UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
[ x ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 	
For the quarterly period ended April 3, 2010

OR
 
[    ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 
For the transition period from   to   .

Commission File Number 1-5480

Textron Inc.
(Exact name of registrant as specified in its charter)

Delaware	 	05-0315468	
(State or other jurisdiction of incorporation or organization)	 	(I.R.S. Employer Identification No.)	

40 Westminster Street, Providence, RI  02903
(Address of principal executive offices)

(401) 421-2800
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   ü     No      

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   ü     No      

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer  [   ü ]	  Accelerated filer  [   ]	  Non-accelerated filer  [   ]	  Smaller reporting company  [   ]	

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes          No   ü

As of April 17, 2010, there were 273,316,122 shares of common stock outstanding.

 

 TEXTRON INC.

INDEX

 	 	Page	 	
PART I.	FINANCIAL INFORMATION	 	 	
 	 	 	 	
Item 1.	Financial Statements	 	 	
 	Consolidated Statements of Operations (Unaudited)	3	 	
 	Consolidated Balance Sheets (Unaudited)	4	 	
 	Consolidated Statements of Cash Flows (Unaudited)	5	 	
 	Notes to the Consolidated Financial Statements (Unaudited)	 	 	
 	Note 1:	Basis of Presentation	7	 	
 	Note 2:	Special Charges	7	 	
 	Note 3:	Share-based Compensation	9	 	
 	Note 4:	Retirement Plans	10	 	
 	Note 5:	Discontinued Operations	10	 	
 	Note 6:	Comprehensive Income	11	 	
 	Note 7:	Income Tax Expense (Benefit)	11	 	
 	Note 8:	Earnings per Share	11	 	
 	Note 9:	Accounts Receivable and Finance Receivables	12	 	
 	Note 10:	Inventories	13	 	
 	Note 11:	Debt	13	 	
 	Note 12:	Guarantees and Indemnifications	13	 	
 	Note 13:	Commitments and Contingencies	14	 	
 	Note 14:	Fair Values of Assets and Liabilities	14	 	
 	Note 15:	Derivatives	17	 	
 	Note 16:	Segment Information	19	 	
Item 1A.	Risk Factors	20	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21	 	
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29	 	
Item 4.	Controls and Procedures	30	 	
 	 	 	 	
PART II.	OTHER INFORMATION	 	 	
 	 	 	 	
Item 1.	Legal Proceedings	30	 	
Item 5.	Other Information	31	 	
Item 6.	Exhibits	32	 	
 	Signatures	33	 	

 

 

 PART I.  FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

TEXTRON INC.
Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)

 	 	Three Months Ended	 	
 	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	 	 	 	 	 	
Manufacturing revenues	 	$	 2,134	 	 	$	 2,404	 	
Finance revenues	 	 	76	 	 	 	 122	 	
 Total revenues	 	 	2,210	 	 	 	 2,526	 	
Costs, expenses and other	 	 	 	 	 	 	 	 	
Cost of sales	 	 	1,776	 	 	 	 1,999	 	
Selling and administrative expense	 	 	287	 	 	 	 346	 	
Provision for losses on finance receivables	 	 	55	 	 	 	 76	 	
Interest expense	 	 	71	 	 	 	 83	 	
Interest income	 	 	(2	)	 	 	 (1	)	
Gain on sale of assets	 	 	—	 	 	 	 (50	)	
Special charges	 	 	12	 	 	 	 32	 	
 Total costs, expenses and other	 	 	2,199	 	 	 	 2,485	 	
Income from continuing operations before income taxes	 	 	11	 	 	 	 41	 	
Income tax expense (benefit)	 	 	15	 	 	 	 (2	)	
Income (loss) from continuing operations	 	 	(4	)	 	 	 43	 	
Income (loss) from discontinued operations, net of income taxes	 	 	(4	)	 	 	 43	 	
Net income (loss)	 	$	 (8	)	 	$	 86	 	
Basic earnings per share	 	 	 	 	 	 	 	 	
Continuing operations	 	$	 (0.01	)	 	$	 0.18	 	
Discontinued operations	 	 	(0.02	)	 	 	 0.17	 	
 Basic earnings per share	 	$	 (0.03	)	 	$	 0.35	 	
Diluted earnings per share	 	 	 	 	 	 	 	 	
Continuing operations	 	$	 (0.01	)	 	$	 0.18	 	
Discontinued operations	 	 	(0.02	)	 	 	 0.17	 	
 Diluted earnings per share	 	$	 (0.03	)	 	$	 0.35	 	
Dividends per share	 	 	 	 	 	 	 	 	
Common stock	 	$	 0.02	 	 	$	 0.02	 	

See Notes to the consolidated financial statements.

3

 TEXTRON INC.
Consolidated Balance Sheets (Unaudited)
(Dollars in millions, except share data)
 	 	April 3,
2010	 	 	January 2,
2010	 	
Assets	 	 	 	 	 	 	
Manufacturing group	 	 	 	 	 	 	
Cash and equivalents	 	$	 1,430	 	 	$	 1,748	 	
Accounts receivable, net	 	 	 959	 	 	 	 894	 	
Inventories	 	 	 2,475	 	 	 	 2,273	 	
Other current assets	 	 	 1,155	 	 	 	 985	 	
 Total current assets	 	 	 6,019	 	 	 	 5,900	 	
Property, plant and equipment, less accumulated
 depreciation and amortization of $2,693 and $2,666	 	 	 1,940	 	 	 	 1,968	 	
Goodwill	 	 	 1,612	 	 	 	 1,622	 	
Other assets	 	 	 1,893	 	 	 	 1,938	 	
 Total Manufacturing group assets	 	 	 11,464	 	 	 	 11,428	 	
Finance group	 	 	 	 	 	 	 	 	
Cash and equivalents	 	 	 79	 	 	 	 144	 	
Finance receivables held for investment, net	 	 	 5,200	 	 	 	 5,865	 	
Finance receivables held for sale	 	 	 721	 	 	 	 819	 	
Other assets	 	 	 646	 	 	 	 684	 	
 Total Finance group assets	 	 	 6,646	 	 	 	 7,512	 	
Total assets	 	$	 18,110	 	 	$	 18,940	 	
Liabilities and shareholders’ equity	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	
Manufacturing group	 	 	 	 	 	 	 	 	
Current portion of long-term debt	 	$	 124	 	 	$	 134	 	
Accounts payable	 	 	 747	 	 	 	 569	 	
Accrued liabilities	 	 	 1,848	 	 	 	 2,039	 	
 Total current liabilities	 	 	 2,719	 	 	 	 2,742	 	
Other liabilities	 	 	 3,257	 	 	 	 3,253	 	
Long-term debt	 	 	 3,422	 	 	 	 3,450	 	
 Total Manufacturing group liabilities	 	 	 9,398	 	 	 	 9,445	 	
Finance group	 	 	 	 	 	 	 	 	
Other liabilities	 	 	 955	 	 	 	 866	 	
Deferred income taxes	 	 	 105	 	 	 	 136	 	
Debt	 	 	 4,811	 	 	 	 5,667	 	
 Total Finance group liabilities	 	 	 5,871	 	 	 	 6,669	 	
 Total liabilities	 	 	 15,269	 	 	 	 16,114	 	
Shareholders’ equity	 	 	 	 	 	 	 	 	
Common stock	 	 	 35	 	 	 	 35	 	
Capital surplus	 	 	 1,355	 	 	 	 1,369	 	
Retained earnings	 	 	 2,960	 	 	 	 2,973	 	
Accumulated other comprehensive loss	 	 	 (1,313	)	 	 	 (1,321	)	
 	 	 	 3,037	 	 	 	 3,056	 	
Less cost of treasury shares	 	 	 196	 	 	 	 230	 	
Total shareholders’ equity	 	 	 2,841	 	 	 	 2,826	 	
Total liabilities and shareholders’ equity	 	$	 18,110	 	 	$	 18,940	 	
Common shares outstanding (in thousands)	 	 	 273,230	 	 	 	 272,272	 	
 
See Notes to the consolidated financial statements.
 
4

 TEXTRON INC.
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended April 3, 2010 and April 4, 2009, respectively
(In millions)

 	 	Consolidated	 	
 	 	2010	 	 	2009	 	
Cash flows from operating activities:	 	 	 	 	 	 	
Net income (loss)	 	$	 (8	)	 	$	 86	 	
Income (loss) from discontinued operations	 	 	(4	)	 	 	43	 	
Income (loss) from continuing operations	 	 	(4	)	 	 	43	 	
Adjustments to reconcile income (loss) from continuing operations to net cash	 	 	 	 	 	 	 	 	
 provided by (used in) operating activities:	 	 	 	 	 	 	 	 	
 Dividends received from Finance group	 	 	—	 	 	 	—	 	
 Capital contributions paid to Finance group	 	 	—	 	 	 	—	 	
 Non-cash items:	 	 	 	 	 	 	 	 	
 Depreciation and amortization	 	 	90	 	 	 	96	 	
 Provision for losses on finance receivables held for investment	 	 	55	 	 	 	76	 	
 Portfolio losses on finance receivables	 	 	28	 	 	 	10	 	
 Other, net	 	 	31	 	 	 	26	 	
 Deferred income taxes	 	 	(13	)	 	 	(113	)	
 Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
 Accounts receivable, net	 	 	(76	)	 	 	41	 	
 Inventories	 	 	(211	)	 	 	(248	)	
 Other assets	 	 	45	 	 	 	(17	)	
 Accounts payable	 	 	184	 	 	 	(97	)	
 Accrued and other liabilities	 	 	(297	)	 	 	(11	)	
 Captive finance receivables, net	 	 	78	 	 	 	39	 	
 Other operating activities, net	 	 	1	 	 	 	(6	)	
Net cash provided by (used in) operating activities of continuing operations	 	 	(89	)	 	 	(161	)	
Net cash provided by (used in) operating activities of discontinued operations	 	 	1	 	 	 	(8	)	
Net cash provided by (used in) operating activities	 	 	(88	)	 	 	(169	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Finance receivables originated or purchased	 	 	(145	)	 	 	 (1,205	)	
Finance receivables repaid	 	 	501	 	 	 	 1,354	 	
Proceeds on receivables sales, including securitizations	 	 	277	 	 	 	 59	 	
Capital expenditures	 	 	(38	)	 	 	 (69	)	
Proceeds from sale of repossessed assets and properties	 	 	32	 	 	 	 68	 	
Other investing activities, net	 	 	12	 	 	 	 13	 	
Net cash provided by (used in) investing activities of continuing operations	 	 	639	 	 	 	 220	 	
Net cash provided by investing activities of discontinued operations	 	 	—	 	 	 	 302	 	
Net cash provided by (used in) investing activities	 	 	639	 	 	 	 522	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Decrease in short-term debt	 	 	—	 	 	 	(1,612	)	
Proceeds from long-term lines of credit	 	 	—	 	 	 	2,970	 	
Proceeds from issuance of long-term debt	 	 	20	 	 	 	16	 	
Principal payments on long-term debt	 	 	(936	)	 	 	(578	)	
Intergroup financing	 	 	—	 	 	 	—	 	
Capital contribution paid to Finance group under Support Agreement	 	 	—	 	 	 	—	 	
Capital contribution paid to Cessna Export Finance Corporation	 	 	—	 	 	 	—	 	
Dividends paid	 	 	(5	)	 	 	(5	)	
Net cash provided by (used in) financing activities of continuing operations	 	 	(921	)	 	 	 791	 	
Effect of exchange rate changes on cash and equivalents	 	 	(13	)	 	 	 —	 	
Net increase (decrease) in cash and equivalents	 	 	(383	)	 	 	 1,144	 	
Cash and equivalents at beginning of period	 	 	1,892	 	 	 	 547	 	
Cash and equivalents at end of period	 	$	 1,509	 	 	$	 1,691	 	
 
See Notes to the consolidated financial statements

5

 TEXTRON INC.
Consolidated Statements of Cash Flows (Unaudited) (Continued)
For the Three Months Ended April 3, 2010 and April 4, 2009, respectively
 (In millions)
 
 	 	Manufacturing Group	 	 	Finance Group	 	
 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	 31	 	 	$	 139	 	 	$	 (39	)	 	$	 (53	)	
Income (loss) from discontinued operations	 	 	(4	)	 	 	43	 	 	 	—	 	 	 	—	 	
Income (loss) from continuing operations	 	 	35	 	 	 	96	 	 	 	(39	)	 	 	(53	)	
Adjustments to reconcile income (loss) from continuing operations to	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 Dividends received from Finance group	 	 	125	 	 	 	84	 	 	 	—	 	 	 	—	 	
 Capital contributions paid to Finance group	 	 	(75	)	 	 	—	 	 	 	—	 	 	 	—	 	
 Non-cash items:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 Depreciation and amortization	 	 	82	 	 	 	88	 	 	 	8	 	 	 	8	 	
 Provision for losses on finance receivables held for investment	 	 	—	 	 	 	—	 	 	 	55	 	 	 	76	 	
 Portfolio losses on finance receivables	 	 	—	 	 	 	—	 	 	 	28	 	 	 	10	 	
 Other, net	 	 	27	 	 	 	26	 	 	 	4	 	 	 	—	 	
 Deferred income taxes	 	 	16	 	 	 	8	 	 	 	(29	)	 	 	(121	)	
 Changes in assets and liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 Accounts receivable, net	 	 	(76	)	 	 	 41	 	 	 	—	 	 	 	 —	 	
 Inventories	 	 	(207	)	 	 	 (245	)	 	 	—	 	 	 	 —	 	
 Other assets	 	 	46	 	 	 	 (29	)	 	 	(4	)	 	 	 9	 	
 Accounts payable	 	 	184	 	 	 	 (97	)	 	 	—	 	 	 	 —	 	
 Accrued and other liabilities	 	 	(224	)	 	 	 (100	)	 	 	(73	)	 	 	 89	 	
 Captive finance receivables, net	 	 	—	 	 	 	 —	 	 	 	—	 	 	 	 —	 	
 Other operating activities, net	 	 	1	 	 	 	 (6	)	 	 	—	 	 	 	 —	 	
Net cash provided by (used in) operating activities of continuing operations	 	 	(66	)	 	 	 (134	)	 	 	(50	)	 	 	 18	 	
Net cash provided by (used in) operating activities of discontinued operations	 	 	1	 	 	 	 (8	)	 	 	—	 	 	 	 —	 	
Net cash provided by (used in) operating activities	 	 	(65	)	 	 	 (142	)	 	 	(50	)	 	 	 18	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Finance receivables originated or purchased	 	 	—	 	 	 	 —	 	 	 	(226	)	 	 	 (1,325	)	
Finance receivables repaid	 	 	—	 	 	 	 —	 	 	 	660	 	 	 	 1,513	 	
Proceeds on receivables sales, including securitizations	 	 	—	 	 	 	 —	 	 	 	277	 	 	 	 59	 	
Capital expenditures	 	 	(38	)	 	 	 (69	)	 	 	—	 	 	 	 —	 	
Proceeds from sale of repossessed assets and properties	 	 	—	 	 	 	 —	 	 	 	32	 	 	 	 68	 	
Other investing activities, net	 	 	(37	)	 	 	 (20	)	 	 	28	 	 	 	 12	 	
Net cash provided by (used in) investing activities of continuing operations	 	 	(75	)	 	 	 (89	)	 	 	771	 	 	 	 327	 	
Net cash provided by investing activities of discontinued operations	 	 	—	 	 	 	 302	 	 	 	—	 	 	 	—	 	
Net cash provided by (used in) investing activities	 	 	(75	)	 	 	 213	 	 	 	771	 	 	 	 327	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Decrease in short-term debt	 	 	—	 	 	 	(869	)	 	 	 	 	 	 	(743	)	
Proceeds from long-term lines of credit	 	 	—	 	 	 	1,230	 	 	 	—	 	 	 	1,740	 	
Proceeds from issuance of long-term debt	 	 	—	 	 	 	—	 	 	 	20	 	 	 	16	 	
Principal payments on long-term debt	 	 	(11	)	 	 	(35	)	 	 	(925	)	 	 	(543	)	
Intergroup financing	 	 	(150	)	 	 	133	 	 	 	150	 	 	 	(112	)	
Capital contributions paid to Finance group under Support Agreement	 	 	—	 	 	 	—	 	 	 	75	 	 	 	—	 	
Capital contributions paid to Cessna Export Finance Corporation	 	 	—	 	 	 	—	 	 	 	20	 	 	 	—	 	
Dividends paid	 	 	(5	)	 	 	(5	)	 	 	(125	)	 	 	(84	)	
Net cash provided by (used in) financing activities of continuing operations	 	 	(166	)	 	 	 454	 	 	 	(785	)	 	 	 274	 	
Effect of exchange rate changes on cash and equivalents	 	 	(12	)	 	 	 (2	)	 	 	(1	)	 	 	 2	 	
Net increase (decrease) in cash and equivalents	 	 	(318	)	 	 	 523	 	 	 	(65	)	 	 	 621	 	
Cash and equivalents at beginning of period	 	 	1,748	 	 	 	 531	 	 	 	144	 	 	 	 16	 	
Cash and equivalents at end of period	 	$	 1,430	 	 	$	 1,054	 	 	$	 79	 	 	$	 637	 	
 
See Notes to the consolidated financial statements.
6

 

 
TEXTRON INC.
Notes to the Consolidated Financial Statements (Unaudited)

Note 1 :  Basis of Presentation

Our consolidated financial statements include the accounts of Textron Inc. and its majority-owned subsidiaries.  We have prepared these unaudited consolidated financial statements in accordance with accounting principles generally accepted in the U.S. for interim financial information.  Accordingly, these interim financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.  The consolidated interim financial statements included in this quarterly report should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 2, 2010.  In the opinion of management, the interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.  We have reclassified certain prior period amounts to conform to the current period presentation.

Our financings are conducted through two separate borrowing groups.  The Manufacturing group consists of Textron Inc. consolidated with its majority-owned subsidiaries that operate in the Cessna, Bell, Textron Systems and Industrial segments.  The Finance group, which is also the Finance segment, consists of Textron Financial Corporation, its subsidiaries and the securitization trusts consolidated into it, along with two other finance subsidiaries owned by Textron Inc. We designed this framework to enhance our borrowing power by separating the Finance group.  Our Manufacturing group operations include the development, production and delivery of tangible goods and services, while our Finance group provides financial services.  Due to the fundamental differences between each borrowing group’s activities, investors, rating agencies and analysts use different measures to evaluate each group’s performance.  To support those evaluations, we present balance sheet and cash flow information for each borrowing group within the consolidated financial statements.  All significant intercompany transactions are eliminated from the consolidated financial statements, including retail and wholesale financing activities for inventory sold by our Manufacturing group and financed by our Finance group.

Note 2:  Special Charges

In the fourth quarter of 2008, we initiated a restructuring program to reduce overhead costs and improve productivity across the company and announced the exit of portions of our commercial finance business.  Our restructuring program primarily includes corporate and segment direct and indirect workforce reductions and the consolidation of certain operations.  By the end of 2010, we expect to have eliminated approximately 11,000 positions worldwide representing approximately 25% of our global workforce since the inception of the program.  As of April 3, 2010, we have terminated approximately 10,500 employees and have exited 25 leased and owned facilities and plants under this program.

 
 
7

Restructuring costs by segment are as follows:

(In millions)	 	Severance
Costs	 	 	Contract
Terminations	 	 	 Total	 	
Three Months Ended April 3, 2010	 	 	 	 	 	 	 	 	 	
Cessna	 	$	 8	 	 	$	 2	 	 	$	 10	 	
Bell	 	 	1	 	 	 	—	 	 	 	1	 	
Finance	 	 	3	 	 	 	—	 	 	 	3	 	
Corporate	 	 	(2	)	 	 	—	 	 	 	(2	)	
 	 	$	 10	 	 	$	 2	 	 	$	 12	 	
Three Months Ended April 4, 2009	 	 	 	 	 	 	 	 	 	 	 	 	
Cessna	 	$	 26	 	 	$	 —	 	 	$	 26	 	
Industrial	 	 	 1	 	 	 	—	 	 	 	 1	 	
Finance	 	 	 2	 	 	 	1	 	 	 	 3	 	
Corporate	 	 	 2	 	 	 	—	 	 	 	 2	 	
 	 	$	 31	 	 	$	 1	 	 	$	 32	 	

Since the inception of the restructuring program in the fourth quarter of 2008, we have incurred the following costs through April 3, 2010:

(In millions)	 	Severance
Costs	 	 	Curtailment Charges, Net	 	 	Asset Impairments	 	 	Contract
Terminations and Other	 	 	 Total	 	
Cessna	 	$	 93	 	 	$	 26	 	 	$	 54	 	 	$	 9	 	 	$	 182	 	
Industrial	 	 	 22	 	 	 	 (4	)	 	 	 9	 	 	 	 3	 	 	 	 30	 	
Bell	 	 	 10	 	 	 	 —	 	 	 	 —	 	 	 	 —	 	 	 	 10	 	
Textron Systems	 	 	 6	 	 	 	 2	 	 	 	 —	 	 	 	 1	 	 	 	 9	 	
Finance	 	 	 29	 	 	 	 1	 	 	 	 11	 	 	 	 2	 	 	 	 43	 	
Corporate	 	 	 38	 	 	 	 —	 	 	 	 —	 	 	 	 1	 	 	 	 39	 	
 	 	$	 198	 	 	$	 25	 	 	$	 74	 	 	$	 16	 	 	$	 313	 	

An analysis of our restructuring reserve activity is summarized below:

(In millions)	 	Severance
Costs	 	 	Contract
Terminations	 	 	Total	 	
Balance at January 2, 2010	 	$	 48	 	 	$	 3	 	 	$	 51	 	
Provisions	 	 	 12	 	 	 	 2	 	 	 	 14	 	
Reversals	 	 	 (2	)	 	 	 —	 	 	 	 (2	)	
Cash paid	 	 	 (20	)	 	 	 —	 	 	 	 (20	)	
Balance at April 3, 2010	 	$	 38	 	 	$	 5	 	 	$	 43	 	

The specific restructuring measures and associated estimated costs are based on our best judgment under prevailing circumstances.  We believe that the restructuring reserve balance is adequate to cover the costs presently accruable relating to activities formally identified and committed to under approved plans as of April 3, 2010 and anticipate that all actions related to these liabilities will be completed within a 12-month period.  We estimate that we will incur approximately $20 million in additional pre-tax restructuring costs during the remainder of 2010, most of which will result in future cash outlays.  The additional costs are expected to primarily include relocation costs at Cessna as it consolidates certain operations and severance costs in the Cessna and Finance segments.  We expect that the program will be substantially completed in 2010; however, we also expect to incur additional costs to exit the non-captive portion of our commercial finance business over the next two to three years, which are estimated to be within a range of $10 million to $15 million, primarily attributable to severance and retention benefits.

 
 
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  Note 3 :  Share-Based Compensation
 
Share-based compensation expense includes restricted stock and stock option awards, as well as performance share units, restricted stock units, and deferred income plan stock unit awards which are payable in cash.  The compensation expense we recorded in net income for our share-based compensation plans is as follows:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Compensation expense (income)	 	$	 23	 	 	$	 —	 	
Hedge expense (income)	 	 	 (2	)	 	 	 12	 	
Income tax expense (benefit)	 	 	 (9	)	 	 	 —	 	
Total net compensation cost included in net income	 	$	 12	 	 	$	 12	 	

In January 2010, we discontinued hedging our stock-based compensation awards and we have not entered into any new forward contracts.

Stock Options
The stock option compensation cost calculated under the fair value approach is recognized over the vesting period of the stock options.  The weighted-average fair value of options granted per share was $7 and $2 in the first quarter of 2010 and 2009, respectively. We estimate the fair value of options granted on the date of grant using the Black-Scholes option-pricing model.  Expected volatilities are based on implied volatilities from traded options on our common stock, historical volatilities and other factors.  We use historical data to estimate option exercise behavior, adjusted to reflect anticipated changes in expected life.
 
The weighted-average assumptions used in our Black-Scholes option-pricing model for awards issued during the respective periods are as follows:

 	 	Three Months Ended	 	
 	 	April 3,
2010	 	 	April 4,
2009	 	
Dividend yield	 	 	0.4	%	 	 	1.4	%	
Expected volatility	 	 	37.0	%	 	 	50.0	%	
Risk-free interest rate	 	 	2.6	%	 	 	2.0	%	
Expected lives ( In years )	 	 	5.5	 	 	 	5.0	 	
 
Stock option activity under the 2007 Long-Term Incentive Plan for the first quarter of 2010 is as follows:

Number of
Options
(In thousands)	 	 	 
Weighted-
Average
Exercise
Price	 	 	Weighted-
Average
Remaining
Contractual
Life
(In years)	 	
Outstanding at beginning of period	 	 	 8,545	 	 	$	 35.67	 	 	 	 6	 	
Granted	 	 	 967	 	 	 	 20.21	 	 	 	 	 	
Exercised	 	 	 (59	)	 	 	 19.48	 	 	 	 	 	
Canceled, expired or forfeited	 	 	 (155	)	 	 	 37.57	 	 	 	 	 	
Outstanding at end of period	 	 	 9,298	 	 	$	 34.13	 	 	 	 6	 	
Exercisable at end of period	 	 	 7,147	 	 	$	 36.65	 	 	 	 5	 	
 
At April 3, 2010, our outstanding options had an aggregate intrinsic value of $15 million and our exercisable options had an aggregate intrinsic value of $5 million.

 
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Restricted Stock Units
There were no stock-settled restricted stock units granted in the first quarter of 2010 or 2009.  Activity for restricted stock units paid in stock during the first quarter of 2010 is as follows:

(Shares in thousands)	 	Number of
Shares	 	 	Weighted-
Average
Grant
Date Fair
 Value	 	
Outstanding at beginning of period, nonvested	 	 	1,290	 	 	$	 46.02	 	
Vested	 	 	(316	)	 	 	 40.41	 	
Forfeited	 	 	 (29	)	 	 	 46.44	 	
Outstanding at end of period, nonvested	 	 	 945	 	 	$	 47.88	 	

Share-Based Compensation Awards
The value of the share-based compensation awards that vested and/or were paid during the respective periods is as follows:
 	 	Three Months Ended	 	
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Subject only to service conditions:	 	 	 	 	 	 	
 Value of shares, options or units vested	 	$	 36	 	 	$	 34	 	
 Intrinsic value of cash awards paid	 	 	 8	 	 	 	 —	 	
Subject to performance vesting conditions:	 	 	 	 	 	 	 	 	
 Intrinsic value of cash awards paid	 	 	 5	 	 	 	 9	 	
Intrinsic value of amounts paid under Deferred Income Plan	 	 	 8	 	 	 	 —	 	

Note 4 :  Retirement Plans

We provide defined benefit pension plans and other postretirement benefits to eligible employees.  The components of net periodic benefit cost for these plans for the first quarter of 2010 and 2009 are as follows:

 	 	Pension Benefits	 	 	Postretirement Benefits
Other Than Pensions	 	
(In millions)	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
Service cost	 	$	 31	 	 	$	 33	 	 	$	 2	 	 	$	 2	 	
Interest cost	 	 	 79	 	 	 	 76	 	 	 	 8	 	 	 	 9	 	
Expected return on plan assets	 	 	 (92	)	 	 	 (97	)	 	 	 —	 	 	 	 —	 	
Amortization of prior service cost (credit)	 	 	 4	 	 	 	 5	 	 	 	 (1	)	 	 	 (1	)	
Amortization of net loss	 	 	 9	 	 	 	 6	 	 	 	 3	 	 	 	 2	 	
Net periodic benefit cost	 	$	 31	 	 	$	 23	 	 	$	 12	 	 	$	 12	 	

Note 5:  Discontinued Operations

On April 3, 2009, we sold HR Textron, an operating unit previously reported within the Textron Systems segment, for $376 million in cash proceeds.  The sale resulted in an after-tax gain of $8 million after final settlement and net after-tax proceeds of approximately $280 million.  Also, in the first quarter of 2009, we had a $34 million tax benefit from the reduction in tax contingencies as a result of the HR Textron sale and a valuation allowance reversal on a previously established deferred tax asset.

 
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Note 6 :  Comprehensive Income

Our comprehensive income, net of taxes, is provided below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Net income (loss)	 	$	 (8	)	 	$	 86	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	 	
 Recognition of prior service cost and unrealized
 losses on pension and postretirement benefits	 	 	 10	 	 	 	 7	 	
 Deferred gains (losses) on hedge contracts	 	 	 7	 	 	 	 (10	)	
 Foreign currency translation and other	 	 	 (9	)	 	 	 2	 	
Comprehensive income	 	$	 —	 	 	$	 85	 	

Note 7:  Income Tax Expense (Benefit)

Income tax expense for continuing operations of $15 million for the first quarter of 2010 equated to an effective income tax rate of 136.4% (provision on income), compared with an effective income tax rate for continuing operations of 4.9% (benefit on income) for the first quarter of 2009.  The increase in the effective tax rate was primarily attributable to the write-off of an $11 million deferred tax asset related to a change in the tax treatment of the Medicare Part D program due to recently enacted U.S. health-care law and a prior year tax benefit due to a reduction in unrecognized tax benefits as a result of the recognition of a capital gain in connection with the sale of CESCOM.

Note 8 :  Earnings Per Share

We calculate basic and diluted earnings per share based on net income, which approximates income available to common shareholders for each period.  Basic earnings per share is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends.  Diluted earnings per share considers the dilutive effect of all potential future common stock, including convertible preferred shares, Convertible Notes, stock options and warrants and restricted stock units in the weighted-average number of common shares outstanding.

The weighted-average shares outstanding for basic and diluted earnings per share are as follows:

 	 	Three Months Ended	 	
 
(In thousands)	 	April 3,
2010	 	 	April 4,
2009	 	
Basic weighted-average shares outstanding	 	 	273,174	 	 	 	243,988	 	
Dilutive effect of convertible preferred shares, stock options
 and restricted stock units	 	 	—	 	 	 	968	 	
Diluted weighted-average shares outstanding	 	 	273,174	 	 	 	244,956	 	

The potential dilutive effect of 28 million weighted-average shares of convertible debt, restricted stocks units, stock options and warrants was excluded from the computation of diluted weighted-average shares outstanding for the three months ended April 3, 2010 as the shares would have an anti-dilutive effect on the loss from continuing operations.  In addition, stock options to purchase 7 million shares of common stock outstanding are excluded from our calculation of diluted weighted-average shares outstanding for the three months ended April 3, 2010 as the exercise prices were greater than the average market price of our common stock for the period.  These securities will likely dilute earnings per share in the future.

 
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Note 9 :  Accounts Receivable and Finance Receivables

(In millions)	 	April 3,
2010	 	 	January 2,
2010	 	
Accounts receivable - Commercial	 	$	 525	 	 	$	 470	 	
Accounts receivable - U.S. Government contracts	 	 	 456	 	 	 	 447	 	
Gross accounts receivable	 	 	 981	 	 	 	 917	 	
Allowance for doubtful accounts	 	 	 (22	)	 	 	 (23	)	
Accounts receivable, net	 	$	 959	 	 	$	 894	 	
 
Finance receivables held for investment	 	$	 5,565	 	 	$	6,206	 	
Allowance for loan losses	 	 	 (365	)	 	 	 (341	)	
Finance receivables held for investment, net	 	$	 5,200	 	 	$	 5,865	 	

During the first quarter of 2010, we reclassified $144 million of captive finance receivables from held for investment to held for sale as a result of inquiries we have received to purchase these finance receivables.  We determined a sale of these finance receivables would be consistent with our goal to maximize the economic value of our portfolio and accelerate cash collections.

The activity in the Finance group’s allowances for loan losses is provided below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Reserve at the beginning of period	 	$	 341	 	 	$	 191	 	
Provision for losses	 	 	 55	 	 	 	 76	 	
Net charge-offs	 	 	 (31	)	 	 	 (47	)	
Reserve at the end of period	 	$	 365	 	 	$	 220	 	

We periodically evaluate finance receivables held for investment, excluding homogeneous loan portfolios and finance leases, for impairment.  Finance receivables classified as held for sale are reflected at the lower of cost or fair value and are excluded from this assessment.  A finance receivable is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired finance receivables are classified as either nonaccrual or accrual loans.  Nonaccrual finance receivables include accounts that are contractually delinquent by more than three months for which the accrual of interest income is suspended.  Impaired accrual finance receivables represent loans with original terms that have been or are expected to be significantly modified to reflect deferred principal payments, generally at market interest rates, for which collection of principal and interest is not doubtful.

Our impaired finance receivables are as follows:

(In millions)	 	April 3,
2010	 	 	January 2,
2010	 	
Impaired nonaccrual finance receivables	 	$	 966	 	 	$	 984	 	
Impaired accrual finance receivables	 	 	 158	 	 	 	 217	 	
Total impaired finance receivables	 	 	 1,124	 	 	 	 1,201	 	
Less: Impaired finance receivables without identified reserve requirements	 	 	 347	 	 	 	 362	 	
Impaired nonaccrual finance receivables with identified reserve requirements	 	$	 777	 	 	$	 839	 	
Allowance for losses on impaired nonaccrual finance receivables	 	$	 174	 	 	$	 153	 	

The average recorded investment in impaired nonaccrual finance receivables was $975 million and $311 million in the first quarter of 2010 and 2009, respectively.  The average recorded investment in impaired accrual finance receivables amounted to $187 million and $45 million in the first quarter of 2010 and 2009, respectively.

 
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Nonaccrual finance receivables include impaired finance receivables, as well as accounts in homogeneous loan portfolios that are not considered to be impaired but are contractually delinquent by more than three months.  At April 3, 2010 and January 2, 2010, nonaccrual finance receivables totaled $1.03 billion and $1.04 billion, respectively.  Nonaccrual finance receivables resulted in the Finance segment’s revenues being reduced by $17 million and $8 million in the first quarter of 2010 and 2009, respectively.

Note 10 :  Inventories

(In millions)	 	April 3,
2010	 	 	January 2,
2010	 	
Finished goods	 	$	 843	 	 	$	 735	 	
Work in process	 	 	 2,121	 	 	 	 1,861	 	
Raw materials	 	 	 567	 	 	 	 613	 	
 	 	 	 3,531	 	 	 	 3,209	 	
Progress/milestone payments	 	 	 (1,056	)	 	 	 (936	)	
 	 	$	 2,475	 	 	$	 2,273	 	

Note 11: Debt

Subsequent to quarter-end, we decided to pay down a portion of the outstanding amount owed under Textron Inc.’s bank line of credit and repaid approximately $250 million.  This debt was classified as long-term debt on our balance sheet at April 3, 2010.

4.5% Convertible Senior Notes
Our common stock price exceeded the conversion threshold price of $17.06 per share for at least 20 trading days during the 30 consecutive trading days ended March 31, 2010.  Accordingly, the notes are convertible at the holder’s option through June 30, 2010.  We may deliver shares of common stock, cash or a combination of cash and shares of common stock in satisfaction of our obligations upon conversion of the Convertible Notes.  We intend to settle the face value of the Convertible Notes in cash.  We have continued to classify these Convertible Notes as long-term based on our intent and ability to maintain the debt outstanding for at least one year through the use of various funding sources available to us.

Note 12:  Guarantees and Indemnifications

As disclosed under the caption “Guarantees and Indemnifications” in Note 18 to the Consolidated Financial Statements in Textron’s 2009 Annual Report on Form 10-K, we have issued or are party to certain guarantees.  As of April 3, 2010, there has been no material change to these guarantees.

We provide limited warranty and product maintenance programs, including parts and labor, for certain products for periods ranging from one to five years.  We estimate the costs that may be incurred under warranty programs and record a liability in the amount of such costs at the time product revenue is recognized.  Factors that affect this liability include the number of products sold, historical and anticipated rates of warranty claims, and cost per claim.  We assess the adequacy of our recorded warranty and product maintenance liabilities periodically and adjust the amounts as necessary.  Additionally, we may establish warranty liabilities related to the issuance of aircraft service bulletins for aircraft no longer covered under the limited warranty programs.

 
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Changes in our warranty and product maintenance liabilities are as follows:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Accrual at the beginning of period	 	$	 263	 	 	$	 278	 	
Provision	 	 	 38	 	 	 	 40	 	
Settlements	 	 	 (58	)	 	 	 (63	)	
Adjustments to prior accrual estimates	 	 	 (3	)	 	 	 1	 	
Accrual at the end of period	 	$	 240	 	 	$	 256	 	

Note 13 :  Commitments and Contingencies

We are subject to legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; compliance with applicable laws and regulations; production partners; product liability; employment; and environmental, safety and health matters.  Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or remediation of environmental contamination.  As a government contractor, we are subject to audits, reviews and investigations to determine whether our operations are being conducted in accordance with applicable regulatory requirements.  Under federal government procurement regulations, certain claims brought by the U.S. Government could result in our being suspended or debarred from U.S. Government contracting for a period of time.  On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations.

On April 6, 2010, a jury in the Philadelphia Common Pleas Court returned verdicts against Avco Corporation, which includes the Lycoming Engines operating division, for $24.7 million in compensatory damages and $64 million in punitive damages in an aviation products liability case involving a 1999 accident.   Judgment has not been entered pending post-trial motions.  While the ultimate outcome of the litigation cannot be assured, we strongly disagree with the verdicts and intend to appeal the verdicts if our post-trial motions are unsuccessful.  We believe that it is probable that the verdicts will be reversed through the appellate process. 

Note 14:  Fair Values of Assets and Liabilities

We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We prioritize the assumptions that market participants would use in pricing the asset or liability (the “inputs”) into a three-tier fair value hierarchy.  This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exists, requiring companies to develop their own assumptions.  Observable inputs that do not meet the criteria of Level 1, and include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2.  Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability, based on the best information available in the circumstances.  Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data.  These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

 
 
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Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The table below presents the assets and liabilities measured at fair value on a recurring basis, which are categorized as Level 2 based on the level of inputs used in the valuation of each asset and liability.

(In millions)	Borrowing Group	 	April 3,
2010	 	 	January 2,
2010	 	
Assets	 	 	 	 	 	 	 	
Foreign currency exchange contracts	Manufacturing	 	$	 65	 	 	$	 57	 	
Derivative financial instruments	Finance	 	 	 60	 	 	 	 61	 	
 Total assets	 	 	$	 125	 	 	$	 118	 	
Liabilities	 	 	 	 	 	 	 	 	 	
Foreign currency exchange contracts	Manufacturing	 	$	 5	 	 	$	 5	 	
Derivative financial instruments	Finance	 	 	 3	 	 	 	 16	 	
 Total liabilities	 	 	$	 8	 	 	$	 21	 	

Foreign currency exchange contracts are measured at fair value using the market method valuation technique.  The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers.  This is observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions so they are classified as Level 2.  We record changes in the fair value of these contracts in other comprehensive income to the extent they are effective as cash flow hedges.  If a contract does not qualify for hedge accounting or is designated as a fair value hedge, changes in the fair value of the contract are recorded in earnings.

The Finance group’s derivative contracts are not exchange-traded.  Derivative financial instruments are measured at fair value utilizing widely accepted, third-party developed valuation models.  The actual terms of each individual contract are entered into a valuation model, along with interest rate and foreign exchange rate data, which is based on readily observable market data published by third-party leading financial news and data providers.  Credit risk is factored into the fair value of derivative assets and liabilities based on the differential between both our credit default swap spread for liabilities and the counterparty’s credit default swap spread for assets as compared to a standard AA-rated counterparty; however, this had no significant impact on the valuation as of April 3, 2010.

Assets Recorded at Fair Value on a Nonrecurring Basis
The table below presents those assets that are measured at fair value on a nonrecurring basis that had fair value measurement adjustments for the Finance group during the first quarter of 2010.  These assets were measured using significant unobservable inputs (Level 3) and include the following:

(In millions)	 	Balance at
April 3,
2010	 	 	Gain
(Loss)	 	
Finance receivables held for sale	 	$	 598	 	 	$	 (10	)	
Impaired finance receivables	 	 	 510	 	 	 	 (46	)	
Other assets	 	 	 67	 	 	 	 (18	)	

Finance Receivables Held for Sale - Finance receivables held for sale are recorded at the lower of cost or fair value.  Finance receivables held for sale are recorded at fair value on a nonrecurring basis during periods in which the fair value is lower than the cost value.  The majority of the finance receivables held for sale were identified at the individual loan level.  Golf course, timeshare and hotel mortgages classified as held for sale were identified as a portion of a larger portfolio with common characteristics based on the intention to balance the sale of certain loans with the collection of others to maximize economic value.  There was no significant change in the fair value of the finance receivables held for sale in the first quarter of 2009.  During the first quarter of 2010, we sold $208 million of finance receivables classified as held for sale in the distribution finance product line and recorded a $13 million gain related to this sale.  Total gains related to receivable sales were $15 million for the first quarter of 2010.

 
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There are no active, quoted market prices for our finance receivables. The estimate of fair value was determined based on the use of discounted cash flow models to estimate the exit price we expect to receive in the principal market for each type of loan in an orderly transaction, which includes both the sale of pools of similar assets and the sale of individual loans. The models we used incorporate estimates of the rate of return, financing cost, capital structure and/or discount rate expectations of current market participants combined with estimated loan cash flows based on credit losses, payment rates and credit line utilization rates. Where available, the assumptions related to the expectations of current market participants are compared with observable market inputs, including bids from prospective purchasers of similar loans and certain bond market indices for loans of similar perceived credit quality. Although we utilize and prioritize these market observable inputs in our discounted cash flow models, these inputs rarely are derived from markets with directly comparable loan structures, industries and collateral types. Therefore, all valuations of finance receivables held for sale involve significant management judgment, which can result in differences between our fair value estimates and those of other market participants.
 
Impaired Finance Receivables - Finance receivable impairment is measured by comparing the expected future cash flows discounted at the finance receivable’s effective interest rate, or the fair value of the collateral if the receivable is collateral dependent, with its carrying amount. If the carrying amount is higher, we establish a reserve based on this difference. This evaluation is inherently subjective as it requires estimates, including the amount and timing of future cash flows expected to be received on impaired finance receivables and the underlying collateral that may differ from actual results. Impaired nonaccrual finance receivables are included in the table above since the measurement of required reserves on our impaired finance receivables is significantly dependent on the fair value of the underlying collateral.  Fair values of collateral are determined based on the use of appraisals, industry pricing guides, input from market participants, our recent experience selling similar assets or internally developed discounted cash flow models. In the first quarter of 2009, fair value measurements recorded on impaired finance receivables resulted in a $32 million charge to provision for loan losses and primarily were related to initial fair value adjustments.	

Other assets – Other assets include repossessed assets and properties, operating assets received in satisfaction of troubled finance receivables and other investments, which are accounted for under the equity method of accounting and have no active, quoted market prices.  The fair value of these assets is determined based on the use of appraisals, industry pricing guides, input from market participants, our recent experience selling similar assets or internally developed discounted cash flow models.  For our other investments, the discounted cash flow models incorporate assumptions specific to the nature of the investments’ business and underlying assets and include industry valuation benchmarks such as discount rates, capitalization rates and cash flow multiples.  For repossessed assets and properties, which are considered assets held for sale, if the carrying amount of the asset is higher than the estimated fair value, we record a corresponding charge to income for the difference.  For operating assets received in satisfaction of troubled finance receivables and other investments, if the sum of the undiscounted cash flows is estimated to be less than the carrying value, we record a charge to income for any shortfall between estimated fair value and the carrying amount.

Assets and Liabilities Not Recorded at Fair Value
The carrying value and estimated fair values of our financial instruments that are not reflected in the financial statements at fair value are as follows:

 	 	April 3, 2010	 	 	January 2, 2010	 	
(In millions)	 	Carrying Value	 	 	Estimated
Fair Value	 	 	Carrying Value	 	 	Estimated
Fair Value	 	
Manufacturing group:	 	 	 	 	 	 	 	 	 	 	 	 	
Debt, excluding leases	 	$	 (3,430	)	 	$	 (3,845	)	 	$	 (3,474	)	 	$	 (3,762	)	
Finance group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Finance receivables held for investment, excluding leases	 	 	 4,685	 	 	 	 4,313	 	 	 	 5,159	 	 	 	 4,703	 	
Retained interest in securitizations	 	 	 —	 	 	 	 —	 	 	 	 6	 	 	 	 6	 	
Investment in other marketable securities	 	 	 63	 	 	 	 57	 	 	 	 68	 	 	 	 55	 	
Debt	 	 	 (4,811	)	 	 	 (4,640	)	 	 	 (5,667	)	 	 	 (5,439	)	

 
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Fair value for the Manufacturing group debt is determined using market observable data for similar transactions.  We utilize the same valuation methodologies to determine the fair value estimates for finance receivables held for investment as used for finance receivables held for sale.

Investments in other marketable securities represent notes receivable issued by securitization trusts that purchase timeshare notes receivable from timeshare developers.  These notes are classified as held-to-maturity and are held at amortized cost.  The estimate of fair value was based on observable market inputs for similar securitization interests in markets that are currently inactive.

At April 3, 2010 and January 2, 2010, approximately 46% and 54%, respectively, of the fair value of term debt for the Finance group was determined based on observable market transactions.  The remaining Finance group debt was determined based on discounted cash flow analyses using observable market inputs from debt with similar duration, subordination and credit default expectations.

Note 15 : Derivatives

The notional and fair value amounts of our derivative instruments that are designated as hedging instruments are provided below:

 	 	 	Notional Amount	 	 	Asset (Liability)	 	
(In millions)	Borrowing Group	 	April 3,
 2010	 	 	January 2, 2010	 	 	April 3,
 2010	 	 	January 2, 2010	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate exchange contracts*	Finance	 	$	 1,305	 	 	$	 1,333	 	 	$	 40	 	 	$	 43	 	
Cross-currency interest rate exchange contracts	Finance	 	 	 140	 	 	 	 161	 	 	 	 19	 	 	 	 18	 	
Foreign currency exchange contracts	Manufacturing	 	 	 629	 	 	 	 696	 	 	 	 54	 	 	 	 54	 	
      Total in other current or other assets	 	 	$	 2,074	 	 	$	 2,190	 	 	$	 113	 	 	$	 115	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest rate exchange contracts*	Finance	 	$	 32	 	 	$	 32	 	 	$	 (3	)	 	$	 (3	)	
Foreign currency exchange contracts	Manufacturing	 	 	 49	 	 	 	 80	 	 	 	 (4	)	 	 	 (5	)	
      Total in accrued or other liabilities	 	 	$	 81	 	 	$	 112	 	 	$	 (7	)	 	$	 (8	)	
*Represents a fair value hedge.

The fair values of derivative instruments for the Manufacturing group are included in either other current assets or accrued liabilities in our balance sheet.  For the Finance group, derivative instruments are included in either other assets or other liabilities.
 
We hedge our net investment position in major currencies and generate foreign currency interest payments that offset other transactional exposures in these currencies. To accomplish this, we borrow directly in foreign currency and designate a portion of foreign currency debt as a hedge of net investments. We also may utilize currency forwards as hedges of our related foreign net investments. Currency effects on the effective portion of these hedges, which are reflected in the cumulative translation adjustment account within other comprehensive income (OCI), produced a $29 million after-tax gain in the first quarter of 2010, resulting in an accumulated net gain balance of $17 million at April 3, 2010.  The ineffective portion of these hedges was insignificant.
 
Our exposure to loss from nonperformance by the counterparties to our derivative agreements at April 3, 2010 is minimal.  We do not anticipate nonperformance by counterparties in the periodic settlements of amounts due.  We historically have minimized this potential for risk by entering into contracts exclusively with major, financially sound counterparties having no less than a long-term bond rating of A.  The credit risk generally is limited to the amount by which the counterparties’ contractual obligations exceed our obligations to the counterparty.  We continuously monitor our exposures to ensure that we limit our risks.

 
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Fair Value Hedges
Our Finance group enters into interest rate exchange contracts to mitigate exposure to changes in the fair value of its fixed-rate receivables and debt due to fluctuations in interest rates.  By using these contracts, we are able to convert our fixed-rate cash flows to floating-rate cash flows.  The amount of ineffectiveness on our fair value hedges is insignificant.  The effect of these contracts is recorded in the Consolidated Statements of Operations, and the gain (loss) for the first quarter of 2010 and 2009 is provided in the following table:

(In millions)	Gain (Loss) Location	 	2010	 	 	2009	 	
Interest rate exchange contracts	Interest expense	 	$	 10	 	 	$	 4	 	
Interest rate exchange contracts	Finance charges	 	 	(4	)	 	 	 (2	)	

Cash Flow Hedges
We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates.  The primary purpose of our foreign currency hedging activities is to manage the volatility associated with foreign currency purchases of materials, foreign currency sales of products, and other assets and liabilities created in the normal course of business.  We primarily utilize forward exchange contracts and purchased options with maturities of no more than 18 months that qualify as cash flow hedges. These are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses.  At April 3, 2010, we had a net deferred gain of $32 million in OCI related to these cash flow hedges.  As the underlying transactions occur, we expect to reclassify an $11 million gain into earnings in the next 12 months and $21 million of gains in the following 12-month period.

For our cash flow hedges, the amount of gain (loss) recognized in OCI and the amount reclassified from accumulated other comprehensive loss into income for the Manufacturing group for the first quarter of 2010 and 2009 is provided in the following table:

 	 	Amount of Gain(Loss) Recognized in OCI
(Effective Portion)	 	Effective Portion of Derivative Reclassified from Accumulated Other Comprehensive Loss into Income	 	
(In millions)                      	 	2010	 	 	2009	 	Gain(Loss) Location	 	2010	 	 	2009	 	
Foreign currency exchange contracts	 	$	 6	 	 	$	 (7	)	Cost of sales	 	$	 3	 	 	$	 (5	)	

Derivatives Not Designated as Hedges

The notional and fair value amounts of our derivative instruments that are not designated as hedging instruments are provided below:

 	 	 	Notional Amount	 	 	Asset (Liability)	 	
(In millions)	Borrowing Group	 	April 3,
 2010	 	 	January 2, 2010	 	 	April 3,
 2010	 	 	January 2, 2010	 	
Foreign currency exchange contracts	Finance	 	$	 258	 	 	$	 531	 	 	$	 1	 	 	$	 (13	)	
Foreign currency exchange contracts	Manufacturing	 	 	 124	 	 	 	 224	 	 	 	 10	 	 	 	 3	 	
     Total	 	 	$	 382	 	 	$	 755	 	 	$	 11	 	 	$	 (10	)	

The Manufacturing group enters into certain other foreign currency exchange contracts that do not meet hedge accounting criteria and primarily are intended to protect against exposure related to intercompany financing transactions. For these instruments, the Manufacturing group reported in selling and administrative expenses an $8 million gain and a $17 million loss in the first quarter of 2010 and 2009, respectively, which were offset by the revaluation of the intercompany financing transactions.

The Finance group also utilizes certain foreign currency exchange contracts that do not meet hedge accounting criteria and are intended to convert certain foreign currency denominated assets and liabilities into the functional currency of the respective legal entity.  Gains and losses related to these derivative instruments are naturally offset by the translation of the related foreign currency denominated assets and liabilities.  For these instruments, the Finance group reported in selling and administrative expenses a $7 million loss in the first quarter of 2010, which

 
 
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was offset by a $6 million gain resulting from the translation of foreign currency denominated assets and liabilities.

Note 16 :  Segment Information

We operate in, and report financial information for, the following five business segments: Cessna, Bell, Textron Systems, Industrial and Finance.  Segment profit is an important measure used for evaluating performance and for decision-making purposes.  Segment profit for the manufacturing segments excludes interest expense, certain corporate expenses and special charges.  The measurement for the Finance segment includes interest income and expense and excludes special charges.  Provisions for losses on finance receivables involving the sale or lease of our products are recorded by the selling manufacturing division when our Finance group has recourse to the Manufacturing group.

Our revenues by segment and a reconciliation of segment profit to income (loss) from continuing operations before income taxes are as follows:

 	 	Three Months Ended	 	
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
REVENUES	 	 	 	 	 	 	
Manufacturing Group	 	 	 	 	 	 	
 Cessna	 	$	 433	 	 	$	 769	 	
 Bell	 	 	618	 	 	 	742	 	
 Textron Systems	 	 	458	 	 	 	418	 	
 Industrial	 	 	625	 	 	 	475	 	
 	 	 	2,134	 	 	 	2,404	 	
Finance Group	 	 	76	 	 	 	122	 	
 Total revenues	 	$	 2,210	 	 	$	 2,526	 	
SEGMENT OPERATING PROFIT	 	 	 	 	 	 	 	 	
Manufacturing Group	 	 	 	 	 	 	 	 	
 Cessna (a)	 	$	 (24	)	 	$	 90	 	
 Bell	 	 	74	 	 	 	69	 	
 Textron Systems	 	 	55	 	 	 	52	 	
 Industrial	 	 	49	 	 	 	(9	)	
 	 	 	154	 	 	 	202	 	
Finance Group	 	 	(58	)	 	 	(66	)	
Segment profit	 	 	96	 	 	 	136	 	
Special charges	 	 	(12	)	 	 	(32	)	
Corporate expenses and other, net	 	 	(37	)	 	 	(35	)	
Interest expense, net for Manufacturing group	 	 	 (36	)	 	 	(28	)	
Income from continuing operations before income taxes	 	$	 11	 	 	$	 41	 	

(a)  	During the first quarter of 2009, we sold the assets of CESCOM, Cessna’s aircraft maintenance tracking service line, resulting in a pre-tax gain of $50 million.	

