Document:

exv10w1

Exhibit 10.1

SECURITY AGREEMENT

     SECURITY AGREEMENT, dated as of February 24, 2010, between Biolase Technology, Inc., a
Delaware corporation (the “Debtor”), and Henry Schein, Inc., a Delaware corporation (the “Secured
Party”).

     WHEREAS, the Debtor and Secured Party have entered into that certain letter agreement, dated
as of February 16, 2010 (the “Purchase Agreement”), pursuant to which Debtor has agreed to sell,
and Secured Party has agreed to purchase, certain inventory of Debtor subject to the terms and
conditions set forth in the Purchase Agreement; and

     WHEREAS, Secured Party has paid Debtor certain initial payments under the Purchase Agreement
in respect of goods to be delivered by Debtor to Secured Party pursuant to the Purchase Agreement,
but no such goods have been delivered as of the date hereof; and

     WHEREAS, it was a condition precedent to the Secured Party’s extension of credit to the Debtor
under the Purchase Agreement that the Debtor execute and deliver to the Secured Party a security
agreement in substantially the form hereof; and

     WHEREAS, the Debtor wishes to grant a security interest in favor of the Secured Party as
herein provided;

     NOW, THEREFORE, in consideration of the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Definitions. All capitalized terms used herein without definitions shall have the
respective meanings provided therefor in the Purchase Agreement. The term “State,” as used
herein, means the State of New York. All terms defined in the Uniform Commercial Code of the
State and used herein shall have the same definitions herein as specified therein. However, if a
term is defined in Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the meaning specified in
Article 9. The term “Obligations,” as used herein, means all of the obligations and liabilities
of the Debtor to the Secured Party, individually or collectively, whether direct or indirect,
joint or several, absolute or contingent, due or to become due, now existing or hereafter arising
in respect of the initial payment made by Secured Party to Debtor in respect of goods to be
delivered by Debtor to Secured Party pursuant to the Purchase Agreement, and the term “Event of
Default,” as used herein, means the failure of the Debtor to perform any of the Obligations.

     2. Grant of Security Interest. The Debtor hereby grants to the Secured Party, to
secure the payment and performance in full of all of the Obligations, a security interest in and
to all of Debtor’s now owned or hereafter acquired inventory (all of the same being hereinafter
collectively called the “Collateral”).

     3. Authorization to File Financing Statements. The Debtor hereby irrevocably
authorizes the Secured Party at any time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements and amendments

 

 

thereto (a) in respect of the Collateral, and (b) provide any other information required by
part 5 of Article 9 of the Uniform Commercial Code of the State, or such other jurisdiction, for
the sufficiency or filing office acceptance of any financing statement or amendment, including
whether the Debtor is an organization, the type of organization and any organizational
identification number issued to the Debtor. The Debtor agrees to furnish any such information to
the Secured Party promptly upon the Secured Party’s request.

     4. Other Actions as to Any and All Collateral. The Debtor further agrees, at the
request and option of the Secured Party, to take any and all other actions the Secured Party may
determine to be necessary or useful for the attachment, perfection and first priority of, and the
ability of the Secured Party to enforce, the Secured Party’s security interest in any and all of
the Collateral, including, without limitation, (a) executing, delivering and, where appropriate,
filing financing statements and amendments relating thereto under the Uniform Commercial Code, to
the extent, if any, that the Debtor’s signature thereon is required therefor, (b) causing the
Secured Party’s name to be noted as secured party on any certificate of title for a titled good if
such notation is a condition to attachment, perfection or priority of, or ability of the Secured
Party to enforce, the Secured Party’s security interest in such Collateral, (c) complying with any
provision of any statute, regulation or treaty of the United States as to any Collateral if
compliance with such provision is a condition to attachment, perfection or priority of, or ability
of the Secured Party to enforce, the Secured Party’s security interest in such Collateral, (d)
obtaining governmental and other third party waivers, consents and approvals in form and substance
satisfactory to Secured Party, including, without limitation, any consent of any licensor, lessor
or other person obligated on Collateral and (e) taking all actions under any earlier versions of
the Uniform Commercial Code or under any other law, as reasonably determined by the Secured Party
to be applicable in any relevant Uniform Commercial Code or other jurisdiction, including any
foreign jurisdiction.

     5. Representations and Warranties Concerning Debtor’s Legal Status. The Debtor
represents and warrants to the Secured Party as follows: (a) the Debtor’s exact legal name is that
indicated on the signature page hereof, (b) the Debtor is an organization of the type, and is
organized in the jurisdiction set forth in the first paragraph of this Agreement, (c) the Debtor’s
organizational identification number is that indicated on the signature page hereof and (d) the
Debtor’s place of business as well as the Debtor’s mailing address is that indicated on the
signature page hereof.

     6. Covenants Concerning Debtor’s Legal Status. The Debtor covenants with the Secured
Party as follows: (a) without providing at least 30 days prior written notice to the Secured
Party, the Debtor will not change its name, its place of business or, if more than one, chief
executive office, or its mailing address or organizational identification number if it has one,
(b) if the Debtor does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational identification number and
(c) the Debtor will not change its type of organization, jurisdiction of organization or other
legal structure.

     7. Representations and Warranties Concerning Collateral, etc. The Debtor further
represents and warrants to the Secured Party as follows: (a) the Debtor is the owner of or has
other rights in or power to transfer the Collateral, free from any right or claim or any person or

2

 

any adverse lien, security interest or other encumbrance, except for the security interest
created by this Agreement and (b) none of the Collateral constitutes, or is the proceeds of, “farm
products” as defined in Section 9-102(a)(34) of the Uniform Commercial Code of the State.

     8. Covenants Concerning Collateral, etc. The Debtor further covenants with the
Secured Party as follows: (a) the Collateral, to the extent not delivered to the Secured Party
pursuant to Section 4, will be kept at those locations listed on the signature page and the Debtor
will not remove the Collateral from such locations (other than in connection with the sale of
inventory in the ordinary conduct of Debtor’s business), without providing at least thirty days
prior written notice to the Secured Party, (b) except for the security interest herein granted,
the Debtor shall be the owner of or have other rights in the Collateral free from any right or
claim of any other person, lien, security interest or other encumbrance, and the Debtor shall
defend the same against all claims and demands of all persons at any time claiming the same or any
interests therein adverse to the Secured Party, (c) the Debtor shall not pledge, mortgage or
create, or suffer to exist any right of any person in or claim by any person to the Collateral, or
any security interest, lien or encumbrance in the Collateral in favor of any person, other than
the Secured Party, (d) the Debtor will keep the Collateral in good order and repair and will not
use the same in violation of law or any policy of insurance thereon, (e) the Debtor will permit
the Secured Party, or its designee, to inspect the Collateral at any reasonable time, wherever
located, (f) the Debtor will pay promptly when due all taxes, assessments, governmental charges
and levies upon the Collateral or incurred in connection with the use or operation of such
Collateral or incurred in connection with this Agreement, (g) the Debtor will continue to operate,
its business in compliance with all applicable provisions of the federal, state and local statutes
and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or
substances and (h) the Debtor will not sell or otherwise dispose, or offer to sell or otherwise
dispose, of the Collateral or any interest therein except for sales of inventory in the ordinary
course of business.

