EXHIBIT 10.9
(TEXTRON LOGO) [b74351tib7435108.gif]
 
DEFERRED INCOME PLAN
FOR NON-EMPLOYEE DIRECTORS
 
As Amended and Restated
Effective January 1, 2009
 

 

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Deferred Income Plan
for Non-Employee Directors
As Amended and Restated
Effective January 1, 2009
Table of Contents

         
Introduction
    1  
 
       
Article I — Definitions
    2  
1.01 “Account”
    2  
1.02 “Beneficiary”
    2  
1.03 “Benefits Committee”
    2  
1.04 “Deferred Income”
    2  
1.05 “IRC”
    2  
1.06 “Participant”
    2  
1.07 “Plan”
    2  
1.08 “Separation From Service”
    3  
1.09 “Textron Company”
    3  
1.10 “Total Disability”
    3  
 
       
Article II — Participation
    3  
2.01 Initial Enrollment
    3  
2.02 Deferral Election
    3  
2.03 Non-Elective Deferred Compensation
    4  
 
       
Article III — Investment Accounts
    4  
3.01 Investment Accounts
    4  
3.02 Moody’s Account
    4  
3.03 Stock Unit Account
    4  
3.04 Quarterly Adjustments
    5  
3.05 Transfers and Distributions From Stock Unit Account
    5  
 
       
Article IV — Vesting
    5  
 
       
Article V — Payments to Participants
    5  
5.01 Separation From Service
    5  
5.02 Time and Form of Payment
    6  
5.03 Distribution Elections
    6  
5.04 Automatic Lump Sum Payments
    7  
5.05 Administrative Adjustments in Payment Date
    7  
5.06 Distributions Before January 1, 2008
    7  

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Article VI — Payments to Beneficiaries
    7  
6.01 Designating a Beneficiary
    7  
6.02 Default Beneficiary
    8  
6.03 Beneficiary Who Is Not Legally Competent
    8  
6.04 Distributions Upon Death
    8  
 
       
Article VII — Unfunded Plan
    8  
 
       
Article VIII — Plan Administration
    8  
8.01 Plan Administrator’s Powers
    8  
8.02 Use of Third Parties to Assist with Plan Administration
    9  
8.03 Proof of Right to Receive Benefits
    9  
8.04 Claims Procedure
    9  
 
       
Article IX — Amendment and Termination
    9  
9.01 Amendment or Termination
    9  
9.02 Restrictions on Amendment or Termination
    9  
9.03 Distributions Upon Plan Termination
    9  
 
       
Article X — Miscellaneous
    10  
10.01 Use of Masculine or Feminine Pronouns
    10  
10.02 Transferability of Plan Benefits
    10  
10.03 Section 409A Compliance
    10  
10.04 Controlling State Law
    11  

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Deferred Income Plan
for Non-Employee Directors
As Amended and Restated
Effective January 1, 2009
Introduction
The Deferred Income Plan for Non-Employee Directors (the “Plan”) is an unfunded,
nonqualified deferred compensation arrangement. The Plan provides both elective
and nonelective deferred compensation for non-employee directors of Textron. The
Plan is amended and restated, effective January 1, 2008, to reflect the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(the “IRC”) and to incorporate certain other changes.
Appendix A sets forth the provisions of the Plan as in effect on October 3,
2004, when IRC Section 409A was enacted as part of the American Jobs Creation
Act of 2004. Deferred compensation that was earned and vested (within the
meaning of Section 409A) before January 1, 2005, and any subsequent increase
that is permitted to be included in this amount under Section 409A, is
calculated and paid solely as provided in Appendix A, and is not subject to any
other provisions of the Deferred Income Plan for Non-Employee Directors.
Deferred compensation that was earned or vested after 2004 and before January 1,
2008, is subject to the provisions of IRC Section 409A. This deferred
compensation is paid exclusively as provided in the Deferred Income Plan for
Non-Employee Directors (not including Appendix A). Although the provisions of
the Deferred Income Plan for Non-Employee Directors generally are effective as
of January 1, 2008, the provisions that govern the distribution of benefits
earned or vested after 2004 are effective as of January 1, 2005.
Section 5.03(a) permits a Participant to make an election before the end of 2007
to receive the Participant’s Account under one of the distribution options in
Section 5.02. Appendix A also permits a Participant to make a distribution
election before the end of 2007 for the benefits payable under the Appendix.
These special election provisions are effective as of July 25, 2007, the date on
which this amended and restated Plan was adopted by the Board of Directors of
Textron Inc.

