EXHIBIT 10.8
(TEXTRON LOGO) [b74351tib7435108.gif]
 
DEFERRED INCOME PLAN
FOR TEXTRON EXECUTIVES
 
Effective January 1, 2009
 

 

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Deferred Income Plan
for Textron Executives
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 “Board”
    2    
1.05 “Change in Control”
    2    
1.06 “Deferred Income”
    3    
1.07 “Eligible Individual”
    4    
1.08 “Executive Plan”
    4    
1.09 “Interest”
    4    
1.10 “IRC”
    4    
1.11 “Key Executive Plan”
    4    
1.12 “Participant”
    4    
1.13 “Plan”
    4    
1.14 “Schedule A Participant”
    4    
1.15 “Schedule B Participant”
    4    
1.16 “Separation From Service”
    5    
1.17 “Textron”
    5    
1.18 “Textron Company”
    5  

     
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1.19 “Total Disability”
    5    
1.20 “Unforeseeable Emergency”
    5  
 
       
Article II — Enrollment and Deferrals
    5    
 
         
2.01 Initial Enrollment
    5    
2.02 Deferral Election
    6    
2.03 Deferral Election Requirements
    7    
2.04 Non-Elective Deferred Compensation
    8    
2.05 Changes in Deferral Elections
    9  
 
       
Article III — Investment Accounts
    9  
 
       
3.01 Investment Accounts
    9    
3.02 Moody’s Account
    10    
3.03 Stock Unit Account
    10    
3.04 Monthly Adjustments
    11    
3.05 Transfers and Distributions From Stock Unit Account
    11  
 
       
Article IV — Vesting
    11  
 
       
4.01 Elective Deferred Income and Automatic Deferred Income
    11    
4.02 Discretionary Deferred Income
    11    
4.03 Textron Company Contribution
    11    
4.04 Change in Control
    12    
4.05 Vesting Under Employment Contract
    12    
4.06 Forfeiture of Non-Vested Amounts
    12  
 
       
Article V — Payments to Participants
    12  
 
       
5.01 Separation From Service
    12    
5.02 Total Disability
    12    
5.03 Form of Payment
    12  

     
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5.04 Distribution Elections
    13    
5.05 Automatic Lump Sum Payments
    14    
5.06 Administrative Adjustments in Payment Date
    14    
5.07 Distribution Upon Unforeseeable Emergency
    15    
5.08 Distribution Upon Change in Control
    15    
5.09 Distributions Before July 25, 2007
    15  
 
       
Article VI — Payments to Beneficiaries
    15  
 
       
6.01 Designating a Beneficiary
    15    
6.02 Default Beneficiary
    15    
6.03 Beneficiary Who Is Not Legally Competent
    16    
6.04 Distributions Upon Death
    16  
 
       
Article VII — Unfunded Plan
    16  
 
       
7.01 No Plan Assets
    16    
7.02 Top-Hat Plan Status
    16  
 
       
Article VIII — Plan Administration
    16  
 
       
8.01 Plan Administrator’s Powers
    16    
8.02 Tax Withholding
    17    
8.03 Use of Third Parties to Assist with Plan Administration
    17    
8.04 Proof of Right to Receive Benefits
    17    
8.05 Claims Procedure
    17    
8.06 Enforcement Following a Change in Control
    18  
 
       
Article IX — Amendment and Termination
    19  
 
       
9.01 Amendment
    19    
9.02 Termination
    19    
9.03 Distributions Upon Plan Termination
    19  

     
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Article X — Miscellaneous
    20  
 
       
10.01 Use of Masculine or Feminine Pronouns
    20    
10.02 Transferability of Plan Benefits
    20    
10.03 Section 409A Compliance
    21    
10.04 Controlling State Law
    21    
10.05 No Right to Employment
    21    
10.06 Additional Conditions Imposed
    21  

     
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Deferred Income Plan
for Textron Executives
Effective January 1, 2009
Introduction
The Deferred Income Plan for Textron Executives (the “Plan”) is an unfunded,
nonqualified deferred compensation arrangement. The Plan provides both elective
and nonelective deferred compensation for designated executives of Textron and
its affiliates. The Plan is a continuation of the Deferred Income Plan for
Textron Key Executives (the “Key Executive Plan”) and the Textron Inc. Deferred
Income Plan for Executives (the “Executive Plan”). These plans were combined to
form the Plan effective January 1, 2008.
Appendix A and Appendix B of the Plan set forth the provisions of the Key
Executive Plan and the Executive 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 or Appendix B, whichever is applicable,
and is not subject to any other provisions of the Deferred Income Plan for
Textron Executives.
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
Textron Executives (not including any appendix to the Plan). Although the
provisions of the Deferred Income Plan for Textron Executives generally are
effective as of January 1, 2008, the provisions that govern the distribution of
benefits earned or vested after 2004 under the Key Executive Plan or the
Executive Plan are effective as of January 1, 2005.
Section 5.04(a) permits a Participant to make a special election before the end
of 2007 to receive the Participant’s Account under one of the distribution
options in Section 5.03. Appendix A and Appendix B also permit a Participant to
request a distribution option before the end of 2007 (or before the end of 2008,
in the case of Participants who terminated before 2002) for the benefits payable
under those Appendices. These special election provisions are effective as of
July 25, 2007, the date on which the Plan was adopted by the Board.

     
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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 and Appendix B,
as applicable.     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
  “Board” means the Board of Directors of Textron.     1.05   “Change in
Control” means, for any Participant who was not an employee of a Textron Company
on December 31, 2007:

  (a)   any “person” or “group” (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”) and of
IRC Section 409A) other than Textron, any trustee or other fiduciary holding
Textron common stock under an employee benefit plan of Textron or a related
company, or any corporation which is owned, directly or indirectly, by the
stockholders of Textron in substantially similar proportions as their ownership
of Textron common stock

  (1)   becomes (other than by acquisition from Textron or a related company)
the “beneficial owner” (as defined in Rule 13d-3 under the Act) of stock of
Textron that, together with other stock held by such person or group, possesses
more than 50% of the combined voting power of Textron’s then-outstanding voting
stock, or     (2)   acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person) beneficial ownership
of stock of Textron possessing more than 30% of the combined voting power of
Textron’s then-outstanding stock, or

     
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    (3)   acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person) all or substantially all of
the total gross fair market value of all of the assets of Textron immediately
prior to such acquisition or acquisitions (where gross fair market value is
determined without regard to any associated liabilities); or

  (b)   a merger or consolidation of Textron with any other corporation occurs,
other than a merger or consolidation that would result in the voting securities
of Textron outstanding immediately before the merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) 50% or more of the combined voting power of
the voting securities of Textron or such surviving entity outstanding
immediately after such merger or consolidation, or     (c)   during any 12-month
period, a majority of the members of the Board is replaced by directors whose
appointment or election is not endorsed by a majority of the members of the
Board of Directors before the date of their appointment or election.

Each of the events described above will be treated as a “Change in Control” only
to the extent that it is a change in ownership, change in effective control, or
change in the ownership of a substantial portion of Textron’s assets within the
meaning of IRC Section 409A.
For any Participant who was an employee of a Textron Company on December 31,
2007, the definition set forth above in this Section 1.04 shall be used to
determine whether an event is a “Change in Control” to the extent that the event
would alter the time or form of payment of the Participant’s benefit. To the
extent that the event would cause any change in the Participant’s rights under
the Plan that does not affect the status of the Participant’s benefit under IRC
Section 409A (including, but not limited to, accelerated vesting of the
Participant’s benefit or restrictions on amendments to the Plan), the definition
set forth in Section 9.03 of Appendix A shall be used to determine whether the
event is a “Change in Control.”

