2019 Proxy Statement

TEXTRON 2019 PROXY STATEMENT 35 TAX CONSIDERATIONS Section 162(m) of the Internal Revenue Code provides that no U.S. income tax deduction is allowable to a publicly held corporation for compensation in excess of $1 million paid to a “covered employee” (generally the NEOs). Under the tax law applicable in 2017 and prior years, “performance based compensation” was exempt from the $1 million limitation if it was payable upon meeting pre established and objective performance goals established by the Committee under a plan that had been approved by shareholders and other tax code requirements were met. In addition, under prior law the principal ¿nancial of¿cer was not treated as a covered employee. In December 2017, the Tax Cuts and Jobs Act (the “Tax Act”) eliminated the exemption from Section 162(m)’s deduction limit for performance based compensation, effective for taxable years beginning after December 1, 2017, unless it quali¿es for transition relief applicable to certain arrangements in place as of November 2, 2017. In addition, the Tax Act broadened the list of covered employees to include the principal ¿nancial of¿cer. As a result of the Tax Act, beginning with our 201 tax year, compensation paid to our named executive of¿cers, including performance based compensation, in excess of $1 million generally will not be tax deductible, with the exception of certain compensation payable under arrangements in place as of November 2, 2017. Because there are uncertainties as to the application of regulations under Section 162(m), as with most tax matters, it is possible that deductions we may claim for compensation payable under arrangements in place as of November 2, 2017, as well as deductions for performance based compensation we have claimed prior to our 201 tax year, may be challenged or disallowed.