EXHIBIT 10.4
SUPPLEMENTAL RETIREMENT PLAN FOR TEXTRON KEY EXECUTIVES
This Plan has been established for the benefit of designated Textron Key
Executives to secure their goodwill, loyalty, and achievement, and to attract
and retain persons of outstanding competence.
This Plan is restated and effective as of January 1, 2001.
ARTICLE I -- DEFINITIONS
Whenever used in this document, the following terms shall have the meanings set
forth in this Article unless a contrary or different meaning is expressly
provided:
1.01 "Beneficiary" means the person or persons entitled under this Plan to
receive Plan benefits after a Participant's death.
1.02 "Benefits Committee" means the Benefits Committee of Textron.
1.03 "Board" means the Board of Directors of Textron.
1.04 "Compensation" means base salary, accrued annual incentive compensation,
performance units, and performance share units, whether or not deferred under
the Deferred Income Plan for Textron Key Executives or Textron Deferred Income
Plan for Executives. However, for any Key Executive who is first awarded
performance share units after October 26, 1999, performance share units shall
not be included in Compensation. Compensation does not include awards under the
Supplemental Bonus Plan for Textron Financial Corporation Executives or the
Textron Quality Management Plan. "Average Compensation" means the average of a
Participant's Compensation during the five consecutive years in which the
Compensation is highest.
1.05 "Key Executive" means an employee of a Textron Company who has been and
continues to be designated as a Key Executive by Textron's Chief Executive
Officer and Chief Human Resources Officer.
1.06 "Normal Form of Benefit" means a life annuity unless the Participant was
designated a Participant in this Plan prior to July 23, 1998, in which case the
Normal Form of Benefit shall be a Joint and 50% Survivor annuity.
1.07 "Participant" means a Key Executive selected by Textron's Chief Executive
Officer for participation in this Plan.
1.08 "Pension Plan" means the Bell Helicopter Textron Retirement Plan,
the Textron Master Retirement Plan, or an included plan.
1.09 "Plan" means this Restated Supplemental Retirement Plan for Textron Key
Executives, as amended and restated from time to time.
1.10 "Surviving Spouse" means a Participant's spouse who is married to the
Participant on the day of the Participant's death while active or on the dates
of the Participant's retirement and death.
1.11 "Textron" means Textron Inc., a Delaware corporation, and any
successor of Textron Inc.
1.12 "Textron Company" means Textron or any company controlled by or under
common control with Textron.
ARTICLE II -- BENEFIT
2.01 Subject to Sections 2.02 and 2.03, the maximum benefit provided to
Participants who qualify for benefits under this Plan is an annuity commencing
upon retirement equal to 50% of Average Compensation (the "Target Benefit") less
the offsets and adjusted by the Early Retirement Factors as set out below.
2.02 The Target Benefit shall be reduced by any nonqualified or qualified
pension plan benefits payable at age 65 from a prior employer other than a
Textron employer. The reduction for any prior employer plans shall be the
actuarial equivalent of a life annuity. The net Target Benefit after reduction
for any prior employer plans shall then be multiplied by the Early Retirement
Factor as set out in Section 2.03 below. The product of the net Target Benefit
times the Early Retirement Factor shall then be reduced by any and all amounts
payable to the Participant at the time of retirement under any qualified or
nonqualified Pension Plan. The reduction for all Pension Plans shall be a Normal
Form of Benefit based on the tables in the Pension Plan. It shall be the
obligation of each Participant to disclose to Textron any amounts that might be
used under this section to reduce the benefits provided by this Plan. Such
disclosure shall include information on annuity payments and lump-sum cash
payments from other plans.
2.03 The Participant's benefits under this Plan shall be based on the
Participant's age at retirement (including death or disability) in accordance
with the following schedule:
EARLY RETIREMENT
AGE AT RETIREMENT FACTORS
- ----------------- -------
65 100%
64 90
63 80
62 70
61 60
60 50
Less Than 60 0
The Organization and Compensation Committee of the Board shall, in its sole
discretion, have the authority to provide a Participant with an enhanced
benefit.