  1.06   “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 some or all of the following
amounts:

  A.   Automatic Deferred Income: A non-elective deferral of a performance share
unit payout into a Schedule A Participant’s Stock Unit Account to meet required
stock ownership levels established under the Stock Ownership Guideline Program
for Textron Executives.

     
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  B.   Discretionary Deferred Income: A non-elective contribution made at
Textron’s discretion to the Moody’s Account of a Schedule A or Schedule B
Participant.     C.   Elective Deferred Income: A deferral of eligible
compensation made at the election of a Schedule A or Schedule B Participant and
credited to the Moody’s Account, or (in the case of a Schedule A Participant)
credited to the Stock Unit Account at the Participant’s direction.     D.  
Textron Company Contribution: A matching contribution allocated to a Schedule A
Participant’s Stock Unit Account equal to 10% of any Elective Deferred Income
the Schedule A Participant allocates to the Stock Unit Account.

  1.07   “Eligible Individual” means a management or highly compensated employee
of a Textron Company (a) who is a United States citizen or resident, (b) who is
in a position designated by Textron as Band 1 or who is selected by Textron to
participate in the Plan, and (c) whose annual base salary exceeds the indexed
dollar limit in effect for the current year under IRC Section 414(q)(1)(B)(i).  
  1.08   “Executive Plan” means the Textron Inc. Deferred Income Plan for
Executives, as in effect before January 1, 2008. The provisions of the Executive
Plan are included in this Plan as Appendix B.     1.09   “Interest” means
interest computed under Article III of this Plan.     1.10   “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.     1.11   “Key Executive Plan” means the Deferred Income Plan for
Textron Key Executives, as in effect before January 1, 2008. The provisions of
the Key Executive Plan are included in this Plan as Appendix A.     1.12  
“Participant” means a current Schedule A or Schedule B Participant, or a former
Participant whose Account has not been forfeited or fully distributed.     1.13
  “Plan” means this Deferred Income Plan for Textron Executives, as amended and
restated from time to time.     1.14   “Schedule A Participant” means an
Eligible Individual who is participating in the Plan pursuant to Article II, and
who is in a position designated by Textron as a Band 1 position before the
beginning of the calendar year.     1.15   “Schedule B Participant” means an
Eligible Individual who is participating in the Plan pursuant to Article II, and
who is either (a) an individual selected by Textron to participate in the Plan
who is not in a Band 1 position before the beginning of

     
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      the calendar year, or (b) an employee of a Textron Company who is not
currently in an eligible position, but who made a deferral election under the
Key Executive Plan or the Executive Plan in 2006.     1.16   “Separation From
Service” means a Participant’s termination of employment with all Textron
Companies, other than by reason of death or Total Disability, that qualifies as
a “separation from service” for purposes of IRC Section 409A.     1.17  
“Textron” means Textron Inc., a Delaware corporation, and any successor of
Textron Inc.     1.18   “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).     1.19   “Total Disability” means physical or mental
incapacity of a Participant who is employed by a Textron Company on the
disability date, if the incapacity (a) enables the Participant to receive
disability benefits under the Federal Social Security Act, and (b) also
qualifies as a “disability” for purposes of IRC Section 409A(a)(2)(C).     1.20
  “Unforeseeable Emergency” means a severe financial hardship (within the
meaning of IRC Section 409A) resulting from any of the following:

  (a)   an illness or accident of the Participant or the Participant’s spouse,
beneficiary, or dependent;     (b)   loss of the Participant’s property due to
casualty (including the need to rebuild a home following damage to a home not
otherwise covered by insurance, for example, as a result of natural disaster);
or     (c)   other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant which are not
covered by insurance and cannot reasonably be relieved by the liquidation of the
Participant’s assets (other than assets deferred hereunder).

     Article II — Enrollment and Deferrals

  2.01   Initial Enrollment. An Eligible Individual 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 (if applicable) the
portion allocated to each investment fund, and identify the Participant’s
Beneficiary.

  (a)   If the Eligible Individual was not previously eligible to participate in
any other account-based elective deferred compensation arrangement of a Textron
Company that is aggregated with this Plan pursuant to IRC

     
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      Section 409A, he may enroll in the Plan within thirty (30) days after he
first becomes an Eligible Individual. If the Eligible Individual 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
an Eligible Individual was previously eligible to participate in any other
account-based elective deferred compensation arrangement of a Textron Company
that is aggregated with this Plan pursuant to IRC Section 409A, he may enroll in
the Plan at a time designated by Textron, but not later than December 31 of the
year in which he first becomes an Eligible Individual, and his enrollment shall
not become effective until the beginning of the next calendar year.     (c)   If
an employee or former employee is not identified in Textron’s records as a
Participant as of December 31, 2008, the individual shall not be a Participant,
and shall not be entitled to receive any benefit under the Plan, unless the
individual either (i) becomes a Participant after 2008 pursuant to Section 2.01,
or (ii) is designated by the Board or by the Management Committee (or by the
designee of either) as a Participant after 2008.

  2.02   Deferral Election. Subject to the requirements set forth in Section
2.03, a Participant may elect to defer the following amounts under the Plan:

  (a)   Schedule A Participants: A Schedule A Participant may elect to defer up
to 80% of annual incentive compensation under an annual incentive compensation
plan sponsored by Textron; up to 80% of any cash distribution (other than a
dividend, dividend equivalent, or distribution upon exercise of an option or
stock appreciation right) under a shareholder-approved long term incentive plan
of Textron; and up to 80% of any other form of compensation irrevocably
designated in writing by the Benefits Committee, before the election deadline
for the calendar year in which the compensation is earned, as being eligible for
deferral under the Plan. In addition, a Schedule A Participant may elect to
defer up to 80% of base salary in his initial year of participation in the Plan,
and may elect to defer up to 25% of base salary in any subsequent year of
participation.     (b)   Schedule B Participants: A Schedule B Participant may
elect to defer up to 80% of annual incentive compensation under an annual
incentive compensation plan sponsored by Textron, and up to 80% of any cash
distribution (other than a distribution upon exercise of an option or stock
appreciation right) under a shareholder-approved long term incentive plan of
Textron. In addition, a Schedule B Participant may elect to defer up to 80% of
any other cash bonus under a cash bonus program that is irrevocably designated
in writing by the CEO, before the election deadline

     
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      for the calendar year in which the bonus is earned, as being eligible for
deferral under the Plan.     (c)   No Deferral of Gain Under Stock Rights. In no
event may a Participant defer cash or stock payable upon exercise of a stock
option or stock appreciation right.

  2.03   Deferral Election Requirements. Any deferral election under the Plan
shall be subject to the following requirements:

  (a)   Initial Deferral Election. Except in the case of a timely election to
defer “performance-based compensation” pursuant to subsection (b), below, a
Participant’s initial deferral election under Section 2.01(a) shall apply only
to compensation paid for services to be performed after the election is made.
Except as provided in subsection (b), for a bonus or other compensation earned
over a specified performance period that commenced before the date of the
election, the total compensation shall be multiplied by the ratio of the number
of days remaining in the performance period after the election to the total
number of days in the performance period, and the resulting portion of the
compensation shall be eligible for deferral pursuant to the Participant’s
initial deferral election.     (b)   Election Deadlines. All deferral elections
shall be made at a time and in a form designated by Textron. Except as provided
in Section 2.05, a deferral election shall become irrevocable at the election
deadline established by Textron.

