Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows: (a) Any Accrued Obligations. (b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's Base Salary rate in effect at any time up to and including the date of the Executive's termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control. (c) A lump-sum cash payment equal to the Prorated Portion of the greater of: (i) the Executive's target annual incentive compensation award established for the fiscal year during which the Executive's award termination occurs, or (ii) the Executive's earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is three hundred sixty-five (365). (d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's highest annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's target incentive compensation established for the fiscal year in which the Executive's date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control. (e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage under applicable retiree health and retiree life insurance plans for the Executive and (in the case of retiree health coverage) the Executive’s eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter. (f) To the extent eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination), continued participation, (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key Executives, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on the date of termination. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period. (g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives and the Spillover Pension Plan and assuming the benefit was fully vested without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated under the assumption that the Executive's employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the actuarial present value), compensation and service credits shall be added). If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurred) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control. (h) A lump-sum cash payment, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates. (i) Full vesting and payment of any outstanding performance share units, assuming performance at target levels for the full performance cycle. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control. (j) Outplacement services at a level commensurate with the Executive's position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination. (k) To the extent that with regard to any particular item, the Executive would receive better treatment under the applicable Company plan or program, such better treatment shall apply. (l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows:
(a) Any Accrued Obligations.
(b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's Base Salary rate in effect at any time up to and including the date of the Executive's termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), ) and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(c) A lump-sum cash payment equal to the Prorated Portion of the greater of: (i) the Executive's target annual incentive compensation award established for the fiscal year during which the Executive's award termination occurs, or (ii) the Executive's earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is three hundred sixty-five (365).
(d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's highest annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's target incentive compensation established for the fiscal year in which the Executive's date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), ) and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage Coverage under all applicable retiree health and other retiree life insurance welfare plans for the Executive and (in the case of retiree health coverage) the Executive’s 's eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end same terms that apply to other salaried retirees of the six-month period, Company and the Company shall reimburse the cost monthly thereaftertheir dependents.
(f) To the extent eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination)Control, continued participation, participation (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key ExecutivesEmployees, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on immediately before the date Change in Control (or, if earlier, at the time of terminationthe Qualifying Termination). The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, period and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period.
(g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives SERP and the Spillover Pension Plan Plan, and assuming the benefit was fully vested without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated under the assumption that the Executive's employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the actuarial present valuevalue but not the commencement date for calculation of benefits (all of which shall be deemed to commence on the date of termination)), compensation (the Executive's "Then Compensation Level") and service credits shall be added). "Then Compensation Level" shall mean an annual rate of compensation equal to the sum of (i) Final Annual Compensation and (ii) the performance units and performance share units earned with respect to the measurement periods ending at or about the end of the fiscal year immediately preceding the year of termination (to the extent recognized in the definition of "Compensation" under the applicable plan; in the case of the SERP as provided in Section 3.4 above such that no amounts deemed earned in respect of performance share units in 2008 (i.e. any grant after the 2005 grant) or later years shall be included in Compensation for purposes of the SERP); provided, however, that with respect to the year of termination, in lieu of utilization of the amount in clause (ii) above, the Executive will be deemed to have received in the year of termination the full amount of performance units and performance share units earned with regard to the measuring periods ending on or about the end of the fiscal year immediately preceding the year of termination (whether or not such amount is actually paid to the Executive prior to the date of termination); provided, further, that, other than as set forth in the immediately preceding proviso, the amounts described in clause (ii) above shall be included in "Compensation" under the plans referred to in this Section 8.2(g) in lieu of any amounts actually paid to the Executive in respect of performance units and performance share units in the year of termination and thereafter. If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not no Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurredControl) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(h) A lump-sum cash payment, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates.
(i) Full vesting and payment of any outstanding performance share units, assuming performance at target levels for the full performance cycle. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(j) Outplacement services at a level commensurate with the Executive's position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination.
(k) To the extent that with regard to any particular item, the Executive would receive better treatment under the applicable Company plan or program, such better treatment shall apply.
(l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows:
(a) Any Accrued Obligations.
(b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's Base Salary rate in effect at any time up to and including the date of the Executive's termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on upon the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) upon the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(c) A lump-sum cash payment equal to the Prorated Portion (as determined in the next sentence) of the greater of: (i) the Executive's target annual incentive compensation award established for the fiscal year during which the Executive's award termination occurs, Termination Year Target Bonus or (ii) the Executive's earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is is, three hundred sixty-five (365).