 
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Item 1A .	RISK FACTORS	

Our business, financial condition and results of operations are subject to various risks, including those discussed below and in our Annual Report on Form 10-K for the year ended January 2, 2010, which may affect the value of our securities.  The risks discussed in our SEC filings are those that we believe currently are the most significant, although additional risks not presently known to us or that we currently deem less significant also may impact our business, financial condition or results of operations, perhaps materially.

The increasing costs of certain employee and retiree benefits could adversely affect our results.

Our earnings and cash flow may be impacted by the amount of income or expense we expend or record for employee benefit plans. This is particularly true for our defined benefit pension plans, where the contributions to those plans are driven by, among other things, our assumptions of the rate of return on plan assets, the discount rate used for future payment obligations and the rates of future cost growth. If the actual investment return and rates prove materially different from our assumptions, this could adversely impact the amount of pension expense and require larger contributions to the plans. Also, changing pension legislation and regulations could increase the cost associated with our defined benefit pension plans. In addition, medical costs are rising at a rate faster than the general inflation rate. Continued medical cost inflation in excess of the general inflation rate increases the risk that we will not be able to mitigate the rising costs of medical benefits. Moreover, the U.S. Congress has recently enacted a comprehensive health-care law, and we are evaluating the potential impacts of this new law on our business.  We expect that some of the requirements of this new law will increase our future costs. Increases to the costs of pension and medical benefits could have an adverse effect on our financial results of operations.

Our business is subject to the risks of doing business in foreign countries.

Our international business exposes us to certain unique and potentially greater risks than our domestic business, and our exposure to such risks may increase if our international business continues to grow. Our international business is subject to U.S. and local government regulations and procurement policies and practices, which may change from time to time, including regulations relating to import-export control, environmental, health and safety, investments, exchange controls and repatriation of earnings or cash settlement challenges, as well as to varying currency, geopolitical and economic risks. These international risks may be especially significant with respect to sales of aerospace and defense products. We maintain manufacturing facilities, services centers, supply centers, and other facilities worldwide, including in various emerging market countries, and we expect that our investment in emerging market countries will continue to increase.  Emerging market operations can present many risks, including civil disturbances, economic and government instability, terrorism and related safety concerns, health concerns, cultural differences in employment and business practices, the imposition of exchange controls and risks associated with inadequate infrastructures to deal with natural disasters.  The impact of any one or more of these or other factors could adversely affect our business, financial condition or operating results.  We also are exposed to risks associated with using foreign representatives and consultants for international sales and operations and teaming with international subcontractors and suppliers in connection with international programs. Some international government customers require contractors to agree to specific in-country purchases, manufacturing agreements or financial support arrangements, known as offsets, as a condition for a contract award. The contracts generally extend over several years and may include penalties if we fail to meet the offset requirements, which could adversely impact our revenues, profitability and cash flows. Additionally, we are facing increasing competition in our international markets from foreign and multinational firms that may have certain advantages, including, for example, cost advantages, over us; as a result, our ability to compete successfully in those markets may be adversely affected, which could negatively impact our revenues.

 
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Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	

Consolidated Results of Operations

Revenues
Revenues decreased $316 million, or 13%, to $2.2 billion in the first quarter of 2010, compared with the corresponding period of 2009, primarily due to a $460 million decrease in revenues at Cessna and Bell, reflecting reductions in commercial aircraft deliveries, and $46 million in lower revenues at the Finance segment largely due to lower average finance receivables resulting from the continued liquidation of the non-captive portfolio.  These revenue decreases were partially offset by a $150 million increase in revenues in the Industrial segment largely due to higher volume reflecting improvements in the automotive market and a $40 million increase in revenues at Textron Systems, primarily due to higher defense volumes.

Cost of Sales
Cost of sales as a percentage of Manufacturing revenues was 83.2% in both of the first quarters of 2010 and 2009.    Cost of sales was favorably impacted by improved leverage on higher volumes at the Industrial segment as a result of cost reduction initiatives, offset by higher costs of sales as a percentage of revenue at Cessna.  In the first quarter of 2010, Cessna’s sales mix reflected a higher proportion of lower margin business jets and research and development costs represented a greater percentage of the lower revenues.  These factors were partially offset by reduced costs from workforce reductions and facility consolidations.

Selling and Administrative Expense
Selling and administrative expense decreased $59 million, or 17%, to $287 million in the first quarter of 2010, compared with the corresponding period of 2009, primarily due to a $32 million impact at Cessna reflecting lower sales commissions, compensation and related costs and professional fees, and a $12 million reduction for the Finance segment, which was favorably impacted by lower compensation and related costs due to the continued liquidation of the non-captive portfolio.

Interest Expense
Interest expense decreased $12 million, or 14%, in the first quarter of 2010, compared with the corresponding period of 2009, primarily due to lower debt in the Finance segment as it continues to liquidate its non-captive portfolio.  Interest expense includes interest for both the Finance group and the Manufacturing group.

Interest expense, net for the Manufacturing group increased $8 million, or 29%, largely due to $21 million of interest on higher average debt borrowings, partially offset by $8 million of interest income received on intergroup borrowings from the Finance segment.

Special Charges
For the first quarter of 2010 and 2009, we incurred $12 million and $32 million in restructuring costs, primarily related to severance at Cessna.  We estimate that we will incur approximately $20 million in additional pre-tax restructuring costs during the remainder of 2010, most of which will result in future cash outlays.  The additional costs are expected to primarily include relocation costs at Cessna as it consolidates certain operations and severance costs in the Cessna and Finance segments.  We expect that the program will be substantially completed in 2010; however, we also expect to incur additional costs to exit the non-captive portion of our commercial finance business over the next two to three years, which are estimated to be within a range of $10 million to $15 million, primarily attributable to severance and retention benefits. By the end of 2010, we expect to have eliminated approximately 11,000 positions worldwide representing approximately 25% of our global workforce since the inception of the restructuring program in the fourth quarter of 2008.  As of April 3, 2010, we have terminated approximately 10,500 employees and have exited 25 leased and owned facilities and plants under this program.

 
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Backlog
Our aircraft and defense business backlog totaled $12.4 billion at April 3, 2010 and was primarily comprised of the following:

(In millions)	 	April 3,
2010	 	 	January 2,
2010	 	
Bell	 	$	 6,853	 	 	$	 6,903	 	
Textron Systems	 	 	 1,442	 	 	 	 1,664	 	
Cessna	 	 	 4,073	 	 	 	 4,893	 	

The decrease in backlog at Cessna is mainly attributable to cancelled business jet orders due to continued weakness in the general aviation industry and deliveries in the quarter.  The decrease in backlog at Textron Systems primarily reflects deliveries in excess of orders for Unmanned Aircraft Systems and Armored Security Vehicles.

Segment Analysis

Segment profit is an important measure used to evaluate performance and for decision-making purposes.  Segment profit for the manufacturing segments excludes interest expense, certain corporate expenses and special charges.  The measurement for the Finance segment includes interest income and expense and excludes special charges.

Cessna
 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	$	 433	 	 	$	 769	 	
Segment profit	 	 	 (24	)	 	 	 90	 	

In the first quarter of 2010, Cessna’s revenues and segment profit decreased $336 million and $114 million, respectively, compared with the first quarter of 2009.  Revenues decreased at Cessna primarily due to lower business jet volume in most of its product lines.  We delivered 31 jets in the first quarter of 2010, compared with 69 jets in the corresponding period of 2009.  This decrease was partially offset by higher used aircraft volume of $10 million, higher CitationAir volume of $9 million and higher spare parts, product support and maintenance volume of $7 million.

Segment profit decreased primarily due to the $122 million impact from lower volume, a nonrecurring $50 million gain on the 2009 sale of CESCOM assets and higher inflation of $15 million, partially offset by improved performance of $68 million.  The improved performance includes $36 million in lower engineering, selling and administrative expenses, largely due to workforce reductions, and lower inventory reserves and used aircraft write-downs of $20 million.

Bell
 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	$	 618	 	 	$	 742	 	
Segment profit	 	 	 74	 	 	 	 69	 	

Revenues decreased $124 million and segment profit increased $5 million in the first quarter of 2010, compared with the first quarter of 2009.  The decrease in revenues primarily reflects lower commercial volume of $89 million, reflecting lower customer demand for helicopters, spares and other support, lower V-22 volume of $39 million, related to the timing of aircraft deliveries, spares and support, and an $18 million impact from revenue recognized in 2009 on the ARH program related to termination support.  These decreases were partially offset by higher military spare parts, product support and maintenance volume of $19 million.

 
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Segment profit increased primarily due to improved performance of $36 million reflecting lower warranty costs of $7 million, improved performance related to the H-1 program of $7 million, nonrecurring product launch costs of $8 million incurred in 2009 for the 429 program and lower selling and administrative expenses of $6 million.  The improved performance was partially offset by the $28 million impact of lower commercial volume and unfavorable mix and a $3 million impact due to lower net military volume.

Textron Systems
 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	$	 458	 	 	$	 418	 	
Segment profit	 	 	 55	 	 	 	 52	 	

Revenues and segment profit increased $40 million and $3 million, respectively, in the first quarter of 2010, compared with the first quarter of 2009, largely due to higher defense volumes.  Revenues increased primarily due to higher Unmanned Aircraft System volume of $44 million, partially offset by lower Sensor Fuzed Weapon volume of $13 million.

Industrial
 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	$	 625	 	 	$	 475	 	
Segment profit (loss)	 	 	 49	 	 	 	 (9	)	

Revenues and segment profit increased $150 million and $58 million, respectively, in the first quarter of 2010, compared with the first quarter of 2009.  Revenues increased primarily due to higher volume of $131 million, largely a result of improvements in the automotive market, and a favorable foreign exchange impact of $16 million.

Segment profit increased primarily due to higher volume of $35 million and improved performance of $35 million, partially offset by higher inflation in excess of pricing of $12 million.  Cost performance has improved largely due to the significant efforts made in 2009 to reduce costs through workforce reductions and other initiatives.

Finance
 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Revenues	 	$	 76	 	 	$	 122	 	
Segment loss	 	 	 (58	)	 	 	 (66	)	

Revenues and segment loss decreased $46 million and $8 million, respectively, in the first quarter of 2010, compared with the first quarter of 2009, primarily due to the following:
(In millions)	 	Revenues	 	 	Segment
Profit	 	
Lower average finance receivables of $1.5 billion	 	$	 (26	)	 	$	 (11	)	
Increase in valuation allowance on held for sale portfolio	 	 	 (10	)	 	 	 (10	)	
Suspended earnings on nonaccrual finance receivables	 	 	 (8	)	 	 	 (8	)	
Decrease in the provision for loan losses	 	 	 —	 	 	 	 21	 	
Lower selling and administrative expenses	 	 	 —	 	 	 	 12	 	

 
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Portfolio losses for the first quarter of 2010 decreased $2 million compared with the corresponding period of 2009.  In the first quarter of 2010, a $13 million gain on the sale of one portfolio was offset by impairments on other finance assets.

The provision for loan losses decreased in the first quarter of 2010, compared with the corresponding period of 2009, primarily due to an $8 million decrease in nonaccrual finance receivables during the first quarter of 2010 compared with a $167 million increase in the first quarter of 2009.  The decrease in nonaccrual finance receivables reflects reductions in several of our portfolios, including a $42 million decrease in receivables secured by general aviation aircraft, largely due to the stabilization in aircraft values and the resolution of several significant accounts through sale, repossession or foreclosure.  These reductions were partially offset by a $47 million increase in marina receivables and a $34 million increase in golf course property receivables.

Selling and administrative expenses decreased in the first quarter of 2010, compared with the corresponding period of 2009 mostly due to a reduction in workforce as a result of our exit plan.

This table reflects information about the Finance segment’s credit performance related to finance receivables held for investment.  Finance receivables held for sale are reflected at fair value on the Consolidated Balance Sheets.  As a result, finance receivables held for sale are not included in the credit performance statistics below.

(Dollars in millions)	 	April 3, 2010	 	 	January 2,
2010	 	
Nonaccrual finance receivables	 	$	 1,032	 	 	$	 1,040	 	
Allowance for losses	 	$	 365	 	 	$	 341	 	
Ratio of nonaccrual finance receivables to finance receivables held for investment	 	 	18.54	%	 	 	16.75	%	
Ratio of allowance for losses to nonaccrual finance receivables	 	 	35.34	%	 	 	32.79	%	
Ratio of allowance for losses to finance receivables held for investment	 	 	6.55	%	 	 	5.49	%	
60+ days contractual delinquency as a percentage of finance receivables	 	 	9.33	%	 	 	9.23	%	
Operating assets received in satisfaction of troubled loans and leases	 	$	 115	 	 	$	 112	 	
Repossessed assets and properties	 	$	 110	 	 	$	 119	 	

Liquidity and Capital Resources

Our financings are conducted through two separate borrowing groups.  The Manufacturing group consists of Textron Inc. consolidated with its majority-owned subsidiaries that operate in the Cessna, Bell, Textron Systems and Industrial segments.  The Finance group, which is also the Finance segment, consists of Textron Financial Corporation (TFC), its subsidiaries and the securitization trusts consolidated into it, along with two other finance subsidiaries owned by Textron Inc. We designed this framework to enhance our borrowing power by separating the Finance group.  Our Manufacturing group operations include the development, production and delivery of tangible goods and services, while our Finance group provides financial services.  Due to the fundamental differences between each borrowing group’s activities, investors, rating agencies and analysts use different measures to evaluate each group’s performance.  To support those evaluations, we present balance sheet and cash flow information for each borrowing group within the Consolidated Financial Statements.

 
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Key information that is utilized in assessing our liquidity is summarized below:
(Dollars in millions)	 	April 3, 2010	 	 	January 2,
2010	 	
Manufacturing group	 	 	 	 	 	 	
 Cash and equivalents	 	$	 1,430	 	 	$	 1,748	 	
 Total debt	 	$	 3,546	 	 	$	 3,584	 	
 Total equity	 	$	 2,841	 	 	$	 2,826	 	
 Total capital (debt plus equity)	 	$	 6,387	 	 	$	 6,410	 	
 Net debt to capital (net of cash and cash equivalents)	 	 	 42.7	%	 	 	 39.4	%	
 Gross debt to capital	 	 	 55.5	%	 	 	 55.9	%	
Finance group	 	 	 	 	 	 	 	 	
 Cash and cash equivalents	 	$	 79	 	 	$	 144	 	
 Securitized off-balance sheet debt	 	$	 —	 	 	$	 31	 	
 Total debt on-balance sheet	 	$	 4,811	 	 	$	 5,667	 	

We believe that with our existing cash balances, coupled with the continued successful execution of the exit plan for the non-captive portion of the commercial finance business, and cash we expect to generate from our manufacturing operations, we will have sufficient cash to meet our future needs.

During the quarter, our credit ratings were affirmed by Moody’s Investor Service and Fitch Ratings and both rating agencies improved their outlooks for Textron Inc. and Textron Financial Corporation to stable. On April 20, 2010, Standard & Poor’s affirmed its rating of both companies and improved its outlook to stable.

Subsequent to quarter-end, we decided to pay down a portion of the outstanding amount owed under Textron Inc.’s bank line of credit and repaid approximately $250 million.  This debt was classified as long-term debt on our balance sheet at April 3, 2010.

In connection with the exit plan, we reduced our managed finance receivables by $769 million in the first quarter of 2010 through a combination of scheduled collections, sales, discounted payoffs, repossession of collateral, charge-offs and impairment charges.  We measure the success of the exit plan based on the percentage of managed finance receivable and other finance asset reductions converted to cash.  In the first quarter of 2010, we had a cash conversion ratio of 95%.  In 2010, we now expect a total reduction in managed finance receivables for the full year of approximately $1.8 billion, net of originations, which includes non-captive finance receivables as well as captive finance receivables.  At April 3, 2010, the exit plan applied to the remaining $3.5 billion of the Finance group’s non-captive managed finance receivable portfolio.

On April 3, 2010, the Finance group had $1.3 billion in debt and $341 million in other liabilities, primarily accounts payable and accrued expenses, that are payable within the next 12 months.

Our common stock price exceeded the conversion threshold price of $17.06 per share for at least 20 trading days during the 30 consecutive trading days ended March 31, 2010.  Accordingly, the notes are convertible at the holder’s option through June 30, 2010.  We may deliver shares of common stock, cash or a combination of cash and shares of common stock in satisfaction of our obligations upon conversion of the Convertible Notes.  We intend to settle the face value of the Convertible Notes in cash.  We have continued to classify these Convertible Notes as long-term based on our intent and ability to maintain the debt outstanding for a least one year through the use of various funding sources available to us.

Manufacturing Group Cash Flows
Free cash flow is a measure generally used by investors, analysts and management to gauge a company’s ability to generate cash from operations in excess of that necessary to be reinvested to sustain and grow the business.  Our definition of Manufacturing free cash flow uses net cash from operating activities of continuing operations and subtracts dividends received from the Finance group and capital expenditures, then adds back capital contributions provided under a Support Agreement with TFC, as discussed below, plus proceeds from the sale of plant, property and equipment.  We believe that our Manufacturing free cash flow calculation provides a relevant

 
 
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measure of liquidity and a useful basis for assessing our ability to fund operations.  This measure is not a financial measure under generally accepted accounting principles (GAAP) and should be used in conjunction with GAAP cash measures provided in our Consolidated Statement of Cash Flows.  Our Manufacturing free cash flow measure may not be comparable with similarly titled measures reported by other companies as there is no definitive accounting standard on how the measure should be calculated.

A reconciliation of net cash from operating activities of continuing operations as presented in our Consolidated Statement of Cash Flows to Manufacturing free cash flow is provided below.

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Net cash used in operating activities of continuing operations – GAAP	 	$	 (66	)	 	$	 (134	)	
Less: Dividends received from the Finance group	 	 	 (125	)	 	 	 (84	)	
Plus: Capital contributions paid to Finance group	 	 	 75	 	 	 	 —	 	
Less: Capital expenditures	 	 	 (38	)	 	 	 (69	)	
Plus: Proceeds on sale of property, plant and equipment	 	 	 1	 	 	 	 1	 	
Manufacturing free cash flow – Non-GAAP	 	$	 (153	)	 	$	 (286	)	

Cash used for restructuring activities totaled $20 million in the first quarter of 2010, compared with $27 million in the corresponding period in 2009.

Cash flows from continuing operations for the Manufacturing group as presented in our Consolidated Statement of Cash Flows are summarized below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Operating activities	 	$	 (66	)	 	$	 (134	)	
Investing activities	 	 	 (75	)	 	 	 (89	)	
Financing activities	 	 	 (166	)	 	 	 454	 	

Operating activities used less cash in the first quarter of 2010 compared with 2009, largely due to improvements in working capital, partially offset by lower earnings, primarily due to reduced volume at Cessna and Bell.  We used $277 million in working capital in the first quarter of 2010, compared with $430 million in the corresponding period of 2009.

In the first quarter of 2010, financing activities primarily consisted of a $150 million use of cash for intergroup financing of the Finance group by the Manufacturing group.  In the first quarter of 2009, financing activities included $1.2 billion in proceeds from drawing down on our bank line of credit and $133 million received from the Finance group to repay intergroup borrowings, partially offset by an $869 million reduction in our short-term debt.

Capital Contributions Paid To and Dividends Received From the Finance Group
Under a Support Agreement between Textron Inc. and TFC, Textron Inc. is required to maintain a controlling interest in TFC and consolidated shareholder’s equity of no less than $200 million.  The agreement also requires Textron Inc. to pay TFC a cash payment sufficient to provide that the sum of TFC’s pre-tax earnings before extraordinary items plus fixed charges will not be less than 125% of TFC’s fixed charges.  Cash contributions paid to TFC and dividends paid by TFC to Textron Inc. are detailed below.

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Dividends paid by TFC to Textron Inc.	 	$	 125	 	 	$	 84	 	
Capital contributions paid to TFC under Support Agreement	 	 	 (75	)	 	 	 —	 	

 
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An additional cash contribution of $71 million was made to TFC on April 9, 2010, which was reflected as capital contribution, to maintain compliance with the fixed charge coverage ratio required by the Support Agreement.  Due to the nature of these contributions, we classify these contributions within cash flows used by operating activities for the Manufacturing group in the Consolidated Statement of Cash Flows.  Capital contributions to support Finance group growth in the ongoing captive finance business are classified as cash flows from financing activities.  The Finance group’s net income (loss) is excluded from the Manufacturing group’s cash flows, while dividends from the Finance group are included within cash flows from operating activities for the Manufacturing group as they represent a return on investment.

Finance Group Cash Flows
The cash flows from continuing operations for the Finance group are summarized below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Operating activities	 	$	 (50	)	 	$	 18	 	
Investing activities	 	 	 771	 	 	 	 327	 	
Financing activities	 	 	 (785	)	 	 	 274	 	

The Finance group used more cash for operating activities primarily due to a $51 million payment to the Manufacturing group in the first quarter of 2010 under the tax sharing agreement, compared with $6 million in the corresponding period of 2009.

The Finance group generated more cash from investing activities as new finance receivable originations declined to $226 million in the first quarter of 2010, compared with $1.3 billion in the first quarter of 2009 as we continued to effect our exit plan for the non-captive business.  Finance receivables repaid and proceeds from sales and securitizations decreased to $937 million in the first quarter of 2010, compared with $1.6 billion in the first quarter of 2009.

The Finance group used more cash for financing activities in the first quarter of 2010, compared with the corresponding period of 2009, since there were no proceeds from third-party borrowings in the first quarter of 2010 to offset debt repayments, compared with $1.7 billion in proceeds from the first quarter 2009 drawdown on our bank lines of credit.  Principal payments on short- and long-term debt totaled $925 million in the first quarter of 2010, compared with $1.3 billion in the corresponding period of 2009.

In the first quarter of 2010, the Finance group borrowed an additional $150 million from the Manufacturing group, while in the first quarter of 2009 the Finance group repaid $112 million to the Manufacturing group.  As of April 3, 2010, the outstanding balance due to the Manufacturing group was $563 million.

Consolidated Cash Flows
The Finance group finances retail purchases and leases for new and used aircraft and equipment manufactured by our Manufacturing group, otherwise known as captive financing.  In the Consolidated Statements of Cash Flows, cash received from customers or from securitizations is reflected as operating activities when received from third parties.  However, in the cash flow information provided for the separate borrowing groups, cash flows related to captive financing activities are reflected based on the operations of each group.  For example, when product is sold by our Manufacturing group to a customer and is financed by the Finance group, the origination of the finance receivable is recorded within investing activities as a cash outflow in the Finance group’s statement of cash flows.  Meanwhile, in the Manufacturing group’s statement of cash flows, the cash received from the Finance group on the customer’s behalf is recorded within operating cash flows as a cash inflow.  Although cash is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of the original financing.  These captive financing activities, along with all significant intercompany transactions, are reclassified or eliminated from the Consolidated Statements of Cash Flows.

 
27

Reclassification and elimination adjustments included in the Consolidated Statement of Cash Flows are summarized below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Reclassifications from investing activities:	 	 	 	 	 	 	
Finance receivable originations for Manufacturing group inventory sales	 	$	 (81	)	 	$	 (120	)	
Cash received from customers, sale of receivables and securitizations	 	 	 159	 	 	 	 159	 	
Capital contributions made to Cessna Export Finance Corp.	 	 	 (20	)	 	 	 —	 	
Other	 	 	 (1	)	 	 	 —	 	
Total reclassifications from investing activities	 	 	 57	 	 	 	 39	 	
Reclassifications from financing activities:	 	 	 	 	 	 	 	 	
Capital contribution paid by Manufacturing group to Finance group	 	 	 75	 	 	 	 —	 	
Dividends received by Manufacturing group from Finance group	 	 	 (125	)	 	 	 (84	)	
Capital contributions made to Cessna Export Finance Corp.	 	 	 20	 	 	 	 —	 	
Total reclassifications from financing activities	 	 	 (30	)	 	 	 (84	)	
Total reclassifications and adjustments to cash flow from operating activities	 	$	 27	 	 	$	 (45	)	

The consolidated cash flows from continuing operations, after elimination of activity noted above, are summarized below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Operating activities	 	$	 (89	)	 	$	 (161	)	
Investing activities	 	 	 639	 	 	 	 220	 	
Financing activities	 	 	 (921	)	 	 	 791	 	

On a consolidated basis, less cash was used for operating activities largely due to a $78 million increase in cash received on captive finance receivables, net of originations, in the first quarter of 2010, compared with $39 million in the corresponding period of 2009 .

We generated more cash from investing activities as new finance receivable originations declined to $145 million in the first quarter of 2010, compared with $1.2 billion in the corresponding period of 2009 as we continued effecting our exit plan for the non-captive finance business.  Finance receivables repaid and proceeds from sales and securitizations decreased to $778 million in the first quarter of 2010, compared with $1.4 billion in the first quarter of 2009.

In the first quarter of 2010, financing activities primarily consisted of a $936 million in principal payments on long-term debt.  In the first quarter of 2009, financing activities included $3.0 billion in proceeds from drawing down on our lines of credit, partially offset by a $1.6 billion reduction in our short-term debt and $578 million in principal payments on long-term debt.

Consolidated Discontinued Operations Cash Flows
The cash flows from discontinued operations are summarized below:

 	 	Three Months Ended	 	
 
(In millions)	 	April 3,
2010	 	 	April 4,
2009	 	
Operating activities	 	$	 1	 	 	$	 (8	)	
Investing activities	 	 	 —	 	 	 	 302	 	

In the first quarter of 2009, cash flow from investing activities for discontinued operations is primarily related to proceeds from the sale of HR Textron.

 
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Forward Looking Information

Certain statements in this Quarterly Report on Form 10-Q and other oral and written statements made by us from time to time are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, such as the Risk Factors contained in our Annual Report on Form 10-K and including the following: (a) changes in worldwide economic and political conditions that impact demand for our products, interest rates and foreign exchange rates; (b) the interruption of production at our facilities or our customers or suppliers; (c) performance issues with key suppliers, subcontractors and business partners; (d) our ability to perform as anticipated and to control costs under contracts with the U.S. Government; (e) the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, and, under certain circumstances, to suspend or debar us as a contractor eligible to receive future contract awards; (f) changing priorities or reductions in the U.S. Government defense budget, including those related to Operation Iraqi Freedom, Operation Enduring Freedom and the Overseas Contingency Operations; (g) changes in national or international funding priorities, U.S. and foreign military budget constraints and determinations, and government policies on the export and import of military and commercial products; (h) legislative or regulatory actions impacting our operations or demand for our products; (i) the ability to control costs and successful implementation of various cost-reduction programs; (j) the timing of new product launches and certifications of new aircraft products; (k) the occurrence of slowdowns or downturns in customer markets in which our products are sold or supplied or in which our Finance segment holds receivables; (l) changes in aircraft delivery schedules or cancellation or deferrals of orders; (m) the impact of changes in tax legislation; (n) the extent to which we are able to pass raw material price increases through to customers or offset such price increases by reducing other costs; (o) our ability to offset, through cost reductions, pricing pressure brought by original equipment manufacturer customers; (p) our ability to realize full value of receivables; (q) the availability and cost of insurance; (r) increases in pension expenses and other postretirement employee costs; (s) our Finance segment’s ability to maintain portfolio credit quality; (t) Textron Financial Corporation’s (“TFC”) ability to maintain certain minimum levels of financial performance required under its committed bank lines of credit and under Textron’s support agreement with TFC; (u) our Finance segment’s access to financing, including securitizations, at competitive rates; (v) our ability to successfully exit from TFC’s commercial finance business, other than the captive finance business; (w) uncertainty in estimating market value of TFC’s receivables held for sale and reserves for TFC’s receivables to be retained; (x) uncertainty in estimating contingent liabilities and unrecognized tax benefits and establishing reserves to address such items; (y) risks and uncertainties related to acquisitions and dispositions, including difficulties or unanticipated expenses in connection with the consummation of acquisitions or dispositions, the disruption of current plans and operations, or the failure to achieve anticipated synergies and opportunities; (z) the efficacy of research and development investments to develop new products; (aa) the launching of significant new products or programs which could result in unanticipated expenses; (bb) bankruptcy or other financial problems at major suppliers or customers that could cause disruptions in our supply chain or difficulty in collecting amounts owed by such customers; (cc) difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and (dd) continued volatility in the economy resulting in a prolonged downturn in the markets in which we do business.

Item 3 .	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	

There has been no significant change in our exposure to market risk during the first quarter of 2010.  For discussion of our exposure to market risk, refer to Item 7A. Quantitative and Qualitative Disclosures about Market Risk contained in Textron’s 2009 Annual Report on Form 10-K.

 
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Item 4 .	CONTROLS AND PROCEDURES	

We have carried out an evaluation, under the supervision and with the participation of our management, including our President and Chief Executive Officer (CEO) and our Executive Vice President and Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Act)) as of the end of the fiscal quarter covered by this report.  Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the fiscal quarter ended April 3, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	

As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on August 13, 2009, a purported shareholder class action lawsuit was filed in the United States District Court in Rhode Island against Textron, its Chairman and former Chief Executive Officer and its former Chief Financial Officer.  The suit, filed by the City of Roseville Employees' Retirement System, alleges that the defendants violated the federal securities laws by making material misrepresentations or omissions related to Cessna and Textron Financial Corporation.  The complaint seeks unspecified compensatory damages.  In December 2009, the Automotive Industries Pension Trust Fund was appointed lead plaintiff in the case. On February 8, 2010, an amended class action complaint was filed with the Court.  The amended complaint names as additional defendants Textron Financial Corporation and three of its present and former officers.  On April 6, 2010, the court entered a stipulation agreed to by the parties in which plaintiffs voluntarily dismissed, without prejudice, certain causes of action in the amended complaint.  On April 9, 2010, all defendants moved to dismiss the remaining counts of the amended complaint, and that motion is still pending.

As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on August 21, 2009, a purported class action lawsuit was filed in the United States District Court in Rhode Island by Dianne Leach, an alleged participant in the Textron Savings Plan.  Six additional substantially similar class action lawsuits were subsequently filed by other individuals.  The complaints varyingly name Textron and certain present and former employees, officers and directors as defendants. These lawsuits allege that the defendants violated the United States Employee Retirement Income Security Act by imprudently permitting participants in the Textron Savings Plan to invest in Textron common stock.  The complaints seek equitable relief and unspecified compensatory damages. On February 2, 2010, an amended class action complaint was filed consolidating the seven previous lawsuits into a single complaint.  On March 19, 2010, all defendants moved to dismiss the consolidated amended complaint, and that motion is still pending.

As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on November 18, 2009, a purported derivative lawsuit was filed by John D. Walker in the United States District Court of Rhode Island against certain present and former officers and directors of Textron.  The suit alleges violations of the federal securities laws consistent with the Roseville action described above, as well as breach of fiduciary duties, waste of corporate assets and unjust enrichment.  On February 16, 2010, all defendants moved to dismiss the derivative complaint, and that motion is still pending.

Textron believes that these lawsuits are without merit and intends to defend them vigorously.

 
30

Item 5 .      OTHER INFORMATION
 
At Textron’s annual meeting of shareholders held on April 28, 2010, the following items were voted upon:

1.  	The following persons were elected to serve as directors in Class II for three year terms expiring in 2013 and received the votes listed:	
 
 	 	For	 	 	Against	 	 	Abstain	 	 	Broker Non-Vote	 	
Kathleen M. Bader	 	 	199,051,891.722	 	 	 	8,688,338.006	 	 	 	2,150,282.631	 	 	 	28,708,906	 	
R. Kerry Clark	 	 	166,650,540.287	 	 	 	36,733,492.218	 	 	 	6,506,476.854	 	 	 	28,708,909	 	
Ivor J. Evans	 	 	166,044,542.577	 	 	 	37,161,722.344	 	 	 	6,684,245.438	 	 	 	28,708,908	 	
Lord Powell of Bayswater KCMG	 	 	158,609,957.863	 	 	 	44,622,459.140	 	 	 	6,658,090.356	 	 	 	28,708,911	 	
James L. Ziemer	 	 	199,577,421.441	 	 	 	8,255,875.871	 	 	 	2,057,214.047	 	 	 	28,708,907	 	
 
The following directors have terms of office which continued after the meeting:  Class III expiring in 2011:  Paul E. Gagne, Dain M. Hancock, Lloyd G. Trotter and Thomas B. Wheeler; and Class I expiring in 2012:  Lewis B. Campbell, Scott C. Donnelly, Lawrence K. Fish and Joe T. Ford.

2.  	The amendments to our Amended and Restated 2007 Long-Term Incentive Plan, as amended (the “2007 Plan”), and our 1999 Long-Term Incentive Plan, as amended and restated, to allow for a one-time stock option exchange program for employees other than executive officers were approved by the following vote:	
 
For	 	 	Against	 	 	Abstain	 	 	Broker Non-Vote	 	
 	181,062,416.003	 	 	 	26,540,877.792	 	 	 	2,287,212.564	 	 	 	28,708,912	 	
 
In addition, certain additional amendments to the 2007 Plan were also approved, as follows:

·  	The definition of “change of control” in the 2007 Plan was amended to require consummation of a transaction, rather than just shareholder approval of a transaction, for a change of control to occur;	
·  	The 2007 Plan has been amended to clarify that no future option exchange for cash may be conducted without shareholder approval; and	
·  	The 2007 Plan has been amended to prohibit amendments that (i) increase benefits to participants, (ii) increase the number of shares reserved under the plan or (iii) modify the requirements for participation in the plan, without, in any such case, receiving shareholder approval of such amendment.	

3.  	The amendment to our Restated Certificate of Incorporation to phase out the classification of the Board of Directors and to provide instead for the annual election of directors, to reflect the current number of directors and to restate the par value of preferred stock to $.01 par value, was approved by the following vote:	
 
For	 	 	Against	 	 	Abstain	 	 	Broker Non-Vote	 	
 	230,645,209.444	 	 	 	6,154,224.352	 	 	 	1,799,984.563	 	 	 	0	 	
 
Also, the amendment to Section 3.13 of Textron’s Amended and Restated By-Laws, which was approved by the Board of Directors contingent upon shareholder approval of the declassification amendment, has become effective; this amendment revises the By-Laws to provide, consistent with Delaware law, that directors may be removed with or without cause by a vote of the holders of a majority of the outstanding shares entitled to vote.

 
31

 
4.  	The appointment of Ernst & Young LLP by the Audit Committee as Textron's independent registered public accounting firm for 2010 was ratified by the following vote:	
 
For	 	 	Against	 	 	Abstain	 	 	Broker Non-Vote	 	
 	233,548,265.772	 	 	 	3,502,952.730	 	 	 	1,548,199.857	 	 	 	0	 	

Item 6.	EXHIBITS	
 	 	
 3.1	Restated Certificate of Incorporation of Textron Inc., as filed with the Secretary of State of Delaware on April 29, 2010	
 	 	
 3.2	Amended and Restated By-Laws of Textron Inc.	
 	 	
10.1	Textron Inc. Short-Term Incentive Plan (As amended and restated effective January 3, 2010)	
 	 	
10.2	Deferred Income Plan for Textron Executives, Effective January 3, 2010, including Appendix A, Provisions of the Deferred Income Plan for Textron Key Executives (As in effect before January 1, 2008)	
 	 	
10.3	Textron Spillover Savings Plan, Effective January 3, 2010, including Appendix A, Defined Contribution Provisions of the Supplemental Benefits Plan for Textron Key Executives (As in effect before January 1, 2008)	
 	 	
10.4	Textron Spillover Pension Plan, As Amended and Restated Effective January 3, 2010, including Appendix A (as amended and restated effective January 3, 2010), Defined Benefit Provisions of the Supplemental Benefits Plan for Textron Key Executives (As in effect before January 1, 2007)	
 	 	
10.5	Supplemental Retirement Plan for Textron Key Executives, As Amended and Restated Effective January 3, 2010, including Appendix A, Provisions of the Supplemental Retirement Plan for Textron Key Executives (As in effect before January 1, 2008)	
 	 	
10.6	Survivor Benefit Plan for Textron Key Executives (As amended and restated effective January 3, 2010)	
 	 	
12.1	Computation of ratio of income to fixed charges of Textron Inc. Manufacturing Group	
 	 	
12.2	Computation of ratio of income to fixed charges of Textron Inc. including all majority-owned subsidiaries	
 	 	
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 	 	
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	

 
32

101	The following materials from Textron Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) Notes to the Consolidated Financial Statements, tagged as blocks of text.	

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 thereunto duly authorized.

TEXTRON INC.
 	
Date:	April 30, 2010	 	/s/Richard L. Yates	
 	 	 	Richard L. Yates
Senior Vice President and Corporate Controller
(principal accounting officer)	

 
33

LIST OF EXHIBITS

  3.1	Restated Certificate of Incorporation of Textron Inc., as filed with the Secretary of State of Delaware on April 29, 2010	
 
  3.2	Amended and Restated By-Laws of Textron Inc.	
 
10.1	Textron Inc. Short-Term Incentive Plan (As amended and restated effective January 3, 2010)	
 
10.2	Deferred Income Plan for Textron Executives, Effective January 3, 2010, including Appendix A, Provisions of the Deferred Income Plan for Textron Key Executives (As in effect before January 1, 2008)	
 
10.3	Textron Spillover Savings Plan, Effective January 3, 2010, including Appendix A, Defined Contribution Provisions of the Supplemental Benefits Plan for Textron Key Executives (As in effect before January 1, 2008)	
 
10.4	Textron Spillover Pension Plan, As Amended and Restated Effective January 3, 2010, including Appendix A (as amended and restated effective January 3, 2010), Defined Benefit Provisions of the Supplemental Benefits Plan for Textron Key Executives (As in effect before January 1, 2007)	
 
10.5	Supplemental Retirement Plan for Textron Key Executives, As Amended and Restated Effective January 3, 2010, including Appendix A, Provisions of the Supplemental Retirement Plan for Textron Key Executives (As in effect before January 1, 2008)	
 
10.6	Survivor Benefit Plan for Textron Key Executives (As amended and restated effective January 3, 2010)	

12.1	Computation of ratio of income to fixed charges of Textron Inc. Manufacturing Group	
 
12.2	Computation of ratio of income to fixed charges of Textron Inc. including all majority-owned subsidiaries	
 
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 
101	The following materials from Textron Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) Notes to the Consolidated Financial Statements, tagged as blocks of text.	
 
34

EXHIBIT 10.1
 
TEXTRON INC. SHORT-TERM INCENTIVE PLAN
 
(As amended and restated effective January 3, 2010)

SECTION 1. ESTABLISHMENT AND PURPOSE
 
1.1   Establishment of the Plan.   Textron Inc., a Delaware company (the “Company”), hereby establishes a short-term incentive compensation plan to be known as the Textron Inc. Short-Term Incentive Plan (the “Plan”). The Plan permits the awarding of cash bonuses to Employees (as defined below), based on the achievement of performance goals that are pre-established by the Board of Directors of the Company (the “Board”) or by the Committee (as defined below).
 
The Plan, as adopted by the Board and approved by the shareholders of the Company at the 2007 annual general meeting of shareholders, is effective as of January 1, 2007 and shall continue until December 31, 2016, unless terminated earlier as set forth in Section 10.  The Plan is amended and restated as follows, effective July 25, 2007, to incorporate those terms necessary or advisable to ensure that awards under the Plan are exempt from or comply with Section 409A of the Internal Revenue Code.
 
The Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments adopted through the date of this restatement.
 
1.2   Purpose.   The purposes of the Plan are to (i) provide greater motivation for certain employees of the Company and its Subsidiaries (as defined below) to attain and maintain the highest standards of performance, (ii) attract and retain employees of outstanding competence, and (iii) direct the energies of employees towards the achievement of specific business goals established for the Company and its Subsidiaries.
 
The purposes of the Plan shall be carried out by the payment to Participants (as defined below) of short-term incentive cash awards, subject to the terms and conditions of the Plan. All compensation payable under this Plan to Participants who are Executive Officers (as defined below) is intended to be deductible by the Company under Section 162(m) of the Code (as defined below).
 
SECTION 2. DEFINITIONS
 
As used in the Plan, the following terms shall have the meanings set forth below (unless otherwise expressly provided).
 
“Award Opportunity” means the various levels of incentive awards which a Participant may earn under the Plan, as established by the Committee pursuant to Section 5.1.  For

 
DC: 2469936-5

an individual, the Award Opportunity is typically expressed as a minimum and maximum percentage of the individual’s Target Incentive Award (as defined below) that define a range within which the actual incentive award will fall. 
 
"Base Salary” shall mean the regular annualized base salary (determined as of January 1 of each Plan Year with respect to Executive Officers) earned by a Participant during a Plan Year prior to any salary reduction contributions made to any deferred compensation plans sponsored or maintained by the Company or by any Subsidiary; provided, however, that Base Salary shall not include awards under this Plan, any bonuses, equity awards, the matching contribution under any plan of the Company or any of its Subsidiaries (as applicable) providing such, overtime, relocation allowances, severance payments or any other special awards as determined by the Committee.
 
“Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
 
“Board” has the meaning set forth in Section 1.1.
 
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
 
“Committee” means the Organization and Compensation Committee of the Board, provided that the Committee shall consist of three or more individuals, appointed by the Board to administer the Plan, pursuant to Section 3, who are “outside directors” to the extent required by and within the meaning of Section 162(m) of the Code, as amended from time to time.
 
“Company” has the meaning set forth in Section 1.1.
 
“Effective Date” means the date the Plan becomes effective, as set forth in Section 1.1 herein.
 
“Employee” means an employee of the Company or a Subsidiary.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
 
“Executive Officer” means a “covered employee” within the meaning of Section 162(m)(3) of the Code or any other executive designated by the Committee for purposes of exempting compensation payable under the Plan from the deduction limitations of Section 162(m) of the Code.
 
“Final Award” means the actual award earned during a Plan Year by a Participant, as determined by the Committee at the end of such Plan Year.

 

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“Participant” means an Employee who is participating in the Plan pursuant to Section 4.
 
“Plan” means this Textron Inc. Short-Term Incentive Plan.
 
“Plan Year” means the calendar year, commencing on January 1st and ending on December 31st, or any other period that the Committee designates as the performance period for a particular performance goal pursuant to Section 5.1.
 
“Subsidiary” means any company or corporation in which the Company beneficially owns, directly or indirectly, 50% or more of the securities entitled to vote in the election of the directors of the corporation.
 
“Target Incentive Award” means the target award to be paid to a Participant when performance measures are achieved, as established by the Committee. For an individual, the Target Incentive Award is typically expressed as a percentage of the individual’s Base Salary (as defined above).
 
“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.
 
SECTION 3. ADMINISTRATION
 
The Plan shall be administered by the Committee. Subject to the limitations set forth in the Plan, the Committee shall: (i) select from the Employees of the Company and its Subsidiaries, those who shall participate in the Plan, (ii) establish Award Opportunities in such forms and amounts as it shall determine, (iii) impose such limitations, restrictions, and conditions upon such Award Opportunities as it shall deem appropriate, (iv) interpret the Plan and adopt, amend, and rescind administrative guidelines and other rules and regulations relating to the Plan, (v) make any and all factual and legal determinations in connection with the administration and interpretation of the Plan, (vi) correct any defect or omission or reconcile any inconsistency in this Plan or in any Award Opportunity granted hereunder, and (vii) make all other necessary determinations and take all other actions necessary or advisable for the implementation and administration of the Plan. The Committee's determinations on matters within its authority shall be conclusive and binding upon all parties.
 
Except with respect to the matters that under Section 162(m) of the Code and Treasury Regulation Section 1.162-27(e) are required to be determined or established by the Committee to qualify awards to Executive Officers under the Plan as qualified performance-based compensation, the Committee shall have the power to delegate to any officer or employee of the Company the authority to administer and interpret the procedural aspects of the Plan, subject to the Plan's terms, including adopting and enforcing rules to decide procedural and administrative issues. To the extent of any such

 

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delegation, references to the “Committee” herein shall be deemed to refer to the relevant delegate.
 
Subject to applicable laws, rules and regulations:  (i) no member of the Committee (or its delegates) shall be liable for any good faith action or determination made in connection with the operation, administration or interpretation of the Plan and (ii) the members of the Committee (and its delegates) shall be entitled to indemnification and reimbursement in the manner provided in the Company’s Certificate of Incorporation as it may be amended from time to time. In the performance of its responsibilities with respect to the Plan, the Committee shall be entitled to rely upon information and/or advice furnished by the Company’s officers or employees, the Company’s accountants, the Company’s counsel and any other party the Committee deems necessary, and no member of the Committee shall be liable for any action taken or not taken in reliance upon any such information and/or advice.
 
SECTION 4. ELIGIBILITY AND PARTICIPATION
 
4.1   Eligibility.   Each Employee who is included in the Plan by the Committee, shall be eligible to participate in the Plan for such Plan Year and all subsequent Plan Years, subject to the limitations of Section 7 herein.
 
4.2   Participation.   Participation in the Plan shall be determined annually by the Committee based upon the criteria set forth in the Plan. Participation in the Plan during the applicable Plan Year shall be limited to those Employees (“Participants”) who are selected by the Committee. Employees who are eligible to participate in the Plan shall be notified of the performance goals and related Award Opportunities for the relevant Plan Year.
 
4.3   Right to Reduce or End Eligibility.   The Committee may elect to reduce the Award Opportunity (as described in Section 5.2 herein) or end it altogether for any single Participant or group of Participants at any time.
 
SECTION 5. AWARD DETERMINATION
 
5.1   Performance Goals.   Prior to the beginning of each Plan Year, or as soon as practicable thereafter, the Committee shall approve or establish in writing the performance goals for that Plan Year. Performance goals may include financial and/or non-financial goals.
 
Performance goals and their relative weight may vary by job. After the performance goals are established, the Committee will align the achievement of the performance goals with the Award Opportunities (as described in Section 5.2 herein), such that the level of achievement at the end of the Plan Year as compared to the pre-established performance goals set at the beginning of the Plan Year will determine the amount of the

 

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Final Award. The Committee also shall have the authority to exercise subjective discretion in the determination of Final Awards to reduce or increase a calculated award based on the Committee's qualitative assessment of performance.
 
The performance period with respect to which awards may be payable under the Plan shall generally be the Plan Year; provided, however, that the Committee shall have the authority and discretion to designate different performance periods under the Plan, in which case references to Plan Year shall be deemed to refer to such other performance period.
 
5.2   Award Opportunities.   Prior to the beginning of each Plan Year, or as soon as practicable thereafter, the Committee shall establish an Award Opportunity for each Participant. In the event a Participant changes job levels during a Plan Year, the Participant's Award Opportunity may be adjusted to reflect the amount of time at each job level during the Plan Year. In addition, if a Participant changes jobs during the year, the Participant’s goals may change as of the effective date of the job change to reflect the different performance goals. Each job’s performance goals will continue to be assessed on a full-year basis to determine payouts, with the proportion of time in each job applied to determine the final payout amount.  In the case of an Award Opportunity that the Committee has designated as “performance-based compensation” for purposes of Section 162(m) or Section 409A of the Code, the Committee shall have the right to adjust the Award Opportunity as described in this Section 5.2 only to the extent that the adjustment would not cause the Award Opportunity to fail to qualify as “performance-based compensation” for purposes of Section 162(m) or Section 409A, as applicable.
 
5.3   Adjustment of Performance Goals.   The Committee shall have the right to adjust the performance goals and the Award Opportunities (either up or down) during a Plan Year if it determines that the occurrence of external changes or other unanticipated business conditions have materially affected the fairness of the goals and have unduly influenced the Company's ability to meet them, including without limitation, events such as material acquisitions, changes in the capital structure of the Company, and extraordinary accounting changes. In addition, performance goals and Award Opportunities will be calculated without regard to any changes in accounting standards that may be required by the Financial Accounting Standards Board after such performance goals or Award Opportunities are established. Further, in the event of a Plan Year of less than twelve months, the Committee shall have the right to adjust the performance goals and the Award Opportunities accordingly, at its sole discretion.  In the case of an Award Opportunity that the Committee has designated as “performance-based compensation” for purposes of Section 162(m) or Section 409A of the Code, the Committee shall have the right to adjust the performance goals or Award Opportunity as described in this Section 5.3 only to the extent that the adjustment would not cause the Award Opportunity to fail to qualify as “performance-based compensation” for purposes of Section 162(m) or Section 409A, as applicable.

 

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5.4   Final Award Determinations.   At the end of each Plan Year, Final Awards shall be computed for each Participant as determined by the Committee. Each Final Award shall be based upon the (i) Participant’s Target Incentive Award percentage, multiplied by his Base Salary and (ii) percent satisfaction of performance goals (as set by the Committee). Final Award amounts may vary above or below the Target Incentive Award, based on the level of achievement of the pre-established performance goals.
 
5.5   Limitations.   The amount payable to a Participant for any Plan Year shall not exceed U.S. $4,000,000.
 
5.6   Award Opportunities under Section 409A.  The Committee may, in its discretion, establish Award Opportunities that will qualify as “performance-based compensation” under Section 409A of the Code.  An Award Opportunity intended to qualify as “performance-based compensation” under Section 409A of the Code shall meet the following requirements:
 
(a)  	For any Participant who is eligible to participate in the Plan on the first day of the performance period, the performance period shall include at least 12 consecutive months;	
 
(b)  	Performance goals shall be established no later than 90 days after the beginning of the performance period, and at a time when it is not substantially certain that the performance goals will be met.  Performance goals may not be adjusted after the first 90 days of the performance period, except that the Committee may, consistent with Section 409A, make adjustments it deems necessary to reflect corporate events, such as recapitalizations or mergers, that would otherwise affect the performance goals; and	
 
(c)  	No Final Award shall be paid unless the pre-established performance goals are satisfied.	
 
SECTION 6. PAYMENT OF FINAL AWARDS
 
6.1   Form and Timing of Payment.   As soon as practicable after the end of each Plan Year, the Committee shall determine the extent to which the Company and each Participant has achieved the performance goals for such Plan Year, including the specific target objective(s) and the satisfaction of any other material terms of the awards, and the Committee shall approve the amount of each Participant's Final Award for the relevant period. Final Award payments shall be payable to the Participant, or to his estate in the case of death, in a single lump-sum cash payment, as soon as practicable after the end of each Plan Year, after the Committee, in its sole discretion, has certified in writing the extent to which the specified performance goals were achieved, but in no event later than

 

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March 15th of the year following the calendar year in which the applicable performance period ends..
 
6.2   Payment of Partial Awards.   In the event a Participant no longer meets the eligibility criteria as set forth in the Plan during the course of a particular Plan Year, the Committee may, in its sole discretion, compute and pay a partial award in a lump sum on the scheduled date in Section 6.1 for the portion of the Plan Year that an Employee was a Participant. Unless such payment is specifically approved by the Committee, no such payments will be made, and continued service through the end of the Plan Year shall be required to earn an award. Unless the Committee determines otherwise, a Participant who has earned a Final Award with respect to a completed Plan Year who subsequently terminates employment or otherwise ceases eligibility before the date that the Final Award is to be paid shall be paid such Final Award on the scheduled date.
 
6.3   Unsecured Interest.   No Participant or any other party claiming an interest in amounts earned under the Plan shall have any interest whatsoever in any specific asset of the Company or of any Subsidiary. To the extent that any party acquires a right to receive payments under the Plan, such right shall be equivalent to that of an unsecured general creditor of the Company.
 
SECTION 7. TERMINATION OF ELIGIBILITY OR EMPLOYMENT
 
7.1   Termination of Eligibility.   In the event a Participant ceases to be eligible to participate in the Plan during a Plan Year but remains employed by the Company or a Subsidiary through the end of such Plan Year, the Final Award determined in accordance with Section 5.4 herein shall be reduced to reflect participation prior to such cessation of eligibility only. The reduced award shall be based upon the proportionate amount of Base Salary earned during the Plan Year prior to cessation of eligibility.
 
The Final Award thus determined shall be payable in a lump sum as soon as practicable following certification of the relevant performance goals by the Committee for the Plan Year in which such termination occurs, or sooner (except with respect to Executive Officers), as determined by the Committee in its sole discretion.  A participant’s Final Award shall be paid no later than March 15 of the year following the calendar year in which the applicable performance period ends.
 
