UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 5, 2009
 
TEXTRON INC.
(Exact name of Registrant as specified in its charter)

Delaware	 	1-5480	 	05-0315468	
(State of Incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	
 
40 Westminster Street, Providence, Rhode Island 02903
(Address of principal executive offices, including zip code)
 
(401) 421-2800
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
Item 1.01        Entry Into a Material Definitive Agreement
 
Offering of 4.50% Convertible Senior Notes due 2013
 
On April 29, 2009, Textron Inc. (“Textron”), entered into an underwriting agreement (the “Notes Underwriting Agreement”) with the underwriters named therein, for whom Goldman, Sachs & Co. and J.P. Morgan Securities Inc. acted as joint book-running managers, to issue and sell $600 million principal amount of its 4.50% Convertible Senior Notes due 2013, including $60 million principal amount thereof issued and sold pursuant to the option granted by Textron to such underwriters (collectively, the “Notes”), which option was exercised in full on April 30, 2009. Textron estimates that the net proceeds from the offering of the Notes, including the Notes sold upon the exercise of such option, will be approximately $582 million, after deducting underwriting discounts and commissions and before offering expenses payable by Textron.
 
The sale of the Notes was made pursuant to Textron’s Registration Statement on Form S-3 (Registration No. 333-152562) (the “Registration Statement”), including the prospectus contained therein dated July 28, 2008, as supplemented by the prospectus supplement dated April 29, 2009 (as so supplemented, the “Notes Prospectus”), filed by Textron with the Securities and Exchange Commission pursuant to Rule 424(b)(2) under the Securities Act of 1933.
 
Textron issued the Notes under an indenture dated as of September 10, 1999 (the “Base Indenture”), as supplemented by a supplemental indenture dated as of May 5, 2009 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between Textron and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York), as trustee (the “Trustee”). Terms of the Indenture and the Notes issued pursuant to the Indenture are described in the section of the Notes Prospectus entitled “Description of notes,” which is incorporated herein by reference. The following description of the Notes and the Indenture is a summary and is not meant to be a complete description of the Notes and the Indenture. This description is qualified in its entirety by reference to the detailed provisions of the Indenture.
 
The Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009. The Notes will mature on May 1, 2013, unless earlier converted or repurchased.
 
The Notes are convertible in certain circumstances and during certain periods into Textron’s common stock, par value $0.125 per share (the “Common Stock”), cash or a combination of cash and shares of Common Stock (as described in the Supplemental Indenture) at an initial conversion rate of 76.1905 shares of Common Stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $13.1250 per share), subject to adjustment in certain circumstances as set forth in the Supplemental Indenture. The initial conversion price represents a conversion premium of 25% over the public offering price of $10.50 per share in the offering of Common Stock described under “ ¾ Offering of Common Stock” below.
 
Upon a fundamental change (as defined in the Supplemental Indenture), holders may require Textron to repurchase all or a portion of their Notes at a purchase price in cash equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the
 
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fundamental change repurchase date. The Notes are not redeemable at Textron’s option prior to maturity.
 
The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes, and the interest accrued on such Notes, if any, to be immediately due and payable.
 
In connection with the issuance and sale by Textron of the Notes as described under this Item 1.01 of this Current Report, the following exhibits are filed with this Current Report and incorporated by reference in the Registration Statement and the Notes Prospectus: (i) the Notes Underwriting Agreement (Exhibit 1.1 to this Current Report); (ii) the Base Indenture (Exhibit 4.1 to this Current Report); (iii) the Supplemental Indenture (Exhibit 4.2 to this Current Report); (iv) the form of Note (Exhibit 4.3 to this Current Report); and (v) the updated legal opinion of Pillsbury Winthrop Shaw Pittman LLP (Exhibit 5.1 to this Current Report).
 
Offering of Common Stock
 
On April 29, 2009, Textron also entered into an underwriting agreement (the “Common Stock Underwriting Agreement”) with the underwriters named therein, for whom Goldman, Sachs & Co. and J.P. Morgan Securities Inc. acted as joint book-running managers, to issue and sell 23,805,000 shares of Common Stock, including 3,105,000 shares of Common Stock issued and sold pursuant to the option granted by Textron to such underwriters (collectively, the “Shares”), which option was exercised in full on May 1, 2009. Textron estimates that the net proceeds from the offering, including the Shares sold upon the exercise of such option, will be approximately $239 million, after deducting underwriting discounts and commissions and before offering expenses payable by Textron.
 
The sale of the Shares was made pursuant to the Registration Statement, including the prospectus contained therein dated July 28, 2008, as supplemented by the prospectus supplement dated April 29, 2009 (as so supplemented, the “Common Stock Prospectus”), filed by Textron with the Securities and Exchange Commission pursuant to Rule 424(b)(2) under the Securities Act of 1933.
 
In connection with the issuance and sale by Textron of the Shares as described under this Item 1.01 of this Current Report, the following exhibits are filed with this Current Report and incorporated by reference in the Registration Statement and the Common Stock Prospectus: (i) the Common Stock Underwriting Agreement (Exhibit 1.2 to this Current Report); (ii) the specimen of Common Stock certificate (Exhibit 4.3 to this Current Report); and (iii) the updated legal opinion of Pillsbury Winthrop Shaw Pittman LLP (Exhibit 5.1 to this Current Report).
 
Convertible Note Hedge and Warrant Transactions
 
On April 29, 2009 and April 30, 2009, in connection with Textron’s issuance of the Notes, Textron entered into a Convertible Bond Hedge Transaction Confirmation with each of Goldman, Sachs & Co. and JPMorgan Chase Bank, National Association to purchase convertible note hedges (collectively, the “Hedge Confirmations”). The initial strike price of the convertible note hedges is $13.1250 per share of Common Stock (the same as the initial conversion price of the Notes) and is similarly subject to certain
 
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customary adjustments (other than those arising from a fundamental change, a change of control or certain other conditions specified in the Hedge Confirmations). The convertible note hedge transactions cover an aggregate of 45,714,300 shares of Common Stock.
 
On April 29, 2009 and April 30, 2009, in connection with Textron’s issuance of the Notes, Textron entered into an Issuer Warrant Transaction Confirmation with each of Goldman, Sachs & Co. and JPMorgan Chase Bank, National Association to sell equity warrants (collectively, the “Warrant Confirmations”). The initial strike price of the equity warrants is $15.75 per share of Common Stock and is similarly subject to certain customary adjustments (other than those arising from a fundamental change, a change of control or other certain conditions specified in the Warrant Confirmations). The equity warrants cover an aggregate of 45,714,300 shares of Common Stock.
 
The transactions contemplated by the Hedge Confirmations (the “Convertible Note Hedge Transactions”) are expected to reduce the potential dilution upon conversion of the Notes in the event that the market value per share of Common Stock, as measured under Convertible Note Hedge Transactions, at the time of conversion of the Notes is greater than the strike price under the Hedge Confirmations, which corresponds to the initial conversion price of the Notes and is similarly subject to certain customary adjustments. If, however, the market price per share of Common Stock, as measured under the terms of transactions contemplated by the Warrant Confirmations (the “Warrant Transactions”), exceeds the strike price under the Warrant Confirmations when they are exercised, there would be dilution from conversion of the Notes to the extent that the then market price per share of Common Stock exceeds the strike price under the Warrant Confirmations.
 
The description above is qualified in its entirety by the Hedge Confirmations and the Warrant Confirmations, including the Reformation Agreements thereto, which are included as Exhibits 10.1 through 10.12 to this Current Report and incorporated by reference in the Registration Statement, the Notes Prospectus and the Common Stock Prospectus.
 
Item 2.03.     Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
 
The information required by Item 2.03 relating to the Notes and the Indenture is contained in Item 1.01 of this Current Report under the section “Offering of 4.50% Convertible Senior Notes due 2013” above and incorporated herein by reference.
 
Item 3.02.     Unregistered Sales of Equity Securities
 
The information required by Item 3.02 relating to the Convertible Note Hedge Transactions and the Warrant Transactions is contained in Item 1.01 of this Current Report under the section “Convertible Note Hedge and Warrant Transactions” above and is incorporated herein by reference.
 
Item 9.01.     Financial Statements and Exhibits
 
(d) Exhibits:
 
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The following exhibits are filed herewith:

Exhibit	 	 	
Number	 	Description	
 	 	 	
1.1	 	Notes Underwriting Agreement, dated April 29, 2009, between Textron and the underwriters named therein	
 	 	 	
1.2	 	Common Stock Underwriting Agreement, dated April 29, 2009, between Textron and the other underwriters named therein	
 	 	 	
4.1	 	Indenture, dated as of September 10, 1999, between Textron and The Bank of New York Mellon Trust Company, N.A, (as successor to The Bank of New York), as trustee, incorporated into this registration statement by reference to Exhibit 4.4 to Textron’s Registration Statement No. 333-113313	
 	 	 	
4.2	 	Supplemental Indenture, dated as of May 5, 2009, between Textron and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York), as trustee	
 	 	 	
4.3	 	Form of Note (included in Exhibit 4.2)	
 	 	 	
4.4	 	Specimen of Common Stock certificate	
 	 	 	
5.1	 	Opinion of Pillsbury Winthrop Shaw Pittman LLP	
 	 	 	
10.1	 	Convertible Bond Hedge Transaction Confirmation, dated April 29, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.2	 	Issuer Warrant Transaction Confirmation, dated April 29, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.3	 	Convertible Bond Hedge Transaction Confirmation, dated April 29, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.4	 	Issuer Warrant Transaction Confirmation, dated April 29, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.5	 	Convertible Bond Hedge Transaction Confirmation, dated April 30, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.6	 	Issuer Warrant Transaction Confirmation, dated April 30, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.7	 	Convertible Bond Hedge Transaction Confirmation, dated April 30, 2009, between JPMorgan Chase Bank, National Association and Textron	
 
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10.8	 	Issuer Warrant Transaction Confirmation, dated April 30, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.9	 	Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.10	 	Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.11	 	Additional Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between Goldman, Sachs & Co.and Textron	
 	 	 	
10.12	 	Additional Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
23.1	 	Consent of Pillsbury Winthrop Shaw Pittman LLP (included in Exhibit 5.1)	
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	TEXTRON INC.	
 	(Registrant)	
 	 	 	
 	By:	/s/ Mary F. Lovejoy	
 	 	
 	Name: Mary F. Lovejoy	
 	Title: Vice President and Treasurer	
 	 	 	
Date: May 5, 2009	 	 	

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Exhibit Index

Exhibit No.	 	Description	
 	 	 	
1.1	 	Notes Underwriting Agreement, dated April 29, 2009, between Textron and the underwriters named therein	
 	 	 	
1.2	 	Common Stock Underwriting Agreement, dated April 29, 2009, between Textron and the other underwriters named therein	
 	 	 	
4.1	 	Indenture, dated as of September 10, 1999, between Textron and The Bank of New York Mellon Trust Company, N.A, (as successor to The Bank of New York), as trustee, incorporated into this registration statement by reference to Exhibit 4.4 to Textron’s Registration Statement No. 333-113313	
 	 	 	
4.2	 	Supplemental Indenture, dated as of May 5, 2009, between Textron and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York), as trustee	
 	 	 	
4.3	 	Form of Note (included in Exhibit 4.2)	
 	 	 	
4.4	 	Specimen of Common Stock certificate	
 	 	 	
5.1	 	Opinion of Pillsbury Winthrop Shaw Pittman LLP	
 	 	 	
10.1	 	Convertible Bond Hedge Transaction Confirmation, dated April 29, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.2	 	Issuer Warrant Transaction Confirmation, dated April 29, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.3	 	Convertible Bond Hedge Transaction Confirmation, dated April 29, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.4	 	Issuer Warrant Transaction Confirmation, dated April 29, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.5	 	Convertible Bond Hedge Transaction Confirmation, dated April 30, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.6	 	Issuer Warrant Transaction Confirmation, dated April 30, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.7	 	Convertible Bond Hedge Transaction Confirmation, dated April 30, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.8	 	Issuer Warrant Transaction Confirmation, dated April 30, 2009, between JPMorgan Chase Bank, National Association and Textron	
 
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10.9	 	Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.10	 	Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
10.11	 	Additional Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between Goldman, Sachs & Co. and Textron	
 	 	 	
10.12	 	Additional Issuer Warrant Transaction Reformation Agreement, dated May 4, 2009, between JPMorgan Chase Bank, National Association and Textron	
 	 	 	
23.1	 	Consent of Pillsbury Winthrop Shaw Pittman LLP (included in Exhibit 5.1)	
 
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Exhibit 1.1
 
UNDERWRITING AGREEMENT
 
April 29, 2009
 
Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
 
Dear Sirs:
 
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. (the “ Managers ”) understand that Textron Inc., a Delaware corporation (the “ Company ”), proposes to issue and sell $540,000,000 aggregate principal amount of its 4.50% Convertible Senior Notes due 2013 (the “ Firm Securities ”). The Company also proposes to grant to the underwriters named below (the “ Underwriters ”) an option to purchase up to an additional $60,000,000 aggregate principal amount of its 4.50% Convertible Senior Notes due 2013 to cover over-allotments, if any (the “ Option Securities ” and, together with the Firm Securities, the “ Offered Securities ”).
 
The Offered Securities will be convertible into cash, shares of common stock of the Company, $0.125 par value per share (the “ Common Stock ”), or a combination thereof, in accordance with the terms of the Offered Securities and the Indenture, dated as of September 10, 1999, between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York, as supplemented by the Supplemental Indenture, to be dated the Initial Closing Date (as defined below) (collectively, the “ Indenture ”), at the initial conversion rate specified in the final term sheet filed with the Commission pursuant Rule 433(d), which shall be in substantially the same form as Annex I attached hereto (the “ Final Term Sheet ”), under the circumstances and subject to adjustment as set forth in the Indenture.  The Offered Securities shall have such additional terms and conditions as are set forth in the Final Term Sheet, and the Final Term Sheet, together with any Issuer Free Writing Prospectuses identified on Annex II attached hereto, shall each be considered a “Permitted Free Writing Prospectus” as such term is defined in the Standard Provisions (as defined below).
 
In connection with the offering and sale of the Offered Securities, the Company and one or more of the Managers and/or their affiliates are entering into convertible note hedge transactions and warrant transactions (the “ Call Spread Transactions ”) pursuant to the convertible note hedge confirmations and the warrant confirmations between the Company and each of Goldman, Sachs & Co. and JPMorgan Chase Bank, National Association, dated the date hereof (the “ Call Spread Documentation ”).
 
Subject to the terms and conditions set forth herein or incorporated by reference herein, the Company hereby agrees to sell and the Underwriters agree to purchase, severally and not jointly, the principal amounts of the Firm Securities set forth opposite their names below at 97%

 
of their principal amount (the “ Purchase Price ”), together with accrued interest, if any, from the Initial Closing Date.

Underwriters	 	Principal Amount
of Firm Securities	 	
Goldman, Sachs & Co.	 	$	211,500,000	 	
J.P. Morgan Securities Inc.	 	211,500,000	 	
Barclays Capital Inc.	 	14,625,000	 	
Citigroup Global Markets Inc.	 	14,625,000	 	
Credit Suisse Securities (USA) LLC	 	14,625,000	 	
Deutsche Bank Securities Inc.	 	14,625,000	 	
HSBC Securities (USA) Inc.	 	14,625,000	 	
Merrill Lynch, Pierce, Fenner & Smith Incorporated	 	14,625,000	 	
The Bank of Tokyo-Mitsubishi UFJ, Ltd.	 	14,625,000	 	
UBS Securities LLC	 	14,625,000	 	
Total:	 	$	540,000,000	 	
 
In addition, the Company hereby agrees to sell the Option Securities to the Underwriters, and the Underwriters, subject to the terms and conditions set forth herein or incorporated by reference herein, shall have the option to purchase, severally and not jointly, from the Company the Option Securities at the Purchase Price, together with accrued interest, if any, from the applicable Option Closing Date (as defined below).
 
If any Option Securities are to be purchased, the principal amount of Option Securities to be purchased by each Underwriter shall be the principal amount of Option Securities which bears the same ratio to the aggregate principal amount of Option Securities being purchased as the principal amount of Firm Securities set forth opposite the name of such Underwriter in the table above (or such number increased as set forth in Article IX of the Standard Provisions) bears to the aggregate principal amount of Firm Securities being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Option Securities as the Managers in their sole discretion shall make.
 
The Underwriters may exercise the option to purchase Option Securities at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Prospectus (the “ Option Expiration Date ”), by written notice from the Managers to the Company.  Such notice shall set forth the aggregate principal amount of Option Securities as to which the option is being exercised and the date and time when the Option Securities are to be delivered and paid for (each, an “ Option Closing Date ”), which may be the same date and time as the Initial Closing Date but shall not be earlier than the Initial Closing Date or later than the
 
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fifth full business day after the date of such notice.  Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.
 
The time and date of the payment for and delivery of the Firm Securities pursuant to Article IV of the Standard Provisions, shall be at 10:00 A.M. (New York time) on May 5, 2009, or at such other time or date as shall be determined by agreement between the Company and the Managers (such date and time of delivery and payment for the Firm  Securities called the “ Initial Closing Date ” and, together with any Option Closing Date, each a “ Closing Date ”). The documents required to be delivered by Article V of the Standard Provisions shall be delivered on each Closing Date to the office of Mayer Brown LLP, counsel for the Underwriters, at 71 South Wacker Drive, Chicago, Illinois  60606, or at such other place as shall be determined by agreement between the Company and the Managers.
 
All the provisions contained in the document entitled “Textron Inc. Underwriting Agreement Standard Provisions (Debt)”, dated April 29, 2009 (the “ Standard Provisions ”), a copy of which is attached as Annex III hereto, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein.  The Registration Statement referred to in Section I of the Standard Provisions is Registration No. 333-152562. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Standard Provisions.
 
In addition to the representations and warranties in Article VII of the Standard Provisions, the Company represents and warrants to, and agrees with, each Underwriter as of the Execution Time and each Closing Date that:
 
1.                Upon issuance and delivery of the Offered Securities in accordance with this Agreement and the Indenture, the Offered Securities will be convertible at the option of the holder thereof for cash, shares of Common Stock, or a combination thereof, in accordance with the terms of the Offered Securities and the Indenture.  The shares of Common Stock, if any, initially issuable upon conversion of the Offered Securities have been duly and validly authorized and, when issued and delivered upon such conversion, will be duly and validly issued, fully paid and non-assessable, and will conform in all material respects to the description thereof contained in the Disclosure Package and the Prospectus; and the issuance of the Common Stock will not be subject to any preemptive or similar rights of any security holder of the Company.
 
2.                The Company’s Board of Directors, or an authorized committee thereof, has duly and validly adopted resolutions to reserve for issuance and will at all times require the Company to reserve and keep available for issuance, free of preemptive or other similar rights, a sufficient number of shares of Common Stock for purposes of enabling the Company to satisfy its obligations to issue Common Stock, if any, upon the conversion of the Offered Securities.
 
3.                The statements set forth in the Disclosure Package and the Prospectus under the captions “Certain United States federal income tax consequences,” “Description of Capital Stock” and “Description of convertible note hedge and warrant transactions” are accurate in all material respects and fairly present the information provided.
 
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4.                The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive or similar rights; except as described in or expressly contemplated by the Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.
 
5.                The Call Spread Documentation has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally, except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and except as the enforcement of indemnification and contribution provisions contained therein may be limited by applicable law or the application of principles of public policy.
 
6.                No person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Offered Securities.
 
7.                The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
 
In addition to the Company’s covenants in Article VI of the Standard Provisions, the Company covenants as follows:
 
1.                The Company will use its best efforts to effect the listing of the Common Stock, if any, issuable upon conversion of the Offered Securities on the New York Stock Exchange.
 
2.                The Company will pay all expenses and fees incurred in connection with the listing of the Common Stock, if any, issuable upon conversion of the Offered Securities on the New York Stock Exchange and the cost and charges of any transfer agent and any registrar.
 
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3.                Between the Execution Time and the Option Expiration Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion rate of the Offered Securities.
 
4.                For a period of 90 days after the date of the Prospectus, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Managers.  The foregoing sentence shall not apply to (a) the Offered Securities to be sold hereunder and any shares of Common Stock of the Company issued upon conversion of the Offered Securities, (b) the Common Stock to be sold in the Company’s concurrent offering of Common Stock, (c) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security in each such case outstanding on the date hereof and referred to in the Disclosure Package and the Prospectus or granted in accordance with clause (d) of this paragraph 4, (d) any shares of Common Stock issued, or options to purchase common stock granted, pursuant to existing equity compensation plans described in the Disclosure Package and the Prospectus, (e) any shares of Common Stock contributed to the Company’s 401(k) plans in effect as of the date hereof, based on a dollar amount that is consistent with the Company’s prior contributions to such plans or (f) the Call Spread Transactions.
 
In addition to the conditions contained in Article V of the Standard Provisions, the obligations of the Underwriters’ to purchase the Offered Securities shall be subject to the following:
 
1.                The form of opinion of the counsel for the Company, to be delivered pursuant to paragraph (c) of Article V of the Standard Provisions and attached as Exhibit A thereto, will be modified to include the following additional opinions:
 
(a)           The shares of Common Stock, if any, initially issuable upon conversion of the Offered Securities have been duly authorized and validly reserved for issuance and, when issued and delivered upon such conversion in accordance with the Indenture, will be duly and validly issued, fully paid and non-assessable, and will conform in all material respects to the description thereof contained in the Disclosure Package and the Prospectus; and the issuance of the Common Stock will not be subject to any preemptive rights of any security holder of the Company under the Delaware General Corporation Law or the Certificate of Incorporation of the Company.
 
(b)          The Company’s Board of Directors, or an authorized committee thereof, has duly and validly adopted resolutions to reserve for issuance, and to require the Company to reserve and keep available for issuance, free of preemptive or other similar rights, a sufficient number of shares of Common Stock for purposes of enabling the Company
 
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to satisfy its obligations to issue Common Stock, if any, upon the conversion of the Offered Securities.
 
(c)           The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable except as otherwise described in the Registration Statement, the Disclosure Package and the Prospectus.
 
2.                Paragraph (d) of Article V of the Standard Provisions, governing the opinion of the special counsel for the Company, will be modified to include an opinion to the effect that the statements set forth in the Disclosure Package and the Prospectus under the captions “Description of Capital Stock” and “Description of convertible note hedge and warrant transactions,” to the extent that such statements purport to constitute summaries of the legal matters or agreements referred to therein, are accurate in all material respects.
 
In addition, such opinion shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company and with representatives of the Underwriters and counsel for the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the Prospectus and related matters were discussed and on the basis of the foregoing, no facts have come to the attention of such counsel that cause such counsel to believe that (i) the Registration Statement, at the Effective Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus, as of its date and, as amended or supplemented, if applicable, as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Disclosure Package, as of the Execution Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial, accounting and statistical data that has been included in or excluded from the Registration Statement, the Disclosure Package or the Prospectus or that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 under the Trust Indenture Act of the Trustee.
 
3.                The Managers shall have received on the Closing Date an opinion of Davis Polk & Wardwell, special product counsel to the Underwriters, dated the Closing Date, with respect to such matters as the Managers may reasonably require.
 
6

 
All communications hereunder will be in writing and effective only on receipt, and, if sent to the Manager, will be mailed, delivered or telefaxed to J.P. Morgan Securities Inc., 383 Madison Avenue, 4th Floor, New York, NY 10179, Attention: Equity Syndicate Desk, facsimile: (212) 622-8358 and to Goldman, Sachs & Co., 85 Broad Street, 23rd Floor, New York, New York 10004, Attention: Registration Department, facsimile: (212) 902-3000; or, if sent to the Company, will be mailed, delivered or telefaxed to Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903, Attention: Mary F. Lovejoy, Vice President and Treasurer, facsimile (401) 457-3533.
 
7

 

 	Very truly yours,	

 	By:	/s/ Goldman, Sachs & Co.	
 	 	(Goldman, Sachs & Co.)	

 	J.P. MORGAN SECURITIES INC.	

 	By:	/s/ Bill Contente	
 	Name:	Bill Contente	
 	Title:	Managing Director	

 	On behalf of the several Underwriters	

 

Accepted:	
 	
TEXTRON INC.	

By:	/s/ Mary F. Lovejoy	 	
Name:	Mary F. Lovejoy	
Title:	Vice President and Treasurer	

 
Convertible Notes UA Signature Page

 
Annex I
 
Form of Final Term Sheet

Pricing Term Sheet	 	Filed pursuant to Rule 433	
dated April 29, 2009	 	Registration File No. 333-152562	
 	 	Supplementing the Preliminary	
 	 	Prospectus Supplements	
 	 	dated April 28, 2009	
 	 	(To Prospectus dated July 28, 2008)	
 
Textron Inc.
Concurrent Offerings of
 
20,700,000 Shares of Common Stock, par value $0.125 per share
(the “Common Stock Offering”)
 
and
 
$540,000,000 principal amount of
4.50% Convertible Senior Notes due 2013
(the “Convertible Senior Notes Offering”)
 
The information in this pricing term sheet relates only to the Common Stock Offering and Convertible Senior Notes Offering and should be read together with (i) the preliminary prospectus supplement dated April 28, 2009 relating to the Common Stock Offering, including the documents incorporated by reference therein, (ii) the preliminary prospectus supplement dated April 28, 2009 relating to the Convertible Senior Notes Offering, including the documents incorporated by reference therein, and (iii) the related base prospectus dated July 28, 2008, each filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, Registration Statement No. 333-152562.

Issuer:	 	Textron Inc., a Delaware corporation.	
 	 	 	
Ticker / Exchange for Common Stock:	 	TXT / The New York Stock Exchange (“NYSE”).	
 	 	 	
Trade Date:	 	April 29, 2009.	
 	 	 	
Settlement Date:	 	May 5, 2009.	
 	 	 	
Common Stock Offering	
 	 	 	
Title of Securities:	 	Common stock, par value $0.125 per share, of the Issuer.	
 	 	 	
Shares Offered and Sold:	 	20,700,000 (or a total of 23,805,000 if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full).	
 	 	 	
Public Offering Price:	 	$10.50 per share / approximately $217.4 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 	 	 	
Underwriting Discounts and Commissions:	 	$0.4725 per share / approximately $9.8 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 
I-1

 

Proceeds, Before Expenses, to the Issuer:	 	$10.0275 per share / approximately $207.6 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 	 	 	
Use of Proceeds:	 	The Issuer estimates that the net proceeds from the Common Stock Offering will be approximately $207.6 million ($238.7 million if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full), after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer. The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions. The Issuer intends to use the remainder of the net proceeds from the Common Stock Offering, together with the net proceeds from the Convertible Senior Notes Offering, to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt.	
 	 	 	
Estimated Net Proceeds:	 	The Issuer expects to raise approximately $731.4 million in net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer, assuming no exercise of either the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in the Common Stock Offering or the underwriters’ option to purchase up to $60,000,000 principal amount of Convertible Senior Notes in the Convertible Senior Notes Offering.	
 	 	 	
Capitalization:	 	The following table replaces the table set forth on page S-29 of the preliminary prospectus supplement for the Common Stock Offering:	
 
I-2

 

 	 	As of April 4, 2009	 	
 	 	(unaudited)	 	As further	 	
($ in millions)	 	Actual	 	As adjusted(1)	 	adjusted(2)	 	
Cash and cash equivalents	 	$	1,691	 	$	1,858	 	$	2,382	 	
Manufacturing group:	 	 	 	 	 	 	 	
Current portion of long-term debt and short-term debt	 	$	5	 	$	5	 	$	5	 	
Convertible senior notes	 	—	 	—	 	540	 	
Other long-term debt	 	2,870	 	2,870	 	2,870	 	
Total Manufacturing debt	 	2,875	 	2,875	 	3,415	 	
Total Finance debt	 	7,954	 	7,954	 	7,954	 	
Total debt	 	10,829	 	10,829	 	11,369	 	
Shareholders’ equity:	 	 	 	 	 	 	 	
Capital stock	 	34	 	37	 	37	 	
Capital surplus	 	1,127	 	1,291	 	1,291	 	
Retained earnings	 	3,106	 	3,106	 	3,106	 	
Accumulated other comprehensive loss	 	(1,423	)	(1,423	)	(1,423	)	
Cost of treasury shares	 	(376	)	(376	)	(376	)	
Total shareholders’ equity	 	2,468	 	2,635	 	2,635	 	
Total capitalization	 	$	13,297	 	$	13,464	 	$	14,004	 	

(1) After giving effect to the issuance and sale of the 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under “Use of proceeds” in the preliminary prospectus supplement for the Common Stock Offering.
(2) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes).	

Commissions and Discounts:	 	The underwriters have advised the Issuer that they propose to initially offer the shares of the Issuer’s common stock directly to the public at the Public Offering Price and to dealers at that price less a concession not in excess of $0.2677 per share. After the initial public offering of the shares of the Issuer’s common stock to the public, the Public Offering Price and other selling terms may be changed by the underwriters.	
 	 	 	
 	 	The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock.	
 
I-3

 

 	 	Per share	 	Without option	 	With option	 	
Public offering price	 	$	10.5000	 	$	217,350,000.00	 	$	249,952,500.00	 	
Underwriting discount	 	$	0.4725	 	$	9,780,750.00	 	$	11,247,862.50	 	
Proceeds, before expenses, to the Issuer	 	$	10.0275	 	$	207,569,250.00	 	$	238,704,637.50	 	

 	 	The expenses of the Common Stock Offering and the Convertible Senior Notes Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.	
 	 	 	
Joint Book-Running Managers:	 	Goldman, Sachs & Co. and J.P. Morgan Securities Inc.	
 	 	 	
Co-Managers:	 	Citigroup Global Markets Inc, Barclays Capital Inc, UBS Securities LLC, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce Fenner & Smith Incorporated, HSBC Securities (USA) Inc. and The Bank of Tokyo Mitsubishi UFJ, Ltd.	
 	 	 	
Convertible Senior Notes Offering	
 	 	 	
Convertible Senior Notes:	 	4.50% Convertible Senior Notes due 2013.	
 	 	 	
Aggregate Principal Amount Offered:	 	$540,000,000 principal amount of Convertible Senior Notes (or a total of $600,000,000 principal amount of Notes if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full).	
 	 	 	
Public Offering Price:	 	$1,000 per Note / $540 million total.	
 	 	 	
Underwriting Discounts and Commissions:	 	$30 per Note / $16.2 million total.	
 	 	 	
Proceeds, Before Expenses, to the Issuer:	 	$970 per Note / $523.8 million total.	
 	 	 	
Maturity:	 	The Convertible Senior Notes will mature on May 1, 2013, unless earlier converted or repurchased by the Issuer at the holder’s option upon a fundamental change.	
 	 	 	
Interest Rate:	 	4.50% per year.	
 	 	 	
Interest Payment Dates:	 	Interest will accrue from the Settlement Date or from the most recent date to which interest has been paid or duly provided for, and will be payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009, to holders of record at 5:00 p.m., New York City time, on the immediately preceding April 15 or October 15, as the case may be.	
 	 	 	
NYSE Closing Stock Price on April 29, 2009:	 	$10.81 per share of the Issuer’s common stock.	
 	 	 	
Reference Price:	 	$10.50 per share of the Issuer’s common stock, the Public Offering Price per share in the Common Stock Offering.	
 	 	 	
Conversion Premium:	 	25% above the Reference Price.	
 
I-4

 

Initial Conversion Price:	 	Approximately $13.1250 per share of the Issuer’s common stock.	
 	 	 	
Initial Conversion Rate:	 	76.1905 shares of the Issuer’s common stock per $1,000 principal amount of the Convertible Senior Notes.	
 	 	 	
Conversion Trigger Price:	 	Approximately $17.0625, which is 130% of the Initial Conversion Price.	
 	 	 	
Settlement Method Election Deadline:	 	The references to “February 18, 2013” on page S-49 of the preliminary prospectus supplement for the Convertible Senior Notes Offering shall be replaced with “February 15, 2013.”	
 	 	 	
Use of Proceeds:	 	The Issuer estimates that the net proceeds from the Convertible Senior Notes Offering will be approximately $523.8 million (or a total of approximately $582.0 million if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full), after deducting the underwriting discounts and commissions and before estimated offering expenses. The Issuer intends to use the net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt. The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions.	
 	 	 	
Capitalization:	 	The following table replaces the table set forth on page S-39 of the preliminary prospectus supplement for the Convertible Senior Notes Offering:	

 	 	As of April 4, 2009	 	
 	 	(unaudited)	 	As further	 	
($ in millions)	 	Actual	 	As adjusted(1)	 	adjusted(2)	 	
Cash and cash equivalents	 	$	1,691	 	$	2,215	 	$	2,382	 	
Manufacturing group:	 	 	 	 	 	 	 	
Current portion of long-term debt and short-term debt	 	$	5	 	$	5	 	$	5	 	
Convertible senior notes offered hereby	 	—	 	540	 	540	 	
Other long-term debt	 	2,870	 	2,870	 	2,870	 	
Total Manufacturing debt	 	2,875	 	3,415	 	3,415	 	
Total Finance debt	 	7,954	 	7,954	 	7,954	 	
Total debt	 	10,829	 	11,369	 	11,369	 	
Shareholders’ equity:	 	 	 	 	 	 	 	
Capital stock	 	34	 	34	 	37	 	
Capital surplus	 	1,127	 	1,127	 	1,291	 	
Retained earnings	 	3,106	 	3,106	 	3,106	 	
Accumulated other comprehensive loss	 	(1,423	)	(1,423	)	(1,423	)	
Cost of treasury shares	 	(376	)	(376	)	(376	)	
Total shareholders’ equity	 	2,468	 	2,468	 	2,635	 	
Total capitalization	 	$	13,297	 	$	13,837	 	$	14,004	 	
 
I-5

 

(1) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes in the Convertible Senior Notes Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes).
(2) After giving effect to the issuance and sale of 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under ‘‘Use of proceeds’’ in the preliminary prospectus supplement for the Convertible Senior Notes Offering.	

Commissions and Discounts:	 	The underwriters have advised the Issuer that they propose to initially offer the Convertible Senior Notes at a price of 100% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any, and to dealers at that price less a concession not in excess of 1.5% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any.	
 	 	 	
 	 	The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.	

 	 	Per Note	 	Without Option	 	With Option	 	
Public offering price	 	100	%	$	540,000,000	 	$	600,000,000	 	
Underwriting discount	 	3	%	$	16,200,000	 	$	18,000,000	 	
Proceeds, before expenses, to the Issuer	 	97	%	$	523,800,000	 	$	582,000,000	 	

 	 	The expenses of the Convertible Senior Notes Offering and the Common Stock Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.	
 	 	 	
Joint Book-Running Managers:	 	Goldman, Sachs & Co. and J.P. Morgan Securities Inc.	
 	 	 	
Co-Managers:	 	HSBC Securities (USA) Inc., The Bank of Tokyo Mitsubishi UFJ, Ltd., Merrill Lynch, Pierce Fenner & Smith Incorporated, Citigroup Global Markets Inc, Barclays Capital Inc, Deutsche Bank Securities Inc., UBS Securities LLC and Credit Suisse Securities (USA) LLC.	
 	 	 	
CUSIP Number:	 	882303 BN0	
 	 	 	
Adjustment to Shares Delivered upon Conversion upon a Make-Whole Fundamental Change:	 	 
The following table sets forth the number of additional shares of the Issuer’s common stock by which the conversion rate shall be increased for certain conversions in connection with a make-whole fundamental	
 
I-6

 

 	 	change based on the stock price and effective date for such make-whole fundamental change:	

 	 	Stock Price	 	
Effective Date	 	$10.50	 	$11.00	 	$12.00	 	$14.00	 	$16.00	 	$18.00	 	$20.00	 	$22.00	 	$24.00	 	$26.00	 	$30.00	 	$40.00	 	$50.00	 	$60.00	 	$80.00	 	$100.00	 	
May 5, 2009	 	19.0476	 	17.5421	 	14.6253	 	10.6336	 	8.1267	 	6.4612	 	5.3008	 	4.4544	 	3.8158	 	3.3145	 	2.5816	 	1.5316	 	0.9661	 	0.6172	 	0.2334	 	0.0570	 	
May 1, 2010	 	19.0476	 	16.5446	 	13.4495	 	9.3539	 	6.8968	 	5.3392	 	4.3069	 	3.5805	 	3.0469	 	2.6387	 	2.0538	 	1.2237	 	0.7718	 	0.4891	 	0.1752	 	0.0314	 	
May 1, 2011	 	19.0476	 	15.5067	 	12.0861	 	7.7414	 	5.3405	 	3.9464	 	3.0900	 	2.5287	 	2.1401	 	1.8525	 	1.4494	 	0.8764	 	0.5548	 	0.3491	 	0.1163	 	0.0072	 	
May 1, 2012	 	19.0476	 	14.7186	 	10.3462	 	5.4842	 	3.2037	 	2.1239	 	1.5838	 	1.2832	 	1.0933	 	0.9579	 	0.7652	 	0.4717	 	0.2979	 	0.1833	 	0.0480	 	0.0000	 	
May 1, 2013	 	19.0476	 	14.7186	 	7.1429	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	
 
The exact stock prices and effective dates may not be set forth in the table above, in which case if the stock price is between two stock price amounts in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock price amounts and the two dates, as applicable, based on a 365-day year. If the stock price is:
 
greater than $100.00 per share (subject to adjustment), the conversion rate will not be increased; or
 
less than $10.50 per share (subject to adjustment), the conversion rate will not be increased.
 
Notwithstanding the foregoing, in no event will the total number of shares of the Issuer’s common stock issuable upon conversion exceed 95.2381 per $1,000 principal amount of the Convertible Senior Notes (which number shall equal the quotient obtained by dividing $1,000 by the closing sale price of the Issuer’s common stock on the Pricing Date), subject to adjustments in the same manner as the conversion rate as set forth under “Description of notes—Conversion rate adjustments” in the preliminary prospectus supplement dated April 28, 2009 for the Convertible Senior Notes Offering.

Convertible Note Hedge and Warrant Transactions	
 	 	 	
Convertible Note Hedge and Warrant Transactions:	 	The convertible note hedge transactions cover, subject to anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. Separately and concurrently with entering into the convertible note hedge transactions, the Issuer entered into warrant transactions whereby the Issuer sold to each of the hedge counterparties warrants to acquire, subject to customary anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. The warrant transactions have an initial strike price equivalent to 150% of the Reference Price. The cost of the convertible note hedge transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $40.5 million.	

 
The Issuer has filed a registration statement (including preliminary prospectus supplements each dated April 28, 2009 and an accompanying prospectus dated July 28, 2008) with the Securities and Exchange Commission, or SEC, for the offerings to which this communication relates. Before you invest, you should read the relevant preliminary prospectus supplement, the accompanying prospectus and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offerings. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, copies may be obtained from Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad Street, New York, NY 10004, call toll-free (866) 471-2526, or fax (212) 902-9316, or email prospectus-ny@ny.email.gs.com; or from
 
I-7

 
J.P. Morgan Securities Inc., National Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, (718) 242-8002.
 
This communication should be read in conjunction with the preliminary prospectus supplements dated April 28, 2009 and the accompanying prospectus. The information in this communication supersedes the information in the relevant preliminary prospectus supplement and the accompanying prospectus to the extent inconsistent with the information in such preliminary prospectus supplement and the accompanying prospectus.
 
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED.  SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
 
I-8

 
Annex II
 
Issuer Free Writing Prospectuses
 
1.  Press release, dated April 28, 2009, filed with the Commission on April 29, 2009 pursuant to Rule 433(d).
 
II-1

 
Annex III
 
Textron Inc. Underwriting Agreement Standard Provisions (Debt)
 
II-2

 
Annex II
 
TEXTRON INC.

UNDERWRITING AGREEMENT
STANDARD PROVISIONS (DEBT)

Dated: April 29, 2009

 
From time to time, Textron Inc., a Delaware corporation (the “ Company ”), may enter into one or more underwriting agreements that provide for the sale of any of the Securities referred to below to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement relating to the Offered Securities referred to below (the “ Underwriting Agreement ”). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as this Agreement. Unless defined in Article XI hereof or otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined.
 
I.
 
The Company proposes to issue from time to time (i) senior debt securities (the “ Senior Securities ”) to be issued pursuant to the provisions of the Indenture, dated as of September 10, 1999, between the Company and The Bank of New York Mellon Trust Company, N.A, as successor trustee to The Bank of New York thereunder (the “ Trustee ”) , as the same may be from time to time amended or supplemented (the “ Indenture ”), (ii) subordinated debt securities (the “ Subordinated Securities ”) to be issued pursuant to the provisions of the Indenture and (iii) junior subordinated securities (the “ Junior Subordinated Securities ”) to be issued pursuant to the provisions of the Indenture. The term “ Securities ” means the Senior Securities, the Subordinated Securities and the Junior Subordinated Securities. The Securities will have varying designations, maturities, rates and times of payment of interest, selling prices and redemption terms.
 
The Company has filed with the Securities and Exchange Commission (the “ Commission ”) the registration statement, including a prospectus relating to the Securities, on Form S-3 that is identified in the Underwriting Agreement and has filed with, or will file with, the Commission pursuant to Rule 424 a prospectus supplement specifically relating to the Securities offered thereby (the “ Offered Securities ”). Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 that were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference.
 
1

 
The term “ Underwriters’ Securities ” means the Offered Securities to be purchased by the Underwriters herein. The term “ Contract Securities ” means the Offered Securities, if any, to be purchased pursuant to the delayed delivery contracts referred to below.
 
II.
 
If the Prospectus provides for sales of Offered Securities pursuant to delayed delivery contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto (“ Delayed Delivery Contracts ”) but with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are to be with institutional investors approved by the Company and of the types set forth in the Prospectus. On the Closing Date, the Company will pay the Managers as compensation, for the accounts of the Underwriters, the fee set forth in the Underwriting Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts.
 
If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the Contract Securities shall be deducted from the Offered Securities to be purchased by the several Underwriters and the aggregate principal amount of Offered Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Offered Securities set forth opposite each Underwriter’s name in the Underwriting Agreement, except to the extent that the Managers determine that such reduction shall be otherwise and so advise the Company.
 
III.
 
The Company is advised by the Managers that the several Underwriters propose to make a public offering of their respective portions of the Underwriters’ Securities as soon after this Agreement is entered into as in the Managers’ judgment is advisable. The terms of the public offering of the Underwriters’ Securities are set forth in the Prospectus.
 
IV.
 
Payment for the Underwriters’ Securities shall be made by wire transfer of immediately available funds to an account designated by the Company, upon delivery to the Managers for the respective accounts of the several Underwriters of the Underwriters’ Securities registered in such names and in such
 
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denominations as the Managers shall request in writing not less than two full business days prior to the date of delivery. Delivery of the Underwriters’ Securities shall be made through the facilities of The Depository Trust Company unless the Managers shall otherwise instruct.
 
V.
 
The obligations of the Underwriters to purchase the Offered Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
 
(a)            The Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by paragraph (c) of Article VI hereof, and any other material required to be filed by the Company pursuant to Rule 433(d), shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
 
(b)            Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto):
 
(i)             there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto); and the Managers shall have received, on the Closing Date, a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. Such certificate will also provide that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. The officer making such certificate may rely upon the best of his or her knowledge as to proceedings pending or threatened;
 
(ii)            there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential
 
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downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company’s securities by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2); and
 
(iii)           there shall not have occurred any change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto) that, in the judgment of the Managers, is material and adverse and that makes it, in the judgment of the Managers, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
 
(c)            The Managers shall have received on the Closing Date an opinion of counsel for the Company identified in Exhibit A hereto, dated the Closing Date, to the effect set forth in Exhibit A.
 
(d)            The Managers shall have received on the Closing Date an opinion of special counsel for the Company, dated the Closing Date, confirming that (i) the statements, if any, contained in the Prospectus under the caption “Certain United States Federal Income Tax Consequences” (or such other caption substantially similar thereto), to the extent that such statements purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, are accurate in all material respects, (ii) the statements in the Prospectus under “Description of Debt Securities” and “Description of the Notes” (or such other captions substantially similar thereto), to the extent that such statements purport to constitute summaries of the Indenture and the Offered Securities, are accurate in all material respects and (iii) the Registration Statement and the Prospectus (other than the financial statements and other financial and statistical information that is contained or incorporated by reference therein, as to which such counsel need express no opinion), at the applicable times specified therein, appeared on their face to be appropriately responsive in all material respects to the applicable requirements of the Act.
 
(e)            The Managers shall have received on the Closing Date an opinion of counsel for the Underwriters, dated the Closing Date, with respect to the issuance and sale of the Offered Securities, the Indenture, the Registration Statement, the Disclosure Package, the Prospectus (together with any supplement thereto) and other related matters as the Managers may reasonably require.
 
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(f)             The Managers shall have received on the date of the Underwriting Agreement and on the Closing Date a letter, dated such dates, in form and substance satisfactory to the Managers, from Ernst & Young LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement, the Disclosure Package and the Prospectus; provided, that the letter delivered on the Closing Date shall use a “cut-off” date no more than three Business Days prior to the Closing Date.
 
If any of the conditions specified in this Article V shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be satisfactory in form and substance to the Managers and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Managers. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
 
VI.
 
 In further consideration of the agreements of the Underwriters contained in this Agreement, the Company covenants as follows:
 
(a)            To furnish to each of the Managers, without charge, one conformed copy of the Registration Statement (excluding exhibits and materials, if any, incorporated by reference therein) and, so long as delivery of a prospectus relating to the Offered Securities by an Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), to furnish the Managers, without charge, as many copies of each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus and any supplements and amendments thereto as the Managers may reasonably request.
 
(b)            Prior to the termination of the offering of the Offered Securities, the Company will not file any amendment of the Registration Statement or supplement (including the Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished to the Managers a copy for their review prior to filing and will not file any such proposed amendment or supplement to which the Managers reasonably object. The Company will cause the Prospectus and any supplement thereto to be filed in a form approved by the Managers with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Managers of such
 
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timely filing. The Company will promptly advise the Managers (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Offered Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice pursuant to Rule 401(g)(2) or objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its reasonable best efforts to have such amendment or new registration statement become effective as soon as practicable.
 
(c)            To prepare a final term sheet, if any, containing solely a description of final terms of the Offered Securities and the offering thereof, in the form approved by the Managers and attached as a schedule to the Underwriting Agreement and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule.
 
(d)            If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made or the circumstances then prevailing, not misleading, the Company will (i) notify promptly the Managers so that any use of the Disclosure Package may cease until it is amended or supplemented, (ii) amend or supplement the Disclosure Package to correct such statement or omission and (iii) supply any amendment or supplement to the Managers in such quantities as they may reasonably request.
 
(e)            If, at any time when a prospectus relating to the Offered Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit
 
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to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made at such time, not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Act or the Exchange Act, including in connection with the use or delivery of the Prospectus, the Company promptly will (i) notify the Managers of any such event, (ii) prepare and file with the Commission, subject to the second sentence of paragraph (b) of this Article VI, an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its reasonable best efforts to have any amendment to the Registration Statement or new registration statement become effective as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the Managers in such quantities as the Managers may reasonably request.
 
(f)             To qualify the Offered Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Managers shall reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of the Offered Securities for investment under the laws of such jurisdictions as the Managers may designate.
 
(g)            To make generally available to the Company’s security holders as soon as practicable an earnings statement covering a twelve-month period beginning after the date of the Underwriting Agreement, which shall satisfy the provisions of Section 11(a) of the Act.
 
(h)            The Company will, whether or not any sale of the Offered Securities is consummated, pay all expenses incident to the performance of its obligations under this Agreement, including the fees and disbursements of its accountants and counsel, the cost of printing and delivery of the Registration Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all amendments thereof and supplements thereto, the Indenture, this Agreement and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Offered Securities, the fees and disbursements, including reasonable fees of counsel, incurred in connection with the qualification of the Offered Securities for sale and determination of eligibility for investment of the Offered Securities under the securities or blue sky laws of each such jurisdiction as the Managers may reasonably designate, the fees and disbursements of the Trustee and the fees of any agency that rates the Offered Securities, the cost of providing any CUSIP or other identification for the Offered Securities, and the fees and expenses of any depository for the Offered Securities.
 
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(i)                                      During the period beginning on the date of the Underwriting Agreement and continuing to and including the date set forth in the Underwriting Agreement, not to offer, sell, contract to sell or otherwise dispose of, or enter into such other transactions with respect to, any debt securities of the Company substantially similar to the Offered Securities, or such other securities of the Company, as are set forth in the Underwriting Agreement, without the prior written consent of the Managers.
 
(j)                                      The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
 
(k)                                   The Company agrees that, unless it has or shall have obtained the prior written consent of the Managers, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than a free writing prospectus containing the information contained in the final term sheet prepared and filed pursuant to paragraph (c) of Article VI hereof; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses identified in the Underwriting Agreement and any electronic road show. Any such free writing prospectus consented to by the Managers or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
VII.
 
The Company represents and warrants to each Underwriter that:
 
(a)                                   The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed the Registration Statement with the Commission for registration under the Act of the offering and sale of the Offered Securities. The Registration Statement has become effective. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and, to the Company’s knowledge, no proceeding for that purpose against the Company or related to the offering has been
 
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initiated or threatened by the Commission. The Company may have filed with the Commission, pursuant to Rule 424(b), one or more preliminary prospectus supplements relating to the Offered Securities, each of which has previously been furnished to the Managers. The Company will file with the Commission a final prospectus supplement relating to the Offered Securities in accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all information required by the Act, and, except to the extent the Managers shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Managers prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
 
(b)                                  On each Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date, the Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the Effective Date and on the Closing Date, the Indenture did or will comply in all material respects with the applicable requirements of the Trust Indenture Act; as of its date and on the Closing Date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statement of Eligibility (Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Managers specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VIII hereof.
 
(c)                                   As of the Execution Time, (i) the Disclosure Package and (ii) each electronic road show, when taken together as a whole with the Disclosure Package, does not contain any untrue statement of a material fact
 
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or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the Managers specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VIII hereof.
 
(d)    The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405). At the time of (i) the initial filing of the Registration Statement, (ii) the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus) and (iii) any offer relating to the Offered Securities in reliance on the exemption of Rule 163 made by the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)), the Company was a “well known seasoned issuer” (as defined in Rule 405), including not having been an “ineligible issuer” (as defined in Rule 405) without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered such an ineligible issuer. The Company has paid or shall pay the required Commission filing fees relating to the Offered Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
 
(e)                                   Each Issuer Free Writing Prospectus and the final term sheet prepared and filed pursuant to paragraph (c) of Article VI hereof does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference and any prospectus supplement deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through the Managers specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VIII hereof.
 
(f)                                     The documents incorporated by reference in the Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, and none of such documents contained any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
 
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circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, then in effect and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
(g)                                  There has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus.
 
(h)                                  The execution and delivery of, and the performance by the Company of its obligations under, this Agreement have been duly authorized by the Company, and this Agreement has been duly executed and delivered by the Company.
 
(i)                                      The Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity; the Indenture conforms in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus; and the Indenture has been duly qualified under the Trust Indenture Act.
 
(j)                                      The Offered Securities have been duly authorized and, when executed by the Company, authenticated by the Trustee and issued in accordance with the Indenture and delivered pursuant to the provisions of this Agreement against payment therefor as described in the Disclosure Package and the Prospectus, will constitute valid and legally binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity and except as rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability and except further as enforcement thereof may be limited by (i) requirements that a claim with respect to any Offered Securities denominated other than in U.S. dollars (or a foreign currency or currency unit judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (ii) governmental authority to limit, delay or prohibit the making of payments outside the United States; and the
 
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Offered Securities will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(k)                                   The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition, financial or otherwise, earnings, business or operations of the Company and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”).
 
(l)                                      Each of Bell Helicopter Textron Inc., Textron Financial Corporation and The Cessna Aircraft Company (collectively, the “ Significant Subsidiaries ”) is a corporation duly organized, validly existing and in good standing in the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect. Except as disclosed in the Disclosure Package and the Prospectus, the Company owns of record, directly or indirectly, all of the outstanding shares of capital stock of each of the Significant Subsidiaries free and clear of any lien, adverse claim, security interest, equity or other encumbrance.
 
(m)                                The execution and delivery of this Agreement and the Indenture by the Company, the issuance and sale of the Offered Securities and the consummation of the transactions contemplated herein and therein will not contravene any (i) provision of applicable law, (ii) the Restated Certificate of Incorporation or Amended and Restated By-Laws of the Company or (iii) any other agreement or instrument binding upon the Company or any of the Company’s Significant Subsidiaries or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or such Significant Subsidiaries, except, in the case of clauses (i) and (iii) such contraventions as would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on the performance of this Agreement, the Indenture or the Offered Securities or the consummation of any of the transactions contemplated hereby or thereby, and no consent, approval or authorization or order of, or qualification with, any governmental body or agency is required for the
 
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performance by the Company of its obligations under this Agreement or the Indenture, and the consummation of the transactions contemplated hereby or thereby, except such as are required pursuant to state securities or blue sky laws.
 
(n)                                  The statements under the captions “Description of Debt Securities,” “Description of the Notes,” “Underwriting” and “Plan of Distribution” (or such other captions substantially similar thereto) in the Prospectus insofar as they constitute a summary of this Agreement, the Indenture and the Offered Securities, fairly present the information called for by Form S-3 with respect to such documents.
 
(o)                                  The statements included under the caption “Legal Proceedings” (or such other caption substantially similar thereto) in the Company’s most recent Annual Report on Form 10-K incorporated by reference in the Registration Statement and the Prospectus insofar as they describe statements of law or legal conclusions are accurate and fairly present the information required to be shown therein as of the date of filing of such report with the Commission.
 
(p)                                  Except as disclosed in the Disclosure Package and the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement, the Indenture or the Offered Securities or the consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a Material Adverse Effect.
 
(q)                                  Since the date as of which information is given in the Disclosure Package and the Prospectus, there has not been (i) any material change in the capital stock (other than changes pursuant to open market or repurchase plans or employee benefit plans or changes resulting from the conversion or redemption of outstanding shares of preferred stock or convertible debt) or long-term debt of the Company and its subsidiaries, taken as a whole, or (ii) any material adverse change, or any development known to the Company that is reasonably likely to result in a material adverse change, in or affecting the condition, financial or otherwise, or the earnings, business or operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Disclosure Package and the Prospectus.
 
(r)                                     The accountants who have certified certain financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and
 
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schedules included in the Disclosure Package and the Prospectus are independent registered public accountants with respect to the Company within the meaning of the Act and the applicable published rules and regulations thereunder.
 
(s)                                   The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries included or incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement present fairly in all material respects the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated, comply as to form in all material respects with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
 
(t)                                     The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Disclosure Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
 
(u)                                  Except as disclosed in the Disclosure Package and the Prospectus, no labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is imminent or, to the knowledge of the Company, is threatened that could reasonably be expected to have a Material Adverse Effect.
 
(v)                                  Except as disclosed in the Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “ Environmental Laws ”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and the Company is not aware of any pending investigation that might lead to such a claim.
 
(w)                                There is and has been no failure on the part of the Company and, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the
 
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Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 thereof relating to loans and Sections 302 and 906 thereof relating to certifications.
 
(x)                                    The Company maintains a system of internal accounting control over financial reporting with respect to itself and its consolidated subsidiaries sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Disclosure Package and the Prospectus, the Company’s internal control over financial reporting was effective as of the date of the most recent audited balance sheet in the Company’s most recent Annual Report on Form 10-K incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement and the Company is not aware of any material weakness in its internal control over financial reporting.
 
