth on the applicable Notice of Grant signed by Textron and Grantee on the terms and conditions herein set forth. Each Performance Cash Unit constitutes the right to receive cash equal to $1.00 for each
Performance Cash Unit earned by the executive, as determined in accordance with the Plan, the Notice of Grant, the Performance Cash Unit Non-Competition Agreement (2/2009), and these Performance Cash Unit Terms and Conditions (2/2009). Performance Cash 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 Cash Units payable to the executive
in accordance with the provisions of this agreement shall be paid solely in cash.

	
·  
	
When the applicable Performance Period ends, Textron will issue to the executive cash equal to the aggregate value of the Performance Cash 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 Cash Units awarded to the executive for which the applicable Performance Period has not ended shall be forfeited (including, but not limited to, Performance Cash 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 Cash Units (including, but not limited to, Performance Cash 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 Cash 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 Cash 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 Cash Units for the fiscal year in which the executive’s employment ends (to the extent that the financial performance goals applicable to the Performance Cash Units have been achieved upon the completion of such fiscal year), subject to a discretionary reduction, in each case, based
on total shareholder return in relation to the S&P 500 for all three fiscal years in the Performance Period.

  

  

  

	
·  
	
If the executives employment with Textron ends for any reason not mentioned above, and if the executive has been employed by Textron for at least one year after the beginning of the Performance Period,  the executive will receive a cash payment (subject to tax withholding) at the end of the Performance Period for the Performance Cash Units actually
earned for any fiscal year that is completed before the executive’s employment ends, subject to a discretionary reduction, in each case, based on total shareholder return in relation to the S&P 500 for all three fiscal years in the Performance Period: and the executive shall forfeit any outstanding Performance Cash Units for any fiscal year during which or following which the executive’s employment ends.

	
·  
	
Notwithstanding the above, the applicable Performance Period for the Performance Cash 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 full value of any Performance Cash Units actually earned for any fiscal year that has already ended, and (2) the full value of the unearned Performance Cash Units outstanding for any fiscal year that has not yet ended, without adjustment in either case for total shareholder return in relation to the S&P 500 during 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 Cash 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.

	
·  
	
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 Cash Units shall not be assignable or transferable by the executive.

	
·  
	
The Performance Cash 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 Performance Period divided by the total number of months required for full vesting of each fiscal year.  An executive must be employed by Textron for a minimum of one year after the beginning
of the Performance Period before pro-rata Performance Cash Units may be paid.  The Pro-Rata Portion shall apply to one third of the Performance Cash 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 total shareholder return in relation to the S&P 500 for all three fiscal years in the Performance Period.

Example:

 

[          ]

 

  

  

  

 

TEXTRON INC.

 PERFORMANCE CASH UNIT NON-COMPETITION AGREEMENT

(2/2009)

You have been granted Performance Cash Units (“PCUs”) pursuant to the Textron 2007 Long-Term Incentive Plan (the “Plan”).  Textron grants Performance Cash 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 Cash Units to you, please acknowledge that you have read and agree to this Performance Cash Unit Non-Competition Agreement by signing the attached Notice of Grant of Performance Cash Unit and Performance Cash Unit Agreement.

Agreement regarding Your Performance Cash Units

	
1.
	
Forfeiture of PCUs 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 Cash Unit and Performance Cash 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 Cash 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 PCU 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 PCUs 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 PCUs 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 PCU 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 PCUs 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 PCUs 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 PCU 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.

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