7.2   Termination of Employment.   In the event a Participant's employment is terminated for any reason, all of the Participant's rights to a Final Award for the Plan Year then in progress shall be forfeited. However, the Committee, in its sole discretion, may pay a partial award for the portion of that Plan Year that the Participant was employed by the Company, computed as determined by the Committee and paid in a lump sum no later than March 15 of the year following the calendar year in which the applicable performance period ends.

 

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SECTION 8. RIGHTS OF PARTICIPANTS
 
8.1   Employment.   Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company.
 
8.2   Nontransferability.   No right or interest of any Participant in the Plan shall be assignable or transferable, or subject to any lien, directly, by operation of law, or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge, and bankruptcy.
 
SECTION 9. EXECUTIVE OFFICERS
 
9.1   Applicability.   The provisions of this Section 9 shall apply only to Executive Officers and are intended to apply additional terms, conditions and limitations required for amounts payable hereunder to Executive Officers to qualify as performance-based compensation exempt from Section 162(m) of the Code. In the event of any inconsistencies between this Section 9 and the other Plan provisions, the provisions of this Section 9 shall control with respect to Executive Officers.
 
9.2   Performance Goals and Award Opportunities.   With respect to Executive Officers, objective written performance goals and Award Opportunities for a Plan Year shall be established by the Committee (and the Committee only, with no delegation) (i) while the attainment of the performance goals for the Plan Year is substantially uncertain and (ii) no more than 90 days after the commencement of the Plan Year (or a number of days equal to 25% of the Plan Year, if less). The performance goals applicable to the Executive Officers shall be limited to the performance goals listed below. The Committee may select one or more of the performance goals specified for each Plan Year which need not be the same for each Executive Officer in a given year. Performance goals will consist of specified levels of one or more of the following performance criteria as the Committee deems appropriate: operating cash flows from continuing operations, operating working capital, free cash flow, revenues, segment profit, corporate expenses, special charges, gain (loss) on sale of business, income from continuing operations, net income, EBITDA—earnings before interest, taxes, depreciation and amortization, EBIT—earnings before interest and taxes, EPS—earnings per share, as adjusted EPS, ROA—return on assets, ROS—return on sales, ROE—return on equity, ROIC—return on invested capital, WACC—weighted average cost of capital, total shareholder return, stock price appreciation, growth in managed assets, organic growth, cost performance, net cost reductions, inventory turns, selling and administrative expense as a percentage of sales, days sales outstanding, ratio of income to fixed charges, segment profit margins, total profit margin, EVA—economic value added, intrinsic value and effective income tax rate. In each case, performance goals shall be determined in accordance with generally accepted accounting principles (subject to modifications approved by the Committee) and shall be consistently applied on a

 

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business unit, divisional, subsidiary or consolidated basis or any combination thereof. Performance goals may be described in terms of objectives that are related to the individual Participant or objectives that are Company-wide or related to a Subsidiary, division, department, region, function or business unit and may be measured on an absolute or cumulative basis or on the basis of percentage of improvement over time, and may be measured in terms of Company performance (or performance of the applicable Subsidiary, division, department, region, function or business unit) or measured relative to selected peer companies or a market index. In addition, for awards not intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee may establish performance goals based on other criteria as it deems appropriate. Notwithstanding the above, for any award or portion of an award designated to be “performance-based compensation” under Section 162(m) of the Code, the Committee does not retain any right to increase any amount otherwise determined under the provisions of the Plan.
 
9.3   Certification of Achievement of Performance Goals.   At the end of the Plan Year and prior to payment, the Committee shall certify in writing the extent to which the performance goals and any other material terms were satisfied. Final Awards shall be computed for each Executive Officer based on (i) the Participant's Target Incentive Award percentage, multiplied by his Base Salary and (ii) percent satisfaction of performance goals (as certified by the Committee). Final Award amounts may vary above or below the Target Incentive Award based on the level of achievement of the pre-established performance goals.
 
9.4   Non-adjustment of Performance Goals.   Once established, performance goals shall not be changed during the Plan Year except as permitted consistent with the qualified performance-based compensation exception under Section 162(m) of the Code.
 
9.5   Discretionary Adjustments.   The Committee retains the discretion to eliminate or decrease the amount of the Final Award otherwise payable to a Participant. For any Final Award or portion of a Final Award designated to be “performance-based compensation” under Section 162(m) of the Code, the Committee shall not retain any right to increase any amount otherwise determined under the provisions of the Plan.

 

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SECTION 10. AMENDMENT AND MODIFICATION
 
10.1  Amendment by Board .  Subject to applicable laws, rules, and regulations, the Board, in its sole discretion, without notice, at any time and from time to time, may modify or amend, in whole or in part, any or all of the provisions of the Plan, or may suspend or terminate the Plan entirely, by written resolution or other formal action reflected in writing.
 
10.2  Delegation of Amendment Authority.  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan  to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.
 
SECTION 11. MISCELLANEOUS
 
11.1   Jurisdiction, Venue and Governing Law.   Except as to matters of federal law, the Plan, and all agreements hereunder, shall be governed by and construed in accordance with the laws of Rhode Island. Any dispute, controversy or claim arising out of or relating to the Plan or any award under the Plan shall be brought only in a court of competent jurisdiction in the State of Rhode Island, and no other court, agency or tribunal shall have jurisdiction to resolve any such dispute, controversy or claim.
 
11.2   Withholding Taxes.   The Company and its Subsidiaries shall have the right to deduct from all payments under the Plan any federal, state, local and/or foreign income, employment or other applicable payroll taxes required by law to be withheld with respect to such payments.
 
11.3   Gender and Number.   Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.
 
11.4   Severability.   In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
 
11.5   Costs of the Plan.   All costs of implementing and administering the Plan shall be borne by the Company.
 
11.6   Successors.   All obligations of the Company and its Subsidiaries under the Plan shall be binding upon and inure to the benefit of any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger,

 

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amalgamation, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
 
11.7  Compliance With Code Section 409A .   The Plan is intended, and shall be interpreted, to provide compensation that is exempt from Code Section 409A under the short-term deferral rule (unless a Participant makes a valid deferral election under a separate plan).  The Company does not warrant that the Plan will comply with Code Section 409A with respect to any Participant or with respect to any payment, however.  In no event shall the Company; any affiliate of the Company; any director, officer, or employee of the Company or an affiliate; or any member of the Committee be liable for any additional tax, interest, or penalty incurred by a Participant as a result of the Plan’s failure to satisfy the requirements of Code Section 409A, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.

 
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EXHIBIT 10.2

 
DEFERRED INCOME PLAN
FOR TEXTRON EXECUTIVES
____________________
 
Effective January 3, 2010

 

 

 

 

DC: 3052838-5

 

Deferred Income Plan
for Textron Executives
 
Effective January 3, 2010

Table of Contents

 
Introduction	 	 	1	
 	 	 	 	
Article I - Definitions	 	 	2	
 	 	 	 	
 	1.01	“Account”	2	
 	1.02	“Beneficiary”	2	
 	1.03	“Board”	2	
 	1.04	“Change in Control”	2	
 	1.05	“Deferred Income”	3	
 	1.06	“Eligible Individual”	4	
 	1.07	“Executive Plan”	4	
 	1.08	“Interest”	4	
 	1.09	“IRC”	4	
 	1.1	“Key Executive Plan”	4	
 	1.11	“Participant”	4	
 	1.12	“Plan”	4	
 	1.13	“Schedule A Participant”	4	
 	1.14	“Schedule B Participant”	4	
 	1.15	“Separation From Service”	5	
 	1.16	“Textron”	5	
 	1.17	“Textron Company”	5	
 	1.18	“Total Disability”	5	

 
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Effective January 3, 2010	Table of Contents
Page i	

 
 	1.19	“Unforeseeable Emergency”	5	
 	 	 	 	
Article II - Enrollment and Deferrals	 	 	5	
 	 	 	 	
 	2.01	Initial Enrollment	5	
 	2.02	Deferral Election	6	
 	2.03	Deferral Election Requirements	7	
 	2.04	Non-Elective Deferred Compensation	8	
 	2.05	Changes in Deferral Elections	9	
 	 	 	 	
Article III - Investment Accounts	 	 	9	
 	 	 	 	
 	3.01	Investment Accounts	9	
 	3.02	Moody’s Account	10	
 	3.03	Stock Unit Account	10	
 	3.04	Monthly Adjustments	10	
 	3.05	Transfers and Distributions From Stock Unit Account	11	
 	 	 	 	
Article IV - Vesting	 	 	11	
 	 	 	 	
 	4.01	Elective Deferred Income and Automatic Deferred Income	11	
 	4.02	Discretionary Deferred Income	11	
 	4.03	Textron Company Contribution	11	
 	4.04	Change in Control	12	
 	4.05	Vesting Under Employment Contract.	12	
 	4.06	Forfeiture of Non-Vested Amounts	12	
 	 	 	 	
Article V - Payments to Participants	 	 	12	
 	 	 	 	
 	5.01	Separation From Service	12	
 	5.02	Total Disability	12	
 	5.03	Form of Payment	12	
 	5.04	Distribution Elections	13	

 
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Effective January 3, 2010	Table of Contents
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	5.05	Automatic Lump Sum Payments	14	
 	5.06	Administrative Adjustments in Payment Date	14	
 	5.07	Distribution Upon Unforeseeable Emergency	14	
 	5.08	Distribution Upon Change in Control	15	
 	5.09	Distributions Before July 25, 2007	15	
 	 	 	 	
Article VI - Payments to Beneficiaries	 	 	15	
 	 	 	 	
 	6.01	Designating a Beneficiary	15	
 	6.02	Default Beneficiary	15	
 	6.03	Beneficiary Who Is Not Legally Competent	15	
 	6.04	Distributions Upon Death	16	
 	 	 	 	
Article VII - Unfunded Plan	 	 	16	
 	 	 	 	
 	7.01	No Plan Assets	16	
 	7.02	Top-Hat Plan Status	16	
 	 	 	 	
Article VIII - Plan Administration	 	 	16	
 	 	 	 	
 	8.01	Plan Administrator’s Powers	16	
 	8.02	Delegation of Administrative Authority	17	
 	8.03	Tax Withholding	17	
 	8.04	Use of Third Parties to Assist with Plan Administration	17	
 	8.05	Proof of Right to Receive Benefits	17	
 	8.06	Claims Procedure	17	
 	8.07	Enforcement Following a Change in Control	18	
 	 	 	 	
Article IX - Amendment and Termination	 	 	19	
 	 	 	 	
 	9.01	Amendment	19	
 	9.02	Delegation of Amendment Authority	19	
 	9.03	Termination	19	

 
 
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Effective January 3, 2010	Table of Contents
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 	9.04	Distributions Upon Plan Termination	19	
 	 	 	 	
Article X - Miscellaneous	 	 	20	
 	 	 	 	
 	10.01	Use of Masculine or Feminine Pronouns	20	
 	10.02	Transferability of Plan Benefits	20	
 	10.03	Section 409A Compliance	21	
 	10.04	Controlling State Law	21	
 	10.05	No Right to Employment	21	
 	10.06	Additional Conditions Imposed	21	

 
 
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Effective January 3, 2010	Table of Contents
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Deferred Income Plan
for Textron Executives
 
Effective January 3, 2010
 
Introduction
 
The Deferred Income Plan for Textron Executives (the “Plan”) is an unfunded, nonqualified deferred compensation arrangement.  The Plan provides both elective and nonelective deferred compensation for designated executives of Textron and its affiliates.  The Plan is a continuation of the Deferred Income Plan for Textron Key Executives (the “Key Executive Plan”) and the Textron Inc. Deferred Income Plan for Executives (the “Executive Plan”).  These plans were combined to form the Plan effective January 1, 2008.  The Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments that are effective through the date of this restatement.
 
Appendix A and Appendix B of the Plan set forth the provisions of the Key Executive Plan and the Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Deferred compensation that was earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in this amount under Section 409A, is calculated and paid solely as provided in Appendix A or Appendix B, whichever is applicable, and is not subject to any other provisions of the Deferred Income Plan for Textron Executives.
 
Deferred compensation that was earned or vested after 2004 and before January 1, 2008, is subject to the provisions of IRC Section 409A.  This deferred compensation is paid exclusively as provided in the Deferred Income Plan for Textron Executives (not including any appendix to the Plan).  Although the provisions of the Deferred Income Plan for Textron Executives generally are effective as of January 1, 2008, the provisions that govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan or the Executive Plan are effective as of January 1, 2005.
 
Section 5.04(a) permits a Participant to make a special election before the end of 2007 to receive the Participant’s Account under one of the distribution options in Section 5.03.  Appendix A and Appendix B also permit a Participant to request a distribution option before the end of 2007 (or before the end of 2008, in the case of Participants who terminated before 2002) for the benefits payable under those Appendices.  These special election provisions are effective as of July 25, 2007, the date on which the Plan was adopted by the Board.

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	 
Page 1	

 

 

Article I -   Definitions
 
In this document, the following terms shall have the meanings set forth in this Article, unless a contrary or different meaning is expressly provided:
 
1.01  	“Account” means the bookkeeping entry used to record deferred income and earnings credited to a Participant under the Plan.  A Participant’s Account may be divided into sub-accounts, as determined by Textron, to track earnings on different hypothetical investment funds.  All amounts credited to the Account shall be unfunded obligations of Textron: no assets shall be set aside or contributed to the Plan for the Participant’s benefit.  A Participant’s Account does not include deferred income that was earned and vested (within the meaning of IRC Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amount under IRC Section 409A.  These amounts are calculated and paid solely as provided in Appendix A and Appendix B, as applicable.	
 
1.02  	“Beneficiary” means the person or persons entitled under this Plan to receive Plan benefits after a Participant’s death.  A Participant’s estate may also be the Participant’s Beneficiary.	
 
1.03  	“Board” means the Board of Directors of Textron.	
 
1.04  	“Change in Control” means, for any Participant who was not an employee of a Textron Company on December 31, 2007:	
 
(a)  	any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”) and of IRC Section 409A) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially similar proportions as their ownership of Textron common stock	
 
(1)  	becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of stock of Textron that, together with other stock held by such person or group, possesses more than 50% of the combined voting power of Textron’s then-outstanding voting stock, or	
 
(2)  	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) beneficial ownership of stock of Textron possessing more than 30% of the combined voting power of Textron's then-outstanding stock, or	
 
(3)  	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) all or	

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	 
Page 2	

 

 
 
 	substantially all of the total gross fair market value of all of the assets of Textron immediately prior to such acquisition or acquisitions (where gross fair market value is determined without regard to any associated liabilities); or	

(b)  	a merger or consolidation of Textron with any other corporation occurs, other than a merger or consolidation that would result in the voting securities of Textron outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or	
 
(c)  	during any 12-month period, a majority of the members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of their appointment or election.	
 
Each of the events described above will be treated as a “Change in Control” only to the extent that it is a change in ownership, change in effective control, or change in the ownership of a substantial portion of Textron’s assets within the meaning of IRC Section 409A.
 
For any Participant who was an employee of a Textron Company on December 31, 2007, the definition set forth above in this Section 1.04 shall be used to determine whether an event is a “Change in Control” to the extent that the event would alter the time or form of payment of the Participant’s benefit.  To the extent that the event would cause any change in the Participant’s rights under the Plan that does not affect the status of the Participant’s benefit under IRC Section 409A (including, but not limited to, accelerated vesting of the Participant’s benefit or restrictions on amendments to the Plan), the definition set forth in Section 9.03 of Appendix A shall be used to determine whether the event is a “Change in Control.”
 
1.05  	“Deferred Income” means any elective or non-elective deferred compensation credited to a Participant’s Account under this Plan.  A Participant’s Deferred Income may consist of some or all of the following amounts:	
 
A.  	Automatic Deferred Income :  A non-elective deferral of a performance share unit payout into a Schedule A Participant’s Stock Unit Account to meet required stock ownership levels established under the Stock Ownership Guideline Program for Textron Executives.	

 
 
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B.  	Discretionary Deferred Income :  A non-elective contribution made at Textron’s discretion to the Moody’s Account of a Schedule A or Schedule B Participant.	
 
C.  	Elective Deferred Income :  A deferral of eligible compensation made at the election of a Schedule A or Schedule B Participant and credited to the Moody’s Account, or (in the case of a Schedule A Participant) credited to the Stock Unit Account at the Participant’s direction.	
 
D.  	Textron Company Contribution :  A matching contribution allocated to a Schedule A Participant’s Stock Unit Account equal to 10% of any Elective Deferred Income the Schedule A Participant allocates to the Stock Unit Account.	
 
1.06  	“Eligible Individual” means a management or highly compensated employee of a Textron Company (a) who is a United States citizen or resident, (b) who is in a position designated by Textron as Band 1 or who is selected by Textron to participate in the Plan, and (c) whose annual base salary exceeds the indexed dollar limit in effect for the current year under IRC Section 414(q)(1)(B)(i).	
 
1.07  	“Executive Plan” means the Textron Inc. Deferred Income Plan for Executives, as in effect before January 1, 2008.  The provisions of the Executive Plan are included in this Plan as Appendix B.	
 
1.08  	“Interest” means interest computed under Article III of this Plan.	
 
1.09  	“IRC” means the Internal Revenue Code of 1986, as amended.  References to any section of the Internal Revenue Code shall include any final regulations interpreting that section.	
 
1.10  	“Key Executive Plan” means the Deferred Income Plan for Textron Key Executives, as in effect before January 1, 2008.  The provisions of the Key Executive Plan are included in this Plan as Appendix A.	
 
1.11  	 “Participant” means a current Schedule A or Schedule B Participant, or a former Participant whose Account has not been forfeited or fully distributed.	
 
1.12  	“Plan” means this Deferred Income Plan for Textron Executives, as amended and restated from time to time.	
 
1.13  	“Schedule A Participant” means an Eligible Individual who is participating in the Plan pursuant to Article II, and who is in a position designated by Textron as a Band 1 position before the beginning of the calendar year.	
 
1.14  	“Schedule B Participant” means an Eligible Individual who is participating in the Plan pursuant to Article II, and who is either (a) an individual selected by Textron to participate in the Plan who is not in a Band 1 position before the beginning of	

 
 
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 	the calendar year, or (b) an employee of a Textron Company who is not currently in an eligible position, but who made a deferral election under the Key Executive Plan or the Executive Plan in 2006.	
 
1.15  	 “Separation From Service” means a Participant’s termination of employment with all Textron Companies, other than by reason of death or Total Disability, that qualifies as a “separation from service” for purposes of IRC Section 409A.	
 
1.16  	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	
 
1.17  	“Textron Company” means Textron or any company controlled by or under common control with Textron within the meaning of IRC Section 414(b) or (c).	
 
1.18  	“Total Disability” means physical or mental incapacity of a Participant who is employed by a Textron Company on the disability date, if the incapacity (a) enables the Participant to receive disability benefits under the Federal Social Security Act, and (b) also qualifies as a “disability” for purposes of IRC Section 409A(a)(2)(C).	
 
1.19  	“Unforeseeable Emergency” means a severe financial hardship (within the meaning of IRC Section 409A) resulting from any of the following:	
 
(a)  	an illness or accident of the Participant or the Participant’s spouse, beneficiary, or dependent;	
 
(b)  	loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of natural disaster); or	
 
(c)  	other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant which are not covered by insurance and cannot reasonably be relieved by the liquidation of the Participant's assets (other than assets deferred hereunder).	
 
Article II -   Enrollment and Deferrals
 
2.01  	Initial Enrollment .  An Eligible Individual shall complete the enrollment process established by Textron in order to become a Participant in the Plan.  The enrollment material shall designate the time and form of distribution for the Participant’s Account, designate the amount of Elective Deferred Income the Participant chooses to contribute and (if applicable) the portion allocated to each investment fund, and identify the Participant’s Beneficiary.	
 
(a)  	If the Eligible Individual was not previously eligible to participate in any other account-based elective deferred compensation arrangement of a Textron Company that is aggregated with this Plan pursuant to IRC	

 
 
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 	 Section 409A, he may enroll in the Plan within thirty (30) days after he first becomes an Eligible Individual.  If the Eligible Individual does not complete his enrollment within the initial 30-day period, his enrollment shall not become effective until the beginning of the next calendar year.	
 
(b)  	If an Eligible Individual was previously eligible to participate in any other account-based elective deferred compensation arrangement of a Textron Company that is aggregated with this Plan pursuant to IRC Section 409A, he may enroll in the Plan at a time designated by Textron, but not later than December 31 of the year in which he first becomes an Eligible Individual, and his enrollment shall not become effective until the beginning of the next calendar year.	
 
(c)  	If an employee or former employee is not identified in Textron’s records as a Participant as of December 31, 2008, the individual shall not be a Participant, and shall not be entitled to receive any benefit under the Plan, unless the individual either (i) becomes a Participant after 2008 pursuant to Section 2.01, or (ii) is designated by the Board (or by its designee) as a Participant after 2008.	
 
2.02  	Deferral Election .  Subject to the requirements set forth in Section 2.03, a Participant  may elect to defer the following amounts under the Plan:	
 
(a)  	Schedule A Participants :  A Schedule A Participant may elect to defer up to 80% of annual incentive compensation under an annual incentive compensation plan sponsored by Textron; up to 80% of any cash distribution (other than a dividend, dividend equivalent, or distribution upon exercise of an option or stock appreciation right) under a shareholder-approved long term incentive plan of Textron; and up to 80% of any other form of compensation irrevocably designated in writing by Textron, before the election deadline for the calendar year in which the compensation is earned, as being eligible for deferral under the Plan.  In addition, a Schedule A Participant may elect to defer up to 80% of base salary in his initial year of participation in the Plan, and may elect to defer up to 25% of base salary in any subsequent year of participation.	
 
(b)  	Schedule B Participants :  A Schedule B Participant may elect to defer up to 80% of annual incentive compensation under an annual incentive compensation plan sponsored by Textron, and up to 80% of any cash distribution (other than a distribution upon exercise of an option or stock appreciation right) under a shareholder-approved long term incentive plan of Textron.  In addition, a Schedule B Participant may elect to defer up to 80% of any other cash bonus under a cash bonus program that is irrevocably designated in writing by the CEO, before the election deadline for the calendar year in which the bonus is earned, as being eligible for deferral under the Plan.	

 
 
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(c)  	No Deferral of Gain Under Stock Rights .  In no event may a Participant defer cash or stock payable upon exercise of a stock option or stock appreciation right.	
 
2.03  	Deferral Election Requirements .  Any deferral election under the Plan shall be subject to the following requirements:	
 
(a)  	Initial Deferral Election .  Except in the case of a timely election to defer “performance-based compensation” pursuant to subsection (b), below, a Participant’s initial deferral election under Section 2.01(a) shall apply only to compensation paid for services to be performed after the election is made.  Except as provided in subsection (b), for a bonus or other compensation earned over a specified performance period that commenced before the date of the election, the total compensation shall be multiplied by the ratio of the number of days remaining in the performance period after the election to the total number of days in the performance period, and the resulting portion of the compensation shall be eligible for deferral pursuant to the Participant’s initial deferral election.	
 
(b)  	Election Deadlines .  All deferral elections shall be made at a time and in a form designated by Textron.  Except as provided in Section 2.05, a deferral election shall become irrevocable at the election deadline established by Textron.	
 
(1)  	General Election Deadline .  Textron may establish deadlines that are permissible under IRC Section 409A for any type of compensation that is eligible for deferral under the Plan.  If no other deadline applies, the deadline for a deferral election shall be not later than December 31 of the year preceding the year for which the services are performed for which the right to the compensation arises.	
 
(2)  	Performance-Based Compensation .  The deadline for any election to defer compensation that is “performance-based compensation” within the meaning of IRC Section 409A shall be not later than six months before the end of the performance period, provided that the Participant performs services continuously from the later of the beginning of the performance period or the date when the performance criteria are established through the date when the election is made, and provided further that the compensation has not become readily ascertainable at the time of the election.	
 
(3)  	Forfeitable Rights .  If a Participant has a legally binding right to a payment in a subsequent year, and the Participant must perform services for at least 12 months in order to avoid forfeiture of the payment, the election deadline shall not be later than the 30th day	

 
 
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 	after the Participant acquires a legally binding right to the payment, provided that the election is made at least 12 months before the earliest date at which the forfeiture condition could lapse for a reason other than death, Total Disability, or Change in Control (and a deferral election made under this paragraph shall not be effective if the forfeiture condition lapses for death, Total Disability, or Change in Control less than 12 months after the date of the election).	
 
(c)  	Minimum Deferrals .  A Participant may not elect to defer an amount less than $5,000 for any year.	
 
(d)  	Change in Participation Level .  A Participant’s status as a Schedule A Participant or a Schedule B Participant shall be determined at the deferral election deadline for any type of compensation.  If a Participant’s status changes, the Participant’s deferral election shall not be affected by the change in status until the next deferral election deadline.	
 
(e)  	Renewal of Elections .  A Schedule A Participant’s election to defer base salary under the Plan shall be effective only with respect to base salary earned in the calendar year (or portion of a year, in case of an initial deferral election) immediately following the election deadline, and any other deferral election under the Plan shall be effective only with respect to the particular bonus, award, or other compensation for which the deferral election is made.  The Participant must make a new deferral election before the applicable deadline in order to defer compensation earned in a subsequent period.  A Participant who fails to make a valid deferral election on or before the applicable deadline shall be deemed to have elected not to defer any compensation to which the deadline applies.	
 
2.04  	Non-Elective Deferred Compensation .  In addition to any Elective Deferred Income, a Participant’s Account may be credited with the following types of non-elective Deferred Income:	
 
(a)  	Automatic Deferred Income .  A Schedule A Participant’s performance share unit payout shall automatically be deferred into the Participant’s Stock Unit Account to the extent necessary to meet required stock ownership levels established under the Executive Share Ownership Policy.  The amount of Automatic Deferred Income for any year shall be based on the Schedule A Participant’s required ownership level and actual or deemed stock ownership at the election deadline that would apply under IRC Section 409A to an elective deferral of the Schedule A Participant’s performance share units, and the amount of the Automatic Deferred Income shall not be altered by any change after the election deadline in the Schedule A Participant’s required ownership level or actual or deemed stock ownership.	

 
 
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(b)  	Discretionary Deferred Income .  A Schedule A or Schedule B Participant may receive additional contributions made at the discretion of the Organization and Compensation Committee of the Board, for Schedule A Participants who are executive officers of Textron, and at the discretion of Textron, for all other Participants.  The document authorizing the discretionary contribution shall specify the vesting schedule, if any, that applies to the discretionary contribution.  Any discretionary contribution shall be allocated solely to a Participant’s Moody’s Account.	
 
(c)  	Textron Company Contribution .  A Schedule A Participant shall receive matching contribution in the Participant’s Stock Unit Account equal to 10% of any Elective Deferred Income the Schedule A Participant allocates initially to the Stock Unit Account.	
 
2.05  	Changes in Deferral Elections .  A Participant may change his deferral election prospectively by filing a new deferral election form before the election deadline established by Textron in accordance with IRC Section 409A, or by failing to file a deferral election by the election deadline (which will be deemed to be an election not to defer for the subsequent period).  A Participant’s deferral election shall be cancelled automatically in the following circumstances, effective with the first payroll period following the event that causes the cancellation, and the Participant may not make a new deferral election before the next deferral election deadline:	
 
(a)  	Financial Hardship .  The Participant receives a distribution on account of financial hardship of elective deferrals under the Textron Savings Plan or any other IRC Section 401(k) plan maintained by a Textron Company, or receives a distribution under this Plan on account of an Unforeseeable Financial Emergency.	
 
(b)  	Total Disability .  The Participant incurs a Total Disability.	
 
Article III -   Investment Accounts
 
3.01  	Investment Accounts .  For recordkeeping purposes, Textron shall maintain a Moody’s Account and (in the case of a Schedule A Participant) a Stock Unit Account, as necessary, to credit hypothetical investment gains and losses to a Participant’s Account.  A Schedule A Participant may direct the extent to which his Elective Deferred Income (other than deferrals of base salary) is allocated initially to the Moody’s Account or the Stock Unit Account.  Any deferrals of base salary or Discretionary Deferred Income of a Schedule A Participant shall be allocated automatically to the Moody’s Account; any Automatic Deferred Income or Textron Company Contribution of a Schedule A Participant shall be allocated automatically to the Stock Unit Account.  All deferrals of a Schedule B Participant shall be allocated automatically to the Moody’s Account.	

 
 
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3.02  	Moody’s Account .  The Moody’s Account shall earn interest at a monthly interest rate that is one twelfth of the average for the calendar month of the Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such monthly yield is no longer published, a substantially similar average selected by Textron.  Interest shall be credited on the last day of each calendar month on the average daily balance of the Moody’s Account during the month.	
 
3.03  	Stock Unit Account .	
 
(a)  	The Stock Unit Account shall consist of phantom shares of Textron common stock.  The number of stock units credited to a Schedule A Participant’s Stock Unit Account as a result of the Automatic Deferred Income or the deferral of annual incentive compensation or performance share units shall be determined using the same methodology approved by the Organization and Compensation Committee of the Board for payment of performance share units.  The number of stock units credited to a Participant’s Stock Unit Account as a result of any other elective or non-elective contribution in cash shall be determined by dividing the amount of Deferred Income credited on the last day of a calendar month by the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month in which the credit is made.	
 
(b)  	Textron shall credit additional stock units to a Participant’s Stock Unit Account to reflect dividend equivalents attributable to the stock units that were credited to the Participant’s Stock Unit Account on the record date.  The number of additional stock units shall be determined by dividing the dividend amount by the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month in which the record date occurs.	
 
(c)  	The number of stock units credited to a Participant’s Stock Unit Account shall be adjusted, without receipt of any consideration by Textron, on account of any stock split, stock dividend, or similar increase or decrease affecting Textron common stock, as if the stock units were actual shares of Textron common stock.	
 
(d)  	All distributions from the Stock Unit Account shall be made in cash.  No Textron common stock shall be distributed from the Plan in any circumstance.	
 
3.04  	Monthly Adjustments .  A Participant’s Moody’s Account and Stock Unit Account shall be adjusted on the last day of each calendar month to reflect additional Deferred Income credited to the Account, distributions from the Account, and investment gains or losses allocated to the Account.	

 
 
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3.05  	Transfers and Distributions From Stock Unit Account .  A Participant who has Separated From Service may elect to transfer all or part of his Stock Unit Account in cash to his Moody’s Account.  The Participant may elect a transfer once each calendar month, in 5% increments (with a minimum transfer of 10% of the Stock Unit Account), effective as of the first calendar day of the month following the minimum notice of three business days.  The cash value transferred will be determined by multiplying (a) the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal, for the ten trading days immediately following the month in which the election to transfer was made, times (b) the number of whole and fractional vested stock units credited to the Participant’s Stock Unit Account on the last day of the calendar month preceding the transfer, times (c) the percentage being transferred.  The same methodology shall be used to determine the amount of any cash distribution from the Participant’s Stock Unit Account.	
 
Article IV -   Vesting
 
4.01  	Elective Deferred Income and Automatic Deferred Income .  A Participant’s Elective Deferred Income and Automatic Deferred Income shall always be 100% vested.	
 
4.02  	Discretionary Deferred Income .  Except as provided in Section 4.04, a Participant’s Discretionary Deferred Income shall vest according to the schedule established when the Discretionary Deferred Income is credited to the Participant’s Account.	
 
4.03  	Textron Company Contribution .  Except as provided in Section 4.04, a Participant’s Textron Company Contribution, and any dividend equivalents associated with the Textron Company Contribution, shall vest as follows	
 
(a)  	50% of the Textron Company Contribution and associated dividend equivalents shall vest on December 31 of the calendar year in which the Elective Deferred Income would have been paid to the Participant if he had not made a deferral election, but only if the Participant does not have a Separation From Service before that December 31; and	
 
(b)  	the remaining 50% of the Textron Company Contribution and associated dividend equivalents shall vest on the following December 31, but only if the Participant does not have a Separation From Service before that December 31.	
 
(c)  	Any Textron Company Contribution and associated dividend equivalents that have not vested pursuant to subsections (a) and (b), above, shall become 100% vested if the Participant’s employment with all Textron Companies ends as a result of the Participant’s death or Total Disability, or the Participant’s voluntary retirement after reaching one or more of the	

 
 
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 	following milestones: (i) age 55 with ten or more years of Textron service; (ii) age 60, or (iii) 20 or more years of Textron service.	
 
4.04  	Change in Control .  In the event of a Change in Control, a Participant’s Account shall become 100% vested if the Participant is employed by a Textron Company on the date of the Change in Control.	
 
4.05  	Vesting Under Employment Contract .  A Participant’s Account, and any additional benefit the Participant is eligible to receive under Appendix A or Appendix B, shall become 100% vested to the extent expressly provided in a written employment contract between the Participant and Textron.	
 
4.06  	Forfeiture of Non-Vested Amounts .  Any portion of the Participant’s Account that is not vested at the time of the Participant’s Separation From Service shall be forfeited.	
 
Article V -   Payments to Participants
 
5.01  	Separation From Service .  Subject to Section 5.04(c)(2) (five-year delay following change in form of payment), upon a Participant’s Separation From Service, the distribution of the Participant’s Account shall commence (or, in the case of a lump sum distribution, shall be made) on the later of (a) the last business day of January following the calendar year of the Participant’s Separation From Service, or (b) the last business day of the seventh month following the Participant’s Separation From Service.	
 
5.02  	Total Disability .  The distribution of a Participant’s Account upon Total Disability shall commence (or, in the case of a lump sum distribution, shall be made) on the later of (a) the last business day of January following the calendar year of the Participant’s Total Disability, or (b) the business day that is at least 60 days after the date of the Participant’s Total Disability.	
 
5.03  	Form of Payment .  Subject to Section 5.05 (automatic lump-sum distributions), below, the distribution of a Participant’s Account upon Separation From Service or Total Disability shall be made in one or a combination of the following forms:	
 
(a)  	A lump sum.	
 
(b)  	Annual installments over a period not exceeding 15 years (or, if less, the number of whole years in the Participant’s remaining life expectancy, determined as of the payment commencement date under the Single Life Table in Treas. Reg. § 1.401(a)(9)-9, Q&A-1), calculated each year by dividing the Participant’s unpaid account balance as of January 1 of that year by the remaining number of unpaid installments.  Installment payments shall be made ratably from the Participant’s Moody’s Account and Stock Unit Account.	

 
 
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5.04  	Distribution Elections .	
 
(a)  	A Participant may make a special election during 2007 to receive the Participant’s Account under one or a combination of the distribution options in Section 5.03.  The Participant may not make a new election under this paragraph if the election would accelerate payment of the Participant’s benefit into the year of the new election, or if the new election would postpone a distribution that otherwise would be made in 2007.  An election under this paragraph shall be made in the manner prescribed by the Plan Administrator, and the Plan Administrator may impose conditions in addition to those described in this subsection (a); but the election shall not be required to comply with the requirements of subsection (c), below (concerning changes in payment elections).	
 
(b)  	Any Participant whose Account is first credited with Deferred Income after 2007 must make a distribution election at the time of the Participant’s enrollment in the Plan.  The Participant’s initial distribution election, and any change in the Participant’s distribution election under subsection (c), below, shall apply to the Participant’s entire Account, including future Deferred Income credited to the Account.  If the Participant elects to receive part of his Account as a lump sum and part in installments, the Participant must designate what portion of his Account will be distributed in each form of payment.  If a Participant does not make a valid distribution election at the time of his initial enrollment, the Participant shall be deemed to have elected a lump sum payment of his entire Account.	
 
(c)  	After 2007, a Participant may change the form of payment he previously elected for his Account once (but only once).  The Participant’s new payment election must satisfy the following requirements:	
 
(1)  	the new election must be made at least twelve months before the date when payment of the Account would otherwise commence (and the new election shall be ineffective if a subsequent event causes the original payment date to fall within the 12-month period);	
 
(2)  	the new election must defer the date on which payment of the Account will commence by at least five years from the commencement date applicable to the Participant’s previous election; and	
 
(3)  	the new election may not require annual installments to be paid over a period exceeding 10 years (or, if less, the number of whole years in the Participant’s remaining life expectancy, determined as	

 
 
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 	 of the payment commencement date under the Single Life Table in Treas. Reg. § 1.401(a)(9)-9, Q&A-1).	
 
5.05  	Automatic Lump Sum Payments .	
 
(a)  	Cash-Out of Small Accounts .  If the value of a Participant’s Account at the time of his Separation From Service or Total Disability is $100,000 or less, the Participant’s Account shall be paid in a lump sum, even if the Participant elected to receive installments.	
 
(b)  	Participants Who Terminate Before Retirement Eligibility .  A Participant who first participated in the Plan after 2007 shall be paid in a lump sum (even if the Participant elected to receive installments) if the Participant’s Separation From Service or Total Disability occurs before the earliest of the following dates: (1) the date on which the Participant reaches at least age 55 and completes at least 10 years of service; (2) the date on which the Participant reaches at least age 35 and completes at least 20 years of service; and (3) the date on which the Participant reaches age 60.  In the case of a Participant who first participated in the Plan before 2008, the automatic lump-sum distribution described in the preceding sentence shall apply to Deferred Income that was credited to a Participant’s Account while the Participant was a Schedule B Participant, and any associated investment gains or losses, but shall not apply to Deferred Income that was credited to a Participant’s Account while the Participant was a Schedule A Participant, or to any associated investment gains or losses.	
 
5.06  	Administrative Adjustments in Payment Date .  A payment is treated as being made on the date when it is due under the Plan if the payment is made on the due date specified by the Plan, or on a later date that is either (a) in the same calendar year (for a payment whose specified due date is on or before September 30), or (b) by the 15th day of the third calendar month following the date specified by the Plan (for a payment whose specified due date is on or after October 1).  A payment also is treated as being made on the date when it is due under the Plan if the payment is made not more than 30 days before the due date specified by the Plan, provided that the payment is not made earlier than six months after the Participant’s Separation From Service.  A Participant may not, directly or indirectly, designate the taxable year of a payment made in reliance on the administrative rules in this Section 5.06.	
 
5.07  	Distribution Upon Unforeseeable Emergency .  If a Participant incurs a severe financial hardship as a result of an Unforeseeable Emergency, the Participant may request a distribution from his vested Account of an amount that does not exceed the sum of (a) the amount necessary to satisfy the emergency and (b) the amount necessary to pay taxes or penalties reasonably anticipated as a result of the distribution.  The amount necessary to satisfy the emergency and to pay the related taxes or penalties shall be determined after taking into account the extent	

 
 
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 	to which the financial hardship is or may be relieved through cancellation of the Participant’s deferral election pursuant to Section 2.05(a); through reimbursement or compensation by insurance or otherwise; or by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).  Textron may, in its sole discretion, grant or deny a request for a distribution upon an Unforeseeable Emergency.	
 
5.08  	Distribution Upon Change in Control .  Subject to the following sentence, if a Change in Control also qualifies as a “change in control” under IRC Section 409A, the Participant’s Account shall be paid in a lump sum in cash on the first business day of the month following the Change in Control.  If a Participant’s Separation From Service occurred before the Change in Control, the lump sum payment under this Section 5.08 shall not be made earlier than six months after the Participant’s Separation From Service.	
 
5.09  	Distributions Before January 1, 2008 .  Distributions after 2004 and before the effective date of the Plan were made in good faith compliance with IRC Section 409A and Internal Revenue Service guidance interpreting IRC Section 409A.	
 
Article VI -   Payments to Beneficiaries
 
6.01  	Designating a Beneficiary .  A Participant may designate one or more Beneficiaries to receive the Participant’s Account after his death.  The designation shall be made in writing on a form provided by Textron, and shall be subject to any requirements or conditions Textron imposes.  The Participant may change the Beneficiary designation at any time before the earlier of the Participant’s death or the complete distribution of the Participant’s Account.  If a Participant’s Account is community property, any designation of a Beneficiary shall be valid or effective only as permitted under applicable law.  Any valid Beneficiary designation, and any valid change in a previous Beneficiary designation, shall become effective when Textron receives and accepts the Beneficiary designation form.  The most recent valid Beneficiary designation in effect at the time of the Participant’s death shall supersede any previous Beneficiary designation.	
 
6.02  	Default Beneficiary .  In the absence of an effective Beneficiary designation, or if all persons so designated have predeceased the Participant, the Participant’s Account shall be paid to the Participant’s surviving spouse.  If there is no surviving spouse, the Participant’s Account shall be paid to the Participant’s natural and adopted children and their descendants per stirpes or, if there are no natural or adopted children or their descendants, to the Participant’s estate.	
 
6.03  	Beneficiary Who Is Not Legally Competent .  If a Participant’s Beneficiary is a minor, a person who has been declared incompetent, or a person incapable of handling the disposition of his property, Textron may pay the Participant’s Account to the guardian, legal representative, or person having the care and custody of such Beneficiary.  Textron may require proof of incompetency,	

 
 
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 	minority, incapacity, or guardianship as it deems appropriate prior to distribution of the Account. Such distribution shall completely discharge any Textron Company from all liability with respect to such Beneficiary’s interest in the Account.	
 
6.04  	Distributions Upon Death .  If a Participant dies before his Account has been fully distributed, any amount remaining in his Account at his death shall be paid to his Beneficiary in a lump sum on the first business day of the first month that begins at least ninety (90) days after the Participant’s death.  If a Beneficiary is receiving installment payments as of December 31, 2007, any remaining installments due after 2007 shall be aggregated and paid in a lump sum on the first business day of January 2008.	
 
Article VII -   Unfunded Plan
 
7.01  	No Plan Assets .  Benefits provided under this Plan are unfunded obligations of Textron.  Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds of the policies shall at all times remain the sole property of Textron and neither the Participants whose lives are insured not their Beneficiaries shall have any ownership rights in such policies of insurance.	
 
7.02  	Top-Hat Plan Status .  The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	
 
Article VIII -   Plan Administration
 
8.01  	Plan Administrator’s Powers .  Textron shall have all such powers as may be necessary to carry out the provisions hereof.  Textron may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 8.06, any actions by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any Participant.  Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 8.02.	

 
 
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8.02  	Delegation of Administrative Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officer of Textron to make a further delegation of the authority to administer the Plan.	
 
8.03  	Tax Withholding .  Textron may withhold from benefits paid under this Plan any taxes or other amounts required by law to be withheld.  Textron may deduct from the undistributed portion of a Participant’s benefit any employment tax that Textron reasonably determines to be due with respect to the benefit under the Federal Insurance Contributions Act (FICA), and an amount sufficient to pay the income tax withholding related to such FICA tax.  Alternatively, Textron may require the Participant or Beneficiary to remit to Textron or its designee an amount sufficient to satisfy any applicable federal, state, and local income and employment tax with respect to the Participant’s benefit.  The Participant or Beneficiary shall remain responsible at all times for paying any federal, state, or local income or employment tax with respect to any benefit under this Plan.  In no event shall Textron or any employee or agent of Textron be liable for any interest or penalty that a Participant or Beneficiary incurs by failing to make timely payments of tax.	
 
8.04  	Use of Third Parties to Assist with Plan Administration .  Textron may employ or engage such agents, accountants, actuaries, counsel, other experts and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan.  Textron and its committees, officers, directors and employees shall not be liable for any action taken, suffered or omitted by them in good faith in reliance upon the advice or opinion of any such agent, accountant, actuary, counsel or other expert.  All action so taken, suffered or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
8.05  	Proof of Right to Receive Benefits .  Textron may require proof of death or Total Disability of any Participant and evidence of the right of any person to receive any Plan benefit.	
 
8.06  	Claims Procedure .  A Participant or Beneficiary who believes that he is being denied a benefit to which he is entitled under the Plan (referred to in this Section 8.06 as a “Claimant”) may file a written request with Textron setting forth the claim.  Textron shall consider and resolve the claim as set forth below.	
 
(a)  	Time for Response .  Upon receipt of a claim, Textron shall advise the Claimant that a response will be forthcoming within 90 days.  Textron may, however, extend the response period for up to an additional 90 days for reasonable cause, and shall notify the Claimant of the reason for the	

 
 
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 	extension and the expected response date.  Textron shall respond to the claim within the specified period.	
 
(b)  	Denial .  If the claim is denied in whole or part, Textron shall provide the Claimant with a written decision, using language calculated to be understood by the Claimant, setting forth (1) the specific reason or reasons for such denial; (2) the specific reference to relevant provisions of this Plan on which such denial is based; (3) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary; (4) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; (5) the time limits for requesting a review of the claim; and (6) the Claimant’s right to bring an action for benefits under Section 502(a) of ERISA.	
 
(c)  	Request for Review .  Within 60 days after the Claimant’s receipt of the written decision denying the claim in whole or in part, the Claimant may request in writing that Textron review the determination.  The Claimant or his duly authorized representative may, but need not, review the relevant documents and submit issues and comment in writing for consideration by Textron.  If the Claimant does not request a review of the initial determination within such 60-day period, the Claimant shall be barred from challenging the determination.	
 
(d)  	Review of Initial Determination .  Within 60 days after Textron receives a request for review, it will review the initial determination.  If special circumstances require that the 60-day time period be extended, Textron will so notify the Claimant and will render the decision as soon as possible, but no later than 120 days after receipt of the request for review.	
 
(e)  	Decision on Review .  All decisions on review shall be final and binding with respect to all concerned parties.  The decision on review shall set forth, in a manner calculated to be understood by the Claimant, (1) the specific reasons for the decision, shall including references to the relevant Plan provisions upon which the decision is based; (2) the Claimant’s right to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information, relevant to his benefits; and (3) the Claimant’s right to bring an action for benefits under Section 502(a) of ERISA.	
 
8.07  	Enforcement Following a Change in Control .  If, after a Change in Control, any claim is made or any litigation is brought by a Participant or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in Section 1.04 shall be liable, jointly and severally, to reimburse the Participant or Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees and costs incurred during the Participant’s or	

 
 
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 	Beneficiary’s lifetime in pursuing any such claim or litigation, and to pay prejudgment interest at the Prime Rate as quoted in the Money Rates section of The Wall Street Journal on any money award or judgment obtained by the Participant or Beneficiary, payable at the same time as the underlying award or judgment.  Any reimbursement pursuant to the preceding sentence shall be paid to the Participant no earlier than six months after the Participant’s Separation From Service, and shall be paid to the Participant or Beneficiary no later than the end of the calendar year following the year in which the expense was incurred.  The reimbursement shall not be subject to liquidation or exchange for another benefit, and the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year.	
 
Article IX -   Amendment and Termination
 
9.01  	Amendment .  Subject to paragraphs (a) and (b) below, the Board shall have the right to amend, modify, or suspend this Plan at any time by written resolution or other formal action reflected in writing.	
 
(a)  	No amendment, modification, or suspension shall reduce the amount credited to a Participant’s Account immediately before the effective date of the amendment, modification, or suspension.	
 
(b)  	Following a Change in Control, no amendment, modification, or suspension shall be made that directly or indirectly reduces any right or benefit provided upon a Change in Control.	
 
9.02  	Delegation of Amendment Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
9.03  	Termination .  The Board shall have the right to terminate this Plan at any time before a Change in Control by written resolution.  No termination of the Plan shall reduce a Participant’s Account immediately before the effective date of the termination.	
 
9.04  	Distributions Upon Plan Termination .  Upon the termination of the Plan by the Board with respect to all Participants, and termination of all arrangements sponsored by any Textron Company that would be aggregated with the Plan under IRC Section 409A, Textron shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay the Participant’s vested Account in a lump sum, to the extent permitted under IRC Section 409A.  All payments that may be made pursuant to this Section 9.04 shall be made no earlier than the thirteenth month and no later than the twenty-fourth month after the termination of the Plan.  Textron may not accelerate payments pursuant to this	

 
 
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 	Section 9.04 if the termination of the Plan is proximate to a downturn in Textron’s financial health.  If Textron exercises its discretion to accelerate payments under this Section 9.04, it shall not adopt any new arrangement that would have been aggregated with the Plan under IRC Section 409A within three years following the date of the Plan’s termination.	
 
Article X -   Miscellaneous
 
10.01  	Use of Masculine or Feminine Pronouns .  Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
10.02  	Transferability of Plan Benefits .	
 
(a)  	Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant, and (4) the domestic relations order does not require the Plan to make a payment to an alternate payee in any form other than a cash lump sum.	
 
(b)  	Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or Beneficiary.	

 
 
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10.03  	Section 409A Compliance .  The Plan is intended to comply with IRC Section 409A and should be interpreted accordingly.  Any distribution election that would not comply with IRC Section 409A is not effective.  To the extent that a provision of this Plan does not comply with IRC Section 409A, such provision shall be void and without effect.  Textron does not warrant that the Plan will comply with IRC Section 409A with respect to any Participant or with respect to any payment, however.  In no event shall any Textron Company; any director, officer, or employee of a Textron Company (other than the Participant); or any member of Textron be liable for any additional tax, interest, or penalty incurred by a Participant or Beneficiary as a result of the Plan’s failure to satisfy the requirements of IRC Section 409A, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.	
 
10.04  	Controlling State Law .  This Plan shall be construed in accordance with the laws of the State of Delaware.	
 
10.05  	No Right to Employment .  Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant of continued employment at any Textron Company.	
 
10.06  	Additional Conditions Imposed .  Textron, the Chief Executive Officer and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 
 
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DEFERRED INCOME PLAN
FOR TEXTRON EXECUTIVES
____________________________
APPENDIX A
____________________________
Provisions of the
 Deferred Income Plan for
Textron Key Executives
(As in effect before January 1, 2008)

 

 

 

 

DC: 3052838-5

 

 
Deferred Income Plan
for Textron Executives
Appendix A — Key Executive Plan

Table of Contents

 
Introduction	 	 	1	
Article I - Definitions	 	 	2	
Article II - Participation and Deferred Income	 	 	4	
Article III - Participant's Accounts, Interest, and Earnings	 	 	5	
Article IV - Benefits	 	 	8	
Article V - Payments of Benefits	 	 	8	
Article VI - Beneficiaries	 	 	10	
Article VII - Unfunded Plan	 	 	11	
Article VIII - Plan Administration	 	 	11	
Article IX - Miscellanous	 	 	12	

 
 
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Effective January 3, 2010	Table of Contents - Appendix A
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Deferred Income Plan
for Textron Executives
Appendix A — Key Executive Plan

Introduction

Before January 1, 2008, the Deferred Income Plan for Textron Key Executives (the “Key Executive Plan”) and the Textron Inc. Deferred Income Plan for Executives (the “Executive Plan”) were separate nonqualified deferred compensation plans, each of which provided both elective and nonelective deferred compensation for designated executives of Textron and its affiliates.  The Key Executive Plan and the Executive Plan were combined effective January 1, 2008, to form the Deferred Income Plan for Textron Executives.
 
A.	Key Executive Protected Benefits
(Earned and Vested Before 2005)	

The portion of Appendix A that follows this Introduction sets forth the provisions of the Key Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004, with certain modifications imposing additional restrictions on distributions and changing provisions for measuring investment returns.  Key Executives’ deferred compensation that was earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increases that are permitted to be included in this amount under Section 409A (“Key Executive Protected Benefits”), are calculated and paid solely as provided in Appendix A, and are not subject to any other provisions of the Deferred Income Plan for Textron Executives .
 
The Key Executive Protected Benefits are not intended to be subject to IRC Section 409A.  No amendment to this Appendix A that would constitute a “material modification” for purposes of IRC Section 409A shall be effective unless the amending instrument states that it is intended to materially modify Appendix A and to cause the Key Executive Protected Benefits to become subject to IRC Section 409A.  Although the Key Executive Protected Benefits are not intended to be subject to IRC Section 409A, no Textron Company (nor any director, officer, or other representative of a Textron Company) shall be liable for any adverse tax consequence suffered by a Participant or Beneficiary if a Key Executive Protected Benefit becomes subject to IRC Section 409A.

B.	Benefits Subject To Section 409A
(Earned or Vested From 2005 Through 2007)	
 
Deferred compensation earned by Key Executives after 2004, and deferred compensation that became vested after 2004, are subject to the provisions of IRC Section 409A.  To the extent that these benefits were earned under the Key Executive Plan before January 1, 2008, the benefits shall be calculated under the provisions of the Key Executive Plan set forth in this Appendix A.  However, any benefits earned or vested under the Key

 
 
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Executive Plan after 2004 shall be paid exclusively as provided in the Deferred Income Plan for Textron Executives (not including any appendix to the Deferred Income Plan for Textron Executives), and shall not be subject to any provision of Appendix A that relates to the payment or distribution of benefits.

Section 5.01 requires a Participant to make an election if the Participant wishes to request one of the distribution options in Section 5.02.  This election provision was effective as of July 25, 2007, the date on which the Plan was adopted by the Board.
 
