EXHIBIT 10.5
SURVIVOR BENEFIT 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
In this document, the following terms shall have the meanings set forth in this
Article, unless a contrary or different meaning is expressly provided:
1.01 "Base Salary" means the annual rate of base salary of a Participant from a
Textron Company at the time of the Participant's death or termination of Textron
Employment, as applicable. "Base Salary" shall not include incentive payments,
bonuses, supplemental unemployment benefits, contributions to any profit sharing
or bonus plan, or expense reimbursements. Any Base Salary, the receipt of which
by the Participant is deferred under the Textron Savings Plan or the Deferred
Income Plan for Textron Key Executives, shall be Base Salary under this Plan.
The Benefits Committee or its designee shall determine whether a particular item
of income constitutes Base Salary if a question arises.
1.02 "Beneficiary" means the person or persons entitled under this Plan to
receive a Survivor Benefit after a Participant's death.
1.03 "Benefits Committee" means the Benefits Committee of Textron.
1.04 "Board" means the Board of Directors of Textron.
1.05 "Key Executive" means an employee of a Textron Company who has been and
continues to be designated a Key Executive under the Plan by Textron's Chief
Executive Officer and the Chief Human Resources Officer.
1.06 "Participant" means a present Key Executive or a former Key Executive who
continues to be designated a Participant under the Plan by Textron's Chief
Executive Officer and Chief Human Resources Officer.
1.07 "Plan" means this Survivor Benefit Plan for Textron Key Executives, as
amended and restated from time to time.
1.08 "Survivor Benefit" means a benefit payable under Article III of this Plan.
1.09 "Textron" means Textron Inc., a Delaware corporation, and any
successor of Textron Inc.
1.10 "Textron Company" means Textron or any company controlled by or under
common control with Textron.
1.11 "Textron Employment" means employment with a Textron Company. Leaves of
absence for such periods and purposes as are approved by Textron and transfers
of employment within or between Textron Companies shall not be deemed
interruptions of Textron Employment.
1.12 "Total Disability" has the same meaning under this Plan as in the Textron
Master Retirement Plan with respect to any Participant at the date his Textron
Employment ends.
ARTICLE II -- PARTICIPATION
The Chief Executive Officer and the Chief Human Resources Officer of Textron
shall designate from time to time the present and former Key Executives who
shall be Participants in this Plan. A Beneficiary shall be eligible for benefits
only as hereinafter provided.
ARTICLE III -- SURVIVOR BENEFIT
3.01 If a Key Executive's Textron Employment ends because of death, his
Beneficiary shall receive a Survivor Benefit equal to three times the Key
Executive's Base Salary at the time of his death.
3.02 If a Participant's Textron Employment ends (a) at or after age 62 (other
than for less than acceptable performance), (b) as a result of Total Disability,
or (c) under circumstances approved in writing for this specific purpose by the
Chief Executive Officer and the Chief Human Resources Officer of Textron, or
because of death while she is no longer a Key Executive, her Beneficiary shall
receive upon her death a Survivor Benefit equal to two times the Participant's
Base Salary at the time her Textron Employment ended.
3.03 If a Participant's Textron Employment ends other than as described in
Sections 3.01 or 3.02, no Survivor Benefit shall be payable on his account.
ARTICLE IV -- PAYMENT OF SURVIVOR BENEFIT
4.01 The Benefits Committee or its designee shall choose in its sole discretion
the method described in Section 4.02 by which a Survivor Benefit payable under
Article III shall be distributed, after considering any method of payment
requested by the Participant or by the Beneficiary entitled to receive the
benefit.
4.02 As soon as practical after a Survivor Benefit becomes payable under Article
III, Textron, upon the written instructions of the Benefits Committee or its
designee, shall distribute the benefit in accordance with any one of the
following methods:
(a) Payment in a single sum; or
(b) Payment in a number of annual installments, each payable as soon as
practical after the end of each successive calendar year, over a period not
exceeding ten years from the date on which the benefit first becomes payable.
The annual installments shall be calculated in a manner which provides
substantially equal installments or shall be calculated each year by dividing
the unpaid amount of the benefit as of January 1 of that year by the remaining
number of unpaid installments; or
(c) Payment through a combination of the foregoing methods.
4.03 Simple interest shall be credited on any unpaid balance of a Survivor
Benefit based on an average of the monthly Moody's Corporate Bond Yield Index as
published by Moody's Investors Service, Inc. (or any successor thereto), or, if
such average is no longer published, a substantially similar average selected by
the Benefits Committee.
