Exhibit 10.14C
TEXTRON INC.
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
As of November 16, 1998
Xx. Xxxxx X. Xxxxxxxx
Chairman
Textron Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Dear Xxx:
This letter will set forth the terms of our agreement with
regard to your retirement from service as the Chairman of the
Board of Directors of Textron Inc. (the "Company") and as an
employee of the Company on January 31, 1999 (the "Retirement
Date").
1. You hereby resign effective as of the Retirement Date
as an employee of the Company, as Chairman, and a member, of the
Board of Directors of the Company (the "Board"), and from any and
all other offices, employment relationships, directorships and
fiduciary capacities held with, or on behalf of, the Company and
its subsidiaries and affiliates (the "Textron Group") and any
employee benefit plan of the Textron Group.
2. You will continue to be paid your current base salary
through the Retirement Date in accordance with the Company's
normal payroll practices and will also be entitled to receive
payment of: (i) any unreimbursed business expenses incurred
through the Retirement Date, and (ii) any accrued (but unused)
vacation through the Retirement Date.
3. You will receive a cash bonus under the Company's
Annual Incentive Compensation Plan ("AIC Plan") for the 1998
fiscal year in the amount of One Million Dollars ($1,000,000).
Except with regard to amounts you elect by December 1, 1998 to
defer pursuant to the Company's Deferred Income Plan (the "DIP"),
such bonus will be paid in a cash lump sum at the time the AIC
Plan bonuses for 1998 are paid to members of the Management
Committee.
4. Immediately following your Retirement Date, you (or
your spouse) will commence receiving monthly benefits in the form
of a joint and 50% survivor annuity under the Company's Amended
and Restated Supplemental Retirement Plan for Textron Inc. Key
Executives (the "SERP") in the amounts of $179,515 per month
(subject to adjustment as provided below) while you are alive
and, after your death, $89,758 per month (subject to adjustment
as provided below) to your spouse while she is alive, provided
she is married to you on both the Retirement Date and your date
of death. Such amounts will be offset by the amounts you receive
under the Company's qualified defined benefit pension plan (the
"Pension Plan"), but already reflect the agreed upon offset of
retirement benefits from your prior employers' defined benefit
pension plans. The above amounts were calculated based on agreed
upon assumptions as to the amounts to which you and your spouse
would have been entitled if you had retired on November 30, 1999
when your benefit under the SERP was fully vested and additional
compensation was paid to you until such date. The foregoing
specified amounts assume that in January 1999 you will earn and
receive payment for 50,000 performance share units with a value
of $75 per unit. The parties agree that once the actual number
and value of such units is determined in January 1999, the
foregoing specified amounts of the SERP benefit will be adjusted
to reflect any difference between the foregoing and the actual
numbers and values of performance share units earned and
received. The SERP benefits shall be inclusive of any benefits
you would have received under the pension portion of the
Company's Supplemental Benefits Plan for Textron Key Employees
(the "SBP") and Section 5 of the offer letter dated October 20,
1989 (the "Offer Letter") as continued pursuant to Section 4(c)
of your employment agreement dated November 24, 1989 as amended
as of December 15, 1994 (the "Employment Agreement"), but shall
be in addition to your benefits under any retirement plan
qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), the Textron Inc. Savings Plan
portion of the SBP and the Market Square Trust portion of the
SBP.
5. Under the Company's 1994 Long-Term Incentive Plan (the
"LTIP"), you (or in the case of your death, your estate) will
receive cash payments equal, in the aggregate, to the fair market
value of your 129,000 outstanding performance share units at the
end of each of the applicable measuring periods in accordance
with the payment provisions of the LTIP. All discretionary
performance targets relating to your individual performance shall
be deemed to be fully achieved and the actual level of
achievement of all earnings per share targets shall be determined
as if you continued to be employed by the Company through the end
of the applicable measuring periods. Under the Company's 1987
and 1990 Long-Term Incentive Plans, your outstanding options to
purchase 314,650 shares of the Company's common stock (the
"Common Stock") will remain vested and exercisable in accordance
with the applicable plans and option agreements, until the
earlier of the expiration of the applicable option term or the
third anniversary of the Retirement Date (subject to the
provisions that apply in the event of your death or termination
due to total disability). In addition, promptly after the
Retirement Date, the Company shall issue you pursuant to Section
6 of the Offer Letter 100,000 shares of the Common Stock (as
previously adjusted from 50,000 shares in accordance therewith to
reflect a stock split), provided that, you may elect prior to
delivery of such shares that the number of such shares delivered
to you be reduced to pay withholding on the shares.
6. Pursuant to the grant of 500,000 retirement share units
you received on December 15, 1994 (as adjusted to reflect stock
splits, stock dividends and other similar events) with a stated
value of $49.1875 per unit (as similarly adjusted) under Section
4(h) of the Employment Agreement, which as of this date is
1,000,000 retirement share units with a stated value of
$24.593750 per unit (the "Retirement Share Units"), the Company
will pay you (or, in the event of your death, your estate) an
amount in cash on February 1, 1999 equal to 1,000,000 multiplied
by the difference between the volume weighted average price of
the Common Stock on November 16, 1998 and the stated value of
$24.593750 per unit.
7. Your retirement will be deemed to be a "normal
retirement" for all purposes under the Company's employee benefit
and equity plans and programs in which you participate and,
accordingly, all of your rights and accounts shall vest and cease
to be subject to forfeitures to the maximum extent permitted by
the terms of such plans and programs. You will, of course, be
entitled to your retirement benefits under the Company's tax-
qualified retirement plans including, but not limited to, the
Pension Plan and Savings Plan, in accordance with the terms of
such plans. You will be entitled to continued coverage under
the Survivor Benefits Plan.