Key Executive Plan

The text that follows sets forth the provisions of the Key Executive Plan as in effect on October 3, 2004, and as modified thereafter in certain respects that do not constitute “material modifications” for purposes of IRC Section 409A.  The defined terms in Appendix A relate only to the provisions set forth in Appendix A: they do not apply to any other provisions of the Deferred Income Plan for Textron Executives, and terms defined elsewhere in the Deferred Income Plan for Textron Executives do not apply to Appendix A.  No additional benefits shall accrue or be deferred under Appendix A after December 31, 2007.

Article I—Definitions

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

1.01	“Beneficiary” means the person or persons entitled under this Plan to receive Plan benefits after a Participant’s death.	

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

1.03	“Compensation” means base salary, annual incentive compensation, cash distributions for performance share units under a long term incentive compensation plan, and any other item designated as Compensation under this Plan by Textron.	

1.04	“Deferral Period” means for a Participant (1) any complete months remaining in the calendar year in which she becomes a Key Executive, and (2) each succeeding calendar year in which she is a Key Executive.	

1.05	“Deferred Income” means any Compensation the receipt of which is deferred under this Plan.
 
“Automatic Deferred Income” means amounts in excess of 100% of a Participant’s Annual Incentive Compensation Target, as defined in Section	

 
 
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Effective January 3, 2010	Appendix A
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 	4.01(a) of the Annual Incentive Compensation Plan for Textron Employees, in the years following a Participant’s fifth full year of participation in this Plan, but only if the Participant has not achieved or maintained a    Minimum Stock Ownership Level.
 
“Discretionary Deferred Income” means additional contributions made at Textron’s discretion to any account maintained for a Participant under this Plan.
   
“Elective Deferred Income” means amounts elected by the Participant to be deferred under this Plan.	

1.06	“Determination Date” means the last day of each calendar month.	

1.07	“Fund Election Agreement” means an agreement in a form prescribed by Textron, by which a Participant elects the funds that will be used to determine earnings on Deferred Income.	

1.08	“Interest” means interest computed under Article III of this Plan.	

1.09	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	

1.10	“Participant” means a Key Executive who is participating in this Plan pursuant to Article II and, unless the context clearly indicates to the contrary, a former Participant who is entitled to benefits under this Plan.	

1.11	“Participation Agreement” means an agreement in a form prescribed by Textron, by which a Participant elects to defer the receipt of Compensation pursuant to this Plan.	

1.12	“Plan” means this Deferred Income Plan for Textron Key Executives, as amended and restated from time to time.	

1.13	“Stock Ownership” means Textron shares obtained through open market purchases and stock option exercises, shares in the Textron Savings Plan, stock units in the Deferred Income Plan and in the Supplemental Benefits Plan; and any other share or share equivalent approved by the Board as qualified stock ownership.	

 
 
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Effective January 3, 2010	Appendix A
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 	“Minimum Stock Ownership Level” means a dollar value of Textron shares that equals or exceeds as of the end of the third quarter each year:	

 	Participant
CEO/COO
Other TLT Members
Other Corporate Officers
All Other Key Executives	Minimum Stock Ownership Level
5 times base salary
3 times base salary
2 times base salary
1 times base salary	

1.14	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	

1.15	“Textron Company” means Textron or any company controlled by or under common control with Textron.	

1.16	“Textron Employment” means employment with a Textron Company. Leaves of absence for such periods and purposes as are approved by Textron and transfers of employment within or between Textron Companies shall not be deemed interruptions of Textron Employment.	

1.17	“Total Disability” has the same meaning under this Plan as in the Textron Master Retirement Plan with respect to any Participant at the date his Textron Employment ends.	
 
Article II—Participation and Deferred Income

2.01	A Participant indicates his choices under this Plan for a Deferral Period by filing a Participation Agreement and, if applicable, a Fund Election agreement with Textron within the time specified by Textron.	

2.02	For any complete calendar months remaining in the calendar year in which a Participant becomes a Key Executive, she may defer up to 100% of her Compensation otherwise payable during those months. For any subsequent Deferral Period, a Participant may defer up to 25% of her base salary, and up to 100% of her Compensation other than base salary, otherwise payable during that period. (For purposes of this 25% limitation, “base salary” includes any base salary the receipt of which by the Participant is deferred under the Textron Savings Plan or this Plan.) A Participant may not defer any Compensation which she has earned at the time she files her Participation Agreement relating thereto.	

2.03	Textron may, at a Participant’s request but in its sole discretion, suspend in whole or in part a Participant’s commitment under any Participation Agreement for such time as it may deem necessary upon a finding that the Participant has suffered a severe financial hardship.	

2.04	If at any time a Participant shall cease to be a Key Executive, his Participation Agreements and Deferral Periods shall terminate at that time and no further Deferred Income shall be withheld from his Compensation.	

 
 
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2.05	No Deferred Income, Interest or dividends shall be payable to a Participant while he is employed by a Textron Company.	

2.06	Textron shall withhold for taxes or other reasons as required by law.	
 
Article III—Participant’s Accounts, Interest, and Earnings
 
3.01	(a)     For record-keeping purposes only, Textron shall maintain a Moody’s Account, a Stock Unit Account and an Interest Account, as is necessary, for each Participant who has Deferred Income under this Plan.
 
(b)      Textron may in its sole discretion from time to time make additional contributions to any account maintained for a Participant. These additional contributions, if any, may be subject to a vesting schedule set by Textron.
 
(c)      The existence of these accounts shall not require any segregation of assets.
 
(d)      Amount deferred as Elective Deferred Income and Automatic Deferred Income shall always be 100% vested.	

3.02	The Moody’s Account shall reflect a Participant’s investment in an interest-bearing account.
 
(a)      The Moody’s Account shall be adjusted as of each Determination Date and shall consist of (1) the balance of the Account as of the immediately preceding Determination Date, (2) amounts of Deferred Income credited to the Account in the intervening month, and (3) Interest earned since the immediately preceding Determination Date based on one-twelfth of the applicable interest rate(s) described in Sections 3.03 or 3.04 on the average daily balance of the Account (or portion thereof) during the intervening month; reduced by (4) any distributions from the account (or portion thereof) during the intervening month.
 
(b)      The interest rates applicable to the Moody’s Account shall be either the Moody’s Rate or the Moody’s Plus Rate.	
 
3.03	The Moody’s Rate shall be the average for the calendar month in which the applicable Determination Date falls of the Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such monthly yield is no longer published, a substantially similar average selected by Textron.  For Participant deferrals made prior to 2002, the crediting rate shall not be less than 8% per year.	

3.04	(a)     The Moody’s Plus Rate applicable on a Determination Date to any portion of the Moody’s Account which is attributable to Deferred Income deferred before 1988 shall be the average described in Section 3.03, plus three percentage points.	

 
 
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Effective January 3, 2010	Appendix A
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 	The crediting rate shall not be less than 11% per year for deferrals made prior to 1988.
 
(b)      The Moody’s Plus Rate applicable on a Determination Date to any portion of the Moody’s Account which is attributable to deferrals from 1988 through 2001 shall be the average described in Section 3.03, plus two percentage points. The crediting rate shall not be less than 10% per year for deferrals made from 1988 through 2001.
 
(c)      For deferrals made on or after January 1, 2002, the Rate on the Determination Date shall be the Moody’s Rate.	
 
3.05	The Stock Unit Account shall consist of stock units, which are phantom shares of Textron Common Stock, accumulated and accounted for under this Plan for the sole purpose of determining the cash amount of any distribution on account of this portion of Deferred Income.  Notwithstanding any Plan provision to the contrary, 100% of Automatic Deferred Income shall be deferred to the Stock Unit Account.	

3.06	The Stock Unit Account shall be adjusted as of each Determination Date and shall consist of the stock units (1) in the account as of the immediately preceding Determination Date, (2) credited under Section 3.07 and 3.08 during the intervening month, and (3) credited under Section 3.09 during the intervening month.	

3.07	(a)     To the extent that a Participant puts Elective Deferred Income in the Stock Unit Account, the amount initially credited to her Account shall equal 110% of such Compensation deferred on or after January 1, 2002.
 
(b)           The amount in excess of 100% of the Elective Deferred Income is the “Textron Company Contribution.” A Participant’s right to receive the Textron Company Contribution, as adjusted under Section 3.09, shall become nonforfeitable according to this schedule:
 
         (1) 50% on December 31 of the calendar year in which that Elective Deferred Income otherwise would have been paid to him, but only if his Textron Employment continues on that December 31; and
 
         (2) the remaining 50% on the next December 31, but only if his Textron Employment continues on that next December 31.
 
(c)      A Participant’s right to receive her Textron Company Contribution shall be nonforfeitable in the event her Textron employment ends because of disability or death.	

 
 
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 	(d)      A Participant’s right to receive her Textron Company Contribution shall become nonforfeitable according to the above schedule if a Participant ends employment when she is at least 55 with ten or more years of Textron service, or is at least age 60, or has completed 20 or more years of Textron service.	
 
3.08	With respect to deferrals into this Plan of amounts from the Annual Incentive Compensation Plan for Textron Employees and the Long Term Incentive Plan for Textron Employees, Textron shall credit stock units to a Participant’s Stock Unit Account, equal to the number of shares the deferred amount could have purchased at the “Current Value” of a share of Textron Common Stock. The Current Value is defined in Section 3.07 of the Long Term Incentive Plan for Textron Employees. With respect to deferrals into this Plan of any other amounts, each month Textron shall credit stock units to a Participant’s Stock Unit Account equal in number to the number of shares of Textron Common Stock that the deferred amount could have purchased at a price per share equal to the average of the composite closing prices of Textron Common Stock, as reported in The Wall Street Journal for the month the contribution is credited.	

3.09	From time to time, Textron shall credit Stock Units to a Participant’s Stock Unit Account equal in number to the number of shares of Textron Common Stock that would have been allocated on account of dividends to the Participant’s Stock Unit Account as of that date, based on the average of the composite closing prices of Textron Common Stock, as reported in The Wall Street Journal for the month in which the date of record occurs.	

3.10	The number of Stock Units credited to a Participant’s account under this Article III shall be adjusted, without receipt of any consideration by Textron, on account of any recapitalization, stock split, stock dividend or similar increase or decrease affecting Textron Common Stock, as if the Stock Units were actually shares of Textron Common Stock.	

3.11	The Interest Account shall be established when the benefits relating to a Participant’s Stock Unit Account become due to the Participant under Article IV. A Participant who has terminated her Textron employment may, once each calendar month, elect to transfer, in 5% increments (with a minimum transfer of 10% of the Stock Unit Account), effective the first calendar day of the month following the minimum notice of three business days, any amount in her Stock Unit Account to her Interest Account.
 
(a)      Any transfer made shall be made in cash and shall be in an amount equal to the product of (x) the Current Value of Textron Common Stock on the date as of which the stock units are converted and transferred to the Interest Account, times (y) the number of whole and fractional stock units which are nonforfeitable.	

 
 
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Effective January 3, 2010	Appendix A
Page 7	

 

 
 
 	(b)      As used in the Plan, the current value of a share of Textron Common Stock on any date shall be the average of the composite closing prices, as reported in The Wall Street Journal , for the first ten trading days of the effective month.
 
(c)      Interest on amounts in the Interest Account will be credited monthly at the Moody’s rate.  Stock units transferred related to deferrals made prior to January 1, 2002, shall have a minimum rate of 8%.	
 
Article IV—Benefits

4.01	If a Key Executive’s Textron Employment ends other than by death or for less than acceptable performance (1) at or after age 62, or (2) as a result of Total Disability, the amount credited to his Moody’s Account at the Moody’s Plus Rate, the amount in his Stock Unit Account which is then nonforfeitable according to Section 3.07, and the amount in his Interest Account, shall be distributed in accordance with Article V.	

4.02	If a Participant’s Textron Employment ends because of death, the benefit distributed pursuant to Article IV shall be the sum of the amount credited to her Moody’s Account (computed at the Moody’s Plus Rate), and the amount in her Stock Unit Account.	

4.03	If a Key Executive’s Textron Employment ends other than as described in Section 4.01 or a Participant’s Textron Employment ends other than as described in Section 4.02, the amount credited to his Moody’s Account computed at the Moody’s Rate (unless the Chief Executive Officer and Chief Human Resources Officer of Textron in their sole discretion approve computation at the Moody’s Plus Rate), the amount in his Stock Unit Account which is then nonforfeitable according to Section 3.07, and the amount in his Interest Account, shall be distributed in accordance with Article V.	

4.04	In the event of a Change in Control as defined in Section 9.03, the amount credited to her Moody’s Account computed at the Moody’s Plus Rate, the amount in her Stock Unit Account and the amount in her Interest Account shall be distributed in accordance with Article V.	

4.05	Benefits shall be payable to a Participant or Beneficiary under only one Section of this Article IV.	

Article V—Payment of Benefits

5.01	Textron shall choose in its sole discretion the methods in Section 5.02 by which benefits payable under Article IV shall be distributed, after considering any method of payment requested by the Participant or by the Beneficiaries entitled to receive the benefits.	

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	Appendix A
Page 8	

 

 
 
 	A Participant who wishes to request a form of payment must file an election to indicate her preferred form of payment; but all Participant elections shall be subject to Textron’s discretion to change the elected form of payment as provided in the preceding sentence.  If the Participant terminated before January 1, 2002, the Participant must file the election by December 31, 2008; any other Participant must file the election by December 31, 2007.  Textron may impose conditions on the new benefit election (including, but not limited to, a requirement that the Participant elect the same form of payment for his pre-2005 Account under this Appendix A and his post-2004 account under the Deferred Income Plan for Textron Executives).  If the current value of a Participant’s Deferred Income Plan Accounts is $100,000 or less at termination, or if the Participant fails to request a form of payment before the applicable deadline, such Participant’s accounts shall be paid in a single sum.	

5.02	After benefits relating to a Participant’s Moody’s Account, his Stock Unit Account and his Interest Account become payable under Article IV, Textron shall distribute the benefits in accordance with any one of the following methods:
 
(a)      Payment in a single sum; or
 
(b)      Payment in a number of annual installments, each payable as soon as practicable after the end of each successive calendar year.  The number of installments shall not exceed the lesser of 15 or life expectancy of the Participant. The annual installments shall be calculated each year by dividing the unpaid amount of the benefits as of January 1 of that year by the remaining number of unpaid installments; or
 
(c)      Payment through a combination of the foregoing methods.	

5.03	(a)     For Participants who terminate prior to January 1, 2002, Plan benefits payable under Section 5.02 shall begin to be paid not later than February 15 of the first calendar year which begins after the date on which (1) the final payment of the Participant’s Compensation is scheduled to be made, or (2) the Participant attains or would have attained age 65, whichever is later. For Participants who terminate on or after January 1, 2002, Plan benefits under Section 5.02(a) shall begin to be paid not later than February 15 following the year the Participant terminated, or sixty days after termination of employment, whichever is later.
 
(b)      P lan benefits are paid from a Moody’s Account in accordance with Section 5.02(a) or 5.02(b), amounts (if any) described in Section 3.04 shall be paid first from Section 3.04(c), next from pre-2002 deferrals in Section 3.03, next from Section 3.04(b), and lastly from Section 3.04(a).	

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	Appendix A
Page 9	

 

 
 
5.04	Notwithstanding any Plan provision to the contrary, the amount then credited to the Moody’s Account, Stock Unit Account and Interest Account of each Key Executive shall become due and payable immediately upon a Change in Control as defined in Section 9.03.	

5.05	Distributions under this Article V shall be made on a pro-rata basis from each account in which there is an amount.	

Article VI—Beneficiaries

6.01	A Participant may designate one or more Beneficiaries to receive Plan benefits payable on the Participant’s account after his death. A Beneficiary may designate one or more Beneficiaries to receive any unpaid Plan benefits to the extent this designation does not contravene any designation filed by the deceased Participant through whom the Beneficiary himself claims under this Plan. Beneficiaries shall be designated only upon forms made available by or satisfactory to Textron, and filed by the Participant or Beneficiary with Textron.  Effective January 1, 2008, any payment to a Beneficiary shall be made in a lump sum.  If a Beneficiary is receiving installment payments as of December 31, 2007, any remaining installments due after 2007 shall be aggregated and paid in a lump sum on the first business day of January 2008.	

6.02	At any time prior to his death, a Participant or Beneficiary may change his own designation of Beneficiary by filing a substitute designation of Beneficiary with Textron.	

6.03	In the absence of an effective designation of Beneficiary, or if all persons so designated shall have predeceased the Participant/Beneficiary or shall have died before the complete distribution of Plan benefits, the balance of Plan benefits shall be paid to the Participant/Beneficiary’s surviving spouse or, if none, to the Participant/Beneficiary’s issue per stirpes or, if no issue, to the executor or administrator of the Participant/Beneficiary’s estate.	

6.04	If a Participant’s Compensation or a Plan benefit is community property, any designation of Beneficiary shall be valid or effective only as permitted under applicable law.	

6.05	If a Plan benefit is payable to a minor or person declared incompetent or to a person incapable of handling the disposition of his property, Textron may pay such Plan benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. Textron may require proof of incompetency, minority, incapacity or guardianship as it deems appropriate prior to distribution of the Plan benefit. Such distribution shall completely discharge any Textron Company from all liability with respect to such benefit.	

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	Appendix A
Page 10	

 

 
 
Article VII—Unfunded Plan

7.01	Benefits to be provided under this Plan are unfunded obligations of Textron. Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations. If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds therefrom shall at all times remain the sole property of Textron and neither the Participants whose lives are insured nor their Beneficiaries shall have any ownership rights in such policies of insurance.	

7.02	This Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.	

Article VIII—Plan Administration

8.01	Textron shall be the plan administrator of this Plan and shall be solely responsible for its general administration and interpretation. Textron shall have all such powers as may be necessary to carry out the provisions hereof and may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 8.05, any action by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any Participant. Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan, and shall make all such determinations and interpretations in a nondiscriminatory manner.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 8.02.	

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

8.03	Textron may employ or engage such agents, accountants, actuaries, counsel, other experts and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan. Textron shall be entitled to rely upon all certifications made by an accountant selected by Textron. Textron and its committees, officers, directors and employees shall not be liable for any action taken, suffered or omitted by them in good faith in reliance upon the advice or	

 
 
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Effective January 3, 2010	Appendix A
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 	or opinion of any such agent, accountant, actuary, counsel or other expert. All action so taken, suffered or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
8.04	Textron may require proof of the death or Total Disability of any Participant, former Participant or Beneficiary and evidence of the right of any person to receive any Plan benefit.	

8.05	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and resolved pursuant to the claims procedure in Section 8.06 of the Deferred Income Plan for Textron Executives.	

8.06	Textron shall withhold from benefits paid under this Plan any taxes or other amounts required to be withheld by law.	

Article IX—Miscellaneous

9.01	Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
9.02	(a)      Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant, and (4) the domestic relations order does not require the Plan to make a payment to an alternate payee in any form other than a cash lump sum.
 
(b)     Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether	

 
 
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Effective January 3, 2010	Appendix A
Page 12	

 

 
 
 	presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or Beneficiary.	
 
9.03	Notwithstanding any provision to the contrary, the Board or its designee shall have the right to amend, modify, suspend or terminate this Plan at any time by written ratification of such action; provided, however, that no amendment, modification, suspension or termination:
 
(a)      Shall reduce the amount credited to any Moody’s Account, Stock Unit Account or Interest Account immediately before the effective date of the amendment, modification, suspension or termination; or
 
(b)      Shall be made to Article V or this Section 9.03 following a Change in Control.
 
If after a Change in Control any claim is made or any litigation is brought by a Participant or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in the next following sentence shall be liable, jointly and severally, to indemnify the Participant or Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees and disbursements incurred in any such claim or litigation and for prejudgment interest as provided in Section 8.07 of the Deferred Income Plan for Textron Executives.
 
For purposes of this Plan, a “Change in Control” shall occur if (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially the same proportions as their ownership of Textron common stock, is or becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or whose nomination for election by Textron’s stockholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof, or (iii) stockholders of Textron approve a merger or consolidation of Textron with any other corporation, other than a merger or consolidation which would result in the voting securities of Textron outstanding immediately prior thereto continuing to represent (either by	

 
 
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Effective January 3, 2010	Appendix A
Page 13	

 

 
 
 	remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of Textron approve a plan of complete liquidation of Textron or an agreement for the sale or disposition by Textron of all or substantially all of Textron’s assets.	

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

9.05	This Plan shall be construed in accordance with the laws of the State of Delaware.	

9.06	Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant to be continued in employment as a Key Executive or other employee of any Textron Company.	

9.07	Textron, the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 
 
Deferred Income Plan for Textron Executives
Effective January 3, 2010	Appendix A
Page 14	

EXHIBIT 10.3

 
TEXTRON SPILLOVER SAVINGS PLAN
____________________
 
Effective January 3, 2010

 

 

 

 

DC: 2559290-5

 

 

Textron Spillover Savings Plan
Effective January 3, 2010

Table of Contents

Introduction	 	 	1	
 	 	 	 	
Article I – Definitions	 	 	2	
 	 	 	 	
 	1.01	Additional Retirement Contribution	2	
 	1.02	Account	2	
 	1.03	Beneficiary	2	
 	1.04	Board	2	
 	1.05	Change in Control	2	
 	1.06	Compensation	4	
 	1.07	ERISA	4	
 	1.08	Executive Plan	4	
 	1.09	IRC	4	
 	1.1	Key Executive	4	
 	1.11	Key Executive Plan	4	
 	1.12	Participant	4	
 	1.13	Plan	5	
 	1.14	Plan Administrator	5	
 	1.15	Qualified Savings Plan	5	
 	1.16	Separation From Service	5	
 	1.17	Supplemental Shares	5	
 	1.18	Statutory Limit	5	
 	1.19	Textron	5	
 	1.2	Textron Company	5	
 	1.21	Total Disability	5	
 	 	 	 	
Article II – Participation	 	 	5	
 	 	 	 	
 	2.01	Eligibility	5	
 	2.02	Period of Participation	6	
 	 	 	 	
Article III – Spillover Savings Benefit	6	
 	 	 	 	
 	3.01	Supplemental Matching Contribution	6	
 	3.02	Supplemental Retirement Contribution	7	

 
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Effective January 3, 2010 	Table of Contents
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Article IV – Vesting	 	 	  8	
 	 	 	 	
 	4.01	Vesting Schedule	8	
 	4.02	Change in Control	8	
 	 	 	 	
Article V – Distribution of Accounts	 	 	8	
 	 	 	 	
 	5.01	Separation From Service	8	
 	5.02	Disability or Death	8	
 	5.03	Administrative Adjustments in Payment Date	8	
 	5.04	Distribution Upon Change in Control	9	
 	5.05	Distributions Before January 1, 2008	9	
 	 	 	 	
Article VI – Unfunded Plan	 	 	9	
 	 	 	 	
 	6.01	No Plan Assets	9	
 	6.02	Top-Hat Plan Status	9	
 	 	 	 	
Article VII – Plan Administration	 	 	9	
 	 	 	 	
 	7.01	Plan Administrator’s Powers	9	
 	7.02	Delegation of Administrative Authority	10	
 	7.03	Tax Withholding	10	
 	7.04	Use of Third Parties to Assist with Plan Administration	10	
 	7.05	Proof of Right to Receive Benefits	10	
 	7.06	Claims Procedure	10	
 	7.07	Enforcement Following a Change in Control	12	
 	 	 	 	
Article VIII – Amendment and Termination	 	 	  12	
 	 	 	 	
 	8.01	Amendment	12	
 	8.02	Delegation of Amendment Authority	12	
 	8.03	Termination	13	
 	8.04	Distributions Upon Plan Termination	13	
 	 	 	 	
Article IX – Miscellaneous	 	 	13	
 	 	 	 	
 	9.01	Use of Masculine or Feminine Pronouns	13	
 	9.02	Transferability of Plan Benefits	13	
 	9.03	Section 409A Compliance	14	
 	9.04	Controlling State Law	14	
 	9.05	No Right to Employment	14	
 	9.06	Additional Conditions Imposed	14	

 
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Effective January 3, 2010 	Table of Contents
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Textron Spillover Savings Plan
 
Effective January 3, 2010
 
Introduction
 
The Textron Spillover Savings Plan (the “Plan”) is an unfunded, nonqualified deferred compensation arrangement.   The Plan is a continuation of the defined contribution portions of the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”) and the Textron Supplemental Benefits Plan for Executives (the “Executive Plan”).  The defined contribution portions of these plans were separated from the defined benefit portions of the plans effective January 1, 2007, and the defined benefit portions were combined to form the Textron Spillover Pension Plan.  The defined contribution portions of the Key Executive Plan and the Executive Plan were continued as separate plans, the Supplemental Savings Plan for Textron Key Executives and the Textron Supplemental Savings Plan for Executives, on and after January 1, 2007.  These two plans are now being combined, effective January 1, 2008, to form the Textron Spillover Savings Plan.
 
The Plan provides supplemental savings benefits for designated executives of Textron and its affiliates who participate in the Textron Savings Plan.  The Plan provides benefits that would have been payable under the Textron Savings Plan if not for the limits imposed by the Internal Revenue Code of 1986, as amended (the “IRC”).  The Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments that are effective through the date of this restatement.
 
Appendix A and Appendix B of the Plan set forth the defined contribution provisions of the Key Executive Plan and the Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Supplemental savings benefits that were earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amounts under IRC Section 409A, are calculated and paid solely as provided in Appendix A or Appendix B, whichever is applicable, and are not subject to any other provisions of the Textron Spillover Savings Plan.
 
A Key Executive’s supplemental savings benefits that were earned or vested after 2004 and before January 1, 2008, under the Key Executive Plan are subject to the provisions of IRC Section 409A.  These benefits are calculated under Appendix A, but are paid exclusively as provided in the Textron Spillover Savings Plan (not including Appendix A).  Although the provisions of the Textron Spillover Savings Plan generally are effective as of January 1, 2008, the provisions that govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan are effective as of January 1, 2005.
 
Supplemental savings benefits provided under the Executive Plan generally are paid out no later than March 15 following the year in which the benefits are credited to a participant’s account.  In a few cases, however, supplemental savings benefits that were earned

 

Textron Spillover Savings Plan
Effective January 3, 2010 	 
Page 1	

 

and vested under the Executive Plan before January 1, 2005, remained unpaid as of the date on which this Plan was established.  These benefits will be paid to the Participants in a lump sum in January of 2008.  Any benefits that were credited under the Executive Plan between January 1, 2007, and December 31, 2007, shall be paid exclusively as provided in Appendix B.
 
Appendix A permits a Participant to request a distribution option for the benefits payable under that Appendix.  This special election provision is effective as of July 25, 2007, the date on which the Plan was adopted by the Board.
 
Article I – Definitions

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

1.01  	“Additional Retirement Contribution” means a contribution that is designated as an “Additional Retirement Contribution” under the Textron Savings Plan, and that is made to an employee who is not eligible to accrue a retirement benefit under a tax-qualified defined benefit plan that is part of the Textron Retirement Program.	

1.02  	“Account” means the bookkeeping entry used to record supplemental contributions and earnings credited to a Participant under the Plan.  A Participant’s Account may include two sub-accounts, a Stock Unit Account and a Moody’s Account, to track earnings on different hypothetical investment funds.  Any Supplemental Shares credited to a Participant’s Account on December 31, 2009, shall be credited to the Participant’s Stock Unit Account as of January 1, 2010.  All amounts credited to the Account shall be unfunded obligations of Textron: no assets shall be set aside or contributed to the Plan for the Participant’s benefit.  A Key Executive’s Account does not include supplemental savings benefits that were earned and vested (within the meaning of IRC Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amounts under IRC Section 409A: these amounts are calculated and paid solely as provided in Appendix A.	

1.03  	“Beneficiary” means the person designated under the Plan (including any person who is automatically designated by the terms of the Plan) to receive any death benefit payable with respect to a Participant.  A Participant’s trust or estate may also be the Participant’s Beneficiary.	

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

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

 

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Effective January 3, 2010 	 
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 	(a)	any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”) and of IRC Section 409A) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially similar proportions as their ownership of Textron common stock	

 	(1)	becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of stock of Textron that, together with other stock held by such person or group, possesses more than 50% of the combined voting power of Textron’s then-outstanding voting stock, or	

 	(2)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) beneficial ownership of stock of Textron possessing more than 30% of the combined voting power of Textron's then-outstanding stock, or	

 	(3)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) all or substantially all of the total gross fair market value of all of the assets of Textron immediately prior to such acquisition or acquisitions (where gross fair market value is determined without regard to any associated liabilities); or	

 	(b)	a merger or consolidation of Textron with any other corporation occurs, other than a merger or consolidation that would result in the voting securities of Textron outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or	

 	(c)	during any 12-month period, a majority of the members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of their appointment or election.	

Each of the events described above will be treated as a “Change in Control” only to the extent that it is a change in ownership, change in effective control, or change in the ownership of a substantial portion of Textron’s assets within the meaning of IRC Section 409A.

 

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Effective January 3, 2010 	 
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For any Participant who was an employee of a Textron Company on December 31, 2007, the definition set forth above in this Section 1.05 shall be used to determine whether an event is a “Change in Control” to the extent that the event would alter the time or form of payment of the Participant’s benefit.  To the extent that the event would cause any change in the Participant’s rights under the Plan that does not affect the status of the Participant’s benefit under IRC Section 409A (including, but not limited to, accelerated vesting of the Participant’s benefit or restrictions on amendments to the Plan), the definition set forth in Section 7.03 of Appendix A shall be used to determine whether the event is a “Change in Control.”

1.06  	“Compensation” means a Participant’s eligible annual compensation as defined in the Qualified Savings Plan in which he participates, and any annual compensation that would be eligible under the Qualified Savings Plan if the Participant’s deferral election under the Deferred Income Plan for Textron Executives were disregarded, but determined (in each case) without regard to the Statutory Limit.	

1.07   	“ ERISA” means the Employee Retirement Income Security Act of 1974, as amended.	

1.08  	“Executive Plan” means the Textron Supplemental Benefits Plan for Executives, as in effect before January 1, 2007, and the Textron Supplemental Savings Plan for Executives, as in effect from January 1 through December 31, 2007.	

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

1.10  	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	

1.11  	“Key Executive Plan” means the Supplemental Benefits Plan for Textron Key Executives, as in effect before January 1, 2007, and the Supplemental Savings Plan for Textron Key Executives, as in effect from January 1 through December 31, 2007.  The defined contribution provisions of the Key Executive Plan are included in this Plan as Appendix A.	

1.12  	“Participant” means an employee of Textron who is eligible to participate in the Plan pursuant to Section 2.01 and whose participation has not been terminated as provided in Section 2.01.	

 

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1.13  	“Plan” means this Textron Spillover Savings Plan, as amended and restated from time to time.	

1.14  	“Plan Administrator” means Textron or its designees, as described in Section 7.01.	

1.15  	“Qualified Savings Plan” means the Textron Savings Plan or another tax-qualified defined contribution plan maintained by a Textron Company that has been designated by the Management Committee of Textron as eligible for supplemental contributions under the Plan.  Any Qualified Savings Plan other than the Textron Savings Plan shall be identified in an appendix to this Plan, and the appendix shall also set forth any special terms or conditions that apply to participants in the Qualified Savings Plan.	

1.16  	“Separation From Service” means a Participant’s termination of employment with all Textron Companies, other than by reason of death or Total Disability, that qualifies as a “separation from service” for purposes of IRC Section 409A.	

1.17  	“Supplemental Shares” means phantom shares of Textron common stock accumulated and accounted for under the Plan for the purpose of determining the cash value of distributions from a Participant’s Stock Unit Account.	

1.18  	“Statutory Limit” means the limit on eligible compensation under tax-qualified defined contribution plans imposed by IRC Section 401(a)(17) or the limit on annual additions imposed by IRC Section 415.	

1.19  	“Textron” means Textron Inc., a Delaware corporation, and any successor to Textron Inc.	

1.20  	“Textron Company” means Textron or any company controlled by or under common control with Textron within the meaning of IRC Section 414(b) or (c).	

1.21  	“Total Disability” means physical or mental incapacity of a Participant who is employed by a Textron Company on the disability date, if the incapacity (a) enables the Participant to receive disability benefits under the Federal Social Security Act, and (b) also qualifies as a “disability” for purposes of IRC Section 409A(a)(2)(C).	

Article II – Participation

2.01  	Eligibility .  An employee of a Textron Company who is a United States citizen or resident and who participates in a Qualified Savings Plan shall become a partici-	

 

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 	pant in the Plan when his matching contribution or Additional Retirement Contribution under the Qualified Savings Plan is limited by the Statutory Limit.	
 
2.02  	Period of Participation .  Except as provided in the following sentence, once an individual becomes a Participant under Section 2.01 above, the individual shall remain a Participant until the individual’s Account is fully distributed, or until the individual’s participation in the Plan is terminated by the Board (or by the Chief Executive Officer and the Chief Human Resources Officer) effective as of the following January 1.  If an employee or former employee is not identified in Textron’s records as a Participant as of December 31, 2008, the individual shall not be a Participant, and shall not be entitled to receive any benefit under the Plan, unless the individual either (i) becomes a Participant after 2008 pursuant to Section 2.01, or (ii) is designated by the Board (or by the Chief Executive Officer and Chief Human Resources Officer) as a Participant after 2008.	

Article III – Spillover Savings Benefit

3.01  	Supplemental Matching Contribution .	

 	(a)	Amount of Contribution .  If a Participant contributes at least 10% of eligible compensation to the Textron Savings Plan during a calendar year, the Participant’s Stock Unit Account under the Plan shall be credited with a supplemental matching contribution equal to (1) 5% [i.e., 50% of 10%] of the Participant’s Compensation, reduced by (2) the Participant’s actual matching contribution for the calendar year under the Textron Savings Plan.  If a Participant participates in a Qualified Savings Plan other than the Textron Savings Plan, the Participant shall receive a comparable supplemental matching contribution in an amount sufficient to restore the portion of the matching contribution lost because of the application of the Statutory Limit to eligible compensation under the Qualified Savings Plan.  The Participant must be employed by a Textron Company on December 31 of the calendar year in order to receive a supplemental matching contribution for that calendar year.	

 	(b)	Stock Unit Account .  The Stock Unit Account shall consist of Supplemental Shares.  Textron shall credit the supplemental matching contribution to a Participant’s Stock Unit Account after the end of the calendar year for which the supplemental matching contribution is made, but not later than March 15 of the following year.  The credit shall be made as a number of Supplemental Shares determined by dividing the amount of the supplemental matching contribution for the calendar year by the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for each trading day in the calendar year for which the credit is made.	

 

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 	(c)	Crediting Dividend Equivalents and Other Adjustments . Textron shall credit additional Supplemental Shares to a Participant’s Stock Unit Account in each calendar quarter to reflect the dividend equivalents attributable to the Supplemental Shares that were credited to the Participant’s Account on the record date.  The number of additional Supplemental Shares shall be determined by dividing the dividend amount by the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month in which the record date occurs.  The number of Supplemental Shares credited to a Participant’s Stock Unit Account shall be adjusted, without receipt of any consideration by Textron, on account of any stock split, stock dividend, or similar increase or decrease affecting Textron common stock, as if the Supplemental Shares were actual shares of Textron common stock.	

 	(d)	Converting Supplemental Shares to Cash .  All distributions from the Plan shall be made in cash.  The cash value distributed will be determined by multiplying the current value of Textron common stock by the number of whole and fractional Supplemental Shares in the Participant’s Stock Unit Account as of the distribution date.  The current value of a share of Textron common stock on the distribution date shall be the average of the composite closing prices, as reported in The Wall Street Journal, for the first ten trading days of the calendar month following the Participant’s Separation From Service, death, or Total Disability.	

3.02  	Supplemental Retirement Contribution .	

 	 (a)	Amount of Contribution .  If a Participant receives an Additional Retirement Contribution under the Textron Savings Plan for a calendar year, and the Additional Retirement Contribution is limited by a Statutory Limit, the Participant’s Moody’s Account shall be credited with a supplemental retirement contribution for that calendar year.  The supplemental retirement contribution shall be credited to the Participant’s Moody’s Account as of the same date on which the Additional Retirement Contribution is contributed to the Textron Savings Plan.  The supplemental retirement contribution shall be equal to (1) the Additional Retirement Contribution that the Participant would have received for the calendar year if the Statutory Limits had not applied, reduced by (2) the Participant’s actual Additional Retirement Contribution under the Textron Savings Plan for the calendar year.  The Participant must be employed by a Textron Company on December 31 of the calendar year in order to receive a supplemental retirement contribution for that calendar year.	
 
 	(b)	Moody’s Account .  The Moody’s Account shall earn interest at a monthly interest rate that is one twelfth of the average for the calendar month of the	

 

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 	 	Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such monthly yield is no longer published, a substantially similar average selected by Textron.  Interest shall be credited on the last day of each calendar month on the average daily balance of the Moody’s Account during the month.  A supplemental retirement contribution shall not begin to earn interest until it is credited to a Participant’s Moody’s Account.	
 
Article IV – Vesting

4.01  	Vesting Schedule .  Except as provided in Section 4.02, a Participant’s Stock Unit Account shall be vested to the same extent that the Participant’s matching contribution account under the Qualified Savings Plan is vested, and a Participant’s Moody’s Account shall be vested to the same extent that the Participant’s Additional Retirement Contribution Account under the Textron Savings Plan is vested.  Any portion of the Participant’s Account that is not vested at the time of the Participant’s Separation From Service shall be forfeited.	

4.02  	Change in Control .  In the event of a Change in Control, a Participant’s Account shall become fully vested if the Participant is employed by a Textron Company on the date of the Change in Control.	

Article V – Distribution of Accounts

5.01 	Separation From Service .  A Participant’s Account shall be distributed in a lump sum in cash on the first business day of the seventh month following his Separation From Service (or in January 2009, if later).	

5.02   	Disability or Death .  If a Participant dies before his Account is distributed, the Participant’s Account shall be distributed in a lump sum in cash on the first business day of the first month that begins at least ninety (90) days after the Participant’s death.  If a Participant suffers a Total Disability before his Account is distributed, the Participant’s Account shall be distributed in a lump sum in cash on the last business day of the month following his Total Disability.  The Participant’s Beneficiary under the Plan shall be the same as the Participant’s beneficiary under the Qualified Savings Plan.  If a Beneficiary is receiving installment payments as of December 31, 2007, any remaining installments due after 2007 shall be aggregated and paid in a lump sum on the first business day of January 2008.	

5.03  	Administrative Adjustments in Payment Date .  A payment is treated as being made on the date when it is due under the Plan if the payment is made on the due date specified by the Plan, or on a later date that is either (a) in the same calendar year (for a payment whose specified due date is on or before September 30), or (b) by the 15th day of the third calendar month following the date specified by the	

 

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 	Plan (for a payment whose specified due date is on or after October 1).  A payment also is treated as being made on the date when it is due under the Plan if the payment is made not more than 30 days before the due date specified by the Plan, provided that the payment is not made earlier than six months after the Participant’s Separation From Service.  A Participant may not, directly or indirectly, designate the taxable year of a payment made in reliance on the administrative rules in this Section 5.03.	
 
5.04  	Distribution Upon Change in Control .  Subject to the following sentence, if a Change in Control also qualifies as a “change in control” under IRC Section 409A, the Participant’s Account shall be paid in a lump sum in cash on the first business day of the month following the Change in Control.  If a Participant’s Separation From Service occurred before the Change in Control, the lump sum payment under this Section 5.04 shall not be made earlier than six months after the Participant’s Separation From Service.	

5.05  	Distributions Before January 1, 2008 .  Distributions after 2004 and before January 1, 2008, were made in good faith compliance with IRC Section 409A and Internal Revenue Service guidance interpreting IRC Section 409A.	

Article VI – Unfunded Plan

6.01	No Plan Assets .  Benefits provided under this Plan are unfunded obligations of Textron.  Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds of the policies shall at all times remain the sole property of Textron and neither the Participants whose lives are insured not their Beneficiaries shall have any ownership rights in such policies of insurance.	

6.02  	Top-Hat Plan Status .  The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	
 
Article VII – Plan Administration
 
7.01  	Plan Administrator’s Powers .  Textron shall have all such powers as may be necessary to carry out the provisions hereof. Textron may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 7.06, any actions by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any	

 
 
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  	Participant.  Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 7.02.	
 
7.02  	Delegation of Administrative Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officer of Textron to make a further delegation of the authority to administer the Plan.	

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

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

7.05  	Proof of Right to Receive Benefits .  Textron may require proof of death or Total Disability of any Participant and evidence of the right of any person to receive any Plan benefit.	

7.06  	Claims Procedure . A Participant or Beneficiary who believes that he is being denied a benefit to which he is entitled under the Plan (referred to in this Section	

 

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

 

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 	 	fits; and (3) the Claimant’s right to bring a civil action under Section 502(a) of ERISA.	
 
7.07  	Enforcement Following a Change in Control .  If, after a Change in Control, any claim is made or any litigation is brought by a Participant or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in Section 1.05 shall be liable, jointly and severally, to reimburse the Participant or Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees and costs incurred during the Participant’s or Beneficiary’s lifetime in pursuing any such claim or litigation, and to pay prejudgment interest at the Prime Rate as quoted in the Money Rates section of The Wall Street Journal on any money award or judgment obtained by the Participant or Beneficiary, payable at the same time as the underlying award or judgment.  Any reimbursement pursuant to the preceding sentence shall be paid to the Participant no earlier than six months after the Participant’s Separation From Service, and shall be paid to the Participant or Beneficiary no later than the end of the calendar year following the year in which the expense was incurred.  The reimbursement shall not be subject to liquidation or exchange for another benefit, and the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year.	
 
Article VIII – Amendment and Termination
 
8.01  	Amendment .  Subject to subsections (a) and (b), below, the Board or its designee shall have the right to amend, modify, or suspend this Plan at any time by written resolution or other formal action reflected in writing.	

 	(a)	No amendment, modification, or suspension shall reduce the amount credited to a Participant’s Account immediately before the effective date of the amendment, modification, or suspension.	

 	(b)	Following a Change in Control, no amendment, modification, or suspension shall be made that directly or indirectly reduces any right or benefit provided upon a Change in Control.	

An amendment to the Qualified Savings Plan that affects the benefits provided under this Plan shall not be deemed to be an amendment to this Plan, and shall not be subject to the restrictions in subsections (a) and (b), provided that the amendment to the Qualified Savings Plan applies to a broad cross-section of participants in the Qualified Savings Plan, and not only or primarily to Participants in this Plan.

8.02  	Delegation of Amendment Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend	

 

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  	the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
8.03  	Termination .  The Board or its designee shall have the right to terminate this Plan at any time before a Change in Control by written resolution.  No termination of the Plan shall reduce a Participant’s Account immediately before the effective date of the termination.	

8.04  	Distributions Upon Plan Termination .  Upon the termination of the Plan by the Board with respect to all Participants, and termination of all arrangements sponsored by any Textron Company that would be aggregated with the Plan under IRC Section 409A, Textron shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay the Participant’s vested Account in a lump sum, to the extent permitted under IRC Section 409A.  All payments that may be made pursuant to this Section 8.04 shall be made no earlier than the thirteenth month and no later than the twenty-fourth month after the termination of the Plan.  Textron may not accelerate payments pursuant to this Section 8.04 if the termination of the Plan is proximate to a downturn in Textron’s financial health.  If Textron exercises its discretion to accelerate payments under this Section 8.04, it shall not adopt any new arrangement that would have been aggregated with the Plan under IRC Section 409A within three years following the date of the Plan’s termination.	

Article IX – Miscellaneous

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

9.02  	Transferability of Plan Benefits .	

 	(a)	Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant, and	

 

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 	 	(4) the domestic relations order does not require the Plan to make a payment to an alternate payee in any form other than a cash lump sum.	
 
 	(b)	Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or Beneficiary.	

9.03  	Section 409A Compliance .  The Plan is intended to comply with IRC Section 409A and should be interpreted accordingly.  Any distribution election that would not comply with IRC Section 409A is not effective.  To the extent that a provision of this Plan does not comply with IRC Section 409A, such provision shall be void and without effect.  Textron does not warrant that the Plan will comply with IRC Section 409A with respect to any Participant or with respect to any payment, however.  In no event shall any Textron Company; any director, officer, or employee of a Textron Company (other than the Participant); or any member of Textron be liable for any additional tax, interest, or penalty incurred by a Participant or Beneficiary as a result of the Plan’s failure to satisfy the requirements of IRC Section 409A, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.	

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

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

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

 

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TEXTRON SPILLOVER SAVINGS PLAN
____________________________
APPENDIX A
____________________________
Defined Contribution Provisions
of the
Supplemental Benefits Plan for
Textron Key Executives
(As in effect before January 1, 2008)

 

 

 

 
DC: 2548996-6

 

 

Textron Spillover Savings Plan
Appendix A — Key Executive Plan

Table of Contents

 

Introduction	 	 	1	
 	 	 	 	
Article I - Definitions	 	 	3	
 	 	 	 	
Article II - Participation	 	 	3	
 	 	 	 	
Article III - Supplemental Savings Benefits	 	 	4	
 	 	 	 	
Article IV - Supplemental Included Plan Benefits	 	 	5	
 	 	 	 	
Article V - Unfunded Plan	 	 	5	
 	 	 	 	
Article VI - Plan Administration	 	 	5	
 	 	 	 	
Article VII - Miscellanous	 	 	7	

Market Square Profit Sharing Plan Schedule

 

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Textron Spillover Savings Plan
Appendix A — Key Executive Plan

Introduction
 
A.	Key Executive Plan
(As in Effect Before January 1, 2007)	
 
Before 2007, the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”) was a separate unfunded, nonqualified deferred compensation arrangement for designated key executives of Textron and its affiliates.  The Key Executive Plan supplemented key executives’ benefits under Textron’s tax-qualified defined benefit plans and tax-qualified defined contribution plans by providing benefits that exceeded the statutory limits under the Internal Revenue Code (“IRC”).  The Key Executive Plan also provided supplemental pension benefits based on certain elements of key executives’ compensation that were not included in pensionable compensation under the tax-qualified defined benefit plans.
 
B.	Supplemental Savings Plan for Textron Key Executives
(Effective January 1, 2007)	
 
Effective January 1, 2007, the defined benefit portion of the Key Executive Plan was separated from the defined contribution portion of the Key Executive Plan.  The defined benefit portion of the Key Executive Plan continued as part of the Textron Spillover Pension Plan, and the defined contribution portion of the Key Executive Plan continued as a separate plan, the Supplemental Savings Plan for Textron Key Executives.

C.	Textron Spillover Savings Plan
(Effective January 1, 2008)	
 
Effective January 1, 2008, the Supplemental Savings Plan for Textron Key Executives and the Textron Supplemental Savings Plan for Executives were merged to form the Textron Spillover Savings Plan.
 
D.	Key Executive Protected Benefits
(Earned and Vested Before 2005)	
 
The portion of Appendix A that follows this Introduction sets forth the defined contribution provisions of the Key Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004, with certain modifications imposing additional restrictions on distributions and changing provisions for measuring investment returns.  Key Executives’ supplemental savings benefits that were earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amounts under Section 409A (“Key Executive Protected Benefits”), are calcu-

 
 
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lated and paid solely as provided in Appendix A, and are not subject to any other provisions of the Textron Spillover Savings Plan.
 
The Key Executive Protected Benefits are not intended to be subject to IRC Section 409A.  No amendment to this Appendix A that would constitute a “material modification” for purposes of Section 409A shall be effective unless the amending instrument states that it is intended to materially modify Appendix A and to cause the Key Executive Protected Benefits to become subject to Section 409A.  Although the Key Executive Protected Benefits are not intended to be subject to Section 409A, no Textron Company (nor any director, officer, or other representative of a Textron Company) shall be liable for any adverse tax consequence suffered by a Participant or beneficiary if a Key Executive Protected Benefit becomes subject to Section 409A.

E.	Benefits Subject To Section 409A
(Earned or Vested From 2005 Through 2007)	
 
Supplemental savings benefits earned by Key Executives after 2004, and supplemental savings benefits that became vested after 2004, are subject to the provisions of IRC Section 409A.  To the extent that these benefits were earned under the Key Executive Plan before January 1, 2008, the benefits shall be calculated under the provisions of the Key Executive Plan set forth in this Appendix A.  However, any benefits earned or vested under the Key Executive Plan after 2004 shall be paid exclusively as provided in the Textron Spillover Savings Plan (not including any appendix to the Textron Spillover Savings Plan), and shall not be subject to any provision of Appendix A that relates to the payment or distribution of benefits.  Although the provisions of the Textron Spillover Savings Plan generally are effective as of January 1, 2008, the provisions that govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan are effective as of January 1, 2005.
 
Section 6.03(c) of Appendix A requires a Participant to make an election if the Participant wishes to request one of the distribution options in Section 6.03.  Section 1.08 of the Market Square Profit Sharing Plan Schedule requires a Participant to make an election if the Participant wishes to request one of the distribution options in Section 1.08.  These election provisions are effective as of July 25, 2007, the date on which the Plan was adopted by the Board.
 
Key Executive Plan
 
The text that follows sets forth the defined contribution provisions of the Key Executive Plan as in effect on October 3, 2004, and as modified thereafter in certain respects that do not constitute “material modifications” for purposes of IRC Section 409A.  The defined terms in Appendix A relate only to the provisions set forth in Appendix A: they do not apply to any other provisions of the Textron Spillover Savings Plan, and terms defined elsewhere in the Textron Spillover Savings Plan do not apply to Appendix A.  No additional benefits shall accrue or be deferred under Appendix A after December 31, 2007.

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 2	

 

 
Article I—Definitions
 
In this Appendix, the following terms shall have the meanings set forth in this Article, unless a contrary or different meaning is expressly provided:
 
1.01	“Board” means the Board of Directors of Textron.	
 
1.02	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.	
 
1.03	“Included Plan” means a Textron defined contribution plan specifically designated by the Board under Article IV.	
 
1.04	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	
 
1.05	“Participant” means a Key Executive who is participating in this Plan pursuant to Article II and, unless the context clearly indicates to the contrary, a former Participant who is entitled to benefits under this Plan.	
 
1.06	“Plan” means this Supplemental Savings Plan for Textron Key Executives, as amended and restated from time to time.	
 
1.07	“Savings Plan” means the Textron Savings Plan, as amended and restated from time to time.	
 
1.08	“Statutory Limit” means any limit on benefits under, or annual additions to, qualified plans imposed by Section 401(a)(17) or 415 of the Internal Revenue Codes of 1954 or 1986, as amended from time to time.	
 
1.09	“Supplemental Shares” means phantom shares of Textron common stock accumulated and accounted for under this Plan for the purpose of determining the cash value of distributions and transfers from a Participant’s supplemental savings account.	
 
1.10	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	
 
1.11	“Textron Company” means Textron or any company controlled by or under common control with Textron.	
 
Article II—Participation
 
2.01	A Key Executive shall participate in this Plan if the annual additions to her accounts under the Savings Plan or any Included Plan are limited by one or more Statutory Limits.	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 3	

 

Article III—Supplemental Savings Benefits
 
3.01	Textron shall maintain a supplemental savings account and a fixed income account for each Participant who participates in the Savings Plan for making credits, payments, and transfers described in this Article.	
 
3.02	A Participant who contributes at least 10% of eligible compensation to the Textron Savings Plan each month shall receive a supplemental savings credit.  Textron shall, as of the end of each calendar month, credit Supplemental Shares to each supplemental savings account, equal to the lost employer contribution for the month divided by the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month.  The lost employer contribution for the month shall be equal to the Participant’s Savings Plan eligible compensation for the month times the Participant’s Savings Plan election percentage (not to exceed 10%) times 50%, less the employer contribution made to the Participant’s Savings Plan Account for the month.	
 
 3.03	Textron shall, in each calendar quarter, credit Supplemental Shares to a Participant’s supplemental savings account equal in number to the number of shares of Textron common stock that would have been allocated on account of dividends to the Participant’s supplemental savings account as of that date, based on the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month in which the date of record occurs.	
 
3.04	Amounts in the fixed income account shall earn interest at a monthly interest rate that is one twelfth of the average for the calendar month of the Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such monthly yield is no longer published, a substantially similar average selected by Textron.  Interest shall be credited on the last day of each calendar month on the average daily balance of the fixed income account during the month.	
 
3.05	A Participant who has terminated her Textron employment may, once each calendar month, elect to transfer, in 5% increments (with a minimum transfer of 10% of the supplemental savings account), effective the first calendar day of the month following the minimum notice of three business days, any amount in her supplemental savings account to her fixed income account.  The cash value transferred will be determined by multiplying the current value of Textron common stock by the number of whole and fractional Supplemental Shares in her supplemental savings account as of the end of the month in which the election is made times the percentage being transferred.  If any portion of a Participant’s accounts under the Savings Plan shall be forfeited, a proportionate part of the Participant’s Supplemental Shares also shall be forfeited.  The current value of a share of Textron common stock at the transfer date shall be the average of the composite closing prices, as reported in The Wall Street Journal, for the first ten trading days of the effective month.	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 4	

 

3.06	The number of Supplemental Shares credited to a Participant’s account under this Article III shall be adjusted, without receipt of any consideration by Textron, on account of any stock split, stock dividend, or similar increase or decrease affecting Textron common stock, as if the Supplemental Shares were actual shares of Textron common stock.	
 