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Article I — Definitions
In this document, the following terms shall have the meanings set forth in this
Article, unless a contrary or different meaning is expressly provided:

1.01   “Account” means the bookkeeping entry used to record deferred income and
earnings credited to a Participant under the Plan. A Participant’s Account may
be divided into sub-accounts, as determined by the Benefits Committee, to track
earnings on different hypothetical investment funds. All amounts credited to the
Account shall be unfunded obligations of Textron: no assets shall be set aside
or contributed to the Plan for the Participant’s benefit. A Participant’s
Account does not include deferred income that was earned and vested (within the
meaning of IRC Section 409A) before January 1, 2005, and any subsequent increase
that is permitted to be included in such amount under IRC Section 409A. These
amounts are calculated and paid solely as provided in Appendix A.   1.02  
“Beneficiary” means the person or persons entitled under this Plan to receive
Plan benefits after a Participant’s death. A Participant’s estate may also be
the Participant’s Beneficiary.   1.03   “Benefits Committee” means the Employee
Benefits Committee of Textron.   1.04   “Deferred Income” means any elective or
non-elective deferred compensation credited to a Participant’s Account under
this Plan. A Participant’s Deferred Income may consist of one or both of the
following amounts:

  (a)   Automatic Deferred Income: A non-elective deferral of a portion of a
Participant’s annual retainer equal to $100,000 into the Participant’s Stock
Unit Account.     (b)   Elective Deferred Income: A deferral of a Participant’s
annual retainer (in excess of the Automatic Deferred Income) made at the
election of a Participant and credited to the Moody’s Account or Stock Unit
Account at the Participant’s direction.

1.05   “IRC” means the Internal Revenue Code of 1986, as amended. References to
any section of the Internal Revenue Code shall include any final regulations
interpreting that section.   1.06   “Participant” means a current non-employee
director of Textron, or a former non-employee director whose Account has not
been forfeited or fully distributed.

1.07   “Plan” means this Deferred Income Plan for Non-Employee Directors, as
amended and restated from time to time.

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1.08   “Separation From Service” means a Participant’s resignation, removal, or
retirement from Textron’s Board of Directors (for a reason other than death or
Total Disability) that constitutes a good-faith, complete termination of his
relationship with Textron, and that also qualifies as a “separation from
service” for purposes of IRC Section 409A.   1.09   “Textron Company” means
Textron or any company controlled by or under common control with Textron within
the meaning of IRC Section 414(b) or (c).   1.10   “Total Disability” means
physical or mental incapacity of a Participant who is serving as a director on
the disability date that would enable the Participant to receive disability
benefits under the Federal Social Security Act (if he were otherwise eligible
for Social Security disability benefits), and that also qualifies as a
“disability” for purposes of IRC Section 409A.

Article II — Participation

2.01   Initial Enrollment. A non-employee director shall complete the enrollment
process established by Textron in order to become a Participant in the Plan. The
enrollment material shall designate the time and form of distribution for the
Participant’s Account, designate the amount of Elective Deferred Income the
Participant chooses to contribute and the portion allocated to each investment
fund, and identify the Participant’s Beneficiary.

  (a)   If the non-employee director was not previously eligible to participate
in any other account-based elective deferred compensation arrangement of a
Textron Company, he may enroll in the Plan within thirty (30) days after he is
first elected as a non-employee director. A non-employee director’s initial
deferral election shall apply only to compensation paid for services to be
performed in calendar quarters beginning after the election is made. If the
non-employee director does not complete his enrollment within the initial 30-day
period, his enrollment shall not become effective until the beginning of the
next calendar year.     (b)   If a non-employee director was previously eligible
to participate in any other account-based elective deferred compensation
arrangement of a Textron Company, he may enroll in the Plan at a time designated
by Textron, but not later than December 31 of the year in which he is first
elected as a non-employee director, and his enrollment shall not become
effective until the beginning of the next calendar year.

2.02   Deferral Election. Subject to the requirements set forth in Section 2.01,
a Participant may elect to defer any or all of the annual retainer (in excess of
the $100,000 Automatic Deferred Income) into either the Moody’s Account or the
Stock Unit Account. After the Participant’s initial deferral election, the

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    Participant shall file a new deferral election each year, at a time
designated by Textron (but not later than December 31), for any eligible
compensation the Participant will earn in the following year. A deferral
election shall become irrevocable at the election deadline established by
Textron.   2.03   Non-Elective Deferred Compensation. In addition to any
Elective Deferred Income, a Participant’s Stock Unit Account shall automatically
be credited with Automatic Deferred Income equal to a $100,000 portion of a
Participant’s annual retainer.