4.04 (a) Notwithstanding any Plan provision to the contrary, upon a Change in
Control as defined in Section 8.03, Textron shall transfer the assets described
in Section 4.04(2) and 4.04(4) to each Participant who is then a Key Executive,
and to each former Key Executive described in Section 3.02 or his Beneficiary.
(b) The assets transferable under Section 4.04(1) shall consist of life
insurance, cash or a combination of life insurance and cash. The target value of
the assets to be transferred shall equal: (a) two times the transferee's Base
Salary immediately before the Change in Control, if her Textron Employment had
not ended before that date; (b) two times the transferee's Base Salary at the
time her Textron Employment ended, if she is then a former employee; or (c) the
balance of the Survivor Benefit, calculated as of immediately before the Change
in Control, if the transferee is a Beneficiary.
(c) For the purposes of Sections 4.04, the value of transferred assets shall
consist of: (a) the face amount of one or more paid-up, noncancellable life
insurance policies (or portions of such policies) naming the Key Executive or
former Key Executive as owner thereof and insured thereunder, and naming his
Beneficiary or other person(s) designated by him as beneficiary thereof, and (b)
in the case of cash transferred under Section 4.04(1) to a Beneficiary, the
amount of that cash.
(d) Upon a Change in Control, Textron shall make good faith efforts to transfer
to each Key Executive or former Key Executive described in Section 4.04(1)
transferred life insurance equal in value to the target value, as defined in
Section 4.04(2), for that individual. If Textron is unable to transfer
sufficient transferred life insurance, Textron shall pay a cash payment
forthwith to the individual in a mutually-agreed amount.
ARTICLE V -- BENEFICIARIES
5.01 A Participant may designate one or more Beneficiaries to receive a Survivor
Benefit payable on the Participant's death. A Beneficiary may designate one or
more Beneficiaries to receive any unpaid balance of a Survivor Benefit, to the
extent this designation does not contravene any designation filed by the
deceased Participant through whom the Beneficiary himself claims under this
Plan. Beneficiaries shall be designated only upon forms made available by or
satisfactory to the Benefits Committee or its designee and filed by the
Participant or Beneficiary with that committee or designee.
5.02 A Participant or Beneficiary may change her own designation of Beneficiary
by filing a substitute designation of Beneficiary with the Benefits Committee or
its designee.
5.03 In the absence of an effective designation of Beneficiary, or if all
persons so designated shall have predeceased the Participant/Beneficiary or
shall have died before the complete distribution of Plan benefits, the balance
of Plan benefits shall be paid to the Participant/Beneficiary's surviving spouse
or, if none, to the Participant/Beneficiary's issue per stirpes or, if no issue,
to the executor or administrator of the Participant/Beneficiary's estate.
5.04 If a Participant's Base Salary or a Survivor Benefit is community property,
any designation of Beneficiary shall be valid or effective only as permitted
under applicable law.
5.05 If a Survivor Benefit is payable to a minor or person declared incompetent
or to a person incapable of handling the disposition of his property, the
Benefits Committee may direct Textron to pay such Survivor Benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or person. The Benefits Committee may require proof of
incompetency, minority, incapacity or guardianship as it deems appropriate prior
to distribution of the Survivor Benefit. Such distribution shall completely
discharge the Benefits Committee and any Textron Company from all liability with
respect to such benefit.
ARTICLE VI -- UNFUNDED PLAN
6.01 Benefits to be provided under this Plan are unfunded obligations of
Textron. Nothing contained in this Plan shall require Textron to segregate any
monies from its general funds, to create any trust, to make any special
deposits, or to purchase any policies of insurance with respect to such
obligations. If Textron elects to purchase individual policies of insurance on
one or more of the Participants to help finance its obligations under this Plan,
then, except as provided in Section 4.04, 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.
6.02 This Plan is intended to provide benefits for a select group of management
employees who are highly compensated, pursuant to Section 104(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended.
6.03 No Participant shall be required or permitted to make contributions to this
Plan.
ARTICLE VII -- PLAN ADMINISTRATION
7.01 Textron shall be the plan administrator of this Plan and shall be solely
responsible for its general administration and interpretation. Textron shall
have all such powers as may be necessary to carry out the provisions hereof.
Textron may from time to time establish rules for the administration of this
Plan and the transaction of its business. Subject to Section 7.04, any action by
Textron shall be final, conclusive and binding on each Participant and all
persons claiming by, through or under any Participant. Textron (and any person
or persons to whom it delegates any of its authority as plan administrator)
shall have discretionary authority to determine eligibility for Plan benefits,
to construe the terms of the Plan, and to determine all questions arising in the
administration of the Plan, and shall make all such determinations and
interpretations in a nondiscriminatory manner.