(y)                                  The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); based on the evaluation of these disclosure controls and procedures, except as disclosed in the Disclosure Package and the Prospectus, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the date of the most recent balance sheet incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement.
 
(z)                                    Except as disclosed in the Disclosure Package and the Prospectus, (i) neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a material violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “ FCPA ”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and (ii) the Company, its subsidiaries and, to the knowledge of the
 
15

 
Company, its affiliates have conducted their businesses in compliance in all material respects with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
 
(aa)                             Except as disclosed in the Disclosure Package and the Prospectus, the operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
 
(bb)                           Except as disclosed in the Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”), and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
 
(cc)                             The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
 
(dd)                           Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement, the Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
 
Any certificate signed by any officer of the Company and delivered to the Managers or counsel for the Underwriters in connection with the offering of the Offered Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
 
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VIII.
 
(a)                                   The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Offered Securities as originally filed or in any amendment thereof, or the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Offered Securities, the Prospectus or any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) or the information contained in the final term sheet required to be prepared and filed pursuant to paragraph (c) of Section VI hereof, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided , however , that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Managers specifically for inclusion therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VIII hereof. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
 
(b)                                  Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Managers specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability that any Underwriter may otherwise have. The Company acknowledges that (i) the sentences related to concessions and reallowances, (ii) the paragraphs related to stabilization, syndicate covering transactions and penalty bids and (iii) the sentence on the cover page regarding the date
 
17

 
on which the Underwriters expect to deliver the Offered Securities in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus.
 
(c)                                   In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the “ indemnified party ”) shall promptly notify the person against whom such indemnity may be sought (the “ indemnifying party ”) in writing; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such proceeding and it has been materially prejudiced by such failure and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or relating proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Managers in the case of parties indemnified pursuant to the second preceding paragraph and by the Company in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any proceeding in respect of which any indemnified party is a party unless such settlement (A) includes an unconditional release of such indemnified party from all liability on claims that are the subject matters of such proceeding and (B) does not include a
 
18

 
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party .
 
(d)                                  If the indemnification provided for in this Article VIII is unavailable to an indemnified party under the second or third paragraphs hereof or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of such Offered Securities (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters in respect thereof. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
 
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VIII were determined by pro rata allocation or by any other method of allocation which does not take account of the considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VIII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten and distributed to the public by such Underwriter were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
 
19

 
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Article VIII are several, in proportion to the respective principal amounts of Offered Securities purchased by each of such Underwriters, and not joint. For purposes of this Article VIII, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
 
The indemnity and contribution agreements contained in this Article VIII and the representations and warranties of the Company in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by any Underwriter or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities.
 
IX.
 
This Agreement shall be subject to termination in the absolute discretion of the Managers, by notice given to the Company, if (a) after the execution and delivery of the Underwriting Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities, (iv) there shall have occurred a material disruption in commercial banking or securities settlement or clearance services or (v) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Managers, is material and adverse and (b) in the case of any of the events specified in clauses (a)(i) through (v), such event, singly or together with any other such event, makes it, in the judgment of the Managers, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Prospectus.
 
20

 
If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase the Offered Securities which it or they have agreed to purchase hereunder, and the aggregate principal amount of the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Offered Securities, the other Underwriters shall be obligated severally in the proportions which the amounts of the Offered Securities set forth opposite their names in the Underwriting Agreement bear to the aggregate principal amount of the Offered Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Managers may specify, to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase; provided that in no event shall the principal amount of the Offered Securities which any Underwriter has agreed to purchase hereunder be increased pursuant to this Article IX by an amount in excess of one-ninth of such principal amount of the Offered Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase the Offered Securities which it or they agreed to purchase hereunder and the aggregate principal amount of the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is more than one-tenth of the aggregate principal amount of the Offered Securities, and arrangements satisfactory to Managers and the Company for the purchase of such Offered Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or of the Company. In any such case either the Managers or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph or any such termination shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
 
X.
 
If this Agreement shall be terminated by the Underwriters or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement, with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with the Offered Securities.
 
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
 
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This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
 
The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Article VIII hereof, and will survive delivery of and payment for the Offered Securities. The provisions of Article VIII hereof and this Article X hereof shall survive the termination or cancellation of this Agreement.
 
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Article VIII hereof, and no other person will have any right or obligation hereunder.
 
The Company hereby acknowledges that (a) the purchase and sale of the Offered Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with the offering of the Offered Securities and the process leading up to the offering of the Offered Securities is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
The Company and the Underwriters hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
 
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
 
XI
 
As used in this Agreement, the following terms shall have the following meanings:
 
“ Act ” shall mean the Securities Act of 1933, as amended and the rules and regulations of the Commission promulgated thereunder.
 
22

 
“ Base Prospectus ” shall mean the prospectus included in the Registration Statement and referred to in Article I hereof contained in the Registration Statement at the Execution Time.
 
“ Business Day ” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
 
“ Disclosure Package ” shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing Prospectuses, if any, identified in the Underwriting Agreement, (iv)  the final term sheet prepared and filed pursuant to paragraph (c) of Article VI hereof, if any, and (v) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
“ Effective Date ” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.
 
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
 
“ Execution Time ” shall mean the date and time set forth in the Underwriting Agreement, which shall also be deemed to be the date and time that the Underwriting Agreement is executed and delivered by the parties hereto.
 
“ Free Writing Prospectus ” shall mean a free writing prospectus, as defined in Rule 405.
 
“ Issuer Free Writing Prospectus ” shall mean an issuer free writing prospectus, as defined in Rule 433.
 
“ Preliminary Prospectus ” shall mean any preliminary prospectus supplement to the Base Prospectus that is used prior to the filing of the Prospectus, together with the Base Prospectus.
 
“ Prospectus ” shall mean the prospectus supplement relating to the Underwriters’ Securities that was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base Prospectus.
 
“ Registration Statement ” shall mean the registration statement referred to in Article I hereof, including exhibits and financial statements and any prospectus supplement relating to the Offered Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.
 
23

 
“ Rule 158 ,” “ Rule 163 ,” “ Rule 164 ,” “ Rule 172 ,” “ Rule 401 ,” “ Rule 405 ,” “ Rule 415 ,” “ Rule 424 ,” “ Rule 430B ,” “ Rule 433, ” “ Rule 436, ” “ Rule 456 ” and “ Rule 457 ” and  refer to such rules under the Act.
 
“ Trust Indenture Act ” shall mean the Trust Indenture Act of 1939, as amended and the rules and regulations of the Commission promulgated thereunder.
 
24

 
SCHEDULE I
 
DELAYED DELIVERY CONTRACT
 
[insert date]
 
Dear Sirs:
 
The undersigned hereby agrees to purchase from Textron Inc., a Delaware corporation (the “ Company ”), and the Company agrees to sell to the undersigned $ principal amount of the Company’s [state title of issue] (the “ Securities ”), offered by the Company’s Prospectus dated                       ,              and Prospectus Supplement dated                         ,           , receipt of copies of which are hereby acknowledged, at a purchase price of                            of the principal amount thereof plus accrued interest and on the further terms and conditions set forth in this contract. The undersigned does not contemplate selling Securities prior to making payment therefor.
 
The undersigned will purchase from the Company Securities in the principal amounts and on the delivery dates set forth below:

Delivery Date	 	Principal Amount	 	Plus Accrued Interest From:	 	
 	 	 	 	 	 	
 	 	$	 	 	 	
 	 	$	 	 	 	
 	 	$	 	 	 	
 
Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a “ Delivery Date .”
 
Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company by wire transfer of immediately available funds to an account designated by the Company at 10:00 A.M. (New York time) on the Delivery Date, upon delivery to the undersigned of the Securities to be purchased by the undersigned on the Delivery Date, in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date.
 
The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company shall have sold, and delivery shall have taken place to the underwriters (the “ Underwriters ”) named in the Prospectus Supplement
 
S-I-1

 
referred to above of, such part of the Securities as is to be sold to them. Promptly after completion of sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith.
 
Failure to take delivery of and make payment for Securities by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract.
 
This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other.
 
If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract, as of the date first above written, between the Company and the undersigned when such counterpart is so mailed or delivered.
 
S-I-2

 
This contract shall be governed by and construed in accordance with the laws of the State of New York.

 	 	Yours very truly,	

 	 	(Purchaser)	

 	 	By	 	

 	 	(Title)	

 	 	(Address)	
 	 	 	
Accepted:	 	 	
 	 	 	
TEXTRON INC.	 	 	

By	 	 	 	
Title:	 	 	

S-I-3

 
PURCHASER — PLEASE COMPLETE AT TIME OF SIGNING
 
The name and telephone and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed is as follows: (Please Print).

Name	 	Telephone No.
(Including Area Code)	 	Department	 	

 	 	 	 	 	 	

 	 	 	 	 	 	
 
S-I-4

 
EXHIBIT A
 
OPINION OF ASSOCIATE GENERAL COUNSEL OF THE COMPANY
 
The opinion of Associate General Counsel (or another lawyer) of the Company, to be delivered pursuant to paragraph (c) of Article V of the document entitled Textron Inc. Underwriting Agreement Standard Provisions (Debt), shall be to the effect that:
 
(a)           the Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect;
 
(b)           each of Bell Helicopter Textron Inc., Textron Financial Corporation and The Cessna Aircraft Company (the “ Significant Subsidiaries ”) is a corporation duly organized, validly existing and in good standing in the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect;
 
(c)           the Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as (1) may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and (2) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability, and has been duly qualified under the Trust Indenture Act;
 
(d)           the Offered Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the Underwriting Agreement or by institutional investors, if any, pursuant to Delayed Delivery Contracts, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and will be entitled to the benefits of the Indenture, except as (1) may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and (2) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability and except further as enforcement thereof may be limited by (i) requirements that a claim with respect to any Offered Securities denominated other than in U.S. dollars (or a foreign currency or currency unit judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined
 
III-1

 
pursuant to applicable law or (ii) governmental authority to limit, delay or prohibit the making of payments outside the United States;
 
(e)           the execution and delivery of, and the performance by the Company of its obligations under, the Underwriting Agreement have been duly authorized by the Company and the Underwriting Agreement has been duly executed and delivered by the Company;
 
(f)            the execution and delivery of, and the performance by the Company of its obligations under, the Delayed Delivery Contracts, if any, have been duly authorized by the Company and the Delayed Delivery Contracts, if any, have been duly executed and delivered by the Company, and are valid and binding agreements of the Company enforceable in accordance with their respective terms, except as (i) may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability;
 
(g)           the execution and delivery of the Underwriting Agreement and the Indenture by the Company and the consummation of the transactions contemplated therein will not contravene (i) any provision of applicable law (except as rights to indemnity and contribution under the Underwriting Agreement may be limited by applicable law), (ii) the Restated Certificate of Incorporation or Amended and Restated By-Laws of the Company or (iii) to such counsel’s knowledge after due inquiry, any other material agreement or instrument binding on the Company or any of the Significant Subsidiaries or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or the Significant Subsidiaries, except, in the case of clauses (i) and (iii), such contraventions as would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on the performance of this Agreement, the Indenture or the Offered Securities or the consummation of any of the transactions contemplated hereby or thereby, and no consent, approval or authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under the Underwriting Agreement or the Indenture, and the consummation of the transactions contemplated thereby, except such as are required pursuant to state securities or blue sky laws;
 
(h)           the statements included under the caption “Legal Proceedings” (or such other caption substantially similar thereto) in the Company’s most recent Annual Report on Form 10-K, incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement insofar as they describe statements of law or legal conclusions are accurate and fairly present the information required to be shown, as of the date of filing of such report with the Commission;
 
(i)            except as disclosed in the Disclosure Package and the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this
 
S-I-2

 
Agreement, the Indenture or the Offered Securities or the consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a Material Adverse Effect;
 
(j)            the Registration Statement has become effective under the Act; any required filing of the Base Prospectus, any Preliminary Prospectus and the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); any required filing of the final term sheet prepared and filed pursuant to paragraph (c) of Article VI of the Underwriting Agreement and any Permitted Free Writing Prospectus has been made in the manner and within the time period required by Rule 433(d); to the knowledge of such counsel, no order suspending the effectiveness of the Registration Statement has been issued by the Commission; and
 
(k)           the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the applicable requirements of the Exchange Act.
 
In addition, such opinion shall state that such counsel, together with other members of the Company’s legal staff, has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company and with representatives of the Underwriters and counsel for the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the Prospectus and related matters were discussed and, although such counsel need not pass upon or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Disclosure Package or the Prospectus and need not make any independent check or verification thereof (other than as specified in subparagraphs (c), (d) and (h) above insofar as the captions referred to therein relate to provisions of documents), on the basis of the foregoing, no facts have come to the attention of such counsel that cause such counsel to believe that (i) the Registration Statement, at the Effective Date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus, as of its date and, as amended or supplemented, if applicable, as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Disclosure Package, as of the Execution Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial, accounting and statistical data that has been included in or excluded from the Registration Statement, the Disclosure Package or the Prospectus or that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 under the Trust Indenture Act of the Trustee.
 
S-I-3

 
To the extent that the matters set forth in such opinion are governed by the laws of the State of New York, such counsel may rely on, or such matters may be excluded from such opinion and instead included in, the opinion of special counsel delivered pursuant to paragraph (d) of Article V of the document entitled Textron Inc. Underwriting Agreement Standard Provisions (Debt).
 
Terms capitalized herein and not otherwise defined shall have the meanings assigned to them in the Textron Inc. Underwriting Agreement Standard Provisions (Debt). In rendering such opinion, such counsel may rely as to matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company and public officials.
 
S-I-4

Exhibit 1.2
UNDERWRITING AGREEMENT
 
April 29, 2009
 
Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
 
Dear Sirs:
 
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. (the “ Managers ”) understand that Textron Inc., a Delaware corporation (the “ Company ”), proposes to issue and sell 20,700,000 shares (the “ Firm Securities ”) of common stock, par value $0.125 per share, of the Company (the “ Common Stock ”). The Company also proposes to grant to the underwriters named below (the “ Underwriters ”) an option to purchase up to an additional 3,105,000 shares of Common Stock (the “ Option Securities ” and, together with the Firm Securities, the “ Offered Securities ”).  The Offered Securities shall have such additional terms and conditions as are set forth in the final term sheet filed with the Commission pursuant to Rule 433(d), which shall be in substantially the same form as Annex I attached hereto (the “ Final Term Sheet ”), and the Final Term Sheet, together with any Issuer Free Writing Prospectuses identified on Annex II attached hereto, shall each be considered a “Permitted Free Writing Prospectus” as such term is defined in the Standard Provisions (as defined below).
 
Subject to the terms and conditions set forth herein or incorporated by reference herein, the Company hereby agrees to sell and the Underwriters agree to purchase, severally and not jointly, the number of Firm Securities set forth opposite their names below at a price of $10.0275 per share of Common Stock (the “ Purchase Price ”).

Underwriters	 	Number of Firm
Securities	 	
Goldman, Sachs & Co.	 	7,417,496	 	
J.P. Morgan Securities Inc.	 	7,417,496	 	
Barclays Capital Inc.	 	733,126	 	
Citigroup Global Markets Inc.	 	733,126	 	
Credit Suisse Securities (USA) LLC	 	733,126	 	
Deutsche Bank Securities Inc.	 	733,126	 	
HSBC Securities (USA) Inc.	 	733,126	 	
Merrill Lynch, Pierce, Fenner & Smith Incorporated	 	733,126	 	
The Bank of Tokyo-Mitsubishi UFJ, Ltd.	 	733,126	 	
UBS Securities LLC	 	733,126	 	
Total:	 	20,700,000	 	

 
In addition, the Company hereby agrees to sell the Option Securities to the Underwriters, and the Underwriters, subject to the terms and conditions set forth herein or incorporated by reference herein, shall have the option to purchase, severally and not jointly, from the Company the Option Securities at the Purchase Price.
 
If any Option Securities are to be purchased, the number of Option Securities to be purchased by each Underwriter shall be the number of Option Securities which bears the same ratio to the number of Option Securities being purchased as the number of Firm Securities set forth opposite the name of such Underwriter in the table above (or such number increased as set forth in Article VIII of the Standard Provisions) bears to the number of Firm Securities being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional shares as the Managers in their sole discretion shall make.
 
The Underwriters may exercise the option to purchase Option Securities at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Prospectus (the “ Option Expiration Date ”), by written notice from the Managers to the Company.  Such notice shall set forth the number of Option Securities as to which the option is being exercised and the date and time when the Option Securities are to be delivered and paid for (each, an “ Option Closing Date ”), which may be the same date and time as the Initial Closing Date but shall not be earlier than the Initial Closing Date or later than the fifth full business day after the date of such notice.  Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.
 
The time and date of the payment for and delivery of the Firm Securities pursuant to Article III of the Standard Provisions, shall be at 10:00 A.M. (New York time) on May 5, 2009, or at such other time or date as shall be determined by agreement between the Company and the Managers (such date and time of delivery and payment for the Firm  Securities called the “ Initial Closing Date ” and, together with any Option Closing Date, each a “ Closing Date ”). The documents required to be delivered by Article IV of the Standard Provisions shall be delivered on each Closing Date to the office of Mayer Brown LLP, counsel for the Underwriters, at 71 South Wacker Drive, Chicago, Illinois  60606, or at such other place as shall be determined by agreement between the Company and the Managers.
 
All the provisions contained in the document entitled “Textron Inc. Underwriting Agreement Standard Provisions (Common Stock)”, dated April 29, 2009 (the “ Standard Provisions ”), a copy of which is attached as Annex III hereto, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein.  The Registration Statement referred to in
 
2

 
Section I of the Standard Provisions is Registration No. 333-152562. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Standard Provisions.
 
In addition to the conditions contained in Article IV of the Standard Provisions, the obligations of the Underwriters’ to purchase the Offered Securities shall be subject to the following: Paragraph (d) of Article IV of the Standard Provisions, governing the opinion of the special counsel for the Company, will be modified to include an opinion to the effect that the statements set forth in the Disclosure Package and the Prospectus under the caption “Description of convertible note hedge and warrant transactions,” to the extent that such statements purport to constitute summaries of the legal matters or the agreements referred to therein, are accurate in all material respects. In addition, such opinion shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company and with representatives of the Underwriters and counsel for the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the Prospectus and related matters were discussed and on the basis of the foregoing, no facts have come to the attention of such counsel that cause such counsel to believe that (i) the Registration Statement, at the Effective Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus, as of its date and, as amended or supplemented, if applicable, as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Disclosure Package, as of the Execution Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial, accounting and statistical data that has been included in or excluded from the Registration Statement, the Disclosure Package or the Prospectus.
 
In addition to the Company’s covenants in Article V of the Standard Provisions, the Company further covenants that for a period of 90 days after the date of the Prospectus, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Managers. The foregoing sentence shall not apply to (a) the Offered Securities to be sold hereunder and any shares of Common Stock of the Company issued upon conversion of the Offered Securities, (b) the Common Stock to be sold in the Company’s concurrent offering of Common Stock, (c) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security in each such case outstanding on the date hereof and referred to in the Disclosure Package and the Prospectus or granted in accordance with clause (d) of this paragraph or issued in accordance with the agreements referred to in the Disclosure Package and the
 
3

 
Prospectus under the caption “Description of convertible note hedge and warrant transactions,” (d) any shares of Common Stock issued, or options to purchase common stock granted, pursuant to existing equity compensation plans described in the Disclosure Package and the Prospectus or (e) any shares of Common Stock contributed to the Company’s 401(k) plans in effect as of the date hereof, based on a dollar amount that is consistent with the Company’s prior contributions to such plans.
 
All communications hereunder will be in writing and effective only on receipt, and, if sent to the Manager, will be mailed, delivered or telefaxed to J.P. Morgan Securities Inc., 383 Madison Avenue, 4th Floor, New York, NY 10179, Attention: Equity Syndicate Desk, facsimile: (212) 622-8358 and to Goldman, Sachs & Co., 85 Broad Street, 23rd Floor, New York, New York 10004, Attention: Registration Department, facsimile: (212) 902-3000; or, if sent to the Company, will be mailed, delivered or telefaxed to Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903, Attention: Mary F. Lovejoy, Vice President and Treasurer, facsimile: (401) 457-3533.
 
4

 

 	 	Very truly yours,	

 	 	By:	/s/ Goldman, Sachs & Co.	
 	 	 	(Goldman, Sachs & Co.)	

 	 	J.P. MORGAN SECURITIES INC.	

 	 	By:	/s/ Bill Contente	
 	 	Name:	Bill Contente	
 	 	Title:	Managing Director	

 	 	On behalf of the several Underwriters	
 	 	 	 	
Accepted:	 	 	 	
 	 	 	 	
TEXTRON INC.	 	 	 	

By:	/s/ Mary F. Lovejoy	 	 	 	
Name: Mary F. Lovejoy	 	 	 	
Title:  Vice President and Treasurer	 	 	 	

Common Stock UA Signature Page

 
Annex I
 
Form of Final Term Sheet

Pricing Term Sheet	 	Filed pursuant to Rule 433	
dated April 29, 2009	 	Registration File No. 333-152562	
 	 	Supplementing the Preliminary	
 	 	Prospectus Supplements	
 	 	dated April 28, 2009	
 	 	(To Prospectus dated July 28, 2008)	
 
Textron Inc.
Concurrent Offerings of

20,700,000 Shares of Common Stock, par value $0.125 per share
(the “Common Stock Offering”)
 
and
 
$540,000,000 principal amount of
4.50% Convertible Senior Notes due 2013
(the “Convertible Senior Notes Offering”)
 
The information in this pricing term sheet relates only to the Common Stock Offering and Convertible Senior Notes Offering and should be read together with (i) the preliminary prospectus supplement dated April 28, 2009 relating to the Common Stock Offering, including the documents incorporated by reference therein, (ii) the preliminary prospectus supplement dated April 28, 2009 relating to the Convertible Senior Notes Offering, including the documents incorporated by reference therein, and (iii) the related base prospectus dated July 28, 2008, each filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, Registration Statement No. 333-152562.

Issuer:	 	Textron Inc., a Delaware corporation.	
 	 	 	
Ticker / Exchange for Common Stock:	 	TXT / The New York Stock Exchange (“NYSE”).	
 	 	 	
Trade Date:	 	April 29, 2009.	
 	 	 	
Settlement Date:	 	May 5, 2009.	
 	 	 	
 	 	Common Stock Offering	
 	 	 	
Title of Securities:	 	Common stock, par value $0.125 per share, of the Issuer.	
 	 	 	
Shares Offered and Sold:	 	20,700,000 (or a total of 23,805,000 if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full).	
 	 	 	
Public Offering Price:	 	$10.50 per share / approximately $217.4 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 	 	 	
Underwriting Discounts and Commissions:	 	$0.4725 per share / approximately $9.8 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 
I-1

 

Proceeds, Before Expenses, to the Issuer:	 	$10.0275 per share / approximately $207.6 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).	
 	 	 	
Use of Proceeds:	 	The Issuer estimates that the net proceeds from the Common Stock Offering will be approximately $207.6 million ($238.7 million if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full), after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer. The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions. The Issuer intends to use the remainder of the net proceeds from the Common Stock Offering, together with the net proceeds from the Convertible Senior Notes Offering, to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt.	
 	 	 	
Estimated Net Proceeds:	 	The Issuer expects to raise approximately $731.4 million in net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer, assuming no exercise of either the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in the Common Stock Offering or the underwriters’ option to purchase up to $60,000,000 principal amount of Convertible Senior Notes in the Convertible Senior Notes Offering.	
 	 	 	
Capitalization:	 	The following table replaces the table set forth on page S-29 of the preliminary prospectus supplement for the Common Stock Offering:	
 
I-2

 

 	 	As of April 4, 2009	 	
 	 	(unaudited)	 	
($ in millions)	 	Actual	 	As adjusted(1)	 	As further
adjusted(2)	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	 1,691	 	$	 1,858	 	$	 2,382	 	
Manufacturing group:	 	 	 	 	 	 	 	
Current portion of long-term debt and short-term debt	 	$	 5	 	$	 5	 	$	 5	 	
Convertible senior notes	 	—	 	—	 	540	 	
Other long-term debt	 	2,870	 	2,870	 	2,870	 	
Total Manufacturing debt	 	2,875	 	2,875	 	3,415	 	
Total Finance debt	 	7,954	 	7,954	 	7,954	 	
Total debt	 	10,829	 	10,829	 	11,369	 	
Shareholders’ equity:	 	 	 	 	 	 	 	
Capital stock	 	34	 	37	 	37	 	
Capital surplus	 	1,127	 	1,291	 	1,291	 	
Retained earnings	 	3,106	 	3,106	 	3,106	 	
Accumulated other comprehensive loss	 	(1,423	)	(1,423	)	(1,423	)	
Cost of treasury shares	 	(376	)	(376	)	(376	)	
Total shareholders’ equity	 	2,468	 	2,635	 	2,635	 	
Total capitalization	 	$	 13,297	 	$	 13,464	 	$	 14,004	 	

(1) After giving effect to the issuance and sale of the 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under “Use of proceeds” in the preliminary prospectus supplement for the Common Stock Offering.
(2) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes).

Commissions and Discounts:	 	The underwriters have advised the Issuer that they propose to initially offer the shares of the Issuer’s common stock directly to the public at the Public Offering Price and to dealers at that price less a concession not in excess of $0.2677 per share. After the initial public offering of the shares of the Issuer’s common stock to the public, the Public Offering Price and other selling terms may be changed by the underwriters.	
 	 	 	
 	 	The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock.	
 
I-3

 

 	 	Per share	 	Without option	 	With option	 	
Public offering price	 	$	10.5000	 	$	217,350,000.00	 	$	249,952,500.00	 	
Underwriting discount	 	$	0.4725	 	$	9,780,750.00	 	$	11,247,862.50	 	
Proceeds, before expenses, to the Issuer	 	$	10.0275	 	$	207,569,250.00	 	$	238,704,637.50	 	

 	 	The expenses of the Common Stock Offering and the Convertible Senior Notes Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.	
 	 	 	
Joint Book-Running Managers:	 	Goldman, Sachs & Co. and J.P. Morgan Securities Inc.	
 	 	 	
Co-Managers:	 	Citigroup Global Markets Inc, Barclays Capital Inc, UBS Securities LLC, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce Fenner & Smith Incorporated, HSBC Securities (USA) Inc. and The Bank of Tokyo Mitsubishi UFJ, Ltd.	
 	 	 	
Convertible Senior Notes Offering	
 	 	 	
Convertible Senior Notes:	 	4.50% Convertible Senior Notes due 2013.	
 	 	 	
Aggregate Principal Amount Offered:	 	$540,000,000 principal amount of Convertible Senior Notes (or a total of $600,000,000 principal amount of Notes if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full).	
 	 	 	
Public Offering Price:	 	$1,000 per Note / $540 million total.	
 	 	 	
Underwriting Discounts and Commissions:	 	$30 per Note / $16.2 million total.	
 	 	 	
Proceeds, Before Expenses, to the Issuer:	 	$970 per Note / $523.8 million total.	
 	 	 	
Maturity:	 	The Convertible Senior Notes will mature on May 1, 2013, unless earlier converted or repurchased by the Issuer at the holder’s option upon a fundamental change.	
 	 	 	
Interest Rate:	 	4.50% per year.	
 	 	 	
Interest Payment Dates:	 	Interest will accrue from the Settlement Date or from the most recent date to which interest has been paid or duly provided for, and will be payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009, to holders of record at 5:00 p.m., New York City time, on the immediately preceding April 15 or October 15, as the case may be.	
 	 	 	
NYSE Closing Stock Price on April 29, 2009:	 	$10.81 per share of the Issuer’s common stock.	
 	 	 	
Reference Price:	 	$10.50 per share of the Issuer’s common stock, the Public Offering Price per share in the Common Stock Offering.	
 	 	 	
Conversion Premium:	 	25% above the Reference Price.	
 
I-4

 

Initial Conversion Price:	 	Approximately $13.1250 per share of the Issuer’s common stock.	
 	 	 	
Initial Conversion Rate:	 	76.1905 shares of the Issuer’s common stock per $1,000 principal amount of the Convertible Senior Notes.	
 	 	 	
Conversion Trigger Price:	 	Approximately $17.0625, which is 130% of the Initial Conversion Price.	
 	 	 	
Settlement Method Election Deadline:	 	The references to “February 18, 2013” on page S-49 of the preliminary prospectus supplement for the Convertible Senior Notes Offering shall be replaced with “February 15, 2013.”	
 	 	 	
Use of Proceeds:	 	The Issuer estimates that the net proceeds from the Convertible Senior Notes Offering will be approximately $523.8 million (or a total of approximately $582.0 million if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full), after deducting the underwriting discounts and commissions and before estimated offering expenses. The Issuer intends to use the net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt.  The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions.	
 	 	 	
Capitalization:	 	The following table replaces the table set forth on page S-39 of the preliminary prospectus supplement for the Convertible Senior Notes Offering:	

 	 	As of April 4, 2009	 	
 	 	(unaudited)	 	
($ in millions)	 	Actual	 	As adjusted(1)	 	As further
adjusted(2)	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	 1,691	 	$	 2,215	 	$	 2,382	 	
Manufacturing group:	 	 	 	 	 	 	 	
Current portion of long-term debt and short-term debt	 	$	 5	 	$	 5	 	$	 5	 	
Convertible senior notes offered hereby	 	—	 	540	 	540	 	
Other long-term debt	 	2,870	 	2,870	 	2,870	 	
Total Manufacturing debt	 	2,875	 	3,415	 	3,415	 	
Total Finance debt	 	7,954	 	7,954	 	7,954	 	
 	 	 	 	 	 	 	 	
Total debt	 	10,829	 	11,369	 	11,369	 	
 	 	 	 	 	 	 	 	
Shareholders’ equity:	 	 	 	 	 	 	 	
Capital stock	 	34	 	34	 	37	 	
Capital surplus	 	1,127	 	1,127	 	1,291	 	
Retained earnings	 	3,106	 	3,106	 	3,106	 	
Accumulated other comprehensive loss	 	(1,423	)	(1,423	)	(1,423	)	
Cost of treasury shares	 	(376	)	(376	)	(376	)	
Total shareholders’ equity	 	2,468	 	2,468	 	2,635	 	
Total capitalization	 	$	 13,297	 	$	 13,837	 	$	 14,004	 	
 
I-5

 

(1) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes in the Convertible Senior Notes Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes). (2) After giving effect to the issuance and sale of 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under ‘‘Use of proceeds’’ in the preliminary prospectus supplement for the Convertible Senior Notes Offering.

Commissions and Discounts:	 	The underwriters have advised the Issuer that they propose to initially offer the Convertible Senior Notes at a price of 100% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any, and to dealers at that price less a concession not in excess of 1.5% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any. The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.	

 	 	Per Note	 	Without Option	 	With Option	 	
Public offering price	 	100	%	$	540,000,000	 	$	600,000,000	 	
Underwriting discount	 	3	%	$	16,200,000	 	$	18,000,000	 	
Proceeds, before expenses, to the Issuer	 	97	%	$	523,800,000	 	$	582,000,000	 	

 	 	The expenses of the Convertible Senior Notes Offering and the Common Stock Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.	
 	 	 	
Joint Book-Running Managers:	 	Goldman, Sachs & Co. and J.P. Morgan Securities Inc.	
 	 	 	
Co-Managers:	 	HSBC Securities (USA) Inc., The Bank of Tokyo Mitsubishi UFJ, Ltd., Merrill Lynch, Pierce Fenner & Smith Incorporated, Citigroup Global Markets Inc, Barclays Capital Inc, Deutsche Bank Securities Inc., UBS Securities LLC and Credit Suisse Securities (USA) LLC.	
 	 	 	
CUSIP Number:	 	882303 BN0	
 	 	 	
Adjustment to Shares Delivered upon Conversion upon a Make-Whole Fundamental Change:	 	

The following table sets forth the number of additional shares of the Issuer’s common stock by which the conversion rate shall be increased for certain conversions in connection with a make-whole fundamental	
 
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 	 	change based on the stock price and effective date for such make-whole fundamental change:	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Stock Price	 	
Effective Date	 	$	 10.50	 	$	 11.00	 	$	 12.00	 	$	 14.00	 	$	 16.00	 	$	 18.00	 	$	 20.00	 	$	 22.00	 	$	 24.00	 	$	 26.00	 	$	 30.00	 	$	 40.00	 	$	 50.00	 	$	 60.00	 	$	 80.00	 	$	 100.00	 	
																																																			
May 5, 2009	 	19.0476	 	17.5421	 	14.6253	 	10.6336	 	8.1267	 	6.4612	 	5.3008	 	4.4544	 	3.8158	 	3.3145	 	2.5816	 	1.5316	 	0.9661	 	0.6172	 	0.2334	 	0.0570	 	
May 1, 2010	 	19.0476	 	16.5446	 	13.4495	 	9.3539	 	6.8968	 	5.3392	 	4.3069	 	3.5805	 	3.0469	 	2.6387	 	2.0538	 	1.2237	 	0.7718	 	0.4891	 	0.1752	 	0.0314	 	
May 1, 2011	 	19.0476	 	15.5067	 	12.0861	 	7.7414	 	5.3405	 	3.9464	 	3.0900	 	2.5287	 	2.1401	 	1.8525	 	1.4494	 	0.8764	 	0.5548	 	0.3491	 	0.1163	 	0.0072	 	
May 1, 2012	 	19.0476	 	14.7186	 	10.3462	 	5.4842	 	3.2037	 	2.1239	 	1.5838	 	1.2832	 	1.0933	 	0.9579	 	0.7652	 	0.4717	 	0.2979	 	0.1833	 	0.0480	 	0.0000	 	
May 1, 2013	 	19.0476	 	14.7186	 	7.1429	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	
 
The exact stock prices and effective dates may not be set forth in the table above, in which case if the stock price is between two stock price amounts in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock price amounts and the two dates, as applicable, based on a 365-day year. If the stock price is:
 
greater than $100.00 per share (subject to adjustment), the conversion rate will not be increased; or
 
less than $10.50 per share (subject to adjustment), the conversion rate will not be increased.
 
Notwithstanding the foregoing, in no event will the total number of shares of the Issuer’s common stock issuable upon conversion exceed 95.2381 per $1,000 principal amount of the Convertible Senior Notes (which number shall equal the quotient obtained by dividing $1,000 by the closing sale price of the Issuer’s common stock on the Pricing Date), subject to adjustments in the same manner as the conversion rate as set forth under “Description of notes—Conversion rate adjustments” in the preliminary prospectus supplement dated April 28, 2009 for the Convertible Senior Notes Offering.
 
Convertible Note Hedge and Warrant Transactions

Convertible Note Hedge and Warrant Transactions:	 	The convertible note hedge transactions cover, subject to anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. Separately and concurrently with entering into the convertible note hedge transactions, the Issuer entered into warrant transactions whereby the Issuer sold to each of the hedge counterparties warrants to acquire, subject to customary anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. The warrant transactions have an initial strike price equivalent to 150% of the Reference Price. The cost of the convertible note hedge transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $40.5 million.	

 
The Issuer has filed a registration statement (including preliminary prospectus supplements each dated April 28, 2009 and an accompanying prospectus dated July 28, 2008) with the Securities and Exchange Commission, or SEC, for the offerings to which this communication relates. Before you invest, you should read the relevant preliminary prospectus supplement, the accompanying prospectus and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offerings. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, copies may be obtained from Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad Street, New York, NY 10004, call toll-free (866) 471-2526, or fax (212) 902-9316, or email prospectus-ny@ny.email.gs.com; or from
 
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J.P. Morgan Securities Inc., National Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, (718) 242-8002.
 
This communication should be read in conjunction with the preliminary prospectus supplements dated April 28, 2009 and the accompanying prospectus. The information in this communication supersedes the information in the relevant preliminary prospectus supplement and the accompanying prospectus to the extent inconsistent with the information in such preliminary prospectus supplement and the accompanying prospectus.
 
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED.  SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
 
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Annex II
 
Issuer Free Writing Prospectuses
 
1.  Press release, dated April 28, 2009, filed with the Commission on April 29, 2009 pursuant to Rule 433(d).
 
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Annex III
 
Textron Inc. Underwriting Agreement Standard Provisions (Common Stock)
 
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TEXTRON INC.

UNDERWRITING AGREEMENT
STANDARD PROVISIONS (COMMON STOCK)

Dated: April 29, 2009

 
From time to time, Textron Inc., a Delaware corporation (the “ Company ”), may enter into one or more underwriting agreements that provide for the sale of shares of the Company’s common stock, $.125 par value per share (the “ Common Stock ”), to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement relating to the Offered Securities referred to below (the “ Underwriting Agreement ”). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as this Agreement. Unless defined in Article X hereof or otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined.
 
I.
 
The Company has filed with the Securities and Exchange Commission (the “ Commission ”) the registration statement, including a prospectus relating to the Common Stock, on Form S-3 that is identified in the Underwriting Agreement and has filed with, or will file with, the Commission pursuant to Rule 424 a prospectus supplement specifically relating to the shares of the Common Stock offered thereby (the “ Offered Securities ”). Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 that were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference.
 
II.
 
The Company is advised by the Managers that the several Underwriters propose to make a public offering of their respective portions of the Offered Securities as soon after this Agreement is entered into as in the Managers’ judgment is advisable. The terms of the public offering of the Offered Securities are set forth in the Prospectus.
 
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III.
 
Payment for the Offered Securities shall be made by wire transfer of immediately available funds to an account designated by the Company, upon delivery to the Managers for the respective accounts of the several Underwriters of the Offered Securities registered in such names and in such denominations as the Managers shall request in writing not less than two full business days prior to the date of delivery. Delivery of the Offered Securities shall be made through the facilities of The Depository Trust Company unless the Managers shall otherwise instruct.
 
IV.
 
The obligations of the Underwriters to purchase the Offered Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
 
(a)           The Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by paragraph (c) of Article V hereof, and any other material required to be filed by the Company pursuant to Rule 433(d), shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
 
(b)           Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto):
 
(i)            there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto); and the Managers shall have received, on the Closing Date, a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. Such certificate will also provide that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. The officer
 
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making such certificate may rely upon the best of his or her knowledge as to proceedings pending or threatened;
 
(ii)           there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company’s securities by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2); and
 
(iii)          there shall not have occurred any change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto) that, in the judgment of the Managers, is material and adverse and that makes it, in the judgment of the Managers, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).
 
(c)           The Managers shall have received on the Closing Date an opinion of counsel for the Company identified in Exhibit A hereto, dated the Closing Date, to the effect set forth in Exhibit A.
 
(d)           The Managers shall have received on the Closing Date an opinion of special counsel for the Company, dated the Closing Date, confirming that (i) the statements, if any, contained in the Prospectus under the caption “Certain United States Federal Income Tax Consequences” (or such other caption substantially similar thereto), to the extent that such statements purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, are accurate in all material respects, (ii) the statements in the Prospectus under “Description of Capital Stock” (or such other caption substantially similar thereto), to the extent that such statements purport to constitute summaries of the Offered Securities, are accurate in all material respects and (iii) the Registration Statement and the Prospectus (other than the financial statements and other financial and statistical information that is contained or incorporated by reference therein, as to which such counsel need express no opinion), at the applicable times specified therein, appeared on their face to be appropriately responsive in all material respects to the applicable requirements of the Act.
 
(e)           The Managers shall have received on the Closing Date an opinion of counsel for the Underwriters, dated the Closing Date, with respect
 
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to the issuance and sale of the Offered Securities, the Registration Statement, the Disclosure Package, the Prospectus (together with any supplement thereto) and other related matters as the Managers may reasonably require.
 
(f)            The Managers shall have received on the date of the Underwriting Agreement and on the Closing Date a letter, dated such dates, in form and substance satisfactory to the Managers, from Ernst & Young LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement, the Disclosure Package and the Prospectus; provided, that the letter delivered on the Closing Date shall use a “cut-off” date no more than three Business Days prior to the Closing Date.
 
(g)           The Offered Securities to be delivered on the Closing Date shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance.
 
If any of the conditions specified in this Article IV shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be satisfactory in form and substance to the Managers and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Managers. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
 
V.
 
In further consideration of the agreements of the Underwriters contained in this Agreement, the Company covenants as follows:
 
(a)           To furnish to each of the Managers, without charge, one conformed copy of the Registration Statement (excluding exhibits and materials, if any, incorporated by reference therein) and, so long as delivery of a prospectus relating to the Offered Securities by an Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), to furnish the Managers, without charge, as many copies of each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus and any supplements and amendments thereto as the Managers may reasonably request.
 
(b)           Prior to the termination of the offering of the Offered Securities, the Company will not file any amendment of the Registration
 
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Statement or supplement (including the Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished to the Managers a copy for their review prior to filing and will not file any such proposed amendment or supplement to which the Managers reasonably object. The Company will cause the Prospectus and any supplement thereto to be filed in a form approved by the Managers with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Managers of such timely filing. The Company will promptly advise the Managers (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Offered Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice pursuant to Rule 401(g)(2) or objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its reasonable best efforts to have such amendment or new registration statement become effective as soon as practicable.
 
(c)           To prepare a final term sheet, if any, containing solely a description of final terms of the Offered Securities and the offering thereof, in the form approved by the Managers and attached as a schedule to the Underwriting Agreement and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule.
 
(d)           If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made or the circumstances then prevailing, not misleading, the Company will (i) notify promptly the Managers so that any use of the Disclosure Package may cease until it is amended or supplemented, (ii) amend or supplement the Disclosure Package to correct such statement or omission and (iii) supply any amendment or
 
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supplement to the Managers in such quantities as they may reasonably request.
 
(e)           If, at any time when a prospectus relating to the Offered Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made at such time, not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Prospectus to comply with the Act or the Exchange Act, including in connection with the use or delivery of the Prospectus, the Company promptly will (i) notify the Managers of any such event, (ii) prepare and file with the Commission, subject to the second sentence of paragraph (b) of this Article V, an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its reasonable best efforts to have any amendment to the Registration Statement or new registration statement become effective as soon as practicable in order to avoid any disruption in use of the Prospectus and (iv) supply any supplemented Prospectus to the Managers in such quantities as the Managers may reasonably request.
 
(f)            To qualify the Offered Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Managers shall reasonably request and to pay all expenses (including reasonable fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of the Offered Securities for investment under the laws of such jurisdictions as the Managers may designate.
 
(g)           To make generally available to the Company’s security holders as soon as practicable an earnings statement covering a twelve-month period beginning after the date of the Underwriting Agreement, which shall satisfy the provisions of Section 11(a) of the Act.
 
(h)           The Company will, whether or not any sale of the Offered Securities is consummated, pay all expenses incident to the performance of its obligations under this Agreement, including the fees and disbursements of its accountants and counsel, the cost of printing and delivery of the Registration Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and all amendments thereof and supplements thereto, this Agreement and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Offered Securities, the fees and expenses incurred in connection with the listing of the Offered Securities on the New York Stock Exchange, the cost and charges of any
 
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transfer agent and any registrar and the fees and disbursements, including reasonable fees of counsel, incurred in connection with the qualification of the Offered Securities for sale and determination of eligibility for investment of the Offered Securities under the securities or blue sky laws of each such jurisdiction as the Managers may reasonably designate.
 
(i)            During the period beginning on the date of the Underwriting Agreement and continuing to and including the date set forth in the Underwriting Agreement, not to offer, sell, contract to sell or otherwise dispose of, or enter into such other transactions with respect to, any shares of the Common Stock, or such other securities of the Company, as are set forth in the Underwriting Agreement, without the prior written consent of the Managers.
 
(j)            The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
 
(j)            The Company agrees that, unless it has or shall have obtained the prior written consent of the Managers, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than a free writing prospectus containing the information contained in the final term sheet prepared and filed pursuant to paragraph (c) of Article V hereof; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses identified in the Underwriting Agreement and any electronic road show. Any such free writing prospectus consented to by the Managers or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
(j)            To use its best efforts to list, subject only to official notice of issuance, the Offered Securities on the New York Stock Exchange.
 
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VI.
 
The Company represents and warrants to each Underwriter that:
 
(a)           The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed the Registration Statement with the Commission for registration under the Act of the offering and sale of the Offered Securities. The Registration Statement has become effective. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and, to the Company’s knowledge, no proceeding for that purpose against the Company or related to the offering has been initiated or threatened by the Commission. The Company may have filed with the Commission, pursuant to Rule 424(b), one or more preliminary prospectus supplements relating to the Offered Securities, each of which has previously been furnished to the Managers. The Company will file with the Commission a final prospectus supplement relating to the Offered Securities in accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all information required by the Act, and, except to the extent the Managers shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Managers prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
 
(b)           On each Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date, the Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act and the Exchange Act; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; as of its date and on the Closing Date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended, or (ii) the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Managers specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such
 
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information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VII hereof.
 
(c)           As of the Execution Time, (i) the Disclosure Package and (ii) each electronic road show, when taken together as a whole with the Disclosure Package, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the Managers specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VII hereof.
 
(d)           The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405). At the time of (i) the initial filing of the Registration Statement, (ii) the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus) and (iii) any offer relating to the Offered Securities in reliance on the exemption of Rule 163 made by the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)), the Company was a “well known seasoned issuer” (as defined in Rule 405), including not having been an “ineligible issuer” (as defined in Rule 405) without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered such an ineligible issuer. The Company has paid or shall pay the required Commission filing fees relating to the Offered Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
 
(e)           Each Issuer Free Writing Prospectus and the final term sheet prepared and filed pursuant to paragraph (c) of Article VI hereof does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference and any prospectus supplement deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through the Managers specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VII hereof.
 
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(f)            The documents incorporated by reference in the Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, and none of such documents contained any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement and the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, then in effect and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
(g)           There has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus.
 
(h)           The execution and delivery of, and the performance by the Company of its obligations under, this Agreement have been duly authorized by the Company, and this Agreement has been duly executed and delivered by the Company.
 
(j)            The Offered Securities have been duly authorized and, when delivered pursuant to the provisions of this Agreement against payment therefor as described in the Disclosure Package and the Prospectus, will be validly issued, fully paid and nonassessable; the issuance of the Offered Securities will not be subject to any preemptive or similar rights; and the Offered Securities will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(k)           The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a material adverse effect on the condition, financial or otherwise, earnings, business or operations of the Company and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”).
 
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(l)            Each of Bell Helicopter Textron Inc., Textron Financial Corporation and The Cessna Aircraft Company (collectively, the “ Significant Subsidiaries ”) is a corporation duly organized, validly existing and in good standing in the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect. Except as disclosed in the Disclosure Package and the Prospectus, the Company owns of record, directly or indirectly, all of the outstanding shares of capital stock of each of the Significant Subsidiaries free and clear of any lien, adverse claim, security interest, equity or other encumbrance.
 
(m)          The execution and delivery of this Agreement by the Company, the issuance and sale of the Offered Securities and the consummation of the transactions contemplated herein and therein will not contravene any (i) provision of applicable law, (ii) the Restated Certificate of Incorporation or Amended and Restated By-Laws of the Company or (iii) any other agreement or instrument binding upon the Company or any of the Company’s Significant Subsidiaries or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or such Significant Subsidiaries, except, in the case of clauses (i) and (iii) such contraventions as would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or thereby, and no consent, approval or authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, and the consummation of the transactions contemplated hereby or thereby, except such as are required pursuant to state securities or blue sky laws.
 
(n)           The statements under the captions “Description of Capital Stock,” “Underwriting” and “Plan of Distribution” (or such other captions substantially similar thereto) in the Prospectus insofar as they constitute a summary of this Agreement and the Offered Securities, fairly present the information called for by Form S-3 with respect to such documents.
 
(o)           The statements included under the caption “Legal Proceedings” (or such other caption substantially similar thereto) in the Company’s most recent Annual Report on Form 10-K incorporated by reference in the Registration Statement and the Prospectus insofar as they describe statements of law or legal conclusions are accurate and fairly present
 
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the information required to be shown therein as of the date of filing of such report with the Commission.
 
(p)           Except as disclosed in the Disclosure Package and the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a Material Adverse Effect.
 
(q)           Since the date as of which information is given in the Disclosure Package and the Prospectus, there has not been (i) any material change in the capital stock (other than changes pursuant to open market or repurchase plans or employee benefit plans or changes resulting from the conversion or redemption of outstanding shares of preferred stock or convertible debt) or long-term debt of the Company and its subsidiaries, taken as a whole, or (ii) any material adverse change, or any development known to the Company that is reasonably likely to result in a material adverse change, in or affecting the condition, financial or otherwise, or the earnings, business or operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Disclosure Package and the Prospectus.
 
(r)            The accountants who have certified certain financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included in the Disclosure Package and the Prospectus are independent registered public accountants with respect to the Company within the meaning of the Act and the applicable published rules and regulations thereunder.
 
(s)           The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries included or incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement present fairly in all material respects the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated, comply as to form in all material respects with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
 
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(t)            The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Disclosure Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
 
(u)           Except as disclosed in the Disclosure Package and the Prospectus, no labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is imminent or, to the knowledge of the Company, is threatened that could reasonably be expected to have a Material Adverse Effect.
 
(v)           Except as disclosed in the Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “ Environmental Laws ”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and the Company is not aware of any pending investigation that might lead to such a claim.
 
(w)          There is and has been no failure on the part of the Company and, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 thereof relating to loans and Sections 302 and 906 thereof relating to certifications.
 
(x)            The Company maintains a system of internal accounting control over financial reporting with respect to itself and its consolidated subsidiaries sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Disclosure Package and the Prospectus, the
 
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Company’s internal control over financial reporting was effective as of the date of the most recent audited balance sheet in the Company’s most recent Annual Report on Form 10-K incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement and the Company is not aware of any material weakness in its internal control over financial reporting.
 
(y)           The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); based on the evaluation of these disclosure controls and procedures, except as disclosed in the Disclosure Package and the Prospectus, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the date of the most recent balance sheet incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement.
 
(z)            Except as disclosed in the Disclosure Package and the Prospectus, (i) neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a material violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “ FCPA ”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and (ii) the Company, its subsidiaries and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance in all material respects with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
 
(aa)         Except as disclosed in the Disclosure Package and the Prospectus, the operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
 
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(bb)         Except as disclosed in the Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”), and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
 
(cc)         The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
 
(dd)         The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive or similar rights; except as described in or expressly contemplated by the Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.
 
(ee)         No person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Offered Securities.
 
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(ff)           Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement, the Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
 
Any certificate signed by any officer of the Company and delivered to the Managers or counsel for the Underwriters in connection with the offering of the Offered Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
 
VII.
 
(a)           The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Offered Securities as originally filed or in any amendment thereof, or the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Offered Securities, the Prospectus or any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) or the information contained in the final term sheet required to be prepared and filed pursuant to paragraph (c) of Section V hereof, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided , however , that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Managers specifically for inclusion therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in paragraph (b) of Article VII hereof.  This indemnity agreement will be in addition to any liability which the Company may otherwise have.
 
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(b)                                  Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Managers specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability that any Underwriter may otherwise have. The Company acknowledges that (i) the sentences related to concessions and reallowances, (ii) the paragraphs related to stabilization, syndicate covering transactions and penalty bids and (iii) the sentence on the cover page regarding the date on which the Underwriters expect to deliver the Offered Securities in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus.
 
(c)                                   In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the “ indemnified party ”) shall promptly notify the person against whom such indemnity may be sought (the “ indemnifying party ”) in writing; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such proceeding and it has been materially prejudiced by such failure and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or relating proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are
 
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incurred. Such firm shall be designated in writing by the Managers in the case of parties indemnified pursuant to the second preceding paragraph and by the Company in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any proceeding in respect of which any indemnified party is a party unless such settlement (A) includes an unconditional release of such indemnified party from all liability on claims that are the subject matters of such proceeding and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
 
(d)                                  If the indemnification provided for in this Article VII is unavailable to an indemnified party under the second or third paragraphs hereof or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of such Offered Securities (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters in respect thereof. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
 
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VII were determined by pro rata allocation or by any other method of allocation which does not take
 
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account of the considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten and distributed to the public by such Underwriter were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Article VII are several, in proportion to the respective principal amounts of Offered Securities purchased by each of such Underwriters, and not joint. For purposes of this Article VII, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
 
The indemnity and contribution agreements contained in this Article VII and the representations and warranties of the Company in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by any Underwriter or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities.
 
VIII.
 
This Agreement shall be subject to termination in the absolute discretion of the Managers, by notice given to the Company, if (a) after the execution and delivery of the Underwriting Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options
 
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Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities, (iv) there shall have occurred a material disruption in commercial banking or securities settlement or clearance services or (v) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Managers, is material and adverse and (b) in the case of any of the events specified in clauses (a)(i) through (v), such event, singly or together with any other such event, makes it, in the judgment of the Managers, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Prospectus.
 
If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase the Offered Securities which it or they have agreed to purchase hereunder, and the aggregate principal amount of the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Offered Securities, the other Underwriters shall be obligated severally in the proportions which the amounts of the Offered Securities set forth opposite their names in the Underwriting Agreement bear to the aggregate principal amount of the Offered Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Managers may specify, to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase; provided that in no event shall the principal amount of the Offered Securities which any Underwriter has agreed to purchase hereunder be increased pursuant to this Article VIII by an amount in excess of one-ninth of such principal amount of the Offered Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase the Offered Securities which it or they agreed to purchase hereunder and the aggregate principal amount of the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is more than one-tenth of the aggregate principal amount of the Offered Securities, and arrangements satisfactory to Managers and the Company for the purchase of such Offered Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or of the Company. In any such case either the Managers or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph or any such termination shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
 
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IX.
 
If this Agreement shall be terminated by the Underwriters or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement, with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with the Offered Securities.
 
This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
 
This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
 
The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Article VII hereof, and will survive delivery of and payment for the Offered Securities. The provisions of Article VII hereof and this Article IX hereof shall survive the termination or cancellation of this Agreement.
 
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Article VII hereof, and no other person will have any right or obligation hereunder.
 
The Company hereby acknowledges that (a) the purchase and sale of the Offered Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with the offering of the Offered Securities and the process leading up to the offering of the Offered Securities is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
The Company and the Underwriters hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
 
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legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
 
This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
 
X
 
As used in this Agreement, the following terms shall have the following meanings:
 
“ Act ” shall mean the Securities Act of 1933, as amended and the rules and regulations of the Commission promulgated thereunder.
 
“ Base Prospectus ” shall mean the prospectus included in the Registration Statement and referred to in Article I hereof contained in the Registration Statement at the Execution Time.
 
“ Business Day ” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
 
“ Disclosure Package ” shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing Prospectuses, if any, identified in the Underwriting Agreement, (iv)  the final term sheet prepared and filed pursuant to paragraph (c) of Article V hereof, if any, and (v) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
“ Effective Date ” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.
 
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
 
“ Execution Time ” shall mean the date and time set forth in the Underwriting Agreement, which shall also be deemed to be the date and time that the Underwriting Agreement is executed and delivered by the parties hereto.
 
“ Free Writing Prospectus ” shall mean a free writing prospectus, as defined in Rule 405.
 
“ Issuer Free Writing Prospectus ” shall mean an issuer free writing prospectus, as defined in Rule 433.
 
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“ Preliminary Prospectus ” shall mean any preliminary prospectus supplement to the Base Prospectus that is used prior to the filing of the Prospectus, together with the Base Prospectus.
 
“ Prospectus ” shall mean the prospectus supplement relating to the Offered Securities that was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base Prospectus.
 
“ Registration Statement ” shall mean the registration statement referred to in Article I hereof, including exhibits and financial statements and any prospectus supplement relating to the Offered Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.
 
