2018 Proxy Statement

29 TEXTRON 2018 PROXY STATEMENT LONG-TERM INCENTIVE COMPENSATION PAYOUTS AND PERFORMANCE ANALYSIS Performance Share Units 3D\RXWV IRU WKH 368 F\FOH ZHUH EDVHG XSRQ SHUIRUPDQFH IRU HDFK RI WKH DQQXDO SHULRGV ZLWKLQ WKH F\FOH DJDLQVW SHUIRUPDQFH JRDOV VHW IRU WKUHH RQH \HDU SHUIRUPDQFH SHULRGV ZHLJKWHG HTXDOO\ ZLWK D PRGL¿HU EDVHG XSRQ TSR relative to our performance peer companies. The performance achieved against the threshold, target and maximum SD\RXWV IRU WKH 368 F\FOH DQG WKH UHVXOWLQJ SHUFHQWDJH HDUQHG E\ WKH H[HFXWLYH RI¿FHUV DUH GHWDLOHG EHORZ The performance metrics for 2017 are described in more detail in the “2017 Annual Incentive Compensation Calculation” chart above and for previous years are described in the proxy statement for the applicable year. Payouts for each individual could range from 0% to 150% of target based on performance. Two measures impact the value of PSU payouts: (i) the number of units earned is based on Textron’s performance against operating metrics and may be adjusted downward (but not upward) in the Committee’s discretion, based upon TSR compared to its peer companies and (ii) the value of each unit earned is based on Textron’s stock price. The tables below show the PSU awards granted in 2015 and associated payouts by executive in terms of both units and value. To validate that the Company’s PSU awards link pay to performance, the Committee evaluated the PSU payouts on the basis of both relative performance (TSR performance vs. peers) and absolute performance (change in stock price) and concluded that the payouts were appropriately linked to Textron’s overall performance. 2015-2017 Performance Share Unit Calculation ($ in millions) Enterprise NOP Manufacturing Cash Flow Threshold 50% Payout Target 100% Payout Maximum 150% Payout $830 $100 $1,526 $863 Enterprise NOP Manufacturing Cash Flow $871 $185 $1,665 $901 Actual: $1,309 Actual: $591 Enterprise NOP Manufacturing Cash Flow $769 $449 $1,459 $1,150 Actual: $1,169 Actual: $993 Component Weighting 60% 40% 60% 40% 60% 40% Component Payout 61.5% 47.9% 57.5% 42.7% 59.7% 51.1% Units Earned as Percent of Original Award: 106.8% TSR Modifier Applied by O&C Committee: -34% Final Payout as % of Original Award: 70.5% 2017 2016 2015 $1,241 $480 $1,348 $543 $1,173 $799 Actual: $1,255 Actual: $631 Total Earned 109.4% 100.2% 110.8%