7.02 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.
7.03 Textron may require proof of the death or Total Disability of any
Participant or Beneficiary and evidence of the right of any person to receive
any Survivor Benefit.
7.04 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 her claim, she or her authorized
representative shall submit to Textron, within 90 days after her claim has been
denied, a written request for reconsideration. Such claimant or her
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.
7.05 Textron shall withhold from benefits paid under this Plan any taxes or
other amounts required to be withheld by law.
ARTICLE VIII -- MISCELLANEOUS
8.01 Unless a contrary or different meaning is expressly provided, each use in
this Plan of the masculine or feminine gender shall include the other and each
use of the singular number shall include the plural.
8.02 No amount payable under this Plan at any time shall be subject in any
manner to alienation, sale, transfer, assignment, pledge or encumbrance of any
kind unless specifically approved in writing in advance by 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.
8.03 Notwithstanding any Plan provision to the contrary, the Board or its
designee shall have the right to amend, modify, suspend or terminate this Plan
at any time by written ratification of such action; provided, however, that no
amendment, modification, suspension or termination:
(a) Shall adversely affect the right of a Beneficiary to receive a Survivor
Benefit, as described in Article IV, payable as the result of the Participant's
death or action taken pursuant to Section 3.02 that occurred before the
effective date of such amendment, modification, suspension or termination; or
(b) Shall be made to Article IV or this Section 8.03 following a Change in
Control. If after a Change in Control any claim is made or any litigation is
brought by a Participant or Beneficiary to enforce or interpret any provision
contained in this Plan, Textron and the "person" or "group" described in the
next following sentence shall be liable, jointly and severally, to indemnify the
Participant or Beneficiary for the Participant's or Beneficiary's reasonable
attorney's fees and disbursements incurred in any such claim or litigation and
for prejudgment interest at the Bankers Trust Company prime interest rate on any
money award or judgment obtained by the Participant or Beneficiary. For purposes
of this Plan, a "Change in Control" shall occur if (i) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Act")) other than Textron, any trustee or other
fiduciary holding Textron Common Stock under an employee benefit plan of Textron
or a related company, or any corporation which is owned, directly or indirectly,
by the stockholders of Textron in substantially the same proportions as their
ownership of Textron Common Stock, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act) of more than 30% of the then outstanding
voting stock of Textron, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board (and any
new director whose election by the Board or whose nomination for election by the
stockholders of Textron was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof, or (iii) the
stockholders of Textron approve a merger
or consolidation of Textron with any other corporation, other than a merger or
consolidation which would result in the voting securities of Textron outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 80% of the combined voting power of the voting securities of
Textron or such surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of Textron approve a plan of complete
liquidation of Textron or an agreement for the sale or disposition by Textron of
all or substantially all of Textron's assets.
8.04 This Plan shall be construed in accordance with the laws of the State of
Delaware.
8.05 Nothing contained in this Plan shall be construed as a contract of
employment between any Participant and any Textron Company, or to suggest or
create a right in any Participant to be continued in employment as a Key
Executive or other employee of any Textron Company.
8.06 Textron, the Chief Executive Officer and the Chief Human Resources Officer,
and the Benefits Committee may impose such other lawful terms and conditions on
participation in this Plan as deemed desirable. The Chief Executive Officer, the
Chief Human Resources Officer and members of the Benefits Committee may
participate in this Plan.
SURVIVOR BENEFIT PLAN FOR
TEXTRON KEY EXECUTIVES
(EFFECTIVE JANUARY 1, 2001)
FIRST AMENDMENT
Pursuant to Section 8.03 of the Survivor Benefit Plan for Textron Key Executives
(Restated, effective January 1, 2001) (the "Plan"), Textron Inc. hereby amends
the Plan, effective August 1, 2003, as follows:
Article II of the Plan is hereby amended by deleting from said Article the
following:
"The Chief Executive Officer and the Chief Human Resources Officer of
Textron shall designate from time to time the present and former Key Executives
who shall be Participants in this Plan."
Article II of the Plan is further amended by adding to the beginning of
said Article the following:
"No Key Executive shall be designated as a Participant in this Plan after
July 31, 2003."
IN WITNESS WHEREOF, Textron Inc. has caused this First Amendment to
be executed by its duly authorized officer to be effective as of August
1, 2003.
TEXTRON INC.
By: ______________________________
George E. Metzger
Vice President Human Resources
and Benefits