Article IV—Supplemental Included Plan Benefits
 
4.01	The Board may cause this Plan to provide supplemental benefits on account of an Included Plan by adopting a Schedule to this Plan.  The Schedule shall specify any special terms or conditions upon which the supplemental benefits shall be provided.  Except as specifically provided in a Schedule, all of the terms and conditions of this Plan shall apply to the Included Plan.	
 
Article V—Unfunded Plan
 
5.01	Benefits to be provided under this Plan are unfunded obligations of Textron. Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds therefrom shall at all times remain the sole property of Textron and neither the Participants whose lives are insured nor their beneficiaries shall have any ownership rights in such policies of insurance.	
 
5.02	This Plan is intended in part to provide benefits for a select group of management employees who are highly compensated, within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and in part to be an excess benefit plan, pursuant to Section 3(36) of ERISA.	
 
5.03	No Participant shall be required or permitted to make contributions to this Plan.	
 
Article VI—Plan Administration
 
6.01	Textron shall be the plan administrator of this Plan and shall be solely responsible for its general administration and interpretation. Textron shall have all such powers as may be necessary to carry out the provisions hereof. Textron may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 6.06, any action by Textron shall be final, conclusive, and binding on each Participant and all persons claiming by, through or under any Participant. Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan, and shall make all such determinations and interpretations in a nondiscriminatory manner.  The	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 5	

 

 
 	Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 6.02.	
 
6.02	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officers of Textron to make a futher delegation of the authority to administer the Plan.	
 
6.03	(a)     Except as provided in the following sentence, and in subsections (b), (c), and (d), below, the distribution of any account under Article III or Article IV shall be made at the same time, in the same manner, to the same persons and in the same proportions, as is made the payment or distribution under the related Savings Plan or Included Plan, or otherwise as determined by Textron in its sole discretion. However, if a Participant’s supplemental savings account contains 50 or fewer Supplemental Shares at termination, such Participant’s supplemental savings account shall be paid in a single sum.  Textron may withhold from benefits and accounts under this Plan, any taxes or other amounts required by law to be withheld. Notwithstanding any provision to the contrary, no benefit shall be paid to any Participant while employed by Textron.
 
(b)     Each amount then credited to the accounts under Article III and Article IV shall become due and payable to the respective Participants and beneficiaries immediately upon a Change in Control as defined in Section 7.03.
 
(c)     Effective for payments commencing on or after January 1, 2008, Textron has exercised its discretion pursuant to subsection (a) to determine that all distributions shall be made or shall commence at the time of a Participant’s termination of employment (or in January 2009, if the Participant’s employment terminated before December 31, 2007) in one of the following forms of payment:	
 
 	 	(i)      A cash lump sum.	
 
 	 	(ii)      Annual installments in cash over a period not exceeding 15 years (or the Participant’s life expectancy, if less), calculated each year by dividing the Participant’s unpaid account balance as of January 1 of that year by the remaining number of unpaid installments.  If a Participant dies while receiving installment payments, the remaining installments will be paid in a lump sum to the Participant’s designated beneficiary.  	
 
 	A Participant who wishes to request a form of payment must file an election in a form acceptable to Textron, before the election deadline described below, to indicate her preferred form of payment; but all Participant elections shall be subject to Textron’s discretion to change the elected form of payment.   If a Participant’s supplemental savings	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 6	

 

 
 
 	account contains 50 or fewer Supplemental Shares at termination, the Participant’s supplemental savings account shall be paid in a cash lump sum at the Participant’s termination of employment.  If a Participant who is still employed by a Textron Company fails to request a form of payment before the end of 2008, such Participant’s account shall be paid in a lump sum in cash six months after the Participant’s termination of employment.  If a Participant’s employment with all Textron Companies has terminated before December 31, 2007, and if the Participant fails to request a form of payment before the end of 2008, such Participant’s account shall be paid in a lump sum in cash in January 2009.	
 
 	(d)     Effective January 1, 2008, any payment to a beneficiary shall be made in a lump sum in the month following the Participant’s death (or in January 2008, if later).  If a beneficiary is receiving installment payments as of December 31, 2007, any remaining installments due after 2007 shall be aggregated and paid in a lump sum in January 2008.	
 
6.04	Textron may employ or engage such agents, accountants, actuaries, counsel, other experts and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan. Textron shall be entitled to rely upon all certifications made by an accountant selected by Textron.  Textron and its committees, officers, directors and employees shall not be liable for any action taken, suffered or omitted by them in good faith in reliance upon the advice or opinion of any such agent, accountant, actuary, counsel or other expert.  All action so taken, suffered or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
6.05	Textron may require proof of death or total disability of any Participant, former Participant or beneficiary and evidence of the right of any person to receive any Plan benefit.	
 
6.06	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and resolved pursuant to the claims procedure in Section 7.06 of the Textron Spillover Savings Plan.	
 
Article VII—Miscellaneous
 
7.01	Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
7.02	(a)     Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, (3) the domestic re-	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 7	

 

 
 	lations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant, and (4) the domestic relations order does not require the Plan to make a payment to an alternate payee in any form other than a cash lump sum.	
 
 	(b)      Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or beneficiary.	
 
7.03	Notwithstanding any Plan provision to the contrary, the Board or its designee shall have the right to amend, modify, suspend or terminate this Plan at any time by written ratification of such action; provided, however, that no amendment, modification, suspension or termination:	
 
 	(1)	shall reduce an amount credited to any supplemental account under Article III or Article IV of this Plan immediately before the effective date of the amendment, modification, suspension or termination; or	
 
 	(2)	shall be made to Section 6.03 or 7.03 following a Change in Control.	
 
 	If after a Change in Control any claim is made or any litigation is brought by a Participant or beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in the next following sentence shall be liable, jointly and severally, to indemnify the Participant or beneficiary and to pay prejudgment interest on any recovery as provided in Section 7.07 of the Textron Spillover Savings Plan.	
 
 	For purposes of this Plan, a “Change in Control” shall occur if (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 8	

 

 
 	company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially the same proportions as their ownership of Textron common stock, is or becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or whose nomination for election by Textron’s stockholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof, or (iii) stockholders of Textron approve a merger or consolidation of Textron with any other corporation, other than a merger or consolidation which would result in the voting securities of Textron outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of Textron approve a plan of complete liquidation of Textron or an agreement for the sale or disposition by Textron of all or substantially all of Textron’s assets.	
 
7.04	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
7.05	This Plan shall be construed in accordance with the laws of the State of Delaware.	
 
7.06	Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant to be continued in employment as a Key Executive or other employee of any Textron Company.	
 
7.07	Textron, the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A
Page 9	

 

 
TEXTRON SPILLOVER SAVINGS PLAN
____________________________
APPENDIX A
____________________________
Market Square Profit Sharing Plan Schedule
(As in effect before January 1, 2008)

 

 

Textron Spillover Savings Plan
Appendix A — Key Executive Plan
Market Square Profit Sharing Plan Schedule
 
 This Schedule to the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”) was restated effective January 1, 2000, pursuant to Article IV of the Key Executive Plan.  The Schedule is included herein as part of Appendix A to the Textron Spillover Savings Plan.  Appendix A sets forth the defined contribution provisions of the Key Executive Plan as in effect on October 3, 2004.

1.01	“Market Square Plan” means The Market Square Profit Sharing Plan, as amended and restated from time to time.	
 
1.02	Textron shall maintain a stock unit account and a fixed income account for each participant for making credits, payments, and transfers described in this Schedule.	
 
1.03	Textron shall, in each calendar quarter, credit Supplemental Shares to a Participant’s stock unit account equal in number to the number of shares of Textron common stock that would have been allocated on account of dividends to the Participant’s stock unit account as of that date, based on the average of the composite closing prices of Textron common stock, as reported in The Wall Street Journal for the month in which the date of record occurs.	
 
1.04	Amounts in the fixed income account shall earn interest at a monthly interest rate that is the average for the calendar month of the Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such monthly yield is no longer published, a substantially similar average selected by Textron.  Interest shall be credited on the last day of each calendar month on the average daily balance of the fixed income account during the month.	
 
1.05	A Participant who has terminated her Textron employment may, once each calendar month, elect to transfer, in 5% increments (with a minimum transfer of 10% of the stock unit account), effective the first calendar day of the month following the minimum notice of three business days, any amount in her stock unit account to her general fund account.  The cash value transferred will be determined by multiplying the current value of Textron common stock by the number of whole and fractional Supplemental Shares in her stock unit account as of the end of the month in which the election is made times the percentage being transferred.  The current value of a share of Textron common stock at the transfer date shall be the average of the composite closing prices, as reported in The Wall Street Journal, for the first ten trading days of the effective month.	
 
1.06	The number of Supplemental Shares credited to a Participant’s account under this schedule shall be adjusted, without receipt of any consideration by Textron, on account of any stock split, stock dividend, or similar increase or decrease affecting Textron common stock, as if the Supplemental Shares were actually shares of Textron common stock.	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A (Market Square Schedule)
Page 1	

 

1.07	Subject to Section 1.08, below, benefits shall become payable upon the Participant’s termination of Textron employment or such other time as determined by Textron in its sole discretion.  Textron shall distribute the benefits in accordance with any one or a combination of the following methods after considering any method of payment requested by the Participant or by the beneficiaries entitled to receive the benefits:	
 
 	 	(1)      Payment in a single sum.	
 
 	 	(2)      Payment in a number of annual installments, each payable as soon as practicable after the end of each successive calendar year, over a period not exceeding the life expectancy of the payee or his primary beneficiary (whichever is greater) determined as of the  date on which the benefits first became payable.  The annual installments shall be calculated each year by dividing the unpaid amount of the benefits as of January 1 of that year by the remaining number of unpaid installments.  Plan benefits payable under Section 1.07 shall begin to be paid not later than April 1 of the calendar year that begins after the date the Participant attains or would have attained age 70½.	
 
1.08	Effective for payments commencing on or after January 1, 2008, Textron has exercised its discretion pursuant to Section 1.07 to determine that all distributions shall be made or shall commence at the time of a Participant’s termination of employment (or in January 2009, if later) in one of the following forms of payment:	
 
 	 	(i)      A cash lump sum.	
 
 	 	(ii)     Annual installments in cash over a period not exceeding 15 years (or the Participant’s life expectancy, if less), calculated each year by dividing the Participant’s unpaid account balance as of January 1 of that year by the remaining number of unpaid installments.  If a Participant dies while receiving installment payments, the remaining installments will be paid in a lump sum to the Participant’s designated beneficiary.	

 	A Participant who wishes to request a form of payment must file an election in a form acceptable to Textron, before the election deadline described below, to indicate her preferred form of payment; but all Participant elections shall be subject to Textron’s discretion to change the elected form of payment.   If a Participant who is still employed by a Textron Company fails to request a form of payment before the end of 2008, such Participant’s account shall be paid in a lump sum in cash six months after the Participant’s termination of employment.  If a Participant’s employment with all Textron Companies has terminated before December 31, 2008, and if the Participant fails to request a form of payment before the end of 2008, such Participant’s account shall be paid in a lump sum in cash in January 2009.
 
Effective January 1, 2008, any payment to a beneficiary shall be made in a lump sum in the month following the Participant’s death (or in January 2008, if later).  If a beneficiary is receiving installment payments as of December 31, 2007, any remaining installments due after 2007 shall be aggregated and paid in a lump sum in January 2008.	

 
 
Textron Spillover Savings Plan
Effective January 3, 2010 	Appendix A (Market Square Schedule)
Page 2	

EXHIBIT 10.4

 
TEXTRON SPILLOVER PENSION PLAN
____________________
 
As Amended and Restated
Effective January 3, 2010

 

 

 

 

DC: 2559289-8

 

 

Textron Spillover Pension Plan
Amended and Restated January 3, 2010

Table of Contents

Introduction	 	1	
 	 	 	
Article I – Definitions	 	2	
 	 	 	
1.01	Beneficiary	2	
1.02	Board	2	
1.03	Change in Control	2	
1.04	Compensation	3	
1.05	Compensation Base	4	
1.06	ERISA	4	
1.07	Executive Plan	4	
1.08	Grandfathered Formula	4	
1.09	Grandfathered Participant	4	
1.10	IRC	4	
1.11	Key Executive Plan	5	
1.12	Participant	5	
1.13	Pension Plan	5	
1.14	Plan	5	
1.15	Plan Administrator	5	
1.16	Retirement Age	5	
1.17	Separation From Service	5	
1.18	Statutory Limit	5	
1.19	Textron	5	
1.20	Textron Company	5	
1.21	Textron Retirement Program	5	
1.22	Total Disability	5	
 	 	 	
Article II – Participation	 	6	
 	 	 	
2.01	Eligibility and Participation	6	
2.02	Period of Participation	6	
 	 	 	
Article III – Spillover Pension Benefit Amounts	 	6	
 	 	 	
3.01	Retirement Benefits	6	
3.02	Grandfathered Participants	6	
3.03	Calculation of Benefits	7	
3.04	Other Forms of Benefit	8	
3.05	Benefit Upon Transfer of Liability	9	

 
Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Table of Contents
Page i	

 

 

Table of Contents

 
Article IV – Vesting	 	9	
 	 	 	
4.01	Vesting Schedule	9	
4.02	Change in Control	9	
 	 	 	
Article V – Distribution of Benefits	 	9	
 	 	 	
5.01	Automatic Distributions	9	
5.02	Spousal Consent	9	
5.03	Time and Form of Distribution	10	
5.04	Lump-sum Distribution	10	
5.05	Six-Month Delay	11	
5.06	Automatic Cash-Out	12	
5.07	Disability Benefits	12	
5.08	Payment of Death Benefits	12	
5.09	Administrative Delay in Payment Date	13	
5.10	Distribution Upon Change in Control	13	
5.11	Change in Payment Election	14	
5.12	Rehired Participants	15	
 	 	 	
Article VI – Unfunded Plan	 	16	
 	 	 	
6.01	No Plan Assets	16	
6.02	Top-Hat Plan Status	16	
 	 	 	
Article VII – Plan Administration	 	16	
 	 	 	
7.01	Plan Administrator’s Powers	16	
7.02	Delegation of Administrative Authority	17	
7.03	Tax Withholding	17	
7.04	Use of Third Parties to Assist with Plan Administration	17	
7.05	Proof of Right to Receive Benefits	18	
7.06	Claims Procedure	18	
7.07	Enforcement Following a Change in Control	19	
 	 	 	
Article VIII – Amendment and Termination	 	19	
 	 	 	
8.01	Amendment	19	
8.02	Delegation of Amendment Authority	20	
8.03	Termination	20	
8.04	Distributions Upon Plan Termination	20	

 
 
Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Table of Contents
Page ii	

 

 

Table of Contents

 
Article IX – Miscellaneous	 	20	
 	 	 	
9.01	Use of Masculine or Feminine Pronouns	20	
9.02	Transferability of Plan Benefits	20	
9.03	Section 409A Compliance	21	
9.04	Controlling State Law	21	
9.05	No Right to Employment	21	
9.06	Additional Conditions Imposed	22	

 
 
Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Table of Contents
Page iii	

 

 

 

Textron Spillover Pension Plan
 
As Amended and Restated
 
Effective January 3, 2010
 
Introduction
 
The Textron Spillover Pension Plan (the “Plan”) is an unfunded, nonqualified deferred compensation arrangement.   The Plan is a continuation of the defined benefit portions of the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”) and the Textron Supplemental Benefits Plan for Executives (the “Executive Plan”).  The defined benefit portions of these plans were combined to form the Plan effective January 1, 2007.  The defined contribution portions of the Key Executive Plan and the Executive Plan were continued as separate plans on and after January 1, 2007, and were combined to form the Textron Spillover Savings Plan effective January 1, 2008.  The Textron Spillover Pension Plan was amended and restated, effective January 1, 2008, to reflect the final regulations interpreting Section 409A of the Internal Revenue Code of 1986, as amended (the “IRC”) and to incorporate certain other changes.
 
The Plan provides supplemental pension benefits for designated executives of Textron and its affiliates who participate in the Textron Retirement Program.  The Plan provides benefits that would have been payable under one of the tax-qualified defined benefit plans in the Textron Retirement Program if not for the limits imposed by the Internal Revenue Code.  For certain executives who participated in the Key Executive Plan or the Executive Plan on December 31, 2006, the Plan also provides benefits based on an expanded definition of compensation, and benefits corresponding to the grandfathered benefits under the Textron Retirement Program.  The Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments that are effective through the date of this restatement.
 
Appendix A and Appendix B of the Plan set forth the defined benefit provisions of the Key Executive Plan and the Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Supplemental pension benefits that were earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amounts under Section 409A, are calculated and paid solely as provided in Appendix A or Appendix B, whichever is applicable, and are not subject to any other provisions of the Textron Spillover Pension Plan.
 
Supplemental pension benefits that were earned or vested after 2004 and before 2007 are subject to the provisions of IRC Section 409A.  These benefits are calculated under Appendix A or Appendix B, whichever is applicable, but are paid exclusively as provided in the Textron Spillover Pension Plan (not including any appendix to the Plan).  Although the provisions of the Textron Spillover Pension Plan generally are effective as of January 1, 2007, the provisions that govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan or the Executive Plan are effective as of January 1, 2005.

 
 
Texton Spillover Pension Plan
Amended and Restated January 3, 2010	 
Page 1	

 

 
 
Article I – Definitions

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

1.01  	“Beneficiary” means the person designated under the Plan (including any person who is automatically designated by the terms of the Plan) to receive any death benefit or pre-pension survivor annuity, or survivor annuity payable with respect to a Participant.  A Participant’s trust or estate may also be the Participant’s Beneficiary for a death benefit other than a life annuity.	

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

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

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

 	(1)	becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of stock of Textron that, together with other stock held by such person or group, possesses more than 50% of the combined voting power of Textron’s then-outstanding voting stock, or	

 	(2)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) beneficial ownership of stock of Textron possessing more than 30% of the combined voting power of Textron's then-outstanding stock, or	

 	(3)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) all or substantially all of the total gross fair market value of all of the assets of Textron immediately prior to such acquisition or acquisitions (where gross fair market value is determined without regard to any associated liabilities); or	

 	(b)	a merger or consolidation of Textron with any other corporation occurs, other than a merger or consolidation that would result in the voting	

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

Each of the events described above will be treated as a “Change in Control” only to the extent that it is a change in ownership, change in effective control, or change in the ownership of a substantial portion of Textron’s assets within the meaning of IRC Section 409A.

For any Participant who was an employee of a Textron Company on December 31, 2007, the definition set forth above in this Section 1.03 shall be used to determine whether an event is a “Change in Control” to the extent that the event would alter the time or form of payment of the Participant’s benefit.  To the extent that the event would cause any change in the Participant’s rights under the Plan that does not affect the status of the Participant’s benefit under IRC Section 409A (including, but not limited to, accelerated vesting of the Participant’s benefit or restrictions on amendments to the Plan), the definition set forth in Section 6.03 of Appendix A shall be used to determine whether the event is a “Change in Control.”

1.04  	“Compensation” means a Participant’s annual compensation determined as follows:	

 	(a)	For years after 2006, Compensation means eligible annual compensation as defined under the corresponding benefit formula in the Participant’s Pension Plan, without regard to the Statutory Limits, subject to the modifications described in this Section 1.04(a).  For any executive who was first awarded performance share units before October 27, 1999, Compensation shall include payments made under performance share units (regardless of when the units are awarded); but Compensation shall not include amounts attributable to performance share units for any executive who was first awarded performance share units after October 26, 1999.  Compensation shall include a Participant’s elective deferrals under the Deferred Income Plan for Textron Key Executives, the Textron Deferred Income Plan for Executives, and the Deferred Income Plan for Textron Executives (and, if applicable, shall also include the automatic deferral of	

 
 
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 	 	a Participant’s performance shares, performance share units, or annual incentive bonus exceeding 100% of the target bonus), but only to the extent that these amounts would have been included in Compensation if they had not been deferred.	

 	(b)	For any individual who participated in the Key Executive Plan before 2007, Compensation for each year before 2007 shall be determined under Section 1.03 of Appendix A.	

 	(c)	For any individual who participated in the Executive Plan (but not in the Key Executive Plan) before 2007, Compensation for each year before 2007 shall be determined under Section 1.03 of Appendix B.	

 	(d)	If a year before 2007 is included in the Participant’s Compensation Base under the Plan, and the Participant did not participate in the Key Executive Plan or the Executive Plan before 2007, Compensation for that year shall be determined as provided in Section 1.04(a), above.	
 
1.05  	“Compensation Base” means a Participant’s final average compensation, determined as provided in the Pension Plan, but substituting Compensation as defined in Section 1.04 of the Plan for the Participant’s annual compensation under the Pension Plan.	

1.06 	“ ERISA” means the Employee Retirement Income Security Act of 1974, as amended.	

1.07  	“Executive Plan” means the Textron Supplemental Benefits Plan for Executives, as in effect before January 1, 2007.  The defined benefit provisions of the Executive Plan are included in this Plan as Appendix B.	

1.08  	“Grandfathered Formula” means the benefit formula, early retirement eligibility provisions, and early retirement factors in effect under a Participant’s Pension Plan on December 31, 2006, as used to determine benefits earned after 2006.	

1.09  	“Grandfathered Participant” means any employee who participated in either the Key Executive Plan or the Executive Plan as of December 31, 2006; who continued to participate in the Plan after 2006; and who did not satisfy the requirements (described in Section 3.02) to receive a grandfathered benefit under the Textron Retirement Program.	

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

 
 
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1.11  	“Key Executive Plan” means the Supplemental Benefits Plan for Textron Key Executives, as in effect before January 1, 2007.  The defined benefit provisions of the Key Executive Plan are included in this Plan as Appendix A.	

1.12  	“Participant” means an employee of Textron who is eligible to participate in the Plan pursuant to Section 2.01 and whose participation has not been terminated as provided in Section 2.02.	

1.13  	“Pension Plan” means a tax-qualified defined benefit plan that is part of the Textron Retirement Program, including (but not limited to) the Bell Helicopter Textron Retirement Plan (part of the Bell Helicopter Textron Master Retirement Plan), the Textron Pension Plan for Cessna Employees (Addendum F to the Textron Master Retirement Plan), and the Textron Pension Plan (Addendum A to the Textron Master Retirement Plan).	

1.14  	“Plan” means this Textron Spillover Pension Plan, as amended and restated from time to time.	

1.15  	“Plan Administrator” means Textron or its designees, as described in Section 7.01.	

1.16  	“Retirement Age” means the age specified by the Participant for the commencement of benefits under this Plan, which may be age 55, 62, or 65.	

1.17  	“Separation From Service” means a Participant’s termination of employment with all Textron Companies, other than by reason of death or Total Disability, that qualifies as a “separation from service” for purposes of IRC Section 409A.	

1.18  	“Statutory Limit” means any limit on benefits under tax-qualified defined benefit plans imposed by IRC Section 401(a)(17) or Section 415.	

1.19  	“Textron” means Textron Inc., a Delaware corporation, and any successor to Textron Inc.	

1.20  	“Textron Company” means Textron or any company controlled by or under common control with Textron within the meaning of IRC Section 414(b) or (c).	

1.21  	“Textron Retirement Program” means a floor-offset retirement arrangement consisting of a floor benefit provided under a Pension Plan and an offset benefit provided under the Textron Inc. Retirement Account Plan.	

1.22  	“Total Disability” means physical or mental incapacity of a Participant who is employed by a Textron Company on the disability date, if the incapacity	

 
 
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 	(a) enables the Participant to receive disability benefits under the Federal Social Security Act, and (b) also qualifies as a “disability” for purposes of IRC Section 409A(a)(2)(C).	

Article II – Participation

2.01  	Eligibility and Participation .  An individual who is a participant in a Pension Plan shall become a Participant in the Plan upon either: (a) (1) being designated by Textron’s Chief Executive Officer and Chief Human Resources Officer as an eligible executive and (2) having compensation, as defined in the Pension Plan, that exceeds the limit of IRC Section 401(a)(17), or (b) participating in the Deferred Income Plan for Textron Executives.  An individual shall not become a Participant in the Plan after December 31, 2009, unless the individual was a participant in a Pension Plan on December 31, 2009, and has not incurred a Separation from Service after that date and before becoming a Participant in the Plan.	

2.02  	Period of Participation .  Except as provided in the following sentence, once an individual becomes a Participant under Section 2.01 above, the individual shall remain a Participant (even if his or her compensation, as defined in the Pension Plan, subsequently falls below the IRC Section 401(a)(17) limit) until the individual’s benefit under the Plan is fully distributed, or until the individual’s participation in the Plan is terminated by the Board (or by the Chief Executive Officer and the Chief Human Resources Officer) effective as of the following January 1.  If an employee or former employee is not identified in Textron’s records as a Participant as of December 31, 2008, the individual shall not be a Participant, and shall not be entitled to receive any benefit under the Plan, unless the individual becomes a Participant after 2008 pursuant to Section 2.01.	

Article III – Spillover Pension Benefit Amounts

3.01  	Retirement Benefits .  The benefit payable under the Plan to a Participant who is not a Grandfathered Participant shall be (a) the benefit that would have been payable under the Pension Plan if the Statutory Limits were ignored and Compensation Base were determined as provided under Section 1.05, minus (b) the benefit that actually would be payable under the Pension Plan at the same time and in the same form.  In addition to the benefit described in the preceding sentence, a Participant who is designated pursuant to Appendix C shall be eligible to receive a wrap-around pension benefit determined as provided in Appendix C, subject to the vesting requirements and other terms and conditions specified in Appendix C.	

3.02  	Grandfathered Participants .  Under the Textron Retirement Program, a new Pension Plan formula became effective on January 1, 2007.  Any Participant who,	

 
 
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 	as of January 1, 2007, was vested, and whose age and years of service combined were at least 55, was grandfathered in his or her prior Pension Plan formula, early retirement eligibility provisions, and early retirement factors.  For service after 2006, a Participant who was grandfathered under the Textron Retirement Program will receive the greater of the benefit determined under the new Pension Plan formula and the benefit determined as if the Grandfathered Formula had remained in effect after 2006.  Textron wishes to provide a comparable benefit under this Plan for certain Participants who participated in the Key Executive Plan or the Executive Plan on December 31, 2006, but who did not satisfy the requirements to be grandfathered under the Textron Retirement Program.  Accordingly, the benefit payable under the Plan to any Participant who is a Grandfathered Participant as defined in Section 1.09 shall be (a) the greater of (i) the benefit determined under the Pension Plan formula applicable to the Participant and (ii) the benefit that would have accrued under the Pension Plan if the Grandfathered Formula had remained in effect after 2006, determined in each case without regard to the Statutory Limits and using Compensation Base as defined in Section 1.05, minus (b) the benefit that actually would be payable under the Pension Plan (without using the Grandfathered Formula) at the same time and in the same form.	
 
3.03  	Calculation of Benefits .  In determining benefits for any purpose under the Plan, and in determining benefits under the Pension Plan for purposes of calculating benefits under the Plan, the following rules shall apply:	

 	(a)	All benefits shall be determined without taking into account any offset for the value of the Participant’s account under the Textron Inc. Retirement Account Plan.	

 	(b)	If a benefit under the Plan commences before or after the Participant’s normal retirement age under the Pension Plan, the benefit under the Plan and under the Pension Plan shall be actuarially adjusted for early or late commencement as provided in the Pension Plan.	

 	(c)	When a benefit under the Plan is reduced by the corresponding benefit under the Pension Plan, the reduction shall be determined as if the Pension Plan benefit were commencing at the same time and were payable in the same form as the benefit under the Plan, regardless of whether the Participant has elected a different time or form of payment for the Pension Plan benefit.	

 	(d)	If it is necessary to determine the present value of a Participant’s benefit for purposes of Section 5.06 (concerning automatic cash-out of small benefits), the present value shall be based on (i) the Participant’s early retirement benefit, if the Participant is eligible for early retirement, (ii) the	

 
 
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 	 	Plan benefit commencing at the Participant’s age 65, if the Participant is not eligible for early retirement or has suffered a Total Disability, or (iii) the survivor annuity or death benefit, if the Participant has died; provided, however, that clause (ii) shall apply in calculating the automatic cash-out under Section 5.06 for any Participant who was, as of December 31, 2008, a member of the Management Committee even if the Participant is eligible for early retirement.  If it is necessary to determine the present value of a Participant’s benefit under any other provision of the Plan, the present value shall be based on the Plan benefit commencing at the Participant’s age 65 (or the Participant’s death, in the case of a survivor annuity or death benefit).  In each case, present value shall be determined using the 1994 Group Annuity Reserving Table (unisex) based on a blend of 50% of the male mortality rates and 50% of the female mortality rates (if mortality is applicable in the calculation) and an interest rate of 7%.	
 
 	(e)	A Participant’s benefit determined under Section 3.01 or Section 3.02 shall be increased as provided in Section 5.04(c) if the Participant’s lump-sum ratio determined under that section exceeds 100%.  If the Participant’s benefit is paid in a form other than a lump sum, the actuarial assumptions specified in subparagraph (d), above, shall be used to convert the enhanced value of the Participant’s benefit to an annuity at age 65; the assumptions specified subparagraph (b) and (c), above, and in Section 3.04, below, shall be used to convert the additional age-65 annuity to the actual form of payment.  If the Participant dies before the Participant’s Separation From Service, the lump-sum ratio shall be determined at the time of the Participant’s death; if the lump-sum ratio is greater than 100%, the enhanced value of the Participant’s benefit shall be used to calculate any pre-pension survivor annuity or death benefit payable to the Participant’s Beneficiary.	

 	(f)	Benefits earned before 2007 under the defined benefit portions of the Key Executive Plan or the Executive Plan shall be calculated solely as provided in Appendix A or Appendix B, whichever is applicable.	

3.04  	Other Forms of Benefit .  Termination benefits, pre-retirement or post-retirement death benefits (including any death benefit and any surviving spouse benefit provided by a Textron Company at its sole cost through a Pension Plan), pre-pension survivor annuity benefits, post-pension survivor annuity benefits, disability benefits, and other optional forms of payment or ancillary benefits shall be based on the Participant’s benefit under the Plan, determined as provided in Section 3.01 or 3.02 and Section 3.03, and shall include any actuarial reduction, charge, survivor percentage, or other adjustment applicable to the corresponding form of payment under the Pension Plan.	

 
 
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3.05	Benefit Upon Transfer of Liability .  In the event Textron transfers liability for a Participant’s benefit under a Pension Plan to another qualified plan, the Plan benefits under this Article III shall be determined as of the date of such transfer, unless otherwise determined by Textron in its sole discretion.	
 
Article IV – Vesting

4.01  	Vesting Schedule .  Participants shall vest in the Plan in the same manner as is provided for under the Pension Plan.	

4.02 	Change in Control .  In the event of a Change in Control, if a Participant is employed by a Textron Company on the date of the Change in Control, all benefits accrued by the Participant as of the date of the Change in Control shall become fully vested.	
 
Article V – Distribution of Benefits

5.01  	Automatic Distributions .  Unless a Participant elected a different time and form of payment before 2008 under Section 5.11(d), below, the Participant’s benefit shall commence as of the later of age 55 or the first day of the seventh month following Separation From Service, and shall be paid in the form of a single life annuity if the Participant is single when the distribution commences, or in the form of an actuarially equivalent joint and 50% surviving spouse annuity if the Participant is married when the distribution commences.  The benefits of a Participant whose benefits vest after his Separation From Service shall commence on the later of the (1) the date that would have applied if his benefits had been vested at his Separation From Service, or (2) the first day of the month following the date on which his benefits vest. A Participant may change the automatic time or form of distribution to another time or form of distribution that is available under this Article V, subject to the spousal consent requirement in Section 5.02, below, and the rules governing changes in distribution elections in Section 5.11, below.  A Participant shall be deemed to have elected the automatic time and form of distribution unless the Participant changes his payment election as provided in Article V.	

5.02	Spousal Consent .  If a Participant is married when he or she makes a distribution election (including a change in a prior distribution election), the Participant must have the written consent of his or her spouse in order to elect any form of payment other than a joint and 50% surviving spouse annuity.  If a Participant elects to receive a distribution in the form of an annuity, and the Participant marries or re-marries after the date of the distribution election, the Participant shall automatically receive an actuarially equivalent joint and 50% surviving spouse annuity unless his or her current spouse consents in writing to a different form of distribution.  Except as provided in the two preceding sentences, if a	

 
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 	Participant has designated a person other than his or her spouse as a Beneficiary, the Participant may change the Beneficiary designation without the consent of his or her spouse.  A change in the Beneficiary designation alone (without a corresponding change in the time or form of distribution) shall not be subject to the requirements of Section 5.11(b).	
 
5.03  	Time and Form of Distribution .  Subject to Section 5.01, a Participant may elect a time and form of distribution specified below for the portion of the Participant’s benefit under the Plan that is earned or vested after 2004 (including any portion of the Participant’s benefit that was earned or vested after 2004 under Appendix A or Appendix B).  Any portion of the Participant’s benefit that was earned and vested before 2005 shall be calculated and paid solely as provided in Appendix A or Appendix B, whichever is applicable, and shall not be subject to this Article V.	

 	(a)	A lump-sum distribution of the portion of the benefit determined under Section 5.04, payable on the first day of the seventh month following the Participant’s Separation From Service, with the remainder of the benefit (if any) payable as an annuity under subsection (c), below.	

 	(b)	A lump-sum distribution of the portion of the benefit determined under Section 5.04, payable on the later of (1) the first day of the seventh month following the Participant’s Separation From Service or (2) attainment of Retirement Age, with the remainder of the benefit (if any) payable as an annuity under subsection (c), below.	

 	(c)	A joint and 50% survivor annuity, a joint and 75% survivor annuity, a joint and 100% survivor annuity, a single life annuity, or any other actuarially-equivalent single life annuity or joint and survivor annuity that the Participant is eligible to elect under the Participant’s Pension Plan, commencing on the later of (1) the first day of the seventh month following the Participant’s Separation From Service or (2) attainment of Retirement Age.	
 
  	A Participant’s benefit under the Plan will be paid pursuant to the most recent valid election in effect at the time of his Separation From Service (including an election the Participant is deemed to have made under the terms of the Plan), except as provided in Section 5.06 (automatic cash-out of small benefits), Section 5.07 (payments following Total Disability), Section 5.08 (payments following death), Section 5.09 (administrative adjustments), Section 5.10 (payments following a Change in Control), and Section 5.11(c) (distributions before 2008).	
 
5.0 4 	Lump-sum Distribution .  A Participant may elect to receive a lump-sum distribution with respect to a portion of his benefit determined as follows:	

 

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 	(a)	If the Participant is not a Grandfathered Participant, the Plan Administrator shall determine the ratio, as of the Participant’s Separation From Service, of (i) the value of the Participant’s account under the Retirement Account Plan to   (ii) the present value of the benefit the Participant earned under the Pension Plan after 2006 (without taking into account any offset for the value of the Participant’s account under the Retirement Account Plan).	

 	(b)	If the Participant is a Grandfathered Participant, the Plan Administrator shall determine the ratio in subsection (a), above, as if the Participant had satisfied the requirements to be grandfathered under the Textron Retirement Program, and had earned a benefit under the Pension Plan after 2006 equal to the greater of the Participant’s actual post-2006 Pension Plan benefit and the benefit determined as if the Grandfathered Formula had remained in effect after 2006.   This paragraph shall apply solely for purposes of determining a Grandfathered Participant’s lump-sum ratio, and not for purposes of determining the amount of the Grandfathered Participant’s benefit under the Plan (except to the extent that the lump-sum ratio results in an enhancement of the Participant’s benefit under subsection (c)).	

 	(c)	The Plan Administrator shall apply the lump-sum ratio determined under subsection (a) or (b), whichever is applicable, to the present value (determined as of the date of the distribution) of the portion of the Participant’s benefit under the Plan that accrued after 2006.  The percentage of the present value determined by the lump-sum ratio shall be payable in a lump sum, and (except as provided in the following sentence) the remaining portion of Participant’s benefit payable under this Article V shall be paid as an annuity.  If the ratio determined under subsection (a) or (b) is greater than 100%, the present value of the Participant’s benefit under the Plan that accrued after 2006 shall be increased by a corresponding amount, and the Participant’s entire benefit under the Plan that was earned or vested after 2004 (including the enhancement) shall be payable in a lump sum; but no portion of the Participant’s benefit under the Plan that accrued before 2007 shall be enhanced by the lump-sum ratio.	
 
5.05	Six-Month Delay .  If a Participant’s benefit is paid as a result of the Participant’s Separation From Service, the benefit shall not commence or be paid under this Article V earlier than six months after the date of the Participant’s Separation From Service.  A benefit paid as a result of the Participant’s Separation From Service shall be calculated as if it commenced or was paid on the first day of the month following the Separation From Service.  Any payments that otherwise would have been made during the initial six-month period shall be paid in a lump	

 
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 	sum, without interest, on the first day of the seventh month after the Participant’s Separation From Service.	
 
5.06  	Automatic Cash-Out .  If the present value of the benefit earned or vested after 2004 (or the present value of the Beneficiary’s pre-pension survivor annuity earned or vested after 2004, in the case of the Participant’s death) is $150,000 or less at the earliest of the Participant’s Separation From Service, Total Disability, or death, then the Participant’s entire benefit earned or vested after 2004 (or the Beneficiary’s entire benefit earned or vested after 2004, in the case of the Participant’s death) shall be distributed in a single lump-sum payment (1) on the first day of the seventh month after the Participant’s Separation From Service, (2) on the first day of the month that is at least 30 days after the Participant’s Total Disability, or (3) on the first business day of the first month that begins at least 90 days after the Participant’s death (subject, however, to the following sentence).  If a Participant’s Separation From Service or death occurs before 2008, and the Participant’s benefit has not commenced as provided in Section 5.11(c), the lump-sum payment described in the preceding sentence shall be made on the first business day of January in 2008; provided that no such lump-sum payment paid as a result of a Separation From Service will be made earlier than the first day of the seventh month after the Participant’s Separation From Service.  A distribution under this Section 5.06 shall be made without regard to any payment election the Participant has made (or is deemed to have made) under Section 5.01 or Section 5.11.	
 
5.07 	Disability Benefits .  Except as provided in Section 5.06 (automatic cash-out of small benefits), if a Participant suffers a Total Disability, the Participant’s benefit under the Plan shall commence or be paid, in the form the Participant elected (or is deemed to have elected), on the first day of the month following the later of the Participant’s Total Disability or attainment of age 65.	
 
5.08 	Payment of Death Benefits .	
 
 	(a)	If a Participant dies before his benefit under the Plan has commenced, and the Participant would be eligible for a pre-pension survivor annuity under the Pension Plan if he died before his benefit commencement date, the Participant’s Beneficiary shall receive an annuity for the life of the Beneficiary, commencing on the first business day of the month following the later of (i) 90 days after the Participant’s death or (ii) the date on which the Participant would have reached age 55 (subject to Section 5.06 concerning the automatic cash-out of small benefits).  The Participant’s Beneficiary must be a person who would have been eligible to receive the corresponding pre-pension survivor annuity under the Pension Plan.	

 
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 	(b)	If a Participant dies before his benefit under the Plan has commenced, and the Participant would be eligible for a 60-month period certain death benefit under the Pension Plan if he died before his benefit commencement date, the Participant’s Beneficiary shall receive an amount equal to the present value of the corresponding monthly payments under the Plan, paid in a lump sum on the first business day of the first month that begins at least 90 days after the Participant’s death.	

 	(c)	If a Participant dies less than 60 months after his benefit under the Plan has commenced, and the Participant would be eligible for a 60-month period certain death benefit under the Pension Plan if he died after his benefit commencement date, the Participant’s Beneficiary shall receive an amount equal to the present value of the corresponding monthly payments under the Plan for a number of months equal to 60 minus the number of monthly payments made to the Participant before his death, paid in a lump sum on the first business day of the first month that begins at least 90 days after the Participant’s death.	
 
 	(d)	The amount of any pre-pension survivor annuity or death benefit shall be determined as provided in Section 3.04.  Any post-retirement death benefit under Section 5.08(c) shall be based solely on the portion of the Participant’s benefit that is payable as an annuity, and shall not include the value of any benefit the Participant has received as a lump sum.	

5.09  	Administrative Adjustments in Payment Date .  A payment is treated as being made on the date when it is due under the Plan if the payment is made on the due date specified by the Plan, or on a later date that is either (a) in the same calendar year (for a payment whose specified due date is on or before September 30), or (b) by the 15th day of the third calendar month following the date specified by the Plan (for a payment whose specified due date is on or after October 1).  A payment also is treated as being made on the date when it is due under the Plan if the payment is made not more than 30 days before the due date specified by the Plan, provided that the payment is not made earlier than six months after the Participant’s Separation From Service.  A Participant may not, directly or indirectly, designate the taxable year of a payment made in reliance on the administrative rules in this Section 5.09.	

5.10  	Distribution Upon Change in Control .  Subject to the following sentence, if a Change in Control also qualifies as a “change in control” under IRC Section 409A, the present value of all benefits earned or vested after 2004 shall be paid in a lump sum in cash on the first business day of the month following the Change in Control.  If a Participant’s Separation From Service occurred before the Change in Control, the lump sum payment under this Section 5.10 shall not be made earlier than six months after the Participant’s Separation From Service.	

 
 
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5.11  	Change in Payment Election .  Any election of a time or form of payment under Article V, or any change in a prior election, is subject to the approval of the Plan Administrator.  If a Participant changes the time or form of payment previously elected, the new election must apply to the Participant’s entire benefit under the Plan that is earned or vested after 2004, and must comply with the following rules:	

 	(a)	Election Between Life Annuities .   If another actuarially-equivalent life annuity (within the meaning of IRC Section 409A) is available to a Participant under Section 5.03(c), a Participant, at any time before the first annuity payment is made, may change his election from one life annuity to another actuarially-equivalent life annuity commencing at the same time.	

 	(b)	Modification of Election .   If a Participant wishes to change the form of payment for his benefit or to elect a different Retirement Age, and the new election does not satisfy the requirements of subsection (a) (concerning elections between life annuities) or the transition rules in subsection (d) (concerning elections before December 31, 2007), the Participant’s new payment election must satisfy the requirements of this subsection (b).  A Participant may change his election under this subsection (b) only if the new election:	

 	(1)	is made at least twelve months before the date when payment of the benefit would otherwise commence;	

 	(2)	defers the date on which payment will commence by at least five years from the commencement date applicable to his previous election;	

 	(3)	does not cause payments triggered by attainment of Retirement Age to commence at an age other than other than 55, 60, 62, 65, 67, or 70; and	

 	(4)	does not cause payments triggered by Separation From Service to commence more than 5 years and seven months after Separation From Service.	

If a Participant’s payments (before the new election) commence at the later of Retirement Age or six months after Separation From Service, the Participant may choose to apply the election of a new time of payment to only one of the two alternative payment events.

 
 
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 	(c)	Distributions Before 2008 .  If a Participant’s Pension Plan benefit commences before 2008, the Participant’s benefit under the Plan that was earned or vested after 2004 shall be paid at the same time and in the same form as the Participant’s Pension Plan benefit, as provided under the Key Executive Plan and the Executive Plan as in effect on October 3, 2004.	
 
 	(d)	One-Time Election During 2007 .   If a Participant’s Pension Plan benefit does not commence before 2008, the Participant may make a special election during 2007 to receive the benefit that is earned or vested after 2004 under one of the distribution options in Section 5.03.  The Participant may not make a new election under this subsection if the election would accelerate payment of the Participant’s benefit into the year of the new election.  If the Participant’s Pension Plan benefit commences after the date of the new election, but before 2008, the new election shall be ineffective and the Participant’s benefit shall be paid as provided in subsection (c), above.  An election under this subsection shall be made in the manner prescribed by the Plan Administrator, and the Plan Administrator may impose conditions in addition to those described in this subsection (d) (such as a requirement that a Participant who participates in more than one nonqualified defined benefit plan elect the same annuity form of payment under all plans); but the election shall not be required to comply with the requirements of subsection (b), above (concerning changes in payment elections) or Section 5.02 (concerning spousal consent).  The Plan Administrator may also allow an employee who is not yet a Participant, but who might become a Participant in the future, to elect a distribution option under this subsection (d) for any benefit the employee might later earn under this Plan.  An employee shall not have a right to receive any benefit under the Plan until he becomes a Participant, even if the employee has previously filed an election designating the time and form of payment for any benefit he might earn if he becomes eligible to participate in the Plan.	

5.12  	Rehired Participants .  If a Participant has a Separation From Service and is later rehired by a Textron Company, the following rules shall apply:	

 	(a)	If the Participant had not earned a vested benefit under the Plan at the time of his first Separation From Service, but the Participant returns to service with a Textron Company and earns a vested benefit after his return to service, the Participant’s benefit under the Plan shall be paid as provided in the Plan upon his death, Total Disability, or subsequent Separation From Service, ignoring (for purposes of determining the time and form of payment of his benefit) his first Separation From Service.	

 
 
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 	(b)	If the Participant had earned a vested benefit under the Plan at the time of his first Separation From Service, the vested benefit that the Participant had earned at the time of his first Separation From Service shall be paid at the same time and in the same form that would have applied if the Participant had not returned to service.  Any additional vested benefit that the Participant earns after his return to service shall be paid as provided in the Plan upon his death, Total Disability, or subsequent Separation From Service, ignoring (for purposes of determining the time and form of payment of his additional vested benefit) his first Separation From Service.	

 	(c)	The break-in-service rules and other terms of the Pension Plan shall determine to what extent (if at all) any service or compensation the Participant had earned at the time of his first Separation From Service is forfeited or is taken into account in calculating the amount of the Participant’s benefit under the Plan after his return to service.	

 	(d)	A Participant’s compensation and service after his rehire date shall be disregarded under this Plan for a Participant who separates from service at any time and who is rehired by a Textron Company after December 31, 2009, except to the extent such compensation or service is taken into account under the terms of the Pension Plan.	

Article VI – Unfunded Plan

6.01  	No Plan Assets .  Benefits provided under this Plan are unfunded obligations of Textron.  Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds of the policies shall at all times remain the sole property of Textron and neither the Participants whose lives are insured not their Beneficiaries shall have any ownership rights in such policies of insurance.	
 
6.02  	Top-Hat Plan Status .  The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	

Article VII – Plan Administration
 
7.01  	Plan Administrator’s Powers .  Textron shall have all such powers as may be necessary to carry out the provisions hereof. Textron may from time to time	

 
 
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  	establish rules for the administration of this Plan and the transaction of its business. Subject to Section 7.06, any actions by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any Participant.  Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 7.02.	

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

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

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

 
 
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7.05  	Proof of Right to Receive Benefits .  Textron may require proof of death or Total Disability of any Participant, former Participant or Beneficiary and evidence of the right of any person to receive any Plan benefit.	

7.06  	Claims Procedure .   A Participant or Beneficiary who believes that he is being denied a benefit to which he is entitled under the Plan (referred to in this Section 7.06 as a “Claimant”) may file a written request with Textron setting forth the claim.  Textron shall consider and resolve the claim as set forth below.  	
 
 	(a)	Time for Response .   Upon receipt of a claim, Textron shall advise the Claimant that a response will be forthcoming within 90 days.  Textron may, however, extend the response period for up to an additional 90 days for reasonable cause, and shall notify the Claimant of the reason for the extension and the expected response date.  Textron shall respond to the claim within the specified period.  	

 	(b)	Denial .  If the claim is denied in whole or part, Textron shall provide the Claimant with a written decision, using language calculated to be understood by the Claimant, setting forth (1) the specific reason or reasons for such denial; (2) the specific reference to relevant provisions of this Plan on which such denial is based; (3) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary; (4) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; (5) the time limits for requesting a review of the claim; and (6) the Claimant’s right to bring an action for benefits under Section 502(a) of ERISA.	
 
 	(c)	Request for Review .  Within 60 days after the Claimant ’s receipt of the written decision denying the claim in whole or in part, the Claimant may request in writing that Textron review the determination.  The Claimant or his duly authorized representative may, but need not, review the relevant documents and submit issues and comment in writing for consideration by Textron.  If the Claimant does not request a review of the initial determination within such 60-day period, the Claimant shall be barred from challenging the determination.	
 
 	(d)	Review of Initial Determination .  Within 60 days after Textron receives a request for review, it will review the initial determination.  If special circumstances require that the 60-day time period be extended, Textron will so notify the Claimant and will render the decision as soon as possible, but no later than 120 days after receipt of the request for review.	

 	(e)	Decision on Review . All decisions on review shall be final and binding with respect to all concerned parties.  The decision on review shall set	

 
 
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 	forth, in a manner calculated to be understood by the Claimant, (1) the specific reasons for the decision, shall including references to the relevant Plan provisions upon which the decision is based; (2) the Claimant’s right to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information, relevant to his benefits; and (3) the Claimant’s right to bring a civil action under Section 502(a) of ERISA.	

7.01  	Enforcement Following a Change in Control .  If, after a Change in Control, any claim is made or any litigation is brought by a Participant or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in Section 1.03 shall be liable, jointly and severally, to reimburse the Participant or Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees and costs incurred during the Participant’s or Beneficiary’s lifetime in pursuing any such claim or litigation, and to pay prejudgment interest at the Prime Rate as quoted in the Money Rates section of The Wall Street Journal on any money award or judgment obtained by the Participant or Beneficiary, payable at the same time as the underlying award or judgment.  Any reimbursement pursuant to the preceding sentence shall be paid to the Participant no earlier than six months after the Participant’s Separation From Service, and shall be paid to the Participant or Beneficiary no later than the end of the calendar year following the year in which the expense was incurred.  The reimbursement shall not be subject to liquidation or exchange for another benefit, and the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year.	
 
Article VIII – Amendment and Termination
 
8.01  	Amendment .  Subject to subsections (a) and (b), below, the Board or its designee shall have the right to amend, modify, or suspend this Plan at any time by written resolution or other formal action reflected in writing.	

 	(a)	No amendment, modification, or suspension shall reduce a Participant’s accrued benefit as determined under Section 3.01 or Section 3.02 immediately before the effective date of the amendment, modification, or suspension.	

 	(b)	Following a Change in Control, no amendment, modification, or suspension shall be made that directly or indirectly reduces any right or benefit provided upon a Change in Control.	
 
 	An amendment to the Pension Plan that affects the benefits provided under this Plan shall not be deemed to be an amendment to this Plan, and shall not be subject to the restrictions in subsections (a) and (b), provided that the amendment to the	

 
 
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 	Pension Plan applies to a broad cross-section of participants in the Pension Plan, and not only or primarily to Participants in this Plan.	
 
8.02 	Delegation of Amendment Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	

8.03 	Termination .  The Board or its designee shall have the right to terminate this Plan at any time before a Change in Control by written resolution.  No termination of the Plan shall reduce a Participant’s accrued benefit as determined under Section 3.01 or Section 3.02 and Section 3.03 immediately before the effective date of the termination.	

8.04 	Distributions Upon Plan Termination .  Upon the termination of the Plan by the Board with respect to all Participants, and termination of all arrangements sponsored by any Textron Company that would be aggregated with the Plan under IRC Section 409A, Textron shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay the Participant’s or Beneficiary’s vested benefit in a lump sum, to the extent permitted under IRC Section 409A.  All payments that may be made pursuant to this Section 8.04 shall be made no earlier than the thirteenth month and no later than the twenty-fourth month after the termination of the Plan.  Textron may not accelerate payments pursuant to this Section 8.04 if the termination of the Plan is proximate to a downturn in Textron’s financial health.  If Textron exercises its discretion to accelerate payments under this Section 8.04, it shall not adopt any new arrangement that would have been aggregated with the Plan under IRC Section 409A within three years following the date of the Plan’s termination.	
 
Article IX – Miscellaneous
 
9.01  	Use of Masculine or Feminine Pronouns .  Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
9.02  	Transferability of Plan Benefits .	

 	(a)	Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) of the Code if IRC Section 414(p) were applicable to the	

 
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 	 	Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, and (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant.	

 	(b)	Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or Beneficiary.
 
Following a Change in Control, no amendment, modification, or suspension shall be made that directly or indirectly reduces any right or benefit provided upon a Change in Control.	
 