“ Rule 158 ,” “ Rule 163 ,” “ Rule 164 ,” “ Rule 172 ,” “ Rule 401 ,” “ Rule 405 ,” “ Rule 415 ,” “ Rule 424 ,” “ Rule 430B ,” “ Rule 433, ” “ Rule 436, ” “ Rule 456 ” and “ Rule 457 ” and refer to such rules under the Act.
 
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EXHIBIT A
 
OPINION OF ASSOCIATE GENERAL COUNSEL OF THE COMPANY
 
The opinion of Associate General Counsel (or another lawyer) of the Company, to be delivered pursuant to paragraph (c) of Article IV of the document entitled Textron Inc. Underwriting Agreement Standard Provisions (Common Stock), shall be to the effect that:
 
(a)                                   the Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect;
 
(b)                                  each of Bell Helicopter Textron Inc., Textron Financial Corporation and The Cessna Aircraft Company (the “ Significant Subsidiaries ”) is a corporation duly organized, validly existing and in good standing in the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and Prospectus, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure so to register or qualify does not have a Material Adverse Effect;
 
(c)                                   the Offered Securities have been duly authorized by the Company and, when delivered to and paid for by the Underwriters in accordance with the Underwriting Agreement will be validly issued, fully paid and nonassessable and the issuance of the Offered Securities is not subject to any preemptive or similar rights of any securityholder of the Company under the Delaware General Corporation Law or the Restated Certificate of Incorporation;
 
(d)                                  the execution and delivery of, and the performance by the Company of its obligations under, the Underwriting Agreement have been duly authorized by the Company and the Underwriting Agreement has been duly executed and delivered by the Company;
 
(e)                                   The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable except as otherwise described in the Registration Statement, the Disclosure Package and the Prospectus;
 
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(f)                                     the execution and delivery of the Underwriting Agreement by the Company and the consummation of the transactions contemplated therein will not contravene (i) any provision of applicable law (except as rights to indemnity and contribution under the Underwriting Agreement may be limited by applicable law), (ii) the Restated Certificate of Incorporation or Amended and Restated By-Laws of the Company or (iii) to such counsel’s knowledge after due inquiry, any other material agreement or instrument binding on the Company or any of the Significant Subsidiaries or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or the Significant Subsidiaries, except, in the case of clauses (i) and (iii), such contraventions as would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect on the performance of this Agreement or the Offered Securities or the consummation of any of the transactions contemplated hereby or thereby, and no consent, approval or authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under the Underwriting Agreement, and the consummation of the transactions contemplated thereby, except such as are required pursuant to state securities or blue sky laws;
 
(g)                                  the statements included under the caption “Legal Proceedings” (or such other caption substantially similar thereto) in the Company’s most recent Annual Report on Form 10-K, incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement insofar as they describe statements of law or legal conclusions are accurate and fairly present the information required to be shown, as of the date of filing of such report with the Commission;
 
(h)                                  except as disclosed in the Disclosure Package and the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) could reasonably be expected to have a Material Adverse Effect;
 
(i)                                      the Registration Statement has become effective under the Act; any required filing of the Base Prospectus, any Preliminary Prospectus and the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); any required filing of the final term sheet prepared and filed pursuant to paragraph (c) of Article V of the Underwriting Agreement and any Permitted Free Writing Prospectus has been made in the manner and within the time period required by Rule 433(d); to the knowledge of such counsel, no order suspending the effectiveness of the Registration Statement has been issued by the Commission; and
 
(j)                                      the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), when
 
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they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the applicable requirements of the Exchange Act.
 
In addition, such opinion shall state that such counsel, together with other members of the Company’s legal staff, has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company and with representatives of the Underwriters and counsel for the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the Prospectus and related matters were discussed and, although such counsel need not pass upon or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Disclosure Package or the Prospectus and need not make any independent check or verification thereof (other than as specified in subparagraphs (c), (d) and (h) above insofar as the captions referred to therein relate to provisions of documents), on the basis of the foregoing, no facts have come to the attention of such counsel that cause such counsel to believe that (i) the Registration Statement, at the Effective Date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus, as of its date and, as amended or supplemented, if applicable, as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Disclosure Package, as of the Execution Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial and statistical data that has been included in or excluded from the Registration Statement, the Disclosure Package or the Prospectus or that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended.
 
Terms capitalized herein and not otherwise defined shall have the meanings assigned to them in the Textron Inc. Underwriting Agreement Standard Provisions (Common Stock). In rendering such opinion, such counsel may rely as to matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company and public officials.
 
3

Exhibit 4.2

 
TEXTRON INC.
 
4.50% Convertible Senior Notes due 2013
 
as Issuer

 
SUPPLEMENTAL INDENTURE
 
Dated as of May 5, 2009
 
to Indenture
 
Dated as of September 10, 1999

 
 
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
(as successor to The Bank of New York)
 
as Trustee

 

 
TABLE OF CONTENTS

 	 	Page	
 	 	 	
ARTICLE 1 Definitions and Other Provisions of General Application	 	2	
 	 	 	
SECTION 1.01.   Scope of Supplemental Indenture	 	2	
SECTION 1.02.   Definitions	 	2	
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act	 	11	
SECTION 1.04.   Rules of Construction	 	11	
 	 	 	
ARTICLE 2 The Notes	 	11	
 	 	 	
SECTION 2.01.   Designation, Amount and Issuance of Notes	 	11	
SECTION 2.02.   Form of the Notes	 	12	
SECTION 2.03.   Date and Denomination of Notes; Payment at Maturity; Payment of Interest	 	13	
SECTION 2.04.   Paying Agent to Hold Money in Trust	 	15	
SECTION 2.05.   Outstanding Notes	 	16	
SECTION 2.06.   Reporting Requirement	 	16	
 	 	 	
ARTICLE 3 Repurchase of Notes	 	16	
 	 	 	
SECTION 3.01.   Repurchase at Option of the Holder Upon a Fundamental Change	 	16	
SECTION 3.02.   Withdrawal of Fundamental Change Repurchase Notice	 	19	
SECTION 3.03.   Deposit of Fundamental Change Repurchase Price	 	19	
SECTION 3.04.   Notes Repurchased in Part	 	20	
SECTION 3.05.   Covenant to Comply with Securities Laws Upon Repurchase of Notes	 	20	
SECTION 3.06.   Sinking Fund and Redemption	 	20	
 	 	 	
ARTICLE 4 Covenants	 	20	
 	 	 	
SECTION 4.01.   Existence	 	20	
SECTION 4.02.   Further Instruments and Acts	 	20	
SECTION 4.03.   Additional Interest	 	20	
SECTION 4.04.   Waiver of Stay, Extension or Usury Laws	 	21	
SECTION 4.05.   Repurchase and Cancellation	 	21	
 
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ARTICLE 5 Successor Company	 	21	
 	 	 	
SECTION 5.01.   When Company May Merge or Transfer Assets	 	21	
SECTION 5.02.   Successor to Be Substituted	 	22	
SECTION 5.03.   Opinion of Counsel to Be Given Trustee	 	22	
 	 	 	
ARTICLE 6 Defaults and Remedies	 	22	
 	 	 	
SECTION 6.01.   Events of Default	 	22	
SECTION 6.02.   Rescission and Annulment	 	24	
SECTION 6.03.   Waiver of Past Defaults	 	24	
SECTION 6.04.   Failure to Comply with Reporting Covenant	 	24	
 	 	 	
ARTICLE 7 Discharge	 	25	
 	 	 	
SECTION 7.01.   Discharge of the Supplemental Indenture	 	25	
SECTION 7.02.   Application of Trust Money	 	25	
SECTION 7.03.   Repayment to Company	 	26	
SECTION 7.04.   Reinstatement	 	26	
 	 	 	
ARTICLE 8 Amendments	 	26	
 	 	 	
SECTION 8.01.   Without Consent of Holders	 	26	
SECTION 8.02.   With Consent of Holders	 	27	
SECTION 8.03.   Revocation and Effect of Consents and Waivers	 	27	
 	 	 	
ARTICLE 9 Conversion of Notes	 	27	
 	 	 	
SECTION 9.01.   Right to Convert	 	27	
SECTION 9.02.   Conversion Procedures; Settlement Upon Conversion; No Adjustment for Interest or Dividends; Cash Payments in Lieu of Fractional Shares	 	30	
SECTION 9.03.   Increased Conversion Rate Applicable to Securities Converted in Connection With Make-Whole Fundamental Changes	 	32	
SECTION 9.04.   Adjustment of Conversion Rate	 	34	
SECTION 9.05.   Effect of Reclassification, Consolidation, Merger or Sale	 	42	
SECTION 9.06.   Certain Covenants	 	43	
SECTION 9.07.   Notice to Holders Prior to Certain Actions	 	43	
SECTION 9.08.   Stockholder Rights Plans	 	44	
 
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SECTION 9.09.   Responsibility of Trustee	 	44	
 	 	 	
ARTICLE 10 Inapplicable Provisions of the Original Indenture	 	45	
 	 	 	
SECTION 10.01.   Limitation Upon Mortgages	 	45	
SECTION 10.02.   Limitation Upon Sale and Leaseback Transactions	 	45	
 	 	 	
ARTICLE 11 Miscellaneous	 	45	
 	 	 	
SECTION 11.01.   Trust Indenture Act Controls	 	45	
SECTION 11.02.   Communication by Holders with Other Holders	 	46	
SECTION 11.03.   Rules by Trustee, Paying Agent and Security Registrar	 	46	
SECTION 11.04.   GOVERNING LAW	 	46	
SECTION 11.05.   No Recourse Against Others	 	46	
SECTION 11.06.   Multiple Originals	 	46	
SECTION 11.07.   Severability Clause	 	46	
SECTION 11.08.   Calculations	 	46	
SECTION 11.09.   Recitals	 	46	
SECTION 11.10.   Ratification of Original Indenture	 	46	
 
EXHIBITS

Exhibit A	 	–	 	Form of Note	 	A-1	
Exhibit B	 	–	 	Form of Conversion Notice	 	B-1	
Exhibit C	 	–	 	Form of Fundamental Change Repurchase Notice	 	C-1	
Exhibit D	 	–	 	Form of Assignment	 	D-1	
 
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SUPPLEMENTAL INDENTURE dated as of May 5, 2009 between TEXTRON INC., a Delaware corporation, as issuer (the “ Company ”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor to The Bank of New York) , a national banking association organized under the laws of the United States, as trustee (the “ Trustee ”) under the indenture dated as of September 10, 1999 between the Company and the Trustee (as amended and supplemented from time to time in accordance with the terms thereof, the “ Original Indenture ”).
 
RECITALS OF THE COMPANY
 
WHEREAS, the Company executed and delivered the Original Indenture to the Trustee to provide, among other things, for the future issuance of the Company’s unsecured Securities from time to time in one or more series as might be determined by the Company under the Original Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Original Indenture ;
 
WHEREAS, Section 3.1 of the Original Indenture provides for the Company to establish Securities of any series pursuant to an indenture supplemental, and 9.1(6) of the Original Indenture provides for the Company and the Trustee to enter into such indenture supplemental to establish the form or terms of Securities of such series as permitted by Sections 2.1 and 3.1 of the Original Indenture without the consent of any Holders;
 
WHEREAS, the Board of Directors has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture;
 
WHEREAS, pursuant to the terms of the Original Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its “4.50% Convertible Senior Notes due 2013” (the “ Notes ”), the form and substance of the Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Supplemental Indenture;
 
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Conversion Notice, the Form of Fundamental Change Repurchase Notice and the Form of Assignment to be borne by the Notes are to be substantially in the forms hereinafter provided for; and
 
WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture, and all requirements necessary to make (i) this Supplemental Indenture a valid and legally binding instrument in accordance with its terms and (ii) the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid and legally binding obligations of the Company, have been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects.
 
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders of the Notes, as follows:

 
ARTICLE 1
 
Definitions and Other Provisions of General Application
 
SECTION 1.01.   Scope of Supplemental Indenture .  The changes, modifications and supplements to the Original Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms of, the Notes and shall not apply to any other Securities that may be issued under the Original Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements.  The provisions of this Supplemental Indenture shall supersede any corresponding provisions in the Original Indenture.
 
SECTION 1.02.   Definitions .  For all purposes of the Indenture, except as otherwise expressly provided or unless the context otherwise requires:
 
(i)            the terms defined in this Article 1 shall have the meanings assigned to them in this Article and include the plural as well as the singular;
 
(ii)           all words, terms and phrases defined in the Original Indenture (but not otherwise defined herein) shall have the same meanings as in the Original Indenture;
 
(iii)          all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, shall have the meanings assigned to them in the Trust Indenture Act;
 
(iv)          all accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of this instrument; and
 
(v)           the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision.
 
“ Additional Shares ” has the meaning specified in Section 9.03.
 
“ Adjustment Event ” has the meaning specified in Section 9.04(k).
 
“ Agent Members ” has the meaning specified in Section 2.03(d)(v).
 
“ Bid Solicitation Agent ” means the financial institution appointed by the Company to solicit bids for the Trading Price of the Notes in accordance with Section 9.01(a)(2).  The Bid Solicitation Agent appointed by the Company shall initially be the Trustee.
 
“ Business Day ” means, solely for purposes of the Indenture and notwithstanding the definition thereof in Section 1.1 of the Original Indenture, each Monday, Tuesday,
 
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Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are authorized or obligated by law or executive order to close.
 
“ Capital Lease ,” as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.
 
“ Capital Stock ” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
 
“ close of business ” means 5:00 p.m. (New York City time).
 
“ Common Equity ” of any Person means Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
 
“ Common Stock ” means the Common Stock, par value $0.125 per share, of the Company, or such other Capital Stock into which the Company’s common stock is reclassified or changed.
 
“ Continuing Director ” means a director who either was a member of the Board of Directors on April 29, 2009 or who becomes a member of the Board of Directors subsequent to that date and whose election, appointment or nomination for election by the stockholders of the Company, is duly approved by a majority of the Continuing Directors on the Board of Directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the entire Board of Directors in which such individual is named as nominee for director. Solely for purposes of this definition, the phrase “or any duly authorized committee of that board” in the definition of “Board of Directors” shall be disregarded.
 
“ Conversion Agent ” means the agency appointed by the Company to which Notes may be presented for conversion.  The Conversion Agent appointed by the Company shall initially be the Trustee.
 
“ Conversion Date ” has the meaning specified in Section 9.02(a).
 
“ Conversion Notice ” has the meaning specified in Section 9.02(a).
 
“ Conversion Obligation ” has the meaning specified in Section 9.01(a).
 
“ Conversion Price ” on any date of determination means $1,000, divided by the Conversion Rate as of such date.
 
“ Conversion Rate ” has the meaning specified in Section 9.01(a).
 
3

 
“ Conversion Value ,” for every $1,000 principal amount of a Note being converted, means an amount equal to the sum of the Daily Conversion Values for each of the forty-five (45) Settlement Period Trading Days in the Settlement Period.
 
“ Current Market Price ” means the average of the Last Reported Sale Prices of the Common Stock over the ten (10) consecutive Trading-Day period ending on the Trading Day immediately preceding the declaration date for the distribution requiring such computation.
 
“ Daily Conversion Value ” for any Settlement Period Trading Day equals 1/45th of (x) the Conversion Rate in effect on that Settlement Period Trading Day, multiplied by (y) the VWAP of the Common Stock on that Settlement Period Trading Day.
 
“ declaration date ” and “ date of declaration ” shall mean, with respect to a distribution by the Company to all or substantially all of its holders of Common Stock, the date on which the distribution has been authorized by the Board of Directors under applicable law.
 
“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.
 
“ Depositary ” has the meaning set forth in the Original Indenture, which shall initially be DTC until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “ Depositary ” shall mean such successor.
 
“ Determination Date ” has the meaning specified in Section 9.04(k).
 
“ Distributed Property ” has the meaning specified in Section 9.04(c).
 
“ DTC ” means The Depository Trust Company.
 
“ Effective Date ” has the meaning specified in Section 9.03.
 
“ Event of Default ” has the meaning set forth in the Original Indenture, as supplemented by the events set forth in Section 6.01 hereof.
 
“ Ex-Dividend Date ” means, in respect of a dividend or distribution to holders of Common Stock, the first date upon which a sale of the Common Stock does not automatically transfer the right to receive the relevant dividend or distribution from the seller of the Common Stock to its buyer.
 
“ Expiration Date ” has the meaning specified in Section 9.04(e).
 
“ Expiration Time ” has the meaning specified in Section 9.04(e).
 
“ Fair Market Value ” means the amount that a willing buyer would pay to a willing seller in an arms’ length transaction, as determined by the Board of Directors.
 
“ Fixed Cash Amount ” has the meaning specified in Section 9.02(b).
 
“ Fixed Dollar Amount ” has the meaning specified in Section 9.02(b).
 
4

 
“ Full Interest Period ” means a period of days during which interest accrues from, and including, an Interest Payment Date to, but excluding, the next Interest Payment Date.
 
“ Fundamental Change ” shall be deemed to have occurred at the time after the Notes are originally issued that any of the following occurs:
 
(i)            a “person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than the Company, its Subsidiaries or the employee benefit plans of the Company or any such Subsidiary of the Company, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of the voting power of the Company’s Common Equity;
 
(ii)           consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets or (B)  any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any conveyance, transfer, sale, lease or other disposition in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries; provided , however , that a transaction where the holders of more than 50% of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee immediately after such event shall not be a Fundamental Change;
 
(iii)          Continuing Directors cease to constitute at least a majority of the Board of Directors;
 
(iv)          the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or
 
(v)           the Common Stock (or other common stock into which the Notes are then convertible) ceases to be listed on at least one national securities exchange;
 
provided , however , that a Fundamental Change shall not be deemed to have occurred if at least 90% of the consideration, excluding cash payments for fractional shares, in the transaction or transactions constituting the Fundamental Change consists of shares of Publicly Traded Securities and as a result of such transaction or transactions the Notes become convertible into such Publicly Traded Securities in accordance with Section 9.05, subject to the provisions of Section 9.02.
 
For purposes of this definition, whether a “person” is a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act and “person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.  In
 
5

 
addition, solely for purposes of clause (iii) above, the phrase “or any duly authorized committee of that board” in the definition of “Board of Directors” shall be disregarded.
 
“ Fundamental Change Company Notice ” has the meaning specified in Section 3.01(b).
 
“ Fundamental Change Repurchase Date ” has the meaning specified in Section 3.01(a).
 
“ Fundamental Change Repurchase Expiration Time ” has the meaning specified in Section 3.01(a)(1).
 
“ Fundamental Change Repurchase Notice ” has the meaning specified in Section 3.01(a)(1).
 
“ Fundamental Change Repurchase Price ” has the meaning specified in Section 3.01(a).
 
“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board as in effect from time to time.
 
“ Global Note ” means any Note that is a Global Security.
 
“ Indebtedness ” for purposes of Section 6.01(c) hereof, as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money of that Person, (ii) that portion of obligations with respect to Capital Leases which is properly classified as a liability on a balance sheet of that Person in conformity with GAAP, (iii) notes payable of that Person and drafts accepted by that Person representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation of that Person owed for all or any part of the deferred purchase price of property or services which purchase price is (A) due more than twelve months from the date of incurrence of the obligation in respect thereof, or (B) evidenced by a note or similar written instrument, (v) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (vi) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person and (vii) any guarantee of that Person, direct or indirect, of any indebtedness, note payable, draft accepted, or obligation described in clauses (i)-(vi) above of any other Person.
 
“ Indenture ” means the Original Indenture, solely to the extent it governs the Notes , as supplemented by this Supplemental Indenture as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Supplemental Indenture and any such supplemental indenture, respectively.
 
6

 
“ Initial Dividend Threshold ” has the meaning specified in Section 9.04(d).
 
“ Interest Payment Date ” has the meaning specified in Section 2.03(c).
 
“ Last Reported Sale Price ” of the Common Stock on any date means:
 
(i)            the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported by the New York Stock Exchange; or
 
(ii)           if the Common Stock is not listed for trading on the New York Stock Exchange, the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded; or
 
(iii)          if the Common Stock is not listed for trading on a U.S. national or regional securities exchange, the closing price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) for the Common Stock on that date as reported by the OTC Bulletin Board (or successor thereto); or
 
(iv)          if not so reported by the OTC Bulletin Board (or successor thereto), the last quoted bid price for the Common Stock in the over-the-counter market on that date as reported by Pink OTC Market Inc. or similar organization; or
 
(v)           if the Common Stock is not so quoted by Pink OTC Market Inc. or similar organization, the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from a nationally recognized independent investment banking firm selected by the Company for this purpose.
 
The Last Reported Sale Price of the Common Stock will be determined without reference to extended or after-hours trading.  If, during a period applicable for calculating the Last Reported Sale Price of the Common Stock, an event occurs that requires an adjustment to the Conversion Rate, the Last Reported Sale Price shall be calculated for such period in a manner determined by the Company to appropriately reflect the impact of such event on the price of the Common Stock during such period.
 
“ Lien ” means any lien, mortgage, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest).
 
“ Make-Whole Fundamental Change ” means any transaction or event that constitutes a Fundamental Change pursuant to clause (i), (ii) (disregarding the proviso in clause (ii)), (iv) and (v) under the definition thereof.
 
7

 
“ Market Disruption Event ” means, if the Common Stock is listed for trading on the New York Stock Exchange or listed on another U.S. national or regional securities exchange, the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Trading Day of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.
 
“ Maturity Date ” means May 1, 2013.
 
“ Notes ” has the meaning set forth in the fourth paragraph of the recitals of this Supplemental Indenture.
 
“ Officer ” means the Chairman or Vice Chairman of the Board of Directors, the President, any Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company.
 
“ open of business ” means 9:00 a.m. (New York City time).
 
“ Paying Agent ” has the meaning set forth in the Original Indenture, which shall initially be the Trustee, and shall be the Person authorized by the Company to pay the principal amount of, interest on, or Fundamental Change Repurchase Price of, any Notes on behalf of the Company.
 
“ Place of Payment ” means, for purposes of the Notes, New York, New York.
 
“ Preferred Stock ”, as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
 
“ Publicly Traded Securities ” means shares of common stock listed on a national securities exchange, which will be so listed when issued or exchanged in connection with an event that would be a Fundamental Change but for the second proviso in the definition of such term.
 
“ Record Date ” means, in respect of any dividend or distribution, the date fixed for determination of stockholders entitled to receive such distribution or, if earlier, the first date on which the shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such dividend or distribution.
 
“ Reference Property ” has the meaning specified in Section 9.05.
 
“ Regular Record Date ” means, with respect to any Interest Payment Date of the Notes, the April 15 and October 15 preceding the applicable May 1 and November 1 Interest Payment Date, respectively.
 
“ Reorganization Event ” has the meaning specified in Section 9.05.
 
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“ Reporting Additional Interest ” has the meaning specified in Section 6.04.
 
“ Schedule TO ” means a Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Exchange Act.
 
“ Scheduled Trading Day ” means any day on which the primary U.S. national securities exchange or market on which the Common Stock is listed or admitted for trading is scheduled to be open for trading.
 
“ Securities Act ” means the Securities Act of 1933, as amended from time to time, and any successor legislation.
 
“ Settlement Period ” means the forty-five (45) consecutive Settlement Period Trading Days:
 
(i)            with respect to Conversion Dates occurring during the period beginning fifty (50) Scheduled Trading Days preceding the Maturity Date, beginning on and including the forty-seventh (47th) Scheduled Trading Day immediately preceding the Maturity Date; and
 
(ii)           in all other cases, beginning on and including the third (3rd) Trading Day following the Conversion Date.
 
“ Settlement Period Market Disruption Event ” means:
 
(i)            a failure by the primary U.S. national securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session; or
 
(ii)           the occurrence or existence prior to 1:00 p.m. on any Trading Day for the Common Stock of an aggregate one half-hour period, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.
 
“ Settlement Period Trading Day ” means a day during which:
 
(i)            trading in the Common Stock generally occurs on the primary U.S. national securities exchange or market on which the Common Stock is listed or admitted for trading; and
 
(ii)           there is no Settlement Period Market Disruption Event;
 
provided , however , that if on any Trading Day the Common Stock is not traded on any market, then that Trading Day shall nevertheless be a “ Settlement Period Trading Day ” so long as the Company is able to obtain the market value per share of the Common Stock on that Trading Day from a nationally recognized independent investment banking firm retained by the Company for this purpose.
 
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“ Significant Subsidiary ” means any Subsidiary of the Company that would be a “significant subsidiary” of the Company within the meaning of Rule 1-02(w) under Regulation S-X promulgated by the Commission.
 
“ Spin-off ” has the meaning specified in Section 9.04(c).
 
“ Stock Price ” means:
 
(i)            in the case of a Make-Whole Fundamental Change in which holders of the Common Stock receive only cash as consideration for their shares of Common Stock, the amount of cash paid per share of the Common Stock in such Make-Whole Fundamental Change; or
 
(ii)           in the case of all other Make-Whole Fundamental Changes, the average of the Last Reported Sale Prices of Common Stock over the five (5) consecutive Trading-Day period ending on the Trading Day immediately preceding the Effective Date of such Make-Whole Fundamental Change.
 
“ Successor Company ” has the meaning specified in Section 5.01(a).
 
“ TFC ” means Textron Financial Corporation, a Delaware corporation.
 
“ Trading Day ” means a day during which:
 
(i)            the New York Stock Exchange is open for trading, or if the Common Stock is not listed for trading on the New York Stock Exchange, the principal U.S. national or regional securities exchange on which the Common Stock is listed is open for trading, or if the Common Stock is not so quoted or listed, any Business Day; and
 
(ii)           there is no Market Disruption Event.
 
“ Trading Price ” per $1,000 principal amount of the Notes on any date of determination shall be calculated based on the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $5,000,000 aggregate principal amount of Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that, if only two such bids can reasonably be obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained, then that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $5,000,000 aggregate principal amount of the Notes, then the Trading Price per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.
 
“ Trading Price Measurement Period ” has the meaning specified in Section 9.01(a)(2).
 
“ Trigger Event ” has the meaning specified in Section 9.04(c).
 
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 “ VWAP ” for the Common Stock means, with respect to any Settlement Period Trading Day during the Settlement Period, the per share volume-weighted average price of the Common Stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Settlement Period Trading Day; or if such volume-weighted average price is unavailable, the market value per share of the Common Stock on such Settlement Period Trading Day as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company.
 
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act.   This Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture.  The following Trust Indenture Act terms have the following meanings:
 
“indenture securities” means the Notes.
 
“indenture security holder” means a Holder.
 
“indenture to be qualified” means this Indenture.
 
“indenture trustee” or “institutional trustee” means the Trustee.
 
“obligor” on the indenture securities means the Company and any other obligor on the indenture securities.
 
All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions.
 
SECTION 1.04.   Rules of Construction .  Unless the context otherwise requires:
 
(1)           a term has the meaning assigned to it;
 
(2)           “or” is not exclusive; and
 
(3)           “including” means including without limitation.
 
ARTICLE 2
 
The Notes
 
SECTION 2.01.   Designation, Amount and Issuance of Notes .  The Notes shall be designated as “4.50% Convertible Senior Notes due 2013.”  The Notes will initially not exceed the aggregate principal amount of $600,000,000, except for Notes authenticated and delivered upon registration of transfer of, in exchange for, or in lieu of, other Notes pursuant to Section 3.04, 5.02 and 9.02(d) of this Supplemental Indenture or Section 3.4, 3.5, 3.6 or 9.6 of the Original Indenture.  Upon the execution of this Supplemental Indenture, or from time to time
 
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thereafter, Notes may be executed by the Company and delivered to the Trustee for authentication.
 
SECTION 2.02.   Form of the Notes .  The Notes and the Trustee’s certificate of authentication to be borne by such Notes, the Conversion Notice, Fundamental Change Repurchase Notice and Assignment shall be substantially in the forms set forth in Exhibits A, B, C and D, respectively, hereto.  The terms and provisions contained in the form of Notes attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.
 
Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of the Indenture, or as may be required by the custodian for the Global Notes, the Depositary or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Notes are subject.
 
So long as the Notes are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, or otherwise contemplated by Section 2.03(d), all of the Notes will be represented by one or more Global Notes.  The transfer and exchange of beneficial interests in any such Global Notes shall be effected through the Depositary in accordance with the Indenture and the applicable procedures of the Depositary.  Except as provided in Section 2.03(d), beneficial owners of a Global Note shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered holders of such Global Note.
 
Any Global Notes shall represent such of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect repurchases, conversions, transfers or exchanges permitted hereby.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the custodian for the Global Note, at the direction of the Trustee, in such manner and upon instructions given by the holder of such Notes in accordance with this Indenture.  Payment of principal of, interest on and premium, if any, on any Global Notes shall be made to the Depositary in immediately available funds.  The Company has initially designated the Trustee as its Paying Agent and Security Registrar in respect of the Notes and the Corporate Trust Office as a place where Notes may be presented for payment or for registration of transfer.  The Company may, however, change the Paying Agent or Security Registrar for the Notes without prior notice to the Holders, and the Company may act as Paying Agent or Security Registrar for the Notes.
 
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SECTION 2.03.   Date and Denomination of Notes; Payment at Maturity; Payment of Interest .
 
(a)           Date and Denomination .  The Notes initially shall be issued in the form of one or more Global Notes without interest coupons in denominations of $1,000 principal amount and integral multiples thereof (i) registered in the name of Cede & Co., as nominee of the Depositary and (ii) delivered to the Trustee as custodian for the Depositary.  Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Notes attached as Exhibit A hereto.
 
(b)           Payment at Maturity .  The Notes shall mature on May 1, 2013, unless earlier converted or repurchased in accordance with the provisions hereof.  On the Maturity Date, each Holder shall be entitled to receive on such date $1,000 in cash for each $1,000 principal amount of Notes, together with accrued and unpaid interest to, but not including, the Maturity Date.  With respect to Global Notes, principal and interest will be paid to the Depositary in immediately available funds.  With respect to any certificated Notes, principal and interest will be payable at the Company’s office or agency in New York City, which initially will be the Corporate Trust Office.  If the Maturity Date is not a Business Day, payment shall be made on the next succeeding Business Day, and no additional interest shall be accrue thereon.
 
(c)           Payment of Interest .  Interest on the Notes will accrue at the rate of 4.50% per annum, from May 5, 2009 until the principal thereof is paid or made available for payment.  Interest shall be payable on May 1 and November 1 of each year (each, an “ Interest Payment Date ”), commencing on November 1, 2009, to the Person in whose name any Note is registered on the Security Register at the close of business on any Regular Record Date with respect to the applicable Interest Payment Date, except that the interest payable on the Maturity Date will be paid to the Person to whom the principal amount is paid.  Notwithstanding the foregoing, any Notes or portion thereof surrendered for conversion after the close of business on the Regular Record Date for an Interest Payment Date but prior to the applicable Interest Payment Date shall be accompanied by payment, in immediately available funds or other funds acceptable to the Company, of an amount equal to the interest otherwise payable on such Interest Payment Date on the principal amount being converted; provided that no such payment need be made:
 
(i) with respect to Notes converted after the close of business on April 15, 2013;
 
(ii)  with respect to Notes converted during the period commencing on the date the Company gives notice of a Fundamental Change pursuant to Section 9.01(a)(4) to, and including, the second Trading Day immediately preceding the Fundamental Change Repurchase Date; or
 
(iii)  with respect to any overdue interest, if overdue interest exists at the time of conversion with respect to converted Notes.
 
Interest on the Notes for a Full Interest Period will be computed on the basis of a three hundred sixty (360)-day year comprised of twelve (12) thirty (30)-day months.  Interest on the Notes for any period other than a Full Interest Period will be computed on the basis of the actual number of days elapsed during the period and a three hundred sixty-five (365)-day year.
 
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The Company shall pay interest on:
 
(i)  any Global Notes by wire transfer of immediately available funds to the account of the Depositary or its nominee;
 
(ii)  any Notes in certificated form having a principal amount of less than $5,000,000, by check mailed to the address of the Person entitled thereto as it appears in the Security Register, provided , however , on the Maturity Date, interest will be payable as described in Section 2.03(b); and
 
(iii)  any Notes in certificated form having a principal amount of $5,000,000 or more, by wire transfer in immediately available funds at the election of the Holders of such Notes duly delivered to the Trustee at least five (5) Business Days prior to the relevant Interest Payment Date, provided , however , on the Maturity Date, interest will be payable as described in Section 2.03(b).
 
If an Interest Payment Date is not a Business Day, payment shall instead be made on the next succeeding Business Day, and no additional interest shall accrue thereon.
 
All references to “interest” in this Indenture shall be deemed to include Reporting Additional Interest, if any, that accrues in connection with the Company’s failure to comply with Section 2.06, if applicable, as provided by Section 6.04.
 
(d)           The following provisions shall apply only to Global Notes:
 
(i)            Notwithstanding any other provision in the Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary or a nominee thereof unless (A) the Depositary (x) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and in each case a successor Depositary has not been appointed by the Company within ninety (90) calendar days, or (B) the Company, at its option, notifies the Trustee in writing that it no longer wishes to have all the Notes represented by Global Notes.  Any Global Note exchanged pursuant to this Section 2.03(d)(i) shall be so exchanged in whole and not in part.
 
(ii)           In addition, certificated Notes will be issued in exchange for beneficial interests in a Global Note upon request by or on behalf of the Depositary in accordance with customary procedures following the request of a beneficial owner seeking to enforce its rights under the Notes or the Indenture, including its rights following the occurrence of an Event of Default.
 
(iii)          Notes issued in exchange for a Global Note or any portion thereof pursuant to clause (i) or (ii) above shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Notes or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the
 
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Depositary shall designate and shall bear any legends required hereunder.  Any Global Notes to be exchanged shall be surrendered by the Depositary to the Trustee, as Registrar; provided that pending completion of the exchange of a Global Note, the Trustee acting as custodian for the Global Notes for the Depositary or its nominee with respect to such Global Notes, shall reduce the principal amount thereof, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Notes issuable on such exchange to or upon the written order of the Depositary or an authorized representative thereof.
 
(iv)          In the event of the occurrence of any of the events specified in clause (i) above or upon any request described in clause (ii) above, the Company will promptly make available to the Trustee a sufficient supply of certificated Notes in definitive, fully registered form, without interest coupons.
 
(v)           Neither any members of, or participants in, the Depositary (the “ Agent Members ”) nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Notes registered in the name of the Depositary or any nominee thereof, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Notes for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Notes.
 
(vi)          At such time as all interests in a Global Note have been repurchased, converted, cancelled or exchanged for Notes in certificated form, such Global Note shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the custodian for the Global Note.  At any time prior to such cancellation, if any interest in a Global Note is repurchased, converted, cancelled or exchanged for Notes in certificated form, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the custodian for the Global Note, be appropriately reduced, and an endorsement shall be made on such Global Note, by the Trustee or the custodian for the Global Note, at the direction of the Trustee, to reflect such reduction.
 
SECTION 2.04.   Paying Agent to Hold Money in Trust .  Notwithstanding Section 3.7 of the Original Indenture to the contrary, prior to each due date of the principal and interest on any Note, the Company shall deposit with the Paying Agent (or if the Company or a
 
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Subsidiary of the Company is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee of any Default by the Company in making any such payment.  If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.
 
SECTION 2.05.   Outstanding Notes .  Notwithstanding anything in the definition of “Outstanding” in Section 1.1 of the Original Indenture to the contrary, if the Paying Agent segregates and holds in trust, in accordance with the Indenture, on a Fundamental Change Repurchase Date or Maturity Date cash sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be repurchased or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Noteholders on that date pursuant to the terms of the Indenture, then on and after that date such Notes (or portions thereof) cease to be “Outstanding” for purposes of the Indenture and interest on them ceases to accrue.
 
SECTION 2.06.   Reporting Requirement .  Section 7.4 of the Original Indenture shall not apply to the Notes.  Instead, the Company shall deliver to the Trustee, within fifteen (15) calendar days after it would have been required to file them with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of the Company’s annual reports on Form 10-K and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.  Documents filed by the Company with the Commission via its EDGAR system (or any successor thereto) will be deemed to be filed with the Trustee as of the time such documents are so filed.  In the event the Company is at any time no longer subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall continue to provide the Trustee with reports containing substantially the same information as would have been required to be filed with the Commission had it continued to have been subject to such reporting requirements.  In such event, such reports shall be provided at the times the Company would have been required to provide reports had the Company continued to have been subject to such reporting requirements.  The Company also shall comply with the other provisions of Section 314(a) of the Trust Indenture Act.
 
ARTICLE 3
 
Repurchase of Notes
 
SECTION 3.01.   Repurchase at Option of the Holder Upon a Fundamental Change.   (a)  If there shall occur a Fundamental Change at any time prior to the Maturity Date, then each Holder shall have the right, at such Holder’s option, to require the Company to
 
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repurchase for cash any or all of such Holder’s Notes, or any portion of the principal amount thereof that is equal to $1,000 or an integral multiple of $1,000, on a date (the “ Fundamental Change Repurchase Date ”) of the Company’s choosing that is not less than twenty (20) Business Days or more than thirty-five (35) Business Days after the date of the Fundamental Change Company Notice at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “ Fundamental Change Repurchase Price ”).  If such Fundamental Change Repurchase Date falls between a Regular Record Date and on or prior to the Interest Payment Date to which it relates, the Company shall instead pay the full amount of accrued and unpaid interest payable on such Interest Payment Date to the holder of record on the close of business on the corresponding Regular Record Date and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of the Notes to be repurchased.  Repurchases of Notes under this Section 3.01 shall be made, at the option of the holder thereof, upon:
 
(1)           delivery to the Paying Agent by a Holder of a duly completed notice (the “ Fundamental Change Repurchase Notice ”) in the form set forth on the reverse of the Note by the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date (the “ Fundamental Change Repurchase Expiration Time ”); and
 
(2)           delivery or book-entry transfer of the Notes to the Paying Agent by the Fundamental Change Repurchase Expiration Time (together with all necessary endorsements) at the Corporate Trust Office of the Paying Agent in New York City, such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor.
 
The Fundamental Change Repurchase Notice shall state:
 
(i)            if certificated Notes have been issued, the certificate numbers of the Notes to be delivered for repurchase, or if certificated Notes have not been issued, such Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures;
 
(ii)           the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and
 
(iii)          that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.
 
Any purchase by the Company contemplated pursuant to the provisions of this Section 3.01 shall be consummated by the payment of the Fundamental Change Purchase Price to the relevant Holders promptly following the later of the Fundamental Change Repurchase Date and the time of the book-entry transfer or delivery of the Note.
 
All questions as to the validity, eligibility (including time of receipt) and acceptance of any Notes for repurchase shall be determined by the Company, whose determination shall be final and binding absent manifest error.
 
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Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 3.01 shall have the right to withdraw, in whole or in part, such Fundamental Change Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.02 below.
 
The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.
 
(b)           On or before the tenth (10th) calendar day after the occurrence of a Fundamental Change, the Company shall mail or cause to be mailed to all Holders of the Notes, and to beneficial owners as required by applicable law, a notice (the “ Fundamental Change Company Notice ”) of the occurrence of the Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof.  Such mailing shall be by first class mail.  The Company shall also deliver a copy of the Fundamental Change Company Notice to the Trustee, the Paying Agent and the Conversion Agent.  Simultaneously with providing such notice, the Company will issue a press release containing the information set forth in the Fundamental Change Company Notice and make this information available on its website.
 
Each Fundamental Change Company Notice shall specify:
 
(i)            the events causing the Fundamental Change;
 
(ii)           the date of the Fundamental Change;
 
(iii)          the last date on which a Holder may exercise the repurchase right pursuant to this Article 3;
 
(iv)          the Fundamental Change Repurchase Price;
 
(v)           the Fundamental Change Repurchase Date;
 
(vi)          the name and address of the Paying Agent and the Conversion Agent;
 
(vii)         that the Notes are eligible to be converted, the applicable Conversion Rate and any adjustments to the applicable Conversion Rate resulting from such Fundamental Change transaction and expected changes in the cash, shares or other property deliverable upon conversion of the Notes as a result of the occurrence of the Fundamental Change, and the settlement method the Company has chosen to satisfy the related Conversion Obligation, if any;
 
(viii)        that the Notes with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Supplemental Indenture;
 
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(ix)           that a Holder must exercise its repurchase right by the Fundamental Change Repurchase Expiration Time;
 
(x)            that the Holder shall have the right to withdraw any Notes tendered prior to the Fundamental Change Repurchase Expiration Time;
 
(xi)           the CUSIP number of the Notes; and
 
(xii)          the procedures that Holders must follow to require the Company to repurchase their Notes pursuant to this Article 3.
 
No failure of the Company to give the foregoing notices and no defect therein shall limit the repurchase rights of Holders or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 3.01.
 
(c)           Notwithstanding the foregoing, no Notes may be repurchased by the Company at the option of the Holders upon a Fundamental Change if there has occurred and is continuing an Event of Default other than an Event of Default that is cured by the payment of the Fundamental Change Repurchase Price.
 
SECTION 3.02.   Withdrawal of Fundamental Change Repurchase Notice .  A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Paying Agent in accordance with the Fundamental Change Repurchase Notice at any time prior to the Fundamental Change Repurchase Expiration Time, specifying:
 
(1)           if certificated Notes have been issued, the certificate numbers of the Notes in respect of which such notice of withdrawal is being submitted, or if certificated Notes have not been issued, such notice of withdrawal must comply with appropriate Depositary procedures;
 
(2)           the principal amount of the Note with respect to which such notice of withdrawal is being submitted, which portion must be in principal amount of $1,000 or an integral multiple thereof; and
 
(3)           the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amount of $1,000 or an integral multiple thereof.
 
SECTION 3.03.   Deposit of Fundamental Change Repurchase Price .  Prior to 10:00 a.m., New York City time, on the Fundamental Change Repurchase Date, the Company shall deposit with the Paying Agent or, if the Company or a Subsidiary of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided herein, an amount of cash (in immediately available funds if deposited on the Fundamental Change Repurchase Date), sufficient to pay the aggregate Fundamental Change Repurchase Price of all the Notes or portions thereof that are to be repurchased as of the Fundamental Change Repurchase Date.
 
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If on the Fundamental Change Repurchase Date the Paying Agent holds cash sufficient to pay the Fundamental Change Repurchase Price of the Notes that Holders have elected to require the Company to repurchase in accordance with Section 3.01, then, on the Fundamental Change Repurchase Date, such Notes will cease to be outstanding, interest will cease to accrue (whether or not book-entry transfer of the Notes is made or the Note is transferred or delivered to the Paying Agent, as the case may be) and all other rights of the Holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price upon delivery or book-entry transfer of the Notes).  This will be the case whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Paying Agent.
 
SECTION 3.04.   Notes Repurchased in Part .  Upon presentation of any Notes repurchased only in part, the Company shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Company, a new Note or Notes, of any authorized denomination, in aggregate principal amount equal to the unrepurchased portion of the Notes presented.
 
SECTION 3.05.   Covenant to Comply with Securities Laws Upon Repurchase of Notes .  The Company will, to the extent applicable, comply with the provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act that may be applicable at the time of the offer to repurchase the Notes, file the related Schedule TO or any other schedule required in connection with any offer by the Company to repurchase the Notes and comply with all other federal and state securities laws in connection with any offer by the Company to repurchase the Notes.
 
SECTION 3.06.   Sinking Fund and Redemption .  The Notes are not subject to the provisions of Articles XI or XII of the Original Indenture.
 
ARTICLE 4
 
Covenants
 
SECTION 4.01.   Existence .  Subject to Article 5, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and rights (charter and statutory); provided that the Company shall not be required to preserve any such right if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the holders of Notes.
 
SECTION 4.02.   Further Instruments and Acts .  The Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Supplemental Indenture.
 
SECTION 4.03.   Additional Interest .  If Reporting Additional Interest is payable by the Company, the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (i) the amount of such Reporting Additional Interest that is payable and (ii) the date on which such Reporting Additional Interest is payable.  Unless and until a Responsible Officer
 
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receives such a certificate, the Trustee may assume without inquiry that no Reporting Additional Interest is payable.
 
SECTION 4.04.   Waiver of Stay, Extension or Usury Laws .  The Company covenants (to the extent it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time; the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
 
SECTION 4.05.   Repurchase and Cancellation .  To the extent permitted by law, the Company may repurchase any Notes in the open-market or by tender offer at any price or by private agreement.  Neither the Company nor its Affiliates shall resell such Notes unless such resale is registered under the Securities Act or such resale is pursuant to an exemption from the registration requirements of the Securities Act that results in such Notes not being “restricted securities,” as such term is defined in Rule 144(a)(3) under the Securities Act.  Any Notes repurchased by the Company may, at the Company’s option, be surrendered to the Trustee for cancellation as provided by Section 3.9 of the Original Indenture.  Any Notes surrendered for cancellation by the Company shall not be reissued or resold.
 
ARTICLE 5
 
Successor Company
 
SECTION 5.01.   When Company May Merge or Transfer Assets .  The Company shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to, another Person, unless:
 
(a)   either (i) the Company is the surviving corporation, or (ii)  if the Company is not the surviving corporation, the resulting, surviving or transferee Person (the “ Successor Company ”) is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia and such Successor Company expressly assumes, by a supplemental indenture, all of the Company’s obligations under the Notes and the Indenture;
 
(b)   immediately after giving effect to the transaction described above, no Default or Event of Default, has occurred and is continuing under the Indenture;
 
(c)   if as a result of such transaction, the Notes become convertible into common stock or other securities issued by a third party, such third party fully and unconditionally guarantees all obligations of the Company or the Successor Company, as applicable, under the Notes and the Indenture; and
 
(d)   the Company has delivered to the Trustee the Officers’ Certificate and Opinion of Counsel pursuant to Section 5.03.
 
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SECTION 5.02.   Successor to Be Substituted .  In case of any such consolidation, merger, sale, conveyance, transfer or lease in which the Company is not the surviving corporation and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee, of the due and punctual payment of the principal of and interest on all of the Notes, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed or satisfied by the Company, except in the case of a lease of all or substantially all of the Company’s properties and assets, such Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Company, with the same effect as if it had been named herein as the party of this first part, and Textron Inc. shall be discharged from its obligations under the Notes and the Indenture.  Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of Textron Inc. any or all of the Notes, issuable hereunder that theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in the Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects have the same legal rank and benefit under the Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation, merger, sale, conveyance or transfer, upon compliance with this Article 5 the Person named as the “Company” in the first paragraph of this Indenture or any successor that shall thereafter have become such in the manner prescribed in this Article 5 may be dissolved, wound up and liquidated at any time thereafter and such Person shall be discharged from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture.
 
SECTION 5.03.   Opinion of Counsel to Be Given Trustee .  Prior to execution of any supplemental indenture pursuant to this Article 5, the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption complies with the provisions of this Article 5.
 
ARTICLE 6
 
Defaults and Remedies
 
SECTION 6.01.   Events of Default .  In addition to the Events of Default specified in Section 5.1 of the Original Indenture, each of the following events shall be an “ Event of Default ” with respect to the Notes:
 
(a)   the Company fails to pay or deliver, as the case may be, cash, shares of Common Stock or a combination thereof in respect of the Conversion Obligation, as required by Article 9, upon the conversion of any Notes, and such failure continues for a period of five (5) calendar days following the scheduled settlement date for such conversion;
 
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(b)   the Company fails to provide notice of the anticipated effective date or actual effective date of a Fundamental Change, Make-Whole Fundamental Change or notice of specified corporate transactions, as described in Sections 3.01(b), 9.01(a)(3) and 9.01(a)(4), in each case, on a timely basis;
 
(c)   (i) failure by the Company or any of its Subsidiaries (other than TFC or its Subsidiaries) to pay when due any principal or interest on any Indebtedness in an individual principal amount of $100,000,000 or more or items of Indebtedness with an aggregate principal amount of $100,000,000 or more beyond the end of any period prior to which the obligee thereunder is prohibited from accelerating payment thereunder or any grace period after the maturity thereof or (ii) breach or default by the Company or any of its Subsidiaries (other than TFC or its Subsidiaries) with respect to any other term of: (y) any evidence of any Indebtedness in an individual principal amount of $100,000,000 or more or items of Indebtedness with an aggregate principal amount of $100,000,000 or more; or (z) any loan agreement, mortgage, indenture or other agreement relating thereto, if such failure, default or breach shall continue for more than the period of grace, if any, specified therein and shall not at the time of acceleration hereunder be cured or waived;
 
(d)   the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; and
 
(e)   the commencement by any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate
 
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action by any Significant Subsidiary of the Company (other than TFC or its Subsidiaries) in furtherance of any such action.
 
SECTION 6.02.   Rescission and Annulment .  After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in aggregate principal amount of the Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:
 
(a)   the conditions set forth in the second paragraph of Section 5.2 of the Original Indenture are met;
 
(b)   rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and
 
(c)   such declaration is not the result of (i) an Event of Default arising from the Company’s failure to pay or deliver, as the case may be, cash, shares of Common Stock or a combination thereof in respect of the Conversion Obligation, as required by Article 9, upon conversion of any Notes, (ii) an Event of Default arising from the Company’s failure to repurchase any Notes pursuant to Article 3 or (iii) an Event of Default with respect to a provision that cannot be modified or amended without the consent of each affected Holder.
 
The provisions of Section 5.2 of the Original Indenture shall otherwise remain applicable to the Notes.
 
SECTION 6.03.   Waiver of Past Defaults .  Subject to Section 5.13 of the Original Indenture, the Holders of not less than a majority in principal amount of the Notes then Outstanding may, on behalf of all Holders, waive any past Default under the Indenture and its consequences, except:
 
(i)            a Default arising from the failure of the Company to pay or deliver, as the case may be, cash, shares of Common stock or a combination thereof in respect of the Conversion Obligation, as required by Article 9, upon the conversion of any Notes; or
 
(ii)           a Default arising from the failure to repurchase any Notes pursuant to Article 3.
 
The provisions of Section 5.13 of the Original Indenture shall otherwise remain applicable to the Notes.
 
SECTION 6.04.   Failure to Comply with Reporting Covenant .  Notwithstanding anything to the contrary in this Indenture, the sole remedy for an Event of Default relating to the Company’s failure to perform or observe the covenants in Section 2.06 will for the 180 days after the occurrence of such an Event of Default consist exclusively of the right to receive additional interest (the “ Reporting Additional Interest ”) on the Notes at an annual rate equal to 0.50% of the principal amount of the Notes.  Reporting Additional Interest will be payable in the same manner and on the same Interest Payment Dates as the stated interest payable on the Notes.  Reporting Additional Interest will accrue on all outstanding Notes from, and including, the date on which an Event of Default relating to a failure by the Company to comply with its obligations
 
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pursuant to Section 2.06 first occurs to, but not including, the one-hundred eightieth (180th) day thereafter (or such earlier date on which the Event of Default relating to the Company’s obligations pursuant to Section 2.06 shall have been cured or waived).  On such one-hundred eightieth (180th) day (or earlier, if an Event of Default relating to the Company’s obligations pursuant to Section 2.06 is cured or waived prior to such one-hundred eightieth (180th) day), such Reporting Additional Interest will cease to accrue, and the Notes will be subject to acceleration as provided in Section 5.2 of the Original Indenture if such Event of Default is continuing.  A Holder’s right to receive Reporting Additional Interest for an Event of Default relating to the Company’s failure to perform or observe the covenant in Section 2.06 will not affect the rights of the Holders in the event of an occurrence of any other Event of Default.
 
ARTICLE 7
 
Discharge
 
SECTION 7.01.   Discharge of the Supplemental Indenture .  (a)  The satisfaction and discharge provisions set forth in this Article 7 shall, with respect to the Notes, supersede in their entirety Section 4.1 of the Original Indenture, and all references in the Original Indenture to Section 4.1 thereof and the satisfaction and discharge provisions therein, as the case may be, shall, with respect to the Notes, be deemed to be references to this Article 7 and the satisfaction and discharge provisions set forth in this Article 7, respectively.  When (i) the Company delivers to the Trustee all outstanding Notes (other than Notes replaced pursuant to Section 3.6 of the Original Indenture) for cancellation or (ii) all outstanding Notes have become due and payable, whether on the Maturity Date, upon a repurchase pursuant to Article 3 hereof, upon conversion pursuant to Article 9 or otherwise, and the Company irrevocably deposits with the Trustee money sufficient to pay on the Maturity Date or upon repurchase all outstanding Notes, including interest thereon to the Maturity Date or the relevant Fundamental Change Repurchase Date, as the case may be (other than Notes replaced pursuant to Section 3.6 of the Original Indenture), and any shares of Common Stock, cash or a combination of cash and shares of Common Stock (or other property) due in respect of converted Notes, and if in each such case the Company pays all other sums payable hereunder by the Company, then this Supplemental Indenture shall, subject to Section 7.01(b), cease to be of further effect.  The Trustee shall acknowledge satisfaction and discharge of this Supplemental Indenture on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 1.2 of the Original Indenture and at the cost and expense of the Company.
 
(b)   Notwithstanding clause (a) above, the Company’s obligations in Sections 3.5, 3.6, 6.7, 6.10 and 7.1 of the Original Indenture, Sections 2.04 and 2.05 hereof and this Article 7 shall survive until the Notes have been paid in full.  Thereafter, the Company’s obligations in Section 6.7 of the Original Indenture shall survive such satisfaction and discharge.
 
(c)   Sections 4.2, 4.3 and 4.4 of the Original Indenture shall not apply to the Notes.
 
SECTION 7.02.   Application of Trust Money .  The Trustee shall hold in trust cash and any shares of Common Stock or other property due in respect of converted Notes deposited with it pursuant to this Article 7.  It shall apply the deposited money through the
 
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Paying Agent and in accordance with the Indenture to the payment of principal of and interest on the Notes or, in the case of any cash or shares of Common Stock (or other property) due in respect of converted Notes, in accordance with the Indenture in relation to the conversion of Notes pursuant to the terms hereof.
 
SECTION 7.03.   Repayment to Company .  The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money or securities held by them at any time after a full satisfaction and discharge pursuant to the terms hereof.
 
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest and any shares of Common Stock or other property due in respect of converted Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money or securities must look to the Company for payment as general creditors.
 
SECTION 7.04.   Reinstatement .  If the Trustee or Paying Agent is unable to apply any cash or to pay or deliver, as the case may be, cash or any shares of Common Stock (or other property) due in respect of converted Notes in accordance with this Article 7 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Supplemental Indenture, the Original Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 7 until such time as the Trustee or Paying Agent is permitted to apply all such cash and pay or deliver, as the case may be, cash or any shares of Common Stock (or other property) due in respect of converted Notes in accordance with this Article 7; provided , however , that, if the Company has made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
 
ARTICLE 8
 
Amendments
 
SECTION 8.01.   Without Consent of Holders .  In addition to any permitted amendment or supplement to the Indenture pursuant to Section 9.1 of the Original Indenture, the Company and the Trustee may amend or supplement the Indenture (to the extent applicable to the Notes) or the Notes without notice to or the consent of any Holder:
 
(a)   to add guarantees with respect to the Notes;
 
(b)   to comply with any requirements of the Commission in connection with qualifying, or maintaining the qualification of, the Indenture under the Trust Indenture Act; or
 
(c)   to conform the provisions of the Indenture and the form or terms of the Notes to the section entitled “Description of notes” as set forth in the final prospectus supplement related to the offering and sale of the Notes dated April 29, 2009.
 
