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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 1, 1995, between Textron
Inc., a Delaware corporation (the "Corporation"), and Xxxxxxx X.
Key (the "Executive").
WHEREAS, the Corporation currently employs the Executive in
the position of Executive Vice President and Chief Financial
Officer and desires to continue such employment during the term
of this Agreement, and the Executive is willing to continue 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 Financial 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 continue in effect through and including
December 31, 1997, provided, however, that on January 1 of
each year during the term of employment, commencing January
1, 1996, 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 during the term of employment, 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
Agrement, "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 (except Section 4(e)),
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. 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:
Xxxxxxx X. Key
00 Xxxxxxx 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/ Xxxxxxx X. Key
Xxxxxxx X. Key
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)