  (1)   General Election Deadline. Textron may establish deadlines that are
permissible under IRC Section 409A for any type of compensation that is eligible
for deferral under the Plan. If no other deadline applies, the deadline for a
deferral election shall be not later than December 31 of the year preceding the
year for which the services are performed for which the right to the
compensation arises.     (2)   Performance-Based Compensation. The deadline for
any election to defer compensation that is “performance-based compensation”
within the meaning of IRC Section 409A shall be not later than six months before
the end of the performance period, provided that the Participant performs
services continuously from the later of the beginning of the performance period
or the date when the performance criteria are established through the date when
the election is made, and provided further that the compensation has not become
readily ascertainable at the time of the election.

     
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  (3)   Forfeitable Rights. If a Participant has a legally binding right to a
payment in a subsequent year, and the Participant must perform services for at
least 12 months in order to avoid forfeiture of the payment, the election
deadline shall not be later than the 30th day after the Participant acquires a
legally binding right to the payment, provided that the election is made at
least 12 months before the earliest date at which the forfeiture condition could
lapse for a reason other than death, Total Disability, or Change in Control (and
a deferral election made under this paragraph shall not be effective if the
forfeiture condition lapses for death, Total Disability, or Change in Control
less than 12 months after the date of the election).

  (c)   Minimum Deferrals. A Participant may not elect to defer an amount less
than $5,000 for any year.     (d)   Change in Participation Level. A
Participant’s status as a Schedule A Participant or a Schedule B Participant
shall be determined at the deferral election deadline for any type of
compensation. If a Participant’s status changes, the Participant’s deferral
election shall not be affected by the change in status until the next deferral
election deadline.     (e)   Renewal of Elections. A Schedule A Participant’s
election to defer base salary under the Plan shall be effective only with
respect to base salary earned in the calendar year (or portion of a year, in
case of an initial deferral election) immediately following the election
deadline, and any other deferral election under the Plan shall be effective only
with respect to the particular bonus, award, or other compensation for which the
deferral election is made. The Participant must make a new deferral election
before the applicable deadline in order to defer compensation earned in a
subsequent period. A Participant who fails to make a valid deferral election on
or before the applicable deadline shall be deemed to have elected not to defer
any compensation to which the deadline applies.

  2.04   Non-Elective Deferred Compensation. In addition to any Elective
Deferred Income, a Participant’s Account may be credited with the following
types of non-elective Deferred Income:

  (a)   Automatic Deferred Income. A Schedule A Participant’s performance share
unit payout shall automatically be deferred into the Participant’s Stock Unit
Account to the extent necessary to meet required stock ownership levels
established under the Executive Share Ownership Policy. The amount of Automatic
Deferred Income for any year shall be based on the Schedule A Participant’s
required ownership level and actual or deemed stock ownership at the election
deadline that would apply under IRC Section 409A to an elective deferral of the
Schedule A Participant’s

     
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      performance share units, and the amount of the Automatic Deferred Income
shall not be altered by any change after the election deadline in the Schedule A
Participant’s required ownership level or actual or deemed stock ownership.    
(b)   Discretionary Deferred Income. A Schedule A or Schedule B Participant may
receive additional contributions made at the discretion of the Organization and
Compensation Committee of the Board, for Schedule A Participants who are
executive officers of Textron, and at the discretion of the Benefits Committee,
for all other Participants. The document authorizing the discretionary
contribution shall specify the vesting schedule, if any, that applies to the
discretionary contribution. Any discretionary contribution shall be allocated
solely to a Participant’s Moody’s Account.     (c)   Textron Company
Contribution. A Schedule A Participant shall receive matching contribution in
the Participant’s Stock Unit Account equal to 10% of any Elective Deferred
Income the Schedule A Participant allocates initially to the Stock Unit Account.

  2.05   Changes in Deferral Elections. A Participant may change his deferral
election prospectively by filing a new deferral election form before the
election deadline established by Textron in accordance with IRC Section 409A, or
by failing to file a deferral election by the election deadline (which will be
deemed to be an election not to defer for the subsequent period). A
Participant’s deferral election shall be cancelled automatically in the
following circumstances, effective with the first payroll period following the
event that causes the cancellation, and the Participant may not make a new
deferral election before the next deferral election deadline:

  (a)   Financial Hardship. The Participant receives a distribution on account
of financial hardship of elective deferrals under the Textron Savings Plan or
any other IRC Section 401(k) plan maintained by a Textron Company, or receives a
distribution under this Plan on account of an Unforeseeable Financial Emergency.
    (b)   Total Disability. The Participant incurs a Total Disability.

     Article III — Investment Accounts

  3.01   Investment Accounts. For recordkeeping purposes, Textron shall maintain
a Moody’s Account and (in the case of a Schedule A Participant) a Stock Unit
Account, as necessary, to credit hypothetical investment gains and losses to a
Participant’s Account. A Schedule A Participant may direct the extent to which
his Elective Deferred Income (other than deferrals of base salary) is allocated
initially to the Moody’s Account or the Stock Unit Account. Any deferrals of

     
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      base salary or Discretionary Deferred Income of a Schedule A Participant
shall be allocated automatically to the Moody’s Account; any Automatic Deferred
Income or Textron Company Contribution of a Schedule A Participant shall be
allocated automatically to the Stock Unit Account. All deferrals of a Schedule B
Participant shall be allocated automatically to the Moody’s Account.     3.02  
Moody’s Account. The Moody’s Account shall earn interest at a monthly interest
rate that is one twelfth of 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. Interest shall
be credited on the last day of each calendar month on the average daily balance
of the Moody’s Account during the month.     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 Schedule A Participant’s Stock
Unit Account as a result of the Automatic Deferred Income or the deferral of
annual incentive compensation or performance share units shall be determined
using the same methodology approved by the Organization and Compensation
Committee of the Board for payment of performance share units. The number of
stock units credited to a Participant’s Stock Unit Account as a result of any
other elective or non- elective contribution in cash shall be determined by
dividing the amount of Deferred Income credited on the last day of a calendar
month by the average of the composite closing prices of Textron common stock, as
reported in The Wall Street Journal for the month 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 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 the month 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.

     
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  (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   Monthly Adjustments. A Participant’s Moody’s Account and Stock Unit
Account shall be adjusted on the last day of each calendar month 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 month, in 5% increments (with a minimum transfer of 10% of
the Stock Unit Account), effective as of the first calendar day of the month
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 month 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 month 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

  4.01   Elective Deferred Income and Automatic Deferred Income. A Participant’s
Elective Deferred Income and Automatic Deferred Income shall always be 100%
vested.     4.02   Discretionary Deferred Income. Except as provided in
Section 4.04, a Participant’s Discretionary Deferred Income shall vest according
to the schedule established when the Discretionary Deferred Income is credited
to the Participant’s Account.     4.03   Textron Company Contribution. Except as
provided in Section 4.04, a Participant’s Textron Company Contribution, and any
dividend equivalents associated with the Textron Company Contribution, shall
vest as follows:

   (a)   50% of the Textron Company Contribution and associated dividend
equivalents shall vest on December 31 of the calendar year in which the Elective
Deferred Income would have been paid to the Participant if he had not made a
deferral election, but only if the Participant does not have a Separation From
Service before that December 31; and      (b)   the remaining 50% of the Textron
Company Contribution and associated dividend equivalents shall vest on the
following December 31, but only if

     
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      the Participant does not have a Separation From Service before that
December 31.     (c)   Any Textron Company Contribution and associated dividend
equivalents that have not vested pursuant to subsections (a) and (b), above,
shall become 100% vested if the Participant’s employment with all Textron
Companies ends as a result of the Participant’s death or Total Disability, or
the Participant’s voluntary retirement after reaching one or more of the
following milestones: (i) age 55 with ten or more years of Textron service;
(ii) age 60, or (iii) 20 or more years of Textron service.