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SECTION 8.02.   With Consent of Holders .  In addition to the amendments or supplements to the Indenture pursuant to Section 9.2 of the Original Indenture that require the consent of the Holder of each Outstanding Note affected thereby, without the consent of each Holder of an Outstanding Note affected (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), no amendment or supplement may:
 
(a)           make any change that impairs or adversely affect the right of a holder to convert any Notes pursuant to Article 9;
 
(b)          reduce the Fundamental Change Repurchase Price, change the time at which Holders may require any Notes to be repurchased by the Company in connection with a Fundamental Change in accordance with Article 3 or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
 
(c)           make any Note payable in a currency other than that stated in the Note;
 
(d)          impair the right of any Holder to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes; or
 
(e)           change the ranking of the Notes.
 
SECTION 8.03.   Revocation and Effect of Consents and Waivers .  Notwithstanding Section 9.4 of the Original Indenture, a consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note.  However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.  An amendment or waiver becomes effective once both (i) the requisite number of consents have been received by the Company or the Trustee and (ii) such amendment or waiver has been executed by the Company and the Trustee.
 
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective for more than one-hundred twenty (120) calendar days after such record date.
 
ARTICLE 9
 
Conversion of Notes
 
SECTION 9.01.   Right to Convert .  (a) Subject to and upon compliance with the provisions of this Article 9, a Holder shall have the right, at such Holder’s option, to convert all
 
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or any portion (if the portion to be converted is $1,000 principal amount or multiple thereof) of such Notes, at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date at an initial conversion rate (the “ Conversion Rate ”) of 76.1905 shares of the Common Stock (subject to adjustments as provided in Sections 9.03 and 9.04 of this Supplemental Indenture) per $1,000 principal amount of Notes (the “ Conversion Obligation ”) only under the following circumstances:
 
(1)                                   Conversion Based on Common Stock Price.   A Holder may surrender its Notes for conversion during any calendar quarter commencing at any time after June 30, 2009, and only during such calendar quarter, if the Last Reported Sale Price for the Common Stock for at least twenty (20) Trading Days during the thirty (30) consecutive Trading-Day period ending on the last Trading Day of the preceding calendar quarter is more than 130% of the applicable Conversion Price in effect on the last day of such preceding calendar quarter.  Whenever the Notes shall become convertible pursuant to this Section 9.01(a)(1), the Company shall notify all Holders, the Trustee and the Conversion Agent promptly and, simultaneously with providing such notice, the Company shall issue a press release containing the relevant information and make this information available on its website.
 
(2)                                   Conversion Upon Satisfaction of Trading Price Condition.   A Holder may surrender its Notes for conversion during the five (5) Business Day period after any ten (10) consecutive Trading Day period (the “ Trading Price Measurement Period ”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance with the procedures set forth in this Section 9.01(a)(2), for each Trading Day in the Trading Price Measurement Period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.  In connection with any conversion in accordance with this Section 9.01(a)(2), the Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes unless requested by the Company; and the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.  At such time, the Company shall instruct the Bid Solicitation Agent to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.  Whenever the Notes shall become convertible pursuant to this Section 9.01(a)(2), the Company shall notify all Holders, the Trustee and the Conversion Agent promptly and, simultaneously with providing such notice, the Company shall issue a press release containing the relevant information and make this information available on its website.
 
(3)                                   Conversion Upon Specified Distributions to Holders of Common Stock .  If the Company elects to:
 
(i)                                      distribute to all or substantially all holders of its Common Stock rights entitling them to purchase, for a period expiring within sixty (60) calendar
 
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days after the date of the distribution, shares of the Common Stock at a price per share less than the average Last Reported Sale Prices of the Common Stock over the ten (10) consecutive Trading Day period ending on the Trading Day immediately preceding the declaration date for such distribution; or
 
(ii)                                   distribute to all or substantially all holders of the Common Stock the Company’s assets, its debt securities or certain rights to purchase securities of the Company, which distribution has a per share value as determined by the Board of Directors exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the declaration date for such distribution,
 
then, in either case, the Company shall notify all Holders, the Trustee and the Conversion Agent at least fifty-five (55) Business Days prior to the Ex-Dividend Date for such distribution.  Simultaneously with providing such notice, the Company shall issue a press release containing the relevant information, including, but not limited to, the declaration date, and make this information available on its website.  Once the Company has given such notice, a Holder may surrender its Notes for conversion at any time until the earlier of the close of business on the Business Day immediately prior to such Ex-Dividend Date for such distribution or the Company’s announcement that such distribution will not take place.  A Holder may not convert any of its Notes pursuant to this Section 9.01(a)(3) if such Holder will otherwise participate in the distribution without conversion as a result of holding the Notes on a basis equivalent to a holder of a number of shares of Common Stock equal to the principal amount of such Notes, divided by the applicable Conversion Price.
 
(4)                                   Conversion Upon a Fundamental Change or a Make-Whole Fundamental Change .   In the event of a Fundamental Change or a Make-Whole Fundamental Change, a Holder may surrender its Notes for conversion at any time beginning on the Business Day following the effective date of such Fundamental Change or Make-Whole Fundamental Change until (a) the close of business on the second Scheduled Trading Day immediately preceding the Fundamental Change Repurchase Date corresponding to such Fundamental Change or (b) the close of business on the thirty-fifth (35th) Trading Day after the effective date of the Make-Whole Fundamental Change in the case of a Make-Whole Fundamental Change that is not a Fundamental Change.  The Company shall notify all Holders, the Trustee and the Conversion Agent of the anticipated occurrence of such a Fundamental Change or Make-Whole Fundamental Change no later than five (5) Business Days prior to the anticipated effective date of such Fundamental Change or Make-Whole Fundamental Change.  Simultaneously with providing such notice, the Company shall issue a press release containing the relevant information and make this information available on its website.
 
(5)                                   Conversion During the Period Commencing on February 19, 2013 to Maturity.   Notwithstanding anything herein to the contrary, a Holder may surrender all or a portion of its Notes for conversion at any time on or after February 19, 2013 until the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date.
 
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SECTION 9.02.   Conversion Procedures; Settlement Upon Conversion; No Adjustment for Interest or Dividends; Cash Payments in Lieu of Fractional Shares .  (a)       In order to exercise the conversion right with respect to any Notes in certificated form, a Holder must (A) complete and manually sign an irrevocable notice of conversion in the form entitled “Form of Conversion Notice” attached to the reverse of such certificated Note (or a facsimile thereof) (a “ Conversion Notice ”), (B) deliver such Conversion Notice and certificated Note to the Conversion Agent at the office of the Conversion Agent, (C) to the extent any shares of Common Stock issuable upon conversion are to be issued in a name other than the Holder’s, furnish appropriate endorsements and transfer documents as may be required by the Conversion Agent, (D) if required pursuant to Section 9.02(f), pay all transfer or similar taxes or duties and (E) if required pursuant to Section 2.03(c), pay funds equal to interest payable on the next Interest Payment Date.
 
In order to exercise the conversion right with respect to any interest in a Global Note, a Holder must (A) comply with the Depositary’s procedures for converting a beneficial interest in a Global Note, (B) to the extent any shares of Common Stock issuable upon conversion are to be issued in a name other than the Holder’s, furnish appropriate endorsements and transfer documents as may be required by the Conversion Agent; (C) if required pursuant to Section 9.02(f), pay all transfer or similar taxes or duties; and (D) if required pursuant to Section 2.03(c), pay funds equal to interest payable on the next Interest Payment Date.
 
The date that the Holder satisfies the foregoing requirements is the “ Conversion Date .”
 
If a Holder has submitted any Notes for repurchase pursuant to Section 3.01, such Notes may be converted only if the Holder submits a withdrawal notice in accordance with Section 3.02 prior to the close of business on the second Scheduled Trading Day immediately preceding the Fundamental Change Repurchase Date and, if such Notes are evidenced by a Global Note, the Holder complies with appropriate Depositary procedures.
 
(b)          Except as provided below, the Company may elect to pay or deliver, as the case may be, shares of its Common Stock, cash or a combination of cash and shares of Common Stock in respect of the Conversion Obligation upon conversion of any Notes.
 
The Company shall from time to time make an election with respect to the method it chooses in respect of the Conversion Obligation upon conversion of any Notes.  Such election shall be effective until the Company provides notice of an election of a different method of settlement.  The Company may not elect a different method of settlement after the fifty-first (51st) Scheduled Trading Day preceding the Maturity Date.  The Company shall provide to all Holders, the Trustee and the Conversion Agent a notice of the newly chosen method of settlement and the effective date of such newly chosen method; provided , however , that in no event shall the Company notify a Holder who has submitted its Notes for conversion of a settlement method applicable to such conversion after the second Trading Day immediately following the related Conversion Date (or, if earlier, February 15, 2013).  Simultaneously with providing such notice, the Company shall issue a press release containing the relevant information and make this information available on its website.
 
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If the Company elects to deliver cash in respect of the Conversion Obligation upon conversion of any Notes, the Company shall specify in such notice the fixed dollar amount per $1,000 principal amount of the Notes to be paid in cash (the “ Fixed Dollar Amount ”); provided the Fixed Dollar Amount due upon conversion shall in no event exceed the Conversion Value.  If, in respect of any conversion, the Company has not previously made an election with respect to the settlement method it chooses in respect of any Conversion Obligation upon conversion of any Notes and does not timely make such an election, the Company shall be deemed to have elected to settle such conversion in the manner set forth in Section 9.01(b)(3) with a Fixed Dollar Amount equal to $1,000 per $1,000 principal amount of Notes.
 
Settlement of conversions (x) solely in shares of Common Stock (other than cash in lieu of fractional shares) shall occur on the third (3rd) Trading Day following the final Settlement Period Trading Day of the Settlement Period that would be applicable if settlement were in cash or a combination of cash and shares of Common Stock, and (y) in cash or in a combination of cash and shares of Common Stock shall occur on the third (3rd) Trading Day following the final Settlement Period Trading Day of the applicable Settlement Period.
 
The number of shares of Common Stock, the amount of cash, or the number of shares of Common Stock and amount of cash, as the case may be, due upon conversion of any Notes shall be computed as follows:
 
(1)                                   if upon conversion of any Notes, the Company has elected to deliver solely shares of Common Stock in respect of the related Conversion Obligation, the Company shall deliver to each converting Holder, for each $1,000 principal amount of Notes converted, a number of shares of Common Stock equal to the Conversion Rate in effect on the final Settlement Period Trading Day of the Settlement Period that would be applicable if settlement were in cash or a combination of cash and shares of Common Stock, plus cash in lieu of fractional shares, if applicable, as set forth in Section 9.02(i);
 
(2)                                   if upon conversion of any Notes, the Company has elected to pay solely cash in respect of the related Conversion Obligation, the Company shall deliver to each converting Holder, for each $1,000 principal amount of Notes converted, cash in an amount equal to the Conversion Value; and
 
(3)                                   if upon conversion of any Notes, the Company has elected (or is deemed to have elected) to pay and deliver, as the case may be, a combination of cash and shares of Common Stock in respect of the related Conversion Obligation, the Company shall pay or deliver, as the case may be, to each converting Holder, for each $1,000 principal amount of Notes converted:  (A) the Fixed Dollar Amount per $1,000 principal amount of the Notes of the Conversion Obligation to be satisfied in cash specified in the notice regarding the Company’s chosen method of settlement or, if lower, the Conversion Value in cash (the “ Fixed Cash Amount ”) and (B) a number of shares of Common Stock equal to the sum, for each of the forty-five (45) Settlement Period Trading Days in the Settlement Period, of 1/45th of (a) the Conversion Rate then in effect minus (b) the quotient of (x) the Fixed Cash Amount divided by (y) the VWAP of the Common Stock on that Settlement Period Trading Day (plus cash in lieu of fractional shares, if applicable, as set forth in Section 9.02(i)).
 
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(c)           If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.
 
(d)          In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered, without charge to such Holder, a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note.
 
(e)           Upon the conversion of an interest in a Global Note, the Trustee and the Depositary shall reduce the principal amount of such Global Note in their records.
 
(f)             The issuance of stock certificates on conversions of Notes shall be made without charge to the converting holder of Notes for any documentary, stamp or similar issue or transfer tax in respect of the issue thereof.  The Company shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the holder of any Notes converted, and the Company shall not be required to issue or deliver any such stock certificate unless and until the Person or Persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.
 
(g)          Upon conversion, accrued and unpaid interest to the Conversion Date with respect to the converted Notes shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.
 
(h)          If the Company’s Conversion Obligation is satisfied in Common Stock or a combination of cash and Common Stock, the Holder that has converted its Notes (or if such Person designated another Person to whom such Common Stock shall be issued and delivered, such Person) shall be treated as a holder of record of such Common Stock as of the close of business on the final Settlement Period Trading Day of the applicable Settlement Period.
 
(i)              No fractional shares of Common Stock shall be issued upon conversion of any Note or Notes.  If any fractional shares of Common Stock would be issuable upon the conversion of any Note or Notes, the Company shall instead deliver cash with respect to the fractional share calculated by multiplying the daily VWAP of the Common Stock on the final Settlement Period Trading Day of the applicable Settlement Period, by the fractional amount and rounding the product to the nearest cent.  If the Company has elected to satisfy the entire Conversion Obligation in Common Stock only, the applicable Settlement Period used to calculate the cash payment under this Section 9.02(i) shall be the Settlement Period that would be applicable if settlement of the Conversion Obligation were in cash or a combination of cash and shares of Common Stock.
 
SECTION 9.03.   Increased Conversion Rate Applicable to Securities Converted in Connection With Make-Whole Fundamental Changes .  If a Holder elects to convert its Notes at any time during the period permitted for conversion in the event of a Make-Whole
 
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Fundamental Change, the Conversion Rate applicable to each Note that is surrendered for conversion in accordance with this Article 9 shall be increased by an additional number of shares of Common Stock (the “ Additional Shares ”) determined pursuant to this Section 9.03.
 
Any conversion will be deemed to have occurred in connection with a Make-Whole Fundamental Change only if such Notes are surrendered for conversion at a time when the Notes would be convertible in light of the occurrence of the Make-Whole Fundamental Change and notwithstanding the fact that a Note may then be convertible because another condition to conversion has been satisfied.
 
The number of Additional Shares shall be determined by reference to the table below, based on the date on which such Make-Whole Fundamental Change occurs or becomes effective (the “ Effective Date ”) and the Stock Price paid per share for the Common Stock in such Make-Whole Fundamental Change.  The Stock Prices set forth in the first row of the table below ( i.e. , the column headers) shall be adjusted as of any date on which the Conversion Rate is adjusted to equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which shall be the Conversion Rate immediately prior to the adjustment and the denominator of which shall be the Conversion Rate as so adjusted.  The number of Additional Shares in the table will be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 9.04.
 
The following table sets forth the number of Additional Shares by which the Conversion Rate shall be increased based on the Stock Price and Effective Date of the Make-Whole Fundamental Change:

 	 	Stock Price	 	
Effective Date	 	$ 10.50	 	$ 11.00	 	$ 12.00	 	$ 14.00	 	$ 16.00	 	$ 18.00	 	$ 20.00	 	$ 22.00	 	$ 24.00	 	$ 26.00	 	$ 30.00	 	$ 40.00	 	$ 50.00	 	$ 60.00	 	$ 80.00	 	$ 100.00	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
May 5, 2009	 	19.0476	 	17.5421	 	14.6253	 	10.6336	 	8.1267	 	6.4612	 	5.3008	 	4.4544	 	3.8158	 	3.3145	 	2.5816	 	1.5316	 	0.9661	 	0.6172	 	0.2334	 	0.0570	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
May 1, 2010	 	19.0476	 	16.5446	 	13.4495	 	9.3539	 	6.8968	 	5.3392	 	4.3069	 	3.5805	 	3.0469	 	2.6387	 	2.0538	 	1.2237	 	0.7718	 	0.4891	 	0.1752	 	0.0314	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
May 1, 2011	 	19.0476	 	15.5067	 	12.0861	 	7.7414	 	5.3405	 	3.9464	 	3.0900	 	2.5287	 	2.1401	 	1.8525	 	1.4494	 	0.8764	 	0.5548	 	0.3491	 	0.1163	 	0.0072	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
May 1, 2012	 	19.0476	 	14.7186	 	10.3462	 	5.4842	 	3.2037	 	2.1239	 	1.5838	 	1.2832	 	1.0933	 	0.9579	 	0.7652	 	0.4717	 	0.2979	 	0.1833	 	0.0480	 	0.0000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
May 1, 2013	 	19.0476	 	14.7186	 	7.1429	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	0.0000	 	
 
provided , however , that:
 
(1)                                   if the actual Stock Price is between two Stock Prices listed in the table above under the column titled “Stock Price,” or if the actual Effective Date of such Make-Whole Fundamental Change is between two Effective Dates listed in the table above in the row immediately below the title “Effective Date,” then the number of Additional Shares shall be determined by the Company by straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Price amounts, and the two Effective Dates, as applicable, based on a 365-day year; and
 
(2)                                   (a) if the actual Stock Price is greater than $100.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the first row of the table above pursuant to this Section 9.03), then the Conversion Rate will not be increased, or (b) if the actual Stock Price is less than $10.50 per share (subject to adjustment in the
 
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same manner as the Stock Prices set forth in the first row of the table above pursuant to this Section 9.03), then the Conversion Rate will not be increased.
 
Notwithstanding the foregoing, in no event will the Conversion Rate as adjusted exceed 95.2381 per $1,000 principal amount of Notes, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 9.04.
 
SECTION 9.04.   Adjustment of Conversion Rate .  The Conversion Rate shall be adjusted from time to time by the Company as follows:
 
(a)           If the Company shall issue shares of Common Stock as a dividend or distribution on shares of Common Stock, or if the Company effects a share split or share combination of the Common Stock, the Conversion Rate will be adjusted based on the following formula:

 
where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date for such dividend or distribution or the effective date of such share split or share combination;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Record Date for such dividend or distribution or the effective date of such share split or share combination;	
 	 	 	 	 	
OS 0	 	=	 	the number of shares of the Common Stock that are outstanding at the close of business on the Record Date for such dividend or distribution or the effective date of such share split or share combination; and	
 	 	 	 	 	
OS’	 	=	 	the number of shares of the Common Stock that are outstanding immediately after, and solely as a result of, such event.	
 
Such adjustment shall become effective immediately after (x) the Record Date for such dividend or distribution or (y) the effective date of such share split or share combination.  If any dividend or distribution of the type described in this Section 9.04(a) is declared but not so paid or made, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
 
(b)          If the Company shall issue to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than sixty (60) calendar days to subscribe for or purchase shares of the Common Stock, at a price per share less than the Current Market Price of the Common Stock, the Conversion Rate shall be adjusted based on the following formula:
 
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where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date for such distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Record Date for such distribution;	
 	 	 	 	 	
OS 0	 	=	 	the number of shares of the Common Stock that are outstanding at the close of business on the Record Date for such distribution;	
 	 	 	 	 	
X	 	=	 	the total number of shares of the Common Stock issuable pursuant to such rights or warrants; and	
 	 	 	 	 	
Y	 	=	 	the number of shares of the Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the Current Market Price.	
 
Such adjustment shall become effective immediately after the Record Date for such distribution.  In the event that such rights or warrants described in this Section 9.04(b) are not so distributed, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if the Record Date for such distribution had not occurred. To the extent that such rights or warrants are not exercised prior to their expiration or shares of the Common Stock are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of the Common Stock actually delivered. In determining the aggregate price payable for such shares of the Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration if other than cash to be determined by the Board of Directors.
 
(c)           If the Company shall distribute shares of its Capital Stock, evidences of its indebtedness or other of its assets or property to all or substantially all holders of its Common Stock, excluding (v) any dividends or distributions referred to in Section 9.04(a); (w) any rights or warrants referred to in Section 9.04(b); (x) any dividends or distributions covered by Section 9.04(d); (y) any dividends and distributions in connection with a Reorganization Event covered by Section 9.05; and (z) any Spin-Off to which the provisions set forth below in this Section 9.04(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, or other assets or property, “ Distributed Property ”), then, in each such case, the Conversion Rate shall be adjusted based on the following formula:

 
 
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where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date for such distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Record Date for such distribution;	
 	 	 	 	 	
SP 0	 	=	 	the Current Market Price; and	
 	 	 	 	 	
FMV	 	=	 	the Fair Market Value, on the Record Date for such distribution, of the Distributed Property, expressed as an amount per share of the Common Stock.	
 
With respect to an adjustment pursuant to this Section 9.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series of, or similar equity interest in, a Subsidiary or other business unit of the Company (a “ Spin-Off ”), that are, or, when issued, will be, quoted or listed on the New York Stock Exchange, the NASDAQ Global Select Market, NASDAQ Global Market or any other national or regional securities exchange or market, the Conversion Rate will instead be adjusted based on the following formula:

 
where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date for such dividend or distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Record Date for such dividend or distribution;	
 	 	 	 	 	
FMV 0	 	=	 	the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock over the ten (10) consecutive Trading-Day period commencing on, and including, the effective date of the Spin-Off; and	
 	 	 	 	 	
MP 0	 	=	 	the average of the Last Reported Sale Prices of the Common Stock over the ten (10) consecutive Trading-Day period commencing on, and including, the effective date of the Spin-Off.	
 
Such adjustment shall become effective immediately after the Record Date for such dividend or distribution.  If such dividend or distribution is not so made, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
 
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For the purposes of this Section 9.04(c) (and subject in all respects to Section 9.08), rights or warrants distributed by the Company to all holders of its Common Stock entitling them to subscribe for or purchase shares of the Company’s capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (a “ Trigger Event” ):  (1) are deemed to be transferred with such shares of Common Stock; (2) are not exercisable; and (3) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 9.04(c), (and no adjustment to the Conversion Rate under this Section 9.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 9.04(c).  If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Supplemental Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date of such deemed distribution (in which case the original rights or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders).  In addition, in the event of any distribution or deemed distribution of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 9.04(c) was made, (1) in the case of any such rights or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such final redemption or repurchase (x) the Conversion Rate shall be readjusted as if such rights or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by holders of Common Stock with respect to such rights or warrants (assuming each such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.
 
For the purposes of this Section 9.04(c) and subsections (a) and (b) of this Section 9.04, any dividend or distribution to which this Section 9.04(c) applies which also includes one or both of:
 
(A)                               a dividend or distribution of shares of Common Stock to which Section 9.04(a) applies; and
 
(B)                                 a dividend or distribution of rights or warrants to which Section 9.04(b) applies,
 
then (1) such dividend or distribution, other than the dividend or distribution of shares of Common Stock to which Section 9.04(a) applies and the dividend or distribution of rights or warrants to which Section 9.04(b) applies , shall be deemed to be a dividend or distribution to which this Section 9.04(c) applies and any Conversion Rate adjustment required by this Section 9.04(c) with respect thereto shall then be made, and (2) the dividend or distribution of shares of Common Stock to which Section 9.04(a) applies and the dividend or distribution of shares of
 
37

 
Common Stock to which Section 9.04(b) applies shall be deemed to immediately follow such dividend or distribution to which this Section 9.04(c) applies and any Conversion Rate adjustment required by Section 9.04(a) and Section 9.04(b) with respect thereto shall then be made, except that, if determined by the Company, (I) the “Record Date” of the dividend or distribution of shares of Common Stock to which Section 9.04(a) applies and the dividend or distribution of shares of Common Stock to which Section 9.04(b) applies shall be deemed to be the Record Date of such dividend or distribution to which this Section 9.04(c) applies and (II) any shares of Common Stock included in the dividend or distribution of shares of Common Stock to which Section 9.04(a) applies or the dividend or distribution of shares of Common Stock to which Section 9.04(b) applies shall be deemed not to be “o utstanding at the close of business on the Record Date for such dividend or distribution or the effective date of such share split or share combination ” within the meaning of Section 9.04(a) or “o utstanding at the close of business on the Record Date for such distribution ” within the meaning of Section 9.04(b).
 
(d)          If the Company pays any cash dividend or distribution to all or substantially all holders of its Common Stock, other than a regular, quarterly cash dividend that does not exceed $0.02 (the “ Initial Dividend Threshold ”), the Conversion Rate shall be adjusted based on the following formula:

 
where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Record Date for such dividend or distribution;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Record Date for such dividend or distribution;	
 	 	 	 	 	
SP 0	 	=	 	the Current Market Price; and	
 	 	 	 	 	
C	 	=	 	the amount in cash per share of Common Stock the Company distributes to holders of its Common Stock in excess of the Initial Dividend Threshold; provided that if the dividend or distribution is not a regular, quarterly cash dividend, the Initial Dividend Threshold shall be deemed to be zero.	
 
Such adjustment shall become effective immediately after the Record Date for such dividend or distribution.  In the event that any such dividend or distribution is not so made, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
 
The Initial Dividend Threshold shall be adjusted in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment shall be made to the Initial Dividend Threshold for any adjustment made to the Conversion Rate pursuant to this Section 9.04(d).
 
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(e)           If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock subject to the tender offer rules, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day immediately succeeding the last date (the “ Expiration Date ”) on which tenders or exchanges may be made pursuant to such tender offer or exchange offer, the Conversion Rate shall be adjusted based on the following formula:

 
where

CR 0	 	=	 	the Conversion Rate in effect at the close of business on the Expiration Date;	
 	 	 	 	 	
CR’	 	=	 	the Conversion Rate in effect immediately after the Expiration Date;	
 	 	 	 	 	
FMV	 	=	 	the Fair Market Value, on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for shares validly tendered or exchanged and not withdrawn as of the Expiration Date;	
 	 	 	 	 	
OS’	 	=	 	the number of shares of Common Stock outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender offer or exchange offer (the “ Expiration Time ”);	
 	 	 	 	 	
OS 0	 	=	 	the number of shares of Common Stock outstanding immediately prior to the Expiration Time; and	
 	 	 	 	 	
SP’	 	=	 	the average of the Last Reported Sale Prices of Common Stock over the ten (10) consecutive Trading Day period commencing on the Trading Day immediately following the Expiration Date.	
 
Such adjustment shall become effective immediately prior to the open of business on the Trading Day immediately following the Expiration Date.  In the event the Company or one of its Subsidiaries is obligated to purchase shares of the Common Stock pursuant to any such tender offer or exchange offer, but the Company or such Subsidiary of the Company is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made.  Except as set forth in the preceding sentence, if the application of this clause (e) to any tender offer or exchange offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer or exchange offer under this Section 9.04(e).
 
(f)             Except with respect to a Spin-Off, in cases where the Fair Market Value of assets, debt securities or certain rights, warrants or options to purchase the Company’s securities,
 
39

 
or the amount of the cash dividend or distribution applicable to one share of Common Stock, distributed to all or substantially all stockholders:
 
(i)                                      equals or exceeds the average Last Reported Sale Prices of Common Stock over the ten (10) consecutive Trading Day period ending on the Trading Day immediately preceding the declaration date for such distribution; or
 
(ii)                                   such average Last Reported Sale Prices exceeds the Fair Market Value of such assets, debt securities or rights, warrants or options, or the amount of cash so distributed by less than $1.00,
 
rather than being entitled to an adjustment in the Conversion Rate, the Holder of a Note will be entitled to receive upon conversion, in addition to the shares of Common Stock, cash or a combination of cash and shares of Common Stock, the kind and amount of assets, debt securities or rights, warrants or options, or cash comprising the distribution, if any, that such Holder would have received if such Holder had held a number of shares of Common Stock equal to the principal amount of the Notes held, divided by the Conversion Price in effect immediately prior to the Record Date for determining the stockholders entitled to receive the distribution.
 
(g)          To the extent permitted by applicable law and subject to the applicable rules of the New York Stock Exchange, the Company from time to time may increase the Conversion Rate by any amount for a period of at least twenty (20) Business Days if the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the Company’s best interest, which determination shall be conclusive.  Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to holders of record of the Notes a notice of the increase, which notice will be given at least fifteen (15) calendar days prior to the effectiveness of any such increase, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.
 
(h)          In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.
 
(i)              All calculations and other determinations under this Article 9 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.  No adjustment pursuant to this Section 9.04 shall be made to the Conversion Rate unless such adjustment would require a change of at least 1% in the Conversion Rate then in effect at such time.  However, any adjustments that are less than 1% of the Conversion Rate shall be carried forward and taken into account in any subsequent adjustment, regardless of whether the aggregate adjustment is less than 1% within one year of the first adjustment carried forward, upon a Fundamental Change, upon a Make-Whole Fundamental Change, and on each day beginning with the forty-seventh (47th) Scheduled Trading Day and ending on and including the second (2nd) Scheduled Trading Day prior to the Maturity Date.
 
(j)              Whenever the Conversion Rate is adjusted as herein provided, the Company will issue a press release containing the relevant information, including, but not limited to, any
 
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applicable declaration date, and make this information available on its website.  In addition, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth any applicable declaration date and the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the Holder of each Note at its last address appearing on the Security Register within twenty (20) calendar days of the effective date of such adjustment.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
 
(k)           In any case in which this Section 9.04 provides that an adjustment shall become effective immediately after (i) a Record Date for a dividend or distribution described in Section 9.04(a), 9.04(b), 9.04(d), (ii) the effective date for a share split or share combination of the Common Stock described in Section 9.04(a), (iii) a Record Date for the determination of stockholders entitled to receive rights or warrants pursuant to Section 9.04(b), or (iv) the expiration date for any tender or exchange offer pursuant to Section 9.04(e), (each, a “ Determination Date ”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Notes converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fractional share pursuant to Section 9.04.  For purposes of this Section 9.04(k), the term “ Adjustment Event ” shall mean:
 
(1)                                   in any case referred to in clause (i) hereof, the date any such dividend or distribution is paid or made;
 
(2)                                   in any case referred to in clause (ii) hereof, the occurrence of such event;
 
(3)                                   in any case referred to in clause (iii) hereof, the date of expiration of such rights or warrants; and
 
(4)                                   in any case referred to in clause (iv) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.
 
(l)                          Notwithstanding any of the foregoing clauses in this Section 9.04, the applicable Conversion Rate will not be adjusted pursuant to this Section 9.04 if the Holders of the Notes will participate in the transaction that would otherwise give rise to adjustment pursuant to this Section 9.04 without conversion of such Holder’s Notes on a basis equivalent to a holder of a number of shares of Common Stock equal to the principal amount of the Notes held by the Holder divided by the applicable Conversion Price.  In no event will the Company adjust the
 
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Conversion Rate to the extent that the adjustment would reduce the Conversion Price below the par value per share of Common Stock.  In addition, the applicable Conversion Rate will not be adjusted:
 
(1)                                   for the issuance of shares of Common Stock, including in connection with satisfaction of the Company’s Conversion Obligation in a combination of cash and shares of Common Stock, or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of Common Stock or such convertible or exchangeable securities;
 
(2)                                   upon the issuance of any shares of the Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of the Common Stock under any plan;
 
(3)                                   upon the issuance of any shares of the Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries; or
 
(4)                                   for a change in the par value of the Common Stock.
 
(m)                    For purposes of this Section 9.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.  The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.
 
(n)                      Whenever any provision of this Article 9 requires a calculation of a number of shares of Common Stock equal to a sum or an average of the VWAPs or the Last Reported Sale Prices over a span of multiple days, the Company will make appropriate adjustments (determined by the Board of Directors) to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, at any time during the period from which the sum or average is to be calculated.
 
SECTION 9.05.   Effect of Reclassification, Consolidation, Merger or Sale .
 
(a)                                   In the event of:
 
(1)                                   any reclassification of the outstanding Common Stock (other than a change in par value or as a result of a share split or share combination to which Section 9.04(a) applies);
 
(2)                                   any share exchange, consolidation or merger involving the Company; or
 
(3)                                   any conveyance, transfer, sale, lease or other disposition to another Person of all or substantially all of the Company’s assets,
 
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in which holders of Common Stock received cash, securities or other property (the “ Reference Property ”) in exchange for such Common Stock (any such event or transaction, a “ Reorganization Event ”), in each case, the Company or the Successor Company, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture, if such supplemental indenture is then required to so comply) providing that the Notes shall, and the Notes shall, without the consent of any Holder, become convertible based on the type and amount of consideration that the holders of a number of shares of Common Stock equal to the principal amount of Notes divided by the Conversion Price would have received in such Reorganization Event.  If the Reorganization Event causes the Common Stock to be exchanged for more than a single type of consideration (determined based in part upon any form of stockholder election), the Reference Property into which the Notes will be convertible will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively made such an election.  In all cases, the provisions under Section 9.02 shall continue to apply with respect to the calculation of the Conversion Obligation and the method of settlement.  The Company hereby agrees not to become a party to any such transaction unless its terms are consistent with the foregoing.  Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as practicable to the adjustments provided for in this Article 9.
 
(b)                                  The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the Security Register of the Notes maintained by the Security Registrar, within twenty (20) calendar days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.
 
SECTION 9.06.   Certain Covenants .    (a)                         The Company shall, prior to the issuance of any Notes hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock or shares of Common Stock held in treasury, a sufficient number of shares of Common Stock, free of preemptive rights, to permit the conversion of the Notes.
 
(b)          The Company covenants that all shares of Common Stock issued upon conversion of Notes will be duly and validly issued and fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.
 
(c)           The Company shall endeavor promptly to comply with all federal and state securities laws regulating the issuance and delivery of shares of Common Stock upon the conversion of Notes, if any, and shall cause to have listed or quoted and shall keep listed or quoted all such shares of Common Stock on each U.S. national securities exchange or automatic quotation system or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.
 
SECTION 9.07.   Notice to Holders Prior to Certain Actions .  Except where notice is required pursuant to Section 9.01, in case:
 
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(a)           the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 9.04; or
 
(b)          the Company shall authorize the granting to all or substantially all of the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 9.04; or
 
(c)           of any reclassification of the Common Stock of the Company (other than a share split or share combination of its outstanding Common Stock, or a change in par value), or of any share exchange, consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the conveyance, transfer, sale, lease or other disposition of all or substantially all of the consolidated assets of the Company; or
 
(d)          of the voluntary or involuntary dissolution, liquidation or winding up of the Company;
 
the Company shall cause to be filed with the Trustee and to be mailed to each Holder at its address appearing on the Security Register, as promptly as possible but in any event at least twenty (20) calendar days prior to the applicable date hereinafter specified, a notice stating (x) the declaration date of the dividend or other distribution, (y) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (z) the date on which such reclassification, share exchange, consolidation, merger, conveyance, transfer, sale, lease or other disposition, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
 
SECTION 9.08.   Stockholder Rights Plans .  If the rights provided for in any rights plan adopted by the Company have not separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights agreement, upon conversion of Notes, the converting Holder will receive, in addition to shares of Common Stock, if any, the rights under the applicable stockholders rights agreement.  If such rights have separated from the Common Stock, the Conversion Rate will be adjusted as provided in Section 9.04(c) at the time of separation as if the Company distributed to all holders of the Common Stock, shares of the Company’s Capital Stock, evidences of indebtedness or assets, subject to readjustment in the event of the expiration, termination or redemption of such rights.
 
SECTION 9.09.   Responsibility of Trustee .  The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine the Conversion Rate or whether any facts exist that may require any
 
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adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 9.  Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 9.05 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders of the Notes upon the conversion of their Notes after any event referred to in such Section 9.05 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 8.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.  Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 9.01 has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 9.01 with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 9.01.
 
ARTICLE 10
 
Inapplicable Provisions of the Original Indenture
 
SECTION 10.01.   Limitation Upon Mortgages .  The provisions of Section 10.4 of the Original Indenture shall not apply to the Notes.
 
SECTION 10.02.   Limitation Upon Sale and Leaseback Transactions .  The provisions of Section 10.5 of the Original Indenture shall not apply to the Notes.
 
ARTICLE 11
 
Miscellaneous
 
SECTION 11.01.   Trust Indenture Act Controls .  This Supplemental Indenture is hereby made subject to, and shall be governed by, the provisions of the Trust Indenture Act required to be part of and to govern indentures qualified under the Trust Indenture Act. If any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision
 
45

 
hereof or the Original Indenture that is required to be included in an indenture qualified under the Trust Indenture Act, the required provision shall control.
 
SECTION 11.02.   Communication by Holders with Other Holders .  Holders may communicate pursuant to Trust Indenture Act § 312(b) with other Holders with respect to their rights under this Indenture or the Notes.  The Company, the Trustee, the Security Registrar and anyone else shall have the protection of Trust Indenture Act § 312(c).
 
SECTION 11.03.   Rules by Trustee, Paying Agent and Security Registrar .  The Trustee may make reasonable rules for action by or a meeting of Holders.  The Security Registrar and the Paying Agent may make reasonable rules for their functions.
 
SECTION 11.04.   GOVERNING LAW .   THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 11.05.   No Recourse Against Others .  No director, officer, employee, incorporator, stockholder or partner of the Company, as such, shall have any liability for any obligations of the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release shall be part of the consideration for the issuance of the Notes.  The waiver may not be effective to waive liabilities under the federal securities laws.
 
SECTION 11.06.   Multiple Originals .  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Supplemental Indenture.
 
SECTION 11.07.   Severability Clause .  In case any provision in the Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
 
SECTION 11.08.   Calculations .  Except as otherwise provided in this Supplemental Indenture, the Company will be responsible for making all calculations called for under the Indenture and the Notes. The Company will make all such calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders.  The Company upon request will provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will deliver a copy of such schedule to any Holder upon the request of such Holder.
 
SECTION 11.09.   Recitals .  The recitals herein are deemed to be those of the Company and not of the Trustee.
 
SECTION 11.10.   Ratification of Original Indenture .  The Original Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this
 
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Supplemental Indenture shall be deemed part of the Original Indenture in the manner and to the extent herein and therein provided.
 
47

 
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.

 	TEXTRON INC.,	
 	as Issuer	
 	 	
 	By:	/s/ Mary F. Lovejoy	
 	 	Name: Mary F. Lovejoy	
 	 	Title: Vice President & Treasurer	

 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee,	
 	 	
 	By:	/s/ Vaneta I. Bernard	
 	 	Name: Vaneta I. Bernard	
 	 	Title: Vice President	
 
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EXHIBIT A
 
[FORM OF FACE OF NOTE]
 
[Global Note Legend]
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
 
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
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No.	Initially $[              ]	
 
4.50% Convertible Senior Note due 2013
 
CUSIP No.: 883203 BN0
ISIN:  US883203BN06
 
TEXTRON INC., a Delaware corporation, promises to pay to [CEDE & CO.](1), or its registered assigns, the principal sum of [            ] MILLION DOLLARS ($            ) [(or such lesser principal amount as shall be specified in the “Schedule of Exchanges of Securities” attached hereto)](2), on May 1, 2013, and to pay interest thereon from May 5, 2009, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on May 1 and November 1 of each year, commencing on November 1, 2009, at the rate of 4.50% per annum, until the principal hereof is paid or made available for payment or converted.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at 5:00 p.m., New York City time, on the Regular Record Date for such interest, which shall be April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
 
Interest on the Notes for a Full Interest Period will be computed on the basis of a three hundred sixty (360)-day year comprised of twelve (12) thirty (30)-day months.  Interest on the Notes for any period other than a Full Interest Period will be computed on the basis of the actual number of days elapsed during the period and a three hundred sixty-five (365)-day year. If an Interest Payment Date is not a Business Day, payment shall instead be made on the next succeeding Business Day, and no additional interest shall accrue thereon.
 
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
 
In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control.  This Note shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of said State.
 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture (as defined on the reverse hereof) or be valid or obligatory for any purpose.

(1)                                   Use bracketed language only if Global Note.
 
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Dated:

 	TEXTRON INC.,	
 	as Issuer	

 	By:	 	
 	 	Name:	
 	 	Title:	

TRUSTEE’S CERTIFICATE OF
  AUTHENTICATION
 
This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture

Dated:	 	 	
 
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee

By:	 	 	
 	Authorized Signatory	 	
 
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[FORM OF REVERSE SIDE OF NOTE]
 
4.50 % Convertible Senior Note due 2013
 
TEXTRON INC., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “ Company ”), issued this Note under an Indenture dated as of September 10, 1999 (herein called the “ Original Indenture ”), as supplemented by the Supplemental Indenture dated as of May 5, 2009 (herein called the “ Supplemental Indenture ” and the Original Indenture, as supplemented by the Supplemental Indenture, the “ Indenture ”), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York, herein called the “ Trustee ”), as Trustee, to which reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders and of the terms upon which the Notes are, and are to be, authorized and delivered.  All terms used in this Note that are defined in the Indenture shall have the meaning assigned to them in the Indenture.
 
1.                                        Method of Payment
 
The Company will pay interest on the Notes (except Defaulted Interest, which will be payable as provided in Section 3.7 of the Original Indenture) to the Persons who are registered holders of Notes at 5:00 p.m., New York City time, on the April 15 and October 15 next preceding the Interest Payment Date even if Notes are canceled after the Regular Record Date and on or before the Interest Payment Date, except as otherwise provided in the Indenture. Holders must surrender Notes to a Paying Agent to collect principal payments.  The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.
 
The Company shall pay interest on:
 
(i)  any Global Notes by wire transfer of immediately available funds to the account of the Depositary or its nominee;
 
(ii)  any Notes in certificated form having a principal amount of less than $5,000,000, by check mailed to the address of the Person entitled thereto as it appears in the Security Register; provided , however , on the Maturity Date, interest will be payable as described in Section 2.03(b) of the Supplemental Indenture; and
 
(iii)  any Notes in certificated form having a principal amount of $5,000,000 or more, by wire transfer in immediately available funds at the election of the Holders of such Notes duly delivered to the Trustee at least five (5) Business Days prior to the relevant Interest Payment Date; provided , however , on the Maturity Date, interest will be payable as described in Section 2.03(b) of the Supplemental Indenture.
 
2.                                        Paying Agent, Security Registrar, Conversion Agent and Bid Solicitation Agent
 
Initially, the Trustee will act as Paying Agent, Security Registrar, Conversion Agent and Bid Solicitation Agent.  The Company may appoint and change any Paying Agent,
 
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Security Registrar or co-registrar, Conversion Agent or Bid Solicitation Agent without notice.  The Company may act as Paying Agent, Security Registrar or co-registrar.
 
3.                                        Sinking Fund and Redemption
 
The Notes are not subject to the provisions of Articles XI or XII of the Original Indenture.
 
4.                                        Repurchase of Notes at the Option of Holders
 
If there shall occur a Fundamental Change at any time prior to the Maturity Date, then each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash any or all of such Holder’s Notes in accordance with the terms of the Indenture.
 
5.                                        Conversion
 
Subject to and upon compliance with the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture and prior to 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or multiples thereof at a Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture, upon surrender of this Note, together with a Conversion Notice as provided in the Indenture and this Note, to the Company at the office or agency of the Company maintained for that purpose in New York City and, unless the shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or by its duly authorized attorney.  Except as provided in the Supplemental Indenture, the Company may elect to pay or deliver, as the case may be, shares of its Common Stock, cash or a combination of cash and shares of Common Stock in respect of the Conversion Obligation upon conversion of any Notes.   The Company may elect, in accordance with the Indenture, a different settlement method pursuant to the terms of the Indenture.  If, in respect of any conversion, the Company has not previously made an election with respect to the settlement method it chooses in respect of any Conversion Obligation upon conversion of any Notes and does not timely make such an election, the Company shall be deemed to have elected to settle such conversion in the manner set forth in Section 9.01(b)(3) of the Supplemental Indenture with a Fixed Dollar Amount equal to $1,000 per $1,000 principal amount of Notes. The initial Conversion Rate shall be 76.1905 shares of Common Stock for each $1,000 principal amount of Notes.  No fractional shares of Common Stock will be issued upon conversion of any Note or Notes, but instead cash will be paid to the Holder as provided in Section 9.02(i) of the Supplemental Indenture.  No adjustment shall be made for dividends or any shares issued upon conversion of such Note except as provided in the Indenture.
 
6.                                        Denominations, Transfer, Exchange
 
The Notes are in Global Form without coupons in denominations of $1,000 and whole multiples of $1,000.  A Holder may transfer or exchange Notes in accordance with the Indenture.  Upon any transfer or exchange, the Security Registrar and the Trustee may require a
 
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Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.
 
7.                                        Persons Deemed Owners
 
The registered Holder of this Note may be treated as the owner of it for all purposes.
 
8.                                        Unclaimed Money
 
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest and any shares of Common Stock or other property due in respect of converted Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money or securities must look to the Company for payment as general creditors.
 
9.                                        Amendment, Waiver
 
Subject to certain exceptions, the Indenture contains provisions permitting an amendment of the Indenture or the Notes with the written consent of the Holders of at least a majority in principal amount of the then outstanding Notes and the waiver of any Event of Default or noncompliance with any provision with the written consent of the Holders of a majority in principal amount of the then outstanding Notes.
 
In addition, the Indenture permits an amendment of the Indenture or the Notes without the consent of any Holder under circumstances specified in the Indenture.
 
10.                                  Defaults and Remedies
 
Under certain circumstances specified in the Indenture, after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of the Outstanding Notes may rescind and annul such declaration with respect to the Notes and its consequences.
 
Subject to certain conditions in the Indenture, the Holders of not less than a majority in principal amount of the Notes then Outstanding may, on behalf of the Holders of all the Notes, waive certain past Defaults under the Indenture and its consequences.
 
11.                                  Trustee Dealings with the Company
 
Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
 
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12.                                  No Recourse Against Others
 
No director, officer, employee, incorporator, stockholder or partner of the Company, as such, shall have any liability for any obligations of the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release shall be part of the consideration for the issuance of the Notes.  The waiver may not be effective to waive liabilities under the federal securities laws.
 
13.                                  Authentication
 
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
 
14.                                  Abbreviations
 
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
15.                                  GOVERNING LAW
 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
16.                                  CUSIP and ISIN Numbers
 
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP and ISIN numbers to be printed on the Notes and has directed the Trustee to use CUSIP and ISIN numbers in notices of repurchase as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of repurchase and reliance may be placed only on the other identification numbers placed thereon.
 
The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note.
 
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SCHEDULE A
 
SCHEDULES OF EXCHANGES OF SECURITIES
 
TEXTRON INC.
 
4.50% Convertible Senior Notes due 2013
 
The initial principal amount of this Global Security is [                      ] DOLLARS ($[                  ]).  The following, exchanges, purchases or conversion of a part of this Global Security have been made:

Date of
Exchange	 	Amount of decrease in
principal amount of this
Global Security	 	Amount of increase in
principal amount of
this Global Security	 	Principal amount of this
Global Security
following such decrease
or increase	 	Signature of
authorized signatory
of Trustee or
Custodian	 	

 	 	 	 	 	 	 	 	 	 	
 
A-8

 
EXHIBIT B
 
[FORM OF CONVERSION NOTICE]

TO:	 	TEXTRON INC.	
 	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee	
 
The undersigned registered owner of this Note hereby irrevocably exercises the option to convert this Note, or the portion thereof (which is $1,000 or a multiple thereof) below designated in accordance with the terms of the Indenture referred to in this Note, and directs that the shares of Common Stock, cash or a combination of cash and shares of Common Stock deliverable or payable upon such conversion and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.  If shares or any portion of this Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will provide the appropriate information below and pay all transfer taxes payable with respect thereto.  Any amount required to be paid by the undersigned on account of interest accompanies this Note.

Dated:	 	 	 	

 	 	 	
 	 	 	
 	 	Signature(s)	
 	 	 	
 	 	Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.	

 	 	Signature Guarantee	
 
B-1

 
Fill in the registration of shares of Common Stock, if any, if to be issued, and Notes if to be delivered, and the person to whom cash, if any, and payment for fractional shares is to be made, if to be made, other than to and in the name of the registered holder:

Please print name and address	 	

(Name)	 	

(Street Address)	 	

(City, State and Zip Code)	 	

Principal amount to be converted	 	
(if less than all):	 	
 	 	
$	 	
 	 	
Social Security or Other Taxpayer	 	
Identification Number:	 	

 
NOTICE:  The signature on this Conversion Notice must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatever.
 
B-2

 
EXHIBIT C
 
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

TO:	 	TEXTRON INC.	
 	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee	
 
The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice from Textron Inc. (the “ Company ”) describing the right of Holders to elect to require the Company to repurchase the Notes and requests and instructs the Company to pay the entire principal amount of this Note, or the portion thereof (which is $1,000 or an integral multiple thereof) below designated, in accordance with the terms of the Indenture at the price of 100% of such entire principal amount or portion thereof, together with accrued and unpaid interest to, but excluding, the Fundamental Change Repurchase Date to the registered holder hereof; provided , however , that if the Fundamental Change Repurchase Date falls after a Regular Record Date and on or prior to the Interest Payment Date to which it relates, the Company will instead pay the full amount of accrued and unpaid interest payable on such Interest Payment Date to the holder of record on the close of business on the corresponding Regular Record Date and the Company will pay only 100% of the principal amount of the Notes to be repurchased to the Holder surrendering this Note for repurchase.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.  The Notes shall be repurchased by the Company as of the Fundamental Change Repurchase Date pursuant to the terms and conditions specified in the Indenture.

Dated:	 	 	 	
 	 	
Signature(s):	 	 	

 
 
NOTICE:  The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatever.

Notes Certificate Number (if applicable):	 	
 	
Principal amount to be repurchased (if less than all, must be $1,000 or whole multiples thereof):	 	
 	
Social Security or Other Taxpayer Identification Number:	 	

C-1

 
EXHIBIT D
 
[FORM OF ASSIGNMENT]
 
For value received                                                                                  hereby sell(s) assign(s) and transfer(s) unto                                                                        (Please insert social security or other Taxpayer Identification Number of assignee) the within Notes, and hereby irrevocably constitutes and appoints                                                                              attorney to transfer said Notes on the books of the Company, with full power of substitution in the premises.

Dated:	 	 	 	

 	 	 	
 	 	 	
 	 	Signature(s)	
 	 	 	
 	 	Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.	

 	 	Signature Guarantee	
 
NOTICE:  The signature on this Assignment must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatever.
 
D-1

Exhibit 4.3
 
NY

NUMBER	 	SHARES	
 
COMMON STOCK
 
THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NY

INCORPORATED UNDER THE LAWS OF THE	 	CUSIP 883203 10 1	
STATE OF DELAWARE	 	SEE REVERSE FOR CERTAIN DEFINITIONS	
 
TEXTRON INC.
 
THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
 
Textron Inc. transferable in person or by duly authorized attorney upon surrender of this Certificate properly endorsed.  This certificate and the shares represented hereby are subject to all of the terms and conditions and limitations of the Certificate of Incorporation and all Amendments thereto and Supplements thereof.  This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
 
Textron Inc.
Incorporated
1967
Delaware
[SEAL]
 
Witness the corporate seal of the Corporation and the signatures of its duly authorized officers.
 
Dated:
 
Countersigned and Registered
                American Stock Transfer Trust Company
                                (New York, NY)
                                                Transfer Agent and Registrar

By:	 	/s/ Frederick K. Butler	 	/s/ Lewis B. Campbell	
Authorized Signature	Secretary	 	Chairman, President and Chief Executive Officer	

 
TEXTRON INC.
 
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS A STATEMENT OF THE RIGHTS, PRIVILEGES, RESTRICTIONS, VOTING POWERS, LIMITATIONS AND QUALIFICATIONS OF THE SEVERAL CLASS OF STOCK OF THE CORPORATION.  REQUESTS MAY BE DIRECTED TO THE SECRETARY OF TEXTRON INC., PROVIDENCE, RHODE ISLAND 02903.
 
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to the applicable laws or regulations:

TEN COM	 	¾	as tenants in common	
TEN ENT	 	¾	as tenants by the entireties	
IT TEN	 	¾	as joint tenants with right of survivorship and not as tenants
in common	
UNIF GIFT MIN ACT	 	¾	               	Custodian	               	 	 	 	 	 	
 	 	 	(Cust)	 	(Minor)	 	 	 	 	 	
 	 	 	Under Uniform Gifts to minors	

Act	                                                   	
(State)	
Additional abbreviations may also be used though not in the above list.

For value received,                            hereby sell, assign and transfer under	

Please insert social security or other
identifying number of assignee

 
 
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE

 
 
                                                                                                                           Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
 
Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated,	 	 	 	 	 	 	 	

 	 	 	 	 	 	
 
Signature(s) Guaranteed:

 	 	 	
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RUL 17Ad-15.
 
2

Exhibit 5.1
 
Pillsbury Winthrop Shaw Pittman LLP
1540 Broadway
New York, New York 10036
 
May 5, 2009
 
Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
 
Ladies and Gentlemen:
 
We have acted as counsel for Textron Inc., a Delaware corporation (the “Company”), in connection with the issuance and sale by the Company of (a) 23,805,000 shares (the “Shares”) of Common Stock, par value $0.125 per share, of the Company (the “Common Stock”) pursuant to an Underwriting Agreement dated April 29, 2009 between the Company and the several underwriters named therein (the “Common Stock Underwriting Agreement”) and (b) $600,000,000 principal amount of the Company’s 4.50% Convertible Senior Notes due 2013 (the “Notes”) pursuant to an Underwriting Agreement dated April 29, 2009 between the Company and the several underwriters named therein (the “Notes Underwriting Agreement and, together with the Common Stock Underwriting Agreement, the “Underwriting Agreements”). The Notes are being issued under the Indenture dated as of September 10, 1999 , as supplemented by a supplemental indenture dated as of May 5, 2009 (as so supplemented, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. , as trustee (the “Trustee”).
 
We have reviewed (a) the Underwriting Agreements, (b) the Indenture, (c) the Registration Statement on Form S-3 (File No. 333- 152562 ) (the “Registration Statement”) filed by the Company to register the Shares and the Notes with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933 (the “Act”), (d) the Prospectus dated July 28, 2008, as supplemented by (i) the Prospectus Supplement dated April 29, 2009 relating to the offer and sale of the Shares, and (ii) the Prospectus Supplement relating to the offer and sale of the Notes (collectively, the “Prospectus Supplements”), filed by the Company with the Commission pursuant to Rule 424(b)(2) under the Act. We have not reviewed any certificates representing the Common Stock or the Notes, except a specimen and form, respectively, thereof. We have also reviewed such other agreements, documents, records, certificates and other materials, and have satisfied ourselves as to such other matters, as we have considered relevant or necessary as a basis for this opinion.
 
In such review, we have assumed the accuracy and completeness of all agreements, documents, records, certificates and other materials submitted to us, the conformity with the originals of all such materials submitted to us as copies (whether or not certified and including facsimiles), the authenticity of the originals of such materials and all materials submitted to us as originals, the

 
genuineness of all signatures and the legal capacity of all natural persons. In delivering this opinion, we have relied, without independent verification, as to factual matters, on certificates and other written or oral statements of governmental and other public officials and of officers and representatives of the Company, and the Trustee and the underwriters named in the Underwriting Agreements.
 
On the basis of the assumptions and subject to the qualifications and limitations set forth herein, we are of the opinion that:
 
1.              The Shares have been validly issued, fully paid and is nonassessable.
 
2.              The Notes constitute the valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be subject to and limited by the effect of (a) applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar laws affecting creditors’ rights generally, (b) general equitable principles (whether considered in a proceeding in equity or at law) and (c) requirements of reasonableness, good faith, materiality and fair dealing and the discretion of the court before which any matter may be brought.
 
This opinion is limited to the law of the State of New York and the Delaware General Corporation Law, in each case as in effect on the date hereof.
 
