2019 Proxy Statement

34 TEXTRON 2019 PROXY STATEMENT ANTI-HEDGING AND PLEDGING POLICY Our executives, including our NEOs, our directors, and their designees are prohibited from engaging in short sales of Textron securities and from engaging in transactions in publicly traded options, such as puts, calls and other derivative securities based on Textron’s securities including any hedging, monetization or similar transactions designed to decrease the risks associated with holding Textron securities, and ¿nancial instruments such as equity swaps, collars, exchange funds and forward sales contracts. In addition, our NEOs and our directors are prohibited from pledging Textron securities as collateral for any loan or holding Textron securities in a margin account. The anti hedging and pledging policy does not apply to employees generally. CLAWBACK POLICY Our 2015 Long Term Incentive Plan, as well as our Short Term Incentive Plan which governs our annual incentive compensation program, include a clawback provision which provides that the Committee shall require reimbursement of any annual incentive payment or long term incentive payment under any award to an executive of¿cer where (i) the payment was predicated upon achieving certain ¿nancial results that were subsequently the subject of a substantial restatement of Company ¿nancial statements, (ii) the Committee determines the executive engaged in intentional misconduct that caused or substantially caused the need for the restatement and (iii) a lower payment would have been made to the executive based upon the restated ¿nancial results. In addition, the Company’s long term incentive award agreements provide that an executive who violates the noncompetition provisions of the award during employment or within two years after termination of employment with the Company forfeits future rights under the award and must repay to the Company value received during the period beginning 1 0 days prior to the earlier of termination or the date the violation occurred. The Company also is subject to the “clawback” provision of Section 0 of the Sarbanes Oxley Act of 2002 which generally requires public company chief executive of¿cers and chief ¿nancial of¿cers to disgorge bonuses, other incentive or equity based compensation, and pro¿ts on sales of company stock that they receive within the 12 month period following the public release of ¿nancial information if there is a restatement because of material noncompliance, due to misconduct, with ¿nancial reporting requirements under the federal securities laws. COMPENSATION ARRANGEMENTS RELATING TO TERMINATION OF EMPLOYMENT Mr. Donnelly’s letter agreement with Textron provides for payment of varying bene¿ts to him upon events such as death, disability, retirement and termination under voluntary, involuntary (for cause), involuntary (not for cause or for good reason) or change in control circumstances. Mr. Donnelly’s termination bene¿ts are consistent with the terms of our previous CEO’s agreement and were approved by the Committee upon Mr. Donnelly’s initial hiring in 200 in order to attract him to Textron. Since hiring Mr. Donnelly, the Committee no longer agrees to formal employment contracts which provide for individual termination protection. Mr. Connor, Mr. Lupone and Ms. Duffy are each eligible for termination bene¿ts that are available to all corporate of¿cers as provided by the Severance Plan for Textron .ey Executives. :ith regard to retirement bene¿ts, in order for Textron to attract Mr. Donnelly to join the Company after his 19 year career at GE, his pension bene¿ts were designed to take into account his years of service at GE so that he would not be disadvantaged by joining Textron. This bene¿t has been effected through the adoption of an amendment to the Textron Spillover Pension Plan adding an appendix which provides a “wrap around pension bene¿t” to Mr. Donnelly in order to compensate for pension bene¿ts at GE that would otherwise not keep pace with his increasing compensation over the course of his career upon joining Textron. The bene¿t takes into account his service with both GE and Textron and uses the de¿nition of pensionable compensation and ¿nal average compensation in the Textron Spillover Pension Plan. This nonquali¿ed pension bene¿t became 100 vested upon his completion of ten years of service with Textron and will be reduced by the combined value of any other bene¿t which he is eligible to receive under (i) a tax quali¿ed de¿ned bene¿t plan maintained by GE, (ii) a tax quali¿ed de¿ned bene¿t plan maintained by Textron and (iii) the Textron Spillover Pension Plan. Mr. Connor’s letter agreement provides for an enhanced pension bene¿t which will give him an additional three years of credited service under the Textron Spillover Pension Plan, subject to the vesting terms of that Plan. Neither Mr. Lupone nor Ms. Duffy has been provided any supplemental or enhanced pension bene¿ts.