Article III — Investment Accounts

3.01   Investment Accounts. For recordkeeping purposes, Textron shall maintain a
Moody’s Account and a Stock Unit Account, as necessary, to credit hypothetical
investment gains and losses to a Participant’s Account. A Participant may direct
the extent to which his Elective Deferred Income is allocated initially to the
Moody’s Account or the Stock Unit Account, and Elective Deferred Income will be
credited quarterly. Any Automatic Deferred Income shall be allocated
automatically to the Stock Unit Account.   3.02   Moody’s Account. The Moody’s
Account shall earn interest at a monthly interest rate that is one twelfth of
the greater of (a) 8%, or (b) the average for the calendar month of the Moody’s
Corporate Bond Yield Index as published by Moody’s Investors Service, Inc. (or
any successor thereto), or, if such monthly yield is no longer published, a
substantially similar average selected by the Benefits Committee; provided,
however, that in no event shall the Moody’s Account earn interest at a monthly
rate greater than 120% of the long-term applicable federal rate (as provided
under section 1274(d) of the Code) for the calendar month. Interest shall be
credited as of the end of each calendar quarter, for each month during the
quarter, on the average balance of the Moody’s Account during the quarter,
determined by adding the opening and closing balances for the quarter and
dividing by two.   3.03   Stock Unit Account.

  (a)   The Stock Unit Account shall consist of phantom shares of Textron common
stock. The number of stock units credited to a Participant’s Stock Unit Account
as a result of any elective or non-elective contribution shall equal the amount
of the cash contribution credited on the last day of a calendar quarter divided
by the average of the composite closing prices of Textron common stock, as
reported in The Wall Street Journal, for each trading day in the quarter in
which the credit is made.     (b)   Textron shall credit additional stock units
to a Participant’s Stock Unit Account to reflect dividend equivalents
attributable to the stock units that

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      were credited to the Participant’s Stock Unit Account on the record date.
The number of additional stock units shall be determined by dividing the
dividend amount by the average of the composite closing prices of Textron common
stock, as reported in The Wall Street Journal, for each trading day in the
quarter in which the record date occurs.     (c)   The number of stock units
credited to a Participant’s Stock Unit Account shall be adjusted, without
receipt of any consideration by Textron, on account of any stock split, stock
dividend, or similar increase or decrease affecting Textron common stock, as if
the stock units were actual shares of Textron common stock.     (d)   All
distributions from the Stock Unit Account shall be made in cash. No Textron
common stock shall be distributed from the Plan in any circumstance.

3.04   Quarterly Adjustments. A Participant’s Moody’s Account and Stock Unit
Account shall be adjusted on the last day of each calendar quarter to reflect
additional Deferred Income credited to the Account, distributions from the
Account, and investment gains or losses allocated to the Account.   3.05  
Transfers and Distributions From Stock Unit Account. A Participant who has
Separated From Service may elect to transfer all or part of his Stock Unit
Account in cash to his Moody’s Account. The Participant may elect a transfer
once each calendar quarter, in 5% increments (with a minimum transfer of 10% of
the Stock Unit Account), effective as of the first day of the calendar quarter
following the minimum notice of three business days. The cash value transferred
will be determined by multiplying (a) the average of the composite closing
prices of Textron common stock, as reported in The Wall Street Journal, for the
ten trading days immediately following the calendar quarter in which the
election to transfer was made, times (b) the number of whole and fractional
vested stock units credited to the Participant’s Stock Unit Account on the last
day of the calendar quarter preceding the transfer, times (c) the percentage
being transferred. The same methodology shall be used to determine the amount of
any cash distribution from the Participant’s Stock Unit Account.

Article IV — Vesting
A Participant’s Elective Deferred Income and Automatic Deferred Income shall
always be 100% vested.
Article V — Payments to Participants

5.01   Separation From Service or Total Disability. Upon a Participant’s
Separation From Service or Total Disability, the distribution of the
Participant’s Account

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    shall commence (or, in the case of a lump sum distribution, shall be made)
on the date elected by the Participant in accordance with Section 5.03.   5.02  
Time and Form of Payment. Subject to Section 5.04 (automatic lump-sum
distributions), below, the distribution of a Participant’s Account upon
Separation From Service or Total Disability shall be made in one of the
following forms:

  (a)   A lump sum payment on the tenth business day of the first calendar
quarter commencing after his Separation From Service or Total Disability.    
(b)   A lump sum payment on the last business day of January in the first
calendar year commencing after his Separation From Service or Total Disability.
    (c)   Annual installments over a period not exceeding ten (10) years,
commencing on the last business day of January in the first calendar year after
his Separation From Service or Total Disability, with subsequent installments
paid on the anniversary of that date. The installment payment shall be
calculated each year by dividing the Participant’s unpaid account balance as of
January 1 of that year by the remaining number of unpaid installments.
Installment payments shall be made ratably from the Participant’s Moody’s
Account and Stock Unit Account.