We hereby consent to the filing of this opinion as Exhibit 5 to the Company’s Current Report on Form 8-K filed by the Company with the Commission on the date hereof and the incorporation thereof in the Registration Statement and to the use of our name under the caption “Legal matters” in each of the Prospectus Supplements. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
 
Very truly yours,
 
/s/ Pillsbury Winthrop Shaw Pittman LLP
 
2

Exhibit 10.1
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004
 
April 29, 2009
 
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533
 
Re:                                          Convertible Bond Hedge Transaction
A/C:                                    028320281
Ref. No.:               SDB1630442183
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“ Bank ”) and Textron Inc. (“ Counterparty ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “ Confirmation ” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein have the meanings assigned to them in the Prospectus dated July 28, 2008, as supplemented by the Prospectus Supplement dated April 29, 2009 (as so supplemented, the “ Prospectus ”), relating to the USD 540,000,000 principal amount of 4.50% Convertible Senior Notes due 2013, (the “ Convertible Notes ” and each USD 1,000 principal amount of Convertible Notes, a “ Convertible Note ”) issued by Counterparty pursuant to an Indenture dated as of September 10, 1999, as supplemented by the Supplemental Indenture (the “ Supplemental Indenture ”) thereto to be dated May 5, 2009, between Counterparty and The Bank of New York Mellon Trust Company, N.A., as trustee (as so supplemented, the “ Indenture ”). In the event of any inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the descriptions thereof in the Prospectus. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus will govern for purposes of this Confirmation. The parties further acknowledge that the Supplemental Indenture section numbers used herein are based on the draft of the Supplemental Indenture last reviewed by Bank as of the date of this Confirmation, and if any such section numbers are changed in the Supplemental Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties. For the avoidance of doubt, references to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is amended following its execution, any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.                This Confirmation evidences a complete and binding agreement between Bank and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and

 
be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and Counterparty had executed an agreement in such form (but without any Schedule) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.                The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	 	
 	 	 	
Trade Date:	 	April 29, 2009	
 	 	 	
Option Style:	 	“Modified American”, as set forth under “Exercise and Valuation” below	
 	 	 	
Option Type:	 	Call	
 	 	 	
Buyer:	 	Counterparty	
 	 	 	
Seller:	 	Bank	
 	 	 	
Shares:	 	The common stock of Counterparty, par value USD 0.125 per Share (Exchange symbol “TXT”)	
 	 	 	
Number of Options:	 	The number of Convertible Notes in denominations of USD 1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Notes. For the avoidance of doubt, the Number of Options shall not be increased as a result of the exercise by the Underwriters (as defined below) of their option pursuant to the Underwriting Agreement (as defined below) to purchase some or all of the “Option Securities” (as defined in the Underwriting Agreement). For the further avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. In no event will the Number of Options be less than zero.	
 	 	 	
Option Entitlement:	 	As of any date, a number of Shares per Option equal to the Conversion Rate (as defined in the Supplemental Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Section 9.03 or to Section 9.04(g) or (h) of the Supplemental Indenture), for each Convertible Note.	
 	 	 	
Strike Price:	 	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD 1,000 divided by the Option Entitlement.	
 	 	 	
Applicable Percentage:	 	50%	
 	 	 	
Number of Shares:	 	The product of the Number of Options and the Option Entitlement and the Applicable Percentage.	
 	 	 	
Premium:	 	USD 62,586,000	
 
2

 

Premium Payment Date:	 	May 5, 2009	
 	 	 	
Exchange:	 	The New York Stock Exchange	
 	 	 	
Related Exchange(s):	 	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares	
 	 	 	
Exercise and Valuation:	 	 	
 	 	 	
Exercise Date:	 	Each Conversion Date.	
 	 	 	
Conversion Date:	 	Each “Conversion Date” (as defined in the Supplemental Indenture) for Convertible Notes.	
 	 	 	
Relevant Convertible Notes:	 	For any Conversion Date, a number of Convertible Notes equal to the lesser of (i) the number of Convertible Notes in denominations of USD 1,000 principal amount submitted for conversion on such Conversion Date in accordance with the terms of the Indenture and (ii) the Number of Options as of such Conversion Date determined without giving effect to the exercise of any Options on such Conversion Date.	
 	 	 	
Required Exercise on Conversion Dates:	 	On each Conversion Date for Convertible Notes, a number of Options (the “ Exercisable Options ”) equal to the number of Relevant Convertible Notes for such Conversion Date shall be automatically exercised, subject to Notice of Exercise and Notice of Settlement Method below.	
 	 	 	
Exercise Period:	 	The period from and excluding the Trade Date to and including the Expiration Date.	
 	 	 	
Expiration Date:	 	The earlier of (x) the last day on which any Convertible Notes remain outstanding and (y) the maturity date of the Convertible Notes (the “ Convertible Maturity Date ”).	
 	 	 	
Scheduled Trading Day:	 	As such term is defined in Section 1.02 of the Supplemental Indenture.	
 	 	 	
Notice of Exercise:	 	Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Options,	
 	 	 	
 	 	(a)  if Physical Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options and (ii) the Conversion Date; and	
 	 	 	
 	 	(b)  if Low Cash Combination Settlement, High Cash Combination Settlement or Cash Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the scheduled first day of the Settlement Period (as defined in the Supplemental Indenture)	
 
3

 

 	 	for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options, (ii) the scheduled first day of the Settlement Period, and (iii) if Low Cash Combination Settlement or High Cash Combination Settlement applies, the fixed dollar amount per USD 1,000 of the principal amount of the Notes specified by Counterparty pursuant to Section 9.02(b)(3)(A) of the Supplemental Indenture (the “ Specified Cash Amount ”);
 
provided that with respect to Options relating to Relevant Convertible Notes with a Conversion Date on or following the fiftieth (50th) Scheduled Trading Day prior to the Convertible Maturity Date (the “ Final Conversion Period ”), such Notice of Exercise need only specify the number of Options being exercised and the Specified Cash Amount, if applicable.	
 	 	 	
Settlement Terms:	 	 	
 	 	 	
Physical Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only Shares to satisfy the Conversion Obligation (as defined in the Supplemental Indenture) in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Low Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is equal to or less than USD 1,000.	
 	 	 	
High Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is greater than USD 1,000.	
 	 	 	
Cash Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Notice of Settlement Method:	 	Counterparty initially elects Low Cash Combination Settlement to settle its Conversion Obligation (as defined in the Supplemental Indenture). If Counterparty chooses to elect a different method of settlement, Counterparty must notify Bank of the newly chosen settlement method no later than the earlier of (i) 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes to which the newly chosen settlement method is going to apply and (ii) 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the Final Conversion Period; provided that it shall be a condition to Counterparty’s election of any such newly chosen settlement method that at the time of such election each of Counterparty and its affiliates is not, and Counterparty	
 
4

 

 	 	hereby represents and covenants that at such time neither of them will be, in possession of any material non-public information with respect to Counterparty or the Shares.	
 	 	 	
Settlement Date:	 	Subject to the delivery of a Notice of Exercise and, to the extent applicable, a Notice of Settlement Method, to Bank, the date Shares and/or cash are required to be delivered with respect to the Relevant Convertible Notes under the terms of the Indenture.	
 	 	 	
Delivery Obligation:	 	In lieu of the obligations set forth in Sections 5.1 and 6.1 of the Equity Definitions, and subject to Notice of Exercise and Notice of Settlement Method above, in respect of an Exercise Date, Bank will deliver to Counterparty, on the related Settlement Date,	
 	 	 	
 	 	(a)  if Physical Settlement or Low Cash Combination Settlement applies, a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares (and cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture) on the Conversion Date) that Counterparty would have been obligated to deliver to the holder(s) of the Relevant Convertible Notes had Counterparty elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation pursuant to Section 9.02(b) of the Supplemental Indenture and with a Specified Cash Amount of USD 1,000, as determined by the Calculation Agent; provided that, in the case of Physical Settlement, the number of Shares delivered by Bank to Counterparty on the related Settlement Date shall not be greater than the product of (i) the Applicable Percentage and (ii) the excess of (x) the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(1) of the Supplemental Indenture over (y) the number of Shares equal to (a) the aggregate principal amount of the Relevant Convertible Notes divided by (b) the Last Reported Sale Price (as defined in the Supplemental Indenture) on the final Settlement Period Trading Day (as defined in the Supplemental Indenture) of the applicable Settlement Period as if Counterparty elected Low Cash Combination Settlement;	
 	 	 	
 	 	(b)  if High Cash Combination Settlement applies, (i) a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture and (ii) an amount of cash equal to the product of the Applicable Percentage and the excess, if any, of (A) the amount of cash (including cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture and subject to the third immediately following paragraph) on the last day of the relevant Settlement	
 
5

 

 	 	Period) that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture over (B) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date; and	
 	 	 	
 	 	(c)  if Cash Settlement Applies, an amount equal to the product of the Applicable Percentage and the excess, if any, of (i) the cash that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(2) of the Supplemental Indenture over (ii) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date (in each case, such Shares and/or cash collectively, the “ Convertible Obligation ”);	
 	 	 	
 	 	provided that, in all cases, the Delivery Obligation shall be determined excluding any Shares or cash (including cash in lieu of fractional Shares) that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes as a direct or indirect result of any adjustments to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture and any interest payment that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes. For the avoidance of doubt, in connection with each Exercise Date, if the Daily Conversion Value (as defined in the Supplemental Indenture) for each of the Settlement Period Trading Days (as defined in the Supplemental Indenture) occurring in the relevant Settlement Period that would be applicable if cash settlement applied, is less than or equal to 1/45th of USD 1,000, Bank will have no delivery obligation hereunder in respect of such Exercise Date.	
 	 	 	
 	 	Counterparty agrees that if, with respect to any Settlement Period Trading Day during any relevant Settlement Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR is unavailable, Counterparty and the nationally recognized independent investment banking firm retained by Counterparty pursuant to the definition of VWAP in the Indenture shall consult with the Calculation Agent to determine the VWAP on such Settlement Period Trading Day.	
 	 	 	
Notice of Delivery Obligation:	 	As applicable and no later than the later of (a) the relevant Exercise Date and (b) the Exchange Business Day immediately following the last day of the Settlement Period, Counterparty shall give Bank notice of the final number of Shares and/or the amount of cash comprising the relevant Convertible Obligation; provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Bank with a single notice of the aggregate number of Shares and/or the amount of cash comprising the Convertible Obligations for all such Exercise Dates (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise,	
 
6

 

 	 	as set forth above, in any way).	
 	 	 	
Settlement Currency:	 	USD	
 	 	 	
Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Low Cash Combination Settled” or “High Cash Combination Settled” to the extent Low Cash Combination Settlement or High Cash Combination Settlement is applicable. “Low Cash Combination Settled” or “High Cash Combination Settled” in relation to any Option means that Low Cash Combination Settlement or High Cash Combination Settlement is applicable to that Option.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
3.     Additional Terms applicable to the Transaction:	
 	
Adjustments applicable to the Transaction:	 	 	
 	 	 	
Potential Adjustment Events:	 	Notwithstanding Section 9.1(e) of the Equity Definitions, a “ Potential Adjustment Event ” means any occurrence of any event or condition, as set forth in Section 9.04 of the Supplemental Indenture that would result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment hereunder as a result of an adjustment to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture.	
 	 	 	
Method of Adjustment:	 	Calculation Agent Adjustment, and means that, notwithstanding Section 9.1(c) of the Equity Definitions, upon any adjustment to the Conversion Rate of the Convertible Notes pursuant to the Indenture (other than Section 9.03 and Sections 9.04(g) and (h) of the Supplemental Indenture), the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.	
 	 	 	
Extraordinary Events applicable to the Transaction:	 	 	
 	 	 	
Merger Events:	 	Notwithstanding Section 9.2(a) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 9.05 of the Supplemental Indenture.	
 	 	 	
Consequence of Merger Events:	 	Notwithstanding Section 9.3 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise,	
 
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 	 	settlement or payment for the Transaction; provided however that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional shares as set forth in Section 9.03 of the Supplemental Indenture.	
 	 	 	
Nationalization and Insolvency:	 	Cancellation and Payment	
 	 	 	
4.     Calculation Agent:	 	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder and a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation. For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Counterparty.	
 
5.                Account Details
 
(a)                                   Account for payments to Counterparty:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares to Counterparty:
 
To be provided by Counterparty
 
(b)                                  Account for payments to Bank:
 
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA:  021-000021
 
Account for delivery of Shares from Bank:
 
To be provided by Bank
 
6.                Offices:
 
The Office of Counterparty for the Transaction is:  Inapplicable, Counterparty is not a Multibranch Party.
 
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The Office of Bank for the Transaction is:  New York
 
Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
 
7.                Notices:  For purposes of this Confirmation:
 
(a)                                   Address for notices or communications to Counterparty:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533
 
(b)                                  Address for notices or communications to Bank:

To:	Goldman, Sachs & Co.	
 	One New York Plaza	
 	New York, NY 10004	
Attn:	Serge Marquié,	
 	Equity Capital Markets	
Telephone:	(212) 902-9779	
Facsimile:	(917) 977-4253	
Email:	marqse@am.ibd.gs.com	
 	 	
With a copy to:	 	
 	 	
Attn:	Vijay Culas	
 	Equity Capital Markets	
Telephone:	(212) 902-6247	
Facsimile:	(212) 428-1898	
Email:	vijay.culas@gs.com	
 
And email notification to the following address:
Eq-derivs-notifications@am.ibd.gs.com
 
8.                Representations and Warranties of Counterparty
 
The representations and warranties of Counterparty set forth in Article VII of the Textron Inc. Underwriting Agreement Standard Provisions (Debt), dated as of April 29, 2009, and incorporated by reference into the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Counterparty and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. Counterparty hereby further represents and warrants to Bank that:
 
(a)                                   Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar
 
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laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)                                  Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or (to the extent such agreement is material to Counterparty and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Counterparty or (to such extent) any of its subsidiaries is bound or to which Counterparty or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)                                   No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)                                  It is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(e)                                   It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, or an “accredited investor” as defined under the Securities Act.
 
(f)             Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Counterparty.
 
(g)                                  Counterparty represents that it is not subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and the assets used in the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(h)                                  There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  The Goldman Sachs Group, Inc. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(i)                                      Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Counterparty is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
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(j)                                      It has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized Options”.  Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.
 
9.                Other Provisions:
 
(a)                                   Opinions . Counterparty shall deliver to Bank an opinion of counsel (including an in-house lawyer of Counterparty), dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation.
 
(b)                                  No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party nor any of its agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any view expressed by the other party or any of its agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)                                   Repurchase Notices . Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other convertible bond hedge transactions between Bank and Counterparty, if any, divided by (ii) the number of Counterparty’s outstanding Shares (such quotient expressed as a percentage, the “ Option Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Option Equity Percentage included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Bank with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of
 
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which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)                                  Regulation M . Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of Counterparty, other than the concurrent distributions of the Convertible Notes and Shares being made on the date hereof. Counterparty shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any distribution other than those described in this paragraph.
 
(e)                                   No Manipulation . Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)                                     Number of Repurchased Shares . Counterparty represents that it could have purchased Shares, in an amount equal to the product of the Number of Options and the Option Entitlement, on the Exchange or otherwise, in compliance with applicable law, its organizational documents and any orders, decrees and contractual agreements binding upon Counterparty, on the Trade Date and the Premium Payment Date.
 
(g)                                  Board Authorization . Each of the Transaction and the issuance of the Convertible Notes was approved by its board of directors and publicly announced, solely for the purposes stated in such board resolution and public disclosure and, prior to any exercise of Options hereunder, Counterparty’s board of directors will have duly authorized any repurchase of Shares pursuant to the Transaction. Counterparty further represents that there is no internal policy, whether written or oral, of Counterparty that would prohibit Counterparty from entering into any aspect of the Transaction, including, but not limited to, the purchases of Shares to be made pursuant hereto.
 
(h)                                  Transfer or Assignment . (i) Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “ Transfer Options ”); provided that such transfer or assignment shall be subject to reasonable conditions that Bank may impose, including but not limited, to the following conditions:
 
(A)           With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(c) or any obligations under Section 9(r) or 9(v) of this Confirmation;
 
(B)            Any Transfer Options shall only be transferred or assigned to a third party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
 
(C)            Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in
 
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the reasonable judgment of Bank, will not expose Bank to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Bank;
 
(D)           Bank will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Bank would have been required to pay to Counterparty in the absence of such transfer and assignment;
 
(E)            An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
 
(F)            Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Bank to permit Bank to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
 
(G)            Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Bank in connection with such transfer or assignment.
 
(ii)            Bank may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to any of its affiliates whose obligations hereunder would be guaranteed by The Goldman Sachs Group, Inc.; provided further that Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of Counterparty to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Bank. If after Bank’s commercially reasonable efforts, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Options to reduce (1) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to 7.5% of Counterparty’s outstanding Shares or less, (2) the Option Equity Percentage to 14.5% or less, and (3) the Share Amount to the Post-Effective Limit (if any applies) or less, Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (1) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (2) the Option Equity Percentage following such partial termination will be equal to or less than 14.5%, and (3) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the Terminated Portion, (2) Counterparty shall be the sole Affected Party with respect to such partial termination and (3) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provisions of paragraph 9(o) shall apply to any amount that is payable by Bank to Counterparty pursuant to this sentence).  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the
 
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Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Counterparty’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(i)                                      Staggered Settlement . If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Bank’s hedging activities hereunder, or due to inability to borrow Shares to deliver to Counterparty at a rate of borrowing less than 35 basis points, Bank reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Bank on the Settlement Date for the Transaction, Bank may, by notice to Counterparty on or prior to any Settlement Date (a “ Nominal Settlement Date ”), elect to deliver the Shares on two or more dates (each, a “ Staggered Settlement Date ”) as follows:
 
(a)                                   in such notice, Bank will specify to Counterparty the related Staggered Settlement Dates, which Bank shall choose in a commercially reasonable manner, (the first of which will be such Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date on a payment versus delivery basis;
 
(b)                                  the aggregate number of Shares that Bank will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Bank would otherwise be required to deliver on such Nominal Settlement Date; and
 
(c)                                   if the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except that the Shares will be allocated among such Staggered Settlement Dates as specified by Bank in the notice referred to in clause (a) above.
 
(j)                                      Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(k)                                   Early Unwind . In the event the sale of Convertible Notes is not consummated with the Underwriters for any reason or Counterparty fails to deliver to Bank opinions of counsel to Counterparty as required pursuant to Section 9(a) by the close of business in New York on May 5,
 
14

 
2009 or such later date as agreed upon by the parties (May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “ Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and Counterparty under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, Counterparty shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). Bank shall notify Counterparty of such amount and Counterparty shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and Counterparty represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(l)                                      Reserved .
 
(m)                                Additional Provisions .
 
(i)             Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “ or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the Agreement with respect to that Issuer.”
 
(ii)            Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Counterparty of an option with terms that would preserve for Counterparty the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(iii)           Notwithstanding anything to the contrary in this Confirmation, if any of the following events occurs, (1) Bank shall have the right to designate such an event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) Counterparty shall be deemed the sole Affected Party and the Transaction shall be deemed the sole Affected Transaction:
 
(a)                                   At any time during the period from and including the Trade Date, to and including the Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Options are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange ”)) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
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(b)                                  Counterparty amends, modifies, supplements or waives any term of the Indenture or the Convertible Notes governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term relating to conversion of the Convertible Notes (including changes to the conversion price, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend, in each case without the prior consent of Bank.
 
(c)                                   On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
(iv)                               Notwithstanding anything to the contrary in this Confirmation, the giving of any Notice of Exercise shall constitute an Additional Termination Event hereunder with respect to the number, if any, of Exercisable Options specified in such Notice of Exercise as corresponding to a conversion of Relevant Convertible Notes in compliance with Section 9.03 of the Supplemental Indenture. Upon receipt of any such notice, Bank shall designate an Exchange Business Day as an Early Termination Date (such day to occur as close as practicable, in Bank’s commercially reasonable judgment, to the settlement date of the Relevant Convertible Notes), with respect to the portion of the Transaction corresponding to number of such Exercisable Options so specified. In lieu of the provisions of “Delivery Obligation”, any payment and/or delivery hereunder with respect to such conversion shall be calculated pursuant to Section 6 of the Agreement; where, for the purposes of such calculation, (A) Counterparty shall be the sole Affected Party with respect to such Additional Termination Event, (B) Bank shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; and (C) for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent (i) shall take into account the time value of the Transaction with respect to the Expiration Date and (ii) shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 9.03 of the Supplemental Indenture; provided further that (A) in case of a partial termination, an Early Termination Date shall be designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the terminated portion and such Transaction shall be the only Terminated Transaction; (B) any amount payable by Bank to Counterparty shall be satisfied solely by delivery by Bank to Counterparty of a number of Shares and cash in lieu of a fractional share equal to such amount calculated pursuant to Section 6 divided by a price per Share determined by the Calculation Agent; and (C) the number of Shares deliverable in respect of such early termination by Bank to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (a) the total number of Shares underlying the corresponding Relevant Convertible Notes (including the number of Additional Shares (as defined in the Supplemental Indenture) resulting from any adjustment set forth in Section 9.03 of the Supplemental Indenture) over (b) the number of Shares equal in value to the aggregate principal amount of the corresponding Relevant Convertible Notes, as determined by the Calculation Agent in its sole reasonable discretion.
 
(vi)                               For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such
 
16

 
calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
(n)                                  No Collateral or Setoff .  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Counterparty hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Counterparty shall have no obligation to make any delivery or payment to Bank (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement.
 
(o)                                  Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If in respect of the Transaction, an amount is payable by Bank to Counterparty (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (a “ Payment Obligation ”), Counterparty may request Bank to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not make such an election in a Merger Event, in which the consideration to be paid to holders of Shares consists solely of cash, or an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement in each case that resulted from an event or events outside Counterparty’s control) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date or the Early Termination Date, as applicable; provided that if Counterparty does not validly request Bank to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that Bank shall deliver to Counterparty the Share Termination Delivery Property on the date when the Payment Obligation would otherwise be due pursuant to Section 9.7 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “ Share Termination Payment Date ”), in satisfaction of the Payment Obligation in the manner reasonably requested by Counterparty free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	 	
Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Bank at the time of notification of	
 
17

 

 	 	the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property.	
 	 	 	
Share Termination Delivery Unit:	 	One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Merger Event, as determined by the Calculation Agent.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(p)                                  Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(q)                                  Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(r)                                     Registration . Counterparty hereby agrees that if, in the good faith reasonable judgment of Bank, the Shares (“ Hedge Shares ”) acquired by Bank for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Bank without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Bank to sell the Hedge Shares in a registered offering, make available to Bank an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Bank, substantially in the form of an underwriting agreement for a registered secondary offering; provided however, that if Bank, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Bank to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance satisfactory to Bank (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction which are necessary, in its reasonable
 
18

 
judgment, to compensate Bank for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Bank at the Last Reported Sale Price on such Trading Days, and in the amounts, requested by Bank.
 
(s)                                   Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
 
(t)                                     Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided , further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(u)                                  Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
(v)                                  Additional Provisions . Counterparty covenants and agrees that, as promptly as practicable following the public announcement of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall notify Bank in writing of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “ Consideration Notification Date ”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated.
 
(w)                                Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares to Bank pursuant to Section 9(k) “ Early Unwind”, such Shares would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to clause (i) below.
 
(i)                                      Delivery of Restricted Shares by Counterparty shall be effected in customary private placement procedures with respect to such Restricted Shares of similar size in form and
 
19

 
substance reasonably acceptable to Bank (a “ Private Placement Settlement ”). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Bank. Bank shall determine the appropriate discount applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 0.9 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to Counterparty, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i).
 
(ii)                                   In the event Counterparty shall not have delivered the full number of Restricted Shares otherwise applicable as a result of the proviso above relating to the Maximum Amount (such deficit, the “ Deficit Restricted Shares ”), Counterparty shall be continually obligated to deliver, from time to time until the full number of Deficit Restricted Shares have been delivered pursuant to this paragraph, Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to the Trade Date which prior to such date become no longer so reserved and (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Counterparty shall immediately notify Bank of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Restricted Shares to be delivered) and promptly deliver the Applicable Percentage of the aggregate number of such Restricted Shares thereafter.
 
(iii)                                Without limiting the generality of the foregoing, Counterparty agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and Counterparty shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Counterparty) has elapsed after any Settlement Date for such Restricted Shares, Counterparty shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to Counterparty or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If Counterparty shall fail to effectuate the Private Placement Settlement as set forth in clause (i), then such failure shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.
 
(x)                                    Right to Extend .  Bank may postpone any Exercise Date or Settlement Date or any other date of valuation or delivery by Bank, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments to the Delivery Obligation), if Bank determines, in its reasonable discretion based on advice of counsel, that such extension is reasonably necessary to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares or Share Termination
 
20

 
Delivery Units in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements.
 
(y)                                  Dividends .  If at any time during the period from and including the Trade Date, to but excluding the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and/or any other variable relevant to the exercise, settlement or payment for the Transaction to preserve the fair value of the Options to Bank after taking into account such dividend or lack thereof.  “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
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Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	Very truly yours,	 	
 	 	 	
 	GOLDMAN, SACHS & CO.	 	

 	By:	/s/ Daniel W. Kopper	
 	Authorized Signatory	 	
 	Name:	 	

 
Accepted and confirmed
as of the Trade Date:

TEXTRON INC.

By:	/s/ Mary F. Lovejoy	 	
Authorized Signatory	 	
Name: Mary F. Lovejoy	 	

Exhibit 10.2
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004
 
April 29, 2009
 
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533

Re:	Issuer Warrant Transaction	
A/C:	028320281	
Ref. No.:	SDB1630442185	
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Warrants issued by Textron Inc. (the “ Company ”) to Goldman, Sachs & Co. (“ Bank ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.             This Confirmation evidences a complete and binding agreement between Bank and the Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and the Company had executed an agreement in such form (but without any Schedule except for the election of United States dollars as the Termination Currency) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.             The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	 	
 	 	 	
Trade Date:	 	April 29, 2009	
 	 	 	
Warrants:	 	Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.	
 	 	 	
Warrant Style:	 	European	

 

Buyer:	 	Bank	
 	 	 	
Seller:	 	The Company	
 	 	 	
Shares:	 	The common stock of Company, par value USD 0.125 per Share (Exchange symbol “TXT”)	
 	 	 	
Number of Warrants:	 	20,571,435, subject to adjustments provided herein	
 	 	 	
Daily Number of Warrants:	 	For any Expiration Date, as provided in Schedule A to this Confirmation, subject to adjustment pursuant to the provisos to “Expiration Date(s)”.	
 	 	 	
Warrant Entitlement:	 	One Share per Warrant	
 	 	 	
Number of Shares:	 	The product of the Number of Warrants and the Warrant Entitlement	
 	 	 	
Strike Price:	 	USD 15.75	
 	 	 	
Premium:	 	USD 42,336,000	
 	 	 	
Premium Payment Date:	 	May 5, 2009	
 	 	 	
Exchange:	 	The New York Stock Exchange	
 	 	 	
Related Exchange(s):	 	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.	
 	 	 	
Exercise and Valuation:	 	 	
 	 	 	
Expiration Time:	 	The Valuation Time	
 	 	 	
Expiration Date(s):	 	Each Exchange Business Day during the period from and including the First Expiration Date to and including the 45th Exchange Business Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date (including the First Expiration Date), the Calculation Agent shall make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate an Exchange Business Day or a number of Exchange Business Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Exchange Business Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Exchange Business Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Exchange Business Day or on any subsequent Exchange Business Day, as the Calculation Agent shall determine using commercially reasonable means.	
 	 	 	
First Expiration Date:	 	August 1, 2013, subject to Market Disruption Event below.	
 	 	 	
Automatic Exercise:	 	Applicable; and means that a number of Warrants for each Expiration Date equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised.	
 	 	 	
Market Disruption Event:	 	Section 4.3(a)(ii) is hereby amended by adding after the words “or Share Basket Transaction” in the first line thereof a phrase “a failure by the Exchange or Related Exchange to open for trading during its regular trading session or” and replacing the phrase “during the one-half hour period that ends at the relevant Valuation Time” with the phrase “at any time during the regular	
 
2

 

 	 	trading session on the Exchange or any Related Exchange, without regard to after hours or any other trading outside of the regular trading session hours”.	
 	 	 	
Valuation applicable to each Warrant:	 	 	
 	 	 	
Valuation Time:	 	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.	
 	 	 	
Valuation Date:	 	Each Exercise Date. Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	 	
Settlement Terms applicable to the Transaction:	 	 	
 	 	 	
Method of Settlement:	 	Net Share Settlement; provided that Cash Settlement shall apply if the Company validly elects Cash Settlement pursuant to the provisions of “Cash Settlement Election” below.	
 	 	 	
Net Share Settlement:	 	On the relevant Settlement Date, Company shall deliver to Bank, the Share Delivery Quantity of Shares for such Settlement Date to the account specified hereto free of payment through the Clearance System.	
 	 	 	
Share Delivery Quantity:	 	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date in respect of such Settlement Date rounded down to the nearest whole number, plus cash in lieu of any fractional Shares (based on such Settlement Price).	
 	 	 	
Net Share Settlement Amount:	 	For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant Entitlement.	
 	 	 	
Strike Price Differential:	 	(a)  If the Settlement Price for any Valuation Date is greater than the Strike Price, an amount equal to the excess of such Settlement Price over the Strike Price; or	
 	 	 	
 	 	(b)  If such Settlement Price is less than or equal to the Strike Price, zero.	
 	 	 	
Settlement Price:	 	For any Valuation Date, the per Share volume-weighted average price for such Valuation Date as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Valuation Date or if such price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent in its reasonable discretion (in each case, without regard to pre-open or after hours trading outside of any regular trading session for such Valuation Date). Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	 	
Settlement Date:	 	For any Exercise Date, the date defined as such in Section 6.2 of the Equity Definitions, subject to Section 9(o)(i) hereof.	
 	 	 	
Cash Settlement Election:	 	With respect to all Warrants to be exercised on the Expiration Dates, the Company can elect Cash Settlement by delivering a written notice to Bank (the	
 
3

 

 	 	“ Cash Settlement Notice ”) on or prior to the fifth (5 th ) scheduled Exchange Business Day immediately preceding the First Expiration Date, which Cash Settlement Notice shall contain:	
 	 	 	
 	 	(i)  a representation that (x) on the date of such Cash Settlement Notice, neither the Company nor any of its affiliates is in possession of any material non-public information with respect to the Company or its Shares, (y) the Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and (z) the Company has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction;	
 	 	 	
 	 	(ii)  a representation that the Company is not electing Cash Settlement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);	
 	 	 	
 	 	(iii)  an acknowledgment by the Company that (A) any transaction by Bank following the Company’s election of Cash Settlement shall be made at Bank’s sole discretion and for Bank’s own account and (B) the Company does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately;	
 	 	 	
 	 	(iv)  an agreement by the Company that, during the period commencing on the date of such Cash Settlement Notice and ending on the second Exchange Business Day following the last Settlement Date hereunder, without the prior written consent of Bank, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to, directly or indirectly (including, without limitation, by means of a derivative instrument), purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares or any security convertible into or exchangeable for the Shares in the public markets; and	
 	 	 	
 	 	(v) a representation that the assets of Company at their fair valuation exceed the liabilities of Company, including contingent liabilities; the capital of Company is adequate to conduct the business of Company; and Company has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.	
 	 	 	
Cash Settlement:	 	If Cash Settlement is applicable, on each Settlement Date, the Company shall deliver to Bank (to an account specified by Bank) the Net Share Settlement Amount for such Settlement Date.	
 	 	 	
 	 	In addition to any other requirements set forth herein, the Company agrees that it shall not have the right to elect Cash Settlement if Bank notifies the Company that, in the reasonable judgment of Bank the election of Cash Settlement or any purchases of Shares that Bank (or its affiliates) might make in connection therewith based upon the advice of counsel and as a result of events occurring after the Trade Date, would raise material risks under applicable securities laws.	
 	 	 	
Failure to Deliver:	 	Inapplicable	
 	 	 	
Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions	
 
4

 

 	 	will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.	
 	 	 	
3.Additional Terms applicable to the Transaction:	
 	
Adjustments applicable to the Warrants:	 	 	
 	 	 	
Method of Adjustment:	 	Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(j) of this Confirmation and not by Section 9.1(c) of the Equity Definitions.	
 	 	 	
Extraordinary Events applicable to the Transaction:	 	 	
 	 	 	
Consequence of Merger Events	 	 	
 	 	 	
(a) Share-for-Share:	 	Alternative Obligation; provided that the Calculation Agent will determine if the Merger Event affects the theoretical value of the Transaction and if so Bank in its sole discretion may elect to make adjustments to any of the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other term necessary to reflect the characteristics (including volatility, dividend practice, borrow cost and liquidity) of the New Shares. Notwithstanding the foregoing, Cancellation and Payment shall apply in the event the New Shares are not publicly traded on a United States national securities exchange or quoted on The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors).	
 	 	 	
(b) Share-for-Other:	 	Cancellation and Payment	
 	 	 	
(c) Share-for-Combined:	 	Cancellation and Payment; provided that on or prior to the Merger Date the Bank may elect, in its sole discretion, to apply the consequence specified opposite “Share for Share” to that portion of the consideration that consists of New Shares (as determined by the Calculation Agent) and the consequence specified opposite “Share for-Other” to that portion of the consideration that consists of Other Consideration (as determined by the Calculation Agent).	
 	 	 	
In the event of any “Tender Offers” (as defined in the 2002 ISDA Equity Derivatives Definitions (the “ 2002 Definitions ”)) , the following consequences, each as defined in the 2002 Definitions and including any relevant cross references, shall apply to such Tender Offers:	
 	
(a) Share-for-Share:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
(b) Share-for-Other:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
(c) Share-for-Combined:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
Nationalization or Insolvency:	 	Cancellation and Payment	

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4.     Calculation Agent:	 	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder and a prior written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation. For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Company.	
 
5.     Account Details:
 
(a)                                   Account for payments to Company:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares from Company:
 
To be provided by Company
 
(b)                                  Account for payments to Bank:
 
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA:  021-000021
 
Account for delivery of Shares to Bank:
 
To be provided by Bank
 
6.     Offices:
 
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.
 
The Office of Bank for the Transaction is:  New York
 
Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
 
7.     Notices: For purposes of this Confirmation:
 
(a)                                   Address for notices or communications to Company:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
 
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Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533
 
Address for notices or communications to Bank:

To:	Goldman, Sachs & Co.	
 	One New York Plaza	
 	New York, NY 10004	
Attn:	Serge Marquié,	
 	Equity Capital Markets	
Telephone:	(212) 902-9779	
Facsimile:	(917) 977-4253	
Email:	marqse@am.ibd.gs.com	
 	 	
With a copy to:	 	
 	 	
Attn:	Vijay Culas	
 	Equity Capital Markets	
Telephone:	(212) 902-6247	
Facsimile:	(212) 428-1898	
Email:	vijay.culas@gs.com	
 
And email notification to the following address:
Eq-derivs-notifications@am.ibd.gs.com
 
8.             Representations and Warranties of the Company
 
The representations and warranties of the Company set forth in Article VII of the Textron Inc. Underwriting Agreement Standard Provisions (Debt), dated as of April 29, 2009, and incorporated by reference into the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Company and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. The Company hereby further represents and warrants to Bank that:
 
(a)                                   Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)                                  Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or (to the extent such agreement is material to Company and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Company or (to such extent) any of its subsidiaries is bound or to which Company or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
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(c)                                   No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)                                  The Shares initially issuable upon exercise of the Warrant by the net share settlement method (the “ Warrant Shares ”) have been reserved for issuance by all required corporate action of Company.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
 
(e)            The Company is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(f)             The Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company.
 
(g)                                  The Company is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
(h)            The assets used by the Company for its obligations under the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(i)             There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  The Goldman Sachs Group, Inc. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(j)             Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Company is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.                                        Other Provisions:
 
(a)                                   Opinions . The Company shall deliver an opinion of counsel (including an in-house lawyer of the Company), dated as of the Trade Date, to Bank with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation.
 
(b)                                  No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party or parties nor
 
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any of its or their agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party or parties for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and not upon any view expressed by the other party or parties or any of its or their agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)                                   Repurchase Notices . The Company shall, on any day on which the Company effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other warrants purchased by Bank from Company, if any, divided by (ii) the number of the Company’s outstanding Shares (such quotient expressed as a percentage, the “ Warrant Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Warrant Equity Percentage included in the immediately preceding Repurchase Notice. The Company agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of the Company’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify the Company in writing, and the Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. The Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. The Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)                                  Regulation M . The Company is not, on the Trade Date or any Exercise Date, and will not be, on any day during the period commencing on such Exercise Date and ending on the second Exchange Business Day following the last Settlement Date with respect to such Exercise Date, engaged in a
 
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distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of the Company, other than the concurrent distributions of the USD 540,000,000 principal amount of 4.50% Convertible Notes due 2013 and Shares being made on the date hereof. The Company shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
(e)                                   No Manipulation . The Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)                                     Board Authorization . The Company represents that it is entering into the Transaction, solely for the purposes stated in the board resolution authorizing the Transaction and in its public disclosure. The Company further represents that there is no internal policy, whether written or oral, of the Company that would prohibit the Company from entering into any aspect of the Transaction, including, but not limited to, the issuances of Shares to be made pursuant hereto.
 
(g)                                  Transfer or Assignment . The Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Bank. Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of the Company to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Company and Bank. If, however, in Bank’s sole discretion, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Warrants to reduce (i) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to equal to or less than 7.5%, (ii) the Warrant Equity Percentage to equal to or less than 14.5%, and (iii) the Share Amount to equal to or less than the Post-Effective Limit (if any applies), Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (i) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (ii) the Warrant Equity Percentage following such partial termination will be equal to or less than 14.5%, and (iii) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the Terminated Portion, (ii) the Company shall be the sole Affected Party with respect to such partial termination and (iii) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provision of paragraph 9(n) shall apply to any amount that is payable by the Company to Bank pursuant to this sentence).  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its
 
10

 
reasonable opinion based upon advice of counsel, that as a result of Company’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(h)                                  Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(i)                                      Early Unwind . In the event the sale of Convertible Notes is not consummated with the Underwriters for any reason or the Company fails to deliver to Bank opinions of counsel as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 (or such later date as agreed upon by the parties, May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and the Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, the Company shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). The amount of any such reimbursement shall be determined by Bank in its sole good faith discretion. Bank shall notify the Company of such amount and the Company shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and the Company represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(j)                                      Dividends . If at any time during the period from but excluding the Trade Date, to and including the final Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is greater than the Regular Dividend on a per Share basis then the Calculation Agent shall adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement to preserve the fair value of the Warrants to Bank after taking into account such dividend. “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
(k)                                   Reserved .
 
(l)                                      Additional Provisions .
 
(i)                                      The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: “(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following the declaration by the Issuer of the terms of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Warrants and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.
 
(ii)                                   Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words
 
11

 
“other similar” between “any” and “event”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or Warrants”.
 
(iii)           Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the Agreement with respect to that Issuer.”
 
(iv)                               Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Buyer of an option with terms that would preserve for Buyer the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(v)                                  Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction or any portion of the Transaction, (1) Bank shall have the right to designate such event as an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) the Company shall be deemed the sole Affected Party and the Transaction or such portion of the Transaction shall be deemed the sole Affected Transaction:
 
(A)                               A “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, any of its subsidiaries or its or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of the common equity of the Company representing more than 50% of the voting power of such common equity.
 
(B)            Consummation of (A) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets or (B) any share exchange, consolidation or merger of the Company pursuant to which the Shares will be converted into cash, securities or other property or any conveyance, transfer, sale, lease or other disposition in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than one of its subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of common equity of the Company immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee immediately after such event shall not be an Additional Termination Event;
 
(C)                                 If (I) the directors who were members of Company’s board of directors on the Trade Date or (II) the directors who become members of Company’s board of directors subsequent to that date and whose election, appointment or nomination for election by Company stockholders is duly approved by a majority of the
 
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continuing directors on Company’s board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by Company on behalf of its entire board of directors in which such individual is named as nominee for director, cease to constitute at least a majority of Company’s board of directors.
 
(D)           The Company defaults on any indebtedness with an original aggregate principal amount of at least USD 125 million and such default results in any principal and interest on such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable.
 
(E)            At any time during the period from and including the Trade Date, to and including the final Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Warrants are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange” )) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(F)            On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
Notwithstanding the forgoing, a transaction set forth in clauses (A) or (B) above will not constitute an Additional Termination Event if at least 90% of the consideration, excluding cash payments for fractional shares, in such transaction or transactions consists of shares of common stock listed on a national securities exchange, including the New York Stock Exchange, which will be so listed when issued or exchanged in connection with such transaction or transactions.
 
For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
(m)                                No Collateral or Setoff . Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between the parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Bank shall have no obligation hereunder or under the Agreement to make any delivery or payment to the Company.
 
(n)                                  Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If, in respect of the Transaction, an amount is payable by the Company to Bank, (i) pursuant to Section 9.7 of the Equity Definitions or Section 12.3 of the 2002 Definitions (except in the event of a Nationalization, Insolvency, Tender Offer or Merger Event, in each case, in which the consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (except in the event of an Event of Default in which the Company is the Defaulting Party or a Termination Event in which the Company is the Affected
 
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Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement in each case that resulted from an event or events outside the Company’s control) (a “ Payment Obligation ”), the Company may, in its sole discretion, satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable; provided that if the Company does not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right to require the Company to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding the Company’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that the Company shall deliver to Bank the Share Termination Delivery Property on the date (the “ Share Termination Payment Date ”) when the Payment Obligation would otherwise be due, subject to paragraph (p)(i) below, in satisfaction, subject to paragraph (p)(ii) below, of the Payment Obligation in the manner reasonably requested by Bank free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	 	
Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to the Company at the time of notification of the Payment Obligation. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable.	
 	 	 	
Share Termination Delivery Unit:	 	In the case of a Termination Event or Event of Default, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of	
 
14

 

 	 	fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event. If such Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.	
 	 	 	
Failure to Deliver:	 	Inapplicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(o)                                  Registration/Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Bank hereunder, such Shares or Share Termination Delivery Property would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of the Company, unless waived by Bank. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, the Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Daily Number of Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Daily Number of Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
 
(i)                                      If the Company elects to settle the Transaction pursuant to this clause (i) (a “ Private Placement Settlement ”), then delivery of Restricted Shares by the Company shall be effected pursuant to customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank; provided that the Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by the Company to Bank (or any affiliate designated by Bank) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Bank (or any such affiliate of Bank). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank),
 
15

 
opinions and certificates, and such other documentation as is customary for private placement agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. In the case of a Private Placement Settlement, Bank shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 1.8 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to the Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above).
 
(ii)                                   If the Company elects to settle the Transaction pursuant to this clause (ii) (a “ Registration Settlement ”), then the Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Bank, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. If Bank, in its sole reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Bank is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “ Resale Period ”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) any Settlement Date in the case of an exercise of Warrants prior to the First Expiration Date pursuant to Section 2 above, (y) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to paragraph (o) above or (z) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Bank completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, the Company shall transfer to Bank by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “ Additional Amount ”) in cash or in a number of Shares (“ Make-whole Shares ”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If the Company elects
 
16

 
to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall the Company deliver a number of Restricted Shares greater than the Maximum Amount.
 
(iii)           Without limiting the generality of the foregoing, the Company agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) has elapsed after any Settlement Date for such Restricted Shares, the Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to the Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If (x) the Company shall fail to effectuate the Private Placement Settlement as set forth in clause (i) or (y) the Company shall fail to effectuate the Registration Settlement as set forth in clause (ii) and the Company shall fail to effectuate the Private Placement Settlement following its failure to effectuate the Registration Settlement, then either the failure set forth in clause (x) or the failure set forth in clause (y) shall constitute an Event of Default with respect to which the Company shall be the Defaulting Party.
 
(p)                                  Limit on Beneficial Ownership . Notwithstanding anything to the contrary in the Agreement or this Confirmation, Bank may not exercise any Warrant hereunder, have the “right to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder if, upon receipt of such Shares, (i) the Share Amount would exceed the Post-Effective Limit, or (ii) the “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and the rules promulgated thereunder) of Shares by Bank Group would be equal to or greater than the lesser of (A) 4.5% of the then outstanding Shares and (B) 12,013,276 Shares (the “ Threshold Number of Shares ”).  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Share Amount would exceed the Post-Effective Limit, or (ii) Bank Group would directly or indirectly so beneficially own in excess of the Threshold Number of Shares.  If any delivery owed to Bank hereunder is not made, in whole or in part, as a result of this provision, the Company’s obligation to make such delivery shall not be extinguished and the Company shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Bank gives notice to the Company that such delivery would not result in (i) the Share Amount exceeding the Post-Effective Limit, or (ii) Bank Group directly or indirectly beneficially owning in excess of the Threshold Number of Shares.
 
(q)                                  Share Deliveries . The Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Bank will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) shall be eligible for resale under Rule 144 of the Securities Act and the Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Property. The Company
 
17

 
further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company), may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank. Notwithstanding anything to the contrary herein, the Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of the Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of the Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Property.
 
(r)                                     Hedging Disruption Event . The occurrence of a Hedging Disruption Event will constitute an Additional Termination Event under the Agreement permitting Bank to terminate the Transaction or any portion of the Transaction, with the Company as the sole Affected Party and the Transaction or such portion of the Transaction as the sole Affected Transaction.
 
“ Hedging Disruption Event ” means with respect to Bank, as determined in its reasonable discretion, the inability or impracticality, due to market illiquidity, illegality, lack of hedging transactions or credit worthy market participants or other similar events, to establish, re-establish or maintain any transactions necessary or advisable to hedge, directly or indirectly, the equity price risk of entering into and performing under the Transaction on terms including costs reasonable to Bank or an affiliate in its reasonable discretion, including (x) the event that at any time Bank reasonably concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of the Transaction through share borrowing arrangements on terms including costs deemed reasonable to Bank in its reasonable discretion and (y) the event where upon Bank or its affiliate would incur a materially increased cost in establishing, re-establishing or maintaining a full hedge of the equity price risk (including without limitation the volatility risk) in respect of the Transaction directly or indirectly as a result of actions taken by the Company. For the avoidance of doubt, the parties hereto agree that if (i) Bank reasonably determines that it is unable to borrow Shares to hedge its exposure with respect to the Transaction at a rate of borrowing that is less than 100 basis points or (ii) Bank, in its good faith reasonable judgment, determines that it cannot hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Bank), an Additional Termination Event under the Agreement shall occur with the Company as the sole Affected Party and the Transaction as the sole Affected Transaction.
 
(s)                                   Maximum Share Delivery . Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will the Company be required to deliver more than the Maximum Amount of Shares in the aggregate to Bank in connection with the Transaction, subject to the provisions below regarding Deficit Shares.  In the event the Company shall not have delivered the full number of Shares otherwise due in connection with the Transaction as a result of the first sentence of this paragraph relating to the Maximum Amount (such deficit, the “ Deficit Shares ”), the Company shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by the Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant delivery date become no longer so reserved and (iii) the Company additionally authorizes any unissued Shares that are not reserved
 
18

 
for other transactions. The Company shall immediately notify Bank of the occurrence of any of the foregoing events (including the aggregate number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver the Applicable Percentage of such aggregate number of Shares thereafter.
 
(t)                                     Right to Extend . Bank may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Bank determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Bank.
 
(u)                                  Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of the Company in any U.S. bankruptcy proceedings of the Company; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by the Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(v)                                  Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(w)                                Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(x)                                    Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, the Company and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure.
 
(y)                                  Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 555 and546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
19

 
Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	Very truly yours,	
 	 	 	
 	 	GOLDMAN, SACHS & CO.	

 	 	By:	/s/ Daniel W. Kopper	
 	 	Authorized Signatory	
 	 	Name:	

Accepted and confirmed	 	 	
as of the Trade Date:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

 
Schedule A
 
For each Expiration Date, the Daily Number of Warrants is set forth below.

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
August 1, 2013	 	457,143	 	
August 2, 2013	 	457,143	 	
August 5, 2013	 	457,143	 	
August 6, 2013	 	457,143	 	
August 7, 2013	 	457,143	 	
August 8, 2013	 	457,143	 	
August 9, 2013	 	457,143	 	
August 12, 2013	 	457,143	 	
August 13, 2013	 	457,143	 	
August 14, 2013	 	457,143	 	
August 15, 2013	 	457,143	 	
August 16, 2013	 	457,143	 	
August 19, 2013	 	457,143	 	
August 20, 2013	 	457,143	 	
August 21, 2013	 	457,143	 	
August 22, 2013	 	457,143	 	
August 23, 2013	 	457,143	 	
August 26, 2013	 	457,143	 	
August 27, 2013	 	457,143	 	
August 28, 2013	 	457,143	 	
August 29, 2013	 	457,143	 	
August 30, 2013	 	457,143	 	
September 3, 2013	 	457,143	 	
September 4, 2013	 	457,143	 	
September 5, 2013	 	457,143	 	
September 6, 2013	 	457,143	 	
September 9, 2013	 	457,143	 	
September 10, 2013	 	457,143	 	
September 11, 2013	 	457,143	 	
September 12, 2013	 	457,143	 	
September 13, 2013	 	457,143	 	
September 16, 2013	 	457,143	 	
September 17, 2013	 	457,143	 	
September 18, 2013	 	457,143	 	
September 19, 2013	 	457,143	 	
September 20, 2013	 	457,143	 	
September 23, 2013	 	457,143	 	
September 24, 2013	 	457,143	 	
September 25, 2013	 	457,143	 	
September 26, 2013	 	457,143	 	
September 27, 2013	 	457,143	 	

A-1

 

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
September 30, 2013	 	457,143	 	
October 1, 2013	 	457,143	 	
October 2, 2013	 	457,143	 	
October 3, 2013	 	457,143	 	
 
A-2

Exhibit 10.3

 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
April 29, 2009
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533

Re:                              Convertible Bond Hedge Transaction
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Transaction entered into between JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. (“ Agent ”) as its agent, and Textron Inc. (“ Counterparty ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “ Confirmation ” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein have the meanings assigned to them in the Prospectus dated July 28, 2008, as supplemented by the Prospectus Supplement dated April 29, 2009 (as so supplemented, the “ Prospectus ”), relating to the USD 540,000,000 principal amount of 4.50% Convertible Senior Notes due 2013, (the “ Convertible Notes ” and each USD 1,000 principal amount of Convertible Notes, a “ Convertible Note ”) issued by Counterparty pursuant to an Indenture dated as of September 10, 1999, as supplemented by the Supplemental Indenture (the “ Supplemental Indenture ”) thereto to be dated May 5, 2009, between Counterparty and The Bank of New York Mellon Trust Company, N.A., as trustee (as so supplemented, the “ Indenture ”). In the event of any inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the descriptions thereof in the Prospectus. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus will govern for purposes of this Confirmation. The parties further acknowledge that the Supplemental Indenture section numbers used herein are based on the draft of the Supplemental Indenture last reviewed by Bank as of the date of this Confirmation, and if any such section numbers are changed in the Supplemental Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties. For the avoidance of doubt, references to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is amended following its execution, any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
1.                This Confirmation evidences a complete and binding agreement between Bank and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and Counterparty had executed an agreement in such form (but without any Schedule) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.                The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	 	
 	 	 	
Trade Date:	 	April 29, 2009	
 	 	 	
Option Style:	 	“Modified American”, as set forth under “Exercise and Valuation” below	
 	 	 	
Option Type:	 	Call	
 	 	 	
Buyer:	 	Counterparty	
 	 	 	
Seller:	 	Bank	
 	 	 	
Shares:	 	The common stock of Counterparty, par value USD 0.125 per Share (Exchange symbol “TXT”)	
 	 	 	
Number of Options:	 	The number of Convertible Notes in denominations of USD 1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Notes. For the avoidance of doubt, the Number of Options shall not be increased as a result of the exercise by the Underwriters (as defined below) of their option pursuant to the Underwriting Agreement (as defined below) to purchase some or all of the “Option Securities” (as defined in the Underwriting Agreement). For the further avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. In no event will the Number of Options be less than zero.	
 	 	 	
Option Entitlement:	 	As of any date, a number of Shares per Option equal to the Conversion Rate (as defined in the Supplemental Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Section 9.03 or to Section 9.04(g) or (h) of the Supplemental Indenture), for each Convertible Note.	
 	 	 	
Strike Price:	 	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD 1,000 divided by the Option Entitlement.	
 	 	 	
Applicable Percentage:	 	50%	
 	 	 	
Number of Shares:	 	The product of the Number of Options and the Option Entitlement and the Applicable Percentage.	
 
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Premium:	 	USD 62,586,000	
 	 	 	
Premium Payment Date:	 	May 5, 2009	
 	 	 	
Exchange:	 	The New York Stock Exchange	
 	 	 	
Related Exchange(s):	 	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares	
 	 	 	
Exercise and Valuation:	 	 	
 	 	 	
Exercise Date:	 	Each Conversion Date.	
 	 	 	
Conversion Date:	 	Each “Conversion Date” (as defined in the Supplemental Indenture) for Convertible Notes.	
 	 	 	
Relevant Convertible Notes:	 	For any Conversion Date, a number of Convertible Notes equal to the lesser of (i) the number of Convertible Notes in denominations of USD 1,000 principal amount submitted for conversion on such Conversion Date in accordance with the terms of the Indenture and (ii) the Number of Options as of such Conversion Date determined without giving effect to the exercise of any Options on such Conversion Date.	
 	 	 	
Required Exercise on Conversion Dates:	 	On each Conversion Date for Convertible Notes, a number of Options (the “ Exercisable Options ”) equal to the number of Relevant Convertible Notes for such Conversion Date shall be automatically exercised, subject to Notice of Exercise and Notice of Settlement Method below.	
 	 	 	
Exercise Period:	 	The period from and excluding the Trade Date to and including the Expiration Date.	
 	 	 	
Expiration Date:	 	The earlier of (x) the last day on which any Convertible Notes remain outstanding and (y) the maturity date of the Convertible Notes (the “ Convertible Maturity Date ”).	
 	 	 	
Scheduled Trading Day:	 	As such term is defined in Section 1.02 of the Supplemental Indenture.	
 	 	 	
Notice of Exercise:	 	Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Options,	
 	 	 	
 	 	(a)  if Physical Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options and (ii) the Conversion Date; and	
 	 	 	
 	 	(b)  if Low Cash Combination Settlement, High Cash Combination Settlement or Cash Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the Scheduled Trading Day

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 	 	immediately preceding the scheduled first day of the Settlement Period (as defined in the Supplemental Indenture) for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options, (ii) the scheduled first day of the Settlement Period, and (iii) if Low Cash Combination Settlement or High Cash Combination Settlement applies, the fixed dollar amount per USD 1,000 of the principal amount of the Notes specified by Counterparty pursuant to Section 9.02(b)(3)(A) of the Supplemental Indenture (the “ Specified Cash Amount ”);	
 	 	 	
 	 	provided that with respect to Options relating to Relevant Convertible Notes with a Conversion Date on or following the fiftieth (50th) Scheduled Trading Day prior to the Convertible Maturity Date (the “ Final Conversion Period ”), such Notice of Exercise need only specify the number of Options being exercised and the Specified Cash Amount, if applicable.	
 	 	 	
Settlement Terms:	 	 	
 	 	 	
Physical Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only Shares to satisfy the Conversion Obligation (as defined in the Supplemental Indenture) in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Low Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is equal to or less than USD 1,000.	
 	 	 	
High Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is greater than USD 1,000.	
 	 	 	
Cash Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Notice of Settlement Method:	 	Counterparty initially elects Low Cash Combination Settlement to settle its Conversion Obligation (as defined in the Supplemental Indenture). If Counterparty chooses to elect a different method of settlement, Counterparty must notify Bank of the newly chosen settlement method no later than the earlier of (i) 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes to which the newly chosen settlement method is going to apply and (ii) 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the Final Conversion Period; provided that it shall be a condition to Counterparty’s election of any such newly	
 
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 	 	chosen settlement method that at the time of such election each of Counterparty and its affiliates is not, and Counterparty hereby represents and covenants that at such time neither of them will be, in possession of any material non-public information with respect to Counterparty or the Shares.	
 	 	 	