     9. Insurance.

          9.1 Maintenance of Insurance. The Debtor will maintain with financially sound and
reputable insurers insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such minimum amounts that the
Debtor will not be deemed a co-insurer under applicable insurance laws, regulations and policies
and otherwise shall be in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Secured Party. In addition, all such insurance
shall be payable to the Secured Party as loss payee under a “standard” or “New York” loss payee
clause.

          9.2 Insurance Proceeds. The proceeds of any casualty insurance in respect of any
casualty loss of any of the Collateral shall, subject to the rights, if any, of other parties with
an interest having priority in the property covered thereby, (i) to the extent that the amount of
such proceeds is less than $50,000, be disbursed to the Debtor for direct application by the Debtor
solely to the repair or replacement of the Debtor’s property so damaged or destroyed, and (ii) in
all other circumstances, be held by the Secured Party as cash collateral for the Obligations. The
Secured Party may, at its sole option, disburse from time to time all or any part of such

3

 

proceeds so held as cash collateral, upon such terms and conditions as the Secured Party may
reasonably prescribe, for direct application by the Debtor solely to the repair or replacement of
the Debtor’s property so damaged or destroyed, or the Secured Party may apply all or any part of
such proceeds to the Obligations.

          9.3 Continuation of Insurance. All policies of insurance shall provide for at least
30 days prior written cancellation notice to the Secured Party. In the event of failure by the
Debtor to provide and maintain insurance as herein provided, the Secured Party may, at its option,
provide such insurance and charge the amount thereof to the Debtor. The Debtor shall furnish the
Secured Party with certificates of insurance and policies evidencing compliance with the foregoing
insurance provision.

     10. Collateral Protection Expenses; Preservation of Collateral.

          10.1 Expenses Incurred by Secured Party. In the Secured Party’s discretion, if the
Debtor fails to do so, the Secured Party may discharge taxes and other encumbrances at any time
levied or placed on any of the Collateral, maintain any of the Collateral, make repairs thereto and
pay any necessary insurance premiums. The Debtor agrees to reimburse the Secured Party on demand
for all expenditures so made. The Secured Party shall have no obligation to the Debtor to make any
such expenditures.

          10.2 Secured Party’s Obligations and Duties. The Secured Party’s sole duty with
respect to the custody, safe keeping and physical preservation of the Collateral in its possession,
if any, under Section 9-207 of the Uniform Commercial Code of the State or otherwise, shall be to
deal with such Collateral in the same manner as the Secured Party deals with similar property for
its own account.

     11. Securities. Regardless of the adequacy of Collateral or any other security for
the Obligations, any deposits or other sums at any time credited by or due from the Secured Party
to the Debtor may at any time be applied to or set off against any of the Obligations.

     12. Power of Attorney.

          12.1 Appointment and Powers of Secured Party. The Debtor hereby irrevocably
constitutes and appoints the Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in
the place and stead of the Debtor or in the Secured Party’s own name, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or useful to accomplish the purposes of this
Agreement and, without limiting the generality of the foregoing, hereby gives said attorneys the
power and right, on behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:

               (a) upon the occurrence and during the continuance of a default by Debtor under the Purchase
Agreement, generally to sell, transfer, pledge, make any agreement with respect to or otherwise
dispose of or deal with any of the Collateral in such manner as is consistent with the Uniform
Commercial Code of the State and as fully and completely as though the Secured Party were the
absolute owner thereof for all purposes, and to do, at the Debtor’s

4

 

expense, at any time, or from time to time, all acts and things which the Secured Party deems
necessary or useful to protect, preserve or realize upon the Collateral and the Secured Party’s
security interest therein, in order to effect the intent of this Agreement, all at least as fully
and effectively as the Debtor might do; and

               (b) to the extent that the Debtor’s authorization given in Section 3 is not sufficient, to
file such financing statements with respect hereto, with or without the Debtor’s signature, or a
photocopy of this Agreement in substitution for a financing statement, as the Secured Party may
deem appropriate and to execute in the Debtor’s name such financing statements and amendments
thereto and continuation statements which may require the Debtor’s signature.

          12.2 Ratification by Debtor. To the extent permitted by law, the Debtor hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This
power of attorney is a power coupled with an interest and is irrevocable.

          12.3 No Duty on Secured Party. The powers conferred on the Secured Party hereunder
are solely to protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. The Secured Party shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to the Debtor for any act or failure
to act, except for the Secured Party’s own gross negligence or willful misconduct.

     13. Rights and Remedies. If a default by Debtor shall have occurred and be
continuing under the Purchase Agreement, the Secured Party, without any other notice to or demand
upon the Debtor shall have in any jurisdiction in which enforcement hereof is sought, in addition
to all other rights and remedies, the rights and remedies of a secured party under the Uniform
Commercial Code of the State and any additional rights and remedies which may be provided to a
secured party in any jurisdiction in which Collateral is located, including, without limitation,
the right to take possession of the Collateral, and for that purpose the Secured Party may, so far
as the Debtor can give authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom. The Secured Party may in its discretion require the
Debtor to assemble all or any part of the Collateral at such location or locations within the
jurisdiction(s) of the Debtor’s principal office(s) or at such other locations as the Secured
Party may reasonably designate. In addition, the Debtor waives any and all rights that it may
have to a judicial hearing in advance of the enforcement of any of the Secured Party’s rights and
remedies hereunder, including, without limitation, its right following a default to take immediate
possession of the Collateral and to exercise its rights and remedies with respect thereto.

     14. Standards for Exercising Rights and Remedies. To the extent that applicable law
imposes duties on the Secured Party to exercise remedies in a commercially reasonable manner, the
Debtor acknowledges and agrees that it is not commercially unreasonable for the Secured Party (a)
to fail to incur expenses reasonably deemed significant by the Secured Party to prepare Collateral
for disposition or otherwise to fail to complete raw material or work in process into finished
goods or other finished products for disposition, (b) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not required by other

5

 

law, to fail to obtain governmental or third party consents for the collection or disposition
of Collateral to be collected or disposed of, (c) to fail to remove liens or encumbrances on or
any adverse claims against Collateral, (d) to exercise collection remedies against persons
obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (e) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to contact other
persons, whether or not in the same business as the Debtor, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the collateral is of a specialized
nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than
retail markets, or (j) to disclaim disposition warranties. The Debtor acknowledges that the
purpose of this Section 14 is to provide non-exhaustive indications of what actions or omissions
by the Secured Party would fulfill the Secured Party’s duties under the Uniform Commercial Code or
other law of the State or any other relevant jurisdiction in the Secured Party’s exercise of
remedies against the Collateral and that other actions or omissions by the Secured Party shall not
be deemed to fail to fulfill such duties solely on account of not being indicated in this Section
14. Without limitation upon the foregoing, nothing contained in this Section 14 shall be
construed to grant any rights to the Debtor or to impose any duties on the Secured Party that
would not have been granted or imposed by this Agreement or by applicable law in the absence of
this Section 14.