5.03   Distribution Elections.

  (a)   A Participant may make a special election before the end of 2007 to
receive the Participant’s Account under one of the distribution options in
Section 5.02. The Participant may not make a new election under this paragraph
if the election would accelerate payment of the Participant’s benefit into the
year of the new election, or if the new election would postpone a distribution
that otherwise would be made in 2007. An election under this paragraph shall be
made in the manner prescribed by the Plan Administrator; but the election shall
not be required to comply with the requirements of subsection (c), below
(concerning changes in payment elections).     (b)   Any Participant whose
Account is first credited with Deferred Income after 2007 must make a
distribution election at the time of the Participant’s enrollment in the Plan.
If a Participant does not make a valid distribution election at the time of his
initial enrollment, the Participant shall be deemed to have elected a lump sum
payment of his Account on the last business day of January in the first calendar
year commencing after his Separation From Service.

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  (c)   After 2007, a Participant may change the form of payment he previously
elected for his Account once (but only once). The Participant’s new payment
election must satisfy the following requirements:

  (1)   the new election must be made at least twelve months before the date
when payment of the Account would otherwise commence (and the new election shall
be ineffective if a subsequent event causes the original payment date to fall
within the 12-month period);     (2)   the new election must defer the date on
which payment of the Account will commence by at least five years from the
commencement date applicable to the Participant’s previous election; and     (3)
  the new election may not require annual installments to be paid over a period
exceeding five (5) years (or, if less, the number of whole years in the
Participant’s remaining life expectancy, determined as of the payment
commencement date under the Single Life Table in Treas. Reg. § 1.401(a)(9)-9,
Q&A-1).

5.04   Automatic Lump Sum Payments. If the value of a Participant’s Account at
the time of his Separation From Service or Total Disability is $100,000 or less,
the Participant’s Account shall be paid in a lump sum, even if the Participant
elected to receive installments.   5.05   Administrative Adjustments in Payment
Date. A payment is treated as being made on the date when it is due under the
Plan if the payment is made on the due date specified by the Plan, or on a later
date that is either (a) in the same calendar year (for a payment whose specified
due date is on or before September 30), or (b) by the 15th day of the third
calendar month following the date specified by the Plan (for a payment whose
specified due date is on or after October 1). A payment also is treated as being
made on the date when it is due under the Plan if the payment is made not more
than 30 days before the due date specified by the Plan. A Participant may not,
directly or indirectly, designate the taxable year of a payment made in reliance
on the administrative rules in this Section 5.05.   5.06   Distributions Before
January 1, 2008. Distributions after 2004 and before the effective date of the
Plan were made in good faith compliance with IRC Section 409A and Internal
Revenue Service guidance interpreting IRC Section 409A.

Article VI — Payments to Beneficiaries

6.01   Designating a Beneficiary. A Participant may designate one or more
Beneficiaries to receive the Participant’s Account after his death. The
designation shall be made in writing on a form provided by Textron, and shall be
subject to

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    any requirements or conditions Textron imposes. The Participant may change
the Beneficiary designation at any time before the earlier of the Participant’s
death or the complete distribution of the Participant’s Account. If a
Participant’s Account is community property, any designation of a Beneficiary
shall be valid or effective only as permitted under applicable law. Any valid
Beneficiary designation, and any valid change in a previous Beneficiary
designation, shall become effective when Textron receives and accepts the
Beneficiary designation form. The most recent valid Beneficiary designation in
effect at the time of the Participant’s death shall supersede any previous
Beneficiary designation.   6.02   Default Beneficiary. In the absence of an
effective Beneficiary designation, or if all persons so designated have
predeceased the Participant, the Participant’s Account shall be paid to the
Participant’s surviving spouse. If there is no surviving spouse, the
Participant’s Account shall be paid to the Participant’s natural and adopted
children and their descendants per stirpes or, if there are no natural or
adopted children or their descendants, to the Participant’s estate.   6.03  
Beneficiary Who Is Not Legally Competent. If a Participant’s Beneficiary is a
minor, a person who has been declared incompetent, or a person incapable of
handling the disposition of his property, the Benefits Committee may direct
Textron to pay the Participant’s Account to the guardian, legal representative,
or person having the care and custody of such Beneficiary. The Benefits
Committee may require proof of incompetency, minority, incapacity, or
guardianship as it deems appropriate prior to distribution of the Account. Such
distribution shall completely discharge the Benefits Committee and any Textron
Company from all liability with respect to such Beneficiary’s interest in the
Account.   6.04   Distributions Upon Death. If a Participant dies before his
Account has been fully distributed, any amount remaining in his Account at his
death shall be paid to his Beneficiary in a lump sum sixty (60) days after the
Participant’s death. If a Beneficiary is receiving installment payments as of
December 31, 2007, any remaining installments due after 2007 shall be aggregated
and paid in a lump sum on the last business day of January 2008.