Settlement Date:	 	Subject to the delivery of a Notice of Exercise and, to the extent applicable, a Notice of Settlement Method, to Bank, the date Shares and/or cash are required to be delivered with respect to the Relevant Convertible Notes under the terms of the Indenture.	
 	 	 	
Delivery Obligation:	 	In lieu of the obligations set forth in Sections 5.1 and 6.1 of the Equity Definitions, and subject to Notice of Exercise and Notice of Settlement Method above, in respect of an Exercise Date, Bank will deliver to Counterparty, on the related Settlement Date,	
 	 	 	
 	 	(a)  if Physical Settlement or Low Cash Combination Settlement applies, a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares (and cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture) on the Conversion Date) that Counterparty would have been obligated to deliver to the holder(s) of the Relevant Convertible Notes had Counterparty elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation pursuant to Section 9.02(b) of the Supplemental Indenture and with a Specified Cash Amount of USD 1,000, as determined by the Calculation Agent; provided that, in the case of Physical Settlement, the number of Shares delivered by Bank to Counterparty on the related Settlement Date shall not be greater than the product of (i) the Applicable Percentage and (ii) the excess of (x) the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(1) of the Supplemental Indenture over (y) the number of Shares equal to (a) the aggregate principal amount of the Relevant Convertible Notes divided by (b) the Last Reported Sale Price (as defined in the Supplemental Indenture) on the final Settlement Period Trading Day (as defined in the Supplemental Indenture) of the applicable Settlement Period as if Counterparty elected Low Cash Combination Settlement;	
 	 	 	
 	 	(b)  if High Cash Combination Settlement applies, (i) a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture and (ii) an amount of cash equal to the product of the Applicable Percentage and the excess, if any, of (A) the amount of cash (including cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the	
 
5

 

 	 	Supplemental Indenture and subject to the third immediately following paragraph) on the last day of the relevant Settlement Period) that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture over (B) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date; and	
 	 	 	
 	 	(c)  if Cash Settlement Applies, an amount equal to the product of the Applicable Percentage and the excess, if any, of (i) the cash that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(2) of the Supplemental Indenture over (ii) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date (in each case, such Shares and/or cash collectively, the “ Convertible Obligation ”);	
 	 	 	
 	 	provided that, in all cases, the Delivery Obligation shall be determined excluding any Shares or cash (including cash in lieu of fractional Shares) that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes as a direct or indirect result of any adjustments to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture and any interest payment that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes. For the avoidance of doubt, in connection with each Exercise Date, if the Daily Conversion Value (as defined in the Supplemental Indenture) for each of the Settlement Period Trading Days (as defined in the Supplemental Indenture) occurring in the relevant Settlement Period that would be applicable if cash settlement applied, is less than or equal to 1/45th of USD 1,000, Bank will have no delivery obligation hereunder in respect of such Exercise Date.	
 	 	 	
 	 	Counterparty agrees that if, with respect to any Settlement Period Trading Day during any relevant Settlement Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR is unavailable, Counterparty and the nationally recognized independent investment banking firm retained by Counterparty pursuant to the definition of VWAP in the Indenture shall consult with the Calculation Agent to determine the VWAP on such Settlement Period Trading Day.	
 	 	 	
Notice of Delivery Obligation:	 	As applicable and no later than the later of (a) the relevant Exercise Date and (b) the Exchange Business Day immediately following the last day of the Settlement Period, Counterparty shall give Bank notice of the final number of Shares and/or the amount of cash comprising the relevant Convertible Obligation; provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Bank with a single notice of the aggregate number of Shares and/or the amount of cash comprising the Convertible Obligations for all such Exercise Dates (it being understood, for the avoidance of doubt, that the requirement of	
 
6

 

 	 	Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise, as set forth above, in any way).	
 	 	 	
Settlement Currency:	 	USD	
 	 	 	
Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Low Cash Combination Settled” or “High Cash Combination Settled” to the extent Low Cash Combination Settlement or High Cash Combination Settlement is applicable. “Low Cash Combination Settled” or “High Cash Combination Settled” in relation to any Option means that Low Cash Combination Settlement or High Cash Combination Settlement is applicable to that Option.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
3.     Additional Terms applicable to the Transaction:	
 	
Adjustments applicable to the Transaction:	 	 	
 	 	 	
Potential Adjustment Events:	 	Notwithstanding Section 9.1(e) of the Equity Definitions, a “ Potential Adjustment Event ” means any occurrence of any event or condition, as set forth in Section 9.04 of the Supplemental Indenture that would result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment hereunder as a result of an adjustment to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture.	
 	 	 	
Method of Adjustment:	 	Calculation Agent Adjustment, and means that, notwithstanding Section 9.1(c) of the Equity Definitions, upon any adjustment to the Conversion Rate of the Convertible Notes pursuant to the Indenture (other than Section 9.03 and Sections 9.04(g) and (h) of the Supplemental Indenture), the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.	
 	 	 	
Extraordinary Events applicable to the Transaction:	 	 	
 	 	 	
Merger Events:	 	Notwithstanding Section 9.2(a) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 9.05 of the Supplemental Indenture.	
 	 	 	
Consequence of Merger Events:	 	Notwithstanding Section 9.3 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the	
 
7

 

 	 	Shares, Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided however that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional shares as set forth in Section 9.03 of the Supplemental Indenture.	
 	 	 	
Nationalization and Insolvency:	 	Cancellation and Payment	
 	 	 	
4.     Calculation Agent:	 	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder and a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation. For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Counterparty.	
 
5.                Account Details
 
(a)                                   Account for payments to Counterparty:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares to Counterparty:
 
To be provided by Counterparty
 
(b)                                  Account for payments to Bank:
 
JPMorgan Chase Bank, National Association, New York
ABA:  021 000 021
Favour: JPMorgan Chase Bank, National Association — London
A/C:  0010962009 CHASUS33
 
Account for delivery of Shares from Bank:
 
DTC 0060
 
6.                Offices:
 
The Office of Counterparty for the Transaction is:  Inapplicable, Counterparty is not a Multibranch Party.
 
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The Office of Bank for the Transaction is:  London
 
JPMorgan Chase Bank, National Association
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
7.                Notices:  For purposes of this Confirmation:
 
(a)                                   Address for notices or communications to Counterparty:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533
 
(b)                                  Address for notices or communications to Bank:
 
JPMorgan Chase Bank, National Association
277 Park Avenue, 11 th  Floor
New York, NY  10172
Attention: Mariusz Kwasnik
Title:  Operations Analyst
EDG Corporate Marketing
Telephone No:  (212) 623-7223
Facsimile No:   (212) 622-8534
 
8.                Representations and Warranties of Counterparty
 
The representations and warranties of Counterparty set forth in Article VII of the Textron Inc. Underwriting Agreement Standard Provisions (Debt), dated as of April 29, 2009, and incorporated by reference into the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Counterparty and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. Counterparty hereby further represents and warrants to Bank that:
 
(a)                                   Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)                                  Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or
 
9

 
regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or (to the extent such agreement is material to Counterparty and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Counterparty or (to such extent) any of its subsidiaries is bound or to which Counterparty or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)                                   No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)                                  It is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(e)                                   It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, or an “accredited investor” as defined under the Securities Act.
 
(f)                                     Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Counterparty.
 
(g)                                  Counterparty represents that it is not subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and the assets used in the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(h)                                  There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  JPMorgan Chase & Co. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(i)                                      Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Counterparty is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.                Other Provisions:
 
(a)                                   Opinions . Counterparty shall deliver to Bank an opinion of counsel (including an in-house lawyer of Counterparty), dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation.
 
(b)                                  No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party nor any of its agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those
 
10

 
expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any view expressed by the other party or any of its agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)                                   Repurchase Notices . Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other convertible bond hedge transactions between Bank and Counterparty, if any, divided by (ii) the number of Counterparty’s outstanding Shares (such quotient expressed as a percentage, the “ Option Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Option Equity Percentage included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Bank with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)                                  Regulation M . Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of Counterparty, other than the concurrent distributions of the Convertible
 
11

 
Notes and Shares being made on the date hereof. Counterparty shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any distribution other than those described in this paragraph.
 
(e)                                   No Manipulation . Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)                                     Number of Repurchased Shares . Counterparty represents that it could have purchased Shares, in an amount equal to the product of the Number of Options and the Option Entitlement, on the Exchange or otherwise, in compliance with applicable law, its organizational documents and any orders, decrees and contractual agreements binding upon Counterparty, on the Trade Date and the Premium Payment Date.
 
(g)                                  Board Authorization . Each of the Transaction and the issuance of the Convertible Notes was approved by its board of directors and publicly announced, solely for the purposes stated in such board resolution and public disclosure and, prior to any exercise of Options hereunder, Counterparty’s board of directors will have duly authorized any repurchase of Shares pursuant to the Transaction. Counterparty further represents that there is no internal policy, whether written or oral, of Counterparty that would prohibit Counterparty from entering into any aspect of the Transaction, including, but not limited to, the purchases of Shares to be made pursuant hereto.
 
(h)                                  Transfer or Assignment . (i) Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “ Transfer Options ”); provided that such transfer or assignment shall be subject to reasonable conditions that Bank may impose, including but not limited, to the following conditions:
 
(A)                               With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(c) or any obligations under Section 9(r) or 9(v) of this Confirmation;
 
(B)                                 Any Transfer Options shall only be transferred or assigned to a third party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
 
(C)            Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Bank, will not expose Bank to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Bank;
 
(D)           Bank will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Bank would have been required to pay to Counterparty in the absence of such transfer and assignment;
 
(E)            An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
 
(F)            Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Bank to permit Bank to
 
12

 
determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
 
(G)            Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Bank in connection with such transfer or assignment.
 
(ii)            Bank may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to any of its affiliates whose obligations hereunder would be guaranteed by JPMorgan Chase Bank, National Association; provided further that Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of Counterparty to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Bank. If after Bank’s commercially reasonable efforts, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Options to reduce (1) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to 7.5% of Counterparty’s outstanding Shares or less, (2) the Option Equity Percentage to 14.5% or less, and (3) the Share Amount to the Post-Effective Limit (if any applies) or less, Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (1) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (2) the Option Equity Percentage following such partial termination will be equal to or less than 14.5%, and (3) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the Terminated Portion, (2) Counterparty shall be the sole Affected Party with respect to such partial termination and (3) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provisions of paragraph 9(o) shall apply to any amount that is payable by Bank to Counterparty pursuant to this sentence). Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Bank to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Bank may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Bank’s obligations in respect of the Transaction and any such designee may assume such obligations. Bank shall be discharged of its obligations to Counterparty to the extent of any such performance.  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or
 
13

 
would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Counterparty’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(i)                                      Staggered Settlement . If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Bank’s hedging activities hereunder, or due to inability to borrow Shares to deliver to Counterparty at a rate of borrowing less than 35 basis points, Bank reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Bank on the Settlement Date for the Transaction, Bank may, by notice to Counterparty on or prior to any Settlement Date (a “ Nominal Settlement Date ”), elect to deliver the Shares on two or more dates (each, a “ Staggered Settlement Date ”) as follows:
 
(a)                                   in such notice, Bank will specify to Counterparty the related Staggered Settlement Dates, which Bank shall choose in a commercially reasonable manner, (the first of which will be such Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date on a payment versus delivery basis;
 
(b)                                  the aggregate number of Shares that Bank will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Bank would otherwise be required to deliver on such Nominal Settlement Date; and
 
(c)                                   if the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except that the Shares will be allocated among such Staggered Settlement Dates as specified by Bank in the notice referred to in clause (a) above.
 
(j)                                      Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(k)                                   Early Unwind . In the event the sale of Convertible Notes is not consummated with the Underwriters for any reason or Counterparty fails to deliver to Bank opinions of counsel to Counterparty as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 or such later date as agreed upon by the parties (May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “ Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and Counterparty under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, Counterparty shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its
 
14

 
affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). Bank shall notify Counterparty of such amount and Counterparty shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and Counterparty represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(l)                                      Role of Agent .   Each party agrees and acknowledges that (i) J.P. Morgan Securities Inc. (“ JPMSI ”), an affiliate of JPMorgan Chase Bank, National Association , has acted solely as agent and not as principal with respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction.
 
(m)                                Additional Provisions .
 
(i)             Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “ or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the Agreement with respect to that Issuer.”
 
(ii)            Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Counterparty of an option with terms that would preserve for Counterparty the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(iii)           Notwithstanding anything to the contrary in this Confirmation, if any of the following events occurs, (1) Bank shall have the right to designate such an event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) Counterparty shall be deemed the sole Affected Party and the Transaction shall be deemed the sole Affected Transaction:
 
(a)                                   At any time during the period from and including the Trade Date, to and including the Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Options are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange ”)) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(b)                                  Counterparty amends, modifies, supplements or waives any term of the Indenture or the Convertible Notes governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term relating to conversion of the Convertible Notes
 
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(including changes to the conversion price, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend, in each case without the prior consent of Bank.
 
(c)                                   On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
(iv)                               Notwithstanding anything to the contrary in this Confirmation, the giving of any Notice of Exercise shall constitute an Additional Termination Event hereunder with respect to the number, if any, of Exercisable Options specified in such Notice of Exercise as corresponding to a conversion of Relevant Convertible Notes in compliance with Section 9.03 of the Supplemental Indenture. Upon receipt of any such notice, Bank shall designate an Exchange Business Day as an Early Termination Date (such day to occur as close as practicable, in Bank’s commercially reasonable judgment, to the settlement date of the Relevant Convertible Notes), with respect to the portion of the Transaction corresponding to number of such Exercisable Options so specified. In lieu of the provisions of “Delivery Obligation”, any payment and/or delivery hereunder with respect to such conversion shall be calculated pursuant to Section 6 of the Agreement; where, for the purposes of such calculation, (A) Counterparty shall be the sole Affected Party with respect to such Additional Termination Event, (B) Bank shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; and (C) for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent (i) shall take into account the time value of the Transaction with respect to the Expiration Date and (ii) shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 9.03 of the Supplemental Indenture; provided further that (A) in case of a partial termination, an Early Termination Date shall be designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the terminated portion and such Transaction shall be the only Terminated Transaction; (B) any amount payable by Bank to Counterparty shall be satisfied solely by delivery by Bank to Counterparty of a number of Shares and cash in lieu of a fractional share equal to such amount calculated pursuant to Section 6 divided by a price per Share determined by the Calculation Agent; and (C) the number of Shares deliverable in respect of such early termination by Bank to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (a) the total number of Shares underlying the corresponding Relevant Convertible Notes (including the number of Additional Shares (as defined in the Supplemental Indenture) resulting from any adjustment set forth in Section 9.03 of the Supplemental Indenture) over (b) the number of Shares equal in value to the aggregate principal amount of the corresponding Relevant Convertible Notes, as determined by the Calculation Agent in its sole reasonable discretion.
 
(vi)                              For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
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(n)                                  No Collateral or Setoff .  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Counterparty hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Counterparty shall have no obligation to make any delivery or payment to Bank (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement.
 
(o)                                  Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If in respect of the Transaction, an amount is payable by Bank to Counterparty (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (a “ Payment Obligation ”), Counterparty may request Bank to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not make such an election in a Merger Event, in which the consideration to be paid to holders of Shares consists solely of cash, or an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement in each case that resulted from an event or events outside Counterparty’s control) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date or the Early Termination Date, as applicable; provided that if Counterparty does not validly request Bank to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that Bank shall deliver to Counterparty the Share Termination Delivery Property on the date when the Payment Obligation would otherwise be due pursuant to Section 9.7 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “ Share Termination Payment Date ”), in satisfaction of the Payment Obligation in the manner reasonably requested by Counterparty free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	 	
Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Bank at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price	
 
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 	 	paid in connection with the purchase of Share Termination Delivery Property.	
 	 	 	
Share Termination Delivery Unit:	 	One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Merger Event, as determined by the Calculation Agent.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	

(p)                                Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(q)                                Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(r)                                   Registration . Counterparty hereby agrees that if, in the good faith reasonable judgment of Bank, the Shares (“ Hedge Shares ”) acquired by Bank for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Bank without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Bank to sell the Hedge Shares in a registered offering, make available to Bank an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Bank, substantially in the form of an underwriting agreement for a registered secondary offering; provided however, that if Bank, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Bank to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance satisfactory to Bank (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction which are necessary, in its reasonable judgment, to compensate Bank for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares
 
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from Bank at the Last Reported Sale Price on such Trading Days, and in the amounts, requested by Bank.
 
(s)                                   Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
 
(t)                                     Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided , further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(u)                                  Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
(v)                                  Additional Provisions . Counterparty covenants and agrees that, as promptly as practicable following the public announcement of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall notify Bank in writing of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “ Consideration Notification Date ”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated.
 
(w)                                Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares to Bank pursuant to Section 9(k) “ Early Unwind”, such Shares would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to clause (i) below.
 
(i)                                    Delivery of Restricted Shares by Counterparty shall be effected in customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank (a “ Private Placement Settlement ”). The Private Placement Settlement of such Restricted Shares shall include customary
 
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representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Bank. Bank shall determine the appropriate discount applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 0.9 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to Counterparty, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i).
 
(ii)                                 In the event Counterparty shall not have delivered the full number of Restricted Shares otherwise applicable as a result of the proviso above relating to the Maximum Amount (such deficit, the “ Deficit Restricted Shares ”), Counterparty shall be continually obligated to deliver, from time to time until the full number of Deficit Restricted Shares have been delivered pursuant to this paragraph, Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to the Trade Date which prior to such date become no longer so reserved and (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Counterparty shall immediately notify Bank of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Restricted Shares to be delivered) and promptly deliver the Applicable Percentage of the aggregate number of such Restricted Shares thereafter.
 
(iii)                             Without limiting the generality of the foregoing, Counterparty agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and Counterparty shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Counterparty) has elapsed after any Settlement Date for such Restricted Shares, Counterparty shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to Counterparty or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If Counterparty shall fail to effectuate the Private Placement Settlement as set forth in clause (i), then such failure shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.
 
(x)                                  Right to Extend .  Bank may postpone any Exercise Date or Settlement Date or any other date of valuation or delivery by Bank, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments to the Delivery Obligation), if Bank determines, in its reasonable discretion based on advice of counsel, that such extension is reasonably necessary to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares or Share Termination Delivery Units in connection with its hedging, hedge unwind or settlement activity hereunder in a
 
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manner that would, if Bank were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements.
 
(y)                                  Dividends .  If at any time during the period from and including the Trade Date, to but excluding the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and/or any other variable relevant to the exercise, settlement or payment for the Transaction to preserve the fair value of the Options to Bank after taking into account such dividend or lack thereof.  “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	Very truly yours,	
 	 	
 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	

 	 	By:	/s/ Michael O’Donovan	
 	 	Authorized Signatory	
 	 	Name:	

Accepted and confirmed	 	
as of the Trade Date:	 	

TEXTRON INC.	 	

By:	/s/ Mary F. Lovejoy	 	
Authorized Signatory	 	
Name: Mary F. Lovejoy	 	

 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

Exhibit 10.4

 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
April 29, 2009
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer

Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	
 
Re:                            Issuer Warrant Transaction
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Warrants issued by Textron Inc. (the “ Company ”) to JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. (“ Agent ”) as its agent, on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.                                      This Confirmation evidences a complete and binding agreement between Bank and the Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and the Company had executed an agreement in such form (but without any Schedule except for the election of United States dollars as the Termination Currency) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.                                      The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	
 	 	
Trade Date:	April 29, 2009	

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 

Warrants:	Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.	
 	 	
Warrant Style:	European	
 	 	
Buyer:	Bank	
 	 	
Seller:	The Company	
 	 	
Shares:	The common stock of Company, par value USD 0.125 per Share  (Exchange symbol “TXT”)	
 	 	
Number of Warrants:	20,571,435, subject to adjustments provided herein	
 	 	
Daily Number of Warrants:	For any Expiration Date, as provided in Schedule A to this Confirmation, subject to adjustment pursuant to the provisos to “Expiration Date(s)”.	
 	 	
Warrant Entitlement:	One Share per Warrant	
 	 	
Number of Shares:	The product of the Number of Warrants and the Warrant Entitlement	
 	 	
Strike Price:	USD 15.75	
 	 	
Premium:	USD 42,336,000	
 	 	
Premium Payment Date:	May 5, 2009	
 	 	
Exchange:	The New York Stock Exchange	
 	 	
Related Exchange(s):	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.	
 	 	
Exercise and Valuation:	 	
 	 	
Expiration Time:	The Valuation Time	
 	 	
Expiration Date(s):	Each Exchange Business Day during the period from and including the First Expiration Date to and including the 45th Exchange Business Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date (including the First Expiration Date), the Calculation Agent shall make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate an Exchange Business Day or a number of Exchange Business Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Exchange Business Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Exchange Business Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Exchange Business Day or on any subsequent Exchange Business Day, as the Calculation Agent shall determine using commercially reasonable means.	
 	 	
First Expiration Date:	August 1, 2013, subject to Market Disruption Event below.	
 	 	
Automatic Exercise:	Applicable; and means that a number of Warrants for each Expiration Date equal to the Daily Number of Warrants (as adjusted pursuant to the terms	
 
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 	hereof) for such Expiration Date will be deemed to be automatically exercised.	
 	 	
Market Disruption Event:	Section 4.3(a)(ii) is hereby amended by adding after the words “or Share Basket Transaction” in the first line thereof a phrase “a failure by the Exchange or Related Exchange to open for trading during its regular trading session or” and replacing the phrase “during the one-half hour period that ends at the relevant Valuation Time” with the phrase “at any time during the regular trading session on the Exchange or any Related Exchange, without regard to after hours or any other trading outside of the regular trading session hours”.	
 	 	
Valuation applicable to each Warrant:	
 	
Valuation Time:	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.	
 	 	
Valuation Date:	Each Exercise Date. Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	
Settlement Terms applicable to the Transaction:	 	
 	 	
Method of Settlement:	Net Share Settlement; provided that Cash Settlement shall apply if the Company validly elects Cash Settlement pursuant to the provisions of “Cash Settlement Election” below.	
 	 	
Net Share Settlement:	On the relevant Settlement Date, Company shall deliver to Bank, the Share Delivery Quantity of Shares for such Settlement Date to the account specified hereto free of payment through the Clearance System.	
 	 	
Share Delivery Quantity:	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date in respect of such Settlement Date rounded down to the nearest whole number, plus cash in lieu of any fractional Shares (based on such Settlement Price).	
 	 	
Net Share Settlement Amount:	For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant Entitlement.	
 	 	
Strike Price Differential:	(a)  If the Settlement Price for any Valuation Date is greater than the Strike Price, an amount equal to the excess of such Settlement Price over the Strike Price; or	
 	 	
 	(b)  If such Settlement Price is less than or equal to the Strike Price, zero.	
 	 	
Settlement Price:	For any Valuation Date, the per Share volume-weighted average price for such Valuation Date as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Valuation Date or if such price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent in its reasonable discretion (in each case, without regard to pre-open or after hours trading outside of any regular trading session for such Valuation Date). Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such	
 
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 	Valuation Date.	
 	 	
Settlement Date:	For any Exercise Date, the date defined as such in Section 6.2 of the Equity Definitions, subject to Section 9(o)(i) hereof.	
 	 	
Cash Settlement Election:	With respect to all Warrants to be exercised on the Expiration Dates, the Company can elect Cash Settlement by delivering a written notice to Bank (the “ Cash Settlement Notice ”) on or prior to the fifth (5 th ) scheduled Exchange Business Day immediately preceding the First Expiration Date, which Cash Settlement Notice shall contain:	
 	 	
 	(i)  a representation that (x) on the date of such Cash Settlement Notice, neither the Company nor any of its affiliates is in possession of any material non-public information with respect to the Company or its Shares, (y) the Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and (z) the Company has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction;	
 	 	
 	(ii)  a representation that the Company is not electing Cash Settlement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);	
 	 	
 	(iii)  an acknowledgment by the Company that (A) any transaction by Bank following the Company’s election of Cash Settlement shall be made at Bank’s sole discretion and for Bank’s own account and (B) the Company does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately;	
 	 	
 	(iv)  an agreement by the Company that, during the period commencing on the date of such Cash Settlement Notice and ending on the second Exchange Business Day following the last Settlement Date hereunder, without the prior written consent of Bank, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to, directly or indirectly (including, without limitation, by means of a derivative instrument), purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares or any security convertible into or exchangeable for the Shares in the public markets; and	
 	 	
 	(v) a representation that the assets of Company at their fair valuation exceed the liabilities of Company, including contingent liabilities; the capital of Company is adequate to conduct the business of Company; and Company has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.	
 	 	
Cash Settlement:	If Cash Settlement is applicable, on each Settlement Date, the Company shall deliver to Bank (to an account specified by Bank) the Net Share Settlement Amount for such Settlement Date.	
 	 	
 	In addition to any other requirements set forth herein, the Company agrees that it shall not have the right to elect Cash Settlement if Bank notifies the Company that, in the reasonable judgment of Bank the election of Cash Settlement or any purchases of Shares that Bank (or its affiliates) might make	
 
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 	in connection therewith based upon the advice of counsel and as a result of events occurring after the Trade Date, would raise material risks under applicable securities laws.	
 	 	
Failure to Deliver:	Inapplicable	
 	 	
Other Applicable Provisions:	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.	
 	 	
3.     Additional Terms applicable to the Transaction:	
 	
Adjustments applicable to the Warrants:	 	
 	 	
Method of Adjustment:	Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(j) of this Confirmation and not by Section 9.1(c) of the Equity Definitions.	
 	 	
Extraordinary Events applicable to the Transaction:	 	
 	 	
Consequence of Merger Events	 	
 	 	
(a) Share-for-Share:	Alternative Obligation; provided that the Calculation Agent will determine if the Merger Event affects the theoretical value of the Transaction and if so Bank in its sole discretion may elect to make adjustments to any of the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other term necessary to reflect the characteristics (including volatility, dividend practice, borrow cost and liquidity) of the New Shares. Notwithstanding the foregoing, Cancellation and Payment shall apply in the event the New Shares are not publicly traded on a United States national securities exchange or quoted on The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors).	
 	 	
(b) Share-for-Other:	Cancellation and Payment	
 	 	
(c) Share-for-Combined:	Cancellation and Payment; provided that on or prior to the Merger Date the Bank may elect, in its sole discretion, to apply the consequence specified opposite “Share for Share” to that portion of the consideration that consists of New Shares (as determined by the Calculation Agent) and the consequence specified opposite “Share for-Other” to that portion of the consideration that consists of Other Consideration (as determined by the Calculation Agent).	
 	 	
In the event of any “Tender Offers” (as defined in the 2002 ISDA Equity Derivatives Definitions (the “ 2002 Definitions ”)) , the following consequences, each as defined in the 2002 Definitions and including any relevant cross references, shall apply to such Tender Offers:	
 	
(a) Share-for-Share:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	
(b) Share-for-Other:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 
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(c) Share-for-Combined:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	
Nationalization or Insolvency:	Cancellation and Payment	
 	 	
4.     Calculation Agent:	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.  Following any calculation by the Calculation Agent hereunder and a prior written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation.  For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Company.	
 
5.     Account Details:

(a)	Account for payments to Company:	
 	 	
 	JPMorgan Chase	
 	New York, NY	
 	Fed Wire: 021000021	
 	Swift / BIC: CHASUS33	
 	CHIP No: 0002	
 	CHIP UID: 280099	
 	Account name: Textron Inc.	
 	Account No: 9101013655	
 	 	
 	Account for delivery of Shares from Company:	
 	 	
 	To be provided by Company	
 	 	
(b)	Account for payments to Bank:	
 	 	
 	JPMorgan Chase Bank, National Association, New York	
 	ABA: 021 000 021	
 	Favour: JPMorgan Chase Bank, National Association — London	
 	A/C: 0010962009 CHASUS33	
 	 	
 	Account for delivery of Shares to Bank:	
 	 	
 	DTC 0060	
 
6.     Offices:
 
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.
 
The Office of Bank for the Transaction is:  London
 
JPMorgan Chase Bank, National Association
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
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7.     Notices: For purposes of this Confirmation:
 
(a)                                   Address for notices or communications to Company:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533
 
Address for notices or communications to Bank:
 
JPMorgan Chase Bank, National Association
277 Park Avenue, 11 th  Floor
New York, NY  10172
Attention: Mariusz Kwasnik
Title:  Operations Analyst
EDG Corporate Marketing
Telephone No:  (212) 623-7223
Facsimile No:   (212) 622-8534
 
8.             Representations and Warranties of the Company
 
The representations and warranties of the Company set forth in Article VII of the Textron Inc. Underwriting Agreement Standard Provisions (Debt), dated as of April 29, 2009, and incorporated by reference into the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Company and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. The Company hereby further represents and warrants to Bank that:
 
(a)                                   Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)                                  Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or (to the extent such agreement is material to Company and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Company or (to such extent) any of its subsidiaries is bound or to which Company or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)                                   No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
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(d)                                  The Shares initially issuable upon exercise of the Warrant by the net share settlement method (the “ Warrant Shares ”) have been reserved for issuance by all required corporate action of Company.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
 
(e)                                   The Company is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(f)                                     The Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company.
 
(g)                                  The Company is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
(h)                                  The assets used by the Company for its obligations under the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(i)                                      There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  JPMorgan Chase & Co. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(j)                                      Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Company is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.             Other Provisions:
 
(a)                                   Opinions . The Company shall deliver an opinion of counsel (including an in-house lawyer of the Company), dated as of the Trade Date, to Bank with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation.
 
(b)                                  No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party or parties nor any of its or their agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party or parties for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and not upon any view expressed by the other party or
 
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parties or any of its or their agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)                                   Repurchase Notices . The Company shall, on any day on which the Company effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other warrants purchased by Bank from Company, if any, divided by (ii) the number of the Company’s outstanding Shares (such quotient expressed as a percentage, the “ Warrant Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Warrant Equity Percentage included in the immediately preceding Repurchase Notice. The Company agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of the Company’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify the Company in writing, and the Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. The Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. The Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)                                  Regulation M . The Company is not, on the Trade Date or any Exercise Date, and will not be, on any day during the period commencing on such Exercise Date and ending on the second Exchange Business Day following the last Settlement Date with respect to such Exercise Date, engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of the Company, other than the concurrent distributions of the USD 540,000,000 principal amount of 4.50% Convertible Notes due 2013 and Shares being made on the date hereof. The Company shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
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(e)                                   No Manipulation . The Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)                                     Board Authorization . The Company represents that it is entering into the Transaction, solely for the purposes stated in the board resolution authorizing the Transaction and in its public disclosure. The Company further represents that there is no internal policy, whether written or oral, of the Company that would prohibit the Company from entering into any aspect of the Transaction, including, but not limited to, the issuances of Shares to be made pursuant hereto.
 
(g)                                  Transfer or Assignment . The Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Bank. Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of the Company to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Company and Bank. If, however, in Bank’s sole discretion, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Warrants to reduce (i) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to equal to or less than 7.5%, (ii) the Warrant Equity Percentage to equal to or less than 14.5%, and (iii) the Share Amount to equal to or less than the Post-Effective Limit (if any applies), Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (i) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (ii) the Warrant Equity Percentage following such partial termination will be equal to or less than 14.5%, and (iii) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the Terminated Portion, (ii) the Company shall be the sole Affected Party with respect to such partial termination and (iii) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provision of paragraph 9(n) shall apply to any amount that is payable by the Company to Bank pursuant to this sentence). Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Bank to purchase, sell, receive or deliver any Shares or other securities to or from the Company, Bank may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Bank’s obligations in respect of the Transaction and any such designee may assume such obligations. Bank shall be discharged of its obligations to the Company to the extent of any such performance.  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Company’s
 
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direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(h)                                  Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(i)                                      Early Unwind . In the event the sale of Convertible Notes is not consummated with the Underwriters for any reason or the Company fails to deliver to Bank opinions of counsel as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 (or such later date as agreed upon by the parties, May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and the Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, the Company shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). The amount of any such reimbursement shall be determined by Bank in its sole good faith discretion. Bank shall notify the Company of such amount and the Company shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and the Company represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(j)                                      Dividends . If at any time during the period from but excluding the Trade Date, to and including the final Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is greater than the Regular Dividend on a per Share basis then the Calculation Agent shall adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement to preserve the fair value of the Warrants to Bank after taking into account such dividend. “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
(k)                                   Role of Agent .   Each party agrees and acknowledges that (i) J.P. Morgan Securities Inc. (“ JPMSI ”), an affiliate of JPMorgan Chase Bank, National Association , has acted solely as agent and not as principal with respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction.
 
(l)                                      Additional Provisions .
 
(i)                                      The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: “(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following the declaration by the Issuer of the terms of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Warrants and, if so, will (i) make
 
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appropriate adjustment(s), if any, to any one or more of:’ and, the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.
 
(ii)                                 Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words “other similar” between “any” and “event”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or Warrants”.
 
(iii)                             Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the Agreement with respect to that Issuer.”
 
(iv)                               Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Buyer of an option with terms that would preserve for Buyer the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(v)                                  Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction or any portion of the Transaction, (1) Bank shall have the right to designate such event as an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) the Company shall be deemed the sole Affected Party and the Transaction or such portion of the Transaction shall be deemed the sole Affected Transaction:
 
(A)                               A “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, any of its subsidiaries or its or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of the common equity of the Company representing more than 50% of the voting power of such common equity.
 
(B)                                 Consummation of (A)  any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets or (B)  any share exchange, consolidation or merger of the Company pursuant to which the Shares will be converted into cash, securities or other property or any conveyance, transfer, sale, lease or other disposition in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than one of its subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of common equity of the Company immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee immediately after such event shall not be an Additional Termination Event;
 
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(C)                                 If (I) the directors who were members of Company’s board of directors on the Trade Date or (II) the directors who become members of Company’s board of directors subsequent to that date and whose election, appointment or nomination for election by Company stockholders is duly approved by a majority of the continuing directors on Company’s board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by Company on behalf of its entire board of directors in which such individual is named as nominee for director, cease to constitute at least a majority of Company’s board of directors.
 
(D)                                The Company defaults on any indebtedness with an original aggregate principal amount of at least USD 125 million and such default results in any principal and interest on such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable.
 
(E)                                 At any time during the period from and including the Trade Date, to and including the final Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Warrants are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange” )) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(F)                                On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
Notwithstanding the forgoing, a transaction set forth in clauses (A) or (B) above will not constitute an Additional Termination Event if at least 90% of the consideration, excluding cash payments for fractional shares, in such transaction or transactions consists of shares of common stock listed on a national securities exchange, including the New York Stock Exchange, which will be so listed when issued or exchanged in connection with such transaction or transactions.
 
For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
(m)                                No Collateral or Setoff . Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between the parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Bank shall have no obligation hereunder or under the Agreement to make any delivery or payment to the Company.
 
(n)                                  Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If, in respect of the Transaction, an amount is payable by the Company to Bank, (i) pursuant to Section 9.7 of the Equity Definitions or Section 12.3 of the 2002 Definitions (except in
 
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the event of a Nationalization, Insolvency, Tender Offer or Merger Event, in each case, in which the consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (except in the event of an Event of Default in which the Company is the Defaulting Party or a Termination Event in which the Company is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement in each case that resulted from an event or events outside the Company’s control) (a “ Payment Obligation ”), the Company may, in its sole discretion, satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable; provided that if the Company does not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right to require the Company to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding the Company’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that the Company shall deliver to Bank the Share Termination Delivery Property on the date (the “ Share Termination Payment Date ”) when the Payment Obligation would otherwise be due, subject to paragraph (p)(i) below, in satisfaction, subject to paragraph (p)(ii) below, of the Payment Obligation in the manner reasonably requested by Bank free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	 	
Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to the Company at the time of notification of the Payment Obligation. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable.	
 	 	 	
Share Termination Delivery Unit:	 	In the case of a Termination Event or Event of Default, one Share or, in the case of Nationalization, Insolvency,	
 
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 	 	Tender Offer or Merger Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event. If such Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.	
 	 	 	
Failure to Deliver:	 	Inapplicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(o)                                  Registration/Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Bank hereunder, such Shares or Share Termination Delivery Property would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of the Company, unless waived by Bank. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, the Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Daily Number of Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Daily Number of Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
 
(i)                                      If the Company elects to settle the Transaction pursuant to this clause (i) (a “ Private Placement Settlement ”), then delivery of Restricted Shares by the Company shall be effected pursuant to customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank; provided that the Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by the Company to Bank (or any affiliate designated by Bank) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the
 
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Restricted Shares by Bank (or any such affiliate of Bank). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. In the case of a Private Placement Settlement, Bank shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 1.8 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to the Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above).
 
(ii)                                 If the Company elects to settle the Transaction pursuant to this clause (ii) (a “ Registration Settlement ”), then the Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Bank, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. If Bank, in its sole reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Bank is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “ Resale Period ”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) any Settlement Date in the case of an exercise of Warrants prior to the First Expiration Date pursuant to Section 2 above, (y) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to paragraph (o) above or (z) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Bank completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, the Company shall transfer to Bank by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “ Additional Amount ”) in cash or in a number of Shares
 
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(“ Make-whole Shares ”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If the Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall the Company deliver a number of Restricted Shares greater than the Maximum Amount.
 
(iii)                              Without limiting the generality of the foregoing, the Company agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) has elapsed after any Settlement Date for such Restricted Shares, the Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to the Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If (x) the Company shall fail to effectuate the Private Placement Settlement as set forth in clause (i) or (y) the Company shall fail to effectuate the Registration Settlement as set forth in clause (ii) and the Company shall fail to effectuate the Private Placement Settlement following its failure to effectuate the Registration Settlement, then either the failure set forth in clause (x) or the failure set forth in clause (y) shall constitute an Event of Default with respect to which the Company shall be the Defaulting Party.
 
(p)                                  Limit on Beneficial Ownership . Notwithstanding anything to the contrary in the Agreement or this Confirmation, Bank may not exercise any Warrant hereunder, have the “right to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder if, upon receipt of such Shares, (i)  the Share Amount would exceed the Post-Effective Limit, or (ii)  the “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and the rules promulgated thereunder) of Shares by Bank Group would be equal to or greater than the lesser of (A) 4.5% of the then outstanding Shares and (B) 12,013,276 Shares (the “ Threshold Number of Shares ”) .  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Share Amount would exceed the Post-Effective Limit, or (ii) Bank Group would directly or indirectly so beneficially own in excess of the Threshold Number of Shares.  If any delivery owed to Bank hereunder is not made, in whole or in part, as a result of this provision, the Company’s obligation to make such delivery shall not be extinguished and the Company shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Bank gives notice to the Company that such delivery would not result in (i) the Share Amount exceeding the Post-Effective Limit, or (ii) Bank Group directly or indirectly beneficially owning in excess of the Threshold Number of Shares.
 
(q)                                  Share Deliveries . The Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Bank will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not
 
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satisfied with respect to the Company) shall be eligible for resale under Rule 144 of the Securities Act and the Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Property. The Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company), may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank. Notwithstanding anything to the contrary herein, the Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of the Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of the Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Property.
 
(r)                                     Hedging Disruption Event . The occurrence of a Hedging Disruption Event will constitute an Additional Termination Event under the Agreement permitting Bank to terminate the Transaction or any portion of the Transaction, with the Company as the sole Affected Party and the Transaction or such portion of the Transaction as the sole Affected Transaction.
 
“ Hedging Disruption Event ” means with respect to Bank, as determined in its reasonable discretion, the inability or impracticality, due to market illiquidity, illegality, lack of hedging transactions or credit worthy market participants or other similar events, to establish, re-establish or maintain any transactions necessary or advisable to hedge, directly or indirectly, the equity price risk of entering into and performing under the Transaction on terms including costs reasonable to Bank or an affiliate in its reasonable discretion, including (x) the event that at any time Bank reasonably concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of the Transaction through share borrowing arrangements on terms including costs deemed reasonable to Bank in its reasonable discretion and (y) the event where upon Bank or its affiliate would incur a materially increased cost in establishing, re-establishing or maintaining a full hedge of the equity price risk (including without limitation the volatility risk) in respect of the Transaction directly or indirectly as a result of actions taken by the Company. For the avoidance of doubt, the parties hereto agree that if (i) Bank reasonably determines that it is unable to borrow Shares to hedge its exposure with respect to the Transaction at a rate of borrowing that is less than 100 basis points or (ii) Bank, in its good faith reasonable judgment, determines that it cannot hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Bank), an Additional Termination Event under the Agreement shall occur with the Company as the sole Affected Party and the Transaction as the sole Affected Transaction.
 
(s)                                   Maximum Share Delivery . Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will the Company be required to deliver more than the Maximum Amount of Shares in the aggregate to Bank in connection with the Transaction, subject to the provisions below regarding Deficit Shares.  In the event the Company shall not have delivered the full number of Shares otherwise due in connection with the Transaction as a result of the first sentence of this paragraph relating to the Maximum Amount (such deficit, the “ Deficit Shares ”), the Company shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by the Company or any of
 
18

 
its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant delivery date become no longer so reserved and (iii) the Company additionally authorizes any unissued Shares that are not reserved for other transactions. The Company shall immediately notify Bank of the occurrence of any of the foregoing events (including the aggregate number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver the Applicable Percentage of such aggregate number of Shares thereafter.
 
(t)                                     Right to Extend . Bank may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Bank determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Bank.
 
(u)                                  Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of the Company in any U.S. bankruptcy proceedings of the Company; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by the Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(v)                                  Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(w)                                Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(x)                                    Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, the Company and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure.
 
(y)                                  Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 555 and546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event
 
19

 
that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
20

 
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	 	Very truly yours,	
 	 	 	
 	 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	

 	 	 	By:	/s/ Michael O’Donovan	
 	 	 	Authorized Signatory	
 	 	 	Name:	

Accepted and confirmed	 	 	
as of the Trade Date:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
Schedule A
 
For each Expiration Date, the Daily Number of Warrants is set forth below.

Expiration Date	 	Daily Number of Warrants	 	
August 1, 2013	 	457,143	 	
August 2, 2013	 	457,143	 	
August 5, 2013	 	457,143	 	
August 6, 2013	 	457,143	 	
August 7, 2013	 	457,143	 	
August 8, 2013	 	457,143	 	
August 9, 2013	 	457,143	 	
August 12, 2013	 	457,143	 	
August 13, 2013	 	457,143	 	
August 14, 2013	 	457,143	 	
August 15, 2013	 	457,143	 	
August 16, 2013	 	457,143	 	
August 19, 2013	 	457,143	 	
August 20, 2013	 	457,143	 	
August 21, 2013	 	457,143	 	
August 22, 2013	 	457,143	 	
August 23, 2013	 	457,143	 	
August 26, 2013	 	457,143	 	
August 27, 2013	 	457,143	 	
August 28, 2013	 	457,143	 	
August 29, 2013	 	457,143	 	
August 30, 2013	 	457,143	 	
September 3, 2013	 	457,143	 	
September 4, 2013	 	457,143	 	
September 5, 2013	 	457,143	 	
September 6, 2013	 	457,143	 	
September 9, 2013	 	457,143	 	
September 10, 2013	 	457,143	 	
September 11, 2013	 	457,143	 	
September 12, 2013	 	457,143	 	
September 13, 2013	 	457,143	 	
September 16, 2013	 	457,143	 	
September 17, 2013	 	457,143	 	
September 18, 2013	 	457,143	 	
September 19, 2013	 	457,143	 	
September 20, 2013	 	457,143	 	
September 23, 2013	 	457,143	 	
September 24, 2013	 	457,143	 	
September 25, 2013	 	457,143	 	
September 26, 2013	 	457,143	 	
September 27, 2013	 	457,143	 	
 
A-1

 

Expiration Date	 	Daily Number of Warrants	 	
September 30, 2013	 	457,143	 	
October 1, 2013	 	457,143	 	
October 2, 2013	 	457,143	 	
October 3, 2013	 	457,143	 	
 
A-2

Exhibit 10.5
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004
 
April 30, 2009
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:       (401) 457-3533

Re:	 	Additional Convertible Bond Hedge Transaction	
A/C:	 	028320281	
Ref. No.:	 	SDB1630442183	
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“ Bank ”) and Textron Inc. (“ Counterparty ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “ Confirmation ” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein have the meanings assigned to them in the Prospectus dated July 28, 2008, as supplemented by the Prospectus Supplement dated April 29, 2009 (as so supplemented, the “ Prospectus ”), relating to the USD 540,000,000 principal amount of 4.50% Convertible Senior Notes due 2013, (the “ Convertible Notes ” and each USD 1,000 principal amount of Convertible Notes, a “ Convertible Note ”) issued by Counterparty pursuant to an Indenture dated as of September 10, 1999, as supplemented by the Supplemental Indenture (the “ Supplemental Indenture ”) thereto to be dated May 5, 2009, between Counterparty and The Bank of New York Mellon Trust Company, N.A., as trustee (as so supplemented, the “ Indenture ”). In the event of any inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the descriptions thereof in the Prospectus. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus will govern for purposes of this Confirmation. The parties further acknowledge that the Supplemental Indenture section numbers used herein are based on the draft of the Supplemental Indenture last reviewed by Bank as of the date of this Confirmation, and if any such section numbers are changed in the Supplemental Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties. For the avoidance of doubt, references to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is amended following its execution, any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.                This Confirmation evidences a complete and binding agreement between Bank and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and
 
1

 
be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and Counterparty had executed an agreement in such form (but without any Schedule) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.                The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	 	
 	 	 	
Trade Date:	 	April 30, 2009	
 	 	 	
Option Style:	 	“Modified American”, as set forth under “Exercise and Valuation” below	
 	 	 	
Option Type:	 	Call	
 	 	 	
Buyer:	 	Counterparty	
 	 	 	
Seller:	 	Bank	
 	 	 	
Shares:	 	The common stock of Counterparty, par value USD 0.125 per Share (Exchange symbol “TXT”)	
 	 	 	
Number of Options:	 	The number of “Option Securities” (as defined in the Underwriting Agreement (as defined below)) in denominations of USD 1,000 principal amount purchased by the Underwriters pursuant to the Underwriting Agreement on the “Option Closing Date” (as defined in the Underwriting Agreement) for such Option Securities (the “ Option Closing Date ”). For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. In no event will the Number of Options be less than zero.	
 	 	 	
Option Entitlement:	 	As of any date, a number of Shares per Option equal to the Conversion Rate (as defined in the Supplemental Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Section 9.03 or to Section 9.04(g) or (h) of the Supplemental Indenture), for each Convertible Note.	
 	 	 	
Strike Price:	 	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD 1,000 divided by the Option Entitlement.	
 	 	 	
Applicable Percentage:	 	50%	
 	 	 	
Number of Shares:	 	The product of the Number of Options and the Option Entitlement and the Applicable Percentage.	
 	 	 	
Premium:	 	USD 7,400,400	
 	 	 	
Premium Payment Date:	 	May 5, 2009	
 
2

 

Exchange:	 	The New York Stock Exchange	
 	 	 	
Related Exchange(s):	 	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares	
 	 	 	
Exercise and Valuation:	 	 	
 	 	 	
Exercise Date:	 	Each Conversion Date.	
 	 	 	
Conversion Date:	 	Each “Conversion Date” (as defined in the Supplemental Indenture) for Convertible Notes.	
 	 	 	
Relevant Convertible Notes:	 	For any Conversion Date, a number of Convertible Notes equal to (i) the number of Convertible Notes in denominations of USD 1,000 principal amount submitted for conversion on such Conversion Date in accordance with the terms of the Indenture, minus (ii) the number of “Relevant Convertible Notes” (as defined in the Convertible Bond Hedge Transaction Confirmation dated April 29, 2009 between Bank and Counterparty (the “ Initial Convertible Bond Hedge Confirmation ”)) for such Conversion Date, if any; provided that if such number is less than zero, the number of Relevant Convertible Notes for such Conversion Date shall be zero.	
 	 	 	
Required Exercise on Conversion Dates:	 	On each Conversion Date for Convertible Notes, a number of Options (the “ Exercisable Options ”) equal to the number of Relevant Convertible Notes for such Conversion Date shall be automatically exercised, subject to Notice of Exercise and Notice of Settlement Method below.	
 	 	 	
Exercise Period:	 	The period from and excluding the Trade Date to and including the Expiration Date.	
 	 	 	
Expiration Date:	 	The earlier of (x) the last day on which any Convertible Notes remain outstanding and (y) the maturity date of the Convertible Notes (the “ Convertible Maturity Date ”).	
 	 	 	
Scheduled Trading Day:	 	As such term is defined in Section 1.02 of the Supplemental Indenture.	
 	 	 	
Notice of Exercise:	 	Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Options,	
 	 	 	
 	 	(a)  if Physical Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options and (ii) the Conversion Date; and	
 	 	 	
 	 	(b)  if Low Cash Combination Settlement, High Cash Combination Settlement or Cash Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the scheduled first day of the	
 
3

 

 	 	Settlement Period (as defined in the Supplemental Indenture) for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options, (ii) the scheduled first day of the Settlement Period, and (iii) if Low Cash Combination Settlement or High Cash Combination Settlement applies, the fixed dollar amount per USD 1,000 of the principal amount of the Notes specified by Counterparty pursuant to Section 9.02(b)(3)(A) of the Supplemental Indenture (the “ Specified Cash Amount ”);	
 	 	 	
 	 	provided that with respect to Options relating to Relevant Convertible Notes with a Conversion Date on or following the fiftieth (50th) Scheduled Trading Day prior to the Convertible Maturity Date (the “ Final Conversion Period ”), such Notice of Exercise need only specify the number of Options being exercised and the Specified Cash Amount, if applicable.	
 	 	 	
Settlement Terms:	 	 	
 	 	 	
Physical Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only Shares to satisfy the Conversion Obligation (as defined in the Supplemental Indenture) in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Low Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is equal to or less than USD 1,000.	
 	 	 	
High Cash Combination Settlement:	 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is greater than USD 1,000.	
 	 	 	
Cash Settlement:	 	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes.	
 	 	 	
Notice of Settlement Method:	 	Counterparty initially elects Low Cash Combination Settlement to settle its Conversion Obligation (as defined in the Supplemental Indenture). If Counterparty chooses to elect a different method of settlement, Counterparty must notify Bank of the newly chosen settlement method no later than the earlier of (i) 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes to which the newly chosen settlement method is going to apply and (ii) 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the Final Conversion Period; provided that it shall be a condition to Counterparty’s election of any such newly chosen settlement method that at the time of such election each	
 
4

 

 	 	of Counterparty and its affiliates is not, and Counterparty hereby represents and covenants that at such time neither of them will be, in possession of any material non-public information with respect to Counterparty or the Shares.	
 	 	 	
Settlement Date:	 	Subject to the delivery of a Notice of Exercise and, to the extent applicable, a Notice of Settlement Method, to Bank, the date Shares and/or cash are required to be delivered with respect to the Relevant Convertible Notes under the terms of the Indenture.	
 	 	 	
Delivery Obligation:	 	In lieu of the obligations set forth in Sections 5.1 and 6.1 of the Equity Definitions, and subject to Notice of Exercise and Notice of Settlement Method above, in respect of an Exercise Date, Bank will deliver to Counterparty, on the related Settlement Date,	
 	 	 	
 	 	(a)  if Physical Settlement or Low Cash Combination Settlement applies, a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares (and cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture) on the Conversion Date) that Counterparty would have been obligated to deliver to the holder(s) of the Relevant Convertible Notes had Counterparty elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation pursuant to Section 9.02(b) of the Supplemental Indenture and with a Specified Cash Amount of USD 1,000, as determined by the Calculation Agent; provided that, in the case of Physical Settlement, the number of Shares delivered by Bank to Counterparty on the related Settlement Date shall not be greater than the product of (i) the Applicable Percentage and (ii) the excess of (x) the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(1) of the Supplemental Indenture over (y) the number of Shares equal to (a) the aggregate principal amount of the Relevant Convertible Notes divided by (b) the Last Reported Sale Price (as defined in the Supplemental Indenture) on the final Settlement Period Trading Day (as defined in the Supplemental Indenture) of the applicable Settlement Period as if Counterparty elected Low Cash Combination Settlement;	
 	 	 	
 	 	(b)  if High Cash Combination Settlement applies, (i) a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture and (ii) an amount of cash equal to the product of the Applicable Percentage and the excess, if any, of (A) the amount of cash (including cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture and subject to the third immediately	
 
5

 

 	 	following paragraph) on the last day of the relevant Settlement Period) that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture over (B) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date; and	
 	 	 	
 	 	(c)  if Cash Settlement Applies, an amount equal to the product of the Applicable Percentage and the excess, if any, of (i) the cash that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(2) of the Supplemental Indenture over (ii) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date (in each case, such Shares and/or cash collectively, the “ Convertible Obligation ”);	
 	 	 	
 	 	provided that, in all cases, the Delivery Obligation shall be determined excluding any Shares or cash (including cash in lieu of fractional Shares) that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes as a direct or indirect result of any adjustments to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture and any interest payment that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes. For the avoidance of doubt, in connection with each Exercise Date, if the Daily Conversion Value (as defined in the Supplemental Indenture) for each of the Settlement Period Trading Days (as defined in the Supplemental Indenture) occurring in the relevant Settlement Period that would be applicable if cash settlement applied, is less than or equal to 1/45th of USD 1,000, Bank will have no delivery obligation hereunder in respect of such Exercise Date.	
 	 	 	
 	 	Counterparty agrees that if, with respect to any Settlement Period Trading Day during any relevant Settlement Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR is unavailable, Counterparty and the nationally recognized independent investment banking firm retained by Counterparty pursuant to the definition of VWAP in the Indenture shall consult with the Calculation Agent to determine the VWAP on such Settlement Period Trading Day.	
 	 	 	
Notice of Delivery Obligation:	 	As applicable and no later than the later of (a) the relevant Exercise Date and (b) the Exchange Business Day immediately following the last day of the Settlement Period, Counterparty shall give Bank notice of the final number of Shares and/or the amount of cash comprising the relevant Convertible Obligation; provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty may provide Bank with a single notice of the aggregate number of Shares and/or the amount of cash comprising the Convertible Obligations for all such Exercise Dates (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit	
 
6

 

 	 	Counterparty’s obligations with respect to Notice of Exercise, as set forth above, in any way).	
 	 	 	
Settlement Currency:	 	USD	
 	 	 	
Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Low Cash Combination Settled” or “High Cash Combination Settled” to the extent Low Cash Combination Settlement or High Cash Combination Settlement is applicable. “Low Cash Combination Settled” or “High Cash Combination Settled” in relation to any Option means that Low Cash Combination Settlement or High Cash Combination Settlement is applicable to that Option.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
3.   Additional Terms applicable to the Transaction:	
 	 	 	
Adjustments applicable to the Transaction:	 	 	
 	 	 	
Potential Adjustment Events:	 	Notwithstanding Section 9.1(e) of the Equity Definitions, a “ Potential Adjustment Event ” means any occurrence of any event or condition, as set forth in Section 9.04 of the Supplemental Indenture that would result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment hereunder as a result of an adjustment to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture.	
 	 	 	
Method of Adjustment:	 	Calculation Agent Adjustment, and means that, notwithstanding Section 9.1(c) of the Equity Definitions, upon any adjustment to the Conversion Rate of the Convertible Notes pursuant to the Indenture (other than Section 9.03 and Sections 9.04(g) and (h) of the Supplemental Indenture), the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.	
 	 	 	