     15. No Waiver by Secured Party, etc. The Secured Party shall not be deemed to have
waived any of its rights or remedies in respect of the Obligations or the Collateral unless such
waiver shall be in writing and signed by the Secured Party. No delay or omission on the part of
the Secured Party in exercising any right or remedy shall operate as a waiver of such right or
remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar
to or waiver of any right or remedy on any future occasion. All rights and remedies of the
Secured Party with respect to the Obligations or the Collateral, whether evidenced hereby or by
any other instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the Secured Party
deems expedient.

     16. Suretyship Waivers by Debtor. The Debtor waives demand, notice, protest, notice
of acceptance of this Agreement, credit extended, Collateral received or delivered or other action
taken in reliance hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Debtor assents to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or release of or
failure to perfect any security interest in any Collateral, to the addition or release of any
party or person primarily or secondarily liable, to the acceptance of partial payment thereon and
the settlement, compromising or adjusting of any thereof, all in such manner and at such time or
times as the Secured Party may deem advisable. The Secured Party shall have no duty as to the
collection or protection of the Collateral or any income therefrom, the preservation of rights
against prior parties, or the preservation of any rights pertaining thereto beyond the safe
custody thereof as set forth in Section 10.2. The Debtor further waives any and all other
suretyship defenses.

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     17. Marshalling. The Secured Party shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or other assurances
of payment of, the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be cumulative and in
addition to all other rights and remedies, however existing or arising. To the extent that it
lawfully may, the Debtor hereby agrees that it will not invoke any law relating to the marshalling
of collateral which might cause delay in or impede the enforcement of the Secured Party’s rights
and remedies under this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, the Debtor hereby irrevocably waives the benefits of all such laws.

     18. Proceeds of Dispositions; Expenses. The Debtor shall pay to the Secured Party on
demand any and all expenses, including reasonable attorneys’ fees and disbursements, incurred or
paid by the Secured Party in protecting, preserving or enforcing the Secured Party’s rights and
remedies under or in respect of any of the Obligations or any of the Collateral. After deducting
all of said expenses, the residue of any proceeds of collection or sale or other disposition of
the Collateral shall, to the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as the Secured Party may determine proper allowance and
provision being made for any Obligations not then due. Upon the final payment and satisfaction in
full of all of the Obligations and after making any payments required by Sections 9-608(a)(1)(C)
or 9-615(a)(3) of the Uniform Commercial Code of the State, any excess shall be returned to the
Debtor. In the absence of final payment and satisfaction in full of all of the Obligations, the
Debtor shall remain liable for any deficiency.

     19. Immediately upon satisfaction of the Obligations, the Secured Party shall authorize the
Debtor, on behalf of the Secured Party and at Debtor’s expense, to execute and file termination
statements in all jurisdictions in which financing statements were filed in respect of this
Agreement, and shall take such other action or refrain from taking any other action as Debtor may
reasonably request, and at Debtor’s sole expense, to effectuate the termination of this Agreement
and the termination of perfection of any security interest granted in and to the Collateral.

     20. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK. The Debtor agrees that any action or claim arising out of, or any
dispute in connection with, this Agreement, any rights, remedies, obligations, or duties
hereunder, or the performance or enforcement hereof or thereof, may be brought in the courts of
the State or any federal court sitting therein and consents to the non-exclusive jurisdiction of
such court and to service of process in any such suit being made upon the Debtor by mail at the
address set forth on the signature page hereto. The Debtor hereby waives any objection that it
may now or hereafter have to the venue of any such suit or any such court or that such suit is
brought in an inconvenient court.

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     21. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS,
REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
Except as prohibited by law, the Debtor waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual damages. The Debtor
(i) certifies that neither the Secured Party nor any representative, agent or attorney of the
Secured Party has represented, expressly or otherwise, that the Secured Party would not, in the
event of litigation, seek to enforce the foregoing waivers or other waivers contained in this
Agreement, and (ii) acknowledges that, in entering into the Purchase Agreement, the Secured Party
is relying upon, among other things, the waivers and certifications contained in this Section 21.

     22. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This Agreement and all
rights and obligations hereunder shall be binding upon the Debtor and its respective successors
and assigns, and shall inure to the benefit of the Secured Party and its successors and assigns.
If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity
of all other terms hereof shall in no way be affected thereby, and this Agreement shall be
construed and be enforceable as if such invalid, illegal or unenforceable term had not been
included herein. The Debtor acknowledges receipt of a copy of this Agreement.

     IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused this Agreement to be
duly executed as of the date first above written.

	 	 	 	 	 
	 	BIOLASE TECHNOLOGY, INC.

 	 
	 	By:  	/s/ David M. Mulder
 	 
	 	 	Name:  	David M. Mulder 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	Organizational ID: Delaware No. 2117279

Address: 4 Cromwell, Irvine, California 92618

HENRY SCHEIN, INC.

 	 
	 	By:  	/s/ Andrew Deal
 	 
	 	 	Name:  	Andrew Deal 	 
	 	 	Title:  	Vice President and Deputy General Counsel 	 
	 

8exv10w10

Exhibit 10.10

 

 

SEVERANCE PLAN FOR

TEXTRON KEY EXECUTIVES

 

As Amended and Restated

Effective January 1, 2010

 

 

 

 

Severance Plan

for Textron Key Executives

As Amended and Restated

Effective January 1,
2010

Table of Contents

	 	 	 	 	 
	Article I — Definitions
	 	 	1	 
	 
	 	 	 	 
	1.01 Board
	 	 	1	 
	 
	1.02 Change in Control
	 	 	1	 
	 
	1.03 Chief Executive Officer
	 	 	2	 
	 
	1.04 Good Reason Termination
	 	 	2	 
	 
	1.05 IRC
	 	 	3	 
	 
	1.06 Key Executive
	 	 	3	 
	 
	1.07 Plan
	 	 	4	 
	 
	1.08 Severance
	 	 	4	 
	 
	1.09 Severance Benefits
	 	 	4	 
	 
	1.10 Severance Pay
	 	 	4	 
	 
	1.11 Textron
	 	 	4	 
	 
	1.12 Textron Company
	 	 	4	 
	 
	 	 	 	 
	Article II — Severance
	 	 	4	 
	 
	 	 	 	 
	2.01 Involuntary Termination
	 	 	4	 
	 
	2.02 Good Reason Termination
	 	 	4	 
	 
	2.03 No Duplication of Benefits
	 	 	4	 
	 
	 	 	 	 
	Article III — Severance Pay and Severance Benefits
	 	 	4	 
	 
	 	 	 	 
	3.01 Amount of Severance Pay
	 	 	5	 
	 
	3.02 Payment of Severance Pay
	 	 	5	 
	 
	3.03 Severance Benefits
	 	 	5	 
	 
	3.04 Release
	 	 	6	 
	 
	3.05 Rehire During Severance Period
	 	 	6	 

			
	 	 	 
	Severance Plan for Textron Key Executives 

Amended and Restated January 1, 2010
	 	Table of Contents

Page i

 

 

