Other Equitable Adjustments The Committee will determine equitable adjustments to the number and kind of Shares authorized for issuance under the 2024 Plan, the special limits contained in the 2024 Plan, the number of Shares subject to outstanding awards and the exercise price of such awards in the event of a stock split, reverse stock split, stock dividend, recapitalization or other enumerated transaction. Types of Awards The 2024 Plan authorizes the grant of stock options, stock appreciation rights, performance stock, restricted stock, restricted stock units, performance share units and other awards. Awards under the 2024 Plan shall provide for a minimum vesting period of at least one year from the grant date of the award, provided that vesting may be accelerated as a result of death, disability, or a change of control, and a maximum of 5% of the Shares authorized for issuance under the 2024 Plan may be issued pursuant to Awards that do not comply with this minimum vesting requirement. Stock Options and Stock Appreciation Rights Stock options granted under the 2024 Plan may be nonqualified options or options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code, as amended (the “Code”). Except in the case of certain substitute awards, the exercise price of a stock option granted under the 2024 Plan may not be less than the closing price of a Share on the date of grant. Stock options generally shall have a minimum vesting period of one year from the date of grant. No stock option granted under the 2024 Plan may have a term in excess of ten years, and stock options intended to qualify as incentive stock options are subject to additional restrictions and limitations. A stock appreciation right issued pursuant to the 2024 Plan entitles the holder, upon exercise, to receive the excess of the closing price of a Share on the date of exercise over the grant price per Share. Under the terms of the 2024 Plan, stock appreciation rights may be granted alone or in tandem with stock options and may be settled in Shares, cash or a combination of Shares and cash. Except in the case of certain substitute awards, the per Share grant price of a stock appreciation right granted under the 2024 Plan may not be less than the closing price of a Share on the date of grant. Stock appreciation rights generally shall have a minimum vesting period of one year from the date of grant. Except as specifically authorized by Textron’s shareholders, and except with respect to adjustments to reflect changes in the Company’s capitalization or the assumption or substitution of previously granted awards held by employees of a company that is acquired by or merges with the Company, at any time when the exercise price of an option or stock appreciation right is above the fair market value of a share, the Company shall not reduce the exercise price of such option or stock appreciation right and shall not exchange such option or stock appreciation right for a new award with a lower (or no) exercise price or for cash. Restricted Stock and Restricted Stock Units Restricted stock and restricted stock units represent, respectively, Shares and the right to receive Shares or the cash value thereof, in each case subject to the holder’s continued employment by Textron and other terms and conditions. Under the terms of the 2024 Plan, restricted stock and restricted stock units intended to be settled in Shares generally may not vest earlier than on the first anniversary of grant. Restricted stock units may be settled in Shares, cash or a combination of Shares and cash. Performance Awards Performance stock and performance share units represent respectively, Shares, and a right to receive Shares or the cash value thereof, subject to the satisfaction of performance criteria and other terms and conditions. Under the terms of the 2024 Plan, such awards generally may not vest prior to the first anniversary of grant. The Committee may determine whether the grant, issuance, retention, vesting and/or settlement of any Award (or portion of an Award) under the Plan will be conditioned in whole or in part on the achievement of one or more Performance Targets. A Performance Target may include a threshold level of performance below which no payout or vesting will occur, target levels of performance at which a full payout or full vesting will occur, and/or a maximum level of performance at and above which a maximum payout amount for exemplary performance will occur. 60 TEXTRON 2024 PROXY STATEMENT
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