(d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's highest average annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's target incentive compensation established for the fiscal year in which the Executive's date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage Coverage under all applicable retiree health and other retiree life insurance welfare plans for the Executive and (in the case of retiree health coverage) the Executive’s 's eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end same terms that apply to other salaried retirees of the six-month period, Company and the Company shall reimburse the cost monthly thereaftertheir dependents.
(f) To the extent eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination), continued participation, (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key Executives, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on immediately before the date Change in Control (or, if earlier, at the time of terminationthe Qualifying Termination). The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period.
(g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives SERP and the Spillover Pension Plan Plan, and assuming the benefit was fully vested (and commenced immediately on such termination) without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated with an early retirement factor under Section 2.03 of the SERP of one hundred percent (100%) and under the assumption that the Executive's employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the actuarial present value, but not the commencement date of benefits for calculation purposes (all of which shall be deemed to commence on the date of termination)), compensation (at the Executive's Then Compensation Level) and service credits shall be added). If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not no Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurredControl) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(h) A lump-sum cash payment, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates.
(i) Full vesting and payment of any outstanding performance share units, based on actual performance for the portion of the performance cycle through the date of the Change in Control, and assuming performance at target levels for the full portion of the performance cyclecycle after the Change in Control. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(j) Outplacement services at a level commensurate with the Executive's position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination.
(k) To the extent that with regard to any particular item, the Executive would receive better treatment under the applicable Company plan or program, such better treatment shall apply.
(l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows:
(a) Any Accrued Obligations.
(b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's Base Salary rate in effect at any time up to and including the date of the Executive's termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(c) A lump-sum cash payment equal to the Prorated Portion (as determined in the next sentence) of the greater of: (i) the Executive's target annual incentive compensation award established for the fiscal year during which the Executive's award termination occurs, Termination Year Target Bonus or (ii) the Executive's earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is three hundred sixty-five (365).
(d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's highest average annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's target incentive compensation established for the fiscal year in which the Executive's date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage Coverage under all applicable retiree health and other retiree life insurance welfare plans for the Executive and (in the case of retiree health coverage) the Executive’s 's eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end same terms that apply to other salaried retirees of the six-month period, Company and the Company shall reimburse the cost monthly thereaftertheir dependents.
(f) To the extent eligible prior or after the Change in Control (or, if earlier, earlier the Qualifying Termination), continued participation, participation (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key Executives, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, coverage until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on immediately before the date Change in Control (or, if earlier, at the time of terminationthe Qualifying Termination). The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period.
(g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives SERP and the Spillover Pension Plan Plan, and assuming the benefit was fully vested (and commenced immediately upon such termination) without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated under the assumption that the Executive's employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the early retirement factor and the actuarial present value, but not the commencement date of benefits for calculation purposes (all of which shall be deemed to commence on the date of termination)), compensation (at the Executive's Then Compensation Level) and service credits shall be added). If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not no Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurredControl) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(h) A lump-sum cash payment, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates.
(i) Full vesting and payment of any outstanding performance share units, based on actual performance for the portion of the performance cycle through the date of the Change in Control, and assuming performance at target levels for the full portion of the performance cyclecycle after the Change in Control. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(j) Outplacement services at a level commensurate with the Executive's position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination.
(k) To The Executive shall be entitled to the extent that with regard to any particular itemPerformance Bonus, the Executive would receive better treatment under the applicable Company plan or programsubject to, such better treatment shall applyand in accordance with, Section 3.9 of this Agreement.
(l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows:
(a) Any Accrued Obligations.
(b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's ’s Base Salary rate in effect at any time up to and including the date of the Executive's ’s termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(c) A lump-sum cash payment equal to the Prorated Portion of the greater of: (i) the Executive's ’s target annual incentive compensation award established for the fiscal year during which the Executive's ’s award termination occurs, or (ii) the Executive's ’s earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is three hundred sixty-five (365).
(d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's ’s highest annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's ’s target incentive compensation established for the fiscal year in which the Executive's ’s date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage under applicable retiree health and retiree life insurance plans for the Executive and (in the case of retiree health coverage) the Executive’s eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter.
(f) To the extent eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination), continued participation, (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key Executives, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on the date of termination. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period.
(g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's ’s tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives and the Spillover Pension Plan and assuming the benefit was fully vested without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated under the assumption that the Executive's ’s employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the actuarial present value), compensation and service credits shall be added). If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not no Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurredControl) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(h) A lump-sum cash payment, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates.
(i) Full vesting and payment of any outstanding performance share units, assuming performance at target levels for the full performance cycle. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(j) Outplacement services at a level commensurate with the Executive's ’s position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination.