9.03  	Section 409A Compliance .  The Plan is intended to comply with IRC Section 409A and should be interpreted accordingly.  Any distribution election that would not comply with IRC Section 409A is not effective.  To the extent that a provision of this Plan does not comply with IRC Section 409A, such provision shall be void and without effect.  Textron does not warrant that the Plan will comply with IRC Section 409A with respect to any Participant or with respect to any payment, however.  In no event shall any Textron Company; any director, officer, or employee of a Textron Company (other than the Participant); or any member of Textron be liable for any additional tax, interest, or penalty incurred by a Participant or Beneficiary as a result of the Plan’s failure to satisfy the requirements of IRC Section 409A, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.	

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

9.05  	No Right to Employment .  Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to	

 
 
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  	suggest or create a right in any Participant of continued employment at any Textron Company.	
 
9.06  	Additional Conditions Imposed .  Textron, the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 

 
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TEXTRON SPILLOVER PENSION PLAN
____________________________
APPENDIX A
(as amended and restated
effective January 3, 2010)
____________________________
Defined Benefit Provisions
 of the
 Supplemental Benefits Plan for
Textron Key Executives
(As in effect before January 1, 2007)

 

 

 

 

 

DC: 2384235-5

 

 

Textron Spillover Pension Plan
Appendix A — Key Executive Plan

Table of Contents

 
Introduction	1	
 	 	
Article I—Definitions	2	
 	 	
Article II—Participation	4	
 	 	
Article III—Supplemental Pension Benefits	4	
 	 	
Article IV—Unfunded Plan	4	
 	 	
Article V—Plan Administration	5	
 	 	
Article VI—Miscellaneous	6	

 

 
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Textron Spillover Pension Plan
Appendix A — Key Executive Plan

 	Introduction	
 
A.	Key Executive Plan
(As In Effect Before 2007)	
 
Before 2007, the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”) was a separate unfunded, nonqualified deferred compensation arrangement for designated key executives of Textron and its affiliates.  The Key Executive Plan supplemented key executives’ benefits under Textron’s tax-qualified defined benefit plans and tax-qualified defined contribution plans by providing benefits that exceeded the statutory limits under the Internal Revenue Code (“IRC”).  The Key Executive Plan also provided supplemental pension benefits based on certain elements of key executives’ compensation that were not included in pensionable compensation under the tax-qualified defined benefit plans.
 
B.	Textron Spillover Pension Plan
(Effective January 1, 2007)	
 
Effective January 1, 2007, the defined benefit portion of the Key Executive Plan was separated from the defined contribution portion of the Key Executive Plan.  The defined benefit portion of the Key Executive Plan continued as part of the Textron Spillover Pension Plan, and the defined contribution portion of the Key Executive Plan continued as a separate plan, the Supplemental Savings Plan for Textron Key Executives.

C.	Key Executive Protected Benefits
(Earned and Vested Before 2005)	
 
The portion of Appendix A that follows this Introduction sets forth the defined benefit provisions of the Key Executive Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Key executives’ supplemental pension benefits that were earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in such amounts under Section 409A (“Key Executive Protected Benefits”), are calculated and paid solely as provided in Appendix A, and are not subject to any other provisions of the Textron Spillover Pension Plan.
 
The Key Executive Protected Benefits are not intended to be subject to IRC Section 409A.  No amendment to this Appendix A that would constitute a “material modification” for purposes of Section 409A shall be effective unless the amending instrument states that it is intended to materially modify Appendix A and to cause the Key Executive Protected Benefits to become subject to Section 409A.  Although the Key Executive Protected Benefits are not intended to be subject to Section 409A, no Textron Company (nor any director, officer, or other representative of a Textron Company) shall be liable for

 
 
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any adverse tax consequence suffered by a Participant or beneficiary if a Key Executive Protected Benefit becomes subject to Section 409A.

D.	Benefits Subject To Section 409A
(Earned or Vested From 2005 Through 2007)	
 
Supplemental pension benefits earned by key executives after 2004, and supplemental pension benefits that became vested after 2004, are subject to the provisions of IRC Section 409A.  To the extent that these benefits were earned under the Key Executive Plan before January 1, 2007, the benefits shall be calculated under the provisions of the Key Executive Plan set forth in this Appendix A, using the benefit formulas in the Pension Plans as in effect before 2007, modified as provided in Appendix A.  However, any benefits earned or vested under the Key Executive Plan after 2004 shall be paid exclusively as provided in the Textron Spillover Pension Plan (not including any appendix to the Textron Spillover Pension Plan), and shall not be subject to any provision of Appendix A that relates to the payment or distribution of benefits.  Although the provisions of the Textron Spillover Pension Plan generally are effective as of January 1, 2007, the provisions that govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan are effective as of January 1, 2005.
 
Key Executive Plan

The text that follows sets forth the defined benefit provisions of the Key Executive Plan as in effect on October 3, 2004.  The defined terms in Appendix A relate only to the provisions set forth in Appendix A: they do not apply to any other provisions of the Textron Spillover Pension Plan, and terms defined elsewhere in the Textron Spillover Pension Plan do not apply to Appendix A.  No additional benefits shall accrue under Appendix A after 2006.
 
Article I—Definitions
 
In this Appendix, the following terms shall have the meanings set forth in this Article, unless a contrary or different meaning is expressly provided:
 
1.01	“Board” means the Board of Directors of Textron.	

1.02	“Compensation” means a Key Executive’s annual compensation determined as follows:	

 	(a)	For years before 2006, except as provided in subsections (b) and (c), Compensation means base salary, accrued annual incentive compensation, performance units, and performance share units, whether or not deferred under the Deferred Income Plan for Textron Key Executives or the Textron Deferred Income Plan for Executives.  For 2006, Compensation shall be determined as provided in the preceding sentence, modified (except as provided in subsection (c)) to include the greater of the Participant’s annual incentive compensation accrued in 2006 or the Participant’s annual incentive compensation paid in 2006.	

 

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 	(b)	For any Key Executive who is first awarded performance share units after October 26, 1999, performance share units shall not be included in Compensation.	

 	(c)	For Key Executives who are members of the Textron Pension Plan for Cessna Employees (Addendum F to the Textron Master Retirement Plan), Compensation means “Final Average Monthly Salary” as defined in that plan. “Final Average Monthly Salary” shall include incentive compensation paid by Textron and shall exclude long-term incentive compensation and shall be calculated without regard to Statutory Limits or deferrals.	

 	(d)	Compensation does not include any award under the Textron Quality Management Plan or the Supplemental Bonus Plan for Textron Financial Corporation Executives.	

1.03	“Deferral Plans” means the Textron Deferred Income Plan for Textron Key Executives and the Textron Deferred Income Plan for Executives, as amended and restated from time to time.	
 
1.04	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.	
 
1.05	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	
 
1.06	“Participant” means a Key Executive who is participating in this Plan pursuant to Article II and, unless the context clearly indicates to the contrary, a former Participant who is entitled to benefits under this Plan.	
 
1.07	“Pension Plan” means the Bell Helicopter Textron Retirement Plan, the Textron Pension Plan for Cessna Employees, the Textron Master Retirement Plan, or an Included Plan that is a defined benefit plan.	
 
1.08	“Plan” means this Supplemental Benefits Plan for Textron Key Executives, as amended and restated from time to time.	
 
1.09	“Statutory Limit” means any limit on benefits under, or annual additions to, qualified plans imposed by Section 401(a)(17) or 415 of the Internal Revenue Codes of 1954 or 1986, as amended from time to time.	
 
1.10	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	
 
1.11	“Textron Company” means Textron or any company controlled by or under common control with Textron.	

 

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Article II—Participation
 
2.01	A Key Executive shall participate in this Plan if her benefits under a Pension Plan are limited by one or more Statutory Limits. In addition, a Key Executive shall participate in this Plan if her receipt of any compensation is deferred under the Deferral Plans.	
 
Article III—Supplemental Pension Benefits
 
3.01	Textron shall pay on account of each Participant who begins to receive payments under one or more of the Pension Plans the amount, if any, by which (1) the normal, early or vested retirement pension that would have been payable on the Participant’s account under the Pension Plans, using Compensation as defined in this Plan, exceeds (2) the normal, early or vested retirement pension calculated under the Pension Plans on the Participant’s account.	
 
3.02	Textron shall pay to the beneficiary designated by the Participant under each Pension Plan the amount, if any, by which (1) the death benefit that would have been payable under that Pension Plan on the Participant’s account using Compensation as defined in this Plan exceeds (2) the death benefit which is actually payable under that Pension Plan on the Participant’s account. For the purposes of this Section, the term “death benefit” shall include any period certain death benefit and any surviving spouse benefit provided by a Textron Company at its sole cost through a Pension Plan.	
 
3.03	In the event Textron transfers the liability of a Pension Plan on account of a Participant to another qualified plan, the supplemental pension or death benefits under Sections 3.01 and 3.02, respectively, shall be determined as of such transfer, unless otherwise decided by Textron in its sole discretion.	
 
Article IV—Unfunded Plan
 
4.01	Benefits to be provided under this Plan are unfunded obligations of Textron. Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations. If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds therefrom shall at all times remain the sole property of Textron and neither the Participants whose lives are insured nor their beneficiaries shall have any ownership rights in such policies of insurance.	
 
4.02	This Plan is intended in part to provide benefits for a select group of management employees who are highly compensated, within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of  ERISA, and in part to be an excess benefit plan, pursuant to Section 3(36) of ERISA.	

 

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4.03	No Participant shall be required or permitted to make contributions to this Plan.	
 
Article V—Plan Administration
 
5.01	Textron shall be the plan administrator of this Plan and shall be solely responsible for its general administration and interpretation. Textron shall have all such powers as may be necessary to carry out the provisions hereof. Textron may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 5.06, any action by Textron shall be final, conclusive, and binding on each Participant and all persons claiming by, through or under any Participant. Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan, and shall make all such determinations and interpretations in a nondiscriminatory manner.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 5.02.	
 
5.02	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officer of Textron to make a further delegation of the authority to administer the Plan.	
 
5.03	(a)	Except as provided in subsections (b) and (c), below, the payment of any benefit under Article III shall be made at the same time, in the same manner, to the same persons and in the same proportions, as is made the payment or distribution under the related Pension Plan, or otherwise as determined by Textron in its sole discretion. Textron may withhold from benefits and accounts under this Plan, any taxes or other amounts required by law to be withheld. Except as provided in subsection (b), below, no benefit shall be paid to any Participant while employed by Textron.	
 
 	(b)	Each benefit then computed under Article III shall become due and payable to the respective Participants and beneficiaries immediately upon a Change in Control as defined in Section 6.03. For purposes of Section 5.03, the present value of a benefit computed under Article III shall be based on the appropriate actuarial assumptions and factors set forth in the related Pension Plan and, if no interest rate assumption has been set forth for any purpose, an interest rate of six percent per year.	
 
 	(c)	Effective for payments commencing on or after January 1, 2008, Textron has exercised its discretion pursuant to subsection (a) to determine that no distribution under the Plan shall commence or be paid earlier than six months after the date of the Participant’s separation from service.  Any payments that otherwise would have been made during the six-month pe-	

 

Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Appendix A
Page 5	

 

 
 
 	 	riod shall be paid in a lump sum, without interest, on the first day of the first month that begins after the six-month period.	
 
5.04	Textron may employ or engage such agents, accountants, actuaries, counsel, other experts and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan. Textron shall be entitled to rely upon all certifications made by an accountant selected by Textron. Textron and its committees, officers, directors and employees shall not be liable for any action taken, suffered or omitted by them in good faith in reliance upon the advice or opinion of any such agent, accountant, actuary, counsel or other expert. All action so taken, suffered or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
5.05	Textron may require proof of death or total disability of any Participant, former Participant or beneficiary and evidence of the right of any person to receive any Plan benefit.	
 
5.06	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and resolved pursuant to the claims procedure in Section 7.06 of the Textron Spillover Pension Plan.	
 
Article VI—Miscellaneous

6.01	Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
6.02	(a)     Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, and (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant.	
 
 	(b)       Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate,	

 

Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Appendix A
Page 6	

 

 
 
 	sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or beneficiary.	
 
6.03	Notwithstanding any Plan provision to the contrary, the Board or its designee shall have the right to amend, modify, suspend or terminate this Plan at any time by written ratification of such action; provided, however, that no amendment, modification, suspension or termination:	
 
 	(1)	shall reduce an amount payable under Article III of this Plan immediately before the effective date of the amendment, modification, suspension or termination; or	
 
 	(2)	shall be made to Section 5.03 or 6.03 following a Change in Control.	
 
 	If after a Change in Control any claim is made or any litigation is brought by a Participant or beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in the next following sentence shall be liable, jointly and severally, to indemnify the Participant or beneficiary and to pay prejudgment interest on any recovery as provided in Section 7.07 of the Textron Spillover Pension Plan.	
 
 	For purposes of this Plan, a “Change in Control” shall occur if (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially the same proportions as their ownership of Textron common stock, is or becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or whose nomination for election by Textron’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof, or (iii) stockholders of Textron approve a merger or consolidation of Textron with any other corporation, other than a merger or consolidation which would result in the voting securities of Textron outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of Textron approve a plan of complete liquidation of Textron	

 

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Amended and Restated January 3, 2010	Appendix A
Page 7	

 

 
 
 	or an agreement for the sale or disposition by Textron of all or substantially all of Textron’s assets.	
 
6.04	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
6.05	This Plan shall be construed in accordance with the laws of the State of Delaware.	
 
6.06	Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant to be continued in employment as a Key Executive or other employee of any Textron Company.	
 
6.07	Textron, the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 

Texton Spillover Pension Plan
Amended and Restated January 3, 2010	Appendix A
Page 8	

EXHIBIT 10.5

 

 
SUPPLEMENTAL RETIREMENT PLAN
FOR TEXTRON KEY EXECUTIVES
____________________
 
As Amended and Restated
Effective January 3, 2010

 

 

 

 

 

 
DC: 2560614-6

 

 

Supplemental Retirement Plan
for Textron Key Executives
 
As Amended and Restated
 
Effective January 3, 2010

Table of Contents

Introduction	 	1	
 	 	 	
Article I—Definitions	 	2	
 	 	 	
1.01	Average Compensation	2	
1.02	Beneficiary	2	
1.03	Board	2	
1.04	Change in Control	2	
1.05	Compensation	3	
1.06	IRC	4	
1.07	Key Executive	4	
1.08	Normal Form of Benefit	4	
1.09	Participant	4	
1.10	Pension Plan	4	
1.11	Plan	5	
1.12	Separation From Service	5	
1.13	Surviving Spouse	5	
1.14	Textron	5	
1.15	Textron Company	5	
1.16	Total Disability	5	
 	 	 	
Article II—Benefit	 	5	
 	 	 	
2.01	Target Benefit	5	
2.02	Reductions in Target Benefit	5	
2.03	Early Retirement Factors	6	
2.04	Payment of Benefits	7	
2.05	Pre-Pension Surviving Spouse Annuity	9	
2.06	Administrative Adjustments in Payment Date	9	
2.07	Distribution Upon Change in Control	9	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	Table of Contents
Page i	

 

 

Article III—Unfunded Plan	 	10	
 	 	 	
3.01	No Plan Assets	10	
3.02	Top-Hat Plan Status	10	
3.03	No Contributions	10	
 	 	 	
Article IV—Plan Administration	 	10	
 	 	 	
4.01	Plan Administrator’s Powers	10	
4.02	Delegation of Administrative Authority	11	
4.03	Tax Withholding	11	
4.04	Use of Third Parties to Assist with Plan Administration	11	
4.05	Proof of Right to Receive Benefits	11	
4.06	Claims Procedure	12	
4.07	Enforcement Following a Change in Control	13	
 	 	 	
Article V—Amendment and Termination	 	13	
 	 	 	
5.01	Amendment	13	
5.02	Delegation of Amendment Authority	14	
5.03	Termination	14	
5.04	Distributions Upon Plan Termination	14	
 	 	 	
Article VI—Miscellaneous	 	14	
 	 	 	
6.01	Use of Masculine or Feminine Pronouns	14	
6.02	Transferability of Plan Benefits	14	
6.03	Section 409A Compliance	15	
6.04	Controlling State Law	15	
6.05	No Right to Employment	15	
6.06	Additional Conditions Imposed	16	

 
 
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Amended and Restated January 3, 2010	Table of Contents
Page ii	

 

 

Supplemental Retirement Plan
for Textron Key Executives
 
As Amended and Restated
 
Effective January 3, 2010

 

Introduction

The Supplemental Retirement Plan for Textron Key Executives (the “Plan”) is an unfunded, nonqualified deferred compensation arrangement.  The Plan provides supplemental retirement benefits for designated Key Executives of Textron and its affiliates.  The Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments that are effective through the date of this restatement.
 
Appendix A of the Plan sets forth the provisions of the Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Supplemental retirement benefits that were earned and vested (within the meaning of IRC Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in these amounts under IRC Section 409A, are calculated and paid solely as provided in Appendix A, and are not subject to any other provisions of the Supplemental Retirement Plan for Textron Key Executives.
 
Supplemental retirement benefits that were earned or vested after 2004 and before January 1, 2008, are subject to the provisions of IRC Section 409A.  These s upplemental retirement benefits are paid exclusively as provided in the Supplemental Retirement Plan for Textron Key Executives (not including any appendix to the Plan).  Although the provisions of the Supplemental Retirement Plan for Textron Key Executives generally are effective as of January 1, 2009, the provisions that govern the distribution of benefits earned or vested after 2004 under the Plan are effective as of January 1, 2005, and the amended definition of “Compensation” is effective as of January 1, 2007.

 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 1	

 

 
 
Article I—Definitions
 
Whenever used in this document, the following terms shall have the meanings set forth in this Article unless a contrary or different meaning is expressly provided:
 
1.01  	“Average Compensation” means the average of a Participant’s Compensation during the five consecutive years in which the Compensation is highest, determined using the same averaging methodology that is used to determine “Compensation Base” in Addendum A of the Textron Master Retirement Plan.	
 
1.02  	“Beneficiary” means the person who is entitled under this Plan to receive a payment that would have been made to a Participant or Surviving Spouse during his or her lifetime, if the Participant or Surviving Spouse dies before the payment is made.	
 
1.03  	“Board” means the Board of Directors of Textron.	
 
1.04  	“Change in Control” means, for any Participant who was not an employee of a Textron Company on December 31, 2007:	

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

 	(1)	becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of stock of Textron that, together with other stock held by such person or group, possesses more than 50% of the combined voting power of Textron’s then-outstanding voting stock, or	

 	(2)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) beneficial ownership of stock of Textron possessing more than 30% of the combined voting power of Textron's then-outstanding stock, or	

 	(3)	acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) all or substantially all of the total gross fair market value of all of the	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 2	

 

 

 	 	assets of Textron immediately prior to such acquisition or acquisitions (where gross fair market value is determined without regard to any associated liabilities); or	
 
 	(b)	a merger or consolidation of Textron with any other corporation occurs, other than a merger or consolidation that would result in the voting securities of Textron outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or	

 	(c)	during any 12-month period, a majority of the members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of their appointment or election.	
 
 	Each of the events described above will be treated as a “Change in Control” only to the extent that it is a change in ownership, change in effective control, or change in the ownership of a substantial portion of Textron’s assets within the meaning of IRC Section 409A.
 
For any Participant who was an employee of a Textron Company on December 31, 2007, the definition set forth above in this Section 1.04 shall be used to determine whether an event is a “Change in Control” to the extent that the event would alter the time or form of payment of the Participant’s benefit.  To the extent that the event would cause any change in the Participant’s rights under the Plan that does not affect the status of the Participant’s benefit under IRC Section 409A (including, but not limited to, the enhancement or accelerated vesting of the Participant’s benefit, or restrictions on amendments to the Plan), the definition set forth in Section 5.04 of Appendix A shall be used to determine whether the event is a “Change in Control.”	
 
1.05  	“Compensation” means a Participant’s annual compensation determined as follows:	
 
 	(a)	For years after 2006, Compensation means eligible annual compensation as defined under the current benefit formula in the tax-qualified Pension Plan that covers the Participant, without regard to the statutory limits in IRC Section 401(a)(17) and IRC Section 415, subject to the modifications described in this Section 1.05(a).  For any executive who was first awarded performance share units before October 27, 1999, Compensation shall include payments made under performance share units (regardless of when the units are awarded); but Compensation shall not include amounts	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 3	

 

 
 
 	 	attributable to performance share units for any executive who was first awarded performance share units after October 26, 1999.  Compensation shall include a Participant’s elective deferrals under the Deferred Income Plan for Textron Key Executives, the Textron Deferred Income Plan for Executives, and the Deferred Income Plan for Textron Executives (and, if applicable, shall also include the automatic deferral of a Participant’s performance share units or annual incentive bonus exceeding 100% of the target bonus), but only to the extent that these amounts would have been included in Compensation if they had not been deferred.	
 
 	(b)	For any individual who participated in the Plan before 2007, Compensation for each year before 2007 shall be determined under Section 1.04 of Appendix A.	

 	(c)	If a year before 2007 is included in the Participant’s Compensation Base under the Plan, and the Participant did not participate in the Plan before 2007, Compensation for that year shall be determined as provided in Section 1.05(a), above.	

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

1.07  	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive by Textron’s Chief Executive Officer and Chief Human Resources Officer.	
 
1.08  	“Normal Form of Benefit” means (a) a single life annuity for the life of the Participant, in the case of a Key Executive who became a Participant on or after July 23, 1998, and (b) a joint and 50% survivor annuity, in the case of a Key Executive who became a Participant before July 23, 1998.	
 
1.09  	“Participant” means a Key Executive selected by Textron’s Chief Executive Officer (or, in the case of the Chief Executive Officer, selected by the Organization and Compensation Committee of the Board) for participation in this Plan.	
 
1.10  	“Pension Plan” means a tax-qualified or nonqualified defined benefit plan maintained by a Textron Company (including any predecessor plans, but excluding this Plan) in which the Key Executive has participated.  “Pension Plan” includes, but is not limited to, the Bell Helicopter Textron Retirement Plan (part of the Bell Helicopter Textron Master Retirement Plan), the Textron Pension Plan (Addendum A to the Textron Master Retirement Plan), and the Textron Spillover Pension Plan.	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
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1.11 	“Plan” means this Supplemental Retirement Plan for Textron Key Executives, as amended and restated from time to time.	
 
1.12 	“Separation From Service” means a Participant’s termination of employment with all Textron Companies, other than by reason of death or Total Disability, that qualifies as a “separation from service” for purposes of IRC Section 409A.	
 
1.13	“Surviving Spouse” means the person to whom a Participant is married (in a marriage recognized under federal law) on the day of the Participant’s death while active or on the dates of the Participant’s retirement and death.	
 
1.14  	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	
 
1.15  	“Textron Company” means Textron or any company controlled by or under common control with Textron within the meaning of IRC Section 414(b) or (c).	
 
1.16  	“Total Disability” means physical or mental incapacity of a Participant who is employed by a Textron Company on the disability date, if the incapacity (a) enables the Participant to receive disability benefits under the Federal Social Security Act, and (b) also qualifies as a “disability” for purposes of IRC Section 409A(a)(2)(C).	
 
Article II—Benefit

2.01  	Target Benefit .  Subject to Sections 2.02 and 2.03, the maximum benefit provided to a Participant who qualifies for benefits under this Plan is an annuity commencing upon Separation From Service or Total Disability equal to 50% of Average Compensation (the “Target Benefit”) less the offsets and adjusted by the Early Retirement Factors as set out below.	
 
2.02  	Reductions in Target Benefit .	
 
 	(a)	Prior Employers’ Plans .  The Target Benefit shall be reduced by the monthly amount of any tax-qualified or nonqualified defined benefit payable to the Participant as a single life annuity at age 65 from a plan or arrangement sponsored by a prior employer other than a Textron Company.  The monthly benefit payable under a prior employer plan shall be converted, if necessary, to a single life annuity commencing at age 65, using the actuarial assumptions or factors specified in the prior employer plan (or, if no conversion basis is available from the prior employer, using comparable actuarial assumptions or factors from Addendum A of the Textron Master Retirement Plan).  It shall be the obligation of each Participant to disclose to Textron, before the Participant’s Separation	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 5	

 

 

 

 	 	 	
 
 	 	From Service, any amounts that might be used under this section to reduce the benefits provided by this Plan.  Such disclosure shall include information on annuity payments and lump-sum cash payments from other plans.	
 
 	(b)	Early Retirement Factors.   The net Target Benefit after reduction for benefits provided under any prior employer plans shall then be multiplied by the Early Retirement Factor as set out in Section 2.03 below.	
 
 	(c)	Pension Plans.   The product of the net Target Benefit times the Early Retirement Factor shall then be reduced by any and all amounts payable to the Participant upon Separation From Service or Total Disability under any qualified or nonqualified Pension Plan.  For purposes of the preceding sentence, the calculation shall be performed assuming that all benefits under this Plan and under any qualified or nonqualified Pension Plan commence on the first day of the month following the Participant’s Separation From Service or Total Disability, even if the commencement of the benefit is delayed by the Participant’s election or by the terms of the plan.  The reduction shall be based on a benefit under each Pension Plan that is payable in the same form as the Participant’s Normal Form of benefit under this Plan; and the benefit under each Pension Plan shall be converted to that form and, if applicable, reduced for early commencement based on the actuarial assumptions and factors used in the Pension Plan.  In the case of any Pension Plan that is part of the Textron Retirement Program, which is a tax-qualified floor-offset arrangement, the reduction in the net Target Benefit under this Plan shall be determined without taking into account any offset in the Pension Plan benefit for the value of the Participant’s account under the Textron Inc. Retirement Account Plan.	
 
2.03 	Early Retirement Factors .  The Participant’s benefits under this Plan shall be based on the Participant’s age at Separation From Service, Total Disability, or death, in accordance with the following schedule:	
 
  Age at Retirement 	Early Retirement Factors	
      65                           	100%	
 	 	
       64	90%	
 	 	
       63                                     	80%	
 	 	
       62                                      	70%	
 	 	
       61                                       	60%	
 	 	
       60                                           	50%	
 	 	
       Less Than 60	0%	

 	 	

 

Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
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 	The Organization and Compensation Committee of the Board shall, in its sole discretion, have the authority to provide a Participant with an enhanced benefit pursuant to a separate written agreement.	
 
2.04  	Payment of Benefits .	
 
 	(a)	Benefit Commencement Date .  Any benefit to which a Participant is entitled under the Plan shall be paid in the Normal Form of Benefit, or in an actuarially equivalent life annuity elected by the Participant pursuant to subsection (e), below.  The Participant’s benefit shall be calculated as if it commenced on the first day of the month following the Participant’s Separation From Service or Total Disability.	
 
 	(b)	Six-Month Delay .  In the case of a benefit payable upon Separation From Service, the benefit shall commence on the first day of the seventh month following the Participant’s Separation From Service, and any monthly payments that would have been due during the intervening six months shall be paid in a lump sum, without interest, on the first day of the seventh month after the Participant’s Separation From Service.  The Participant may designate a Beneficiary to receive the payments for the months before the Participant’s death in the event of the Participant’s death after Separation From Service and before the expiration of the six-month delay.	
 
 	(c)	Disability Benefits .  In the case of a benefit payable upon Total Disability, the benefit shall commence on the first day of the month following the later of the Participant’s Total Disability or attainment of age 65.	
 
 	(d)	Form of Payment .  Any form of benefit payable other than the Normal Form of Benefit shall be the actuarial equivalent of the Normal Form of Benefit, calculated using the actuarial assumptions and factors in the Textron Master Retirement Plan.  For any individual who becomes a Participant after July 23, 1998, benefit payments under the Plan will be reduced if the Participant elects a 50%, 75%, or 100% joint and survivor benefit or joint and surviving spouse benefit.  The joint and survivor factors are the same factors provided by Addendum A of the Textron Master Retirement Plan.	
 
 	(e)	Payment Election .  A Participant who wishes to elect a form of payment other than the Normal Form of Benefit must complete and return a written distribution election form acceptable to Textron before the Participant’s Separation From Service or Total Disability.  Subject to the spousal consent requirement in subsection (f), below, the Participant may elect any actuarially equivalent life annuity (within the meaning of IRC Section 409A) that is available under Addendum A of the Textron Master	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 7	

 

 
 
 	 	Retirement Plan at the Participant’s benefit commencement date under this Plan, regardless of whether the Participant participates in Addendum A or elects the same form of payment under Addendum A.	
 
 	(f)	Spousal Consent .  For any individual who becomes a Participant after July 23, 1998, if the Participant is married when he or she makes a distribution election (including a change in a prior distribution election), the Participant must have the written consent of his or her spouse in order to elect any form of payment other than a joint and 50% surviving spouse annuity.  If the Participant marries or re-marries after the date of the distribution election, the Participant shall automatically receive an actuarially equivalent joint and 50% surviving spouse annuity unless his or her current spouse consents in writing to a different form of distribution.	
 
 	(g)	Spillover Pension Plan .	
 
 	(i)	If a Participant in this Plan is entitled to receive a retirement benefit or pre-pension surviving spouse annuity under the Textron Spillover Pension Plan or any other nonqualified Pension Plan that would be subtracted from the Participant’s benefit under Section 2.02(c) of this Plan, the amount of the benefit shall be calculated under the Textron Spillover Pension Plan (or other nonqualified Pension Plan), but the benefit shall be paid exclusively at the time and in the form provided under this Plan, as if the other plan’s benefit were part of the Participant’s benefit under this Plan.  The preceding sentence shall apply even if the Participant is not otherwise eligible to receive any retirement benefit or pre-pension surviving spouse annuity under this Plan (for example, because he retired before his benefit under this Plan vested or because his benefit under this Plan is fully offset by his Pension Plan benefits).	
 
 	(ii)	If a Participant’s Separation From Service, Total Disability, or death occurs before the earliest date on which he would be entitled to a benefit under this Plan, his retirement benefit under the Textron Spillover Pension Plan or other nonqualified Pension Plan shall commence on the Participant’s earliest retirement date under this Plan, as if he had retired on that date.  In the case of a Separation From Service, the retirement benefit under the Textron Spillover Pension Plan or other nonqualified Pension Plan shall be subject to the six-month delay in subsection (b).  The retirement benefit under the Textron Spillover Pension Plan or other nonqualified Pension Plan shall be actuarially adjusted, using the actuarial assumptions and factors in the other plan, to reflect the actual commencement date under this Plan.	

 
 
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Amended and Restated January 3, 2010	 
Page 8	

 

 
 
 	(iii)	If a Participant is entitled to a death benefit or other benefit under the Textron Spillover Pension Plan or other nonqualified Pension Plan that is not provided under this Plan and that would not in any circumstance be subtracted from the Participant’s benefit under Section 2.02(c) of this Plan, the benefit shall be paid as provided in the Textron Spillover Pension Plan or other nonqualified Pension Plan.	
 
2.05  	Pre-Pension Surviving Spouse Annuity .  If a Participant dies after age 60 and prior to benefit commencement under this Plan, the Participant’s Surviving Spouse will receive an annuity equal to the amount the spouse would have received if the Participant had requested a joint and 50% surviving spouse annuity and had retired the day before he died.  The pre-pension surviving spouse annuity payable under this section shall commence on the first business day of the first month that begins at least 90 days after the Participant’s death.	
 
2.06  	Administrative Adjustments in Payment Date .  A payment is treated as being made on the date when it is due under the Plan if the payment is made on the due date specified by the Plan, or on a later date that is either (a) in the same calendar year (for a payment whose specified due date is on or before September 30), or (b) by the 15th day of the third calendar month following the date specified by the Plan (for a payment whose specified due date is on or after October 1).  A payment also is treated as being made on the date when it is due under the Plan if the payment is made not more than 30 days before the due date specified by the Plan, provided that the payment is not made earlier than six months after the Participant’s Separation From Service.  A Participant may not, directly or indirectly, designate the taxable year of a payment made in reliance on the administrative rules in this Section 2.06.	
 
2.07  	Distribution Upon Change in Control .	

 	(a)	Benefit Enhancement .  If the Participant’s Separation From Service, Total Disability, or death occurs after a Change in Control, the Participant shall, in lieu of the benefit payable under the preceding sections of this Article II, receive a benefit equal to the actuarial present value at Separation From Service, Total Disability, or death of the benefit the Participant would have received had the Participant terminated employment at age 65, based upon the Participant’s Average Compensation as of the date of Separation From Service, Total Disability, or death.  The present value shall be determined using the 1994 Group Annuity Reserving Table (unisex) based on a blend of 50% of the male mortality rates and 50% of the female mortality rates and an interest rate of 7%.  Any pre-pension surviving spouse annuity or pre-pension survivor annuity payable upon the Participant’s death after a Change in Control shall be based on the Participant’s enhanced benefit calculated under this subsection.	

 
 
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Amended and Restated January 3, 2010	 
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 	(b)	Distribution .  If the Participant’s Separation From Service, Total Disability, or death occurs within 24 months after the Change in Control, and if the Change in Control also qualifies as a “change in control” under IRC Section 409A, the enhanced benefit shall be paid in a lump sum.  If the Participant’s Separation From Service, Total Disability, or death occurs more than 24 months after the Change in Control, or if the Change in Control does not qualify as a “change in control” under IRC Section 409A, the enhanced benefit shall be paid in the Normal Form or as an actuarially equivalent life annuity elected by the Participant.  In either case, the enhanced benefit shall commence (or, in the case of a lump sum, shall be paid) on the applicable benefit commencement date specified in Section 2.04 or Section 2.05.	

Article III—Unfunded Plan
 
3.01  	No Plan Assets .  Benefits to be provided under this Plan are unfunded obligations of Textron.  Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds therefrom shall at all times remain the sole property of Textron and neither the Participants whose lives are insured nor their Surviving Spouses or Beneficiaries shall have any ownership rights in such policies of insurance.	
 
3.02  	Top-Hat Plan Status .  The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	
 
3.03  	No Contributions .  No Participant shall be required or permitted to make contributions to this Plan.	
 
Article IV—Plan Administration
 
4.01  	Plan Administrator’s Powers .  Textron shall have all such powers as may be necessary to carry out the provisions hereof.  Textron may from time to time establish rules for the administration of this Plan and the transaction of its business. Subject to Section 4.06, any actions by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any Participant.  Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary	

 
 
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Amended and Restated January 3, 2010	 
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 	authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 4.02.  The Organization and Compensation Committee of the Board shall render all decisions under this Plan (including participation, Plan benefits, and benefit distributions) affecting Textron’s Chief Executive Officer.	
 
4.02	Delegation of Administrative Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officer of Textron to make a further delegation of the authority to administer the Plan.	
 
4.03  	Tax Withholding .  Textron may withhold from benefits paid under this Plan any taxes or other amounts required by law to be withheld.  Textron may deduct from the undistributed portion of a Participant’s benefit any employment tax that Textron reasonably determines to be due with respect to the benefit under the Federal Insurance Contributions Act (FICA), and an amount sufficient to pay the income tax withholding related to such FICA tax.  Alternatively, Textron may require the Participant or Beneficiary to remit to Textron or its designee an amount sufficient to satisfy any applicable federal, state, and local income and employment tax with respect to the Participant’s benefit.  The Participant or Beneficiary shall remain responsible at all times for paying any federal, state, or local income or employment tax with respect to any benefit under this Plan.  In no event shall Textron or any employee or agent of Textron be liable for any interest or penalty that a Participant or Beneficiary incurs by failing to make timely payments of tax.	
 
4.04 	Use of Third Parties to Assist with Plan Administration .  Textron may employ or engage such agents, accountants, actuaries, counsel, other experts and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan.  Textron and its committees, officers, directors and employees shall not be liable for any action taken, suffered or omitted by them in good faith in reliance upon the advice or opinion of any such agent, accountant, actuary, counsel or other expert.  All action so taken, suffered or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
4.05 	Proof of Right to Receive Benefits .  Textron may require proof of death or Total Disability of any Participant, former Participant, Surviving Spouse, or Beneficiary and evidence of the right of any person to receive any Plan benefit.	

 
 
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Amended and Restated January 3, 2010	 
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4.06	Claims Procedure .   A Participant, Surviving Spouse, or Beneficiary who believes that he is being denied a benefit to which he is entitled under the Plan (referred to in this Section 4.06 as a “Claimant”) may file a written request with Textron setting forth the claim.  Textron (or the Organization and Compensation Committee of the Board, in the case of a claim involving Textron’s Chief Executive Officer) shall consider and resolve the claim as set forth below.  	
 
 	(a)	Time for Response .   Upon receipt of a claim, Textron shall advise the Claimant that a response will be forthcoming within 90 days.  Textron may, however, extend the response period for up to an additional 90 days for reasonable cause, and shall notify the Claimant of the reason for the extension and the expected response date.  Textron shall respond to the claim within the specified period. 	
 
 	(b)	Denial .  If the claim is denied in whole or part, Textron shall provide the Claimant with a written decision, using language calculated to be understood by the Claimant, setting forth (1) the specific reason or reasons for such denial; (2) the specific reference to relevant provisions of this Plan on which such denial is based; (3) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary; (4) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; (5) the time limits for requesting a review of the claim; and (6) the Claimant’s right to bring an action for benefits under Section 502(a) of ERISA.	

 	(c)	Request for Review .  Within 60 days after the Claimant’s receipt of the written decision denying the claim in whole or in part, the Claimant may request in writing that Textron review the determination.  The Claimant or his duly authorized representative may, but need not, review the relevant documents and submit issues and comment in writing for consideration by Textron.  If the Claimant does not request a review of the initial determination within such 60-day period, the Claimant shall be barred from challenging the determination.	
 
 	(d)	Review of Initial Determination .   Within 60 days after the Committee receives a request for review, it will review the initial determination.  If special circumstances require that the 60-day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than 120 days after receipt of the request for review.	
 
 	(e)	Decision on Review . All decisions on review shall be final and binding with respect to all concerned parties.  The decision on review shall set forth, in a manner calculated to be understood by the Claimant, (1) the	

 
 
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Amended and Restated January 3, 2010	 
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 	 	specific reasons for the decision, shall including references to the relevant Plan provisions upon which the decision is based; (2) the Claimant’s right to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information, relevant to his benefits; and (3) the Claimant’s right to bring a civil action under Section 502(a) of ERISA.	
 
4.07	Enforcement Following a Change in Control .  If, after a Change in Control, any claim is made or any litigation is brought by a Participant, Surviving Spouse, or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in Section 1.04 shall be liable, jointly and severally, to reimburse the Participant, Surviving Spouse, or Beneficiary for the Participant’s, Surviving Spouse’s, or Beneficiary’s reasonable attorney’s fees and costs incurred during the Participant’s, Surviving Spouse’s, or Beneficiary’s lifetime in pursuing any such claim or litigation, and to pay prejudgment interest at the Prime Rate as quoted in the Money Rates section of The Wall Street Journal on any money award or judgment obtained by the Participant, Surviving Spouse, or Beneficiary, payable at the same time as the underlying award or judgment.  Any reimbursement pursuant to the preceding sentence shall be paid to the Participant no earlier than six months after the Participant’s Separation From Service, and shall be paid to the Participant, Surviving Spouse, or Beneficiary no later than the end of the calendar year following the year in which the expense was incurred.  The reimbursement shall not be subject to liquidation or exchange for another benefit, and the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year.	

 Article V—Amendment and Termination
 
5.01 	Amendment . Subject to subsections (a) and (b), below, the Board shall have the right to amend, modify, or suspend this Plan at any time by written resolution or other formal acdtion reflected in writing.	
 
 	(a)	No amendment, modification, or suspension shall reduce a Participant’s accrued benefit as determined under Article II immediately before the effective date of the amendment, modification, or suspension.	

 	(b)	Following a Change in Control, no amendment, modification, or suspension shall be made that directly or indirectly reduces any right or benefit provided upon a Change in Control.	
 
 	An amendment to a Pension Plan that affects the benefits provided under this Plan shall not be deemed to be an amendment to this Plan, and shall not be subject to the restrictions in subsections (a) and (b), provided that the amendment to the	

 
 
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Amended and Restated January 3, 2010	 
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 	Pension Plan applies to a broad cross-section of participants in the Pension Plan, and not only or primarily to Participants in this Plan.	
 
5.02  	Delegation of Amendment Authority .  The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
5.03  	Termination .  The Board shall have the right to terminate this Plan at any time before a Change in Control by written resolution.  No termination of the Plan shall reduce a Participant’s accrued benefit as determined under Article II immediately before the effective date of the termination.	

5.04  	Distributions Upon Plan Termination .  Upon the termination of the Plan by the Board with respect to all Participants, and termination of all arrangements sponsored by any Textron Company that would be aggregated with the Plan under IRC Section 409A, Textron shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay the Participant’s vested benefit in a lump sum, to the extent permitted under IRC Section 409A.  All payments that may be made pursuant to this Section 5.04 shall be made no earlier than the thirteenth month and no later than the twenty-fourth month after the termination of the Plan.  Textron may not accelerate payments pursuant to this Section 5.04 if the termination of the Plan is proximate to a downturn in Textron’s financial health.  If Textron exercises its discretion to accelerate payments under this Section 5.04, it shall not adopt any new arrangement that would have been aggregated with the Plan under IRC Section 409A within three years following the date of the Plan’s termination.	

Article VI—Miscellaneous
 
6.01  	Use of Masculine or Feminine Pronouns .  Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
6.02  	Transferability of Plan Benefits .	

 	(a)	Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) of the Code if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the	

 
 
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Amended and Restated January 3, 2010	 
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 	 	domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, and (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant.	
 
 	(b)	Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant, Surviving Spouse, or Beneficiary.	

6.03  	Section 409A Compliance .  The Plan is intended to comply with IRC Section 409A and should be interpreted accordingly.  Any distribution election that would not comply with IRC Section 409A is not effective.  To the extent that a provision of this Plan does not comply with IRC Section 409A, such provision shall be void and without effect.  Textron does not warrant that the Plan will comply with IRC Section 409A with respect to any Participant or with respect to any payment, however.  In no event shall any Textron Company; any director, officer, or employee of a Textron Company (other than the Participant); or any member of Textron be liable for any additional tax, interest, or penalty incurred by a Participant or Beneficiary as a result of the Plan’s failure to satisfy the requirements of IRC Section 409A, or as a result of the Plan’s failure to satisfy any other requirements of applicable tax laws.	

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

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

 
 
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Amended and Restated January 3, 2010	 
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6.06  	Additional Conditions Imposed .  Textron (through the Organization and Compensation Committee of the Board), the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 
 
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SUPPLEMENTAL RETIREMENT PLAN
FOR TEXTRON KEY EXECUTIVES
____________________________
APPENDIX A
____________________________
Provisions of the
Supplemental Retirement Plan
for Textron Key Executives
(As in effect before January 1, 2008)

DC: 2561101-3

 

 
Supplemental Retirement Plan
for Textron Key Executives
Appendix A — Prior Plan Provisions

Table of Contents

Introduction	2	
 	 	
Article I—Definitions	3	
1.01	Beneficiary	3	
1.02	Board	3	
1.03	Compensation	3	
1.04	Key Executive	3	
1.05	Normal Form of Benefit	3	
1.06	Participant	3	
1.07	Pension Plan	3	
1.08	Plan	3	
1.09	Surviving Spouse	4	
1.10	Textron	4	
1.11	Textron Company	4	
 	 	 	
Article II—Benefit	4	
 	 	
Article III—Unfunded Plan	5	
 	 	
Article IV—Plan Administration	6	
 	 	
Article V—Miscellaneous	7	

 
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Amended and Restated January 3, 2010	Table of Contents (Appendix A)
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Supplemental Retirement Plan
for Textron Key Executives
Appendix A — Prior Plan Provisions

Introduction

The Supplemental Retirement Plan for Textron Key Executives (the “Plan”) is an unfunded, nonqualified deferred compensation arrangement.  The Plan provides supplemental retirement benefits for designated Key Executives of Textron and its affiliates.  The Plan was amended and restated, effective as of January 1, 2008, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“IRC”).  This restatement of the Plan reflects all amendments that were effective through January 3, 2010.
 
A.	Key Executive Protected Benefits
(Earned and Vested Before 2005)	
 
The portion of Appendix A that follows this Introduction sets forth the provisions of the Plan as in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs Creation Act of 2004.  Key Executives’ s upplemental retirement benefits that were earned and vested (within the meaning of IRC Section 409A) before January 1, 2005, and any subsequent increase that is permitted to be included in these amounts under IRC Section 409A, (“Key Executive Protected Benefits”), are calculated and paid solely as provided in Appendix A, and are not subject to any other provisions of the Supplemental Retirement Plan for Textron Key Executives.
 
The Key Executive Protected Benefits are not intended to be subject to IRC Section 409A.  No amendment to this Appendix A that would constitute a “material modification” for purposes of IRC Section 409A shall be effective unless the amending instrument states that it is intended to materially modify Appendix A and to cause the Key Executive Protected Benefits to become subject to IRC Section 409A.  Although the Key Executive Protected Benefits are not intended to be subject to IRC Section 409A, no Textron Company (nor any director, officer, or other representative of a Textron Company) shall be liable for any adverse tax consequence suffered by a Participant, Surviving Spouse, or Beneficiary if a Key Executive Protected Benefit becomes subject to IRC Section 409A.

B.	Benefits Subject To Section 409A
(Earned or Vested From 2005 Through 2007)	
 
Supplemental retirement benefits that were earned by Key Executives after 2004, and Supplemental retirement benefits that became vested after 2004, are subject to the provisions of IRC Section 409A.  To the extent that these benefits were earned under the Plan before January 1, 2008, the benefits shall be calculated under the prior Plan

 
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Amended and Restated January 3, 2010	Appendix A
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provisions set forth in this Appendix A.  However, any benefits earned or vested under the Plan after 2004 shall be paid exclusively as provided in the Supplemental Retirement Plan for Textron Key Executives (not including this Appendix A), and shall not be subject to any provision of Appendix A that relates to the payment or distribution of benefits.  Although the provisions of the Supplemental Retirement Plan for Textron Key Executives generally are effective as of January 1, 2008, the provisions that govern the distribution of benefits earned or vested after 2004 under the prior Plan provisions are effective as of January 1, 2005.

Article I—Definitions
 
Whenever used in this document, the following terms shall have the meanings set forth in this Article unless a contrary or different meaning is expressly provided:
 
1.01	“Beneficiary” means the person or persons entitled under this Plan to receive Plan benefits after a Participant’s death.	
 
1.02	“Board” means the Board of Directors of Textron.	
 
1.03	“Compensation” means base salary, accrued annual incentive compensation, performance units, and performance share units, whether or not deferred under the Deferred Income Plan for Textron Key Executives or Textron Deferred Income Plan for Executives.  However, for any Key Executive who is first awarded performance share units after October 26, 1999, performance share units shall not be included in Compensation.  Compensation does not include awards under the Supplemental Bonus Plan for Textron Financial Corporation Executives or the Textron Quality Management Plan.  “Average Compensation” means the average of a Participant’s Compensation during the five consecutive years in which the Compensation is highest.	
 
1.04	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive by Textron’s Chief Executive Officer and Chief Human Resources Officer.	
 
1.05	“Normal Form of Benefit” means a life annuity unless the Participant was designated a Participant in this Plan prior to July 23, 1998, in which case the Normal Form of Benefit shall be a Joint and 50% Survivor annuity.	
 
1.06	“Participant” means a Key Executive selected by Textron’s Chief Executive Officer for participation in this Plan.	
 
1.07	“Pension Plan” means the Bell Helicopter Textron Retirement Plan, the Textron Master Retirement Plan, or an included plan.	
 
1.08	“Plan” means this Restated Supplemental Retirement Plan for Textron Key Executives, as amended and restated from time to time.	

 
 
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1.09	“Surviving Spouse” means a Participant’s spouse who is married to the Participant on the day of the Participant’s death while active or on the dates of the Participant’s retirement and death.	
 
1.10	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.	
 
1.11	“Textron Company” means Textron or any company controlled by or under common control with Textron.	
 
Article II—Benefit
 
2.01	Subject to Sections 2.02 and 2.03, the maximum benefit provided to Participants who qualify for benefits under this Plan is an annuity commencing upon retirement equal to 50% of Average Compensation (the “Target Benefit”) less the offsets and adjusted by the Early Retirement Factors as set out below.	
 
2.02	The Target Benefit shall be reduced by any nonqualified or qualified pension plan benefits payable at age 65 from a prior employer other than a Textron employer.  The reduction for any prior employer plans shall be the actuarial equivalent of a life annuity.  The net Target Benefit after reduction for any prior employer plans shall then be multiplied by the Early Retirement Factor as set out in Section 2.03 below.  The product of the net Target Benefit times the Early Retirement Factor shall then be reduced by any and all amounts payable to the Participant at the time of retirement under any qualified or nonqualified Pension Plan.  The reduction for all Pension Plans shall be a Normal Form of Benefit based on the tables in the Pension Plan.  It shall be the obligation of each Participant to disclose to Textron any amounts that might be used under this section to reduce the benefits provided by this Plan.  Such disclosure shall include information on annuity payments and lump-sum cash payments from other plans.	
 
2.03	The Participant’s benefits under this Plan shall be based on the Participant’s age at retirement (including death or disability) in accordance with the following schedule:	
 
  Age at Retirement 	Early Retirement Factors	
      65                           	100%	
 	 	
       64	90	
 	 	
       63                                     	80	
 	 	
       62                                      	70	
 	 	
       61                                       	60	
 	 	
       60                                           	50	
 	 	
       Less Than 60	0	

 	 	

 

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The Organization and Compensation Committee of the Board shall, in its sole discretion, have the authority to provide a Participant with an enhanced benefit.
 
2.04	The Normal Form of Benefit shall be a life annuity unless the Participant was designated a Participant in this Plan prior to July 23, 1998, in which case the Normal Form of Benefit shall be a Joint and 50% Survivor annuity.  The payment of any benefit under Section 2.01 shall be paid in the Normal Form of Benefit or otherwise as determined by Textron’s Chief Executive Officer in his sole discretion after considering any form of payment requested by the Participant, Surviving Spouse, or other Beneficiary entitled to receive the benefits.  Any form of benefit payable other than the Normal Form shall be the actuarial equivalent of the Normal Form using the factors in the Textron Master Retirement Plan.  For any individual who becomes a Participant after July 23, 1998, their benefit payments will be reduced if they elect a 50% or a 100% Joint and Survivor Benefit.  The Joint and Survivor factors are the same factors provided by the Textron Master Retirement Plan.	
 
2.05	If a Participant dies after age 60 and prior to benefit commencement under this Plan, the Participant’s Surviving Spouse will receive an annuity equal to the amount the Spouse would have received assuming the Participant had requested a Joint and 50% Survivor annuity and retired the day before he died.	
 
Article III—Unfunded Plan
 
3.01	Benefits to be provided under this Plan are unfunded obligations of Textron.  Nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, such individual policies and the proceeds therefrom shall at all times remain the sole property of Textron and neither the Participants whose lives are insured nor their Beneficiaries shall have any ownership rights in such policies of insurance.	
 
3.02	The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	
 
3.03	No Participant shall be required or permitted to make contributions to this Plan.	

 
 
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Amended and Restated January 3, 2010	Appendix A
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Article IV—Plan Administration
 
4.01	(a)	Textron shall be the plan administrator of this Plan and shall be solely responsible for its general administration and interpretation.  Textron shall have all such powers as may be necessary to carry out the respective provisions hereof.  Textron may from time to time establish rules for the administration of this Plan and the transaction of its business.  Subject to Section 4.05, any action by Textron shall be final, conclusive, and binding on each Participant and all persons claiming by, through, or under any Participant.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 4.02.	
 
 	(b)	Notwithstanding any provision in this Plan to the contrary, the Organization and Compensation Committee of the Board shall render all decisions under this Plan (including participation, Plan benefits, and benefit distributions) affecting Textron’s Chief Executive Officer.	
 
 	(c)	Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan, and shall make all such determinations and interpretations in a nondiscriminatory manner.	
 
 	(d)	Notwithstanding any provision to the contrary, no benefit shall be paid to any Participant while employed by Textron.	
       
4.02	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to administer the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board or officer of Textron to make a further delegation of the authority to administer the Plan.	
 
4.03	Textron may employ or engage such agents, accountants, actuaries, counsel, other experts, and other persons as it deems necessary or desirable in connection with the interpretation and administration of this Plan.  Textron shall be entitled to rely upon all certifications made by an accountant selected by Textron.  Textron and its committees, officers, directors, and employees shall not be liable for any action taken, suffered, or omitted by them in good faith in reliance upon the advice or opinion of any such agent, accountant, actuary, counsel, or other expert.  All action so taken, suffered, or omitted shall be conclusive upon each of them and upon all other persons interested in this Plan.	
 
4.04	Textron may require proof of death or total disability of any Participant, former Participant or beneficiary and evidence of the right of any person to receive any Plan benefit.	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	Appendix A
Page 6	

 

 
 
4.05	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and resolved pursuant to the claims procedure in Section 4.06 of the Supplemental Retirement Plan for Textron Key Executives.	
 