Extraordinary Events applicable to the Transaction:	 	 	
 	 	 	
Merger Events:	 	Notwithstanding Section 9.2(a) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 9.05 of the Supplemental Indenture.	
 	 	 	
Consequence of Merger Events:	 	Notwithstanding Section 9.3 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, Strike Price, Number of Options, the Option	
 
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 	 	Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided however that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional shares as set forth in Section 9.03 of the Supplemental Indenture.	
 	 	 	
Nationalization and Insolvency:	 	Cancellation and Payment	
 	 	 	
4.   Calculation Agent:	 	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder and a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation. For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Counterparty.	
 
5.                Account Details
 
(a)                                   Account for payments to Counterparty:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares to Counterparty:
 
To be provided by Counterparty
 
(b)                                  Account for payments to Bank:
 
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA:  021-000021
 
Account for delivery of Shares from Bank:
 
To be provided by Bank
 
6.                Offices:
 
The Office of Counterparty for the Transaction is:  Inapplicable, Counterparty is not a Multibranch Party.
 
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The Office of Bank for the Transaction is:  New York
 
Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
 
7.      Notices:  For purposes of this Confirmation:
 
(a)            Address for notices or communications to Counterparty:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer

Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	
 
(b)            Address for notices or communications to Bank:

To:	Goldman, Sachs & Co.	
 	One New York Plaza	
 	New York, NY 10004	
Attn:	Serge Marquié,	
 	Equity Capital Markets	
Telephone:	(212) 902-9779	
Facsimile:	(917) 977-4253	
Email:	marqse@am.ibd.gs.com	
 
With a copy to:

Attn:	Vijay Culas	
 	Equity Capital Markets	
Telephone:	(212) 902-6247	
Facsimile:	(212) 428-1898	
Email:	vijay.culas@gs.com	
 
And email notification to the following address:
Eq-derivs-notifications@am.ibd.gs.com
 
8.      Representations and Warranties of Counterparty
 
The representations and warranties made by Counterparty pursuant to the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Counterparty and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”) on the “Option Closing Date” (as defined in the Underwriting Agreement), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. Counterparty hereby further represents and warrants to Bank that:
 
(a)            Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity,
 
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including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)            Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or (to the extent such agreement is material to Counterparty and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Counterparty or (to such extent) any of its subsidiaries is bound or to which Counterparty or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)            No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)            It is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(e)            It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, or an “accredited investor” as defined under the Securities Act.
 
(f)             Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Counterparty.
 
(g)            Counterparty represents that it is not subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and the assets used in the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(h)            There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  The Goldman Sachs Group, Inc. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(i)             Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Counterparty is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
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(j)             It has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized Options”.  Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.
 
9.      Other Provisions:
 
(a)            Opinions . Counterparty shall deliver to Bank an opinion of counsel (including an in-house lawyer of Counterparty), dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation.
 
(b)            No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party nor any of its agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any view expressed by the other party or any of its agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)            Repurchase Notices . Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other convertible bond hedge transactions between Bank and Counterparty, if any, divided by (ii) the number of Counterparty’s outstanding Shares (such quotient expressed as a percentage, the “ Option Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Option Equity Percentage included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Bank with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of
 
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which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)            Regulation M . Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of Counterparty.  Counterparty shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
(e)            No Manipulation . Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)             Number of Repurchased Shares . Counterparty represents that it could have purchased Shares, in an amount equal to the product of the Number of Options and the Option Entitlement, on the Exchange or otherwise, in compliance with applicable law, its organizational documents and any orders, decrees and contractual agreements binding upon Counterparty, on the Trade Date and the Premium Payment Date.
 
(g)            Board Authorization . Each of the Transaction and the issuance of the Convertible Notes was approved by its board of directors and publicly announced, solely for the purposes stated in such board resolution and public disclosure and, prior to any exercise of Options hereunder, Counterparty’s board of directors will have duly authorized any repurchase of Shares pursuant to the Transaction. Counterparty further represents that there is no internal policy, whether written or oral, of Counterparty that would prohibit Counterparty from entering into any aspect of the Transaction, including, but not limited to, the purchases of Shares to be made pursuant hereto.
 
(h)            Transfer or Assignment . (i) Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “ Transfer Options ”); provided that such transfer or assignment shall be subject to reasonable conditions that Bank may impose, including but not limited, to the following conditions:
 
(A)           With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(c) or any obligations under Section 9(r) or 9(v) of this Confirmation;
 
(B)            Any Transfer Options shall only be transferred or assigned to a third party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
 
(C)            Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Bank, will not expose Bank to material risks under applicable securities laws) and execution of any documentation and delivery of
 
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legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Bank;
 
(D)           Bank will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Bank would have been required to pay to Counterparty in the absence of such transfer and assignment;
 
(E)            An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
 
(F)            Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Bank to permit Bank to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
 
(G)            Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Bank in connection with such transfer or assignment.
 
(ii)            Bank may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to any of its affiliates whose obligations hereunder would be guaranteed by The Goldman Sachs Group, Inc.; provided further that Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of Counterparty to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Bank. If after Bank’s commercially reasonable efforts, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Options to reduce (1) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to 7.5% of Counterparty’s outstanding Shares or less, (2) the Option Equity Percentage to 14.5% or less, and (3) the Share Amount to the Post-Effective Limit (if any applies) or less, Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (1) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (2) the Option Equity Percentage following such partial termination will be equal to or less than 14.5%, and (3) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the Terminated Portion, (2) Counterparty shall be the sole Affected Party with respect to such partial termination and (3) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provisions of paragraph 9(o) shall apply to any amount that is payable by Bank to Counterparty pursuant to this sentence).  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be
 
13

 
aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Counterparty’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(i)             Staggered Settlement . If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Bank’s hedging activities hereunder, or due to inability to borrow Shares to deliver to Counterparty at a rate of borrowing less than 35 basis points, Bank reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Bank on the Settlement Date for the Transaction, Bank may, by notice to Counterparty on or prior to any Settlement Date (a “ Nominal Settlement Date ”), elect to deliver the Shares on two or more dates (each, a “ Staggered Settlement Date ”) as follows:
 
(a)            in such notice, Bank will specify to Counterparty the related Staggered Settlement Dates, which Bank shall choose in a commercially reasonable manner, (the first of which will be such Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date on a payment versus delivery basis;
 
(b)            the aggregate number of Shares that Bank will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Bank would otherwise be required to deliver on such Nominal Settlement Date; and
 
(c)            if the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except that the Shares will be allocated among such Staggered Settlement Dates as specified by Bank in the notice referred to in clause (a) above.
 
(j)             Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(k)            Early Unwind . In the event the sale of “Option Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason or Counterparty fails to deliver to Bank opinions of counsel to Counterparty as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 or such later date as agreed upon by the parties (May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically
 
14

 
terminate (the “ Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and Counterparty under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, Counterparty shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). Bank shall notify Counterparty of such amount and Counterparty shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and Counterparty represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(l)             Reserved .
 
(m)           Additional Provisions .
 
(i)             Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “ or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the Agreement with respect to that Issuer.”
 
(ii)            Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Counterparty of an option with terms that would preserve for Counterparty the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(iii)           Notwithstanding anything to the contrary in this Confirmation, if any of the following events occurs, (1) Bank shall have the right to designate such an event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) Counterparty shall be deemed the sole Affected Party and the Transaction shall be deemed the sole Affected Transaction:
 
(a)            At any time during the period from and including the Trade Date, to and including the Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Options are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange ”)) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
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(b)            Counterparty amends, modifies, supplements or waives any term of the Indenture or the Convertible Notes governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term relating to conversion of the Convertible Notes (including changes to the conversion price, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend, in each case without the prior consent of Bank.
 
(c)            On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
(iv)           Notwithstanding anything to the contrary in this Confirmation, the giving of any Notice of Exercise shall constitute an Additional Termination Event hereunder with respect to the number, if any, of Exercisable Options specified in such Notice of Exercise as corresponding to a conversion of Relevant Convertible Notes in compliance with Section 9.03 of the Supplemental Indenture. Upon receipt of any such notice, Bank shall designate an Exchange Business Day as an Early Termination Date (such day to occur as close as practicable, in Bank’s commercially reasonable judgment, to the settlement date of the Relevant Convertible Notes), with respect to the portion of the Transaction corresponding to number of such Exercisable Options so specified. In lieu of the provisions of “Delivery Obligation”, any payment and/or delivery hereunder with respect to such conversion shall be calculated pursuant to Section 6 of the Agreement; where, for the purposes of such calculation, (A) Counterparty shall be the sole Affected Party with respect to such Additional Termination Event, (B) Bank shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; and (C) for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent (i) shall take into account the time value of the Transaction with respect to the Expiration Date and (ii) shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 9.03 of the Supplemental Indenture; provided further that (A) in case of a partial termination, an Early Termination Date shall be designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the terminated portion and such Transaction shall be the only Terminated Transaction; (B) any amount payable by Bank to Counterparty shall be satisfied solely by delivery by Bank to Counterparty of a number of Shares and cash in lieu of a fractional share equal to such amount calculated pursuant to Section 6 divided by a price per Share determined by the Calculation Agent; and (C) the number of Shares deliverable in respect of such early termination by Bank to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (a) the total number of Shares underlying the corresponding Relevant Convertible Notes (including the number of Additional Shares (as defined in the Supplemental Indenture) resulting from any adjustment set forth in Section 9.03 of the Supplemental Indenture) over (b) the number of Shares equal in value to the aggregate principal amount of the corresponding Relevant Convertible Notes, as determined by the Calculation Agent in its sole reasonable discretion.
 
(vi)           For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such
 
16

 
calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
(n)            No Collateral or Setoff .  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Counterparty hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Counterparty shall have no obligation to make any delivery or payment to Bank (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement.
 
(o)            Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If in respect of the Transaction, an amount is payable by Bank to Counterparty (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (a “ Payment Obligation ”), Counterparty may request Bank to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not make such an election in a Merger Event, in which the consideration to be paid to holders of Shares consists solely of cash, or an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement in each case that resulted from an event or events outside Counterparty’s control) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date or the Early Termination Date, as applicable; provided that if Counterparty does not validly request Bank to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that Bank shall deliver to Counterparty the Share Termination Delivery Property on the date when the Payment Obligation would otherwise be due pursuant to Section 9.7 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “ Share Termination Payment Date ”), in satisfaction of the Payment Obligation in the manner reasonably requested by Counterparty free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	 	
Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Bank at the time of notification of	
 
17

 

 	 	the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property.	
 	 	 	
Share Termination Delivery Unit:	 	One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Merger Event, as determined by the Calculation Agent.	
 	 	 	
Failure to Deliver:	 	Applicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(p)            Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(q)            Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(r)             Registration . Counterparty hereby agrees that if, in the good faith reasonable judgment of Bank, the Shares (“ Hedge Shares ”) acquired by Bank for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Bank without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Bank to sell the Hedge Shares in a registered offering, make available to Bank an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Bank, substantially in the form of an underwriting agreement for a registered secondary offering; provided however, that if Bank, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Bank to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance satisfactory to Bank (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction which are necessary, in its reasonable
 
18

 
judgment, to compensate Bank for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Bank at the Last Reported Sale Price on such Trading Days, and in the amounts, requested by Bank.
 
(s)            Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
 
(t)             Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided , further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(u)            Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
(v)            Additional Provisions . Counterparty covenants and agrees that, as promptly as practicable following the public announcement of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall notify Bank in writing of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “ Consideration Notification Date ”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated.
 
(w)           Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares to Bank pursuant to Section 9(k) “ Early Unwind”, such Shares would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to clause (i) below.
 
(i)             Delivery of Restricted Shares by Counterparty shall be effected in customary private placement procedures with respect to such Restricted Shares of similar size in form and
 
19

 
substance reasonably acceptable to Bank (a “ Private Placement Settlement ”). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Bank. Bank shall determine the appropriate discount applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 0.9 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to Counterparty, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i).
 
(ii)            In the event Counterparty shall not have delivered the full number of Restricted Shares otherwise applicable as a result of the proviso above relating to the Maximum Amount (such deficit, the “ Deficit Restricted Shares ”), Counterparty shall be continually obligated to deliver, from time to time until the full number of Deficit Restricted Shares have been delivered pursuant to this paragraph, Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to the Trade Date which prior to such date become no longer so reserved and (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Counterparty shall immediately notify Bank of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Restricted Shares to be delivered) and promptly deliver the Applicable Percentage of the aggregate number of such Restricted Shares thereafter.
 
(iii)           Without limiting the generality of the foregoing, Counterparty agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and Counterparty shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Counterparty) has elapsed after any Settlement Date for such Restricted Shares, Counterparty shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to Counterparty or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If Counterparty shall fail to effectuate the Private Placement Settlement as set forth in clause (i), then such failure shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.
 
(x)             Right to Extend .  Bank may postpone any Exercise Date or Settlement Date or any other date of valuation or delivery by Bank, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments to the Delivery Obligation), if Bank determines, in its reasonable discretion based on advice of counsel, that such extension is reasonably necessary to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares or Share Termination
 
20

 
Delivery Units in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements.
 
(y)            Dividends .  If at any time during the period from and including the Trade Date, to but excluding the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and/or any other variable relevant to the exercise, settlement or payment for the Transaction to preserve the fair value of the Options to Bank after taking into account such dividend or lack thereof.  “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
21

 
Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	 	 	 	
 	 	Very truly yours,	
 	 	 	 	
 	 	 	GOLDMAN, SACHS & CO.	

 	 	 	By:	/s/ Daniel W. Kopper	
 	 	 	Authorized Signatory	
 	 	 	Name:	

Accepted and confirmed	 	 	 	
as of the Trade Date:	 	 	 	
 	 	 	 	
TEXTRON INC.	 	 	 	

By:	/s/ Mary F. Lovejoy	 	 	 	
Authorized Signatory	 	 	 	
Name: Mary F. Lovejoy	 	 	 	

Exhibit 10.6
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004
 
April 30, 2009
 
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer

Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	

Re:	Additional Issuer Warrant Transaction	 	
A/C:	028320281	 	
Ref. No.:	SDB1630442185	 	
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Warrants issued by Textron Inc. (the “ Company ”) to Goldman, Sachs & Co. (“ Bank ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.              This Confirmation evidences a complete and binding agreement between Bank and the Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and the Company had executed an agreement in such form (but without any Schedule except for the election of United States dollars as the Termination Currency) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.              The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	
 	 	
Trade Date:	April 30, 2009	
 	 	
Warrants:	Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.	
 	 	
Warrant Style:	European	

 

Buyer:	Bank	
 	 	
Seller:	The Company	
 	 	
Shares:	The common stock of Company, par value USD 0.125 per Share  (Exchange symbol “TXT”)	
 	 	
Number of Warrants:	2,285,715, subject to adjustments provided herein.	
 	 	
Daily Number of Warrants:	For any Expiration Date, as provided in Schedule A to this Confirmation, subject to adjustment pursuant to the provisos to “Expiration Date(s)”.	
 	 	
Warrant Entitlement:	One Share per Warrant	
 	 	
Number of Shares:	The product of the Number of Warrants and the Warrant Entitlement	
 	 	
Strike Price:	USD 15.75	
 	 	
Premium:	USD 5,150,400	
 	 	
Premium Payment Date:	May 5, 2009	
 	 	
Exchange:	The New York Stock Exchange	
 	 	
Related Exchange(s):	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.	
 	 	
Exercise and Valuation:	 	
 	 	
Expiration Time:	The Valuation Time	
 	 	
Expiration Date(s):	Each Exchange Business Day during the period from and including the First Expiration Date to and including the 45th Exchange Business Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date (including the First Expiration Date), the Calculation Agent shall make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate an Exchange Business Day or a number of Exchange Business Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Exchange Business Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Exchange Business Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Exchange Business Day or on any subsequent Exchange Business Day, as the Calculation Agent shall determine using commercially reasonable means.	
 	 	
First Expiration Date:	August 1, 2013, subject to Market Disruption Event below.	
 	 	
Automatic Exercise:	Applicable; and means that a number of Warrants for each Expiration Date equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised.	
 	 	
Market Disruption Event:	Section 4.3(a)(ii) is hereby amended by adding after the words “or Share Basket Transaction” in the first line thereof a phrase “a failure by the Exchange or Related Exchange to open for trading during its regular trading session or” and replacing the phrase “during the one-half hour period that ends at the	
 
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 	relevant Valuation Time” with the phrase “at any time during the regular trading session on the Exchange or any Related Exchange, without regard to after hours or any other trading outside of the regular trading session hours”.	
 	 	
Valuation applicable to each Warrant:	 	
 	 	
Valuation Time:	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.	
 	 	
Valuation Date:	Each Exercise Date. Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	
Settlement Terms applicable to the Transaction:	 	
 	 	
Method of Settlement:	Net Share Settlement; provided that Cash Settlement shall apply if Company validly elects Cash Settlement pursuant to the provisions of “Cash Settlement Election” below.
 
Company agrees that (i) it will elect Cash Settlement in respect of the Transaction only if it also validly elects cash settlement in respect of the transaction governed by the Issuer Warrant Transaction Confirmation dated April 29, 2009 between Bank and Company (the “ Initial Warrant Confirmation ” and such transaction, the “ Initial Warrant Transaction ”), and (ii) it will elect cash settlement in respect of the Initial Warrant Transaction only if it also validly elects Cash Settlement in respect of the Transaction.  If Cash Settlement is not validly elected for either the Transaction or the Initial Warrant Transaction pursuant to the provisions of “Cash Settlement” below or the provisions of the Initial Warrant Confirmation, respectively, then notwithstanding anything to the contrary in the Confirmation or the Initial Warrant Confirmation (A) Net Share Settlement shall apply in respect of the Transaction and (B) “Net Share Settlement” (as defined in the Initial Warrant Confirmation) shall apply in respect of the Initial Warrant Transaction.	
 	 	
Net Share Settlement:	On the relevant Settlement Date, Company shall deliver to Bank, the Share Delivery Quantity of Shares for such Settlement Date to the account specified hereto free of payment through the Clearance System.	
 	 	
Share Delivery Quantity:	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date in respect of such Settlement Date rounded down to the nearest whole number, plus cash in lieu of any fractional Shares (based on such Settlement Price).	
 	 	
Net Share Settlement Amount:	For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant Entitlement.	
 	 	
Strike Price Differential:	(a)  If the Settlement Price for any Valuation Date is greater than the Strike Price, an amount equal to the excess of such Settlement Price over the Strike Price; or	
 	 	
 	(b)  If such Settlement Price is less than or equal to the Strike Price, zero.	
 	 	
Settlement Price:	For any Valuation Date, the per Share volume-weighted average price for such Valuation Date as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR (or any successor thereto) in respect of	
 
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 	the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Valuation Date or if such price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent in its reasonable discretion (in each case, without regard to pre-open or after hours trading outside of any regular trading session for such Valuation Date). Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	
Settlement Date:	For any Exercise Date, the date defined as such in Section 6.2 of the Equity Definitions, subject to Section 9(o)(i) hereof.	
 	 	
Cash Settlement Election:	Subject to the provisions of “Method of Settlement” above, with respect to all Warrants to be exercised on the Expiration Dates, the Company can elect Cash Settlement by delivering a written notice to Bank (the “ Cash Settlement Notice ”) on or prior to the fifth (5 th ) scheduled Exchange Business Day immediately preceding the First Expiration Date, which Cash Settlement Notice shall contain:	
 	 	
 	(i)  a representation that (x) on the date of such Cash Settlement Notice, neither the Company nor any of its affiliates is in possession of any material non-public information with respect to the Company or its Shares, (y) the Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and (z) the Company has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction;	
 	 	
 	(ii)  a representation that the Company is not electing Cash Settlement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);	
 	 	
 	(iii)  an acknowledgment by the Company that (A) any transaction by Bank following the Company’s election of Cash Settlement shall be made at Bank’s sole discretion and for Bank’s own account and (B) the Company does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately;	
 	 	
 	(iv)  an agreement by the Company that, during the period commencing on the date of such Cash Settlement Notice and ending on the second Exchange Business Day following the last Settlement Date hereunder, without the prior written consent of Bank, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to, directly or indirectly (including, without limitation, by means of a derivative instrument), purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares or any security convertible into or exchangeable for the Shares in the public markets; and	
 	 	
 	(v) a representation that the assets of Company at their fair valuation exceed the liabilities of Company, including contingent liabilities; the capital of Company is adequate to conduct the business of Company; and Company has the ability to pay its debts and obligations as such debts mature and does not	
 
4

 

 	intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.	
 	 	
Cash Settlement:	If Cash Settlement is applicable, on each Settlement Date, the Company shall deliver to Bank (to an account specified by Bank) the Net Share Settlement Amount for such Settlement Date.	
 	 	
 	In addition to any other requirements set forth herein, the Company agrees that it shall not have the right to elect Cash Settlement if Bank notifies the Company that, in the reasonable judgment of Bank the election of Cash Settlement or any purchases of Shares that Bank (or its affiliates) might make in connection therewith based upon the advice of counsel and as a result of events occurring after the Trade Date, would raise material risks under applicable securities laws.	
 	 	
Failure to Deliver:	Inapplicable	
 	 	
Other Applicable Provisions:	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.	
 	 	
3.      Additional Terms applicable to the Transaction:	
 	 	
Adjustments applicable to the Warrants:	 	
 	 	
Method of Adjustment:	Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(j) of this Confirmation and not by Section 9.1(c) of the Equity Definitions.	
 	 	
Extraordinary Events applicable to the Transaction:	 	
 	 	
Consequence of Merger Events	 	
 	 	
(a) Share-for-Share:	Alternative Obligation; provided that the Calculation Agent will determine if the Merger Event affects the theoretical value of the Transaction and if so Bank in its sole discretion may elect to make adjustments to any of the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other term necessary to reflect the characteristics (including volatility, dividend practice, borrow cost and liquidity) of the New Shares. Notwithstanding the foregoing, Cancellation and Payment shall apply in the event the New Shares are not publicly traded on a United States national securities exchange or quoted on The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors).	
 	 	
(b) Share-for-Other:	Cancellation and Payment	
 	 	
(c) Share-for-Combined:	Cancellation and Payment; provided that on or prior to the Merger Date the Bank may elect, in its sole discretion, to apply the consequence specified opposite “Share for Share” to that portion of the consideration that consists of New Shares (as determined by the Calculation Agent) and the consequence	
 
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 	specified opposite “Share for-Other” to that portion of the consideration that consists of Other Consideration (as determined by the Calculation Agent).	
 	 	
In the event of any “Tender Offers” (as defined in the 2002 ISDA Equity Derivatives Definitions (the “ 2002 Definitions ”)) , the following consequences, each as defined in the 2002 Definitions and including any relevant cross references, shall apply to such Tender Offers:	
 	
(a) Share-for-Share:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	
(b) Share-for-Other:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	
(c) Share-for-Combined:	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	
Nationalization or Insolvency:	Cancellation and Payment	
 	 	
4.      Calculation Agent:	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.  Following any calculation by the Calculation Agent hereunder and a prior written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation.  For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Company.	
 
5.      Account Details:
 
(a)            Account for payments to Company:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares from Company:
 
To be provided by Company
 
(b)            Account for payments to Bank:
 
Chase Manhattan Bank New York
For A/C Goldman, Sachs & Co.
A/C #930-1-011483
ABA:  021-000021
 
Account for delivery of Shares to Bank:
 
To be provided by Bank
 
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6.      Offices:
 
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.
 
The Office of Bank for the Transaction is:  New York
 
Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
 
7.      Notices: For purposes of this Confirmation:
 
(a)            Address for notices or communications to Company:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer

Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	
 
Address for notices or communications to Bank:

To:	Goldman, Sachs & Co.	
 	One New York Plaza	
 	New York, NY 10004	
Attn:	Serge Marquié,	
 	Equity Capital Markets	
Telephone:	(212) 902-9779	
Facsimile:	(917) 977-4253	
Email:	marqse@am.ibd.gs.com	
 
With a copy to:

Attn:	Vijay Culas	
 	Equity Capital Markets	
Telephone:	(212) 902-6247	
Facsimile:	(212) 428-1898	
Email:	vijay.culas@gs.com	
 
And email notification to the following address:
Eq-derivs-notifications@am.ibd.gs.com
 
8.              Representations and Warranties of the Company
 
The representations and warranties made by the Company pursuant to the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Company and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”) on the “Option Closing Date” (as defined in the Underwriting Agreement), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. The Company hereby further represents and warrants to Bank that:
 
(a)            Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has
 
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been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)            Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or (to the extent such agreement is material to Company and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Company or (to such extent) any of its subsidiaries is bound or to which Company or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)            No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)            The Shares initially issuable upon exercise of the Warrant by the net share settlement method (the “ Warrant Shares ”) have been reserved for issuance by all required corporate action of Company.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
 
(e)            The Company is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(f)             The Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company.
 
(g)            The Company is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
(h)            The assets used by the Company for its obligations under the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(i)             There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  The Goldman Sachs Group, Inc. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or
 
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jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(j)             Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Company is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.              Other Provisions:
 
(a)            Opinions . The Company shall deliver an opinion of counsel (including an in-house lawyer of the Company), dated as of the Trade Date, to Bank with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation.
 
(b)            No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party or parties nor any of its or their agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party or parties for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and not upon any view expressed by the other party or parties or any of its or their agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)            Repurchase Notices . The Company shall, on any day on which the Company effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other warrants purchased by Bank from Company, if any, divided by (ii) the number of the Company’s outstanding Shares (such quotient expressed as a percentage, the “ Warrant Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Warrant Equity Percentage included in the immediately preceding Repurchase Notice. The Company agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of the Company’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify the Company in writing, and the Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. The Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. The Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened
 
9

 
proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)            Regulation M . The Company is not, on the Trade Date or any Exercise Date, and will not be, on any day during the period commencing on such Exercise Date and ending on the second Exchange Business Day following the last Settlement Date with respect to such Exercise Date, engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of the Company.  The Company shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
(e)            No Manipulation . The Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)             Board Authorization . The Company represents that it is entering into the Transaction, solely for the purposes stated in the board resolution authorizing the Transaction and in its public disclosure. The Company further represents that there is no internal policy, whether written or oral, of the Company that would prohibit the Company from entering into any aspect of the Transaction, including, but not limited to, the issuances of Shares to be made pursuant hereto.
 
(g)            Transfer or Assignment . The Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Bank. Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of the Company to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Company and Bank. If, however, in Bank’s sole discretion, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Warrants to reduce (i) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to equal to or less than 7.5%, (ii) the Warrant Equity Percentage to equal to or less than 14.5%, and (iii) the Share Amount to equal to or less than the Post-Effective Limit (if any applies), Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (i) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (ii) the Warrant Equity Percentage following such partial termination will be equal to or less than 14.5%, and (iii) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the Terminated Portion, (ii) the Company shall be
 
10

 
the sole Affected Party with respect to such partial termination and (iii) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provision of paragraph 9(n) shall apply to any amount that is payable by the Company to Bank pursuant to this sentence).  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Company’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(h)            Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(i)             Early Unwind . In the event the sale of “Option Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason or the Company fails to deliver to Bank opinions of counsel as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 (or such later date as agreed upon by the parties, May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and the Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, the Company shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). The amount of any such reimbursement shall be determined by Bank in its sole good faith discretion. Bank shall notify the Company of such amount and the Company shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and the Company represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(j)             Dividends . If at any time during the period from but excluding the Trade Date, to and including the final Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is greater than the Regular Dividend on a per Share basis then the Calculation Agent shall adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement to preserve the fair value of the Warrants to Bank after taking into account such dividend. “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
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(k)            Reserved .
 
(l)             Additional Provisions .
 
(i)             The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: “(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following the declaration by the Issuer of the terms of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Warrants and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.
 
(ii)            Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words “other similar” between “any” and “event”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or Warrants”.
 
(iii)           Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the Agreement with respect to that Issuer.”
 
(iv)           Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Buyer of an option with terms that would preserve for Buyer the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(v)            Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction or any portion of the Transaction, (1) Bank shall have the right to designate such event as an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) the Company shall be deemed the sole Affected Party and the Transaction or such portion of the Transaction shall be deemed the sole Affected Transaction:
 
(A)           A “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, any of its subsidiaries or its or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of the common equity of the Company representing more than 50% of the voting power of such common equity.
 
(B)            Consummation of (A)  any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock,
 
12

 
other securities, other property or assets or (B)  any share exchange, consolidation or merger of the Company pursuant to which the Shares will be converted into cash, securities or other property or any conveyance, transfer, sale, lease or other disposition in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than one of its subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of common equity of the Company immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee immediately after such event shall not be an Additional Termination Event;
 
(C)            If (I) the directors who were members of Company’s board of directors on the Trade Date or (II) the directors who become members of Company’s board of directors subsequent to that date and whose election, appointment or nomination for election by Company stockholders is duly approved by a majority of the continuing directors on Company’s board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by Company on behalf of its entire board of directors in which such individual is named as nominee for director, cease to constitute at least a majority of Company’s board of directors.
 
(D)           The Company defaults on any indebtedness with an original aggregate principal amount of at least USD 125 million and such default results in any principal and interest on such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable.
 
(E)            At any time during the period from and including the Trade Date, to and including the final Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Warrants are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange” )) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(F)            On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
Notwithstanding the forgoing, a transaction set forth in clauses (A) or (B) above will not constitute an Additional Termination Event if at least 90% of the consideration, excluding cash payments for fractional shares, in such transaction or transactions consists of shares of common stock listed on a national securities exchange, including the New York Stock Exchange, which will be so listed when issued or exchanged in connection with such transaction or transactions.
 
For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
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(m)           No Collateral or Setoff . Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between the parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Bank shall have no obligation hereunder or under the Agreement to make any delivery or payment to the Company.
 
(n)            Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If, in respect of the Transaction, an amount is payable by the Company to Bank, (i) pursuant to Section 9.7 of the Equity Definitions or Section 12.3 of the 2002 Definitions (except in the event of a Nationalization, Insolvency, Tender Offer or Merger Event, in each case, in which the consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (except in the event of an Event of Default in which the Company is the Defaulting Party or a Termination Event in which the Company is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement in each case that resulted from an event or events outside the Company’s control) (a “ Payment Obligation ”), the Company may, in its sole discretion, satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable; provided that if the Company does not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right to require the Company to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding the Company’s election to the contrary.

Share Termination Alternative:	Applicable and means that the Company shall deliver to Bank the Share Termination Delivery Property on the date (the “ Share Termination Payment Date ”) when the Payment Obligation would otherwise be due, subject to paragraph (p)(i) below, in satisfaction, subject to paragraph (p)(ii) below, of the Payment Obligation in the manner reasonably requested by Bank free of payment.	
 	 	
Share Termination Delivery Property:	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	
Share Termination Unit Price:	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to the Company at the time of notification of the Payment Obligation. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(i) below, the	
 
14

 

 	Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable.	
 	 	
Share Termination Delivery Unit:	In the case of a Termination Event or Event of Default, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event. If such Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.	
 	 	
Failure to Deliver:	Inapplicable	
 	 	
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(o)            Registration/Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Bank hereunder, such Shares or Share Termination Delivery Property would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of the Company, unless waived by Bank. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, the Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Daily Number of Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Daily Number of Warrants. The Calculation Agent shall make reasonable adjustments to settlement
 
15

 
terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
 
(i)             If the Company elects to settle the Transaction pursuant to this clause (i) (a “ Private Placement Settlement ”), then delivery of Restricted Shares by the Company shall be effected pursuant to customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank; provided that the Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by the Company to Bank (or any affiliate designated by Bank) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Bank (or any such affiliate of Bank). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. In the case of a Private Placement Settlement, Bank shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 1.8 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to the Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above).
 
(ii)            If the Company elects to settle the Transaction pursuant to this clause (ii) (a “ Registration Settlement ”), then the Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Bank, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. If Bank, in its sole reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Bank is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “ Resale Period ”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) any Settlement Date in the case of an exercise of Warrants prior to the First Expiration Date pursuant to Section 2 above, (y) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to paragraph (o) above or (z) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Bank completes the sale of all
 
16

 
Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, the Company shall transfer to Bank by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “ Additional Amount ”) in cash or in a number of Shares (“ Make-whole Shares ”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If the Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall the Company deliver a number of Restricted Shares greater than the Maximum Amount.
 
(iii)           Without limiting the generality of the foregoing, the Company agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) has elapsed after any Settlement Date for such Restricted Shares, the Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to the Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If (x) the Company shall fail to effectuate the Private Placement Settlement as set forth in clause (i) or (y) the Company shall fail to effectuate the Registration Settlement as set forth in clause (ii) and the Company shall fail to effectuate the Private Placement Settlement following its failure to effectuate the Registration Settlement, then either the failure set forth in clause (x) or the failure set forth in clause (y) shall constitute an Event of Default with respect to which the Company shall be the Defaulting Party.
 
(p)            Limit on Beneficial Ownership . Notwithstanding anything to the contrary in the Agreement or this Confirmation, Bank may not exercise any Warrant hereunder, have the “right to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder if, upon receipt of such Shares, (i)  the Share Amount would exceed the Post-Effective Limit, or (ii)  the “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and the rules promulgated thereunder) of Shares by Bank Group would be equal to or greater than the lesser of (A) 4.5% of the then outstanding Shares and (B) 12,013,276 Shares (the “ Threshold Number of Shares ”) .  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Share Amount would exceed the Post-Effective Limit, or (ii) Bank Group would directly or indirectly so beneficially own in excess of the Threshold Number of Shares.  If any delivery owed to Bank hereunder is not made, in whole or in part, as a result of this provision, the Company’s obligation to make such delivery shall not be extinguished and the Company shall
 
17

 
make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Bank gives notice to the Company that such delivery would not result in (i) the Share Amount exceeding the Post-Effective Limit, or (ii) Bank Group directly or indirectly beneficially owning in excess of the Threshold Number of Shares.
 
(q)            Share Deliveries . The Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Bank will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) shall be eligible for resale under Rule 144 of the Securities Act and the Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Property. The Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company), may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank. Notwithstanding anything to the contrary herein, the Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of the Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of the Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Property.
 
(r)             Hedging Disruption Event . The occurrence of a Hedging Disruption Event will constitute an Additional Termination Event under the Agreement permitting Bank to terminate the Transaction or any portion of the Transaction, with the Company as the sole Affected Party and the Transaction or such portion of the Transaction as the sole Affected Transaction.
 
“ Hedging Disruption Event ” means with respect to Bank, as determined in its reasonable discretion, the inability or impracticality, due to market illiquidity, illegality, lack of hedging transactions or credit worthy market participants or other similar events, to establish, re-establish or maintain any transactions necessary or advisable to hedge, directly or indirectly, the equity price risk of entering into and performing under the Transaction on terms including costs reasonable to Bank or an affiliate in its reasonable discretion, including (x) the event that at any time Bank reasonably concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of the Transaction through share borrowing arrangements on terms including costs deemed reasonable to Bank in its reasonable discretion and (y) the event where upon Bank or its affiliate would incur a materially increased cost in establishing, re-establishing or maintaining a full hedge of the equity price risk (including without limitation the volatility risk) in respect of the Transaction directly or indirectly as a result of actions taken by the Company. For the avoidance of doubt, the parties hereto agree that if (i) Bank reasonably determines that it is unable to borrow Shares to hedge its exposure with respect to the Transaction at a rate of borrowing that is less than 100 basis points or (ii) Bank, in its good faith reasonable judgment, determines that it cannot hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by
 
18

 
Bank), an Additional Termination Event under the Agreement shall occur with the Company as the sole Affected Party and the Transaction as the sole Affected Transaction.
 
(s)            Maximum Share Delivery . Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will the Company be required to deliver more than the Maximum Amount of Shares in the aggregate to Bank in connection with the Transaction, subject to the provisions below regarding Deficit Shares.  In the event the Company shall not have delivered the full number of Shares otherwise due in connection with the Transaction as a result of the first sentence of this paragraph relating to the Maximum Amount (such deficit, the “ Deficit Shares ”), the Company shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by the Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant delivery date become no longer so reserved and (iii) the Company additionally authorizes any unissued Shares that are not reserved for other transactions. The Company shall immediately notify Bank of the occurrence of any of the foregoing events (including the aggregate number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver the Applicable Percentage of such aggregate number of Shares thereafter.
 
(t)             Right to Extend . Bank may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Bank determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Bank.
 
(u)            Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of the Company in any U.S. bankruptcy proceedings of the Company; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by the Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(v)            Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(w)           Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(x)             Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, the Company and each of its employees, representatives, or other agents may disclose
 
19

 
to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure.
 
(y)            Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 555 and546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
20

 
Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	 	 	 	
 	 	Very truly yours,	
 	 	 	 	
 	 	 	GOLDMAN, SACHS & CO.	

 	 	 	By:	/s/ Daniel W. Kopper	
 	 	 	Authorized Signatory	
 	 	 	Name:	

Accepted and confirmed	 	 	 	
as of the Trade Date:	 	 	 	
 	 	 	 	
TEXTRON INC.	 	 	 	

By:	/s/ Mary F. Lovejoy	 	 	 	
Authorized Signatory	 	 	 	
Name: Mary F. Lovejoy	 	 	 	

 
Schedule A
 
For each Expiration Date, the Daily Number of Warrants is set forth below.

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
August 1, 2013	 	50,794	 	
August 2, 2013	 	50,794	 	
August 5, 2013	 	50,794	 	
August 6, 2013	 	50,794	 	
August 7, 2013	 	50,794	 	
August 8, 2013	 	50,794	 	
August 9, 2013	 	50,794	 	
August 12, 2013	 	50,794	 	
August 13, 2013	 	50,794	 	
August 14, 2013	 	50,794	 	
August 15, 2013	 	50,794	 	
August 16, 2013	 	50,794	 	
August 19, 2013	 	50,794	 	
August 20, 2013	 	50,794	 	
August 21, 2013	 	50,794	 	
August 22, 2013	 	50,794	 	
August 23, 2013	 	50,794	 	
August 26, 2013	 	50,794	 	
August 27, 2013	 	50,794	 	
August 28, 2013	 	50,794	 	
August 29, 2013	 	50,794	 	
August 30, 2013	 	50,794	 	
September 3, 2013	 	50,794	 	
September 4, 2013	 	50,794	 	
September 5, 2013	 	50,794	 	
September 6, 2013	 	50,794	 	
September 9, 2013	 	50,794	 	
September 10, 2013	 	50,794	 	
September 11, 2013	 	50,794	 	
September 12, 2013	 	50,794	 	
September 13, 2013	 	50,794	 	
September 16, 2013	 	50,794	 	
September 17, 2013	 	50,794	 	
September 18, 2013	 	50,794	 	
September 19, 2013	 	50,794	 	
September 20, 2013	 	50,794	 	
September 23, 2013	 	50,794	 	
September 24, 2013	 	50,794	 	
September 25, 2013	 	50,794	 	
September 26, 2013	 	50,794	 	
September 27, 2013	 	50,794	 	
 
A-1

 

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
September 30, 2013	 	50,794	 	
October 1, 2013	 	50,794	 	
October 2, 2013	 	50,794	 	
October 3, 2013	 	50,779	 	
 
A-2

Exhibit 10.7

 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
April 30, 2009
 
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:        (401) 457-3533
 
Re:           Additional Convertible Bond Hedge Transaction
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Transaction entered into between JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. (“ Agent ”) as its agent, and Textron Inc. (“ Counterparty ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “ Confirmation ” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein have the meanings assigned to them in the Prospectus dated July 28, 2008, as supplemented by the Prospectus Supplement dated April 29, 2009 (as so supplemented, the “ Prospectus ”), relating to the USD 540,000,000 principal amount of 4.50% Convertible Senior Notes due 2013, (the “ Convertible Notes ” and each USD 1,000 principal amount of Convertible Notes, a “ Convertible Note ”) issued by Counterparty pursuant to an Indenture dated as of September 10, 1999, as supplemented by the Supplemental Indenture (the “ Supplemental Indenture ”) thereto to be dated May 5, 2009, between Counterparty and The Bank of New York Mellon Trust Company, N.A., as trustee (as so supplemented, the “ Indenture ”). In the event of any inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the descriptions thereof in the Prospectus. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Prospectus, the descriptions thereof in the Prospectus will govern for purposes of this Confirmation. The parties further acknowledge that the Supplemental Indenture section numbers used herein are based on the draft of the Supplemental Indenture last reviewed by Bank as of the date of this Confirmation, and if any such section numbers are changed in the Supplemental Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties. For the avoidance of doubt, references to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is amended following its execution, any such amendment will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.

JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.      This Confirmation evidences a complete and binding agreement between Bank and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and Counterparty had executed an agreement in such form (but without any Schedule) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.      The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms: 	 	
 	 	
Trade Date: 	April 30, 2009	
 	 	
Option Style:	“Modified American”, as set forth under “Exercise and Valuation” below	
 	 	
Option Type:	Call	
 	 	
Buyer:	Counterparty	
 	 	
Seller:	Bank	
 	 	
Shares:	The common stock of Counterparty, par value USD 0.125 per Share  (Exchange symbol “TXT”)	
 	 	
Number of Options:	The number of “Option Securities” (as defined in the Underwriting Agreement (as defined below)) in denominations of USD 1,000 principal amount purchased by the Underwriters pursuant to the Underwriting Agreement on the “Option Closing Date” (as defined in the Underwriting Agreement) for such Option Securities (the “ Option Closing Date ”). For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. In no event will the Number of Options be less than zero.	
 	 	
Option Entitlement:	As of any date, a number of Shares per Option equal to the Conversion Rate (as defined in the Supplemental Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Section 9.03 or to Section 9.04(g) or (h) of the Supplemental Indenture), for each Convertible Note.	
 	 	
Strike Price:	As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD 1,000 divided by the Option Entitlement.	
 	 	
Applicable Percentage:	50%	
 	 	
Number of Shares:	The product of the Number of Options and the Option Entitlement and the Applicable Percentage.	
 
2

 

Premium:	USD 7,400,400	
 	 	
Premium Payment Date:	May 5, 2009	
 	 	
Exchange:	The New York Stock Exchange	
 	 	
Related Exchange(s):	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares	
 	 	
Exercise and Valuation:	 	
 	 	
Exercise Date:	Each Conversion Date.	
 	 	
Conversion Date:	Each “Conversion Date” (as defined in the Supplemental Indenture) for Convertible Notes.	
 	 	
Relevant Convertible Notes:	For any Conversion Date, a number of Convertible Notes equal to (i) the number of Convertible Notes in denominations of USD 1,000 principal amount submitted for conversion on such Conversion Date in accordance with the terms of the Indenture, minus (ii) the number of “Relevant Convertible Notes” (as defined in the Convertible Bond Hedge Transaction Confirmation dated April 29, 2009 between Bank and Counterparty (the “ Initial Convertible Bond Hedge Confirmation ”)) for such Conversion Date, if any; provided that if such number is less than zero, the number of Relevant Convertible Notes for such Conversion Date shall be zero.	
 	 	
Required Exercise on
Conversion Dates:	On each Conversion Date for Convertible Notes, a number of Options (the “ Exercisable Options ”) equal to the number of Relevant Convertible Notes for such Conversion Date shall be automatically exercised, subject to Notice of Exercise and Notice of Settlement Method below.	
 	 	
Exercise Period:	The period from and excluding the Trade Date to and including the Expiration Date.	
 	 	
Expiration Date:	The earlier of (x) the last day on which any Convertible Notes remain outstanding and (y) the maturity date of the Convertible Notes (the “ Convertible Maturity Date ”).	
 	 	
Scheduled Trading Day:	As such term is defined in Section 1.02 of the Supplemental Indenture.	
 	 	
Notice of Exercise:	Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Options,	
 	 	
 	(a)  if Physical Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options and (ii) the Conversion Date; and	
 
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 	(b)  if Low Cash Combination Settlement, High Cash Combination Settlement or Cash Settlement applies, Counterparty must notify Bank in writing before 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the scheduled first day of the Settlement Period (as defined in the Supplemental Indenture) for the Relevant Convertible Notes, which notice shall specify (i) the number of Exercisable Options, (ii) the scheduled first day of the Settlement Period, and (iii) if Low Cash Combination Settlement or High Cash Combination Settlement applies, the fixed dollar amount per USD 1,000 of the principal amount of the Notes specified by Counterparty pursuant to Section 9.02(b)(3)(A) of the Supplemental Indenture (the “ Specified Cash Amount ”);	
 	 	
 	provided that with respect to Options relating to Relevant Convertible Notes with a Conversion Date on or following the fiftieth (50th) Scheduled Trading Day prior to the Convertible Maturity Date (the “ Final Conversion Period ”), such Notice of Exercise need only specify the number of Options being exercised and the Specified Cash Amount, if applicable.	
 	 	
Settlement Terms:	 	
 	 	
Physical Settlement:	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only Shares to satisfy the Conversion Obligation (as defined in the Supplemental Indenture) in connection with the conversion of the Relevant Convertible Notes.	
 	 	
Low Cash Combination Settlement:	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is equal to or less than USD 1,000.	
 	 	
High Cash Combination Settlement: 	Means that (i) Counterparty has elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes and (ii) the Specified Cash Amount with respect to such conversion is greater than USD 1,000.	
 	 	
Cash Settlement:	Notwithstanding anything to the contrary in the Equity Definitions, means that Counterparty has elected to deliver only cash to satisfy the Conversion Obligation in connection with the conversion of the Relevant Convertible Notes.	
 	 	
Notice of Settlement Method:	Counterparty initially elects Low Cash Combination Settlement to settle its Conversion Obligation (as defined in the Supplemental Indenture). If Counterparty chooses to elect a different method of settlement, Counterparty must notify Bank of the newly chosen settlement method no later than the earlier of (i) 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately following the Conversion Date for the Relevant Convertible Notes to which the newly chosen	
 
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 	settlement method is going to apply and (ii) 5:00 p.m. (New York City time) on the Scheduled Trading Day immediately preceding the Final Conversion Period; provided that it shall be a condition to Counterparty’s election of any such newly chosen settlement method that at the time of such election each of Counterparty and its affiliates is not, and Counterparty hereby represents and covenants that at such time neither of them will be, in possession of any material non-public information with respect to Counterparty or the Shares.	
 	 	
Settlement Date: 	Subject to the delivery of a Notice of Exercise and, to the extent applicable, a Notice of Settlement Method, to Bank, the date Shares and/or cash are required to be delivered with respect to the Relevant Convertible Notes under the terms of the Indenture.	
 	 	
Delivery Obligation:	In lieu of the obligations set forth in Sections 5.1 and 6.1 of the Equity Definitions, and subject to Notice of Exercise and Notice of Settlement Method above, in respect of an Exercise Date, Bank will deliver to Counterparty, on the related Settlement Date,	
 	 	
 	(a)  if Physical Settlement or Low Cash Combination Settlement applies, a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares (and cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture) on the Conversion Date) that Counterparty would have been obligated to deliver to the holder(s) of the Relevant Convertible Notes had Counterparty elected to deliver a combination of Shares and cash to satisfy the Conversion Obligation pursuant to Section 9.02(b) of the Supplemental Indenture and with a Specified Cash Amount of USD 1,000, as determined by the Calculation Agent; provided that, in the case of Physical Settlement, the number of Shares delivered by Bank to Counterparty on the related Settlement Date shall not be greater than the product of (i) the Applicable Percentage and (ii) the excess of (x) the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(1) of the Supplemental Indenture over (y) the number of Shares equal to (a) the aggregate principal amount of the Relevant Convertible Notes divided by (b) the Last Reported Sale Price (as defined in the Supplemental Indenture) on the final Settlement Period Trading Day (as defined in the Supplemental Indenture) of the applicable Settlement Period as if Counterparty elected Low Cash Combination Settlement;	
 	 	
 	(b)  if High Cash Combination Settlement applies, (i) a number of Shares equal to the product of the Applicable Percentage and the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture and (ii) an amount of cash equal to the	
 
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 	product of the Applicable Percentage and the excess, if any, of (A) the amount of cash (including cash in lieu of fractional Shares, if any, resulting from rounding of such aggregate number of Shares based on the VWAP (as defined in the Supplemental Indenture and subject to the third immediately following paragraph) on the last day of the relevant Settlement Period) that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental Indenture over (B) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date; and	
 	 	
 	(c)  if Cash Settlement Applies, an amount equal to the product of the Applicable Percentage and the excess, if any, of (i) the cash that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Notes pursuant to Section 9.02(b)(2) of the Supplemental Indenture over (ii) the principal amount of the Relevant Convertible Notes being converted on such Conversion Date (in each case, such Shares and/or cash collectively, the “ Convertible Obligation ”);	
 	 	
 	provided that, in all cases, the Delivery Obligation shall be determined excluding any Shares or cash (including cash in lieu of fractional Shares) that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes as a direct or indirect result of any adjustments to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture and any interest payment that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Notes. For the avoidance of doubt, in connection with each Exercise Date, if the Daily Conversion Value (as defined in the Supplemental Indenture) for each of the Settlement Period Trading Days (as defined in the Supplemental Indenture) occurring in the relevant Settlement Period that would be applicable if cash settlement applied, is less than or equal to 1/45th of USD 1,000, Bank will have no delivery obligation hereunder in respect of such Exercise Date.	
 	 	
 	Counterparty agrees that if, with respect to any Settlement Period Trading Day during any relevant Settlement Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR is unavailable, Counterparty and the nationally recognized independent investment banking firm retained by Counterparty pursuant to the definition of VWAP in the Indenture shall consult with the Calculation Agent to determine the VWAP on such Settlement Period Trading Day.	
 	 	
Notice of Delivery Obligation: 	As applicable and no later than the later of (a) the relevant Exercise Date and (b) the Exchange Business Day immediately following the last day of the Settlement Period, Counterparty shall give Bank notice of the final number of Shares and/or the amount of cash comprising the relevant Convertible Obligation; provided that, with respect to any Exercise Date occurring during the Final Conversion Period, Counterparty	
 
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 	may provide Bank with a single notice of the aggregate number of Shares and/or the amount of cash comprising the Convertible Obligations for all such Exercise Dates (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise, as set forth above, in any way).	
 	 	
Settlement Currency:	USD	
 	 	
Other Applicable Provisions:	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Low Cash Combination Settled” or “High Cash Combination Settled” to the extent Low Cash Combination Settlement or High Cash Combination Settlement is applicable. “Low Cash Combination Settled” or “High Cash Combination Settled” in relation to any Option means that Low Cash Combination Settlement or High Cash Combination Settlement is applicable to that Option.	
 	 	
Failure to Deliver:	Applicable	
 	 	
3.      Additional Terms applicable to the Transaction: 	
 	
Adjustments applicable to the Transaction:	 	
 	 	
Potential Adjustment Events: 	Notwithstanding Section 9.1(e) of the Equity Definitions, a “ Potential Adjustment Event ” means any occurrence of any event or condition, as set forth in Section 9.04 of the Supplemental Indenture that would result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment hereunder as a result of an adjustment to the Conversion Rate pursuant to Section 9.03 or Section 9.04(g) or (h) of the Supplemental Indenture.	
 	 	
Method of Adjustment:	Calculation Agent Adjustment, and means that, notwithstanding Section 9.1(c) of the Equity Definitions, upon any adjustment to the Conversion Rate of the Convertible Notes pursuant to the Indenture (other than Section 9.03 and Sections 9.04(g) and (h) of the Supplemental Indenture), the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.	
 	 	
Extraordinary Events applicable to the Transaction:	 	
 	 	
Merger Events:	Notwithstanding Section 9.2(a) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 9.05 of the Supplemental Indenture.	
 
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Consequence of Merger Events:	Notwithstanding Section 9.3 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, Strike Price, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided however that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional shares as set forth in Section 9.03 of the Supplemental Indenture.	
Nationalization and Insolvency:	Cancellation and Payment	
 	 	
4.      Calculation Agent:	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.  Following any calculation by the Calculation Agent hereunder and a prior written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation.  For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Counterparty.	
 
5.      Account Details
 
(a)            Account for payments to Counterparty:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares to Counterparty:
 
To be provided by Counterparty
 
(b)            Account for payments to Bank:
 
JPMorgan Chase Bank, National Association, New York
ABA:  021 000 021
Favour: JPMorgan Chase Bank, National Association — London
A/C:  0010962009 CHASUS33
 
Account for delivery of Shares from Bank:
 
DTC 0060
 
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6.      Offices:
 
The Office of Counterparty for the Transaction is:  Inapplicable, Counterparty is not a Multibranch Party.
 
The Office of Bank for the Transaction is:  London
 
JPMorgan Chase Bank, National Association
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
7.      Notices:  For purposes of this Confirmation:
 
(a)            Address for notices or communications to Counterparty:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:     (401) 421-2800
Facsimile No.:        (401) 457-3533
 
(b)            Address for notices or communications to Bank:
JPMorgan Chase Bank, National Association
277 Park Avenue, 11 th  Floor
New York, NY  10172
Attention: Mariusz Kwasnik
Title:  Operations Analyst
EDG Corporate Marketing
Telephone No:  (212) 623-7223
Facsimile No:   (212) 622-8534
 
8.      Representations and Warranties of Counterparty
 
The representations and warranties made by Counterparty pursuant to the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Counterparty and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”) on the “Option Closing Date” (as defined in the Underwriting Agreement), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. Counterparty hereby further represents and warrants to Bank that:
 
(a)            Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
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(b)            Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or (to the extent such agreement is material to Counterparty and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Counterparty or (to such extent) any of its subsidiaries is bound or to which Counterparty or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)            No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)            It is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(e)            It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, or an “accredited investor” as defined under the Securities Act.
 
(f)             Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Counterparty.
 
(g)            Counterparty represents that it is not subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and the assets used in the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(h)            There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  JPMorgan Chase & Co. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(i)             Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Counterparty is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.      Other Provisions:
 
(a)            Opinions . Counterparty shall deliver to Bank an opinion of counsel (including an in-house lawyer of Counterparty), dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation.
 
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(b)            No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party nor any of its agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and upon any view expressed by the other party or any of its agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)            Repurchase Notices . Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other convertible bond hedge transactions between Bank and Counterparty, if any, divided by (ii) the number of Counterparty’s outstanding Shares (such quotient expressed as a percentage, the “ Option Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Option Equity Percentage included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Bank with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
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(d)            Regulation M . Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of Counterparty.  Counterparty shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
(e)            No Manipulation . Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)             Number of Repurchased Shares . Counterparty represents that it could have purchased Shares, in an amount equal to the product of the Number of Options and the Option Entitlement, on the Exchange or otherwise, in compliance with applicable law, its organizational documents and any orders, decrees and contractual agreements binding upon Counterparty, on the Trade Date and the Premium Payment Date.
 
(g)            Board Authorization . Each of the Transaction and the issuance of the Convertible Notes was approved by its board of directors and publicly announced, solely for the purposes stated in such board resolution and public disclosure and, prior to any exercise of Options hereunder, Counterparty’s board of directors will have duly authorized any repurchase of Shares pursuant to the Transaction. Counterparty further represents that there is no internal policy, whether written or oral, of Counterparty that would prohibit Counterparty from entering into any aspect of the Transaction, including, but not limited to, the purchases of Shares to be made pursuant hereto.
 
(h)            Transfer or Assignment . (i) Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “ Transfer Options ”); provided that such transfer or assignment shall be subject to reasonable conditions that Bank may impose, including but not limited, to the following conditions:
 
(A)           With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(c) or any obligations under Section 9(r) or 9(v) of this Confirmation;
 
(B)            Any Transfer Options shall only be transferred or assigned to a third party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
 
(C)            Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Bank, will not expose Bank to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Bank;
 
(D)           Bank will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Bank would have been required to pay to Counterparty in the absence of such transfer and assignment;
 
(E)            An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
 
(F)            Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax
 
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documentation as may be reasonably requested by Bank to permit Bank to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
 
(G)            Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Bank in connection with such transfer or assignment.
 