Article VII — Unfunded Plan
Benefits provided under this Plan are unfunded obligations of Textron. Nothing
contained in this Plan shall require Textron to segregate any monies from its
general funds, to create any trust, to make any special deposits, or to purchase
any policies of insurance with respect to such obligations.
Article VIII — Plan Administration

8.01   Plan Administrator’s Powers. Textron shall have all such powers as may be
necessary to carry out the provisions hereof. Textron may from time to time

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    establish rules for the administration of this Plan and the transaction of
its business. Subject to Section 8.04, any actions by Textron shall be final,
conclusive and binding on each Participant and all persons claiming by, through
or under any Participant. Textron (and any person or persons to whom it
delegates any of its authority as plan administrator) shall have discretionary
authority to determine eligibility for Plan benefits, to construe the terms of
the Plan, and to determine all questions arising in the administration of the
Plan.   8.02   Use of Third Parties to Assist with Plan Administration. Textron
may employ or engage such agents, accountants, actuaries, counsel, other experts
and other persons as it deems necessary or desirable in connection with the
interpretation and administration of this Plan. Textron and its committees,
officers, directors and employees shall not be liable for any action taken,
suffered or omitted by them in good faith in reliance upon the advice or opinion
of any such agent, accountant, actuary, counsel or other expert. All action so
taken, suffered or omitted shall be conclusive upon each of them and upon all
other persons interested in this Plan.   8.03   Proof of Right to Receive
Benefits. Textron may require proof of death or Total Disability of any
Participant and evidence of the right of any person to receive any Plan benefit.
  8.04   Claims Procedure. A Participant or Beneficiary who believes that he is
being denied a benefit to which he is entitled under the Plan may file a written
request with the Benefits Committee setting forth the claim. The Benefits
Committee shall consider and resolve the claim.

Article IX — Amendment and Termination

9.01   Amendment or Termination. Subject to Section 9.02, below, the Board or
its designee shall have the right to amend, modify, suspend, or terminate this
Plan at any time by written resolution or other formal action reflected in
writing.   9.02   Restrictions on Amendment or Termination. No amendment,
modification, suspension, or termination shall reduce the amount credited to a
Participant’s Account immediately before the effective date of the amendment,
modification, suspension, or termination.   9.03   Distributions Upon Plan
Termination. Upon the termination of the Plan by the Board with respect to all
Participants, and termination of all arrangements sponsored by any Textron
Company that would be aggregated with the Plan under IRC Section 409A, Textron
shall have the right, in its sole discretion, and notwithstanding any elections
made by the Participant, to pay the Participant’s vested Account in a lump sum,
to the extent permitted under IRC Section 409A. All payments that may be made
pursuant to this Section 9.03 shall be made no

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earlier than the thirteenth month and no later than the twenty-fourth month
after the termination of the Plan. Textron may not accelerate payments pursuant
to this Section 9.03 if the termination of the Plan is proximate to a downturn
in Textron’s financial health. If Textron exercises its discretion to accelerate
payments under this Section 9.03, it shall not adopt any new arrangement that
would have been aggregated with the Plan under IRC Section 409A within three
years following the date of the Plan’s termination.
Article X — Miscellaneous

10.01   Use of Masculine or Feminine Pronouns. Unless a contrary or different
meaning is expressly provided, each use in this Plan of the masculine or
feminine gender shall include the other and each use of the singular number
shall include the plural.   10.02   Transferability of Plan Benefits.