4.06	Textron shall withhold from benefits paid under this Plan any taxes or other amounts required to be withheld by law.	
 
Article V—Miscellaneous
 
5.01	Unless a contrary or different meaning is expressly provided, each use in this Plan of the masculine or feminine gender shall include the other and each use of the singular number shall include the plural.	
 
5.02	(a)	Textron shall recognize the right of an alternate payee named in a domestic relations order to receive all or a portion of a Participant’s benefit under the Plan, provided that (1) the domestic relations order would be a “qualified domestic relations order” within the meaning of IRC Section 414(p) of the Code if IRC Section 414(p) were applicable to the Plan (except that the order may require payment to be made to the alternate payee before the Participant’s earliest retirement age), (2) the domestic relations order does not purport to give the alternate payee any right to assets of any Textron Company, and (3) the domestic relations order does not purport to allow the alternate payee to defer payments beyond the date when the benefits assigned to the alternate payee would have been paid to the Participant.	
 
 	(b)	Except as provided in subsection (a) concerning domestic relations orders, no amount payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind to the extent that the assignment or other action would cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  A Participant may, with the written approval of Textron, make an assignment of a benefit for estate planning or similar purposes if the assignment does not cause the amount to be included in the Participant’s gross income or treated as a distribution for federal income tax purposes.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant, Surviving Spouse, or Beneficiary.	
 
5.03	Notwithstanding any Plan provision to the contrary, the Board shall have the right to amend, modify, suspend, or terminate this Plan at any time by written notification of such action; provided, however, that no amendment, modification, suspension, or termination:	

 
 
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Amended and Restated January 3, 2010	Appendix A
Page 7	

 

 
 
 	(a)	Shall reduce an amount payable under Article II before the effective date of the amendment, modification, suspension or termination; or	
 
 	(b)	Shall be made to Section 5.03 or 5.05 following a Change in Control.	
 
5.04	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
5.05	If after a Change in Control any claim is made or any litigation is brought by a Participant or beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in the next following sentence shall be liable, jointly and severally, to indemnify the Participant or beneficiary for the Participant’s or beneficiary’s reasonable attorney’s fees and disbursements incurred in any such claim or litigation and for prejudgment interest at the Bankers Trust Company prime interest rate on any money award or judgment obtained by the Participant or beneficiary.  In the event that the Participant retires or his employment otherwise terminates at any time after a “Change in Control” as defined below, the Participant shall, in lieu of the benefit payable under Article II, receive a benefit equal to the actuarial present value at termination of the benefit the Participant would have received had the Participant terminated employment at age 65, based upon the Participant’s Average Compensation as of the date of her termination.  If the Participant terminates within 24 months after the Change in Control, such benefit shall be paid in a lump sum.  If the Participant terminates more than 24 months after the Change in Control, then the Participant shall be paid in an annuity.  Textron shall select the discount rate and mortality table to be used in determining the actuarial present values.
 
For purposes of this Plan, a “Change in Control” shall occur if (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than Textron, any trustee or other fiduciary holding Textron common stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially the same proportions as their ownership of Textron common stock, is or becomes (other than by acquisition from Textron or a related company) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or whose nomination for election by Textron’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose	

 
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Amended and Restated January 3, 2010	Appendix A
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 	election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof, or (iii) stockholders of Textron approve a merger or consolidation of Textron with any other corporation, other than a merger or consolidation which would result in the voting securities of Textron outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of Textron approve a plan of complete liquidation of Textron or an agreement for the sale or disposition by Textron of all or substantially all of Textron’s assets.	
 
5.06	This Plan shall be construed in accordance with the laws of the State of Delaware.	
 
5.07	Nothing contained in this Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant to be continued in any capacity with, or as an employee of, any Textron Company.	

 
 
Supplemental Retirement Plan for Textron Key Executives
Amended and Restated January 3, 2010	Appendix A
Page 9	

EXHIBIT 10.6

SURVIVOR BENEFIT PLAN
FOR TEXTRON KEY EXECUTIVES
 
(As amended and restated effective January 3, 2010)

This Plan has been established for the benefit of designated Textron Key Executives to secure their goodwill, loyalty, and achievement and to attract and retain persons of outstanding competence.

This Plan was amended and restated effective July 25, 2007, to ensure that it will be a death benefit plan that will be exempt from Section 409A of the Internal Revenue Code.

This Plan has been amended from time to time since the previous restatement.  This restatement of the Plan reflects all amendments that are effective through the date of this restatement.

ARTICLE I – DEFINITIONS

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

1.01	“Base Salary” means the annual rate of base salary of a Participant from a Textron Company at the time of the Participant’s death or termination of Textron Employment, as applicable.  “Base Salary” shall not include incentive payments, bonuses, supplemental unemployment benefits, contributions to any profit sharing or bonus plan, or expense reimbursements.  Any Base Salary, the receipt of which by the Participant is deferred under the Textron Savings Plan or the Deferred Income Plan for Textron Key Executives, shall be Base Salary under this Plan.  Textron shall determine whether a particular item of income constitutes Base Salary if a question arises.	

1.02	“Beneficiary” means the person or persons entitled under this Plan to receive a Survivor Benefit after a Participant’s death.	

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

1.04	“Key Executive” means an employee of a Textron Company who has been and continues to be designated as a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	

1.05	“Participant” means a present Key Executive or a former Key Executive who continues to be designated a Participant under the Plan by Textron’s Chief Executive Officer and Chief Human Resources Officer.	

1.06	“Plan” means this Survivor Benefit Plan for Textron Key Executives, as amended and restated from time to time.	

1.07	“Survivor Benefit” means a benefit payable under Article III of this Plan.	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
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1.08	“Textron” means Textron, Inc., a Delaware corporation, and any successor of Textron Inc.	

1.09	“Textron Company” means Textron or any company controlled by or under common control with Textron.	

1.10	“Textron Employment” means employment with a Textron Company.  Leaves of absence for such periods and purposes as are approved by Textron and transfers of employment within or between Textron Companies shall not be deemed interruptions of Textron Employment.	

1.11	“Total Disability” has the same meaning under this Plan as in the Textron Master Retirement Plan with respect to any Participant at the date his Textron Employment ends.	

ARTICLE II – PARTICIPATION

No Key Executive shall be designated as a Participant in this Plan after July 31, 2003.  A Beneficiary shall be eligible for benefits only as hereinafter provided.

ARTICLE III – SURVIVOR BENEFIT

3.01	If a Key Executive’s Textron Employment ends because of death, his Beneficiary shall receive a Survivor Benefit equal to three times the Key Executive’s Base Salary at the time of his death.	

3.02	If a Participant’s Textron Employment ends (a) at or after age 62 (other than for less than acceptable performance), (b) as a result of Total Disability, or (c) under circumstances approved in writing for this specific purpose by the Chief Executive Officer and the Chief Human Resources Officer of Textron, or because of death while she is no longer a Key Executive, her Beneficiary shall receive upon her death a Survivor Benefit equal to two times the Participant’s Base Salary at the time her Textron Employment ended.	

3.03	If a Participant’s Textron Employment ends other than as described in Sections 3.01 or 3.02, no Survivor Benefit shall be payable on his account.	

ARTICLE IV – PAYMENT OF SURVIVOR BENEFIT

4.01	Textron shall choose in its sole discretion the method described in Section 4.02 by which a Survivor Benefit payable under Article III shall be distributed, after considering any method of payment requested by the Participant or by the Beneficiary entitled to receive the benefit.	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 2	

 

 
 
4.02	Subject to Section 4.03, below, as soon as practical after a Survivor Benefit becomes payable under Article III, Textron shall distribute the benefit in accordance with any one of the following methods:	

(a)           Payment in a single sum; or

 	(b)	Payment in a number of annual installments, each payable as soon as practical after the end of the each successive calendar year, over a period not exceeding ten years from the date on which the benefit first becomes payable.  The annual installments shall be calculated in a manner which provides substantially equal installments or shall be calculated each year by dividing the unpaid amount of the benefit as of January 1 of that year by the remaining number of unpaid installments; or	

(c)           Payment through a combination of the foregoing methods.

 	Simple interest shall be credited on any unpaid balance of a Survivor Benefit based on an average of the monthly Moody’s Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such average is no longer published, a substantially similar average selected by Textron.	
 
4.03	Effective for payments on or after January 1, 2008, Textron has exercised its discretion pursuant to Section 4.01 to determine that all Survivor Benefits shall be paid in a single sum as soon as practical after a Survivor Benefit becomes payable under Article III.   If a Beneficiary is receiving installment payments as of July 25, 2007, the Plan shall pay the remaining installments in a single sum as soon as practical after January 1, 2008; and Textron may, in its sole discretion, direct the Plan to pay the remaining installments to the Beneficiary in a single sum before January 1, 2008.	
 
4.04	(a)	Upon a Change in Control as defined in Section 8.03, Textron shall establish an irrevocable grantor trust, as described in Section 677 of the Internal Revenue Code (a “rabbi trust”), to accumulate assets that will assist Textron in meeting its obligations under the Plan.  The rabbi trust shall have an independent trustee selected by Textron.  The trust agreement with respect to the rabbi trust shall provide that the assets of the rabbi trust shall at all times be subject to the claims of Textron’s general creditors in the event of the bankruptcy or insolvency of Textron, but shall in all other circumstances be used solely to pay Survivor Benefits under the Plan and reasonable expenses of administering the rabbi trust until all Survivor Benefits have been paid in full.	
 
 	(b)	Upon a Change in Control as defined in Section 8.03, Textron shall transfer assets to the rabbi trust described in Section 4.04(a).  The assets shall consist of life insurance, cash, or a combination of life insurance and cash.  The target value of the assets to be transferred shall equal the sum of the following:  (a) two times each Participant’s Base Salary immediately before the Change in Control, if her Textron Employment had not ended before that date; and (b) two times each	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 3	

 

 
 
 	 	Participant’s Base Salary at the time her Textron Employment ended, if she is then a former employee; and (c) the balance of the Survivor Benefit, calculated immediately before the Change in Control, if the Participant had died before the Change in Control.	
 
ARTICLE V – BENEFICIARIES

5.01	A Participant may designate one or more Beneficiaries to receive a Survivor Benefit payable on the Participant’s death.  A Beneficiary may designate one or more Beneficiaries to receive any unpaid balance of a Survivor Benefit, to the extent this designation does not contravene any designation filed by the deceased Participant through whom the Beneficiary himself claims under this Plan.  Beneficiaries shall be designated only upon forms made available by or satisfactory to Textron and filed by the Participant or Beneficiary with Textron or its designee.	

5.02	A Participant or Beneficiary may change her own designation of Beneficiary by filing a substitute designation of Beneficiary with Textron.	

5.03	In the absence of an effective designation of Beneficiary, or if all persons so designated shall have predeceased the Participant/Beneficiary or shall have died before the complete distribution of Plan benefits, the balance of Plan benefits shall be paid to the Participant/ Beneficiary’s surviving spouse or, if none, to the Participant/Beneficiary’s issue per stirpes or, if no issue, to the executor or administrator of the Participant/Beneficiary’s estate.	

5.04	If a Participant’s Base Salary or a Survivor Benefit is community property, any designation of Beneficiary shall be valid or effective only as permitted under applicable law.	

5.05	If a Survivor Benefit is payable to a minor or person declared incompetent or to a person incapable of handling the disposition of his property, Textron may pay such Survivor Benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or person.  Textron may require proof of incompetency, minority, incapacity or guardianship as it deems appropriate prior to distribution of the Survivor Benefit.  Such distribution shall completely discharge any Textron Company from all liability with respect to such benefit.	

ARTICLE VI – UNFUNDED PLAN

6.01	Benefits to be provided under this Plan are unfunded obligations of Textron.  Before a Change in Control occurs, nothing contained in this Plan shall require Textron to segregate any monies from its general funds, to create any trust, to make any special deposits, or to purchase any policies of insurance with respect to such obligations.  If Textron elects to purchase individual policies of insurance on one or more of the Participants to help finance its obligations under this Plan, then such individual policies	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 4	

 

 

 	and the proceeds therefrom shall at all times remain the sole property of Textron, and neither the Participants whose lives are insured nor their Beneficiaries shall have any ownership rights in such policies of insurance.	
 
6.02	This Plan is intended to provide benefits for a select group of management employees who are highly compensated, pursuant to section 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.	

6.03	No Participant shall be required or permitted to make contributions to this Plan.	

ARTICLE VII – PLAN ADMINISTRATION

7.01	Textron shall be the plan administrator of this Plan and shall be solely responsible for its general administration and interpretation.  Textron shall have all such powers as may be necessary to carry out the provisions hereof.  Textron may from time to time establish rules for the administration of this Plan and the transaction of its business.  Subject to Section 7.05, any action by Textron shall be final, conclusive and binding on each Participant and all persons claiming by, through or under any Participant.  Textron (and any person or persons to whom it delegates any of its authority as plan administrator) shall have discretionary authority to determine eligibility for Plan benefits, to construe the terms of the Plan, and to determine all questions arising in the administration of the Plan, and shall make all such determinations and interpretations in a nondiscriminatory manner.  The Board may exercise Textron’s authority as plan administrator, and the authority to administer the Plan may be delegated as provided in Section 7.02.	

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

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

7.04	Textron may require proof of the death or Total Disability of any Participant or Beneficiary and evidence of the right of any person to receive any Survivor Benefit.	

7.05	A Beneficiary who believes that he is being denied a benefit to which he is entitled under the Plan (referred to in this Section 7.05 as a “Claimant”) may file a written request with	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 5	

 

 

 	Textron setting forth the claim.  Textron shall consider and resolve the claim as set forth below.  	
 
 	(a)	Upon receipt of a claim, Textron shall advise the Claimant that a response will be forthcoming within 90 days.  Textron may, however, extend the response period for up to an additional 90 days for reasonable cause, and shall notify the Claimant of the reason for the extension and the expected response date.  Textron shall respond to the claim within the specified period.  	

 	(b)	If the claim is denied in whole or part, Textron shall provide the Claimant with a written decision, using language calculated to be understood by the Claimant, setting forth (1) the specific reason or reasons for such denial; (2) the specific reference to relevant provisions of this Plan on which such denial is based; (3) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary; (4) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; (5) the time limits for requesting a review of the claim; and (6) the Claimant’s right to bring an action for benefits under Section 502 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).	

 	(c)	Within 60 days after the Claimant’s receipt of the written decision denying the claim in whole or in part, the Claimant may request in writing that Textron review the determination.  The Claimant or his duly authorized representative may, but need not, review the relevant documents and submit issues and comment in writing for consideration by Textron.  If the Claimant does not request a review of the initial determination within such 60-day period, the Claimant shall be barred from challenging the determination.	

 	(d)	Within 60 days after Textron receives a request for review, it will review the initial determination.  If special circumstances require that the 60-day time period be extended, Textron will so notify the Claimant and will render the decision as soon as possible, but no later than 120 days after receipt of the request for review.	
 
 	(e)	All decisions on review shall be final and binding with respect to all concerned parties.  The decision on review shall set forth, in a manner calculated to be understood by the Claimant, (1) the specific reasons for the decision, shall including references to the relevant Plan provisions upon which the decision is based; (2) the Claimant’s right to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information, relevant to his benefits; and (3) the Claimant’s right to bring a civil action under ERISA section 502(a).	

7.06	Textron shall withhold from benefits paid under this Plan any taxes or other amounts required to be withheld by law.	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 6	

 

 
 
ARTICLE VIII – MISCELLANEOUS

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

8.02	No amount payable under this Plan at any time shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance of any kind unless specifically approved in writing in advance by Textron or its designee.  Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such Benefit, whether presently or subsequently payable, shall be void unless so approved.  Except as required by law, no benefit payable under this Plan shall in any manner be subject to garnishment, attachment, execution or other legal process, or be liable for or subject to the debts or liability of any Participant or Beneficiary.	

8.03	Notwithstanding any Plan provision to the contrary, the Board or its designee shall have the right to amend, modify, suspend or terminate this Plan at any time by written ratification of such action; provided, however, that no amendment, modification, suspension or termination:	

 	(a)	Shall adversely affect the right of a Beneficiary to receive a Survivor Benefit, as described in Article III, payable as the result of the Participant’s death or action taken pursuant to Section 3.02 that occurred before the effective date of such amendment, modification, suspension or termination; or	

 	(b)	Shall be made to Article IV or this Section 8.03 following a Change in Control.  If after a Change in Control any claim is made or any litigation is brought by  a Participant or Beneficiary to enforce or interpret any provision contained in this Plan, Textron and the “person” or “group” described in the next following sentence shall be liable, jointly and severally, to indemnify the Participant or Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees and disbursements incurred in any such claim or litigation and for prejudgment interest at the Prime Rate as quoted in the Money Rates section of The Wall Street Journal on any money award or judgment obtained by the Participant or Beneficiary.  For purposes of this Plan, a “Change in Control” shall occur if (i)  any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other than Textron, any trustee or other fiduciary holding Textron Common Stock under an employee benefit plan of Textron or a related company, or any corporation which is owned, directly or indirectly, by the stockholders of Textron in substantially the same proportions as their ownership of Textron Common Stock, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding voting stock of Textron, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (and any new director whose election by the Board or whose nomination for election by the stockholders of Textron was	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 7	

 

 

 	 	approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof, or (iii) the stockholders of Textron approve a merger or consolidation of Textron with any other corporation, other than a merger or consolidation which would result in the voting securities of Textron outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of Textron or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of Textron approve a plan of complete liquidation of Textron or an agreement for the sale or disposition by Textron of all or substantially all of Textron’s assets.	
 
8.04	The Board may, to the extent permitted by applicable law, make a non-exclusive written delegation of the authority to amend the Plan to a committee of the Board or to one or more officers of Textron.  The Board may, to the extent permitted by applicable law, authorize a committee of the Board to make a further delegation of the authority to amend the Plan.	
 
8.05	This Plan shall be construed in accordance with the laws of the State of Delaware.	

8.06	Nothing contained in the Plan shall be construed as a contract of employment between any Participant and any Textron Company, or to suggest or create a right in any Participant to be continued in employment as a Key Executive or other employee of any Textron Company.	

8.07	Textron, the Chief Executive Officer, and the Chief Human Resources Officer may impose such other lawful terms and conditions on participation in this Plan as deemed desirable.	

 
 
Survivor Benefit Plan for Textron Key Executives
Amended and Restated January 3, 2010	 
Page 8	

EXHIBIT 12.1

TEXTRON INC.
MANUFACTURING GROUP
COMPUTATION OF RATIO OF INCOME TO FIXED CHARGES
(unaudited)
(In millions, except ratio)

 	 	Three Months
Ended
April 3, 2010	 	
Fixed charges:	 	 	 	
 Interest expense*	 	$	 46	 	
 Estimated interest portion of rents	 	 	 8	 	
 Total fixed charges	 	$	 54	 	

Income:	 	 	 	 	
 Income from continuing operations before income taxes	 	$	 11	 	
 Fixed charges	 	 	 54	 	
    Dividends received from Finance group	 	 	 125	 	
   Capital contributions paid to Finance group under
Support Agreement	 	 	 (75	)	
 Eliminate pretax loss of Finance group	 	 	 60	 	
 Adjusted income	 	$	 175	 	
 	 	 	 	 	
Ratio of income to fixed charges	 	 	 3.24	 	

*	Includes interest expense on all third-party indebtedness, except for interest related to unrecognized tax benefits, which is included in income tax expense.	

EXHIBIT 12.2

TEXTRON INC.
INCLUDING ALL MAJORITY-OWNED SUBSIDIARIES
COMPUTATION OF RATIO OF INCOME TO FIXED CHARGES
(unaudited)
(In millions, except ratio)

 	 	Three Months
Ended
April 3, 2010	 	
Fixed charges:	 	 	 	
 Interest expense*	 	$	 71	 	
 Estimated interest portion of rents	 	 	 8	 	
 Total fixed charges	 	$	 79	 	

Income:	 	 	 	 	
 Income from continuing operations before income taxes	 	$	 11	 	
 Fixed charges	 	 	 79	 	
 Adjusted income	 	$	 90	 	
 	 	 	 	 	
Ratio of income to fixed charges	 	 	 1.14	 	

  *	Includes interest expense on all third-party indebtedness, except for interest related to unrecognized tax benefits, which is included in income tax expense.	

Exhibit 31.1

 
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Scott C. Donnelly, President and Chief Executive Officer of Textron Inc. certify that:
 
1.	I have reviewed this quarterly report on Form 10-Q of Textron Inc.;	
 
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 
 	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	
 
 	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	
 
 	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

 
 
Date:	April 30, 2010	 	/s/ Scott C. Donnelly	
 	 	 	Scott C. Donnelly
President and Chief Executive Officer	

Exhibit 31.2

 
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Frank T. Connor, Executive Vice President and Chief Financial Officer of Textron Inc. certify that:
 
1. 	I have reviewed this quarterly report on Form 10-Q of Textron Inc.;	
 
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
 
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
 
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 
 	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
 
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	
 
 	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	
 
 	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

 
Date:	April 30, 2010	 	/s/ Frank T. Connor	
 	 	 	Frank T. Connor
Executive Vice President and Chief Financial Officer	

Exhibit 32.1

 
TEXTRON INC.
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 
In connection with the Quarterly Report of Textron Inc. (the "Company") on Form 10-Q for the three months ended April 3, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Scott C. Donnelly, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)  	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
(2)  	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

 
Date:	April 30, 2010	 	/s/ Scott C. Donnelly	
 	 	 	Scott C. Donnelly
President and Chief Executive Officer	

Exhibit 32.2

 
 
TEXTRON INC.
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Textron Inc. (the "Company") on Form 10-Q for the three months ended April 3, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Frank T. Connor, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)  	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
(2)  	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

 
Date:	April 30, 2010	 	/s/ Frank T. Connor	
 	 	 	Frank T. Connor
Executive Vice President and Chief Financial Officer	

EXHIBIT 3.1

RESTATED CERTIFICATE OF INCORPORATION

OF

TEXTRON INC.

*  *  *  *  *
UNDER SECTION 245 OF THE GENERAL CORPORATION LAW
*  *  *  *  *

 TEXTRON INC., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

 1.           The name of the corporation is TEXTRON INC. The name under which it was originally incorporated is American Textron Inc.

 2.           The original Certificate of Incorporation of the corporation was filed with the Secretary of State on July 31, 1967, and the most recent Restated Certificate of Incorporation (hereinafter the “Certificate of Incorporation”) was filed with the Secretary of State on January 29, 1998.

 3.           This Restated Certificate of Incorporation was duly adopted by the Board of Directors in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware and only restates and integrates and does not further amend the provisions of the corporation's Certificate of Incorporation as heretofore amended or supplemented. There is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

 4.           The text of the Certificate of Incorporation of said TEXTRON INC., as heretofore amended or supplemented, is hereby restated and integrated, without further amendment, to read as follows:

FIRST:   The name of the corporation (hereinafter called the "Corporation") is

TEXTRON INC.

             SECOND:   The respective names of the county and of the city within the county in which the registered office of the Corporation is to be located in the State of Delaware are the County of New Castle and the City of Wilmington. The name of the registered agent of the Corporation is The Corporation Trust Company. The street and number of said principal office and the address by street and number of said registered agent is No. 1209 Orange Street, in the City of Wilmington, State of Delaware.

             THIRD:   The nature of the business of the Corporation and the objects or purposes to be transacted, promoted or carried on by it are as follows:

 1.           To make, manufacture, produce, prepare, process, purchase or otherwise acquire, and to hold, use, sell, import, export or otherwise trade or deal in and with goods, wares, products, merchandise, machines, machinery, appliances and apparatus, of every kind, nature and description, and, in general, to engage or participate in any manufacturing or other business of any kind or character whatsoever, including, but not by way of limitation, importing, exporting,

 
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mining, quarrying, producing, farming, agriculture, forestry, construction, management, advisory, mercantile, financial or investment business, any business engaged in rendering any manner of services and any business of buying, selling, leasing or dealing in properties of any and all kinds, whether any such business is located in the United States of America or any foreign country, and whether or not related to, conducive to, incidental to, or in any way connected with, the foregoing business.
 2.           To engage in research, exploration, laboratory and development work relating to any material, substance, compound or mixture now known or which may hereafter be known, discovered or developed and to perfect, develop, manufacture, use, apply and generally to deal in and with any such material, substance, compound or mixture.

 3.           To purchase, lease or otherwise acquire, to hold, own, use, develop, maintain, manage and operate, to sell, transfer, lease, assign, convey, exchange or otherwise turn to account or dispose of, and generally, to deal in and with, personal and real property, tangible or intangible, of every kind and description, wheresoever situated, and any and all rights, concessions, interests and privileges therein.

 4.           To adopt, apply for, obtain, register, purchase, lease or otherwise acquire, to maintain, protect, hold, use, own, exercise, develop, manufacture under, operate and introduce and to sell and grant licenses or other rights in respect of, assign or otherwise dispose of, turn to account, or in any manner deal with and contract with reference to, any trademarks, trade names, patents, patent rights, concessions, franchises, designs, copyrights and distinctive marks and rights analogous thereto and inventions, devices, improvements, processes, recipes, formulae and the like, including, but not by way of limitation, such thereof as may be covered by, used in connection with, or secured or received under, Letters Patent of the United States of America or elsewhere, and any licenses and rights in respect thereof, in connection therewith or appertaining thereto.

 5.           To purchase or otherwise acquire and to hold, pledge, sell, exchange or otherwise dispose of securities (which term includes any shares of stock, bonds, debentures, notes, mortgages or other obligations and any certificates, receipts or other instruments representing rights to receive, purchase or subscribe for the same or representing any other rights or interests therein or in any property or assets) created or issued by any person, firm, association, corporation (including, to the extent permitted by the laws of the State of Delaware, the Corporation) or government or subdivision, agency or instrumentality thereof; to make payment therefore in any lawful manner; and to exercise, as owner or holder thereof, any and all rights, powers and privileges in respect thereof (to the extent aforesaid).
 6.           To make, enter into, perform and carry out contracts of every kind and description with any person, firm, association, corporation or government or subdivision, agency or instrumentality thereof; to endorse or guarantee the payment of principal, interest or dividends upon, and to guarantee the performance of sinking fund or other obligations of, any securities or the payment of a certain amount per share in liquidation of the capital stock of any other corporation; and to guarantee in any way permitted by law the performance of any of the contracts or other undertakings of any person, firm, association, corporation or government or subdivision, agency or instrumentality thereof.

 7.           To acquire by purchase, exchange or otherwise, all, or any part of, or any interest in, the properties, assets, business and good will of anyone or more persons, firms, associations or corporations heretofore or hereafter engaged in any business whatsoever; to pay for the same in
 
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cash, property or its own or other securities; to hold, operate, lease, reorganize, liquidate, sell or in any manner dispose of the whole or any part, thereof; to assume or guarantee, in connection therewith, the performance of any liabilities, obligations or contracts of such persons, firms, associations or corporations; and to conduct the whole or any part of any business thus acquired.
 8.           To lend its uninvested funds from time to time to such extent, to such persons, firms, associations, corporations or governments or subdivisions, agencies or instrumentalities thereof, and on such terms and on such security, if any, as the Board of Directors of the Corporation (hereinafter called the "Board of Directors") may determine.

 9.           To borrow money for any of the purposes of the Corporation, from time to time, and without limit as to amount; to issue and sell from time to time, its own securities in such amounts, on such terms and conditions, for such purposes and for such consideration, as may now be or hereafter shall be permitted by the laws of the State of Delaware; and to secure such securities by mortgage upon, or the pledge of, or the conveyance or assignment in trust of, the whole or any part of the properties, assets, business and good will of the Corporation then owned or thereafter acquired.
 10.           To promote, organize, manage, aid or assist, financially or otherwise, persons, firms, associations or corporations engaged in any business whatsoever; and to assume or underwrite the performance of all or any of their obligations.
 11.           To organize or cause to be organized under the laws of the State of Delaware, any other state or states of the United States of America, the District of Columbia, any territory, dependency, colony or possession of the United States of America or of any foreign country, a corporation or corporations for the purpose of transacting, promoting or carrying on any or all objects or purposes for which the Corporation is organized; to dissolve, wind up, liquidate, merge or consolidate any such corporation or corporations or to cause the same to be dissolved, wound up, liquidated, merged or consolidated; and, subject to the laws of the State of Delaware, to consolidate or merge with or into one or more other corporations organized under the laws of the State of Delaware or under the laws of any other state or states in the United States of America, the District of Columbia, any territory, dependency, colony or possession of the United States of America or of any foreign country if the laws under which said other corporation or corporations are formed shall permit such consolidation or merger.

 12.           To conduct its business in any and all of its branches and maintain offices both within and without the State of Delaware in any and all states of the United States of America, in the District of Columbia, in any or all territories, dependencies, colonies or possessions of the United States of America and in foreign countries.

 13.           To such extent as a business corporation organized under the laws of the State of Delaware may now or hereafter lawfully do, to do, either as principal or agent and either alone or through subsidiaries or in connection with other persons, firms, associations or corporations, all and everything necessary, suitable, convenient or proper for, or in connection with, or incident to, the accomplishment of any of the purposes or the attainment of anyone or more of the objects herein enumerated or designed directly or indirectly to promote the interests of the Corporation or to enhance the value of its properties; and in general to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware and to do any and all things and exercise any and all powers, rights and privileges which a business corporation may now or hereafter be organized or authorized to do or to exercise under the laws of the State of Delaware.

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 14.           Whenever the context permits, the following provisions shall govern the construction of the paragraphs of these purposes; no specified enumeration shall be construed as restricting in any way any general language; any word, whether in the singular or plural shall be construed to mean both the singular and the plural; any phrase in the conjunctive or in the disjunctive shall include both the conjunctive and disjunctive; the mention of the whole shall include any part or parts; anyone or more or all of the purposes set forth may be pursued from time to time and whenever deemed desirable; verbs in the present or future tense shall be construed to include both the present and future tenses or either of them.

FOURTH:   The total number of shares of all classes of stock which the Corporation shall have authority to issue is 515,000,000 of which 15,000,000 shares of the par value  of $.01 each are to be of a class designated "Preferred Stock" and 500,000,000 shares of the par value of $.125 each are to be of a class designated "Common Stock".

 The voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the classes of stock of the Corporation which are fixed by this Certificate of Incorporation, and the authority vested in the Board of Directors to fix by resolution or resolutions providing for the issue of Preferred Stock the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the shares of Preferred Stock which are not fixed by this Certificate of Incorporation are as follows:

(a)      The Preferred Stock may be issued from time to time in one or more series of any number of shares; provided that the aggregate number of shares issued and not canceled of any and all such series shall not exceed the total number of shares of Preferred Stock hereinabove authorized. Each series of Preferred Stock shall be distinctively designated by letter or descriptive words. All series of Preferred Stock shall rank equally and be identical in all respects except as permitted by the provisions of paragraphs (b) and (f) of this Article FOURTH.

(b)      Authority is hereby vested in the Board of Directors from time to time to issue the Preferred Stock as Preferred Stock of any series and in connection with the creation of each such series to fix by resolution or resolutions providing for the issue of shares thereof the voting powers, if any, the designation, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such series to the full extent now or hereafter permitted by this Certificate of Incorporation and the laws of the State of Delaware, in respect of the matters set forth in the following subparagraphs (1) to (8), inclusive:

(1)      The distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased or decreased (but not below the number of shares thereof then outstanding) from time to time by action of the Board of Directors;

(2)      The dividend rate of such series, any preferences to or provisions in relation to the dividends payable on any other class or classes or of any other series of stock, and any limitations, restrictions or conditions on the payment of dividends;

(3)      The price or prices at which, and the terms and conditions on which, the shares of such series may be redeemed by the Corporation;

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(4)      The amount or amounts payable upon the shares of such series in the event of any liquidation, dissolution or winding up of the Corporation;

(5)      Whether or not the shares of such series shall be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series and, if so entitled, the amount of such fund and the manner of its application;

(6)      Whether or not the shares of such series shall be made convertible into, or exchangeable for, shares of any other class or classes of stock of the Corporation or shares of any other series of Preferred Stock, and, if made so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;

(7)      Whether or not the shares of such series shall have any voting powers and, if voting powers are so granted, the extent of such voting powers; and

(8)      Whether or not the issue of any additional shares of such series or of any future series in addition to such series shall be subject to restrictions in addition to the restrictions, if any, on the issue of additional shares imposed in the resolution or resolutions fixing the terms of and outstanding series of Preferred Stock theretofore issued pursuant to this Article FOURTH and, if subject to additional restrictions, the extent of such additional restrictions.

(c)      The holders of Preferred Stock of each series shall be entitled to receive, when and as declared by the Board of Directors, dividends in cash at the rate for such series fixed by the Board of Directors as provided in paragraph (b) of this Article FOURTH, and no more, payable quarterly on the first days of January, April, July and October or of such other months as may be designated by the Board of Directors (each of the quarterly periods ending on the first day of January, April, July and October in each year, or on the first days of such other months, respectively, being hereinafter called a dividend period), in each case from the date of cumulation (as defined in paragraph (h) of this Article FOURTH) of such series. Except as may otherwise be provided in the resolution or resolutions providing for the issue of any given series of Preferred Stock, dividends on Preferred Stock shall be cumulative (whether or not there shall be net profits or net assets of the Corporation legally available for the payment of such dividends), so that, if at any time full cumulative dividends (as defined in paragraph (h) of this Article FOURTH) upon the Preferred Stock of all series to the end of the last completed dividend period shall not have been paid or declared and a sum sufficient for payment thereof set apart, the amount of the deficiency shall be fully paid, but without interest, or dividends in such amount shall have been declared on each such series and a sum sufficient for the payment thereof shall have been set apart for such payment, before any sum or sums shall be set aside for or applied to the purchase or redemption of Preferred Stock of any series (either pursuant to any applicable sinking fund provisions or any redemptions authorized pursuant to paragraph (g) of this Article FOURTH or otherwise) or set aside for or applied to the purchase of Common Stock and before any dividend shall be declared or paid or any other distribution ordered or made upon the Common Stock (other than a dividend payable in Common Stock); provided, however, that any moneys deposited in the sinking fund provided for any series of Preferred Stock in the resolution or resolutions providing for the issue of shares of said series, in compliance with the provisions of such sinking fund and of this paragraph (c), may thereafter be applied to the purchase or redemption of Preferred

5

Stock in accordance with the terms of such sinking fund whether or not at the time of such application full cumulative dividends upon the outstanding Preferred Stock of all series to the end of the last completed dividend period shall have been paid or declared and set apart for payment. All dividends declared upon the Preferred Stock of the respective series outstanding shall be declared pro rata, so that the amounts of dividends declared per share on the Preferred Stock of different series shall in all cases bear to each other the same ratio that accrued dividends per share on the shares of such respective series bear to each other.

(d)      Before any sum or sums shall be set aside for or applied to the purchase of Common Stock and before any dividends shall be declared or paid or any distribution ordered or made upon the Common Stock (other than a dividend payable in Common Stock), the Corporation shall comply with the sinking fund provisions, if any, of any resolution or resolutions providing for the issue of any series of Preferred Stock any shares of which shall at the time be outstanding.

(e)      Subject to the provisions of paragraphs (c) and (d) of this Article FOURTH, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to receive such dividends as from time to time may be declared by the Board of Directors.

(f)      In the event of any liquidation, dissolution or winding up of the Corporation, the holders of Preferred Stock of each series then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, whether from capital, surplus or earnings, before any payment shall be made to the holders of Common Stock, an amount determined as provided in paragraph (b) of this Article FOURTH for every share of their holdings of Preferred Stock of such series. If upon any liquidation, dissolution or winding up of the Corporation the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of Preferred Stock of all series the full account to which they respectively shall be entitled, the holders of Preferred Stock of all series shall share ratably in any distribution of assets according to the respective amounts which would be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to Preferred Stock of all series were paid in full. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment shall have been made to the holders of Preferred Stock of the full amount to which they shall be entitled as aforesaid, the holders of Common Stock shall be entitled, to the exclusion of the holders of Preferred Stock of any and all series, to share, ratably according to the number of shares of Common Stock held by them, in all remaining assets of the Corporation available for distribution to its stockholders. Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation, nor the sale, transfer or lease of all or substantially all the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. Notwithstanding the foregoing provisions of this paragraph (f), it may be provided as to anyone or more series of Preferred Stock that upon liquidation, dissolution or winding up of the Corporation the shares of such series shall not have any preference, other than to be paid out of the assets of the Corporation available for distribution to its stockholders, an amount equal to accrued dividends [as defined in paragraph (h) hereof] and thereafter to share ratably with the holders of Common Stock (and any other class or series having a similar right) in all distributions of assets as they would have shared if all of the shares of such series had been converted into Common Stock immediately before such distribution or to share, in such event, upon such other terms and conditions as may be provided.

 
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(g)      Subject to any requirements which may be applicable to the redemption of any given series of Preferred Stock as provided in any resolution or resolutions providing for the issue of such series of Preferred Stock, the Preferred Stock of all series, or of any series thereof, or any part of any series thereof, at any time outstanding, may be redeemed by the Corporation, at its election expressed by resolution of the Board of Directors, at any time or from time to time, upon not less than 30 days, but not more than 90 days, previous notice to the holders of record of Preferred Stock to be redeemed, given by mail in such manner as may be prescribed by resolution or resolutions of the Board of Directors:

(1)      if such redemption shall be otherwise than by the application of moneys in any sinking fund referred to in paragraph (d) of this Article FOURTH, at the redemption price, fixed as provided in paragraph (b) of this Article FOURTH, at which shares of Preferred Stock of the particular series may then be redeemed at the option of the Corporation and

(2)   if such redemption shall be by the application of moneys in any sinking fund referred to in paragraph (d) of this Article FOURTH, at the redemption price, fixed as provided in paragraph (b) of this Article FOURTH, at which shares of Preferred Stock of the particular series may then be redeemed for such sinking fund;

provided, however , that, before any Preferred Stock of any series shall be redeemed at said redemption price thereof specified in clause (I) of this paragraph (g), all moneys at the time in the sinking fund, if any, for Preferred Stock of that series shall first be applied, as nearly as may be, to the purchase or redemption of Preferred Stock of that series as provided in the resolution or resolutions of the Board of Directors providing for such sinking fund. If less than all the outstanding shares of Preferred Stock of any series are to be redeemed, the redemption may be made either by lot or pro rata in such manner as may be prescribed by resolution of the Board of Directors. The Corporation may, if it shall so elect, provide moneys for the payment of the redemption price by depositing the amount thereof for the account of the holders of Preferred Stock entitled thereto with a bank or trust company doing business in the City of New York, in the State of New York, and having capital and surplus of at least $5,000,000. The date upon which such deposit may be made by the Corporation (hereinafter called the "date of deposit") shall be prior to the date fixed as the date of redemption. In any such case there shall be included in the notice of redemption a statement of the date of deposit and of the name and address of the bank or trust company with which the deposit has been or will be made. On and after the date fixed in any such notice of redemption as the date of redemption (unless default shall be made by the Corporation in providing moneys for the payment of the redemption price pursuant to such notice) or, if the Corporation shall have made such deposit on or before the date specified therefor in the notice, then on and after the date of deposit all rights of the holders of the Preferred Stock to be redeemed as stockholders of the Corporation, except the right to receive the redemption price as hereinafter provided and, in the case of such deposit, any conversion rights not theretofore expired, shall cease and terminate. Such conversion rights, however, in any event shall cease and terminate upon the date fixed for redemption or upon any earlier date fixed by the Board of Directors pursuant to paragraph (b) of this Article FOURTH for termination of such conversion rights. Anything herein contained to the contrary notwithstanding, said redemption price shall include an amount equal to accrued dividends on the Preferred Stock to be redeemed to the date fixed for the redemption thereof and the Corporation shall not be required to declare or pay on such Preferred Stock to be redeemed, and the holders thereof shall not be entitled to receive, any dividends in addition to those thus included in the

7

redemption price; provided, however , that the Corporation may pay in regular course any dividends thus included in the redemption price either to the holders of record on the record date fixed for the determination of stockholders entitled to receive such dividend (in which event, anything herein to the contrary notwithstanding, the amount so deposited need not include any dividends so paid or to be paid) or as a part of the redemption price upon surrender of the certificates for the shares redeemed. At any time on or after the date fixed as aforesaid for such redemption or, if the Corporation shall elect to deposit the moneys for such redemption as herein provided, then at any time on or after the date of deposit and without awaiting the date fixed as aforesaid for such redemption, the respective holders of record of the Preferred Stock to be redeemed shall be entitled to receive the redemption price upon actual delivery to the Corporation, or, in the event of such deposit, to the bank or trust company with which such deposit shall be made, of certificates for the shares to be redeemed, such certificates, if required, to be properly stamped for transfer and duly endorsed in blank or accompanied by proper instruments of assignment and transfer thereof duly executed in blank. Any moneys so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of six years after the redemption date shall be paid by such bank or trust company to the Corporation and any interest accrued on moneys so deposited shall belong to the Corporation and shall be paid to it from time to time. Preferred Stock redeemed pursuant to the provisions of this paragraph (g) shall be canceled and shall thereafter have the status of authorized and unissued shares of Preferred Stock.

(h)      The term "date of cumulation" as used with reference to any series of Preferred Stock shall be deemed to mean the date fixed by the Board of Directors as the date of cumulation of such series at the time of the creation thereof or, if no date shall have been so fixed, the date on which shares of such series are first issued. Whenever used with reference to any share of any series of Preferred Stock, the term "full cumulative dividends" shall be deemed to mean (whether or not in any dividend period, or any part thereof, in respect of which such term is used there shall have been net profits or net assets of the Corporation legally available for the payment of such dividends) that amount which shall be equal to dividends at the full rate fixed for such series as provided in paragraph (b) of this Article FOURTH for the period of time elapsed from the date of cumulation of such series to the date as of which full cumulative dividends are to be computed (including an amount equal to the dividend at such rate for any fraction of a dividend period included in such period of time); and the term "accrued dividends" shall be deemed to mean full cumulative dividends to the date as of which accrued dividends are to be computed, less the amount of all dividends paid, or deemed paid as hereinafter in this paragraph (h) provided, upon said share. In the event of the issue of additional shares of Preferred Stock of any series after the original issue of shares of Preferred Stock of such series, all dividends paid or accrued on Preferred Stock of such series prior to the date of issue of such additional Preferred Stock and all dividends declared and payable to holders of Preferred Stock of such series of record on any date prior to the issue of any such additional Preferred Stock shall be deemed to have been paid on the additional Preferred Stock so issued.

(i)      No holder of stock of any class of the Corporation, whether now or hereafter authorized, shall have any preemptive, preferential or other rights to subscribe for or purchase or acquire any shares of any class or any other securities of the Corporation, whether now or hereafter authorized, and whether or not convertible into, or evidencing or carrying the right to purchase, shares of any class or any other securities now or hereafter authorized, and whether the same shall be issued for cash, services or property, or by way of dividend or otherwise.

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(j)      Subject to the provisions of this Certificate of Incorporation and except as otherwise provided by law, the shares of stock of the Corporation, regardless of class, may be issued for such consideration and for such corporate purposes as the Board of Directors may from time to time determine.
 
(k)      Except as otherwise provided by law, or this Certificate of Incorporation or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of shares of Preferred Stock, as such holders, shall not have any right to vote, and are hereby specifically excluded from the right to vote, in the election of directors or for any other purpose. Except as aforesaid, the holders of Preferred Stock, as such holders, shall not be entitled to notice of any meeting of stockholders.

(l)      Subject to the provisions of any applicable law, or of the By-laws of the Corporation as from time to time amended, with respect to the closing of the transfer books or the fixing of a record date for the determination of stockholders entitled to vote and except as otherwise provided by law, or by this Certificate of Incorporation or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively possess voting power for the election of directors and for all other purposes, each holder of record of shares of Common Stock being entitled to one vote for each share of Common Stock standing in his name on the books of the Corporation.
 
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK

 RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

 (1) Designation and Amount.   The shares of such series shall be designated as "Series C Junior Participating Preferred Stock" ("Series C Stock") and the number of shares constituting such series shall be 2,000,000.

 (2) Dividends and Distributions.

 (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series C Stock with respect to dividends, the holders of shares of Series C Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first days of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series C Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.125 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with

 
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respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series C Stock. In the event the Corporation shall at any time after September 27, 1995 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series C Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 (B) The Corporation shall declare a dividend or distribution on the Series C Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series C Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series C Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series C Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series C Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series C Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series C Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

 (3) Voting Rights. The holders of shares of Series C Stock shall have the following voting rights:

 (A) Subject to the provision for adjustment hereinafter set forth, each share of Series C Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series C Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 (B) Except as otherwise provided herein or by law, the holders of shares of Series C Stock and the holders of shares of Common Stock and any other series of Preferred Stock entitled

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to vote with the Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C) (i)      If at the time of any annual meeting of stockholders for the election of directors a default in preferred dividends (as hereinafter defined) shall exist, the holders of shares of Preferred Stock voting separately as a class without regard to series (with each share of Preferred Stock being entitled to that number of votes to which it is entitled on matters submitted to stockholders generally, or, if it is not entitled to vote with respect to such matters, to one vote), shall have the right to elect two members of the Board of Directors of the Corporation. The holders of Common Stock shall not be entitled to vote in the election of the two directors so to be elected by the holders of shares of Preferred Stock. Any director elected by the holders of shares of Preferred Stock, voting as a class as aforesaid, shall continue to serve as such director for the full term for which he shall have been elected notwithstanding that prior to the end of such term a default in preferred dividends shall cease to exist. If, prior to the end of the term of any director elected by the holders of the Preferred Stock, voting as a class as aforesaid, a vacancy in the office of such director shall occur by reason of death, resignation, removal or disability, or for any other cause, such vacancy shall be filled for the unexpired term in the manner provided in the By-laws of the Corporation, provided that, if such vacancy shall be filled by election by the stockholders at a meeting thereof, the right to fill such vacancy shall be vested in the holders of Preferred Stock, voting as a class as aforesaid, unless, in any such case, no default in preferred dividends shall exist at the time of such election.

(ii)           For the purposes of paragraph (C) (i) of this Section 3, a default in preferred dividends shall be deemed to have occurred whenever the amount of dividends in arrears upon any series of Preferred Stock shall be equivalent to six full quarterly dividends or more and, having so occurred, such default in preferred dividends shall be deemed to exist thereafter until all accrued dividends on all shares of Preferred Stock then outstanding shall have been paid to the end of the last preceding quarterly dividend period. Nothing herein contained shall be deemed to prevent an amendment of the By-laws of the Corporation, in the manner therein provided, which shall increase the number of directors so as to provide as additional places on the Board of Directors either or both the directorships to be filled by the two directors so to be elected by the holders of the Preferred Stock or to prevent any other change in the number of directors of the Corporation.

 (D) Except as set forth herein or required by law, holders of Series C Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

 (4) Certain Restrictions.

 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series C Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series C Stock outstanding shall have been paid in full, the Corporation shall not

 (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Stock;

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 (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series C Stock, except dividends paid ratably on the Series C Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

 (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series C Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series C Stock;

 (iv) purchase or otherwise acquire for consideration any shares of Series C Stock, or any shares of stock ranking on a parity with the Series C Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

 (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

 (5) Reacquired Shares.   Any shares of Series C Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

 (6) Liquidation, Dissolution or Winding Up.   (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series C Stock unless, prior thereto, the holders of shares of Series C Stock shall have received $100.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series C Liquidation Preference"). Following the payment of the full amount of the Series C Liquidation Preference, no additional distributions shall be made to the holders of shares of Series C Stock unless, prior thereto, the holders of shares of Common Stock (which expression shall include, for the purposes only of this Section (6), any series of the Corporation's Preferred Stock ranking on a parity with the Common Stock upon liquidation, dissolution or winding up) shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series C Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series C Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series C Stock and Common Stock, respectively, holders of Series C Stock and holders of shares of Common Stock shall

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receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one (I) with respect to such Series C Stock and Common Stock, on a per share basis, respectively.

 (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series C Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series C Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

 (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 (7) Consolidation, Merger, etc.   In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series C Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series C Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 (8) Redemption.   The shares of Series C Stock may be purchased by the Corporation at such times and on such terms as may be agreed to between the Corporation and the selling stockholder, subject to any limitations which may be imposed by law or this Certificate of Incorporation.

 (9) Ranking.   The Series C Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. Notwithstanding the foregoing, upon liquidation, dissolution or winding up, the Series C Stock shall rank senior in accordance with Section (6) hereof to any series of the Corporation's Preferred Stock ranking on a parity with the Common Stock upon liquidation, dissolution or winding up.

 (10) Amendment.   The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or

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special rights of the Series C Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series C Stock, voting separately as a class.

 (11) Fractional Shares.   Series C Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series C Stock.

SERIES D CUMULATIVE PREFERRED STOCK

 RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

 (1) Designation and Amount.   The shares of such series shall be designated as Series D Cumulative Preferred Stock ("Series D") and the number of shares constituting such series shall be 3,000.

 (2) Dividend Rate. The dividend rate of the shares of Series D shall be $5,920 per share per annum, cumulative (entitled to "full cumulative dividends," as defined in the Certificate of Incorporation) from the date shares of Series D are first issued, payable quarterly on the first days of January, April, July and October in each year. Holders of shares of Series D shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of the "full cumulative dividends" at said rate.

 (3) Optional Redemption.   On and after December 31, 2017, shares of Series D may be redeemed at the election of the Corporation or at the election of any holder of shares of Series D (with respect to Series D shares owned by such holder) in all cases at a price of $100,000 per share plus an amount equal to "accrued dividends" (as defined in the Certificate of Incorporation) (i) in the case of a redemption at the election of the Corporation, upon not less than 40 days' (but not more than 90 days') notice by the Corporation to the holders of Series D shares and subject to the terms and conditions specified in paragraph (g) of Article FOURTH of the Certificate of Incorporation or (ii) in the case of a redemption at the election of a holder of shares of Series D, upon not less than 40 days' (but not more than 90 days') notice by such holder to the Corporation, subject to any limitations which may be imposed by law or the Certificate of Incorporation.

 (4) Rights on Liquidation, Dissolution, Winding Up.   In the event of any liquidation, dissolution or winding up of the Corporation, the holders of shares of Series D then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders an amount equal to $100,000 per share plus an amount equal to "accrued dividends" (as defined in the Certificate of Incorporation).

 (5) Sinking Fund.   Shares of Series D are not subject or entitled to the benefit of a sinking fund.

 (6) No Conversion Rights.   Shares of Series D shall not be convertible into shares of Common Stock.

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 (7) Voting.   Subject to the provisions of any applicable law, the holders of record of shares of Series D shall have no voting rights except as set forth in this paragraph (7) or in paragraph (9). If at the time of any annual meeting of stockholders for the election of directors a default in preferred dividends (as hereinafter defined), shall exist, the holders of shares of Preferred Stock voting separately as a class without regard to series (with each share of Preferred Stock being entitled to one vote), shall have the right to elect two members of the Board of Directors of the Corporation. The holders of Common Stock shall not be entitled to vote in the election of the two directors so to be elected by the holders of shares of Preferred Stock. Any director elected by the holders of shares of Preferred Stock, voting as a class as aforesaid, shall continue to serve as such director for the full term for which he shall have been elected notwithstanding that prior to the end of such term a default in preferred dividends shall cease to exist. If, prior to the end of the term of any director elected by the holders of the Preferred Stock, voting as a class as aforesaid, a vacancy in the office of such director shall occur by reason of death, resignation, removal or disability, or for any other cause, such vacancy shall be filled for the unexpired term in the manner provided in the By-laws of the Corporation, provided that, if such vacancy shall be filled by election by the stockholders at a meeting thereof, the right to fill such vacancy shall be vested in the holders of Preferred Stock, voting as a class as aforesaid, unless, in any such case, no default in preferred dividends shall exist at the time of such election.

 For the purposes of this paragraph (7), a default in preferred dividends shall be deemed to have occurred whenever the amount of dividends in arrears upon any series of Preferred Stock shall be equivalent to six full quarter-yearly dividends or more and, having so occurred, such default in preferred dividends shall be deemed to exist thereafter until all accrued dividends on all shares of Preferred Stock then outstanding shall have been paid to the end of the last preceding quarterly dividend period. Nothing herein contained shall be deemed to prevent an amendment of the By-laws of the Corporation, in the manner therein provided, which shall increase the number of directors so as to provide as additional places on the Board of Directors either of or both the directorships to be filled by the two directors so to be elected by the holders of the Preferred Stock or to prevent any other change in the number of directors of the Corporation.

 (8) Reacquired Shares.   Any shares of Series D which have been purchased, redeemed or otherwise reacquired by the Corporation in any manner whatsoever, shall upon compliance with any applicable provision of the General Corporation Law of the State of Delaware have the status of authorized and unissued shares of Preferred Stock and may be reissued as part of Series D or as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors.

