2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 32 ANTI-HEDGING AND PLEDGING POLICY Our executives, including our NEOs, are prohibited from engaging in short sales of Textron securities and from engaging in WUDQVDFWLRQV LQ SXEOLFO\ WUDGHG RSWLRQV VXFK DV SXWV FDOOV DQG RWKHU GHULYDWLYH VHFXULWLHV EDVHG RQ 7H[WURQ¶V VHFXULWLHV LQFOXGLQJ any hedging, monetization or similar transactions designed to decrease the risks associated with holding Textron securities VXFK DV ]HUR FRVW FROODUV DQG IRUZDUG VDOHV FRQWUDFWV ,Q DGGLWLRQ RXU 1(2V DUH SURKLELWHG IURP SOHGJLQJ 7H[WURQ VHFXULWLHV as collateral for any loan or holding Textron securities in a margin account. CLAWBACK POLICY 2XU /RQJ 7HUP ,QFHQWLYH 3ODQ DV ZHOO DV RXU 6KRUW 7HUP ,QFHQWLYH 3ODQ LQFOXGH D FODZEDFN SURYLVLRQ ZKLFK SURYLGHV WKDW WKH &RPPLWWHH VKDOO UHTXLUH UHLPEXUVHPHQW RI DQ\ DQQXDO LQFHQWLYH SD\PHQW RU ORQJ WHUP LQFHQWLYH SD\PHQW XQGHU DQ\ DZDUG WR DQ H[HFXWLYH RI¿FHU ZKHUH L WKH SD\PHQW ZDV SUHGLFDWHG XSRQ DFKLHYLQJ FHUWDLQ ¿QDQFLDO UHVXOWV WKDW ZHUH VXEVHTXHQWO\ WKH VXEMHFW RI D VXEVWDQWLDO UHVWDWHPHQW RI &RPSDQ\ ¿QDQFLDO VWDWHPHQWV LL WKH &RPPLWWHH GHWHUPLQHV WKH executive engaged in intentional misconduct that caused or substantially caused the need for the restatement and (iii) a ORZHU SD\PHQW ZRXOG KDYH EHHQ PDGH WR WKH H[HFXWLYH EDVHG XSRQ WKH UHVWDWHG ¿QDQFLDO UHVXOWV ,Q DGGLWLRQ WKH &RPSDQ\¶V ORQJ WHUP LQFHQWLYH DZDUG DJUHHPHQWV SURYLGH WKDW DQ H[HFXWLYH ZKR YLRODWHV WKH QRQFRPSHWLWLRQ 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 180 days prior to the earlier of termination or the date the violation occurred. 7KH &RPSDQ\ DOVR LV VXEMHFW WR WKH ³FODZEDFN´ SURYLVLRQ RI 6HFWLRQ RI WKH 6DUEDQHV 2[OH\ $FW RI ZKLFK JHQHUDOO\ UHTXLUHV SXEOLF FRPSDQ\ FKLHI H[HFXWLYH RI¿FHUV DQG FKLHI ¿QDQFLDO RI¿FHUV WR GLVJRUJH ERQXVHV RWKHU LQFHQWLYH RU HTXLW\ EDVHG FRPSHQVDWLRQ DQG SUR¿WV RQ VDOHV RI FRPSDQ\ VWRFN WKDW WKH\ UHFHLYH ZLWKLQ WKH PRQWK SHULRG IROORZLQJ WKH SXEOLF UHOHDVH RI ¿QDQFLDO LQIRUPDWLRQ LI WKHUH LV D UHVWDWHPHQW EHFDXVH RI PDWHULDO QRQFRPSOLDQFH GXH WR PLVFRQGXFW ZLWK ¿QDQFLDO reporting requirements under the federal securities laws. COMPENSATION ARRANGEMENTS RELATING TO TERMINATION OF EMPLOYMENT 0U 'RQQHOO\¶V OHWWHU DJUHHPHQW ZLWK 7H[WURQ SURYLGHV IRU SD\PHQW RI