  4.04   Change in Control. In the event of a Change in Control, a Participant’s
Account shall become 100% vested if the Participant is employed by a Textron
Company on the date of the Change in Control.     4.05   Vesting Under
Employment Contract. A Participant’s Account, and any additional benefit the
Participant is eligible to receive under Appendix A or Appendix B, shall become
100% vested to the extent expressly provided in a written employment contract
between the Participant and Textron.     4.06   Forfeiture of Non-Vested
Amounts. Any portion of the Participant’s Account that is not vested at the time
of the Participant’s Separation From Service shall be forfeited.

     Article V — Payments to Participants

  5.01   Separation From Service. Subject to Section 5.04(c)(2) (five-year delay
following change in form of payment), upon a Participant’s Separation From
Service, the distribution of the Participant’s Account shall commence (or, in
the case of a lump sum distribution, shall be made) on the later of (a) the last
business day of January following the calendar year of the Participant’s
Separation From Service, or (b) the last business day of the seventh month
following the Participant’s Separation From Service.     5.02   Total
Disability. The distribution of a Participant’s Account upon Total Disability
shall commence (or, in the case of a lump sum distribution, shall be made) on
the later of (a) the last business day of January following the calendar year of
the Participant’s Total Disability, or (b) the business day that is at least
60 days after the date of the Participant’s Total Disability.     5.03   Form of
Payment. Subject to Section 5.05 (automatic lump-sum distributions), below, the
distribution of a Participant’s Account upon Separation From Service or Total
Disability shall be made in one or a combination of the following forms:

(a)   A lump sum.

     
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(b)   Annual installments over a period not exceeding 15 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), 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.

  5.04   Distribution Elections.

  (a)   A Participant may make a special election during 2007 to receive the
Participant’s Account under one or a combination of the distribution options in
Section 5.03. 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, and the Plan
Administrator may impose conditions in addition to those described in this
subsection (a); 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. The Participant’s initial distribution election, and any
change in the Participant’s distribution election under subsection (c), below,
shall apply to the Participant’s entire Account, including future Deferred
Income credited to the Account. If the Participant elects to receive part of his
Account as a lump sum and part in installments, the Participant must designate
what portion of his Account will be distributed in each form of payment. 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 entire Account.     (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);

     
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  (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 10 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).

  5.05   Automatic Lump Sum Payments.

  (a)   Cash-Out of Small Accounts. 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.     (b)   Participants Who Terminate Before
Retirement Eligibility. A Participant who first participated in the Plan after
2007 shall be paid in a lump sum (even if the Participant elected to receive
installments) if the Participant’s Separation From Service or Total Disability
occurs before the earliest of the following dates: (1) the date on which the
Participant reaches at least age 55 and completes at least 10 years of service;
(2) the date on which the Participant reaches at least age 35 and completes at
least 20 years of service; and (3) the date on which the Participant reaches age
60. In the case of a Participant who first participated in the Plan before 2008,
the automatic lump-sum distribution described in the preceding sentence shall
apply to Deferred Income that was credited to a Participant’s Account while the
Participant was a Schedule B Participant, and any associated investment gains or
losses, but shall not apply to Deferred Income that was credited to a
Participant’s Account while the Participant was a Schedule A Participant, or to
any associated investment gains or losses.

  5.06   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, provided that the payment is not made earlier than
six months after the Participant’s Separation From Service. A Participant may
not, directly or indirectly, designate the taxable year of a payment made in
reliance on the administrative rules in this Section 5.06.

     
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  5.07   Distribution Upon Unforeseeable Emergency. If a Participant incurs a
severe financial hardship as a result of an Unforeseeable Emergency, the
Participant may request a distribution from his vested Account of an amount that
does not exceed the sum of (a) the amount necessary to satisfy the emergency and
(b) the amount necessary to pay taxes or penalties reasonably anticipated as a
result of the distribution. The amount necessary to satisfy the emergency and to
pay the related taxes or penalties shall be determined after taking into account
the extent to which the financial hardship is or may be relieved through
cancellation of the Participant’s deferral election pursuant to Section 2.05(a);
through reimbursement or compensation by insurance or otherwise; or by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). The Benefits Committee
may, in its sole discretion, grant or deny a request for a distribution upon an
Unforeseeable Emergency.     5.08   Distribution Upon Change in Control. Subject
to the following sentence, if a Change in Control also qualifies as a “change in
control” under IRC Section 409A, the Participant’s Account shall be paid in a
lump sum in cash on the first business day of the month following the Change in
Control. If a Participant’s Separation From Service occurred before the Change
in Control, the lump sum payment under this Section 5.08 shall not be made
earlier than six months after the Participant’s Separation From Service.    
5.09   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 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

     
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      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 on the first business day of the first month that begins at least ninety
(90) 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 first business day
of January 2008.

     Article VII — Unfunded Plan

  7.01   No Plan Assets. 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. If Textron elects to purchase individual policies of insurance on
one or more of the Participants to help finance its obligations under this Plan,
such individual policies and the proceeds of the policies shall at all times
remain the sole property of Textron and neither the Participants whose lives are
insured not their Beneficiaries shall have any ownership rights in such policies
of insurance.     7.02   Top-Hat Plan Status. The Plan is maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).

     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
establish rules for the administration of this Plan and the transaction of its
business. Subject to Section 8.05, any actions by Textron shall be final,
conclusive and binding on each Participant and all persons claiming by, through

     
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    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   Tax Withholding. Textron may withhold from benefits paid under
this Plan any taxes or other amounts required by law to be withheld. Textron may
deduct from the undistributed portion of a Participant’s benefit any employment
tax that Textron reasonably determines to be due with respect to the benefit
under the Federal Insurance Contributions Act (FICA), and an amount sufficient
to pay the income tax withholding related to such FICA tax. Alternatively,
Textron may require the Participant or Beneficiary to remit to Textron or its
designee an amount sufficient to satisfy any applicable federal, state, and
local income and employment tax with respect to the Participant’s benefit. The
Participant or Beneficiary shall remain responsible at all times for paying any
federal, state, or local income or employment tax with respect to any benefit
under this Plan. In no event shall Textron or any employee or agent of Textron
be liable for any interest or penalty that a Participant or Beneficiary incurs
by failing to make timely payments of tax.     8.03   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.     8.04   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.     8.05   Claims Procedure. A Participant
or Beneficiary who believes that he is being denied a benefit to which he is
entitled under the Plan (referred to in this Section 8.05 as a “Claimant”) may
file a written request with the Benefits Committee setting forth the claim. The
Benefits Committee shall consider and resolve the claim as set forth below.

  (a)   Time for Response. Upon receipt of a claim, the Benefits Committee shall
advise the Claimant that a response will be forthcoming within 90 days. The
Benefits Committee may, however, extend the response period for up to an
additional 90 days for reasonable cause, and shall notify the Claimant of the
reason for the extension and the expected response date.