  (a)   Textron shall recognize the right of an alternate payee named in a
domestic relations order to receive all or a portion of a Participant’s benefit
under the Plan, provided that (1) the domestic relations order would be a
“qualified domestic relations order” within the meaning of IRC Section 414(p) if
IRC Section 414(p) were applicable to the Plan (except that the order may
require payment to be made to the alternate payee before the Participant’s
earliest retirement age), (2) the domestic relations order does not purport to
give the alternate payee any right to assets of any Textron Company, (3) the
domestic relations order does not purport to allow the alternate payee to defer
payments beyond the date when the benefits assigned to the alternate payee would
have been paid to the Participant, and (4) the domestic relations order does not
require the Plan to make a payment to an alternate payee in any form other than
a cash lump sum.     (b)   Except as provided in subsection (a) concerning
domestic relations orders, no amount payable at any time under this Plan shall
be subject in any manner to alienation, sale, transfer, assignment, pledge or
encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge
or otherwise encumber any such benefit, whether presently or subsequently
payable, shall be void unless so approved. Except as required by law, no benefit
payable under this Plan shall in any manner be subject to garnishment,
attachment, execution or other legal process, or be liable for or subject to the
debts or liability of any Participant or Beneficiary.

10.03   Section 409A Compliance. The Plan is intended to comply with IRC
Section 409A and should be interpreted accordingly. Any distribution election
that would not comply with IRC Section 409A is not effective. To the extent that
a provision

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    of this Plan does not comply with IRC Section 409A, such provision shall be
void and without effect. Textron does not warrant that the Plan will comply with
IRC Section 409A with respect to any Participant or with respect to any payment,
however. In no event shall any Textron Company; any director, officer, or
employee of a Textron Company (other than the Participant); or any member of the
Benefits Committee be liable for any additional tax, interest, or penalty
incurred by a Participant or Beneficiary as a result of the Plan’s failure to
satisfy the requirements of IRC Section 409A, or as a result of the Plan’s
failure to satisfy any other requirements of applicable tax laws.   10.04  
Controlling State Law. This Plan shall be construed in accordance with the laws
of the State of Delaware.

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(TEXTRON LOGO) [b74351tib7435108.gif]
 
DEFERRED INCOME PLAN
FOR NON-EMPLOYEE DIRECTORS
 
APPENDIX A

 
Prior Plan Provisions
(As in effect before January 1, 2008)
 

 

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Deferred Income Plan
for Non-Employee Directors
Appendix A — Prior Plan Provisions
Table of Contents

         
Introduction
    1    
ARTICLE I — PARTICIPATION
    2    
ARTICLE II — DEFERRED INCOME ACCOUNTS
    2    
ARTICLE III — PAYMENTS
    3    
ARTICLE IV — MISCELLANEOUS
    5  

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Deferred Income Plan
for Non-Employee Directors
Appendix A — Prior Plan Provisions
Introduction
Before January 1, 2008, the Deferred Income Plan for Non-Employee Directors (the
“Plan”) provided both elective and nonelective deferred compensation for
non-employee directors of Textron. The Plan has been amended and restated,
effective January 1, 2008, to reflect the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “IRC”) and to incorporate certain
other changes.

A.   Protected Benefits
(Earned and Vested Before 2005)

The portion of Appendix A that follows this Introduction sets forth the
provisions of the Plan as in effect on October 3, 2004, when IRC Section 409A
was enacted as part of the American Jobs Creation Act of 2004, with certain
modifications imposing additional restrictions on distributions and changing
provisions for measuring investment returns. Directors’ deferred compensation
that was earned and vested (within the meaning of Section 409A) before
January 1, 2005, and any subsequent increases that are permitted to be included
in this amount under Section 409A (“Protected Benefits”), are calculated and
paid solely as provided in Appendix A, and are not subject to any other
provisions of the Deferred Income Plan for Non-Employee Directors.
The Protected Benefits are not intended to be subject to IRC Section 409A. No
amendment to this Appendix A that would constitute a “material modification” for
purposes of Section 409A shall be effective unless the amending instrument
states that it is intended to materially modify Appendix A and to cause the
Protected Benefits to become subject to Section 409A. Although the Key Executive
Protected Benefits are not intended to be subject to Section 409A, no Textron
Company (nor any director, officer, or other representative of a Textron
Company) shall be liable for any adverse tax consequence suffered by a Director
or Beneficiary if a Protected Benefit becomes subject to Section 409A.

