Textron 2021 Proxy Statement

TEXTRON 2021 PROXY STATEMENT 25 Practices we prohibit • No single-trigger vesting of long-term incentive awards upon a change in control of the Company • No tax gross-ups for officers hired after 2008 • No employment contracts guaranteeing fixed-term employment or bonuses to executives and no individually negotiated termination protection since 2008 • No excessive executive perquisites • No hedging or pledging Textron securities • No repricing or exchanging stock options without shareholder approval New Long-Term Incentive Compensation Program Design for 2020 For 2020, the Committee implemented a new design for Textron’s long-term incentive compensation (“LTIC”) program for executives. During 2019, the Committee had conducted a thorough and diligent process to update the LTIC program. This process included extensive engagement with the Company’s shareholders to obtain their views and preferences on LTIC design, as well as an in-depth review of the Company’s executive compensation program with the assistance of the Committee’s new independent compensation consultant. This review focused on our LTIC program and included benchmarking competitive pay practices against peer companies, reviewing the efficacy of our program’s performance metrics in driving strategic business objectives and analyzing other potential long-term performance metrics. The changes to our LTIC program to address the clear preferences of our shareholders as well as several changes made to align our program with peer company practice or to achieve objectives identified by the Committee are summarized in the following chart: 2020 Long-Term Incentive Compensation (“LTIC”) Program Changes Change LTI Grants Awarded Prior to 2020 LTI Grants Awarded in 2020 Performance Share Units LTI Award Mix % 40% 50% Performance Period Three one-year periods One three-year period Performance Metrics Net Operating Profit (60%) Manufacturing Cash Flow (40%) Average Return on Invested Capital (50%) Cumulative Manufacturing Cash Flow (30%) Relative Total Shareholder Return (20%) Payout Opportunity Threshold: 50% Maximum: 150% Threshold: 25% Maximum: 200% Restricted Stock Units LTI Award Mix % 30% 25% Vesting Schedule Vest over five years in equal annual installments beginning on the third anniversary of the grant date Vest in full on the third anniversary of the grant date Stock Options LTI Award Mix % 30% 25%