2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 40 EHJLQ FROOHFWLQJ D UHGXFHG EHQH¿W DV HDUO\ DV DJH %RWK 0U &RQQRU DQG 0V -RKQVRQ TXDOLI\ IRU WKH HDUO\ UHWLUHPHQW EHQH¿W under the TRP. Under the Textron Retirement Account Plan, Textron makes annual contributions to a participant’s account equal to 2% of eligible compensation up to the Internal Revenue Code limit, and the account balance is adjusted for investment gains and losses. The participant may receive the account in a lump sum or as an actuarially equivalent annuity upon termination of employment DW DQ\ DJH 7KH YDOXH RI DQ\ GLVWULEXWLRQ IURP WKH 7H[WURQ 5HWLUHPHQW $FFRXQW 3ODQ RIIVHWV EHQH¿WV DFFUXHG DIWHU XQGHU the pension formula. Effective January 1, 2010, the TRP was closed to new entrants, and new employees, including Mr. Lupone, instead receive an annual company contribution to the Textron Savings Plan equal to 4% of eligible compensation up to the Internal Revenue Code Limit. SPP: SPILLOVER PENSION PLAN 7H[WURQ PDLQWDLQV WKH 6SLOORYHU 3HQVLRQ 3ODQ ³633´ WR FRPSHQVDWH FHUWDLQ 7H[WURQ H[HFXWLYHV IRU SHQVLRQ EHQH¿WV WKDW ZRXOG KDYH EHHQ HDUQHG EXW IRU OLPLWDWLRQV LPSRVHG RQ WD[ TXDOL¿HG SODQV XQGHU IHGHUDO ODZ 7KH IRUPXOD IRU WKH 633 LV WKH VDPH DV WKH IRUPXOD IRU WKH GH¿QHG EHQH¿W SRUWLRQ RI WKH TXDOL¿HG SODQ WKH 753 (OLJLEOH FRPSHQVDWLRQ FRPSRQHQWV LQFOXGH EDVH VDODU\ and annual incentive compensation paid in a given year. The amount included in the formula equals the total of these components ZKHWKHU RU QRW GHIHUUHG OHVV WKH ,QWHUQDO 5HYHQXH &RGH OLPLW QRWHG DERYH LQ %HQH¿WV XQGHU WKH 633 DOVR YHVW DIWHU ¿YH \HDUV RI TXDOLI\LQJ VHUYLFH DQG DUH JHQHUDOO\ SDLG XQGHU WKH VDPH DJH DQG VHUYLFH UHTXLUHPHQWV DV WKH GH¿QHG EHQH¿W SRUWLRQ RI WKH 753 7KLV SODQ LV XQIXQGHG DQG QRW TXDOL¿HG IRU WD[ SXUSRVHV In 2008, an appendix was added to the SPP for certain designated participants hired on or after January 1, 2008, including Mr. 'RQQHOO\ WR SURYLGH D ³ZUDS DURXQG SHQVLRQ EHQH¿W ´ 7KLV DSSHQGL[ ZLOO UHFRJQL]H DQ DGGLWLRQDO EHQH¿W VHUYLFH DFFUXDO LGHQWL¿HG LQ WKH RIIHU OHWWHU RI WKH GHVLJQDWHG SDUWLFLSDQW DQG WKH UHVXOWLQJ FDOFXODWLRQ ZLOO EH RIIVHW E\ WKH SULRU HPSOR\HU DJH EHQH¿W DV GHVFULEHG LQ WKH RIIHU OHWWHU DQG DQ\ TXDOL¿HG DQG QRQ TXDOL¿HG DJH EHQH¿W SURYLGHG E\ 7H[WURQ 6SHFL¿F WR 0U 'RQQHOO\ UHIHU WR WKH &' $ IRU GHWDLOV RQ KLV ³ZUDS DURXQG´ EHQH¿W Effective January 1, 2010, the SPP was closed to new entrants except for those who were participants in the Textron Retirement Program on December 31, 2009. Mr. Lupone, therefore, is not eligible to participate in the SPP. TSPPSO: TEXTRON SUPPLEMENTAL PENSION PLAN IN LIEU OF STOCK OPTIONS 7KH 7H[WURQ 6XSSOHPHQWDO 3HQVLRQ 3ODQ LQ /LHX RI 6WRFN 2SWLRQV ³763362´ LV D SHQVLRQ HQKDQFHPHQW EHQH¿W WKDW ZDV provided to a select group of employees whose stock option grants were reduced beginning in 2003. The plan increases SHQVLRQDEOH HDUQLQJV IRU WKHVH HPSOR\HHV E\ DSSUR[LPDWHO\ %HQH¿WV XQGHU WKH 763362 DOVR YHVW DIWHU ¿YH \HDUV RI TXDOLI\LQJ VHUYLFH DQG DUH JHQHUDOO\ SDLG XQGHU WKH VDPH DJH DQG VHUYLFH UHTXLUHPHQWV DV WKH GH¿QHG EHQH¿W SRUWLRQ RI WKH 753 7KLV SODQ LV XQIXQGHG DQG QRW TXDOL¿HG IRU WD[ SXUSRVHV The TSPPSO is no longer open to new entrants. Based on Ms. Duffy’s position in 2003, she is the only NEO who is eligible to participate in the plan.