	 	 	 	 	 
	Article IV — Unfunded Plan
	 	 	6	 
	 
	 	 	 	 
	4.01 No Plan Assets
	 	 	6	 
	 
	4.02 Welfare Plan Status
	 	 	6	 
	 
	4.03 No Contributions
	 	 	6	 
	 
	 	 	 	 
	Article V — Plan Administration
	 	 	6	 
	 
	 	 	 	 
	5.01 Plan Administrator’s Powers
	 	 	6	 
	 
	5.02 Delegation of Administrative Authority
	 	 	7	 
	 
	5.03 Tax Withholding
	 	 	7	 
	 
	5.04 Use of Third Parties to Assist with Plan Administration
	 	7	 
	 
	5.05 Claims Procedure
	 	 	7	 
	 
	5.06 Enforcement Following a Change in Control
	 	 	9	 
	 
	 	 	 	 
	Article VI — Amendment and Termination
	 	 	9	 
	 
	 	 	 	 
	6.01 Amendment or Termination
	 	 	9	 
	 
	6.02 Restrictions on Amendment or Termination
	 	 	9	 
	 
	6.03 Delegation of Amendment Authority
	 	 	9	 
	 
	 	 	 	 
	Article VII — Miscellaneous
	 	 	10	 
	 
	 	 	 	 
	7.01 Use of Masculine or Feminine Pronouns
	 	 	10	 
	 
	7.02 Transferability of Plan Benefits
	 	 	10	 
	 
	7.03 Section 409A Compliance
	 	 	10	 
	 
	7.04 Controlling State Law
	 	 	10	 
	 
	7.05 No Right to Employment
	 	 	10	 
	 
	7.06 Additional Conditions Imposed
	 	 	10	 

 

 

	 	 	 	 	 	 	 
	APPENDIX A

	 	Grandfathered Change in Control Definition
	 	 	A-1	 
	 
	APPENDIX B

	 	Grandfathered Good Reason Termination Definition
	 	 	B-1	 
	 
	APPENDIX C

	 	Grandfathered Severance Pay Formula
	 	 	C-1	 
	 
	APPENDIX D

	 	Form of Release
	 	 	D-1	 

 

 

SEVERANCE PLAN FOR

TEXTRON KEY EXECUTIVES

     This Plan has been established for the benefit of certain Textron Executives to secure their
goodwill, loyalty and achievement, and in consideration of their past service.

     The Plan was amended and restated, effective January 1, 2008, to incorporate those terms
necessary or advisable to ensure that severance benefits provided under the Plan are exempt from or
comply with Section 409A of the Internal Revenue Code of 1986, as amended. The Plan has been
amended from time to time since the previous restatement. This restatement of the Plan reflects
all amendments adopted through the date of this restatement.

Article I — Definitions

     Whenever used in this document, the following terms shall have the meanings set forth in this
Article, unless a contrary or different meaning is expressly provided:

	1.01	 	“Board” means the Board of Directors of Textron.

	1.02	 	“Change in Control” means, for any Key Executive who was not an employee of a
Textron Company on December 31, 2007:

	 	(a)	 	any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Act”) and of IRC Section 409A)
other than Textron, any trustee or other fiduciary holding Textron common stock under
an employee benefit plan of Textron or a related company, or any corporation which is
owned, directly or indirectly, by the stockholders of Textron in substantially similar
proportions as their ownership of Textron common stock

	 	(1)	 	becomes (other than by acquisition from Textron or a related
company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of
stock of Textron that, together with other stock held by such person or group,
possesses more than 50% of the combined voting power of Textron’s
then-outstanding voting stock, or
	 
	 	(2)	 	acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person) beneficial
ownership of stock of Textron possessing more than 30% of the combined voting
power of Textron’s then-outstanding stock, or
	 
	 	(3)	 	acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person) all or
substantially all of the total gross fair market value of all of the assets of
Textron immediately prior to such acquisition or

			
	 	 	 
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	 	 	 	acquisitions (where gross fair market value is determined without regard
to any associated liabilities); or

	 	  (b)	 	a merger or consolidation of Textron with any other corporation
occurs, other than a merger or consolidation that would result in the voting
securities of Textron outstanding immediately before the merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) 50% or more of the combined voting
power of the voting securities of Textron or such surviving entity outstanding
immediately after such merger or consolidation, or
	 
	 	  (c)	 	during any 12-month period, a majority of the members of the Board is
replaced by directors whose appointment or election is not endorsed by a majority
of the members of the Board of Directors before the date of their appointment or
election.

	 	 	Each of the events described above will be treated as a “Change in Control” only to the
extent that it is a change in ownership, change in effective control, or change in the
ownership of a substantial portion of Textron’s assets within the meaning of IRC Section
409A.
	 
	 	 	For any Key Executive who was an employee of a Textron Company on December 31, 2007,
the definition set forth above in this Section 1.02 shall be used to determine whether an
event is a “Change in Control” to the extent that the event would alter the time or form of
payment of the Key Executive’s benefit. To the extent that the event would cause any
change in the Key Executive’s rights under the Plan that does not affect the status of the
Key Executive’s benefit under IRC Section 409A (including, but not limited to, accelerated
vesting of the Key Executive’s benefit or restrictions on amendments to the Plan), the
definition set forth in Appendix A shall be used to determine whether the event is a
“Change in Control.”

	1.03	 	“Chief Executive Officer” means the Chief Executive Officer of Textron.

	1.04	 	“Good Reason Termination” means, for any Key Executive who was not an employee of a Textron
Company on December 31, 2007:

	 	(a)	 	The Key Executive’s Severance occurs during a two-year period following the
initial existence of one or more of the following conditions arising without the
consent of the Key Executive:

	 	(1)	 	A material diminution in the Key Executive’s base
compensation.
	 
	 	(2)	 	A material diminution in the Key Executive’s authority,
duties, or responsibilities.

			
	 	 	 
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	 	(3)	 	A material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Key Executive is required to report, including a
requirement that the Key Executive report to a corporate officer or employee
instead of reporting directly to the Board.
	 
	 	(4)	 	A material diminution in the budget over which the Key
Executive retains authority.
	 
	 	(5)	 	A material change in the geographic location at which the Key
Executive must perform services.
	 
	 	(6)	 	Any other action or inaction that constitutes a material
breach by a Textron Company of the agreement, if any, under which the Key
Executive provides services.

	 	(b) 	 	The amount, time, and form of payment upon the Separation From Service must
be substantially identical with the amount, time, and form of payment payable as a
result of an actual involuntary Separation From Service, to the extent such a right
exists.
	 
	 	(c) 	 	The Key Executive must provide notice of the existence of a condition
described in subsection (a), above, within 90 days after the initial existence of the
condition. Upon receiving the notice, the Textron Company shall have a period of 30
days during which it may remedy the condition and not be required to pay any Severance
Pay or Severance Benefit that otherwise would be due upon a Good Reason Termination.

	 	 	For any Key Executive who was an employee of a Textron Company on December 31, 2007, the
definition set forth in Appendix B shall be used to determine whether the Key Executive’s
Severance is a “Good Reason Termination.”

	1.05	 	“IRC” means the Internal Revenue Code of 1986, as amended. References to any section of the
Internal Revenue Code shall include any final regulations interpreting that section.