 (9) Restricted Activities.   (a) So long as any shares of Series D are outstanding, (A) without the written consent or affirmative vote of the holders of at least two-thirds of the aggregate number of shares of Series D at the time outstanding given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, the Corporation shall not amend, alter or repeal the preferences, special rights or other powers of the Series D shares so as to affect the rights of the holders of Series D shares adversely (and the authorization and issuance of any class of stock prior to the Series D shares as to dividend preference shall be deemed to affect the Series D shares adversely);

 (B) without the written consent or affirmative vote of the holders of at least a majority of the aggregate number of shares of Preferred Stock at the time outstanding given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, without regard to series, the Corporation will not (i) increase the authorized amount of Preferred Stock beyond

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the 15,000,000 shares presently authorized or (ii) create any other class or classes of stock ranking on a parity with the Preferred Stock as to dividend preference; and

 (C) except as expressly set forth in division (B) of this subparagraph (a), nothing in this paragraph (9) shall be deemed to restrict the issuance of any additional shares of Series D or of any series of Preferred Stock which may be issued in the future.

(b)           For the purposes of this paragraph (9) any class or classes of stock of the Corporation shall be deemed to rank,

 (A) prior to the Series D shares as to dividends, if the holders of such class or classes shall be entitled to the receipt of dividends in preference or priority to the holders of the Series D shares; and

 (B) on a parity with the Series D shares as to dividends whether or not the dividend rates or dividend payment dates thereof be different from those of Series D, if the holders of such class or classes of stock shall be entitled to the receipt of dividends in proportion to their respective dividend rates without preferences or priority one over the other as between the holders of such class or classes of stock and the holders of the Series D shares.

 (10) Fractional Shares.   Series D may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series D.

FIFTH:   The Corporation is to have perpetual existence.

SIXTH:   The private property of the stockholders of the Corporation shall not be subject to the payment of corporate debts to any extent whatsoever.

        SEVENTH:   Notwithstanding any other provisions of this Certificate of Incorporation or the By-laws of the Corporation to the contrary, no action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken by written consent without a meeting, except:

 (a)  any action which may be taken solely upon the vote or consent of holders of Preferred Stock or any series thereof, or

 (b)  any action taken upon the signing of a consent in writing, setting forth the action so taken, by all the stockholders of the Corporation entitled to vote thereon.

EIGHTH:   The Board of Directors shall have power, without stockholder action:

 1. To make By-laws for the Corporation, and to amend, alter or repeal any By-laws.

 2. To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve or reserves.
 
 The powers and authorities herein conferred upon the Board of Directors are in furtherance and not in limitation of those conferred by the laws of the State of Delaware. In addition to the powers and authorities herein or by statute expressly conferred upon it, the Board

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of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the laws of the State of Delaware, of this Certificate of Incorporation and of the By-laws of the Corporation.

NINTH:    The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in this Certificate of Incorporation, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article NINTH.

TENTH:   (a) The number of directors constituting the whole Board shall be as fixed from time to time by vote of a majority of the whole Board, provided, however , that the number of directors shall not be less than three and that the number shall not be reduced so as to shorten the term of any director at the time in office. The number of directors constituting the whole Board shall hereafter be thirteen until otherwise fixed by a majority of the whole Board in accordance with the preceding sentence.

 (b) Commencing with the 2011 annual meeting of the stockholders of the Corporation, the directors whose terms expire at that meeting shall be elected annually for terms expiring at the next succeeding annual meeting.  Directors elected at the 2009 annual meeting of stockholders shall hold office until the 2012 annual meeting of stockholders; directors elected at the 2010 annual meeting of stockholders shall hold office until the 2013 annual meeting of stockholders.  Any vacancies in the Board of Directors for any reasons, and any newly created directorships resulting from any increase in the directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, or by a sole remaining director. Any directors so chosen shall hold office until their successors shall be elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Notwithstanding any other provision of this Article TENTH, and except as otherwise required by law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the term of office, the filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto.

               ELEVENTH:   1. The affirmative vote of the holders of not less than two-thirds of the outstanding shares of "Voting Stock" (as hereinafter defined) shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) of the Corporation or any subsidiary of the Corporation with any "Related Person" (as hereinafter defined), notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified by law, in any agreement with any national securities exchange or otherwise; provided, however , that the two-thirds voting requirement shall not be applicable and such Business Combination shall require only such affirmative vote as is required by law, any agreement with any national securities exchange or otherwise if:

 (a)           The "Continuing Directors" (as hereinafter defined) of the Corporation by at least a majority vote have expressly approved such Business Combination either in advance of or subsequent to such Related Person becoming a Related Person; or

 (b)           All of the following conditions are met:

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 (i)           The cash or "Fair Market Value" (as hereinafter defined) as of the date of the consummation of the Business Combination (the "Combination Date") of the property, securities or other consideration to be received per share by holders of a particular class or series of capital stock, as the case may be, of the Corporation in the Business Combination is not less than the highest of:

 (A)       the highest per share price (including brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or on behalf of the Related Person in acquiring beneficial ownership of any of its holdings of such class or series of capital stock of the Corporation (i) within the two-year period immediately prior to the Combination Date or (ii) in the transaction or series of transactions in which the Related Person became a Related Person, whichever is higher; or

 (B)       the Fair Market Value per share of the shares of capital stock being acquired in the Business Combination (i) as at the Combination Date or (ii) the date on which the Related Person became a Related Person, whichever is higher; or

 (C)       in the case of Common Stock, the per share book value of the Common Stock as reported at the end of the fiscal quarter immediately prior to the Combination Date, and in the case of Preferred Stock, the highest preferential amount per share to which the holders of shares of such class or series of Preferred Stock would be entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, regardless of whether the Business Combination to be consummated constitutes such an event.

 The provisions of this paragraph 1 (b) (i) shall be required to be met with respect to every class or series of outstanding capital stock, whether or not the Related Person has previously acquired any shares of a particular class or series of capital stock. In all above instances, appropriate adjustments shall be made for recapitalizations and for stock dividends, stock splits and like distributions; and

 (ii)             The consideration to be received by holders of a particular class or series of capital stock shall be in cash or in the same form as previously has been paid by or on behalf of the Related Person in connection with its direct or indirect acquisition of beneficial ownership of shares of such class or series of stock. If the consideration so paid for any such share varies as to form, the form of consideration for such shares shall be either cash or the form used to acquire beneficial ownership of the largest number of shares of such class or series of capital stock previously acquired by the Related Person.

2. For purposes of this Article ELEVENTH:

 (a) The term "Business Combination" shall mean any (i) merger or consolidation of the Corporation or a subsidiary of the Corporation with a Related Person or any other corporation which is or after such merger or consolidation would be an "Affiliate" or "Associate" (as hereinafter defined) of a Related Person, (ii) sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of

18

transactions) with any Related Person or any affiliate of any Related Person, of all or any "Substantial Part" (as hereinafter defined) of the assets of the Corporation or of a subsidiary of the Corporation to a Related Person or any Affiliate or Associate of any Related Person, (iii) adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of a Related Person or any Affiliate or Associate of any Related Person, (iv) sale, lease, exchange or other disposition, including without limitation a mortgage or other security device, of all or any Substantial Part of the assets of a Related Person or any Affiliate or Associate of any Related Person to the Corporation or a subsidiary of the Corporation, (v) issuance or pledge of securities of the Corporation or a subsidiary of the Corporation to or with a Related Person or any Affiliate or Associate of any Related Person, (vi) reclassification of securities (including any reverse stock split) or recapitalization of the Corporation or any other transaction that would have the effect, either directly or indirectly, of increasing the proportionate share of any class of equity or convertible securities of the Corporation or any subsidiary of the Corporation which is directly or indirectly beneficially owned by any Related Person or any Affiliate or Associate of any Related Person, and (vii) agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.

 (b) The term "person" shall mean any individual, firm, corporation or other entity and shall include any group comprised of any person and any other person with whom such person or any Affiliate or Associate of such person has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of Voting Stock of the Corporation.

 (c) The term "Related Person" shall mean any person (other than the Corporation, or any Subsidiary and other than any profit-sharing, employee stock ownership or other employee benefit plan of the Corporation or any Subsidiary or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which:

 (i) is the beneficial owner (as hereinafter defined) often percent (10%) or more of the Voting Stock;

 (ii) is an Affiliate or Associate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner of ten percent (10%) or more of the Voting Stock; or

 (iii) is at such time an assignee of or has otherwise succeeded to the beneficial ownership of any shares of Voting Stock which were at any time within the two-year period immediately prior to such time beneficially owned by any Related Person, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

 (d) A person shall be a "beneficial owner" of any Voting Stock:

 (i) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly;

 (ii) which such person or any of its Affiliates or Associates has, directly or indirectly, (a) the right to acquire (whether such right is exercisable

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immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (b) the right to vote pursuant to any agreement, arrangement or understanding; or

 (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.

 (e) For the purposes of determining whether a person is a Related Person pursuant to subparagraph (c) of this paragraph 2, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of subparagraph (d) of this paragraph 2 but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 (f) The terms "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on January 1, 1984.

 (g) The term "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Related Person set forth in subparagraph (c) of this paragraph 2, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.

 (h) The term "Continuing Director" means any member of the Board of Directors, while such person is a member of the Board of Directors, who is not an Affiliate, Associate or a representative of the Related Person and was a member of the Board of Directors prior to the time that the Related Person became a Related Person, and any successor of a Continuing Director, while such successor is a member of the Board of Directors, who is not an Affiliate, Associate or a representative of the Related Person and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors.

 (i) The term "Substantial Part" shall mean more than twenty percent (20%) of the Fair Market Value, as determined by a majority of the Continuing Directors, of the total consolidated assets of the Corporation and its Subsidiaries taken as a whole as of the end of its most recent fiscal year ended prior to the time the determination is being made.

 (j) For the purposes of paragraph 1 (b) (i) of this Article ELEVENTH, the term "other consideration to be received" shall include, without limitation, capital stock retained by the stockholders.

 (k) The term "Voting Stock" shall mean all of the outstanding shares of Common Stock and the outstanding shares of Preferred Stock entitled to vote on each matter on which the holders of record of Common Stock shall be entitled to vote, and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares voting as one class.

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 (l) The term "Fair Market Value" means: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for the New York Stock Exchange - Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such stock exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any successor system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of the Continuing Directors; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Continuing Directors.

 (m) A Related Person shall be deemed to have acquired a share of the Voting Stock of the Corporation at the time when such Related Person became the beneficial owner thereof. If a majority of the Continuing Directors is not able to determine the price at which a Related Person has acquired a share of Voting Stock of the Corporation, such price shall be deemed to be the Fair Market Value of the shares in question at the time when the Related Person became the beneficial owner thereof. With respect to shares owned by Affiliates, Associates or other persons whose ownership is attributed to a Related Person under the foregoing definition of Related Person, the price deemed to be paid therefor by such Related Person shall be the price paid upon the acquisition thereof by such Affiliate, Associate or other person, or, if such price is not determinable by a majority of the Continuing Directors, the Fair Market Value of the shares in question at the time when the Affiliate, Associate or other such person became the beneficial owner thereof.

 3. The fact that any Business Combination complies with the provisions of paragraph 1 (b) of this Article ELEVENTH shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the stockholders of the Corporation, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member thereof, with respect to evaluations of or actions and responses taken with respect to such Business Combination.

TWELFTH:   No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that this Article TWELFTH shall not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware (as in effect and as hereafter amended), or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article TWELFTH to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of each director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Neither the amendment nor repeal of this Article TWELFTH nor the adoption of any provision of this Certificate of

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Incorporation inconsistent with this Article TWELFTH shall eliminate or reduce the effect of this Article TWELFTH in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article TWELFTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

IN WITNESS WHEREOF, said TEXTRON INC. has caused this certificate to be signed and attested and the corporate seal to be hereunto affixed this 28th day of April, 2010.

[SEAL]	 	 	 	/s/	Terrence O’Donnell	
 	 	 	 	 	Terrence O’Donnell	
 	 	 	 	 	Executive Vice President,	
 	 	 	 	 	General Counsel and Corporate Secretary	
 	 	 	 	 	 	
Attest:	/s/	Ann T. Willaman	 	 	 	
 	 	Ann T. Willaman	 	 	 	
 	 	Assistant Secretary	 	 	 	
 
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EXHIBIT 3.2
 
TEXTRON INC. 
(a Delaware corporation) 
 
[Missing Graphic Reference]
AMENDED AND RESTATED BY-LAWS 

Effective April 28, 2010

ARTICLE  I.
 
Offices.
 
Section 1.01. Registered Office. The registered office of  the Corporation in the State of Delaware shall be at No. 1209 Orange Street, City of Wilmington, County of New Castle. The name of the resident agent in charge thereof shall be The Corporation Trust Company.
 
Section 1.02. Other Offices. The Corporation may also  have an office or offices in the City of Providence, State of Rhode Island, and at such other place or places either within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation require.

ARTICLE I  I.
 
Meetings of Stockholders.
 
Section 2.01. Place of Meetings. All meetings of the  stockholders of the Corporation shall be held at such place either within or without the State of Delaware as shall be fixed by the Board of Directors and specified in the respective notices or waivers of notice of said meetings.
 
Section 2.02. Annual Meetings. (a) The annual meeting  of the stockholders for the election of directors and for the transaction of such other business as properly may come before the meeting shall be held on such day, at such time and in such place (either within or without the State of Delaware) as shall be fixed by the Board of Directors.

(b) If the election of directors shall not be held on the day fixed by the Board of Directors for any annual meeting, or on the day of any adjourned session thereof, the Board of Directors shall cause the election to be held at a special meeting as soon thereafter as conveniently may be. At such special meeting the stockholders may elect the directors and transact other business with the same force and effect as at an annual meeting duly called and held.

Section 2.03. Special Meetings. A special meeting of the stockholders for any purpose or purposes may be called at any time by the Chief Executive Officer or by order of the Board of Directors. The business which may be transacted at a special meeting is limited to that set forth in the notice of special meeting and, if the notice so provides, such other matters as the Chief Executive Officer or the Board of Directors may bring before the meeting.

Section 2.04. Notice of Stockholder Nominations and Other Business. (a) In order to assure that stockholders and the Corporation have a reasonable opportunity to consider nominations and other business proposed to be brought before a meeting of stockholders and to allow for full information to be distributed to stockholders, at any annual meeting or special meeting of the stockholders only such nominations may be made and only such business shall be conducted as shall have been brought before the meeting pursuant to this Section 2.04 of these Amended and Restated By-Laws (“By-Laws”). Nominations of persons for election to the Board of Directors may be made at an annual meeting of stockholders, a special meeting held in lieu of an annual meeting pursuant to Section 2.02(b), or a special meeting of stockholders at which directors are to be elected that is called by the Chief Executive Officer or by order of the Board of Directors pursuant to Section 2.03, (i) by or at the direction of the Board of Directors or any nominating committee appointed by the Board of Directors or (ii) by any stockholder of the Corporation who shall have been a stockholder of record of the Corporation at the time the notice provided for in this Section 2.04 is delivered to the Corporation, who is entitled to vote at the meeting and who timely complies with the notice

 

 

 
procedures set forth in this Section 2.04. Except as otherwise provided by statute, the Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) or these By-Laws, the only business (other than the nominations of persons for election to the Board of Directors in accordance with the foregoing sentence) which shall be conducted at any annual meeting of the stockholders or special meeting in lieu thereof called pursuant to Section 2.02(b) of these By-Laws shall be that business brought before the meeting (i) by or at the direction of the Board of Directors or the chairman of the meeting or (ii) by any stockholder of the Corporation who shall have been a stockholder of record of the Corporation at the time the notice provided for in this Section 2.04 is delivered to the Corporation, who is entitled to vote at the meeting and who timely complies with the notice procedures set forth in this Section 2.04, and such other business must be a proper subject for stockholder action under the Delaware General Corporation Law.  

(b)  To be timely in the case of an annual meeting, the stockholder’s notice provided for in this Section 2.04 must be received at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 150th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, provided, however, that in the event the annual meeting is called for a date that is more than 30 days before or more than 60 days after such anniversary date, such notice must be so received not later than the close of business on the 90th day before the date of such annual meeting or the 10th day following the day on which public disclosure of the date of the annual meeting was first made, whichever occurs later. To be timely in the case of a special meeting (including a special meeting held in lieu of an annual meeting) that is called for a date that is more than 30 days before or more than 60 days after the anniversary date of the immediately preceding annual meeting of stockholders, such notice must be received at the principal executive offices of the Corporation not later than the close of business on the 90th day before the date of such special meeting or the 10th day following the day on which public disclosure of the date of the special meeting was first made, whichever occurs later, and otherwise must be received at the principal executive offices of the Corporation not later than the close of business on the date by which a notice must be received with respect to the annual meeting. In no event shall the public announcement of a postponement or adjournment of an annual meeting or a special meeting commence a new period for the giving of a stockholder’s notice as described above.

(c) The stockholder’s notice provided for in this Section 2.04 shall be addressed and delivered to the Secretary and shall set forth:
 (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director (A) the name, age, business address and residence address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person; and (D) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934 (the “Exchange Act”);
 (ii) as to any business (other than the nominations of persons for election to the Board of Directors) that the stockholder proposes to bring before the meeting (A) a description of each item of business proposed to be brought before the meeting; (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these By-Laws, the language of the proposed amendment); (C) the reasons for conducting such business at the meeting; and (D) any material interest in such business of such stockholder and the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), if any, on whose behalf the business is being proposed, including any benefit that such person would derive therefrom;
      (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or other business is being proposed (A) the name and address of the stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner; (B) the class or series and number of shares of stock of the Corporation held of record by such stockholder and such beneficial owner as of the date of such notice by the stockholder, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for the meeting of the class or series and number of shares of stock of the Corporation owned of record by the stockholder and such beneficial owner as of the record date for the meeting; and (C) a representation that such stockholder intends to appear in person or by proxy at the meeting to propose such nomination or other business; and
 (iv) as to the stockholder giving the notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination or other business is being proposed, as to such beneficial owner (A) the class or series

 

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and number of shares of stock of the Corporation which are beneficially owned by such stockholder or beneficial owner as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for the meeting of the class or series and number of shares of stock of the Corporation beneficially owned by such stockholder or beneficial owner as of the record date for the meeting; (B) a description of any agreement, arrangement or understanding with respect to such nomination or other business between or among such stockholder or beneficial owner and any other person or persons (naming such persons), including without limitation any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable to the stockholder or beneficial owner) and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for the meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting; (C) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, swaps, hedging transactions, and borrowed or loaned shares) that has been entered into and is in existence as of the date of the stockholder’s notice by, or on behalf of, such stockholder or beneficial owner, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of the Corporation’s capital stock, or increase or decrease the voting power of the stockholder or beneficial owner with respect to shares of stock of the Corporation or pursuant to which such stockholder or beneficial owner has a right to vote any stock of the Corporation, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for the meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting; (D) a representation as to whether the stockholder or the beneficial owner will engage in a solicitation with respect to such nomination or proposal and, if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange Act) in such solicitation and whether such person intends or is part of a group that intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the business to be proposed (in person or by proxy) by the stockholder; and (E) all other information which would be required to be included in a proxy statement filed with the Securities and Exchange Commission if, with respect to any such item of business, such stockholder or beneficial owner were a participant in a solicitation subject to Section 14 of the Securities Exchange Act; and
 (v) as to the stockholder giving the notice and the  beneficial owners, if any, on whose behalf the nomination or other business is being proposed, such stockholder’s and beneficial owner’s written consent to the public disclosure of information provided pursuant to paragraph (c) of this Section 2.04.

In the case of nominations, such notice must be accompanied by the written consent of each proposed nominee to being named as a nominee and to serve as a director of the Corporation if so elected. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation including information relevant to a determination whether such proposed nominee can be considered an independent director.

(d)  The foregoing notice requirements of this Section 2.04 shall not apply to a stockholder if the stockholder has notified the Corporation of his or her intention to present a stockholder proposal at an annual meeting only pursuant to and in compliance with Rule 14a-8 under the Exchange Act and such stockholder proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such meeting.
 
(e) The Chairman of the Board of Directors may, if the facts warrant, determine that a notice received by the Corporation relating to a nomination proposed to be made or an item of business proposed to be introduced at a meeting of stockholders does not satisfy the requirements of this Section 2.04 (including if the stockholder does not provide the information and representations required under Section 2.04(c)(iii)(B) and 2.04(c)(iv)(A)-(C) to the Corporation within five business days following the record date for the meeting), and if it be so determined, shall so declare and any such nomination or other business shall not be introduced at such meeting of stockholders, notwithstanding that proxies in respect of such matters may have been received. The chairman of a meeting of stockholders may, if the facts warrant, determine that a nomination proposed to be made or an item of business proposed to be introduced at such meeting was not properly brought before the meeting in accordance with the foregoing procedures (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by Section 2.04(c)(iv), and if it be so determined, the chairman of the meeting shall so declare to the meeting and that nomination or other business shall be disregarded.  Notwithstanding the foregoing

 

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provisions of this Section 2.04, unless otherwise required by law, if the stockholder does not appear in person or by proxy at the meeting to present the nomination or proposed business, such nomination or other business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

(f) Notwithstanding the foregoing provisions of this Section 2.04, a stockholder in addition shall comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 2.04.
 
Section 2.05. Notice of Meetings. (a) Except as otherwise  required by statute, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than ten days nor more than sixty days before the day on which the meeting is to be held by delivering written notice thereof to such stockholder personally or by mailing such notice, postage prepaid, addressed to such stockholder at the stockholder’s post-office address last shown in the records of the Corporation or by transmitting notice thereof to such stockholder by any other available method. Every such notice shall state the time and place of the meeting and, in case of a special meeting, shall state briefly the purposes thereof.

(b) Except as otherwise required by statute, notice of any meeting of stockholders shall not be required to be given to any stockholders who shall attend such meeting in person or by proxy or who shall waive such notice in writing or by electronic transmission either before or after such meeting. Notice of any adjourned meeting of the stockholders shall not be required to be given except when expressly required by statute.
 
Section 2.06. Quorum. (a)  At each meeting of the stock  holders, except as otherwise provided by statute, the Certificate of Incorporation or these By-Laws, the holders of record of a majority of the issued and outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.

(b) In the absence of a quorum a majority in interest of the stockholders of the Corporation entitled to vote, present in person or represented by proxy or, in the absence of all such stockholders, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock shall be present or represented. At any such adjourned meeting at which a quorum shall be present any business may be transacted which might have been transacted at the meeting as originally called.
 
Section 2.07. Organization. At  each meeting of the  stockholders the Chairman of the Board or, in his or her absence, the Chief Executive Officer or, in the absence of the Chairman of the Board and the Chief Executive Officer, the Lead Director or, in the absence of the Chairman of the Board, the Chief Executive Officer and the Lead Director, the Vice Chairman of the Board or, in the absence of the Chairman of the Board, the Chief Executive Officer, the Lead Director and the Vice Chairman of the Board, the President or any Vice President or, in the absence of all such officers, a chairman chosen by a majority vote of the stockholders entitled to vote thereat, present in person or by proxy, shall act as chairman, and the Secretary or an Assistant Secretary of the Corporation or, in the absence of the Secretary and all Assistant Secretaries, a person whom the chairman of such meeting shall appoint shall act as secretary of the meeting and keep the minutes thereof.
 
Section 2.08. Voting. (a)  Except as otherwise provided  by statute, the Certificate of Incorporation or these By-Laws, at every meeting of the stockholders each stockholder shall be entitled to one vote, in person or by proxy, for each share of capital stock of the Corporation registered in such stockholder’s name on the books of the Corporation:
 
 (i) on the date fixed pursuant to Section 8.03 of these By-Laws as the record date for the determination of stockholders entitled to vote at such meeting; or
 (ii) if no such record date shall have been fixed, then the record date shall be at the close of business on the day next preceding the day on which notice of such meeting is given.

(b) Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. In the case of stock held jointly by two or more executors, administrators, guardians, conservators, trustees or other fiduciaries, such fiduciaries may designate in writing one or more of their number to represent such stock and vote the shares so held,

 

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unless there is a provision to the contrary in the instrument, if any, defining their powers and duties. (c) Persons whose stock is pledged shall be entitled to vote thereon until such stock is transferred on the books of the Corporation to the pledgee, and thereafter only the pledgee shall be entitled to vote. (d) Any stockholder entitled to vote may do so in person or by such stockholder’s proxy appointed by an instrument in writing subscribed by such stockholder or by such stockholder’s attorney thereunto authorized, or by a telegram, cable or any other available method delivered to the secretary of the meeting; provided, however, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. (e) At all meetings of the stockholders, all matters (except as otherwise provided by statute, the Certificate of Incorporation or these By-Laws) shall be decided by the vote of a majority in interest of the stockholders entitled to vote thereon, present in person or by proxy, at such meeting, a quorum being present.

Section 2.09. Voting Procedures and Inspectors of Elec  tions. (a) The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. (b) The inspectors shall (i) ascertain the number of shares outstanding and the voting power of each, (ii) determine the shares represented at a meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v)   certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. (c) The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Delaware Court of Chancery upon application by a stockholder shall determine otherwise.

Section 2.10. List of Stockholders. (a) It shall be the duty  of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, or cause to be prepared and made, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open during ordinary business hours to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting, either on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or during ordinary business hours at the principal place of business of the Corporation. (b) Such list shall be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. (c) Upon the willful neglect or refusal of the directors to produce such list at any meeting for the election of directors they shall be ineligible for election to any office at such meeting. (d) The stock ledger shall be conclusive evidence as to who are the stockholders entitled to examine the stock ledger and the list of stockholders required by this Section 2.10 on the books of the Corporation or to vote in person or by proxy at any meeting of stockholders.

ARTICLE I  II.
 
Board of Directors.
 
Section 3.01. General Powers. The business, property  and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

Section 3.02. Number, Qualifications and Term of Office.    (a) The number of directors of the Corporation which shall constitute the whole Board of Directors shall be such number as from time to time shall be fixed by the Board of Directors in accordance with the Certificate of Incorporation. (b) No person shall be elected a director who has attained the age of 72. (c) Each director shall hold office as set forth in the Certificate of Incorporation.

 

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Section 3.03.   Election.   At each meeting of the stockholders for the election of directors at which a quorum is present, each director shall be elected by the vote of the majority of the votes cast; provided, that if the number of nominees exceeds the number of directors to be elected, based on nominations expected as of the record date for such meeting to be made by or at the direction of the Board of Directors or to be brought before the meeting by a stockholder who has given notice thereof or otherwise, the directors, not exceeding the authorized number of directors as fixed by the Board of Directors in accordance with the Certificate of Incorporation, receiving the greatest number of votes of the stockholders entitled to vote thereon, present in person or by proxy, shall be the directors for the term as set forth in the Certificate of Incorporation. For purposes of this Section 3.03, a majority of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. The Nominating and Corporate Governance Committee (or comparable committee of the Board) shall establish procedures under which any director who is not elected shall offer to tender his or her resignation to the Board and under which such committee and the Board shall consider and determine whether to accept or reject the resignation. If, for any cause, the Board of Directors shall not have been elected at an annual meeting, they may be elected thereafter at a special meeting of the stockholders called for that purpose in the manner provided in these By-Laws.

Section 3.04. Quorum and Manner of Acting. (a) Except  as otherwise provided by statute, the Certificate of Incorporation or these By-Laws, a majority of the directors at the time in office shall constitute a quorum for the transaction of business at any meeting and the affirmative action of a majority of the directors present at any meeting at which a quorum is present shall be required for the taking of any action by the Board of Directors. (b) If one or more of the directors shall be disqualified to vote at such meeting, then the required quorum shall be reduced by one for each such director so disqualified; provided, however, that in no event shall the quorum as adjusted be less than one third of the total number of directors. (c) In the absence of a quorum at any meeting of the Board such meeting need not be held, or a majority of the directors present thereat or, if no director be present, the Secretary may adjourn such meeting from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. (d) From time to time, the independent directors may elect, from among their number, a Lead Director who shall perform such duties as shall be assigned to him or her by the Board of Directors.

Section 3.05. Offices, Place of Meeting and Records. The  Board of Directors may hold meetings, have an office or offices and keep the books and records of the Corporation at such place or places within or without the State of Delaware as the Board may from time to time determine. The place of meeting shall be specified or fixed in the respective notices or waivers of notice thereof, except as otherwise provided by statute, the Certificate of Incorporation or these By-Laws.

Section 3.06. Annual Meeting. The Board of Directors  shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable following each annual election of directors. Such meeting shall be called and held at the place and time specified in the notice or waiver of notice thereof as in the case of a special meeting of the Board of Directors.

Section 3.07. Regular Meetings. Regular meetings of the  Board of Directors shall be held at such places and at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at said place at the same hour on the next succeeding business day. Notice of regular meetings need not be given.

Section 3.08. Special Meetings; Notice. Special meetings  of the Board of Directors shall be held whenever called by the Chairman of the Board, the Lead Director or the Chief Executive Officer or by any two of the directors. Notice of each such meeting shall be mailed to each director, addressed to him or her at his or her residence or usual place of business, at least three days before the day on which the meeting is to be held, or shall be sent to him or her at his or her residence or at such place of business by other available means, or shall be delivered personally, by telephone or by electronic transmission, not later than two days (or such shorter period as the person or persons calling such meeting may deem necessary or appropriate in the circumstances) before the day on which the meeting is to be held. Each such notice shall state the time and place of the meeting but need not state the purposes thereof except as otherwise herein expressly provided. Notice of any such meeting need not be given to any director, however, if waived by him or her in writing or otherwise, whether before or after such meeting shall be held, or if he or she shall be present at such meeting.

 

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Section 3.09. Organization. At each meeting of the Board  of Directors, the Chairman of the Board or, in his or her absence, the Lead Director or, in the absence of each of them, the Chief Executive Officer, if the Chief Executive Officer is then serving on the Board, or, in the absence of each of them, the Vice Chairman of the Board or, in the absence of all such officers, a director chosen by a majority of the directors present shall act as chairman. The Secretary or, in his or her absence an Assistant Secretary or, in the absence of the Secretary and all Assistant Secretaries, a person whom the chairman of such meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof.

Section 3.10. Order of Business. At all meetings of the  Board of Directors business shall be transacted in the order determined by the Board.

Section 3.11. Chairman of the Board. The Chairman of the Board shall, when present, preside at all meetings of the Board of Directors and at all meetings of the stockholders and shall have such additional powers and shall perform such further duties as may from time to time be assigned to him or her by the Board of Directors or the Executive Committee.

Section 3.12. Vice Chairman of the Board. The Vice Chairman of the Board shall, in the absence of the Chairman of the Board, the Lead Director and the President, if the President is then serving on the Board, preside at all meetings of the Board of Directors, and, in the absence of the Chairman of the Board, the President and the Lead Director, at all meetings of the stockholders and shall have such powers and shall perform such further duties as may from time to time be assigned to him or her by the Board of Directors or the Executive Committee.

Section 3.13. Removal of Directors. Any director may be removed, with or without cause, at any time, by the affirmative vote of the holders of record of a majority of the issued and outstanding stock entitled to vote for the election of directors of the Corporation given at a special meeting of the stockholders called and held for the purpose; and the vacancy in the Board caused by any such removal may be filled by the Board in the manner provided in the Certificate of Incorporation.

Section 3.14. Resignation. Any director of the Corpora  tion may resign at any time by giving written notice of his or her resignation to the Board of Directors or to the Chairman of the Board, the Vice Chairman of the Board, the President or the Secretary of the Corporation. Such resignation shall take effect at the date of receipt of such notice unless a later time is specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.15. Vacancies. Any vacancy in the Board of  Directors caused by death, resignation, removal, disqualification, an increase in the number of directors, or any other cause may be filled by the remaining directors then in office as set forth in the Certificate of Incorporation. Each director so elected shall hold office as set forth in the Certificate of Incorporation.

Section 3.16. Compensation. Each director, in considera  tion of his or her serving as such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at directors’ meetings, or both, as the Board of Directors shall from time to time determine, together with reimbursement for the reasonable expenses incurred by him or her in connection with the performance of his or her duties; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefore.

ARTICLE IV  .
 
Committees.
 
Section 4.01. Executive Committee. (a) The Board of Direc  tors shall, by resolution or resolutions passed by a majority of the whole Board, appoint an Executive Committee to consist of not less than three nor more than eight members of the Board of Directors, including the Chairman of the Board, and shall designate one of the members as its chairman. Notwithstanding any limitation on the size of the Executive Committee, the Committee may invite

 

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members of the Board to attend its meetings. In such case such invitees shall be entitled to vote on matters considered at such meetings and shall receive such fee, if any, as shall be fixed by the Board of Directors for such attendance.

(b) Each member of the Executive Committee shall hold office, so long as he or she shall remain a director, until the first meeting of the Board of Directors held after the next annual election of directors and until his or her successor is duly appointed and qualified. The chairman of the Executive Committee or, in his or her absence, the Chairman of the Board or a member of the Committee chosen by a majority of the members present shall preside at meetings of the Executive Committee and the Secretary or an Assistant Secretary of the Corporation, or such other person as the Executive Committee shall from time to time determine, shall act as secretary of the Executive Committee.

(c) The Board of Directors, by action of the majority of the whole Board, shall fill vacancies in the Executive Committee.

Section 4.02. Powers. During the intervals between the  meetings of the Board of Directors, the Executive Committee shall have and may exercise all the powers of the Board of Directors in all cases in which specific directions shall not have been given by the Board of Directors; but neither the Executive Committee nor any other committee created under these By-Laws shall have the power or authority to amend the Certificate of Incorporation, adopt an agreement of merger or consolidation, recommend to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amend the By-Laws of the Corporation; and, unless the resolution, By-Laws, or Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware.

Section 4.03. Procedure; Meetings; Quorum. The Execu  tive Committee shall fix its own rules of procedure subject to the approval of the Board of Directors, and shall meet at such times and at such place or places as may be provided by such rules. At every meeting of the Executive Committee the presence of a majority of all the members shall be necessary to constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution. In the absence of a quorum at any meeting of the Executive Committee such meeting need not be held, or a majority of the members present thereat or, if no members be present, the secretary of the meeting may adjourn such meeting from time to time until a quorum be present.

Section 4.04. Compensation. Each member of the E  xecutive Committee shall be entitled to receive from the Corporation such fee, if any, as shall be fixed by the Board of Directors, together with reimbursement for the reasonable expenses incurred by him or her in connection with the performance of his or her duties.

Section 4.05. Other Board Committees. The Board of Di  rectors may from time to time, by resolution passed by a majority of the whole Board, designate one or more committees in addition to the Executive Committee, each committee to consist of two or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution or in the By-Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation.

A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide. The Board of Directors shall have power to change the members of any committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time.

Section 4.06. Alternates. The Board of Directors may,  by resolution passed by a majority of the whole Board, designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee; provided, however, that in the absence of any such designation of alternates the member or members of any committee present at any meeting and not disqualified from acting, whether or not he, she or they constitute a quorum, may unanimously appoint another member to the Board to act at the meeting in the place of any absent or disqualified member.

 

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Section 4.07. Additional Committees. The Board of Di  rectors may from time to time create such additional committees of directors, officers, employees or other persons designated by it (or any combination of such persons) for the purpose of advising the Board, the Executive Committee and the officers and employees of the Corporation in all such matters as the Board shall deem advisable and with such functions and duties as the Board shall by resolutions prescribe.

A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide. The Board of Directors shall have power to change the members of any committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time.

ARTICLE V  .
 
Action by Consent or Telephone. 
 
Section 5.01. Consent of Directors. Any action required  or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if prior to such action a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or such committee.

Section 5.02. Telephone Meetings. Members of the Board  of Directors or any committee designated by the Board of Directors may participate in a meeting of such Board or Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

ARTICLE V  I.
 
Officers  .
 
Section 6.01. Number. The principal officers of the Cor  poration shall be a Chief Executive Officer, a President, one or more Vice Presidents (the number thereof and variations in title to be determined by the Board of Directors), a Treasurer and a Secretary. In addition, there may be such other or subordinate officers, agents and employees as may be appointed in accordance with the provisions of Section 6.03. Any two or more offices, except those of President and Secretary, may be held by the same person.

Section 6.02. Election, Qualifications and Term of Office.    Each officer of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 6.03, shall be elected annually by the Board of Directors and shall hold office until his or her successor shall have been duly elected and qualified, or until his or her death, or until he or she shall have resigned or shall have been removed in the manner herein provided.

Section 6.03. Other Officers. The Corporation may have  such other officers, agents, and employees as the Board of Directors may deem necessary including a Controller, one or more Assistant Controllers, one or more Assistant Treasurers and one or more Assistant Secretaries, each of whom shall hold office for such period, have such authority, and perform such duties as the Board of Directors, the Chief Executive Officer or the President may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint or remove any such subordinate officers, agents or employees.

Section 6.04. Removal. Any officer may be removed,  either with or without cause, by the vote of a majority of the whole Board of Directors or, except in case of any officer elected by the Board of Directors, by any committee or officer upon whom the power of removal may be conferred by the Board of Directors.

Section 6.05. Resignation. Any officer may resign at any  time by giving written notice to the Board of Directors, the Chief Executive Officer or the President. Any such resignation shall take effect at the date of receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

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Section 6.06. Vacancies. A vacancy in any office because  of death, resignation, removal, disqualification or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in these By-Laws for regular election or appointment to such office.

Section 6.07. Chief Executive Officer. The Chief Executive Officer of the Corporation shall, subject to the provisions of these By-Laws and the control of the Board of Directors, have direct charge of the business and affairs of the Corporation. He or she shall, in the absence of the Chairman of the Board and the Lead Director, preside at all meetings of the Board of Directors, if the Chief Executive Officer is then serving on the Board, and, in the absence of the Chairman of the Board, at all meetings of the stockholders, and shall perform all duties incident to the office of chief executive and such other duties as from time to time may be assigned to him or her by the Board of Directors. The Chief Executive Officer shall report directly to the Board of Directors and shall have the right to delegate any of his or her powers to any other officer or employee.

Section 6.08. President. The President shall have general direction of the operations of the Corporation, subject to the control of the Board of Directors, the Executive Committee and/or the Chief Executive Officer of the Corporation. He or she shall have such additional powers and shall perform such further duties as may from time to time be assigned to him or her by the Board of Directors, the Executive Committee or the Chief Executive Officer of the Corporation.

Section 6.09. Vice Presidents. Each Vice President shall  have such powers and perform such duties as the Board of Directors or the Executive Committee may from time to time prescribe or as shall be assigned to him or her by the Chief Executive Officer or the President.

Section 6.10. Treasurer. The Treasurer shall have charge  and custody of, and be responsible for, all funds and securities of the Corporation, and shall deposit all such funds to the credit of the Corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of these By-Laws; he or she shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the Executive Committee, making proper vouchers for such disbursements, and shall render to the Board of Directors or the stockholders, whenever the Board may require him or her so to do, a statement of all his or her transactions as Treasurer or the financial condition of the Corporation; and, in general, he or she shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Board of Directors, any Committee of the Board designated by it so to act or the Chief Executive Officer or the President.

Section 6.11. Secretary. The Secretary shall record or  cause to be recorded in books provided for the purpose the minutes of the meetings of the stockholders, the Board of Directors, and all committees of which a secretary shall not have been appointed; shall see that all notices are duly given in accordance with the provisions of these By-Laws and as required by law; shall be custodian of all corporate records (other than financial) and of the seal of the Corporation and see that the seal is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these By-Laws; shall keep, or cause to be kept, the list of stockholders as required by Section 2.10, which includes the post-office addresses of the stockholders and the number of shares held by them, respectively, and shall make or cause to be made, all proper changes therein, shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed; and, in general, shall perform all duties incident to the office of Secretary and such other duties as may from time to time be assigned to him or her by the Board of Directors, the Executive Committee or the Chief Executive Officer or the President.

Section 6.12. Controller. The Controller shall be in charge  of the books and records of account of the Corporation and of its statistical records. He or she shall keep or cause to be kept, at such office or offices as the Board of Directors may from time to time designate, complete and accurate accounts of all assets, liabilities, receipts, disbursements and other transactions of the Corporation; shall cause regular audits of such books and records to be made; shall be responsible for the preparation and filing of all reports and actions related to or based upon the books and records of the Corporation; shall render financial statements at the annual meeting of stockholders, if called upon so to do, or at the request of any director or the Board of Directors; shall render to the Board of Directors such statistical reports and analyses as the Board from time to time may require; and, in general, shall perform all the duties incident to the office of Controller and such other duties as from time to time may be

 

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assigned to him or her by the Board of Directors, the Executive Committee or the Chief Executive Officer or the President.

Section 6.13. Salaries. The salaries of the principal offi  cers of the Corporation shall be fixed from time to time by the Board of Directors or an appropriate Committee of the Board, and none of such officers shall be prevented from receiving a salary by reason of the fact that he or she is also a director of the Corporation.

ARTICLE VII  .
 
Contracts, Checks, Drafts, Bank Accounts, Etc.
 
Section 7.01. Execution of Contracts. Unless the Board  of Directors or the Executive Committee shall otherwise determine, the Chief Executive Officer, the President, any Vice President or the Treasurer and the Secretary or any Assistant Secretary may enter into any contract or execute any contract or other instrument, the execution of which is not otherwise specifically provided for, in the name and on behalf of the Corporation. The Board of Directors, or any committee designated thereby with power so to act, except as otherwise provided in these By-Laws, may authorize any other or additional officer or officers or agent or agents of the Corporation to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances. Unless authorized so to do by these By-Laws or by the Board of Directors or by any such committee, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount.

Section 7.02. Loans. No loan shall be contracted on be  half of the Corporation, and no evidence of indebtedness shall be issued, endorsed or accepted in its name, unless authorized by the Board of Directors or Executive Committee or other committee designated by the Board so to act. Such authority may be general or confined to specific instances. When so authorized, the officer or officers thereunto authorized may effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes or other evidences of indebtedness of the Corporation, and, when authorized as aforesaid, as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, may mortgage, pledge hypothecate or transfer any real or personal property at any time owned or held by the Corporation, and to that end execute instruments of mortgage or pledge or otherwise transfer such property.

Section 7.03. Checks, Drafts, etc. All checks, drafts, bills  of exchange or other orders for the payment of money, obligations, notes, or other evidence of indebtedness, bills of lading, warehouse receipts and insurance certificates of the Corporation shall be signed or endorsed by such officer or officers, agent or agents, attorney or attorneys, employee or employees, of the Corporation as shall from time to time be determined by resolution of the Board of Directors or Executive Committee or other committee designated by the Board so to act.

Section 7.04. Deposits. All funds of the Corporation not  otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the Board of Directors or Executive Committee or other committee designated by the Board so to act may from time to time designate, or as may be designated by any officer or officers or agent or agents of the Corporation to whom such power may be delegated by the Board of Directors or Executive Committee or other committee designated by the Board so to act and, for the purpose of such deposit and for the purposes of collection for the account of the Corporation, all checks, drafts, and other orders for the payment of money which are payable to the order of the Corporation may be endorsed, assigned and delivered by any officer, agent or employee of the Corporation or in such other manner as may from time to time be designated or determined by resolution of the Board of Directors or Executive Committee or other committee designated by the Board so to act.

Section 7.05. Proxies in Respect of Securities of Other Cor  porations. Unless otherwise provided by resolution adopted by the Board of Directors or the Executive Committee or other committee so designated to act by the Board, the Chief Executive Officer or the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation, association

 

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or trust any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation, association or trust, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation, association or trust, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper in the premises.

ARTICLE VIII  .
 
Books and Records.
 
Section 8.01. Place. The books and records of the Corpo  ration may be kept at such places within or without the State of Delaware as the Board of Directors may from time to time determine. The stock record books and the blank stock certificate books shall be kept by the Secretary or by any other officer or agent designated by the Board of Directors.

Section 8.02. Addresses of Stockholders. Each stockholder  shall furnish to the Secretary of the Corporation or to the transfer agent of the Corporation an address at which notices of meetings and all other corporate notices may be served upon or mailed to such stockholder, and if any stockholder shall fail to designate such address, corporate notices may be served upon such stockholder by mail, postage prepaid, to such stockholder at the post-office address last known to the Secretary or to the transfer agent of the Corporation or by transmitting a notice thereof to such stockholder at such address by other available method.

Section 8.03. Record Dates. The Board of Directors may  fix in advance a date, not exceeding sixty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of any rights, or the date when any change or conversion or exchange of capital stock of the Corporation shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting or any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any change, conversion or exchange of capital stock of the Corporation, or to give such consent, and in each such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to notice of, or to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

Section 8.04. Audit of Books and Accounts. The books  and accounts of the Corporation shall be audited at least once in each fiscal year by independent public accountants of good standing, appointed by the Audit Committee (or comparable committee) of the Board.

ARTICLE IX  .
 
Shares and Their Transfer.
 
Section 9.01. Certificates of Stock. Every owner of stock  of the Corporation shall be entitled to have a certificate certifying the number of shares owned by such stockholder in the Corporation and designating the class of stock to which such shares belong. Such certificate shall otherwise be in such form as the Board of Directors shall prescribe from time to time, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of stock of the Corporation shall be uncertificated shares. Notwithstanding the foregoing, each holder of uncertificated shares shall be entitled, upon request, to a certificate representing such shares. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificated shares of the same class and series shall be identical. Each certificate representing shares shall be signed by the Chairman of the Board or the Vice Chairman of the Board or the President or a Vice President and the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the

 

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Corporation; provided, however, that where such certificate is signed or countersigned by a transfer agent or registrar the signatures of such officers of the Corporation and the seal of the Corporation may be in facsimile form. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered by the Corporation as though the person or persons who signed such certificate or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation.

Section 9.02. Record. A record shall be kept of the name  of the person, firm or corporation owning the stock represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, and the date thereof, and, in the case of cancellation, the date of cancellation. The person, firm or corporation in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation.

Section 9.03. Transfer of Stock. Transfers of shares of  the stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by such holder’s attorney thereunto authorized. If such shares of stock are represented by a certificate, upon the surrender of the certificate for such shares to the Corporation or its transfer agent, with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, and with such proof of the authenticity of the signature and of authority to transfer, and of payment of transfer taxes, as the Corporation or its agents may require, the Corporation may issue a new certificate, or, upon request, evidence of the equivalent uncertificated shares, to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the holder of uncertificated shares, the Corporation shall cancel such uncertificated shares and issue new equivalent uncertificated shares, or, upon such holder’s request, certificated shares, to the person entitled thereto, and record the transaction upon its books.

Section 9.04. Transfer Agent and Registrar; Regulations.    The Corporation shall, if and whenever the Board of Directors shall so determine, maintain one or more transfer offices or agencies, each in charge of a transfer agent designated by the Board of Directors, where the shares of the capital stock of the Corporation shall be directly transferable, and also if and whenever the Board of Directors shall so determine, maintain one or more registry offices, each in charge of a registrar designated by the Board of Directors, where such shares of stock shall be registered. The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with these By-Laws, concerning the issue, transfer and registration of certificates for shares of the capital stock of the Corporation.

Section 9.05. Lost, Destroyed or Mutilated Certificates. In  case of the alleged loss or destruction or the mutilation of a certificate representing capital stock of the Corporation, a new certificate or uncertificated shares may be issued in place thereof, in the manner and upon such terms as the Board of Directors may prescribe.

ARTICLE X  .
 
Seal.
 
The Board of Directors shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and the words and figures: Incorporated 1967, Delaware.

ARTICLE XI  .
 
Fiscal Year.
 
The fiscal year of the Corporation shall begin at the opening of business on the Sunday nearest to the first day of January and end at the close of business on the Saturday nearest to the thirty-first day of December in each year, whether such Sunday or Saturday, as the case may be, falls in December or in January.

 

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ARTICLE XII  .
 
Indemnification.
 
 (a) The Corporation shall indemnify, to the full extent permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a director, officer or employee of the Corporation or  while a director, officer or employee of the Corporation is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (each such person being referred to hereafter as an “Indemnitee”), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

(b) The Corporation shall indemnify, to the full extent permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action , suit  or proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was an Indemnitee against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action, suit  or proceeding  if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action, suit or proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

        (c) Notwithstanding the foregoing, except with respect to a proceeding to enforce rights to indemnification or advancement of expenses under this Article XII, the Corporation shall be required to indemnify an Indemnitee under this Article XII in connection with an action, suit or proceeding (or part thereof) initiated by such person only if such action, suit or proceeding (or part thereof) was authorized by the Board of Directors.

(d) To the extent that an Indemnitee shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (a) and (b), or in defense of any claim, issue or matter therein, or in any action, suit or proceeding brought by an Indemnitee to enforce rights to indemnification or advancement of expenses granted pursuant to this Article XII, such person shall be indemnified, to the full extent permitted by law, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(e) Any indemnification under paragraphs (a) and (b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Indemnitee is proper in the circumstances because such person has met the applicable standard of conduct set forth in paragraph (a) or (b), as applicable. Such determination shall be made (1) by the Board of Directors by a majority vote of directors who were not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such disinterested directors designated by a majority vote of such directors, even though less than a quorum, (3) if there are no disinterested directors, or the disinterested directors so direct, by independent legal counsel in a written opinion, or (4)by the stockholders.

(f) Expenses (including attorneys’ fees) incurred by an Indemnitee in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (a) and (b) shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of

 

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such Indemnitee to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article XII. Notwithstanding the foregoing, no advance shall be made by the Corporation if a determination is reasonably and promptly made (1) as to any person who is or was a director or officer of the Corporation (i) by the Board of Directors by a majority vote of disinterested directors, even though less than a quorum, (ii) by a committee of such disinterested directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no disinterested directors, or the disinterested directors so direct, by independent legal counsel in a written opinion, that, based upon the facts known to the Board of Directors, the committee or counsel at the time such determination is made such director or officer acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal proceeding, that such director or officer believed or had reasonable cause to believe such person’s conduct was unlawful, and (2) as to any Indemnitee who is not or was not a director or officer of the Corporation, by the Chief Executive Officer, the President or any Vice President so authorized by the Chief Executive Officer or the President, that, based upon the facts known to the Chief Executive Officer, the President or such Vice President at the time such determination is made such Indemnitee acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal proceeding, that such person believed or had reasonable cause to believe such person’s conduct was unlawful, provided that such Indemnitee shall have the right to present a written appeal of any determination made by the Chief Executive Officer, the President or such Vice President to the persons specified under clause (1) of this paragraph (f), as determined by the Board of Directors. In no event shall any advance be made in instances where the persons specified under clause (1) or (2) of this paragraph (f) reasonably determine that an Indemnitee deliberately breached such person’s duty to the Corporation or its stockholders.

(g) The rights granted pursuant to this Article XII shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. All rights granted pursuant to this Article XII shall vest at the time a person becomes an Indemnitee of the Corporation and shall be deemed to be provided by a contract between the Corporation and each Indemnitee who serves in such capacity at any time while this Article XII is in effect. Any repeal or modification of the provisions of this Article XII shall be prospective only and shall not adversely affect the rights of any Indemnitee in effect under this Article XII at the time of any act or omission occurring prior to such repeal or modification.

(h) The Corporation may purchase and maintain insurance on behalf of any person who is or was an Indemnitee   against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article XII.

(i) For purposes of this Article XII, references to “the Corporation” shall include, in addition to the resulting or surviving corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, which, if its separate existence had continued would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer or employee of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article XII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

( j ) For purposes of this Article XII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer or employee of the Corporation which imposes duties on, or involves services by, such director, officer or employee with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article XII.

 

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(k) The rights granted pursuant to, this Article XII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be an Indemnitee and shall inure to the benefit of the heirs, executors and administrators of such a person .

(l) If any provision or provisions of this Article XII shall be held to be invalid, illegal or unenforceable for any reason whatsoever (1) the validity, legality and enforceability of the remaining provisions of this Article XII (including, without limitation, all portions of any paragraphs of this Article XII containing any such provisions held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (2) to the fullest extent possible, the provisions of this Article XII (including, without limitation, all portions of any paragraph of this Article XII containing any such provision held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

ARTICLE XIII  .
 
Waiver of Notice.
 
Whenever any notice whatever is required to be given by statute, the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE X  IV.
 
Amendments.
 
These By-Laws may be altered, amended or repealed, in whole or in part, and new By-Laws may be adopted, in whole or in part, by the affirmative vote of the holders of record of a majority of the outstanding stock of the Corporation present in person or represented by proxy and entitled to vote in respect thereof, given at an annual meeting or at any special meeting at which a quorum shall be present, or by the affirmative vote of a majority of the whole Board of Directors given at any meeting. Any By-Law made, altered, amended or repealed by the Board of Directors shall be subject to alteration, amendment or repeal by vote of stockholders as provided above.

 

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