B.   Benefits Subject To Section 409A
(Earned or Vested From 2005 Through 2007)

Deferred compensation earned by Directors after 2004, and deferred compensation
that became vested after 2004, are subject to the provisions of IRC
Section 409A. To the extent that these benefits were earned under the Plan
before January 1, 2008, the benefits shall be calculated under the provisions of
the Plan set forth in this Appendix A. However, any benefits earned or vested
under the Plan after 2004 shall be paid exclusively as provided in the Deferred
Income Plan for Non-Employee Directors (not

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including this Appendix A), and shall not be subject to any provision of
Appendix A that relates to the payment or distribution of benefits. Although the
provisions of the Deferred Income Plan for Non-Employee Directors generally are
effective as of January 1, 2008, the provisions that govern the distribution of
benefits earned or vested after 2004 under the Plan are effective as of January
1, 2005.
Section 3.3 requires a Director to make an election before the end of 2007 to
receive the Director’s Account under one of the distribution options in
Section 3.3. This election provision is effective as of July 25, 2007, the date
on which the Plan was adopted by the Board of Directors of Textron Inc.
Deferred Income Plan
for Non-Employee Directors
The text that follows sets forth the provisions of the Plan as in effect on
October 3, 2004, and as modified thereafter in certain respects that do not
constitute “material modifications” for purposes of IRC Section 409A. The
defined terms in Appendix A relate only to the provisions set forth in
Appendix A: they do not apply to any other provisions of the Deferred Income
Plan for Non-Employee Directors, and terms defined elsewhere in the Deferred
Income Plan for Non-Employee Directors do not apply to Appendix A. No additional
benefits shall accrue or be deferred under Appendix A after December 31, 2007.
ARTICLE I — PARTICIPATION

  1.1   Non-employee members of the Board of Directors of Textron Inc. may elect
to defer receipt of any or all of the annual retainer, in excess of the $60,000
required deferral to the stock unit account, and meeting fees into either a
stock unit account or an interest-bearing account. The Annual Stock Unit Grant
is automatically deferred into the stock unit account.     1.2   Each Director
must have on file with Textron a Deferral Election Form indicating deferral
elections for the following calendar year(s).     1.3   For any complete
calendar quarters remaining in the calendar year in which an individual
initially becomes a non-employee director, the Director may elect to defer his
or her fees at any time before the start of each such quarter.

ARTICLE II — DEFERRED INCOME ACCOUNTS

  2.1   For record-keeping purposes only, Textron shall maintain a stock unit
account and an interest-bearing account for each non-employee Director.

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  2.2   Stock Unit Account.         The Stock Unit Account shall consist of
Stock Units, which are phantom shares of Textron common stock accumulated and
accounted for the sole purpose of determining the cash payout of any
distribution under this portion of the Plan.         As of the end of each
calendar quarter, Textron shall credit to the Stock Unit Account 10% (includes a
10% Premium contributed by Textron, the “Premium”) of the amount the Director
deferred into this account during the quarter. Textron shall credit no Premium
with respect to the Annual Stock Unit Grant or the required deferral. Textron
shall also credit to this account Stock Units equal to the number of shares of
Textron common stock that would have been allocated on account of dividends.    
    The number of Stock Units Textron shall credit to the Stock Unit Account
will equal the number of shares of Textron common stock that could have been
purchased at a price per share equal to the average price per share of Textron
common stock contributed to the Textron Savings Plan during that quarter.      
  Half of the 10% Premium contributed by Textron shall vest (become
nonforfeitable) on December 31 of the calendar year in which the deferred income
otherwise would have been paid, and the remaining half on the next December 31.
The Premium will continue to vest after the termination of the Directorship. The
Premium will vest only if the related deferred compensation is unpaid at the
time of vesting. Unvested Premiums shall vest immediately upon the Director’s
death or total disability as determined by the Textron Benefits Committee.    
2.3   Moody’s Account         As of the end of each calendar quarter Textron
shall credit to the Moody’s Account an amount equal to interest on the average
balance the Moody’s Account during such quarter. The average balance will be
computed by adding the opening and closing balances for the quarter and dividing
by two. Interest will be credited monthly at the greater of 8% or the Moody’s
Corporate Bond Yield Index Rate.

ARTICLE III — PAYMENTS

  3.1   Payments or withdrawals from either the Stock Unit Account or the
Moody’s Account or transfers between the two accounts shall not be allowed while
the individual remains a Director of Textron. Prior to or at the time of the
Director’s resignation, removal, or retirement from the Board of Directors, the