	1.06	 	“Key Executive” means an employee of a Textron Company who has been and continues to be
designated as a Key Executive under the Plan by the Chief Executive Officer and Chief Human
Resources Officer of Textron. A Key Executive may subsequently waive participation in this
Plan by an express written instrument to that effect. A Key Executive shall not become
entitled to separation pay under any other plan or arrangement maintained by a Textron Company
as a result of having waived his participation in this Plan. An individual shall not be a
Key Executive for purposes of this Plan, and shall not be eligible for any benefit provided
under this Plan, during any period in which the individual is covered by

			
	 	 	 
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	 	 	an offer letter or employment agreement with Textron that provides severance pay at least
equal to the Severance Pay provided under this Plan.
	 
	1.07	 	“Plan” means this Severance Plan for Textron Key Executives, as amended and restated from
time to time.
	 
	1.08	 	“Severance” means a Key Executive’s termination of employment with all Textron Companies,
other than by reason of death or Total Disability, that qualifies as an “involuntary
separation from service” for purposes of IRC Section 409A, and that occurs in circumstances
described in Article II.
	 
	1.09	 	“Severance Benefits” means medical or dental benefits described in and payable under Section
3.03.
	 
	1.10	 	“Severance Pay” means the amount described in and payable under Sections 3.01 and 3.02.
Notwithstanding any provision of any other plan, contract, or arrangement to which a Textron
Company is a party, including without limitation any employee benefit plan, Severance Pay
shall not be taken into account in determining the amount of any benefit or compensation
thereunder.
	 
	1.11	 	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.
	 
	1.12	 	“Textron Company” means Textron or any company controlled by or under common control with
Textron within the meaning of IRC Section 414(b) or (c).

Article II — Severance

	2.01	 	Involuntary Termination. A Key Executive shall be entitled to Severance Pay if he
incurs a Severance because he is notified in writing by Textron that his employment is being
terminated (other than for less than acceptable performance, as determined by Textron). If a
Key Executive is transferred from a Textron Company to a buyer in connection with a bona fide
sale of substantial assets of Textron, the transfer shall not be regarded as a “Severance” for
purposes of this Section 2.01 unless Textron designates it as a Severance in a written
document or agreement that makes specific reference to this Plan.
	 
	2.02	 	Good Reason Termination. A Key Executive shall also be entitled to Severance Pay if
he incurs a Good Reason Termination within the two-year period immediately following a Change
in Control.
	 
	2.03	 	No Duplication of Benefits. A Key Executive who is entitled to Severance Pay or
Severance Benefits under this Plan shall not be eligible to receive severance pay or severance
benefits under any other severance plan maintained by a Textron Company.

Article III — Severance Pay and Severance Benefits

			
	 	 	 
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	3.01	 	Amount of Severance Pay. Severance Pay shall be determined as of the date of
the Key Executive’s Severance. For Key Executives who were eligible to participate in the
Plan on December 31, 2007, Severance Pay shall be determined as provided in Appendix C.
For Key Executives who became eligible to participate in the Plan on or after January 1,
2008, Severance Pay shall equal the sum of:

	 	(a)	 	the Key Executive’s annual rate of base salary at the date of Severance,
except that any reduction in base salary following a Change in Control shall be
disregarded; and

	 	(b)	 	the larger of (1) the average of the Key Executive’s three most recent actual
awards of annual incentive compensation (whether or not deferred) from a Textron
Company, or (2) the Key Executive’s current target incentive compensation under the
annual incentive compensation plan of a Textron Company.

	3.02	 	Payment of Severance Pay. Textron shall pay Severance Pay to the Key Executive in a
single sum within 60 days immediately following Severance. If the Key Executive dies after
his Severance but before this payment has been made, Textron shall pay Severance Pay to the
Key Executive’s surviving spouse, or, if none, to the Key Executive’s issue per stirpes, or,
if no surviving spouse or issue, to the executor or administrator of the Key Executive’s
estate.

	3.03	 	Severance Benefits. In addition, if the Severance occurs following a Change in
Control or under other circumstances approved in writing by Textron’s Chief Executive Officer
and Chief Human Resources Officer, Textron shall provide, at its sole cost, medical and dental
benefits to the Key Executive and to his dependents, on terms which are not less favorable to
them than the terms existing immediately before the Severance of that Key Executive. Such
Severance Benefits shall be continued for the period provided by IRC Section 4980B(f) (but not
longer than 18 months following Severance). If any medical or dental expense reimbursements
otherwise available to a Key Executive under this Section 3.03 would be includable in the Key
Executive’s gross income for federal income tax purposes, the expenses shall be reimbursed
only to the extent that they meet the following conditions:

	 	(a)	 	the expenses are incurred and paid by the Key Executive (or incurred by the
Key Executive and paid by a Textron Company directly to the service provider on the
Key Executive’s behalf);

	 	(b)	 	the expenses would be allowable as a deduction to the Key Executive under IRC
Section 213 (disregarding the requirement that the deduction under that section apply
only to expenses that exceed 7.5% of adjusted gross income); and
	 
	 	(c)	 	the expenses are not reimbursed from a source other than a Textron Company.

			
	 	 	 
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	3.04	 	Release. A Key Executive shall receive Severance Pay and Severance Benefits
under the Plan only if the Key Executive delivers to Textron a release of all claims of the
Key Executive (other than any rights to indemnification, contribution, exculpation,
advances, or directors and officers liability insurance under Textron’s organizational
documents, under any plan or agreement, or at law) with regard to Textron, its subsidiaries
and related entities, and their respective past or present officers, directors, and
employees, in the form attached to this Plan as Appendix D. If the release has not become
irrevocable before the date on which Severance Pay or Severance Benefits are due under the
Plan, the Severance Pay or Severance Benefits shall be forfeited.

	3.05	 	Rehire During Severance Period. If a Key Executive is rehired by a Textron Company
within 12 months after his Severance (or within 18 months after his Severance, in the case of
a Key Executive whose Severance Pay was calculated under Section C.01 of Appendix C), the Key
Executive’s Severance Benefits will cease, and the Key Executive must repay to Textron the
portion of his Severance Pay that corresponds to his remaining severance period. The Key
Executive’s remaining severance period is determined by subtracting the number of whole and
fractional months between the Key Executive’s Severance and the date on which he was rehired
from 12 (or from 18, in the case of a Key Executive whose Severance Pay was calculated under
Section C.01 of Appendix C). The repayment shall include any taxes withheld from the
Severance Pay, unless IRS rules permit (and Textron approves) a repayment net of taxes.
Before returning to work, the Key Executive must write Textron a check for the full amount
due.

Article IV — Unfunded Plan

	4.01	 	No Plan Assets. Severance Pay and Severance Benefits to be provided under this Plan
are unfunded obligations of Textron. Nothing contained in this Plan shall require Textron to
segregate any monies from its general funds, to create any trust, to make any special
deposits, or to purchase any policies of insurance with respect to such obligations.

	4.02	 	Welfare Plan Status. This Plan is intended to be a welfare plan providing benefits
for a select group of management employees who are highly compensated, pursuant to Sections
3(1) and 104(a)(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and 29 C.F.R. § 2520.104-24.