YDU\LQJ EHQH¿WV WR KLP XSRQ HYHQWV VXFK DV GHDWK disability, retirement and termination under voluntary, involuntary (for cause), involuntary (not for cause or for good reason), RU FKDQJH LQ FRQWURO FLUFXPVWDQFHV 0U 'RQQHOO\¶V WHUPLQDWLRQ EHQH¿WV DUH FRQVLVWHQW ZLWK WKH WHUPV RI RXU SUHYLRXV &(2¶V agreement and were approved by the Committee upon Mr. Donnelly’s initial hiring in 2008 in order to attract him to Textron. Since hiring Mr. Donnelly, the Committee no longer agrees to formal employment contracts which provide for individual WHUPLQDWLRQ SURWHFWLRQ 0U &RQQRU 0U /XSRQH DQG 0V 'XII\ DUH HDFK HOLJLEOH IRU WHUPLQDWLRQ EHQH¿WV WKDW DUH DYDLODEOH WR DOO FRUSRUDWH RI¿FHUV DV SURYLGHG E\ WKH 6HYHUDQFH 3ODQ IRU 7H[WURQ .H\ ([HFXWLYHV :LWK UHJDUG WR UHWLUHPHQW EHQH¿WV LQ RUGHU IRU 7H[WURQ WR DWWUDFW 0U 'RQQHOO\ WR MRLQ WKH &RPSDQ\ DIWHU KLV \HDU FDUHHU DW *( KLV SHQVLRQ EHQH¿WV ZHUH GHVLJQHG WR WDNH LQWR DFFRXQW KLV \HDUV RI VHUYLFH DW *( VR WKDW KH ZRXOG QRW EH GLVDGYDQWDJHG E\ MRLQLQJ 7H[WURQ 7KLV EHQH¿W KDV EHHQ effected through the adoption of an amendment to the Textron Spillover Pension Plan adding an appendix which provides a ³ZUDS DURXQG SHQVLRQ EHQH¿W´ WR 0U 'RQQHOO\ LQ RUGHU WR FRPSHQVDWH IRU SHQVLRQ EHQH¿WV DW *( WKDW ZRXOG RWKHUZLVH QRW NHHS SDFH ZLWK KLV LQFUHDVLQJ FRPSHQVDWLRQ RYHU WKH FRXUVH RI KLV FDUHHU XSRQ MRLQLQJ 7H[WURQ 7KH EHQH¿W WDNHV LQWR DFFRXQW KLV VHUYLFH ZLWK ERWK *( DQG 7H[WURQ DQG XVHV WKH GH¿QLWLRQ RI SHQVLRQDEOH FRPSHQVDWLRQ DQG ¿QDO DYHUDJH FRPSHQVDWLRQ LQ WKH 7H[WURQ 6SLOORYHU 3HQVLRQ 3ODQ 7KLV QRQTXDOL¿HG SHQVLRQ EHQH¿W ZLOO EHFRPH YHVWHG XSRQ WKH HDUOLHU RI KLV completion of ten years of service with Textron or his attainment of age 62 while employed by Textron and will be reduced by WKH FRPELQHG YDOXH RI DQ\ RWKHU EHQH¿W ZKLFK KH LV HOLJLEOH WR UHFHLYH XQGHU L D WD[ TXDOL¿HG GH¿QHG EHQH¿W SODQ PDLQWDLQHG E\ *( LL D WD[ TXDOL¿HG GH¿QHG EHQH¿W SODQ PDLQWDLQHG E\ 7H[WURQ DQG LLL WKH 7H[WURQ 6SLOORYHU 3HQVLRQ 3ODQ 0U &RQQRU¶V OHWWHU DJUHHPHQW SURYLGHV IRU DQ HQKDQFHG SHQVLRQ EHQH¿W ZKLFK ZLOO JLYH KLP DQ DGGLWLRQDO WKUHH \HDUV RI credited service under the Textron Spillover Pension Plan, subject to the vesting terms of that Plan. Neither Mr. Lupone QRU 0V 'XII\ KDV EHHQ SURYLGHG DQ\ VXSSOHPHQWDO RU HQKDQFHG SHQVLRQ EHQH¿WV