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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of June 10, 1997, between Textron Inc., a Delaware
corporation (the "Corporation"), and Xxxx X. Xxxxxx (the "Executive").
WHEREAS, the Corporation desires to employ the Executive in the position of
Executive Vice President and Chief Human Resources Officer during the term of
this Agreement, and the Executive is willing accept such employment upon the
terms and conditions set forth below;
NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the parties hereto hereby agree as
follows:
1. Employment.
The Corporation hereby employs and engages the services of the Executive as
one of its key principal executive officers with the initial position of
Executive Vice President and Chief Human Resources Officer of the
Corporation for the "term of employment" set forth in Section 2 of this
Agreement. The Executive agrees to serve the Corporation in such position
as set forth in Section 3 of this Agreement for the term of employment.
2. Term of Employment.
The Executive's "term of employment" (as that phrase is used herein) shall
be a period commencing on July 1, 1997, and continuing in effect through
and including December 31, 1999, provided, however, that on January 1 of
each year during the term of employment, commencing January 1, 1998, the
term of employment shall automatically be extended for an additional year
unless prior to such January 1 the Corporation gives written notice to the
Executive of the Corporation's intention not to so extend the term of
employment, and provided, further, that in the event the Executive's status
is converted to that of an employee-consultant pursuant to Section 6(b) of
this Agreement, the Executive's term of employment shall expire no earlier
than the second anniversary of the effective date of such conversion.
3. Position and Duties.
(a) During the term of employment the Executive's position, authority
and responsibilities, the type of work he is asked to perform, and the
status and stature of the people with whom he is asked to work, shall
not be diminished, and the Executive's services shall be performed at
the Corporation's headquarters in Providence, Rhode Island or at such
other location (i) as may be mutually agreed between the Corporation
and the Executive or (ii) to which the Corporation's corporate
headquarters is relocated.
(b) The Executive agrees to devote his full business time during
normal business hours to the business and affairs of the Corporation
(except as otherwise provided herein) and to use his best efforts to
promote the interests of the Corporation and to perform faithfully and
efficiently the responsibilities assigned to him in accordance with
the terms of this Agreement, to the extent necessary to discharge such
responsibilities, except for (i) services on corporate, civic or
charitable boards or committees not significantly interfering with the
performance of such responsibilities and (ii) periods of vacation and
sick leave to which he is entitled. It is expressly understood and
agreed that the Executive's continuing service on any boards and
committees with which he shall be connected, as a member or otherwise,
as of the date hereof, or any such service approved by the Corporation
during the term of employment, shall not be deemed to interfere with
the performance of the Executive's services to the Corporation
pursuant to this paragraph (b).
4. Compensation and Other Terms of Employment.
(a) Base Salary. During the term of employment, the Executive shall
receive an annual base salary ("Base Salary"), payable in equal
monthly installments, at an annual rate at least equal to the
aggregate annual base salary payable to the Executive by the
Corporation at the commencement of the term of employment. The Base
Salary shall be reviewed and may be increased at any time and from
time to time in accordance with the Corporation's regular practices.
Any increase in the Base Salary shall not serve to limit or reduce any
other obligation of the Corporation hereunder, and after any such
increase the Base Salary shall not be reduced from such increased
level.
(b) Incentive Plans. As further compensation, the Executive will be
eligible during the term of employment for participation in the
Corporation's short-term incentive compensation plan in a
participation level commensurate with his level of employment. The
Executive shall also be eligible during the term of employment for
awards of stock options and performance units under the Corporation's
long-term incentive plan. In the event such plans are amended or
superseded, the Executive shall be entitled to participate in the
amended or successor plan at a level substantially equivalent to his
participation in the plans immediately prior to such amendment or
succession. Any agreements existing as of the date hereof between the
Corporation and the Executive providing for special incentive or
similar benefits are continued by this Agreement.
(c) Retirement, Savings and Other Executive Plans. In addition to
the Base Salary and incentive plans as hereinabove provided, during
the term of employment the Executive shall be entitled to participate
in all savings, retirement, employee benefit and key executive plans
generally available to executive officers of the Corporation. Nothing
herein shall be construed to prevent the Corporation from amending or
terminating any such plans to the extent currently permitted by the
terms of such plans. Any agreements existing as of the date hereof
between the Corporation and the Executive providing for special
pension, retirement or similar benefits are continued by this
Agreement.
(d) Expenses. During the term of employment, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and
procedures of the Corporation in effect as of the date hereof.
(e) Office and Support Staff. During the term of employment, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other
assistance, commensurate with his level of employment.
(f) Vacation and Fringe Benefits. During the term of employment, the
Executive shall be entitled to paid vacation and fringe benefits
(including, but not limited to, travel facilities) in accordance with
the policies of the Corporation in effect as of the date hereof.
5. Termination.
(a) Death. Except for the obligations of the Corporation set forth
in this paragraph (a), this Agreement shall terminate automatically
upon the Executive's death. In the event of such termination, the
Corporation shall pay to the Executive's estate all benefits and
compensation accrued hereunder through the end of the month in which
the Executive died.
(b) Cause. The Corporation may terminate the Executive's employment
for Cause. For purposes of the Agreement, "Cause" shall mean (i) an
act or acts of dishonesty on the Executive's part which are intended
to result in his substantial personal enrichment at the expense of the
Corporation or (ii) any material violation by the Executive of his
responsibilities set forth in Section 3 or Section 6(c) hereof which
are demonstrably willful and deliberate on the Executive's part and
which result in material injury to the Corporation or (iii) any
material violation by the Executive of Textron's Business Conduct
Guidelines.
