TEXTRON INC
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<TITLE>ANNUAL INCENTIVE COMPENSATION PLAN</TITLE>
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<P ALIGN="RIGHT">Exhibit 10.1</TD>
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<P ALIGN="CENTER">ANNUAL INCENTIVE COMPENSATION PLAN</P>
<P ALIGN="CENTER">FOR TEXTRON EMPLOYEES</P>
<P ALIGN="CENTER">(Effective January 1, 1994)</P>
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<U><P ALIGN="CENTER">Second Amendment</P>
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<P ALIGN="CENTER">&nbsp;</P>
</B></U><P>&#160;&#160;&#160;&#160;&#160;Pursuant to Section 7.03 of the Annual Incentive Compensation Plan for Textron<BR>
 Employees (the &#147;Plan&#148;), the Board of Directors of Textron Inc. (the &#147;Board&#148;) is <BR>
authorized to amend the Plan at any time. The Board adopted the following amendment <BR>
to the Plan at its September 27, 1997 meeting, effective upon adoption. The amendment <BR>
changes the definition of a &#147;change in control&#148; as used in the Plan to prevent the <BR>
inadvertent triggering of change in control provisions in transactions not involving an <BR>
actual change in control of Textron Inc.</P>
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</FONT><LI>The last paragraph of Section 7.04 of the Plan is amended to read as follows:</LI></OL>
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<P>&#147;For purposes of this Plan, a &#39;Change in Control&#39; shall occur if (I) any &#39;person&#39; or <BR>
&#39;group&#39; (within the meaning of Sections 13(d) and 14(d)(2) of the Securities <BR>
Exchange Act of 1934, as amended (the &#39;Act&#39;)) other than Textron, any trustee or <BR>
other fiduciary holding Textron Common Stock under an employee benefit plan <BR>
of Textron or a related company, or any corporation which is owned, directly or <BR>
indirectly, by the stockholders of Textron in substantially the same proportions as <BR>
their ownership of Textron Common Stock, is or becomes (other than by <BR>
acquisition from Textron or a related company) the &#39;beneficial owner&#39; (as defined <BR>
in Rule 13d&#45;3 under the Act) of more than thirty percent (30%) of the then <BR>
outstanding voting stock of Textron, or (ii) during any period of two consecutive <BR>
years, individuals who at the beginning of such period constitute the Board (and <BR>
any new director whose election by the Board or whose nomination for election <BR>
by Textron&#39;s stockholders was approved by a vote of at least two&#45;thirds of the <BR>
directors than still in office who either were directors at the beginning of such <BR>
period or whose election or nomination for election was previously so approved) <BR>
cease for any reason to constitute a majority thereof, or (iii) stockholders of <BR>
Textron approve a merger or consolidation of Textron with any other corporation, <BR>
other than a merger or consolidation which would result in the voting securities of <BR>
Textron outstanding immediately prior thereto continuing to represent (either by <BR>
remaining outstanding or by being converted into voting securities of the <BR>
surviving entity) more than fifty percent (50%) of the combined voting power of <BR>
the voting securities of Textron or such surviving entity outstanding immediately <BR>
after such merger or consolidation, or (iv) the stockholders of Textron approve a <BR>
plan of complete liquidation of Textron or an agreement for the sale or disposition <BR>
by Textron of all or substantially all of Textron&#39;s assets.&#148;</P>

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<P>IN WITNESS WHEREOF, Textron Inc. has caused this Amendment to be <BR>
executed by its duly authorized officer, to be effective as of September 27, 1997.</P>

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<P>TEXTRON INC.<BR>
By ________________________________<BR>
John D. Butler<BR>
Executive Vice President Administration<BR>
and Chief Human Resources Officer</TD>
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