SURVIVOR BENEFIT PLAN FOR TEXTRON KEY EXECUTIVES This Plan has been established for the benefit of certain Textron Key Executives to secure their goodwill, loyalty and achievement and to attract to and retain in the employ of Textron Companies persons of ...
SURVIVOR BENEFIT PLAN FOR TEXTRON KEY EXECUTIVES
This Plan has been established for the benefit of certain
Textron Key Executives to secure their goodwill, loyalty and
achievement and to attract to and retain in the employ of
Textron Companies persons of outstanding competence.
This Plan as restated shall be effective from and after
January 1, 1994, except as otherwise provided.
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 "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 Article V to receive a Survivor Benefit after a
Participant's death.
1.03 "Benefits Committee" means the Benefits Committee
appointed by the Board.
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 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 Pension 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 practicable 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:
(1) payment in a single sum; or
(2) payment in a number of annual installments, each
payable as soon as practicable 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
(3) 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 annualized 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 (1) 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.
(2) 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.
(3) 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, non-cancellable life insurance policies
(or portions of such policies) purchased from Pacific Mutual
Life Insurance Company or a successor company or similarly-
rated company, 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.
(4) 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 account under this Plan. 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 At any time prior to her death, 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 or shall have died before the
Survivor Benefit has been fully distributed, the balance of
the Survivor Benefit shall be paid to the Participant's
surviving spouse or, if none, to the Participant's issue per
stirpes or, if no issue, to the executor or administrator of
the Participant's or Beneficiary's estate or as otherwise
determined by the Benefits Committee in its sole discretion.
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 be a welfare plan providing
benefits for a select group of management employees who are
highly compensated, pursuant to Sections 3(1) and 104(a)(3) of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Labor Department Regulations Section
2520.104-24.
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 respective 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.
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 with Textron
on its prescribed forms. 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 a
hearing. Such claimant or her authorized representative may
then review pertinent documents and submit issues and comments
in writing. Textron shall schedule an opportunity for a full
and fair hearing of the issue within the next 60 days. Within
60 days after the hearing, 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 Survivor Benefit 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 Survivor Benefit, whether presently or
subsequently payable, shall be void unless so approved. Except
as required by law, no Survivor 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:
(1) 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
(2) 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.
IN WITNESS WHEREOF, Textron Inc. has caused this restated
Plan to be executed by its duly authorized officer to be
effective as of January 1, 1994.
TEXTRON INC.
By: /s/William F. Wayland
William F. Wayland
Executive Vice President
Administration and
Chief Human Resources Officer
Date: November 27, 1995