	4.03	 	No Contributions. No Key Executive shall be required or permitted to make
contributions to this Plan.

Article V — Plan Administration

	5.01	 	Plan Administrator’s Powers. Textron shall have all such powers as may be necessary
to carry out the provisions of this Plan. Textron may from time to time establish rules for
the administration of this Plan and the transaction of its business. Subject to Section 5.05,
any actions by Textron shall be final,

			
	 	 	 
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Amended and Restated January 1, 2010
	 	Page 6

 

 

	   	 	conclusive and binding on each Key Executive and all
persons claiming by, through or under any Key Executive. Textron (and any person or persons
to whom it delegates any of its authority as plan administrator) shall have discretionary
authority to determine eligibility for Plan benefits, to construe the terms of the Plan,
and to determine all questions arising in the administration of the Plan. The Board may
exercise Textron’s authority as plan administrator, and the authority to administer the
Plan may be delegated as provided in Section 5.02.

	5.02	 	Delegation of Administrative Authority. The Board may, to the extent permitted by applicable
law, make a non-exclusive written delegation of the authority to administer the Plan to a
committee of the Board or to one or more officers of Textron. The Board may, to the extent
permitted by applicable law, authorize a committee of the Board or officer of Textron to make
a further delegation of the authority to administer the Plan.

	5.03	 	Tax Withholding. Textron may withhold from Severance Pay and Severance Benefits any
taxes or other amounts required by law to be withheld. Textron may deduct from the
undistributed portion of a Key Executive’s benefit any employment tax that Textron reasonably
determines to be due with respect to the benefit under the Federal Insurance Contributions Act
(FICA), and an amount sufficient to pay the income tax withholding related to such FICA tax.
Alternatively, Textron may require the Key Executive to remit to Textron or its designee an
amount sufficient to satisfy any applicable federal, state, and local income and employment
tax with respect to the Key Executive’s benefit. The Key Executive shall remain responsible
at all times for paying any federal, state, or local income or employment tax with respect to
any benefit under this Plan. In no event shall Textron or any employee or agent of Textron be
liable for any interest or penalty that a Key Executive incurs by failing to make timely
payments of tax.

	5.04	 	Use of Third Parties to Assist with Plan Administration. Textron may employ or
engage such agents, accountants, actuaries, counsel, other experts and other persons as it
deems necessary or desirable in connection with the interpretation and administration of this
Plan. Textron and its committees, officers, directors and employees shall not be liable for
any action taken, suffered or omitted by them in good faith in reliance upon the advice or
opinion of any such agent, accountant, actuary, counsel or other expert. All action so taken,
suffered or omitted shall be conclusive upon each of them and upon all other persons
interested in this Plan.

	5.05	 	Claims Procedure. A Key Executive or the surviving spouse or beneficiary of a Key
Executive who believes that he is being denied a benefit to which he is entitled under the
Plan (referred to in this Section 5.05 as a “Claimant”) may file a written request with
Textron setting forth the claim. Textron shall consider and resolve the claim as set forth
below.

			
	 	 	 
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Amended and Restated January 1, 2010
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	 	(a)	 	Time for Response. Upon receipt of a claim, Textron shall advise the
Claimant that a response will be forthcoming within 90 days. Textron may, however,
extend the response period for up to an additional 90 days for reasonable cause, and
shall notify the Claimant of the reason for the extension and the expected response
date. Textron shall respond to the claim within the specified period.
	 
	 	(b)	 	Denial. If the claim is denied in whole or part, Textron shall
provide the Claimant with a written decision, using language calculated to be
understood by the Claimant, setting forth (1) the specific reason or reasons for such
denial; (2) the specific reference to relevant provisions of this Plan on which such
denial is based; (3) a description of any additional material or information necessary
for the Claimant to perfect his claim and an explanation why such material or such
information is necessary; (4) appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review; (5) the time limits for requesting
a review of the claim; and (6) the Claimant’s right to bring an action for benefits
under Section 502 of ERISA.
	 
	 	(c)	 	Request for Review. Within 60 days after the Claimant’s receipt of
the written decision denying the claim in whole or in part, the Claimant may request
in writing that Textron review the determination. The Claimant or his duly authorized
representative may, but need not, review the relevant documents and submit issues and
comment in writing for consideration by Textron. If the Claimant does not request a
review of the initial determination within such 60-day period, the Claimant shall be
barred from challenging the determination.
	 
	 	(d)	 	Review of Initial Determination. Within 60 days after Textron
receives a request for review, it will review the initial determination. If special
circumstances require that the 60-day time period be extended, Textron will so notify
the Claimant and will render the decision as soon as possible, but no later than 120
days after receipt of the request for review.
	 
	 	(e)	 	Decision on Review. All decisions on review shall be final and
binding with respect to all concerned parties. The decision on review shall set
forth, in a manner calculated to be understood by the Claimant, (1) the specific
reasons for the decision, shall including references to the relevant Plan provisions
upon which the decision is based; (2) the Claimant’s right

			
	 	 	 
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Amended and Restated January 1, 2010
	 	Page 8

 

 

	 	 	 	to receive, upon request and free of charge, reasonable access to and copies of all
documents, records, and other information, relevant to his benefits; and (3) the
Claimant’s right to bring a civil action under Section 502 of ERISA.

	5.06	 	Enforcement Following a Change in Control. If, after a Change in Control, any claim
is made or any litigation is brought by a Key Executive or any person claiming through a Key
Executive to enforce or interpret any provision contained in this Plan, Textron and the
“person” or “group” described in Section 1.02 shall be liable, jointly and severally, to
reimburse the Key Executive’s or other claimant’s reasonable attorney’s fees and costs
incurred during the Key Executive’s or other claimant’s lifetime in pursuing any such claim or
litigation, and to pay prejudgment interest at the Prime Rate as quoted in the Money Rates
section of The Wall Street Journal on any money award or judgment obtained by the Key
Executive or other claimant, payable at the same time as the underlying award or judgment.
Any reimbursement pursuant to the preceding sentence shall be paid to the Key Executive or
other claimant no earlier than six months after the Severance date and no later than the end
of the calendar year following the year in which the expense was incurred. The reimbursement
shall not be subject to liquidation or exchange for another benefit, and the amount of
reimbursable expense incurred in one year shall not affect the amount of reimbursement
available in another year.

Article VI — Amendment and Termination

	6.01	 	Amendment or Termination. Subject to Section 6.02, below, the Board or its designee
shall have the right to amend, modify, suspend, or terminate this Plan at any time by written
resolution or other formal action reflected in writing.

	6.02	 	Restrictions on Amendment or Termination. No amendment, modification, suspension, or
termination shall adversely affect a Key Executive’s right to receive Severance Pay, Severance
Benefits, or legal defense costs and prejudgment interest described in Section 5.06 that are
payable as the result of the Severance of the Key Executive before the earlier of the adoption
date or effective date of the amendment, modification, suspension, or termination. No
amendment, modification suspension, or termination shall be effective during the two-year
period immediately following a Change in Control, unless the Key Executive who is potentially
affected by the amendment, modification, suspension, or termination consents in writing.