(k) To the extent that with regard to any particular item, the Executive would receive better treatment under the applicable Company plan or program, such better treatment shall apply.
(l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
Payments Upon a Qualifying Termination. Subject to the provisions of Section 8.1(b) and (c) regarding the time and manner of payment, the payments and benefits payable upon a Qualifying Termination are as follows:
(a) Any Accrued Obligations.
(b) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the highest rate of the Executive's Base Salary rate in effect at any time up to and including the date of the Executive's termination. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 2½ times the Executive’s Base Salary (reduced by any payments attributable to Base Salary made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(b) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(c) A lump-sum cash payment equal to the Prorated Portion (as determined in the next sentence) of the greater of: (i) the Executive's target annual incentive compensation award established for the fiscal year during which the Executive's award termination occurs, Termination Year Target Bonus or (ii) the Executive's earned annual incentive award for the fiscal year prior to the fiscal year in which the earlier of the Change in Control or the Qualifying Termination occurs (whether or not deferred). The "Prorated Portion" of the foregoing amount shall be determined by multiplying such amount by a fraction, the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company, and the denominator of which is is, three hundred sixty-five (365).
(d) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) equal to three (3) times the greater of: (i) the Executive's highest annual incentive compensation earned over the three (3) fiscal years ending prior to the earlier of the Change in Control or the Qualifying Termination (whether or not deferred); or (ii) the Executive's target incentive compensation established for the fiscal year in which the Executive's date of termination occurs. If the Qualifying Termination occurs after a Section 409A Change in Control, the entire amount shall be paid in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to 2 2½ times the bonus amount described in Section 6.3(b)(ii) (reduced by any installment payments attributable to the bonus amount made under Section 6.3(b) before the Change in Control) shall be paid as provided in Section 6.3(b), and any incremental additional amount payable under this Section 8.2(d) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(e) To the extent the Executive is eligible, was eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination) or if the Executive would be eligible with credit for an additional three (3) years of age and service credit, coverage Coverage under all applicable retiree health and other retiree life insurance welfare plans for the Executive and (in the case of retiree health coverage) the Executive’s 's eligible dependents. If the Executive is eligible for retiree life insurance coverage only because of the additional age and service credit, the Executive shall pay the full cost of purchasing the coverage (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), and the Company shall reimburse the Executive for the cost (before tax) of the coverage. The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end same terms that apply to other salaried retirees of the six-month period, Company and the Company shall reimburse the cost monthly thereaftertheir dependents.
(f) To the extent eligible prior or after the Change in Control (or, if earlier, the Qualifying Termination), continued participation, participation (coordinated with (e) above to the extent duplicative), at no additional cost (before tax) to the Executive than the Executive would have as an employee, in the Company’s Survivor Benefit Plan for Textron Key Executives, accidental death and dismemberment insurance coverage, and dependent life insurance coverage, coverage until three (3) years after the date of termination, provided, however, that in the event the Executive obtains other employment that offers substantially similar or improved benefits, as to any particular welfare plan, such continuation of coverage by the Company for such similar or improved benefit under such plan shall immediately cease. The Company shall also reimburse the Executive for the cost (before tax) of purchasing (under the Company’s group insurance policy, or under an individual policy if coverage under the Company’s policy is not available), for the continuation period described in the preceding sentence, the level of Company-paid term life insurance coverage and long-term disability insurance coverage that the Executive received on immediately before the date Change in Control (or, if earlier, at the time of terminationthe Qualifying Termination). The Company shall reimburse the cost of coverage for the first six months following the Executive’s termination in a lump sum, without interest, on the first regular payroll date after the end of the six-month period, and the Company shall reimburse the cost monthly thereafter for the remainder of the continuation period.