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      Director must elect a payment schedule.     3.2   Upon the Director’s
resignation, removal, or retirement from the Board of Directors, the Director
may, once each calendar quarter, elect to transfer, in 5% increments (with a
minimum transfer of 10% of the Stock Unit Account), any or all amounts in the
Stock Unit Account to the Moody’s Account. The cash amount transferred will be
determined by multiplying the current value of Textron common stock by the
number of whole or fractional Stock Units in the Stock Unit Account as of the
end of that calendar quarter times the percentage being transferred. The current
value shall be the average of the composite closing prices, as reported in The
Wall Street Journal for the ten trading days immediately following the calendar
quarter in which the election to transfer was made.     3.3   A Director must
make a payment election by completing the Payment Election Form before the end
of 2007. The Director may elect on the Payment Election Form to receive (1) the
entire amount of his or her accounts as soon as practical following the end of
the current quarter which will be deemed to be an election to transfer under the
provisions of paragraph 3.2 in the current quarter all amounts in the Director’s
Stock Unit Account, (2) the entire amount of his or her accounts as soon as
practical following the end of the current calendar year which will be deemed to
be an election to transfer under the provisions of paragraph 3.2 in the final
quarter of the current calendar year all amounts in the Director’s Stock Unit
Account, or (3) payment in a number of annual installments, each payable as soon
as practical following the end of each successive calendar year, over a period
of up to five years which will be deemed to be an election to transfer under the
provisions of paragraph 3.2 in the final quarter of each respective calendar
year an amount, if necessary, from the Director’s Stock Unit Account sufficient
to make the required payment. Annual installments shall be calculated each year
by dividing the unpaid amount as of January 1 of that year by the remaining
number of unpaid installments. If a Director fails to make a payment election
before the end of 2007, the Director’s Account shall be distributed in a lump
sum following the end of the calendar year in which he retires or otherwise
terminates from the Board of Directors.     3.4   During the installment period,
the unpaid balance in the Moody’s Account will continue to earn interest at the
same rate as if the individual had continued as a Director.     3.5   If a
Director dies before his Account has been fully distributed, any amount
remaining in his Account at his death shall be paid to his Beneficiary in a lump
sum on the last business day of the month following his death. If a Beneficiary
is receiving installment payments as of December 31, 2007, any remaining
installments due after 2007 shall be aggregated and paid in a lump

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      sum on the last business day of January 2008.         The designated
beneficiary may be changed from time to time by delivering a new Designation of
Beneficiary Form to Textron. If no designation is made, or if the named
beneficiary predeceases the Director, payment shall be made to the Director’s
estate.   3.6     At the discretion of Textron, the payments to be made after
the Director’s resignation, removal, or retirement from the Board of Directors
pursuant to this Article III may be accelerated in such amounts and at such
times as the Benefits Committee determines.

ARTICLE IV — MISCELLANEOUS

4.1   Benefits provided under this Plan are unfunded obligations of Textron.
Nothing contained in this Plan shall require Textron to segregate any monies
from its general funds with respect to such obligations.   4.2   The Textron
Benefits Committee shall be the plan administrator of this Plan and shall be
solely responsible for its general administration and interpretation and for
carrying out the provisions hereof, and shall have all such powers as may be
necessary to do so.   4.3   Unless a contrary or different meaning is expressly
provided, each use in this Plan of the masculine or feminine shall include the
other and each use of the singular number shall include the plural.   4.4  
Textron shall recognize the right of an alternate payee named in a domestic
relations order to receive all or a portion of a Participant’s benefit under the
Plan, provided that (1) the domestic relations order would be a “qualified
domestic relations order” within the meaning of IRC Section 414(p) if IRC
Section 414(p) were applicable to the Plan (except that the order may require
payment to be made to the alternate payee before the Participant’s earliest
retirement age), (2) the domestic relations order does not purport to give the
alternate payee any right to assets of any Textron Company, (3) the domestic
relations order does not purport to allow the alternate payee to defer payments
beyond the date when the benefits assigned to the alternate payee would have
been paid to the Participant, and (4) the domestic relations order does not
require the Plan to make a payment to an alternate payee in any form other than
a cash lump sum. Except as provided in the preceding sentence concerning
domestic relations orders, no amount payable at any time under this Plan shall
be subject in any manner to alienation, sale, transfer, assignment, pledge or
encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge
or otherwise encumber any such benefit, whether presently or subsequently
payable, shall be void unless so approved. Except as

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      required by law, no benefit payable under this Plan shall in any manner be
subject to garnishment, attachment, execution or other legal process, or be
liable for or subject to the debts or liability of any Director or Beneficiary.
    4.5   The Board or its designee shall have the right to amend, modify,
suspend, or terminate this Plan at any time by written ratification of such
action; provided, however, that no amendment, modification, suspension, or
termination shall reduce the amount credited to either the Stock Unit Account or
the Moody’s Account immediately before the effective date of the amendment,
modification, suspension, or termination.     4.6   This Plan shall be construed
in accordance with the laws of the State of Delaware.

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