	6.03	 	Delegation of Amendment Authority. The Board may, to the extent permitted by applicable law,
make a non-exclusive written delegation of the authority to amend the Plan to a committee of
the Board or to one or more officers of Textron. The Board may, to the extent permitted by
applicable law, authorize a committee of the Board to make a further delegation of the
authority to amend the Plan.

			
	 	 	 
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	 	Page 9

 

 

Article VII — Miscellaneous

	7.01	 	Use of Masculine or Feminine Pronouns. Unless a contrary or different meaning is
expressly provided, each use in this Plan of the masculine or feminine gender shall include
the other and each use of the singular number shall include the plural.

	7.02	 	Transferability of Plan Benefits. No Severance Pay or Severance Benefit shall be
subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any
Severance Pay or Severance Benefit, whether presently or subsequently payable, shall be void
unless so approved. Except as required by law, no benefit payable under this Plan shall in
any manner be subject to garnishment, attachment, execution, or other legal process, or be
liable for or subject to the debts or liability of any Key Executive.

	7.03	 	Section 409A Compliance. Severance Pay and Severance Benefits are intended to be
exempt from IRC Section 409A, and legal defense costs and prejudgment interest described in
Section 5.06 are intended to comply with IRC Section 409A. The Plan should be interpreted
accordingly. To the extent that a provision of this Plan does not comply with IRC Section
409A, such provision shall be void and without effect. Textron does not warrant that the Plan
will comply with IRC Section 409A with respect to any participant or with respect to any
payment, however. In no event shall any Textron Company, or any director, officer, or
employee of a Textron Company (other than the Key Executive) be liable for any additional tax,
interest, or penalty incurred by a Key Executive as a result of the Plan’s failure to satisfy
the requirements of IRC Section 409A, or as a result of the Plan’s failure to satisfy any
other requirements of applicable tax laws.

	7.04	 	Controlling State Law. This Plan shall be construed in accordance with the laws of
the State of Delaware.

	7.05	 	No Right to Employment. Nothing contained in this Plan shall be construed as a
contract of employment between any Key Executive and any Textron Company, or to suggest or
create a right in any Key Executive of continued employment at any Textron Company.

	7.06	 	Additional Conditions Imposed. Textron, the Chief Executive Officer and the Chief
Human Resources Officer may impose such other lawful terms and conditions on participation in
this Plan as deemed desirable. The Chief Executive Officer and the Chief Human Resources
Officer may participate in this Plan.

			
	 	 	 
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Amended and Restated January 1, 2010
	 	Page 10

 

 

IN WITNESS WHEREOF, Textron Inc. has caused this amended and restated Plan to be executed by its
duly authorized officer, to be effective as of January 1, 2010.

	 	 	 	 	 
	 	 	TEXTRON INC.

 	 
	 	By:  	
 	 
	 	 	Cathy Streker 	 
	 	Date: 	Vice President Human Resources
and Benefits

 February     , 2010 	 
	 

			
	 	 	 
	Severance Plan for Textron Key Executives 

Amended and Restated January 1, 2010
	 	Page 11

 

 

Severance Plan 

for Textron Key Executives

As Amended and Restated

Effective January 1,
2010

APPENDIX A

Grandfathered Change in Control Definition

For any Key Executive who was an employee of a Textron Company on December 31, 2007, the following
definition shall be used under Section 1.02 to determine whether an event is a “Change in Control”
for purposes of the Plan:

	 	 	A “Change in Control” shall occur if (i) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”))
other than Textron, any trustee or other fiduciary holding Textron common stock under an
employee benefit plan of Textron or a related company, or any corporation which is owned,
directly or indirectly, by the stockholders of Textron in substantially the same
proportions as their ownership of Textron common stock, is or becomes (other than by
acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule
13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or
(ii) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board (and any new director whose election by the Board or whose
nomination for election by Textron’s stockholders was approved by a vote of at least two
thirds of the directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority thereof, or (iii) stockholders of Textron approve a
merger or consolidation of Textron with any other corporation, other than a merger or
consolidation which would result in the voting securities of Textron outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of Textron or such surviving entity
outstanding immediately after such merger or consolidation, or (iv) the stockholders of
Textron approve a plan of complete liquidation of Textron or an agreement for the sale or
disposition by Textron of all or substantially all of Textron’s assets.

			
	 	 	 
	Severance Plan for Textron Key Executives 

As Amended and Restated January 1, 2010
	 	Appendix A

Page A-1

 

 

Severance Plan 

for Textron Key Executives

As Amended and Restated

Effective January 1,
2010

APPENDIX B

Grandfathered Good Reason Termination Definition

For any Key Executive who was an employee of a Textron Company on December 31, 2007, the following
definition shall be used under Section 1.04 to determine whether an event is a “Good Reason
Termination” for purposes of the Plan:

	 	 	A Key Executive’s Severance within the two-year period immediately following a Change in
Control shall be a “Good Reason Termination” he leaves Textron employment under the conditions
described in subsection (a) or (b), below. A termination pursuant to this Appendix B shall be
treated as a Good Reason Termination for purposes of the Plan only if the conditions that cause
the Key Executive to leave employment result in a material negative change in the employment
relationship, so that his termination effectively constitutes an involuntary separation from
service within the meaning of IRC Section 409A. The Key Executive must give Textron written
notice of a condition described in subsection (a) or (b), below, within 90 days after the
condition arises, and must give Textron at least 30 days to remedy the condition before the Key
Executive leaves Textron employment.

	 	(a)	 	The Key Executive’s position, authority or responsibilities, the type of work which
the Key Executive is asked to perform, the Key Executive’s base salary or opportunity to
earn incentive compensation, the Key Executive’s working conditions and perquisites, or
the status and stature of the people with whom the Key Executive is asked to work, are not
comparable to that existing with respect to the Key Executive on the day before the date
of the Change in Control (except to the extent, if any, to which the Key Executive
expressly agrees in writing); or
	 
	 	(b)	 	the Key Executive’s services may not be performed at the location where the Key Executive was
employed on the day before the date of the Change in Control or at such other location as may be
mutually agreed by Textron and the Key Executive.

			
	 	 	 
	Severance Plan for Textron Key Executives 

Amended and Restated January 1, 2010
	 	Appendix B

Page B-1

 

 

Severance Plan 

for Textron Key Executives

As Amended and Restated

Effective January 1,
2010

APPENDIX C

Grandfathered Severance Pay Formula

	C.01	 	For Key Executives who were eligible to participate in the Plan on December 31, 2007, and who
were either Textron corporate officers or segment heads on that date, Severance Pay for
purposes of Section 3.01 shall equal 150% of the sum of:

	 	(a)	 	the Key Executive’s annual rate of base salary at the date of Severance,
except that any reduction in base salary following a Change in Control shall be
disregarded; and
	 
	 	(b)	 	the larger of (1) the average of the Key Executive’s three most recent actual
awards of annual incentive compensation (whether or not deferred) from a Textron
Company, or (2) the Key Executive’s current target incentive compensation under the
annual incentive compensation plan of a Textron Company.