(g) A lump-sum cash payment (subject to the distribution rules set forth later in this paragraph) of the actuarial present value equivalent (as determined in accordance with the most favorable (to the Executive) overall actuarial assumptions and subsidies in any of the Company's tax-qualified or nonqualified type defined benefit pension plans in which the Executive then participates) of the accrued benefits accrued by the Executive as of the date of termination under the terms of any nonqualified defined benefit type retirement plan, including but not limited to, the Amended and Restated Supplemental Executive Retirement Plan for Textron Inc. Key Executives SERP and the Spillover Pension Plan Plan, and assuming the benefit was fully vested (and commenced immediately on such termination) without regard to any minimum age or service requirements. For this purpose, such benefits shall be calculated with an early retirement factor under Section 2.03 of the SERP of one hundred percent (100%) and under the assumption that the Executive's employment continued following the date of termination for three (3) full years (i.e., three (3) additional years of age (including, but not limited to, for purposes of determining the actuarial present value, but not the commencement date of benefits for calculation purposes (all of which shall be deemed to commence on the date of termination)), compensation (at the Executive's Then Compensation Level) and service credits shall be added). If the Qualifying Termination occurs after a Section 409A Change in Control, the present value of the amount that would have been payable under the nonqualified defined benefit type retirement plans if not no Change in Control had occurred shall be paid in a lump sum, without interest, on the date when it would otherwise have been payable under the nonqualified plans if no Change in Control had occurred. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, the amount that would have been payable under the nonqualified defined benefit type retirement plans if no Change in Control had occurred (reduced by any payments made under the plans before the Change in Control occurredControl) shall be paid as provided under the terms of the applicable nonqualified plans. In either case, any incremental additional amount payable under this Section 8.2(g) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(h) A lump-sum cash payment, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control, equal to three (3) times the amount of the maximum Company contribution or match to any defined contribution type plan in which the Executive participates.
(i) Full vesting and payment of any outstanding performance share units, assuming performance at 130% of target levels for the full performance cycle. Subject to Section 8.1(c), the payment described in the preceding sentence shall be made in a lump sum, without interest, on the later of (i) on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination, or (ii) within 30 business days after the effective date of the Change in Control. For equity awards other than performance share units, immediate full vesting of any outstanding stock options and other equity awards (and lapse of any forfeiture provisions). In addition, to the extent any stock options are exercisable for less than three (3) years after the Executive's termination (or, if less, the remainder of the respective terms of such options, including any termination of exercisability of all Company stock options in connection with the Change in Control or a merger related thereto), the Executive also shall receive a cash payment equal to the estimated future value of such options for the lesser of three (3) years or the remainder of the respective terms of such options (calculated in accordance with the same Black-Scholes methodology used for the Company's then latest audited financial statements or, if not so used, for internal valuation of the last stock option grants made by the Company prior to the earlier of the Qualifying Termination or the Change in Control). If the Qualifying Termination occurs after a Section 409A Change in Control, the entire Black-Scholes payment shall be made in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s termination. If the Change in Control is not a Section 409A Change in Control, or if the Qualifying Termination precedes a Section 409A Change in Control, an amount equal to the Black-Scholes payment described in Section 6.3(e) (reduced by any Black-Scholes payment made under Section 6.3(e) before the Change in Control) shall be paid as provided in Section 6.3(e), and any incremental additional amount payable under this Section 8.2(i) solely as a result of the Change in Control shall be paid in a lump sum, without interest, on the later of (i) the first regular payroll date after the end of the sixth month following the Executive’s termination, or (ii) within 30 business days after the effective date of the Change in Control.
(j) Outplacement services at a level commensurate with the Executive's position, including use of an executive office and secretary, for a period of one (1) year commencing on the date of termination but in no event extending beyond the date on which the Executive commences other full time employment. The only taxable payments or in-kind benefits provided under this paragraph during the first six months following the Executive’s Qualifying Termination shall be (A) in-kind benefits that the Executive could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income), and (B) reasonable outplacement expenses actually incurred by the Executive and directly related to the Qualifying Termination. Any taxable outplacement expenses incurred during the first six months following the Executive’s termination that are otherwise payable under this paragraph, but whose payment during the initial six-month period would result in additional tax under Section 409A of the Code, shall be paid by the Executive during the initial six-month period; and the Company shall reimburse the Executive for the payments in a lump sum, without interest, on the first regular payroll date after the end of the sixth month following the Executive’s Qualifying Termination.
(k) To the extent that with regard to any particular item, the Executive would receive better treatment under the applicable Company plan or program, such better treatment shall apply.
(l) If the Executive dies after the Executive’s termination of employment and before the end of the six-month period following the Executive’s termination, any payment provided under Section 8.1 or this Section 8.2 that would have been made (in the case of a lump-sum payment) or that would have commenced (in the case of a periodic payment) on the first regular payroll date after the end of the six-month period shall instead be made or commence on the first regular payroll date following the Executive’s death, provided that the Executive’s beneficiary is otherwise entitled to receive the payment under Section 8.1 or this Section 8.2. To the extent that any payment under Section 8.1 or this Section 8.2 is made “on the first regular payroll date” following a date or event, the regular payroll date shall be determined based on the Company’s payroll cycle applicable to the Executive at the time of his separation from service (within the meaning of Section 409A of the Code), without regard to any change in the payroll cycle that becomes effective after the Executive’s separation from service.
Appears in 1 contract
Samples: Employment Agreement (Textron Inc)