2.04 The Normal Form of Benefit shall be a life annuity unless the Participant
was designated a Participant in this Plan prior to July 23, 1998, in which case
the Normal Form of Benefit shall be a Joint and 50% Survivor annuity. The
payment of any benefit under Section 2.01 shall be paid in the Normal Form of
Benefit or otherwise as determined by Textron's Chief Executive Officer in his
sole discretion after considering any form of payment requested by the
Participant, Surviving Spouse, or other Beneficiary entitled to receive the
benefits. Any form of benefit payable other than the Normal Form shall be the
actuarial equivalent of the Normal Form using the factors in the Textron Master
Retirement Plan. For any individual who becomes a Participant after July 23,
1998, their benefit payments will be reduced if they elect a 50% or a 100% Joint
and Survivor Benefit. The Joint and Survivor factors are the same factors
provided by the Textron Master Retirement Plan.
2.05 If a Participant dies after age 60 and prior to benefit commencement under
this Plan, the Participant's Surviving Spouse will receive an annuity equal to
the amount the Spouse would have received assuming the Participant had requested
a Joint and 50% Survivor annuity and retired the day before he died.
ARTICLE III -- UNFUNDED PLAN
3.01 Benefits to be provided under this Plan are unfunded obligations of
Textron. Nothing contained in this Plan shall require Textron to segregate any
monies from its general funds, to create any trust, to make any special
deposits, or to purchase any policies of insurance with respect to such
obligations. If Textron elects to purchase individual policies of insurance on
one or more of the Participants to help finance its obligations under this Plan,
such individual policies and the proceeds therefrom shall at all times remain
the sole property of Textron and neither the Participants whose lives are
insured nor their Beneficiaries shall have any ownership rights in such policies
of insurance.
3.02 This Plan is intended to provide benefits for a select group of management
employees who are highly compensated, pursuant to Section 110 of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
3.03 No Participant shall be required or permitted to make contributions to this
Plan.
ARTICLE IV -- PLAN ADMINISTRATION
4.01(a) Textron shall be the plan administrator of this Plan and shall be solely
responsible for its general administration and interpretation. Textron shall
have all such powers as may be necessary to carry out the respective provisions
hereof. Textron may from time to time establish rules of the administration of
this Plan and the transaction of its business. Subject to Section 4.03, any
action by Textron shall be final, conclusive, and binding on each Participant
and all persons claiming by, through, or under any Participant.
(b) Notwithstanding any provision in this Plan to the contrary, the Organization
and Compensation Committee of the Board shall render all decisions under this
Plan (including participation, Plan benefits, and benefit distributions)
affecting Textron's Chief Executive Officer.
(c) Textron (and any person or persons to whom it delegates any of its authority
as plan administrator) shall have discretionary authority to determine
eligibility for Plan benefits, to construe the terms of the Plan, and to
determine all questions arising in the administration of the Plan, and shall
make all such determinations and interpretations in a nondiscriminatory manner.
(d) Notwithstanding any provision to the contrary, no benefit shall be paid to
any Participant while employed by Textron.
4.02 Textron may employ or engage such agents, accountants, actuaries, counsel,
other experts, and other persons as it deems necessary or desirable in
connection with the interpretation and administration of this Plan. Textron
shall be entitled to rely upon all certifications made by an accountant selected
by Textron. Textron and its committees, officers, directors, and employees shall
not be liable for any action taken, suffered, or omitted by them in good faith
in reliance upon the advice or opinion of any such agent, accountant, actuary,
counsel, or other expert. All action so taken, suffered, or omitted shall be
conclusive upon each of them and upon all other persons interested in this Plan.
4.03 Textron may require proof of death or total disability of any Participant,
former Participant or beneficiary and evidence of the right of any person to
receive any Plan benefit.