	C.02	 	For Key Executives who were eligible to participate in the Plan on December 31, 2007, but who
were neither Textron corporate officers nor segment heads on that date, Severance Pay for
purposes of Section 3.01 shall equal the sum of:

	 	(a)	 	the Key Executive’s annual rate of base salary at the date of Severance,
except that any reduction in base salary following a Change in Control shall be
disregarded; and
	 
	 	(b)	 	the larger of (1) the average of the Key Executive’s three most recent actual
awards of annual incentive compensation (whether or not deferred) from a Textron
Company, or (2) the Key Executive’s current target incentive compensation under the
annual incentive compensation plan of a Textron Company.

			
	 	 	 
	Severance Plan for Textron Key Executives 

Amended and Restated January 1, 2010
	 	Appendix C

Page C-1

 

 

Severance Plan 

for Textron Key Executives

As Amended and Restated

Effective January 1,
2010

APPENDIX D

Form of Release

NOTICE: YOU MAY CONSIDER THIS GENERAL RELEASE OF CLAIMS FOR UP TO TWENTY-ONE (21) DAYS FROM YOUR
NOTICE OF TERMINATION. IF YOU DECIDE TO SIGN IT, YOU MAY REVOKE THIS GENERAL RELEASE OF CLAIMS
WITHIN SEVEN (7) DAYS AFTER SIGNING IT. IF YOU REVOKE THE RELEASE WITHIN THIS PERIOD, YOUR
REVOCATION MUST BE IMMEDIATELY SUBMITTED IN WRITING AS DESCRIBED IN THE RELEASE. YOU MIGHT WISH
TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS DOCUMENT.

TEXTRON, INC.

GENERAL RELEASE OF CLAIMS

     The Severance Plan for Textron Key Executives (the “Severance Plan”) states that I will
receive certain payments and benefits in the event of the termination of my employment with Textron
Inc. (“Textron”) only if I execute a general release of claims and I do not revoke the general
release during the applicable revocation period. In consideration of the payments and benefits
that I will receive under the Severance Plan, on behalf of myself and on behalf of any person
acting by, through, or under me (collectively, the “Executive Releasors”), I hereby release, waive,
and forever discharge Textron, Inc.; its current and former subsidiaries and related entities; its
and their respective past or present officers and directors; its and their employees, fiduciaries,
agents, and insurers (but only in their capacity as employees, fiduciaries, agents, or insurers of
Textron and its current and former subsidiaries and related entities); and the successors and
assigns of each of them (collectively, the “Textron Releasees”) from any and all liability,
charges, causes of action, demands, damages, or claims for relief of any kind whatsoever, whether
known or unknown at this time, arising out of, or connected with, my employment with Textron and/or
the termination of my employment from the beginning of the world through the effective date of this
Release. The claims waived by me under this General Release of Claims (the “Release”) include, but
are not limited to, all matters in law, in equity, in contract, in tort, or pursuant to statute,
including any claim for discrimination in employment on the basis of age, race, sex, national
origin, disability, religion, or any other type of discrimination under the Age Discrimination in
Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, or other federal, state or local law or ordinance, to the fullest extent permitted under law.

 

 

     This Release does not apply to any claims or rights that may arise after the date I signed
this Release. I understand that Textron is not admitting to any violation of my rights or any duty
or obligation owed to me.

Exclusions

     Excluded from this Release are my claims that, by law, cannot be waived, including but not
limited to (1) the right to file a charge with or participate in an investigation conducted by
certain government agencies including, but not limited to, the United States Equal Employment
Opportunity Commission, (2) any rights or claims to benefits accrued under benefit plans maintained
by Textron under the Employee Retirement Income Security Act, and (3) any claims that cannot be
waived under the Fair Labor Standards Act or the Family and Medical Leave Act. Also excluded from
this Release are my claims for payments, benefits, indemnity, contribution, exculpation, advances,
and insurance that are expressly excluded from the requirement that I execute a Release by specific
reference in the Severance Plan.

Acknowledgements

     I acknowledge and agree to the following:

	 	1.	 	The benefits I am receiving under the Severance Plan constitute consideration
over and above any benefits that I might be entitled to receive without executing this
Release;
	 
	 	2.	 	Textron advised me in writing to consult with an attorney prior to signing this
Release;
	 
	 	3.	 	I was given a period of at least twenty-one (21) days within which to consider
this Release; and
	 
	 	4.	 	Textron has advised me of my statutory right to revoke my agreement to this
Release at any time within seven (7) days after my signing this Release.

Representations and Warranties

     I warrant and represent that my decision to sign this Release was entirely voluntary on my
part. My decision was not made in reliance on any inducement, promise, or representation, whether
express or implied, other than the inducements, representations, and promises expressly set forth
herein and in the Severance Plan, and my decision did not result from any threats or other coercive
activities to induce my agreement to this Release.

     In addition, I warrant and represent that neither I nor any other Executive Releasor will sue
Textron or any other Textron Releasee in any forum for any claim covered by this Release, except
that I may bring a claim under ADEA to challenge this Release.

     I further warrant and represent that I fully understand and appreciate the consequences of my
signing this Release.

 

 

     Textron further warrants and represents that it has obtained or will obtain any approvals that
are necessary for Textron to enter into and abide by the terms of this Release.

Revocation

     If I decide to exercise my right to revoke this Release within seven (7) days after my
agreement to this Release, I warrant and represent that I will notify Textron in writing of my
intent to revoke this Release, and that I will simultaneously return in full any consideration
received from Textron that was subject to the condition that I execute a general release of claims.

Entire Agreement

     This Release, except to the extent specifically provided otherwise herein, supersedes any
prior agreements or understandings, oral or written, between the parties hereto with respect to the
subject matter hereof and constitutes the entire agreement of the parties with respect to the
subject matter hereof.

Modification

     This Release shall not be varied, altered, modified, canceled, changed, or in any way amended,
nor any provision hereof waived, except by mutual agreement of the parties in a written instrument
executed by the parties hereto or their legal representatives.

Successors and Assigns

     This Release shall inure to the benefit of and be binding upon each of the parties and their
respective successors and assigns; provided, however, that neither this Release nor
any of the rights, interests, or obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party, and no assignment of any right,
interest or obligation shall release any such assigning party therefrom unless the other party
shall have consented to such release in writing specifically referring to the right, interest or
obligation from which such assigning party is to be released. Any purported assignment in
violation of this paragraph shall be void and of no force or effect. This paragraph shall not
prevent any successor to a Textron Releasee from receiving the benefit of (and being bound by) the
Release automatically, without the need for prior written consent by the Executive Releasors.

Governing Law

     The provisions of this Release shall be construed and enforced in accordance with the laws of
the State of Delaware, without regard to any otherwise applicable principles of conflicts of laws.

 

 

Counterparts

     This Release may be executed in two (2) or more counterparts, each of which shall be deemed to
be an original, but all of which together will constitute one and the same agreement.

     IN WITNESS WHEREOF, the Executive and Textron have executed this Release as of the day and
year first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	[EXECUTIVE]	 	 
	 
	 	 	 	 	 	 
	 	 	TEXTRON INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:

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