     
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      The Benefits Committee shall respond to the claim within the specified
period.     (b)   Denial. If the claim is denied in whole or part, the Benefits
Committee shall provide the Claimant with a written decision, using language
calculated to be understood by the Claimant, setting forth (1) the specific
reason or reasons for such denial; (2) the specific reference to relevant
provisions of this Plan on which such denial is based; (3) a description of any
additional material or information necessary for the Claimant to perfect his
claim and an explanation why such material or such information is necessary;
(4) appropriate information as to the steps to be taken if the Claimant wishes
to submit the claim for review; (5) the time limits for requesting a review of
the claim; and (6) the Claimant’s right to bring an action for benefits under
Section 502(a) of ERISA.     (c)   Request for Review. Within 60 days after the
Claimant’s receipt of the written decision denying the claim in whole or in
part, the Claimant may request in writing that the Benefits Committee review the
determination. The Claimant or his duly authorized representative may, but need
not, review the relevant documents and submit issues and comment in writing for
consideration by the Benefits Committee. If the Claimant does not request a
review of the initial determination within such 60-day period, the Claimant
shall be barred from challenging the determination.     (d)   Review of Initial
Determination. Within 60 days after the Benefits Committee receives a request
for review, it will review the initial determination. If special circumstances
require that the 60-day time period be extended, the Benefits Committee will so
notify the Claimant and will render the decision as soon as possible, but no
later than 120 days after receipt of the request for review.     (e)   Decision
on Review. All decisions on review shall be final and binding with respect to
all concerned parties. The decision on review shall set forth, in a manner
calculated to be understood by the Claimant, (1) the specific reasons for the
decision, shall including references to the relevant Plan provisions upon which
the decision is based; (2) the Claimant’s right to receive, upon request and
free of charge, reasonable access to and copies of all documents, records, and
other information, relevant to his benefits; and (3) the Claimant’s right to
bring an action for benefits under Section 502(a) of ERISA.

  8.06   Enforcement Following a Change in Control. If, after a Change in
Control, any claim is made or any litigation is brought by a Participant or
Beneficiary to enforce or interpret any provision contained in this Plan,
Textron and the “person” or “group” described in Section 1.05 shall be liable,
jointly and severally, to reimburse the Participant or Beneficiary for the
Participant’s or Beneficiary’s

     
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      reasonable attorney’s fees and costs incurred during the Participant’s or
Beneficiary’s lifetime in pursuing any such claim or litigation, and to pay
prejudgment interest at the Prime Rate as quoted in the Money Rates section of
The Wall Street Journal on any money award or judgment obtained by the
Participant or Beneficiary, payable at the same time as the underlying award or
judgment. Any reimbursement pursuant to the preceding sentence shall be paid to
the Participant no earlier than six months after the Participant’s Separation
From Service, and shall be paid to the Participant or Beneficiary no later than
the end of the calendar year following the year in which the expense was
incurred. The reimbursement shall not be subject to liquidation or exchange for
another benefit, and the amount of reimbursable expense incurred in one year
shall not affect the amount of reimbursement available in another year.

     Article IX — Amendment and Termination

  9.01   Amendment. Subject to subsections (a) and (b), below, the Board or its
designee shall have the right to amend, modify, or suspend this Plan at any time
by written resolution or other formal action reflected in writing. Subject to
subsections (a) and (b), below, the Management Committee of Textron or its
designee also shall have the right to amend, modify, or suspend any provisions
of this Plan, by written resolution or other formal action reflected in writing,
with respect to any Participant who is not a member of the Management Committee
or a Key Executive.

  (a)   No amendment, modification, or suspension shall reduce the amount
credited to a Participant’s Account immediately before the effective date of the
amendment, modification, or suspension.     (b)   Following a Change in Control,
no amendment, modification, or suspension shall be made that directly or
indirectly reduces any right or benefit provided upon a Change in Control.

  9.02   Termination. The Board or its designee shall have the right to
terminate this Plan at any time before a Change in Control by written
resolution. No termination of the Plan shall reduce a Participant’s Account
immediately before the effective date of the 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
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

     
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      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 to the extent that the assignment or other action would
cause the amount to be included in the Participant’s gross income or treated as
a distribution for federal income tax purposes. A Participant may, with the
written approval of the Benefits Committee, make an assignment of a benefit for
estate planning or similar purposes if the assignment does not cause the amount
to be included in the Participant’s gross income or treated as a distribution
for federal income tax purposes. 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.

     
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  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 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.     10.05   No Right to Employment. Nothing
contained in this Plan shall be construed as a contract of employment between
any Participant and any Textron Company, or to suggest or create a right in any
Participant of continued employment at any Textron Company.     10.06  
Additional Conditions Imposed. Textron, the Chief Executive Officer and the
Chief Human Resources Officer, and the Benefits Committee may impose such other
lawful terms and conditions on participation in this Plan as deemed desirable.
The Chief Executive Officer, the Chief Human Resources Officer, and members of
the Benefits Committee may participate in this Plan.

     
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(TEXTRON LOGO) [b74351tib7435108.gif]
 
DEFERRED INCOME PLAN
FOR TEXTRON EXECUTIVES
 
APPENDIX A
 
Provisions of the
Deferred Income Plan for
Textron Key Executives
(As in effect before January 1, 2008)
 

 

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Deferred Income Plan
for Textron Executives
Appendix A — Key Executive Plan
Table of Contents

         
Introduction
    1    
Article I—Definitions
    2    
Article II—Participation and Deferred Income
    4    
Article III—Participant’s Accounts, Interest, and Earnings
    5    
Article IV—Benefits
    8    
Article V—Payment of Benefits
    9    
Article VI—Beneficiaries
    10    
Article VII—Unfunded Plan
    11    
Article VIII—Plan Administration
    11    
Article IX—Miscellaneous
    12  

     
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Deferred Income Plan
for Textron Executives
Appendix A — Key Executive Plan
Introduction
Before January 1, 2008, the Deferred Income Plan for Textron Key Executives (the
“Key Executive Plan”) and the Textron Inc. Deferred Income Plan for Executives
(the “Executive Plan”) were separate nonqualified deferred compensation plans,
each of which provided both elective and nonelective deferred compensation for
designated executives of Textron and its affiliates. The Key Executive Plan and
the Executive Plan were combined effective January 1, 2008, to form the Deferred
Income Plan for Textron Executives.

A.   Key Executive Protected Benefits
(Earned and Vested Before 2005)

The portion of Appendix A that follows this Introduction sets forth the
provisions of the Key Executive 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. Key Executives’ 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 (“Key Executive 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 Textron Executives.
The Key Executive 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 IRC Section 409A shall be effective unless the
amending instrument states that it is intended to materially modify Appendix A
and to cause the Key Executive Protected Benefits to become subject to IRC
Section 409A. Although the Key Executive Protected Benefits are not intended to
be subject to IRC 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 Participant or Beneficiary if a Key Executive
Protected Benefit becomes subject to IRC Section 409A.