(ii)            Bank may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to any of its affiliates whose obligations hereunder would be guaranteed by JPMorgan Chase Bank, National Association; provided further that Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of Counterparty to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Counterparty and Bank. If after Bank’s commercially reasonable efforts, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Options to reduce (1) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to 7.5% of Counterparty’s outstanding Shares or less, (2) the Option Equity Percentage to 14.5% or less, and (3) the Share Amount to the Post-Effective Limit (if any applies) or less, Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (1) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (2) the Option Equity Percentage following such partial termination will be equal to or less than 14.5%, and (3) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the Terminated Portion, (2) Counterparty shall be the sole Affected Party with respect to such partial termination and (3) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provisions of paragraph 9(o) shall apply to any amount that is payable by Bank to Counterparty pursuant to this sentence). Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Bank to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Bank may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Bank’s obligations in respect of the Transaction and any such designee may assume such obligations. Bank shall be discharged of its obligations to Counterparty to the extent of any such performance.  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements
 
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(including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Counterparty’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(i)             Staggered Settlement . If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Bank’s hedging activities hereunder, or due to inability to borrow Shares to deliver to Counterparty at a rate of borrowing less than 35 basis points, Bank reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Bank on the Settlement Date for the Transaction, Bank may, by notice to Counterparty on or prior to any Settlement Date (a “ Nominal Settlement Date ”), elect to deliver the Shares on two or more dates (each, a “ Staggered Settlement Date ”) as follows:
 
(a)            in such notice, Bank will specify to Counterparty the related Staggered Settlement Dates, which Bank shall choose in a commercially reasonable manner, (the first of which will be such Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date on a payment versus delivery basis;
 
(b)            the aggregate number of Shares that Bank will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Bank would otherwise be required to deliver on such Nominal Settlement Date; and
 
(c)            if the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Physical Settlement terms, the Low Cash Combination Settlement terms or the High Cash Combination Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except that the Shares will be allocated among such Staggered Settlement Dates as specified by Bank in the notice referred to in clause (a) above.
 
(j)             Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(k)            Early Unwind . In the event the sale of “Option Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason or Counterparty fails to deliver to Bank opinions of counsel to Counterparty as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 or such later date as agreed upon by the parties (May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “ Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and Counterparty under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the
 
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Underwriters, Counterparty shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). Bank shall notify Counterparty of such amount and Counterparty shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and Counterparty represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(l)             Role of Agent .   Each party agrees and acknowledges that (i) J.P. Morgan Securities Inc. (“ JPMSI ”), an affiliate of JPMorgan Chase Bank, National Association , has acted solely as agent and not as principal with respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction.
 
(m)           Additional Provisions .
 
(i)             Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “ or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the Agreement with respect to that Issuer.”
 
(ii)            Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Counterparty of an option with terms that would preserve for Counterparty the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(iii)           Notwithstanding anything to the contrary in this Confirmation, if any of the following events occurs, (1) Bank shall have the right to designate such an event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) Counterparty shall be deemed the sole Affected Party and the Transaction shall be deemed the sole Affected Transaction:
 
(a)            At any time during the period from and including the Trade Date, to and including the Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Options are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange ”)) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(b)            Counterparty amends, modifies, supplements or waives any term of the Indenture or the Convertible Notes governing the principal amount, coupon,
 
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maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term relating to conversion of the Convertible Notes (including changes to the conversion price, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend, in each case without the prior consent of Bank.
 
(c)            On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
(iv)           Notwithstanding anything to the contrary in this Confirmation, the giving of any Notice of Exercise shall constitute an Additional Termination Event hereunder with respect to the number, if any, of Exercisable Options specified in such Notice of Exercise as corresponding to a conversion of Relevant Convertible Notes in compliance with Section 9.03 of the Supplemental Indenture. Upon receipt of any such notice, Bank shall designate an Exchange Business Day as an Early Termination Date (such day to occur as close as practicable, in Bank’s commercially reasonable judgment, to the settlement date of the Relevant Convertible Notes), with respect to the portion of the Transaction corresponding to number of such Exercisable Options so specified. In lieu of the provisions of “Delivery Obligation”, any payment and/or delivery hereunder with respect to such conversion shall be calculated pursuant to Section 6 of the Agreement; where, for the purposes of such calculation, (A) Counterparty shall be the sole Affected Party with respect to such Additional Termination Event, (B) Bank shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement; and (C) for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent (i) shall take into account the time value of the Transaction with respect to the Expiration Date and (ii) shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 9.03 of the Supplemental Indenture; provided further that (A) in case of a partial termination, an Early Termination Date shall be designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the terminated portion and such Transaction shall be the only Terminated Transaction; (B) any amount payable by Bank to Counterparty shall be satisfied solely by delivery by Bank to Counterparty of a number of Shares and cash in lieu of a fractional share equal to such amount calculated pursuant to Section 6 divided by a price per Share determined by the Calculation Agent; and (C) the number of Shares deliverable in respect of such early termination by Bank to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (a) the total number of Shares underlying the corresponding Relevant Convertible Notes (including the number of Additional Shares (as defined in the Supplemental Indenture) resulting from any adjustment set forth in Section 9.03 of the Supplemental Indenture) over (b) the number of Shares equal in value to the aggregate principal amount of the corresponding Relevant Convertible Notes, as determined by the Calculation Agent in its sole reasonable discretion.
 
(vi)           For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
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(n)            No Collateral or Setoff .  Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Counterparty hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Counterparty shall have no obligation to make any delivery or payment to Bank (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement.
 
(o)            Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If in respect of the Transaction, an amount is payable by Bank to Counterparty (i) pursuant to Section 9.7 of the Equity Definitions or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (a “ Payment Obligation ”), Counterparty may request Bank to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not make such an election in a Merger Event, in which the consideration to be paid to holders of Shares consists solely of cash, or an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement in each case that resulted from an event or events outside Counterparty’s control) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date or the Early Termination Date, as applicable; provided that if Counterparty does not validly request Bank to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary.

Share Termination Alternative:	Applicable and means that Bank shall deliver to Counterparty the Share Termination Delivery Property on the date when the Payment Obligation would otherwise be due pursuant to Section 9.7 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “ Share Termination Payment Date ”), in satisfaction of the Payment Obligation in the manner reasonably requested by Counterparty free of payment.	
 	 	
Share Termination Delivery Property:	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 	 	
Share Termination Unit Price:	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Bank at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit	
 
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 	Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property.	
 	 	
Share Termination Delivery Unit:	One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Merger Event, as determined by the Calculation Agent.	
 	 	
Failure to Deliver:	Applicable	
 	 	
Other applicable provisions:	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(p)            Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
(q)            Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(r)             Registration . Counterparty hereby agrees that if, in the good faith reasonable judgment of Bank, the Shares (“ Hedge Shares ”) acquired by Bank for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Bank without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Bank to sell the Hedge Shares in a registered offering, make available to Bank an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Bank, substantially in the form of an underwriting agreement for a registered secondary offering; provided however, that if Bank, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Bank to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance satisfactory to Bank (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction which are necessary, in its reasonable judgment, to compensate Bank for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares
 
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from Bank at the Last Reported Sale Price on such Trading Days, and in the amounts, requested by Bank.
 
(s)            Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
 
(t)             Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided , further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(u)            Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
(v)            Additional Provisions . Counterparty covenants and agrees that, as promptly as practicable following the public announcement of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall notify Bank in writing of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “ Consideration Notification Date ”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated.
 
(w)           Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares to Bank pursuant to Section 9(k) “ Early Unwind”, such Shares would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to clause (i) below.
 
(i)             Delivery of Restricted Shares by Counterparty shall be effected in customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank (a “ Private Placement Settlement ”). The Private Placement Settlement of such Restricted Shares shall include customary
 
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representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Bank. Bank shall determine the appropriate discount applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 0.9 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to Counterparty, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i).
 
(ii)            In the event Counterparty shall not have delivered the full number of Restricted Shares otherwise applicable as a result of the proviso above relating to the Maximum Amount (such deficit, the “ Deficit Restricted Shares ”), Counterparty shall be continually obligated to deliver, from time to time until the full number of Deficit Restricted Shares have been delivered pursuant to this paragraph, Restricted Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Counterparty or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to the Trade Date which prior to such date become no longer so reserved and (iii) Counterparty additionally authorizes any unissued Shares that are not reserved for other transactions. Counterparty shall immediately notify Bank of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Restricted Shares to be delivered) and promptly deliver the Applicable Percentage of the aggregate number of such Restricted Shares thereafter.
 
(iii)           Without limiting the generality of the foregoing, Counterparty agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and Counterparty shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Counterparty) has elapsed after any Settlement Date for such Restricted Shares, Counterparty shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to Counterparty or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If Counterparty shall fail to effectuate the Private Placement Settlement as set forth in clause (i), then such failure shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.
 
(x)             Right to Extend .  Bank may postpone any Exercise Date or Settlement Date or any other date of valuation or delivery by Bank, with respect to some or all of the relevant Options (in which event the Calculation Agent shall make appropriate adjustments to the Delivery Obligation), if Bank determines, in its reasonable discretion based on advice of counsel, that such extension is reasonably necessary to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares or Share Termination Delivery Units in connection with its hedging, hedge unwind or settlement activity hereunder in a
 
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manner that would, if Bank were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements.
 
(y)            Dividends .  If at any time during the period from and including the Trade Date, to but excluding the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with respect to the Shares (an “ Ex-Dividend Date ”), and that dividend is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend date for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and/or any other variable relevant to the exercise, settlement or payment for the Transaction to preserve the fair value of the Options to Bank after taking into account such dividend or lack thereof.  “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	 	 	 	
 	 	Very truly yours,	
 	 	 	 	
 	 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	

 	 	 	By:	/s/ Michael O’Donovan	
 	 	 	Authorized Signatory	
 	 	 	Name:	

Accepted and confirmed	 	 	 	
as of the Trade Date:	 	 	 	
 	 	 	 	
TEXTRON INC.	 	 	 	

By:	/s/ Mary F. Lovejoy	 	 	 	
Authorized Signatory	 	 	 	
Name: Mary F. Lovejoy	 	 	 	

 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

Exhibit 10.8

 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
April 30, 2009
 
To: Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:               (401) 421-2800
Facsimile No.:                       (401) 457-3533
 
Re:                              Additional Issuer Warrant Transaction
 
The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Warrants issued by Textron Inc. (the “ Company ”) to JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. (“ Agent ”) as its agent, on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
 
The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
 
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
 
1.                                        This Confirmation evidences a complete and binding agreement between Bank and the Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “ Agreement ”) as if Bank and the Company had executed an agreement in such form (but without any Schedule except for the election of United States dollars as the Termination Currency) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
 
2.                                        The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:	 	 	
 	 	 	
Trade Date:	 	April 30, 2009	
 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 

Warrants:	 	Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.	
 	 	 	
Warrant Style:	 	European	
 	 	 	
Buyer:	 	Bank	
 	 	 	
Seller:	 	The Company	
 	 	 	
Shares:	 	The common stock of Company, par value USD 0.125 per Share (Exchange symbol “TXT”)	
 	 	 	
Number of Warrants:	 	2,285,715, subject to adjustments provided herein.	
 	 	 	
Daily Number of Warrants:	 	For any Expiration Date, as provided in Schedule A to this Confirmation, subject to adjustment pursuant to the provisos to “Expiration Date(s)”.	
 	 	 	
Warrant Entitlement:	 	One Share per Warrant	
 	 	 	
Number of Shares:	 	The product of the Number of Warrants and the Warrant Entitlement	
 	 	 	
Strike Price:	 	USD 15.75	
 	 	 	
Premium:	 	USD 5,150,400	
 	 	 	
Premium Payment Date:	 	May 5, 2009	
 	 	 	
Exchange:	 	The New York Stock Exchange	
 	 	 	
Related Exchange(s):	 	The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.	
 	 	 	
Exercise and Valuation:	 	 	
 	 	 	
Expiration Time:	 	The Valuation Time	
 	 	 	
Expiration Date(s):	 	Each Exchange Business Day during the period from and including the First Expiration Date to and including the 45th Exchange Business Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date (including the First Expiration Date), the Calculation Agent shall make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate an Exchange Business Day or a number of Exchange Business Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Exchange Business Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Exchange Business Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Exchange Business Day or on any subsequent Exchange Business Day, as the Calculation Agent shall determine using commercially reasonable means.	
 	 	 	
First Expiration Date:	 	August 1, 2013, subject to Market Disruption Event below.	
 	 	 	
Automatic Exercise:	 	Applicable; and means that a number of Warrants for each Expiration Date	
 
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 	 	equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised.	
 	 	 	
Market Disruption Event:	 	Section 4.3(a)(ii) is hereby amended by adding after the words “or Share Basket Transaction” in the first line thereof a phrase “a failure by the Exchange or Related Exchange to open for trading during its regular trading session or” and replacing the phrase “during the one-half hour period that ends at the relevant Valuation Time” with the phrase “at any time during the regular trading session on the Exchange or any Related Exchange, without regard to after hours or any other trading outside of the regular trading session hours”.	
 	 	 	
Valuation applicable to each Warrant:	
 	 	 	
Valuation Time:	 	At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.	
 	 	 	
Valuation Date:	 	Each Exercise Date. Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	 	
Settlement Terms applicable to the Transaction:	 	 	
 	 	 	
Method of Settlement:	 	Net Share Settlement; provided that Cash Settlement shall apply if Company validly elects Cash Settlement pursuant to the provisions of “Cash Settlement Election” below.
 
Company agrees that (i) it will elect Cash Settlement in respect of the Transaction only if it also validly elects cash settlement in respect of the transaction governed by the Issuer Warrant Transaction Confirmation dated April 29, 2009 between Bank and Company (the “ Initial Warrant Confirmation ” and such transaction, the “ Initial Warrant Transaction ”), and (ii) it will elect cash settlement in respect of the Initial Warrant Transaction only if it also validly elects Cash Settlement in respect of the Transaction. If Cash Settlement is not validly elected for either the Transaction or the Initial Warrant Transaction pursuant to the provisions of “Cash Settlement” below or the provisions of the Initial Warrant Confirmation, respectively, then notwithstanding anything to the contrary in the Confirmation or the Initial Warrant Confirmation (A) Net Share Settlement shall apply in respect of the Transaction and (B) “Net Share Settlement” (as defined in the Initial Warrant Confirmation) shall apply in respect of the Initial Warrant Transaction.	
 	 	 	
Net Share Settlement:	 	On the relevant Settlement Date, Company shall deliver to Bank, the Share Delivery Quantity of Shares for such Settlement Date to the account specified hereto free of payment through the Clearance System.	
 	 	 	
Share Delivery Quantity:	 	For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date in respect of such Settlement Date rounded down to the nearest whole number, plus cash in lieu of any fractional Shares (based on such Settlement Price).	
 	 	 	
Net Share Settlement Amount:	 	For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant Entitlement.	
 	 	 	
Strike Price Differential:	 	(a)  If the Settlement Price for any Valuation Date is greater than the Strike	
 
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 	 	Price, an amount equal to the excess of such Settlement Price over the Strike Price; or	
 	 	 	
 	 	(b)  If such Settlement Price is less than or equal to the Strike Price, zero.	
 	 	 	
Settlement Price:	 	For any Valuation Date, the per Share volume-weighted average price for such Valuation Date as displayed under the heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Valuation Date or if such price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent in its reasonable discretion (in each case, without regard to pre-open or after hours trading outside of any regular trading session for such Valuation Date). Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.	
 	 	 	
Settlement Date:	 	For any Exercise Date, the date defined as such in Section 6.2 of the Equity Definitions, subject to Section 9(o)(i) hereof.	
 	 	 	
Cash Settlement Election:	 	Subject to the provisions of “Method of Settlement” above, with respect to all Warrants to be exercised on the Expiration Dates, the Company can elect Cash Settlement by delivering a written notice to Bank (the “ Cash Settlement Notice ”) on or prior to the fifth (5 th ) scheduled Exchange Business Day immediately preceding the First Expiration Date, which Cash Settlement Notice shall contain:	
 	 	 	
 	 	(i)  a representation that (x) on the date of such Cash Settlement Notice, neither the Company nor any of its affiliates is in possession of any material non-public information with respect to the Company or its Shares, (y) the Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and (z) the Company has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction;	
 	 	 	
 	 	(ii)  a representation that the Company is not electing Cash Settlement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);	
 	 	 	
 	 	(iii)  an acknowledgment by the Company that (A) any transaction by Bank following the Company’s election of Cash Settlement shall be made at Bank’s sole discretion and for Bank’s own account and (B) the Company does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately;	
 	 	 	
 	 	(iv)  an agreement by the Company that, during the period commencing on the date of such Cash Settlement Notice and ending on the second Exchange Business Day following the last Settlement Date hereunder, without the prior written consent of Bank, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to, directly or indirectly (including, without limitation, by means of a derivative instrument), purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any	
 
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 	 	Shares or any security convertible into or exchangeable for the Shares in the public markets; and	
 	 	 	
 	 	(v) a representation that the assets of Company at their fair valuation exceed the liabilities of Company, including contingent liabilities; the capital of Company is adequate to conduct the business of Company; and Company has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.	
 	 	 	
Cash Settlement:	 	If Cash Settlement is applicable, on each Settlement Date, the Company shall deliver to Bank (to an account specified by Bank) the Net Share Settlement Amount for such Settlement Date.	
 	 	 	
 	 	In addition to any other requirements set forth herein, the Company agrees that it shall not have the right to elect Cash Settlement if Bank notifies the Company that, in the reasonable judgment of Bank the election of Cash Settlement or any purchases of Shares that Bank (or its affiliates) might make in connection therewith based upon the advice of counsel and as a result of events occurring after the Trade Date, would raise material risks under applicable securities laws.	
 	 	 	
Failure to Deliver:	 	Inapplicable	
 	 	 	
Other Applicable Provisions:	 	The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.	
 	 	 	
3.Additional Terms applicable to the Transaction:	
 	
Adjustments applicable to the Warrants:	 	 	
 	 	 	
Method of Adjustment:	 	Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(j) of this Confirmation and not by Section 9.1(c) of the Equity Definitions.	
 	 	 	
Extraordinary Events applicable to the Transaction:	 	 	
 	 	 	
Consequence of Merger Events	 	 	
 	 	 	
(a) Share-for-Share:	 	Alternative Obligation; provided that the Calculation Agent will determine if the Merger Event affects the theoretical value of the Transaction and if so Bank in its sole discretion may elect to make adjustments to any of the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other term necessary to reflect the characteristics (including volatility, dividend practice, borrow cost and liquidity) of the New Shares. Notwithstanding the foregoing, Cancellation and Payment shall apply in the event the New Shares are not publicly traded on a United States national securities exchange or quoted on The NASDAQ Global Select Market or The	

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 	 	NASDAQ Global Market (or their respective successors).	
 	 	 	
(b) Share-for-Other:	 	Cancellation and Payment	
 	 	 	
(c) Share-for-Combined:	 	Cancellation and Payment; provided that on or prior to the Merger Date the Bank may elect, in its sole discretion, to apply the consequence specified opposite “Share for Share” to that portion of the consideration that consists of New Shares (as determined by the Calculation Agent) and the consequence specified opposite “Share for-Other” to that portion of the consideration that consists of Other Consideration (as determined by the Calculation Agent).	
 	 	 	
In the event of any “Tender Offers” (as defined in the 2002 ISDA Equity Derivatives Definitions (the “ 2002 Definitions ”)) , the following consequences, each as defined in the 2002 Definitions and including any relevant cross references, shall apply to such Tender Offers:	
 	
(a) Share-for-Share:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
(b) Share-for-Other:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
(c) Share-for-Combined:	 	Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)	
 	 	 	
Nationalization or Insolvency:	 	Cancellation and Payment	
 	 	 	
4.                Calculation Agent:	 	Bank; provided that all determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Following any calculation by the Calculation Agent hereunder and a prior written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such prior written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such calculation. For the avoidance of doubt, nothing in this provision will require Bank to provide its proprietary models to Company.	
 
5.                Account Details:
 
(a)                                   Account for payments to Company:
 
JPMorgan Chase
New York, NY
Fed Wire:  021000021
Swift / BIC:  CHASUS33
CHIP No:  0002
CHIP UID:  280099
Account name:  Textron Inc.
Account No:  9101013655
 
Account for delivery of Shares from Company:
 
To be provided by Company
 
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(b)                                  Account for payments to Bank:
 
JPMorgan Chase Bank, National Association, New York
ABA:  021 000 021
Favour: JPMorgan Chase Bank, National Association — London
A/C:  0010962009 CHASUS33
 
Account for delivery of Shares to Bank:
 
DTC 0060
 
6.                Offices:
 
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.
 
The Office of Bank for the Transaction is:  London
 
JPMorgan Chase Bank, National Association
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
 
7.                Notices: For purposes of this Confirmation:
 
(a)                                   Address for notices or communications to Company:
 
Textron Inc.
40 Westminster Street
Providence, RI 02903
Attention: Chief Financial Officer
Telephone No.:               (401) 421-2800
Facsimile No.:                       (401) 457-3533
 
Address for notices or communications to Bank:
 
JPMorgan Chase Bank, National Association
277 Park Avenue, 11 th  Floor
New York, NY  10172
Attention: Mariusz Kwasnik
Title:  Operations Analyst
EDG Corporate Marketing
Telephone No:  (212) 623-7223
Facsimile No:   (212) 622-8534
 
8.                                        Representations and Warranties of the Company
 
The representations and warranties made by the Company pursuant to the Underwriting Agreement (the “ Underwriting Agreement ”), dated as of April 29, 2009, between Company and J.P. Morgan Securities Inc. and Goldman, Sachs & Co., as representatives of the underwriters party thereto (the “ Underwriters ”) on the “Option Closing Date” (as defined in the Underwriting Agreement), are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. The Company hereby further represents and warrants to Bank that:
 
(a)                                   Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has
 
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been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (whether considered in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
 
(b)            Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or (to the extent such agreement is material to Company and its subsidiaries taken as a whole) any of its subsidiaries is a party or by which Company or (to such extent) any of its subsidiaries is bound or to which Company or (to such extent) any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
 
(c)            No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.
 
(d)            The Shares initially issuable upon exercise of the Warrant by the net share settlement method (the “ Warrant Shares ”) have been reserved for issuance by all required corporate action of Company.  The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
 
(e)            The Company is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.
 
(f)             The Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company.
 
(g)            The Company is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
(h)            The assets used by the Company for its obligations under the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “ Code ”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.
 
(i)             There is no law, rule, regulation or regulatory order (collectively, “ Adverse Laws ”) that, as a result of the ownership or control (whether direct, beneficial, constructive or otherwise) of Shares by  JPMorgan Chase & Co. (“ Bank Parent ”) or any person controlled directly or indirectly by Bank Parent, would give rise to reporting or registration obligations or a requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or would result in a not insignificant adverse effect on Bank Parent or any such controlled person, other than any Adverse Law that applies to the ownership of equity positions generally without regard to the nature of the issuer’s business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law that applies solely as a result of the business, identity, place of business or jurisdiction of
 
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organization of the holder of the common stock (such as the Bank Holding Company Act of 1956, as amended).
 
(j)                                      Other than Textron Business Credit, Inc., which is a “Rhode Island financial institution,” and Textron Financial Corporation, which is a “Rhode Island bank holding company” but is not a bank holding company under the Bank Holding Company Act of 1956, as amended, Company is not and does not control, directly or indirectly, a bank or bank holding company or other financial institution regulated under federal or state banking law.
 
9.                                        Other Provisions:
 
(a)                                   Opinions . The Company shall deliver an opinion of counsel (including an in-house lawyer of the Company), dated as of the Trade Date, to Bank with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation.
 
(b)                                  No Reliance, etc . Each party represents that (i) it is entering into the Transaction evidenced hereby as principal (and not as agent or in any other capacity); (ii) neither the other party or parties nor any of its or their agents are acting as a fiduciary for it; (iii) it is not relying upon any representations except those expressly set forth in the Agreement or this Confirmation; (iv) it has not relied on the other party or parties for any legal, regulatory, tax, business, investment, financial, and accounting advice, and it has made its own investment, hedging, and trading decisions based upon its own judgment and not upon any view expressed by the other party or parties or any of its or their agents; and (v) it is entering into the Transaction with a full understanding of the terms, conditions and risks thereof and it is capable of and willing to assume those risks.
 
(c)                                   Repurchase Notices . The Company shall, on any day on which the Company effects any repurchase of Shares, promptly give Bank a written notice of such repurchase (a “ Repurchase Notice ”) on such day if following such repurchase, the quotient of (i) the sum of (A) the Number of Shares for the Transaction and (B) the aggregate number of Shares underlying any other warrants purchased by Bank from Company, if any, divided by (ii) the number of the Company’s outstanding Shares (such quotient expressed as a percentage, the “ Warrant Equity Percentage ”) would be (x) greater than 9.0% or (y) 0.5% greater than the Warrant Equity Percentage included in the immediately preceding Repurchase Notice. The Company agrees to indemnify and hold harmless Bank and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “ Indemnified Person ”) from and against any and all losses (including losses relating to Bank’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of the Company’s failure to provide Bank with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify the Company in writing, and the Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. The Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. The Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened
 
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proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction.
 
(d)                                  Regulation M . The Company is not, on the Trade Date or any Exercise Date, and will not be, on any day during the period commencing on such Exercise Date and ending on the second Exchange Business Day following the last Settlement Date with respect to such Exercise Date, engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of any securities of the Company.  The Company shall not, until the second Exchange Business Day immediately following the Trade Date, engage in any such distribution.
 
(e)                                   No Manipulation . The Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
 
(f)                                     Board Authorization . The Company represents that it is entering into the Transaction, solely for the purposes stated in the board resolution authorizing the Transaction and in its public disclosure. The Company further represents that there is no internal policy, whether written or oral, of the Company that would prohibit the Company from entering into any aspect of the Transaction, including, but not limited to, the issuances of Shares to be made pursuant hereto.
 
(g)                                  Transfer or Assignment . The Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Bank. Bank may transfer or assign all or any portion of its rights or obligations under the Transaction without consent of the Company to any third party with a rating for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Bank at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“ S&P ”), or A3 by Moody’s Investor Service, Inc. (“ Moody’s ”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute agency rating mutually agreed by Company and Bank. If, however, in Bank’s sole discretion, Bank is unable to effect a transfer or assignment on pricing terms reasonably acceptable to Bank and within a time period reasonably acceptable to Bank of a sufficient number of Warrants to reduce (i) Bank Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) to equal to or less than 7.5%, (ii) the Warrant Equity Percentage to equal to or less than 14.5%, and (iii) the Share Amount to equal to or less than the Post-Effective Limit (if any applies), Bank may designate any Exchange Business Day as an Early Termination Date with respect to a portion (the “ Terminated Portion ”) of the Transaction, such that (i) Bank Group’s “beneficial ownership” following such partial termination will be equal to or less than 7.5%, (ii) the Warrant Equity Percentage following such partial termination will be equal to or less than 14.5%, and (iii) the Share Amount following such partial termination will be equal to or less than such Post-Effective Limit. In the event that Bank so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the Terminated Portion, (ii) the Company shall be
 
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the sole Affected Party with respect to such partial termination and (iii) such Transaction shall be the only Terminated Transaction (and, for the avoidance of doubt, the provision of paragraph 9(n) shall apply to any amount that is payable by the Company to Bank pursuant to this sentence). Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Bank to purchase, sell, receive or deliver any Shares or other securities to or from the Company, Bank may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Bank’s obligations in respect of the Transaction and any such designee may assume such obligations. Bank shall be discharged of its obligations to the Company to the extent of any such performance.  “ Bank Group ” means Bank and each business unit of its affiliates subject to aggregation with Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder.  The “ Share Amount ” as of any day is the number of Shares that Bank and any person whose ownership position would be aggregated with that of Bank (Bank or any such person, a “ Bank Person ”) under any law, rule, regulation or regulatory order that for any reason becomes applicable to ownership of Shares after the Trade Date (“ Applicable Laws ”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership of under the Applicable Laws, as determined by Bank in its reasonable discretion. The “ Post-Effective Limit ” means (x) the minimum number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval from any person or entity) of a Bank Person, or would result in an adverse effect on a Bank Person, under the Applicable Laws, as determined by Bank in its reasonable discretion, minus (y) 1% of the number of Shares outstanding.  If at any time Bank determines, in its reasonable opinion based upon advice of counsel, that as a result of Company’s direct or indirect interest in, or direct or indirect control of, either Textron Business Credit, Inc. or Textron Financial Corporation, any state or federal laws are or have become applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the Share Amount shall be determined as set forth above in the definitions of those terms, irrespective of whether or not such laws have been applicable to ownership of Shares on or prior to the Trade Date.
 
(h)                                  Damages . Neither party shall be liable under Section 6.10 of the Equity Definitions for special, indirect or consequential damages, even if informed of the possibility thereof, except as specifically set forth otherwise herein.
 
(i)                                      Early Unwind . In the event the sale of “Option Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason or the Company fails to deliver to Bank opinions of counsel as required pursuant to Section 9(a) by the close of business in New York on May 5, 2009 (or such later date as agreed upon by the parties, May 5, 2009 or such later date the “ Early Unwind Date ”), the Transaction shall automatically terminate (the “Early Unwind ”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Bank and the Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date; provided that, other than to the extent the Early Unwind Date occurred as a result of the breach of the Underwriting Agreement by the Underwriters, the Company shall reimburse Bank, in cash or Shares, for any costs or expenses (including market losses) relating to the unwinding of its or its affiliate’s hedging activities in connection with the Transaction (including any loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position). The amount of any such reimbursement shall be determined by Bank in its sole good faith discretion. Bank shall notify the Company of such amount and the Company shall pay such amount in immediately available funds or deliver Shares on the Early Unwind Date. Bank and the Company represent and acknowledge to the other that, subject to the proviso included in this paragraph, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
 
(j)                                      Dividends . If at any time during the period from but excluding the Trade Date, to and including the final Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares
 
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(an “ Ex-Dividend Date ”), and that dividend is greater than the Regular Dividend on a per Share basis then the Calculation Agent shall adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement to preserve the fair value of the Warrants to Bank after taking into account such dividend. “ Regular Dividend ” shall mean USD 0.02 per Share per quarter.
 
(k)                                   Role of Agent .   Each party agrees and acknowledges that (i) J.P. Morgan Securities Inc. (“ JPMSI ”), an affiliate of JPMorgan Chase Bank, National Association , has acted solely as agent and not as principal with respect to this Transaction and (ii) JPMSI has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction.
 
(l)                                      Additional Provisions .
 
(i)                                      The first paragraph of Section 9.1(c) of the Equity Definitions is hereby amended to read as follows: “(c) If “Calculation Agent Adjustment” is specified as the method of adjustment in the Confirmation of a Share Option Transaction, then following the declaration by the Issuer of the terms of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or Warrants and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the sentence immediately preceding Section 9.1(c)(ii) is hereby amended by deleting the words “diluting or concentrative”.
 
(ii)            Section 9.1(e)(vi) of the Equity Definitions is hereby amended by deleting the words “other similar” between “any” and “event”; deleting the words “diluting or concentrative” and replacing them with “material”; and adding the following words at the end of the sentence “or Warrants”.
 
(iii)           Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the third line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the period at the end of subsection (ii) thereof and inserting the following words therefor “or (C) at Bank’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the Agreement with respect to that Issuer.”
 
(iv)           Notwithstanding Section 9.7 of the Equity Definitions, everything in the first paragraph of Section 9.7(b) of the Equity Definitions after the words “Calculation Agent” in the third line through the remainder of such Section 9.7 shall be deleted and replaced with the following:
 
“based on an amount representing the Calculation Agent’s determination of the fair value to Buyer of an option with terms that would preserve for Buyer the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Option Value Event.”
 
(v)                                  Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction or any portion of the Transaction, (1) Bank shall have the right to designate such event as an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, and (2) the Company shall be deemed the sole Affected Party and the Transaction or such portion of the Transaction shall be deemed the sole Affected Transaction:
 
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(A)                               A “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, any of its subsidiaries or its or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of the common equity of the Company representing more than 50% of the voting power of such common equity.
 
(B)            Consummation of (A)  any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets or (B)  any share exchange, consolidation or merger of the Company pursuant to which the Shares will be converted into cash, securities or other property or any conveyance, transfer, sale, lease or other disposition in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than one of its subsidiaries; provided, however, that a transaction where the holders of more than 50% of all classes of common equity of the Company immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee immediately after such event shall not be an Additional Termination Event;
 
(C)            If (I) the directors who were members of Company’s board of directors on the Trade Date or (II) the directors who become members of Company’s board of directors subsequent to that date and whose election, appointment or nomination for election by Company stockholders is duly approved by a majority of the continuing directors on Company’s board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by Company on behalf of its entire board of directors in which such individual is named as nominee for director, cease to constitute at least a majority of Company’s board of directors.
 
(D)           The Company defaults on any indebtedness with an original aggregate principal amount of at least USD 125 million and such default results in any principal and interest on such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable.
 
(E)            At any time during the period from and including the Trade Date, to and including the final Expiration Date, the Shares cease to be listed or quoted on the Exchange for any reason (other than a Merger Event as a result of which the shares of common stock underlying the Warrants are listed or quoted on the New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) (each, a “ Successor Exchange” )) and are not immediately re-listed or quoted as of the date of such de-listing on a Successor Exchange.
 
(F)            On or after the Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives Definitions as published by ISDA (the “ 2002 Definitions ”), with any reference in such definition to “Shares” being replaced with references to “Hedge Position(s)” and without regard to clause (Y) of such definition) shall have occurred.
 
Notwithstanding the forgoing, a transaction set forth in clauses (A) or (B) above will not constitute an Additional Termination Event if at least 90% of the consideration, excluding cash payments for fractional shares, in such transaction or transactions consists
 
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of shares of common stock listed on a national securities exchange, including the New York Stock Exchange, which will be so listed when issued or exchanged in connection with such transaction or transactions.
 
For the avoidance of doubt, in determining the Close-out Amount pursuant to Section 6(e) of the Agreement, the Determining Party shall act in good faith and a commercially reasonable manner, and, upon request, the Determining Party shall provide to the other party a statement showing in reasonable detail, such calculations (including any quotations, market data or information from internal sources used in making such calculation); provided that the Determining Party shall not be obligated to disclose any proprietary model used for such calculation.
 
(m)                                No Collateral or Setoff . Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of the Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between the parties hereto, by operation of law or otherwise. Notwithstanding anything to the contrary in the Equity Definitions, Bank shall have no obligation hereunder or under the Agreement to make any delivery or payment to the Company.
 
(n)                                  Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events . If, in respect of the Transaction, an amount is payable by the Company to Bank, (i) pursuant to Section 9.7 of the Equity Definitions or Section 12.3 of the 2002 Definitions (except in the event of a Nationalization, Insolvency, Tender Offer or Merger Event, in each case, in which the consideration to be paid to holders of Shares consists solely of cash) or (ii) pursuant to Sections 6(d) and 6(e) of the Agreement (except in the event of an Event of Default in which the Company is the Defaulting Party or a Termination Event in which the Company is the Affected Party, other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement in each case that resulted from an event or events outside the Company’s control) (a “ Payment Obligation ”), the Company may, in its sole discretion, satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) and shall give irrevocable telephonic notice to Bank, confirmed in writing within one Currency Business Day, no later than 12:00 p.m. New York local time on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable; provided that if the Company does not validly elect to satisfy its Payment Obligation by the Share Termination Alternative, Bank shall have the right to require the Company to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding the Company’s election to the contrary.

Share Termination Alternative:	 	Applicable and means that the Company shall deliver to Bank the Share Termination Delivery Property on the date (the “ Share Termination Payment Date ”) when the Payment Obligation would otherwise be due, subject to paragraph (p)(i) below, in satisfaction, subject to paragraph (p)(ii) below, of the Payment Obligation in the manner reasonably requested by Bank free of payment.	
 	 	 	
Share Termination Delivery Property:	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.	
 
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Share Termination Unit Price:	 	The value to Bank of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to the Company at the time of notification of the Payment Obligation. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in paragraph (p)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, the Tender Offer Date, the date of the occurrence of the Nationalization or Insolvency, or Early Termination Date, as applicable.	
 	 	 	
Share Termination Delivery Unit:	 	In the case of a Termination Event or Event of Default, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event. If such Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.	
 	 	 	
Failure to Deliver:	 	Inapplicable	
 	 	 	
Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 (as modified above) of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction.	
 
(o)                                  Registration/Private Placement Procedures . If, in the reasonable opinion of Bank based upon advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Bank hereunder, such Shares or Share Termination Delivery Property would be in the hands of Bank subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such
 
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Shares or Share Termination Delivery Property, “ Restricted Shares ”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of the Company, unless waived by Bank. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, the Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Daily Number of Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Daily Number of Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
 
(i)                                      If the Company elects to settle the Transaction pursuant to this clause (i) (a “ Private Placement Settlement ”), then delivery of Restricted Shares by the Company shall be effected pursuant to customary private placement procedures with respect to such Restricted Shares of similar size in form and substance reasonably acceptable to Bank; provided that the Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by the Company to Bank (or any affiliate designated by Bank) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Bank (or any such affiliate of Bank). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Bank, due diligence rights (for Bank or any designated buyer of the Restricted Shares by Bank), opinions and certificates, and such other documentation as is customary for private placement agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. In the case of a Private Placement Settlement, Bank shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the amount of such Restricted Shares to be delivered to Bank hereunder; provided that in no event such number shall be greater than 1.8 times the Number of Shares (the “ Maximum Amount ”). Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Bank to the Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to paragraph (o) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above).
 
(ii)                                   If the Company elects to settle the Transaction pursuant to this clause (ii) (a “ Registration Settlement ”), then the Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Bank, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements with respect to companies of comparable size, maturity and line of business, all reasonably acceptable to Bank. If Bank, in its sole reasonable discretion,
 
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is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Bank is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “ Resale Period ”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) any Settlement Date in the case of an exercise of Warrants prior to the First Expiration Date pursuant to Section 2 above, (y) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to paragraph (o) above or (z) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Bank completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, the Company shall transfer to Bank by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the “ Additional Amount ”) in cash or in a number of Shares (“ Make-whole Shares ”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If the Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall the Company deliver a number of Restricted Shares greater than the Maximum Amount.
 
(iii)           Without limiting the generality of the foregoing, the Company agrees that any Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank and (ii) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) has elapsed after any Settlement Date for such Restricted Shares, the Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Bank (or such affiliate of Bank) to the Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Bank (or such affiliate of Bank).
 
If (x) the Company shall fail to effectuate the Private Placement Settlement as set forth in clause (i) or (y) the Company shall fail to effectuate the Registration Settlement as set forth in clause (ii) and the Company shall fail to effectuate the Private Placement Settlement following its failure to effectuate the Registration Settlement, then either the failure set forth in clause (x) or the failure set forth in clause (y) shall constitute an Event of Default with respect to which the Company shall be the Defaulting Party.
 
(p)                                  Limit on Beneficial Ownership . Notwithstanding anything to the contrary in the Agreement or this Confirmation, Bank may not exercise any Warrant hereunder, have the “right to acquire” (within the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not
 
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apply with respect to any Warrant hereunder if, upon receipt of such Shares, (i)  the Share Amount would exceed the Post-Effective Limit, or (ii)  the “beneficial ownership” (within the meaning of Section 13 or Section 16 of the Exchange Act and the rules promulgated thereunder) of Shares by Bank Group would be equal to or greater than the lesser of (A) 4.5% of the then outstanding Shares and (B) 12,013,276 Shares (the “ Threshold Number of Shares ”) .  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Share Amount would exceed the Post-Effective Limit, or (ii) Bank Group would directly or indirectly so beneficially own in excess of the Threshold Number of Shares.  If any delivery owed to Bank hereunder is not made, in whole or in part, as a result of this provision, the Company’s obligation to make such delivery shall not be extinguished and the Company shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Bank gives notice to the Company that such delivery would not result in (i) the Share Amount exceeding the Post-Effective Limit, or (ii) Bank Group directly or indirectly beneficially owning in excess of the Threshold Number of Shares.
 
(q)                                  Share Deliveries . The Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Bank will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company) shall be eligible for resale under Rule 144 of the Securities Act and the Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Property. The Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to the Company), may be transferred by and among Bank and its affiliates and the Company shall effect such transfer without any further action by Bank. Notwithstanding anything to the contrary herein, the Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of the Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of the Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Property.
 
(r)                                     Hedging Disruption Event . The occurrence of a Hedging Disruption Event will constitute an Additional Termination Event under the Agreement permitting Bank to terminate the Transaction or any portion of the Transaction, with the Company as the sole Affected Party and the Transaction or such portion of the Transaction as the sole Affected Transaction.
 
“ Hedging Disruption Event ” means with respect to Bank, as determined in its reasonable discretion, the inability or impracticality, due to market illiquidity, illegality, lack of hedging transactions or credit worthy market participants or other similar events, to establish, re-establish or maintain any transactions necessary or advisable to hedge, directly or indirectly, the equity price risk of entering into and performing under the Transaction on terms including costs reasonable to Bank or an affiliate in its reasonable discretion, including (x) the event that at any time Bank reasonably concludes that it or any of its affiliates are unable to establish, re-establish or maintain a full hedge of its position in respect of the Transaction through share borrowing arrangements on terms including costs deemed reasonable to Bank in its reasonable discretion and
 
18

 
(y) the event where upon Bank or its affiliate would incur a materially increased cost in establishing, re-establishing or maintaining a full hedge of the equity price risk (including without limitation the volatility risk) in respect of the Transaction directly or indirectly as a result of actions taken by the Company. For the avoidance of doubt, the parties hereto agree that if (i) Bank reasonably determines that it is unable to borrow Shares to hedge its exposure with respect to the Transaction at a rate of borrowing that is less than 100 basis points or (ii) Bank, in its good faith reasonable judgment, determines that it cannot hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Bank), an Additional Termination Event under the Agreement shall occur with the Company as the sole Affected Party and the Transaction as the sole Affected Transaction.
 
(s)                                   Maximum Share Delivery . Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will the Company be required to deliver more than the Maximum Amount of Shares in the aggregate to Bank in connection with the Transaction, subject to the provisions below regarding Deficit Shares.  In the event the Company shall not have delivered the full number of Shares otherwise due in connection with the Transaction as a result of the first sentence of this paragraph relating to the Maximum Amount (such deficit, the “ Deficit Shares ”), the Company shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by the Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant delivery date become no longer so reserved and (iii) the Company additionally authorizes any unissued Shares that are not reserved for other transactions. The Company shall immediately notify Bank of the occurrence of any of the foregoing events (including the aggregate number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver the Applicable Percentage of such aggregate number of Shares thereafter.
 
(t)                                     Right to Extend . Bank may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Bank determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Bank’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Bank to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Bank were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Bank.
 
(u)                                  Status of Claims in Bankruptcy . Bank acknowledges and agrees that this Confirmation is not intended to convey to Bank rights with respect to the Transaction that are senior to the claims of common stockholders of the Company in any U.S. bankruptcy proceedings of the Company; provided that nothing herein shall limit or shall be deemed to limit Bank’s right to pursue remedies in the event of a breach by the Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Bank’s rights in respect of any transactions other than the Transaction.
 
(v)                                  Governing Law; Exclusive Jurisdiction . For the Agreement and this Confirmation, New York law (without reference to choice of law doctrine to the extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and replacing them with the word “exclusive”, and (ii)  inserting after the word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.
 
19

 
(w)                                Waiver of Jury Trial . Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
 
(x)                                    Tax Disclosure . Effective from the date of commencement of discussions concerning the Transaction, the Company and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure.
 
(y)                                  Securities Contract; Swap Agreement . The parties hereto intend for:  (a) the Transaction to be a “securities contract” and a “swap agreement” and the Agreement to be a “master netting agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “ Bankruptcy Code ”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e), 546(g), 555 and546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” as described in the Bankruptcy Code; and (c) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.
 
20

 
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	Very truly yours,	 	
 	 	 	 	
 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION	

 	 	By:	/s/ Michael O’Donovan	
 	 	Authorized Signatory	 	
 	 	Name:	 	

Accepted and confirmed	 	 	 	
as of the Trade Date:	 	 	 	

TEXTRON INC.	 	 	 	

By:	/s/ Mary F. Lovejoy	 	 	 	
Authorized Signatory	 	 	 	
Name: Mary F. Lovejoy	 	 	 	

 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
Schedule A
 
For each Expiration Date, the Daily Number of Warrants is set forth below.

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
August 1, 2013	 	50,794	 	
August 2, 2013	 	50,794	 	
August 5, 2013	 	50,794	 	
August 6, 2013	 	50,794	 	
August 7, 2013	 	50,794	 	
August 8, 2013	 	50,794	 	
August 9, 2013	 	50,794	 	
August 12, 2013	 	50,794	 	
August 13, 2013	 	50,794	 	
August 14, 2013	 	50,794	 	
August 15, 2013	 	50,794	 	
August 16, 2013	 	50,794	 	
August 19, 2013	 	50,794	 	
August 20, 2013	 	50,794	 	
August 21, 2013	 	50,794	 	
August 22, 2013	 	50,794	 	
August 23, 2013	 	50,794	 	
August 26, 2013	 	50,794	 	
August 27, 2013	 	50,794	 	
August 28, 2013	 	50,794	 	
August 29, 2013	 	50,794	 	
August 30, 2013	 	50,794	 	
September 3, 2013	 	50,794	 	
September 4, 2013	 	50,794	 	
September 5, 2013	 	50,794	 	
September 6, 2013	 	50,794	 	
September 9, 2013	 	50,794	 	
September 10, 2013	 	50,794	 	
September 11, 2013	 	50,794	 	
September 12, 2013	 	50,794	 	
September 13, 2013	 	50,794	 	
September 16, 2013	 	50,794	 	
September 17, 2013	 	50,794	 	
September 18, 2013	 	50,794	 	
September 19, 2013	 	50,794	 	
September 20, 2013	 	50,794	 	
September 23, 2013	 	50,794	 	
September 24, 2013	 	50,794	 	
September 25, 2013	 	50,794	 	
September 26, 2013	 	50,794	 	
September 27, 2013	 	50,794	 	
 
A-1

 

Expiration Date	 	Daily Number of Warrants	 	
 	 	 	 	
September 30, 2013	 	50,794	 	
October 1, 2013	 	50,794	 	
October 2, 2013	 	50,794	 	
October 3, 2013	 	50,779	 	
 
A-2

Exhibit 10.9
 
EXECUTION VERSION
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004

To: Textron Inc.	
40 Westminster Street	
Providence, RI 02903	
Attention: Chief Financial Officer	
Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	

Re:	Issuer Warrant Transaction Reformation Agreement (this “Reformation Agreement”)	
A/C:	028320281	
Ref. No.:	SDB1630442185	
 
WHEREAS, Textron Inc. (the “ Company ”) and Goldman, Sachs & Co. (“ Bank ”) entered into the Issuer Warrant Transaction (the “ Transaction ”)  pursuant to a letter agreement dated April 29, 2009 (the “ Confirmation ”) with the mutual understanding that the Confirmation would not require approval of the Company’s shareholders under the rules of the New York Stock Exchange (the “ NYSE ”);
 
WHEREAS, the Company’s counsel has subsequently been informed by representatives of the NYSE that approval of the Company’s shareholders may be required if the Company elects to settle the Transaction pursuant to Section 9(o)(i) of the Confirmation; and
 
WHEREAS, the parties wish to reform the Confirmation to reflect their mutual intention and to avoid any doubt that settlement of the Transaction pursuant to Section 9(o)(i) of the Confirmation does not require approval of the Company’s shareholders under the rules of the NYSE;
 
NOW THEREFORE, the parties agree as follows:
 
1.                                      As of the “Trade Date” (as defined in the Confirmation), the definition of “Maximum Amount” in Section 9(o)(i) of the Confirmation shall be “1.45 times the Number of Shares,” and all references in the Confirmation to the “Maximum Amount” shall be references to the “Maximum Amount” as so defined.
 
2.                                      Except as set forth in Section 1 above, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.
 
3.                                      This Reformation Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.
 
4.                                      The provisions of this Reformation Agreement shall be governed by New York law (without reference to choice of law doctrine).

 
Company hereby agrees (a) to check this Reformation Agreement carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Company with respect to this Reformation Agreement, by manually signing this Reformation Agreement or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	Very truly yours,	
 	 	 	
 	 	GOLDMAN, SACHS & CO.	

 	 	By:	/s/ Daniel W. Kopper	
 	 	Authorized Signatory	
 	 	Name: Daniel W. Kopper	
 	 	Vice President	
 	 	 	
Accepted and confirmed:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

Date: May 4, 2009	 	 	

Exhibit 10.10

 
EXECUTION VERSION
 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

To: Textron Inc.	
40 Westminster Street	
Providence, RI 02903	
Attention: Chief Financial Officer	
Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	
 
Re:                              Issuer Warrant Transaction Reformation Agreement (this “Reformation Agreement”)
 
WHEREAS, Textron Inc. (the “ Company ”) and JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. as its agent, entered into the Issuer Warrant Transaction (the “ Transaction ”)  pursuant to a letter agreement dated April 29, 2009 (the “ Confirmation ”) with the mutual understanding that the Confirmation would not require approval of the Company’s shareholders under the rules of the New York Stock Exchange (the “ NYSE ”);
 
WHEREAS, the Company’s counsel has subsequently been informed by representatives of the NYSE that approval of the Company’s shareholders may be required if the Company elects to settle the Transaction pursuant to Section 9(o)(i) of the Confirmation; and
 
WHEREAS, the parties wish to reform the Confirmation to reflect their mutual intention and to avoid any doubt that settlement of the Transaction pursuant to Section 9(o)(i) of the Confirmation does not require approval of the Company’s shareholders under the rules of the NYSE;
 
NOW THEREFORE, the parties agree as follows:
 
1.                                      As of the “Trade Date” (as defined in the Confirmation), the definition of “Maximum Amount” in Section 9(o)(i) of the Confirmation shall be “1.45 times the Number of Shares,” and all references in the Confirmation to the “Maximum Amount” shall be references to the “Maximum Amount” as so defined.
 
2.                                      Except as set forth in Section 1 above, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.
 
3.                                      This Reformation Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.
 
4.                                      The provisions of this Reformation Agreement shall be governed by New York law (without reference to choice of law doctrine).
 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Reformation Agreement and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	Very truly yours,	
 	 	 	
 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	

 	 	By:	/s/ Jeffrey Zajkowski	
 	 	Authorized Signatory	
 	 	Name: Jeffrey Zajkowski	

Accepted and confirmed:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

Date: May 4, 2009	 	 	

Exhibit 10.11
 
EXECUTION VERSION
 
Goldman, Sachs & Co.
One New York Plaza
New York, NY 10004

To: Textron Inc.	
40 Westminster Street	
Providence, RI 02903	
Attention: Chief Financial Officer	
Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	

Re:	Additional Issuer Warrant Transaction Reformation Agreement (this “Reformation Agreement”)	
A/C:	028320281	
Ref. No.:	SDB1630442185	
 
WHEREAS, Textron Inc. (the “ Company ”) and Goldman, Sachs & Co. (“ Bank ”) entered into the Additional Issuer Warrant Transaction (the “ Transaction ”)  pursuant to a letter agreement dated April 30, 2009 (the “ Confirmation ”) with the mutual understanding that the Confirmation would not require approval of the Company’s shareholders under the rules of the New York Stock Exchange (the “ NYSE ”);
 
WHEREAS, the Company’s counsel has subsequently been informed by representatives of the NYSE that approval of the Company’s shareholders may be required if the Company elects to settle the Transaction pursuant to Section 9(o)(i) of the Confirmation; and
 
WHEREAS, the parties wish to reform the Confirmation to reflect their mutual intention and to avoid any doubt that settlement of the Transaction pursuant to Section 9(o)(i) of the Confirmation does not require approval of the Company’s shareholders under the rules of the NYSE;
 
NOW THEREFORE, the parties agree as follows:
 
1.                                     As of the “Trade Date” (as defined in the Confirmation), the definition of “Maximum Amount” in Section 9(o)(i) of the Confirmation shall be “1.45 times the Number of Shares,” and all references in the Confirmation to the “Maximum Amount” shall be references to the “Maximum Amount” as so defined.
 
2.                                     Except as set forth in Section 1 above, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.
 
3.                                     This Reformation Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.
 
4.                                     The provisions of this Reformation Agreement shall be governed by New York law (without reference to choice of law doctrine).

 
Company hereby agrees (a) to check this Reformation Agreement carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Company with respect to this Reformation Agreement, by manually signing this Reformation Agreement or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.

 	Very truly yours,	
 	 	 	
 	 	GOLDMAN, SACHS & CO.	

 	 	By:	/s/ Daniel W. Kopper	
 	 	Authorized Signatory	
 	 	Name: Daniel W. Kopper	
 	 	Vice President	
 	 	 	
Accepted and confirmed:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

Date: May 4, 2009	 	 	

Exhibit 10.12

 
EXECUTION VERSION
 
JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

To: Textron Inc.	
40 Westminster Street	
Providence, RI 02903	
Attention: Chief Financial Officer	
Telephone No.:	(401) 421-2800	
Facsimile No.:	(401) 457-3533	
 
Re:                              Additional Issuer Warrant Transaction Reformation Agreement (this “Reformation Agreement”)
 
WHEREAS, Textron Inc. (the “ Company ”) and JPMorgan Chase Bank, National Association, London Branch (“ Bank ”), represented by J.P. Morgan Securities Inc. as its agent, entered into the Additional Issuer Warrant Transaction (the “ Transaction ”)  pursuant to a letter agreement dated April 30, 2009 (the “ Confirmation ”) with the mutual understanding that the Confirmation would not require approval of the Company’s shareholders under the rules of the New York Stock Exchange (the “ NYSE ”);
 
WHEREAS, the Company’s counsel has subsequently been informed by representatives of the NYSE that approval of the Company’s shareholders may be required if the Company elects to settle the Transaction pursuant to Section 9(o)(i) of the Confirmation; and
 
WHEREAS, the parties wish to reform the Confirmation to reflect their mutual intention and to avoid any doubt that settlement of the Transaction pursuant to Section 9(o)(i) of the Confirmation does not require approval of the Company’s shareholders under the rules of the NYSE;
 
NOW THEREFORE, the parties agree as follows:
 
1.                                       As of the “Trade Date” (as defined in the Confirmation), the definition of “Maximum Amount” in Section 9(o)(i) of the Confirmation shall be “1.45 times the Number of Shares,” and all references in the Confirmation to the “Maximum Amount” shall be references to the “Maximum Amount” as so defined.
 
2.                                       Except as set forth in Section 1 above, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.
 
3.                                       This Reformation Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.
 
4.                                       The provisions of this Reformation Agreement shall be governed by New York law (without reference to choice of law doctrine).
 
JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746
Registered Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority

 
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Reformation Agreement and returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622 8519 .

 	Very truly yours,	
 	 	 	
 	 	J.P. MORGAN SECURITIES INC., as agent for JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	

 	 	By:	/s/ Jeffrey Zajkowski	
 	 	Authorized Signatory	
 	 	Name: Jeffrey Zajkowski	

Accepted and confirmed:	 	 	

TEXTRON INC.	 	 	

By:	/s/ Mary F. Lovejoy	 	 	
Authorized Signatory	 	 	
Name: Mary F. Lovejoy	 	 	

Date: May 4, 2009