4.04 Claims under this Plan shall be filed in writing with Textron. If a claim
is denied wholly or in part, it shall be denied within a reasonable time after
its filing in a writing delivered to the claimant with the reasons for the
denial, citations to pertinent provisions of the Plan, a description of any
additional material or information to be furnished by the claimant and the
reasons therefor, and an explanation of the Plan's claim review procedure. If
the claimant wishes further consideration of his claim, he or his authorized
representative shall submit to Textron, within 90 days after his claim has been
denied, a written request for reconsideration. Such claimant or his authorized
representative may review pertinent documents and submit issues and comments in
writing. Within 60 days after receiving the request for reconsideration (120
days if additional time is required), Textron shall communicate its decision to
the claimant in writing, stating the reasons for its decision and referring to
pertinent Plan provisions.
4.05 Textron shall withhold from benefits paid under this Plan any taxes or
other amounts required to be withheld by law.
ARTICLE V -- MISCELLANEOUS
5.01 Unless a contrary or different meaning is expressly provided, each use in
this Plan of the masculine or feminine gender shall include the other and each
use of the singular number shall include the plural.
5.02 No amount payable at any time under this Plan shall be subject in any
manner to alienation, sale, transfer, assignment, pledge or encumbrance of any
kind unless specifically approved in writing in advance by the Benefits
Committee or its designee. Any attempt to alienate, sell, transfer, assign,
pledge or otherwise encumber any such benefit, whether presently or subsequently
payable, shall be void unless so approved. Except as required by law, no benefit
payable under this Plan shall in any manner be subject to garnishment,
attachment, execution or other legal process, or be liable for or subject to the
debts or liability of any Participant or beneficiary.
5.03 Notwithstanding any Plan provision to the contrary, the Board or its
designee shall have the right to amend, modify, suspend, or terminate this Plan
at any time by written notification of such action; provided, however, that no
amendment, modification, suspension, or termination:
(a) Shall reduce an amount payable under Article II before the effective date of
the amendment, modification, suspension or termination; or
(b) Shall be made to Section 5.04 following a Change in Control.
5.04 If after a Change in Control any claim is made or any litigation is brought
by a Participant or beneficiary to enforce or interpret any provision contained
in this Plan, Textron and the "person" or "group" described in the next
following sentence shall be liable, jointly and severally, to indemnify the
Participant or beneficiary for the Participant's or beneficiary's reasonable
attorney's fees and disbursements incurred in any such claim or litigation and
for prejudgment interest at the Bankers Trust Company prime interest rate on any
money award or judgment obtained by the Participant or beneficiary.
In the event that the Participant retires or his employment otherwise terminates
at any time after a "Change in Control" as defined below, the Participant shall,
in lieu of the benefit payable under
Article II, receive a benefit equal to the actuarial present value at
termination of the benefit the Participant would have received had the
Participant terminated employment at age 65, based upon the Participant's
Average Compensation as of the date of her termination. If the Participant
terminates within 24 months after the Change in Control, such benefit shall be
paid in a lump sum. If the Participant terminates more than 24 months after the
Change in Control, then the Participant shall be paid in an annuity. The
Benefits Committee shall select the discount rate and mortality table to be used
in determining the actuarial present values.
For purposes of this Plan, a "Change in Control" shall occur if (i) any "person"
or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Act")) other than Textron, any trustee or
other fiduciary holding Textron common stock under an employee benefit plan of
Textron or a related company, or any corporation which is owned, directly or
indirectly, by the stockholders of Textron in substantially the same proportions
as their ownership of Textron common stock, is or becomes (other than by
acquisition from Textron or a related company) the "beneficial owner" (as
defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding
voting stock of Textron, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board (and any
new director whose election by the Board or whose nomination for election by
Textron's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof, or (iii)
stockholders of Textron approve a merger or consolidation of Textron with any
other corporation, other than a merger or consolidation which would result in
the voting securities of Textron outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of Textron or such surviving entity
outstanding immediately after such merger or consolidation, or (iv) the
stockholders of Textron approve a plan of complete liquidation of Textron or an
agreement for the sale or disposition by Textron of all or substantially all of
Textron's assets.
5.05 This Plan shall be construed in accordance with the laws of the State of
Delaware.
5.06 Nothing contained in this Plan shall be construed as a contract of
employment between any Participant and any Textron Company, or to suggest or
create a right in any Participant to be continued in any capacity with, or as an
employee of, any Textron Company.