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

Deferred compensation earned by Key Executives 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 Key
Executive Plan before January 1, 2008, the benefits shall be calculated under
the provisions of the Key Executive Plan set forth in this Appendix A. However,
any benefits earned or vested under the Key

     
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Executive Plan after 2004 shall be paid exclusively as provided in the Deferred
Income Plan for Textron Executives (not including any appendix to the Deferred
Income Plan for Textron Executives), and shall not be subject to any provision
of Appendix A that relates to the payment or distribution of benefits.
Section 5.01 requires a Participant to make an election if the Participant
wishes to request one of the distribution options in Section 5.02. This election
provision was effective as of July 25, 2007, the date on which the Plan was
adopted by the Board.
Key Executive Plan
The text that follows sets forth the provisions of the Key Executive 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 Textron Executives, and terms defined elsewhere in the Deferred Income
Plan for Textron Executives do not apply to Appendix A. No additional benefits
shall accrue or be deferred under Appendix A after December 31, 2007.
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   “Beneficiary” means the person or persons entitled under this Plan to
receive Plan benefits after a Participant’s death.   1.02   “Benefits Committee”
means the Employee Benefits Committee of Textron.   1.03   “Board” means the
Board of Directors of Textron.   1.04   “Compensation” means base salary, annual
incentive compensation, cash distributions for performance share units under a
long term incentive compensation plan, and any other item designated as
Compensation under this Plan by the Benefits Committee or its designee.   1.05  
“Deferral Period” means for a Participant (1) any complete months remaining in
the calendar year in which she becomes a Key Executive, and (2) each succeeding
calendar year in which she is a Key Executive.   1.06   “Deferred Income” means
any Compensation the receipt of which is deferred under this Plan.

     
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      “Automatic Deferred Income” means amounts in excess of 100% of a
Participant’s Annual Incentive Compensation Target, as defined in
Section 4.01(a) of the Annual Incentive Compensation Plan for Textron Employees,
in the years following a Participant’s fifth full year of participation in this
Plan, but only if the Participant has not achieved or maintained a Minimum Stock
Ownership Level.       “Discretionary Deferred Income” means additional
contributions made at Textron’s discretion to any account maintained for a
Participant under this Plan.       “Elective Deferred Income” means amounts
elected by the Participant to be deferred under this Plan.   1.07  
“Determination Date” means the last day of each calendar month.   1.08   “Fund
Election Agreement” means an agreement in a form prescribed by the Benefits
Committee or its designee, by which a Participant elects the funds that will be
used to determine earnings on Deferred Income.   1.09   “Interest” means
interest computed under Article III of this Plan.   1.10   “Key Executive” means
an employee of a Textron Company who has been and continues to be designated as
a Key Executive under the Plan by Textron’s Chief Executive Officer and Chief
Human Resources Officer.   1.11   “Participant” means a Key Executive who is
participating in this Plan pursuant to Article II and, unless the context
clearly indicates to the contrary, a former Participant who is entitled to
benefits under this Plan.   1.12   “Participation Agreement” means an agreement
in a form prescribed by the Benefits Committee or its designee, by which a
Participant elects to defer the receipt of Compensation pursuant to this Plan.  
1.13   “Plan” means this Deferred Income Plan for Textron Key Executives, as
amended and restated from time to time.   1.14   “Stock Ownership” means Textron
shares obtained through open market purchases and stock option exercises, shares
in the Textron Savings Plan, stock units in the Deferred Income Plan and in the
Supplemental Benefits Plan; and any other share or share equivalent approved by
the Board as qualified stock ownership.       “Minimum Stock Ownership Level”
means a dollar value of Textron shares that equals or exceeds as of the end of
the third quarter each year:

     
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      Participant   Minimum Stock Ownership Level  
CEO/COO
  5 times base salary
Other TLT Members
  3 times base salary
Other Corporate Officers
  2 times base salary
All Other Key Executives
  1 times base salary

1.15   “Textron” means Textron Inc., a Delaware corporation, and any successor
of Textron Inc.   1.16   “Textron Company” means Textron or any company
controlled by or under common control with Textron.   1.17   “Textron
Employment” means employment with a Textron Company. Leaves of absence for such
periods and purposes as are approved by Textron and transfers of employment
within or between Textron Companies shall not be deemed interruptions of Textron
Employment.   1.18   “Total Disability” has the same meaning under this Plan as
in the Textron Master Retirement Plan with respect to any Participant at the
date his Textron Employment ends.

Article II—Participation and Deferred Income

2.01   A Participant indicates his choices under this Plan for a Deferral Period
by filing a Participation Agreement and, if applicable, a Fund Election
agreement with the Benefits Committee or its designee within the time specified
by that committee or designee.   2.02   For any complete calendar months
remaining in the calendar year in which a Participant becomes a Key Executive,
she may defer up to 100% of her Compensation otherwise payable during those
months. For any subsequent Deferral Period, a Participant may defer up to 25% of
her base salary, and up to 100% of her Compensation other than base salary,
otherwise payable during that period. (For purposes of this 25% limitation,
“base salary” includes any base salary the receipt of which by the Participant
is deferred under the Textron Savings Plan or this Plan.) A Participant may not
defer any Compensation which she has earned at the time she files her
Participation Agreement relating thereto.   2.03   The Benefits Committee may,
at a Participant’s request but in its sole discretion, suspend in whole or in
part a Participant’s commitment under any Participation Agreement for such time
as it may deem necessary upon a finding that the Participant has suffered a
severe financial hardship.

     
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2.04   If at any time a Participant shall cease to be a Key Executive, his
Participation Agreements and Deferral Periods shall terminate at that time and
no further Deferred Income shall be withheld from his Compensation.   2.05   No
Deferred Income, Interest or dividends shall be payable to a Participant while
he is employed by a Textron Company.   2.06   Textron shall withhold for taxes
or other reasons as required by law.

Article III—Participant’s Accounts, Interest, and Earnings

3.01   (a) For record-keeping purposes only, Textron shall maintain a Moody’s
Account, a Stock Unit Account and an Interest Account, as is necessary, for each
Participant who has Deferred Income under this Plan.     (b) Textron may in its
sole discretion from time to time make additional contributions to any account
maintained for a Participant. These additional contributions, if any, may be
subject to a vesting schedule set by the Benefits Committee.     (c) The
existence of these accounts shall not require any segregation of assets.     (d)
Amount deferred as Elective Deferred Income and Automatic Deferred Income shall
always be 100% vested.   3.02   The Moody’s Account shall reflect a
Participant’s investment in an interest-bearing account.     (a) The Moody’s
Account shall be adjusted as of each Determination Date and shall consist of
(1) the balance of the Account as of the immediately preceding Determination
Date, (2) amounts of Deferred Income credited to the Account in the intervening
month, and (3) Interest earned since the immediately preceding Determination
Date based on one-twelfth of the applicable interest rate(s) described in
Sections 3.03 or 3.04 on the average daily balance of the Account (or portion
thereof) during the intervening month; reduced by (4) any distributions from the
account (or portion thereof) during the intervening month.     (b) The interest
rates applicable to the Moody’s Account shall be either the Moody’s Rate or the
Moody’s Plus Rate.   3.03   The Moody’s Rate shall be the average for the
calendar month in which the applicable Determination Date falls 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

     
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    by the Benefits Committee. For Participant deferrals made prior to 2002, the
crediting rate shall not be less than 8% per year.   3.04   (a) The Moody’s Plus
Rate applicable on a Determination Date to any portion of the Moody’s Account
which is attributable to Deferred Income deferred before 1988 shall be the
average described in Section 3.03, plus three percentage points. The crediting
rate shall not be less than 11% per year for deferrals made prior to 1988.    
(b) The Moody’s Plus Rate applicable on a Determination Date to any portion of
the Moody’s Account which is attributable to deferrals from 1988 through 2001
shall be the average described in Section 3.03, plus two percentage points. The
crediting rate shall not be less than 10% per year for deferrals made from 1988
through 2001.     (c) For deferrals made on or after January 1, 2002, the Rate
on the Determination Date shall be the Moody’s Rate.   3.05   The Stock Unit
Account shall consist of stock units, which are phantom shares of Textron Common
Stock, accumulated and accounted for under this Plan for the sole purpose of
determining the cash amount of any distribution on account of this portion of
Deferred Income. Notwithstanding any Plan provision to the contrary, 100% of
Automatic Deferred Income shall be deferred to the Stock Unit Account.   3.06  
The Stock Unit Account shall be adjusted as of each Determination Date and shall
consist of the stock units (1) in the account as of the immediately preceding
Determination Date, (2) credited under Section 3.07 and 3.08 during the
intervening month, and (3) credited under Section 3.09 during the intervening
month.   3.07   (a) To the extent that a Participant puts Elective Deferred
Income in the Stock Unit Account, the amount initially credited to her Account
shall equal 110% of such Compensation deferred on or after January 1, 2002.    
(b) The amount in excess of 100% of the Elective Deferred Income is the “Textron
Company Contribution.” A Participant’s right to receive the Textron Company
Contribution, as adjusted under Section 3.09, shall become nonforfeitable
according to this schedule:

     (1) 50% on December 31 of the calendar year in which that Elective Deferred
Income otherwise would have been paid to him, but only if his Textron Employment
continues on that December 31; and
     (2) the remaining 50% on the next December 31, but only if his Textron
Employment continues on that next December 31.

     
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  (c) A Participant’s right to receive her Textron Company Contribution shall be
nonforfeitable in the event her Textron employment ends because of disability or
death.     (d) A Participant’s right to receive her Textron Company Contribution
shall become nonforfeitable according to the above schedule if a Participant
ends employment when she is at least 55 with ten or more years of Textron
service, or is at least age 60, or has completed 20 or more years of Textron
service.   3.08   With respect to deferrals into this Plan of amounts from the
Annual Incentive Compensation Plan for Textron Employees and the Long Term
Incentive Plan for Textron Employees, Textron shall credit stock units to a
Participant’s Stock Unit Account, equal to the number of shares the deferred
amount could have purchased at the “Current Value” of a share of Textron Common
Stock. The Current Value is defined in Section 3.07 of the Long Term Incentive
Plan for Textron Employees. With respect to deferrals into this Plan of any
other amounts, each month Textron shall credit stock units to a Participant’s
Stock Unit Account equal in number to the number of shares of Textron Common
Stock that the deferred amount could have purchased at a price per share equal
to the average of the composite closing prices of Textron Common Stock, as
reported in The Wall Street Journal for the month the contribution is credited.
  3.09   From time to time, Textron shall credit Stock Units to a Participant’s
Stock Unit Account equal in number to the number of shares of Textron Common
Stock that would have been allocated on account of dividends to the
Participant’s Stock Unit Account as of that date, based on the average of the
composite closing prices of Textron Common Stock, as reported in The Wall Street
Journal for the month in which the date of record occurs.   3.10   The number of
Stock Units credited to a Participant’s account under this Article III shall be
adjusted, without receipt of any consideration by Textron, on account of any
recapitalization, stock split, stock dividend or similar increase or decrease
affecting Textron Common Stock, as if the Stock Units were actually shares of
Textron Common Stock.   3.11   The Interest Account shall be established when
the benefits relating to a Participant’s Stock Unit Account become due to the
Participant under Article IV. A Participant who has terminated her Textron
employment may, once each calendar month, elect to transfer, in 5% increments
(with a minimum transfer of 10% of the Stock Unit Account), effective the first
calendar day of the month following the minimum notice of three business days,
any amount in her Stock Unit Account to her Interest Account.

     
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(a)   Any transfer made shall be made in cash and shall be in an amount equal to
the product of (x) the Current Value of Textron Common Stock on the date as of
which the stock units are converted and transferred to the Interest Account,
times (y) the number of whole and fractional stock units which are
nonforfeitable.   (b)   As used in the Plan, the current value of a share of
Textron Common Stock on any date shall be the average of the composite closing
prices, as reported in The Wall Street Journal, for the first ten trading days
of the effective month.   (c)   Interest on amounts in the Interest Account will
be credited monthly at the Moody’s rate. Stock units transferred related to
deferrals made prior to January 1, 2002, shall have a minimum rate of 8%.

Article IV—Benefits

4.01   If a Key Executive’s Textron Employment ends other than by death or for
less than acceptable performance (1) at or after age 62, or (2) as a result of
Total Disability, the amount credited to his Moody’s Account at the Moody’s Plus
Rate, the amount in his Stock Unit Account which is then nonforfeitable
according to Section 3.07, and the amount in his Interest Account, shall be
distributed in accordance with Article V.   4.02   If a Participant’s Textron
Employment ends because of death, the benefit distributed pursuant to Article IV
shall be the sum of the amount credited to her Moody’s Account (computed at the
Moody’s Plus Rate), and the amount in her Stock Unit Account.   4.03   If a Key
Executive’s Textron Employment ends other than as described in Section 4.01 or a
Participant’s Textron Employment ends other than as described in Section 4.02,
the amount credited to his Moody’s Account computed at the Moody’s Rate (unless
the Chief Executive Officer and Chief Human Resources Officer of Textron in
their sole discretion approve computation at the Moody’s Plus Rate), the amount
in his Stock Unit Account which is then nonforfeitable according to
Section 3.07, and the amount in his Interest Account, shall be distributed in
accordance with Article V.   4.04   In the event of a Change in Control as
defined in Section 9.03, the amount credited to her Moody’s Account computed at
the Moody’s Plus Rate, the amount in her Stock Unit Account and the amount in
her Interest Account shall be distributed in accordance with Article V.   4.05  
Benefits shall be payable to a Participant or Beneficiary under only one Section
of this Article IV.

     
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Article V—Payment of Benefits

5.01   The Benefits Committee or its designee shall choose in its sole
discretion the methods in Section 5.02 by which benefits payable under
Article IV shall be distributed, after considering any method of payment
requested by the Participant or by the Beneficiaries entitled to receive the
benefits.       A Participant who wishes to request a form of payment must file
an election to indicate her preferred form of payment; but all Participant
elections shall be subject to the Benefits Committee’s discretion to change the
elected form of payment as provided in the preceding sentence. If the
Participant terminated before January 1, 2002, the Participant must file the
election by December 31, 2008; any other Participant must file the election by
December 31, 2007. Textron may impose conditions on the new benefit election
(including, but not limited to, a requirement that the Participant elect the
same form of payment for his pre-2005 Account under this Appendix A and his
post-2004 account under the Deferred Income Plan for Textron Executives). If the
current value of a Participant’s Deferred Income Plan Accounts is $100,000 or
less at termination, or if the Participant fails to request a form of payment
before the applicable deadline, such Participant’s accounts shall be paid in a
single sum.   5.02   After benefits relating to a Participant’s Moody’s Account,
his Stock Unit Account and his Interest Account become payable under Article IV,
Textron, upon the written instructions of the Benefits Committee or its
designee, shall distribute the benefits in accordance with any one of the
following methods:     (a) Payment in a single sum; or     (b) Payment in a
number of annual installments, each payable as soon as practicable after the end
of each successive calendar year. The number of installments shall not exceed
the lesser of 15 or life expectancy of the Participant. The annual installments
shall be calculated each year by dividing the unpaid amount of the benefits as
of January 1 of that year by the remaining number of unpaid installments; or    
(c) Payment through a combination of the foregoing methods.   5.03   (a) For
Participants who terminate prior to January 1, 2002, Plan benefits payable under
Section 5.02 shall begin to be paid not later than February 15 of the first
calendar year which begins after the date on which (1) the final payment of the
Participant’s Compensation is scheduled to be made, or (2) the Participant
attains or would have attained age 65, whichever is later. For Participants who
terminate on or after January 1, 2002, Plan benefits under Section 5.02(a) shall
begin to be paid not later than February 15 following the year the Participant
terminated, or sixty days after termination of employment, whichever is later.