8. The Company shall provide each of you and your spouse
with coverage under the Company's health plans for senior
executives until your respective sixty-fifth birthdays. You and
your spouse shall be charged for the premium for the coverage at
the same rate charged for COBRA continuation coverage. To the
extent that you or your spouse would be subject to the
limitations of Section 105(h) of the Code with regard to the
taxation of the benefits provided, such coverage shall be
provided on an insured basis.
9. The Company shall provide you with an executive office
and secretarial services for a period of one (1) year following
your retirement at such location as mutually agreed near where
you are then residing. The Company shall pay or reimburse your
tax preparation expenses (not exceeding $10,000 per year) for the
1998 and 1999 tax years and shall pay your club dues through
December 31, 1999. On the Retirement Date, the Company shall
transfer at no cost to you (other than taxes) ownership of your
current Company car to you.
10. After the Retirement Date, you shall continue to be
indemnified by the Company to the full extent provided or
permitted by the Bylaws and Charter of the Company with regard to
your activities prior to the Retirement Date as an officer or
director of the Company or other members of the Textron Group, as
well as a fiduciary of plans of the Textron Group. The Company
shall continue to cover you under directors and officers
liability insurance with regard to such activities while
potential liability exists in the same amount and to the same
extent as the Company covers its other officers and directors.
11. Your benefits under the DIP will be paid out in five
annual installments commencing in January of 2001 in accordance
with the terms of the DIP. The matching amounts credited to your
stock unit account thereunder will continue to vest after your
retirement in accordance with the DIP until such account is fully
vested.
12. In the event of your death prior to the Retirement
Date, your date of death shall be deemed to be your Retirement
Date and you shall be deemed to have vested in all of the amounts
due hereunder, which shall be paid to your estate in the cases of
Sections 3, 5, 6 and 9 hereof and otherwise as provided in the
applicable plan or program (as modified herein if applicable).
You will also be entitled in such case to the benefits under the
Survivor Benefits Plan.
13. The Company represents and warrants that this Agreement
and, in particular Sections 5 and 6 hereof, have been approved by
the full Board of Directors or a committee thereof that satisfies
the "non-employee director" requirements of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended.
14. You shall not with willful intent to damage
economically or as to reputation or vindictively disparage the
Company, its subsidiaries or their respective past or present
officers, directors or employees (the "Protected Group"),
provided that the foregoing shall not apply to (i) actions or
statements taken or made by you while employed by the Company in
good faith as fulfilling your duties with the Company or
otherwise at the request of the Company, (ii) truthful statements
made in compliance with legal process or governmental inquiry,
(iii) as you in good xxxxx xxxx necessary to rebut any untrue or
misleading public statements made about you or any other member
of the Protected Group, (iv) statements made in good faith by you
to rebut untrue or misleading statements made about you or any
other member of the Protected Group by any member of the
Protected Group, and (v) normal commercial puffery in a
competitive business situation.
15. Neither the Company officially nor any then member of
the Executive Leadership Team (or the equivalent) of the Company,
as such term is currently used within the Company, shall with
willful intent to damage you economically or as to reputation or
otherwise vindictively disparage you, provided the foregoing
shall not apply to (i) actions or statements taken or made in
good faith within the Company in fulfilling duties with the
Company, (ii) truthful statements made in compliance with legal
process, governmental inquiry or as required by legal filing or
disclosure requirements, (iii) as in good faith deemed necessary
to rebut any untrue or misleading statements by you as to any
member of the Protected Group or (iv) normal commercial puffery
in a competitive business situation.
16. You hereby agree that prior to and for a period of one
(1) year after the Retirement Date, you will not engage in
Competition with the Company with any of the Listed Companies,
including, but not limited to: (i) soliciting customers,
business or orders for, or selling any products and services in,
Competition with the Company for such Listed Companies, or (ii)
diverting, enticing, or otherwise taking away customers, business
or orders of the Company, or attempting to do so, in either case
in Competition with the Company for such Listed Companies.
"Competition" shall mean engaging in, as an employee, director,
partner, principal, shareholder, consultant, advisor, independent
contractor or similar capacity, with the Listed Companies,
provided that Competition shall not include: (i) holding five
percent (5%) or less of an interest in the equity or debt of any
publicly traded company, (ii) engaging in any activity with the
prior written approval of the Chief Executive Officer or the O&C
Committee, or (iii) the employment by, or provision of services
to, an investment banking firm or consulting firm that provides
services to entities that are in Competition with the Company,
provided that you do not personally represent or provide services
to such entities that are Listed Companies. The "Listed
Companies" shall be designated in writing by the Company
simultaneous with the execution of this Agreement. In the event
of your material breach or threatened material breach of this
Section, the Company, in addition to its other remedies at law or
in equity, shall be entitled to injunctive or other equitable
relief in order to enforce or prevent your violation of this
Section.
17. All amounts payable hereunder shall be subject to
required withholding and deductions in accordance with applicable
law and the Textron Group's practices.
18. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
19. This Agreement set forth the parties' entire agreement
(and supersedes any and all prior understandings) with respect to
its subject matter, including, without limitation, the Employment
Agreement and the Offer Letter, provided that Section 8 of the
Employment Agreement (regarding setoffs and legal fees) shall
apply to this Agreement. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both
of which taken together shall constitute one and the same
document.
TEXTRON INC.
By:/s/Xxxxx X. Xxxxxxxx
Name:
Title:
Date: November 20, 1998
Agreed & Accepted:
/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Date: November 16, 1998