If the Executive's employment is terminated for Cause, the
Corporation shall pay the Executive his full accrued Base Salary
through the date of such termination at the rate in effect at the time
of such termination, and the Corporation shall have no further
obligations to the Executive under this Agreement.
6. Consulting Services.
(a) In the event of the Executive's Disability (as hereinafter
defined), the Executive's status shall automatically become that of an
employee-consultant for the remainder of the term of employment.
During such period, the Executive shall be required to provide
services to the Corporation in accordance with paragraph (c) of this
Section 6, but only to the extent the Executive has the ability to
provide such services. Upon the completion of the term of employment,
the Executive shall be entitled to receive (in addition to any other
payments and benefits accrued as of such time) such disability
benefits and other benefits as may be payable to the Executive under
the terms of the employee benefit plans referred to in Section 4(c)
hereof. "Disability" shall mean a disability which prevents the
Executive from performing the services contemplated by Section 3
hereof for the entire remainder of the term of employment.
(b) Notwithstanding any other provisions contained in this Agreement,
the Corporation, at its option for any reason, or the Executive, for
Good Reason (as hereinafter defined), may convert the Executive's
status into that of an employee-consultant for the remainder of the
term of employment in accordance with the procedures set forth in this
paragraph (b). In the event the Corporation determines that the
Executive shall no longer hold his present position or the Corporation
intends to effect any change in the Executive's employment status that
would constitute Good Reason, the Corporation shall give notice to the
Executive of such determination or intention. In the event that the
Executive claims that the Corporation has taken any action
constituting Good Reason, the Executive shall give notice to the
Corporation of such claim. In either event, the parties shall meet
and attempt to reach a mutually satisfactory adjustment of the terms
of the Executive's employment; provided, however, that the Executive
shall not be obligated to accept any change in the terms of his
employment proposed by the Corporation. If the Corporation and the
Executive cannot reach a mutually satisfactory adjustment, either the
Corporation or the Executive may then convert the Executive's status
to that of an employee-consultant.
"Good Reason" shall mean:
(i) without the express written consent of the Executive,
(A) the assignment of the Executive to any duties or location
inconsistent in any significant respect with the provisions of
Section 3(a) hereof, or (B) any other significant change in the
position, authority or responsibilities of the Executive (except
as permitted by this Section 6);
(ii) any failure by the Corporation to comply with any of
the provisions of Section 4 hereof, other than an insubstantial
and inadvertent failure remedied by the Corporation promptly
after receipt of notice thereof given by the Executive; or
(iii) any purported termination by the Corporation of
the Executive's employment hereunder other than in accordance
with, and as permitted by, this Agreement, it being understood
and agreed that any such purported termination shall not be
effective for any purpose of this Agreement.
(c) In the event the Executive's status is converted to that of an
employee-consultant as provided in this Section 6, the Executive shall
continue to be a full-time employee of the Corporation and shall,
except as limited by paragraph (a) of this Section 6, provide such
advisory services concerning the business of the Corporation, of the
same type and stature performed by the Executive prior to the
conversion of his status to employee-consultant, as may reasonably be
requested by the Corporation. The period during which the Executive
serves as an employee-consultant pursuant to this Section 6 shall for
all purposes of this Agreement be considered part of the term of
employment. During such period, the Corporation shall continue to be
bound by, and obligated to perform in all respects, all of the
provisions of Section 4 hereof, and, to the extent not inconsistent
with this Section 6, all of the other provisions of the Agreement
shall continue in full force and effect; provided, however, that
during such period, the Executive shall not be eligible for awards of
stock options and performance units under the Corporation's long-term
incentive plan, nor shall the Executive be entitled to office and
support staff under Section 4(e). During such period, the Executive
shall not engage in any activities in competition with the Corporation
and shall continue to be deemed an employee under all benefit plans
and programs of the Corporation.
7. Non-Exclusivity of Rights.
(a) Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or
other plan or program provided by the Corporation or any of its
affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the
Executive may have under any stock option or other agreements with the
Corporation or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Corporation or any of its
affiliated companies shall be payable in accordance with the terms of
such plan or program.
(b) Notwithstanding the foregoing, and in consideration of the
premises contained in this Agreement, the Executive specifically
waives any rights he may have to receive any severance pay or other
severance benefits under the Textron Executive Severance Plan and any
other severance plan, program or agreement of the Corporation.
8. No Set-Off; Legal Fees.
The Corporation's obligation to make the payments provided for herein and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including without limitation any set-off, counter-claim,
recoupment, defense or other right which the Corporation may have against
the Executive or others. Unless it is finally determined by a court of
competent jurisdiction after all available appeals that the Corporation has
validly terminated the Executive's employment for Cause, the Corporation
agrees to pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any
contest by the Corporation or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof, plus interest on the total unpaid amount determined to
be payable hereunder, such interest to be calculated on the basis of the
prime commercial lending rate announced by Xxxxxx Guaranty Trust Company in
effect from time to time, for the period commencing on the date of such
contest and ending on the date on which the Corporation shall pay such
total amount (such interest to be compounded quarterly).
9. Confidential Information.
The Executive shall hold in a fiduciary capacity for the benefit of the
Corporation all secret or confidential information, knowledge or data
relating to the Corporation or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive
during his employment by the Corporation or any of its affiliated companies
and which shall not be public knowledge. During and after the end of the
term of employment, the Executive shall not, without the prior written
consent of the Corporation, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those designated
by it.
10. No Assignment.
This Agreement is personal to the Executive and without the prior written
consent of the Corporation shall not be assignable by the Executive other
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
11. Miscellaneous.
(a) 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. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified other than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Textron Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to the Corporation:
Textron Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
TEXTRON INC.
By /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Executive Vice President
Administration and
Chief Human Resources Officer
ATTEST:
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Assistant Secretary
(SEAL)