     
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  (b) Plan benefits are paid from a Moody’s Account in accordance with
Section 5.02(a) or 5.02(b), amounts (if any) described in Section 3.04 shall be
paid first from Section 3.04(c), next from pre-2002 deferrals in Section 3.03,
next from Section 3.04(b), and lastly from Section 3.04(a).   5.04  
Notwithstanding any Plan provision to the contrary, the amount then credited to
the Moody’s Account, Stock Unit Account and Interest Account of each Key
Executive shall become due and payable immediately upon a Change in Control as
defined in Section 9.03.   5.05   Distributions under this Article V shall be
made on a pro-rata basis from each account in which there is an amount.

Article VI—Beneficiaries

6.01   A Participant may designate one or more Beneficiaries to receive Plan
benefits payable on the Participant’s account after his death. A Beneficiary may
designate one or more Beneficiaries to receive any unpaid Plan benefits to the
extent this designation does not contravene any designation filed by the
deceased Participant through whom the Beneficiary himself claims under this
Plan. Beneficiaries shall be designated only upon forms made available by or
satisfactory to the Benefits Committee or its designee, and filed by the
Participant or Beneficiary with that committee or designee. Effective January 1,
2008, any payment to a Beneficiary shall be made in a lump sum. 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
first business day of January 2008.   6.02   At any time prior to his death, a
Participant or Beneficiary may change his own designation of Beneficiary by
filing a substitute designation of Beneficiary with the Benefits Committee or
its designee.   6.03   In the absence of an effective designation of
Beneficiary, or if all persons so designated shall have predeceased the
Participant/Beneficiary or shall have died before the complete distribution of
Plan benefits, the balance of Plan benefits shall be paid to the
Participant/Beneficiary’s surviving spouse or, if none, to the
Participant/Beneficiary’s issue per stirpes or, if no issue, to the executor or
administrator of the Participant/Beneficiary’s estate.   6.04   If a
Participant’s Compensation or a Plan benefit is community property, any
designation of Beneficiary shall be valid or effective only as permitted under
applicable law.   6.05   If a Plan benefit is payable to a minor or person
declared incompetent or to a person incapable of handling the disposition of his
property, the Benefits

     
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    Committee may direct Textron to pay such Plan benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Benefits Committee may require proof of incompetency, minority,
incapacity or guardianship as it deems appropriate prior to distribution of the
Plan benefit. Such distribution shall completely discharge the Benefits
Committee and any Textron Company from all liability with respect to such
benefit.

Article VII—Unfunded Plan

7.01   Benefits to be 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. If Textron elects to purchase individual policies of insurance on
one or more of the Participants to help finance its obligations under this Plan,
such individual policies and the proceeds therefrom shall at all times remain
the sole property of Textron and neither the Participants whose lives are
insured nor their Beneficiaries shall have any ownership rights in such policies
of insurance.   7.02   This Plan is maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees within the meaning of Sections 201(2), 301(a)(3), and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

Article VIII—Plan Administration

8.01   Textron shall be the plan administrator of this Plan and shall be solely
responsible for its general administration and interpretation. Textron shall
have all such powers as may be necessary to carry out the provisions hereof.
Textron may from time to time establish rules for the administration of this
Plan and the transaction of its business. Subject to Section 8.04, any action 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, and shall make all such determinations and
interpretations in a nondiscriminatory manner.   8.02   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 shall be entitled to rely upon all
certifications made by an accountant selected by Textron. 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

     
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    so taken, suffered or omitted shall be conclusive upon each of them and upon
all other persons interested in this Plan.   8.03   Textron may require proof of
the death or Total Disability of any Participant, former Participant or
Beneficiary and evidence of the right of any person to receive any Plan benefit.
  8.04   Claims under this Plan shall be filed in writing with Textron, and
shall be reviewed and resolved pursuant to the claims procedure in Section 8.05
of the Deferred Income Plan for Textron Executives.   8.05   Textron shall
withhold from benefits paid under this Plan any taxes or other amounts required
to be withheld by law.

Article IX—Miscellaneous

9.01   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.   9.02   (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 to the
extent that the assignment or other action would cause the amount to be included
in the Participant’s gross income or treated as a distribution for federal
income tax purposes. A Participant may, with the written approval of the
Benefits Committee, make an assignment of a benefit for estate planning or
similar purposes if the assignment does not cause the amount to be included in
the Participant’s gross income or treated as a distribution for federal income
tax purposes. Any attempt to alienate, sell, transfer, assign, pledge or
otherwise encumber any such benefit, whether presently or subsequently payable,
shall be

     
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Effective January 1, 2009
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    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.   9.03   Notwithstanding any provision to the
contrary, 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:     (a) Shall reduce the amount credited to any Moody’s Account,
Stock Unit Account or Interest Account immediately before the effective date of
the amendment, modification, suspension or termination; or     (b) Shall be made
to Article V or this Section 9.03 following a Change in Control.       If after
a Change in Control any claim is made or any litigation is brought by a
Participant or Beneficiary to enforce or interpret any provision contained in
this Plan, Textron and the “person” or “group” described in the next following
sentence shall be liable, jointly and severally, to indemnify the Participant or
Beneficiary for the Participant’s or Beneficiary’s reasonable attorney’s fees
and disbursements incurred in any such claim or litigation and for prejudgment
interest as provided in Section 8.06 of the Deferred Income Plan for Textron
Executives.       For purposes of this Plan, a “Change in Control” shall occur
if (i) any “person” or “group” (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Act”)) other
than Textron, any trustee or other fiduciary holding Textron common stock under
an employee benefit plan of Textron or a related company, or any corporation
which is owned, directly or indirectly, by the stockholders of Textron in
substantially the same proportions as their ownership of Textron common stock,
is or becomes (other than by acquisition from Textron or a related company) the
“beneficial owner” (as defined in Rule 13d-3 under the Act) of more than 30% of
the then outstanding voting stock of Textron, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board (and any new director whose election by the Board or whose nomination
for election by Textron’s stockholders was approved by a vote of at least two
thirds of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority thereof,
or (iii) stockholders of Textron approve a merger or consolidation of Textron
with any other corporation, other than a merger or consolidation which would
result in the voting securities of Textron outstanding immediately prior thereto
continuing to represent (either by

     
Deferred Income Plan for Textron Executives
  Appendix A
Effective January 1, 2009
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    remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of Textron or such surviving entity outstanding immediately after
such merger or consolidation, or (iv) the stockholders of Textron approve a plan
of complete liquidation of Textron or an agreement for the sale or disposition
by Textron of all or substantially all of Textron’s assets.   9.04   This Plan
shall be construed in accordance with the laws of the State of Delaware.   9.05
  Nothing contained in this Plan shall be construed as a contract of employment
between any Participant and any Textron Company, or to suggest or create a right
in any Participant to be continued in employment as a Key Executive or other
employee of any Textron Company.   9.06   Textron, the Chief Executive Officer
and the Chief Human Resources Officer, and the Benefits Committee may impose
such other lawful terms and conditions on participation in this Plan as deemed
desirable. The Chief Executive Officer, the Chief Human Resources Officer and
members of the Benefits Committee may participate in this Plan.

     
Deferred Income Plan for Textron Executives
  Appendix A
Effective January 1, 2009
  Page 14