Document:

exv10w8

EXHIBIT 10.8

 

DEFERRED INCOME PLAN

FOR TEXTRON EXECUTIVES

 

Effective January 1, 2009

 

 

 

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
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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
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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
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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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	Effective January 1, 2009

	 	Page 21 

 

 

 

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)

 

 

 

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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	 	Appendix A
	Effective January 1, 2009

	 	Page 1

 

 

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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	 	Page 2

 

 

	 
	 	 	“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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	 	Appendix A
	Effective January 1, 2009

	 	Page 3

 

 

	 	 	 
	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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	 	Appendix A
	Effective January 1, 2009

	 	Page 4

 

 

	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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	 	Appendix A
	Effective January 1, 2009

	 	Page 5

 

 

	 	 	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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	 	Appendix A
	Effective January 1, 2009

	 	Page 6

 

 

		 	(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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	 	Appendix A
	Effective January 1, 2009

	 	Page 7

 

 

	(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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	 	Appendix A
	Effective January 1, 2009

	 	Page 8

 

 

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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	Effective January 1, 2009

	 	Page 9

 

 

		 	(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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	 	Appendix A
	Effective January 1, 2009

	 	Page 10

 

 

	 	 	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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	 	Appendix A
	Effective January 1, 2009

	 	Page 11

 

 

	 	 	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

	 	 	 
	Deferred Income Plan for Textron Executives

	 	Appendix A
	Effective January 1, 2009

	 	Page 12

 

 

	 	 	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

	 	Page 13

 

 

	 	 	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 14exv10w9

EXHIBIT 10.9

 

DEFERRED INCOME PLAN

FOR NON-EMPLOYEE DIRECTORS

 

As Amended and Restated

Effective January 1, 2009

 

 

 

Deferred Income Plan 

for Non-Employee Directors

As Amended and Restated

Effective January 1, 2009

Table of Contents

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

			
	 	 	 
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Page i

 

 

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

			
	 	 	 
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Amended and Restated January 1, 2009
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Page ii

 

 

Deferred Income Plan

for Non-Employee Directors

As Amended and Restated

Effective January 1, 2009

Introduction

The Deferred Income Plan for Non-Employee Directors (the “Plan”) is an unfunded, nonqualified
deferred compensation arrangement. The Plan provides both elective and nonelective deferred
compensation for non-employee directors of Textron. The Plan is amended and restated, effective
January 1, 2008, to reflect the requirements of Section 409A of the Internal Revenue Code of 1986,
as amended (the “IRC”) and to incorporate certain other changes.

Appendix A sets forth the provisions of the Plan as in effect on October 3, 2004, when IRC Section
409A was enacted as part of the American Jobs Creation Act of 2004. Deferred compensation that was
earned and vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent
increase that is permitted to be included in this amount under Section 409A, is calculated and paid
solely as provided in Appendix A, and is not subject to any other provisions of the Deferred Income
Plan for Non-Employee Directors.

Deferred compensation that was earned or vested after 2004 and before January 1, 2008, is subject
to the provisions of IRC Section 409A. This deferred compensation is paid exclusively as provided
in the Deferred Income Plan for Non-Employee Directors (not including Appendix A). Although the
provisions of the Deferred Income Plan for Non-Employee Directors generally are effective as of
January 1, 2008, the provisions that govern the distribution of benefits earned or vested after
2004 are effective as of January 1, 2005.

Section 5.03(a) permits a Participant to make an election before the end of 2007 to receive the
Participant’s Account under one of the distribution options in Section 5.02. Appendix A also
permits a Participant to make a distribution election before the end of 2007 for the benefits
payable under the Appendix. These special election provisions are effective as of July 25, 2007,
the date on which this amended and restated Plan was adopted by the Board of Directors of Textron
Inc.

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 1

 

 

Article I — Definitions

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

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

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

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

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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 2

 

 

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

Article II — Participation

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

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

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

			
	 	 	 
	Deferred Income Plan for Non-Employee Directors 

Amended and Restated January 1, 2009
	 	Page 3

 

 

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

Article III — Investment Accounts

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

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

			
	 	 	 
	Deferred Income Plan for Non-Employee Directors 

Amended and Restated January 1, 2009
	 	Page 4

 

 

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

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

Article IV — Vesting

A Participant’s Elective Deferred Income and Automatic Deferred Income shall always be 100% vested.

Article V — Payments to Participants

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

			
	 	 	 
	Deferred Income Plan for Non-Employee Directors 

Amended and Restated January 1, 2009
	 	Page 5

 

 

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

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

	5.03	 	Distribution Elections.

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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 6

 

 

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

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

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

Article VI — Payments to Beneficiaries

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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 7

 

 

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

Article VII — Unfunded Plan

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

Article VIII — Plan Administration

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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 8

 

 

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

Article IX — Amendment and Termination

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

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

Article X — Miscellaneous

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

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

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

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

			
	 	 	 
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DEFERRED INCOME PLAN

FOR NON-EMPLOYEE DIRECTORS

 

APPENDIX A

 

Prior Plan Provisions

(As in effect before January 1, 2008)

 

 

 

Deferred Income Plan 

for Non-Employee Directors

Appendix A — Prior Plan Provisions

Table of Contents

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

			
	 	 	 
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	 	Table of Contents — Appendix A

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Deferred Income Plan 

for Non-Employee Directors

Appendix A — Prior Plan Provisions

Introduction

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

			
	A.	 	Protected Benefits

(Earned and Vested Before 2005)

The portion of Appendix A that follows this Introduction sets forth the provisions of the Plan as
in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs
Creation Act of 2004, with certain modifications imposing additional restrictions on distributions
and changing provisions for measuring investment returns. Directors’ deferred compensation that
was earned and vested (within the meaning of Section 409A) before January 1, 2005, and any
subsequent increases that are permitted to be included in this amount under Section 409A
(“Protected Benefits”), are calculated and paid solely as provided in Appendix A, and are not
subject to any other provisions of the Deferred Income Plan for Non-Employee Directors.

The Protected Benefits are not intended to be subject to IRC Section 409A. No amendment to this
Appendix A that would constitute a “material modification” for purposes of Section 409A shall be
effective unless the amending instrument states that it is intended to materially modify Appendix A
and to cause the Protected Benefits to become subject to Section 409A. Although the Key Executive
Protected Benefits are not intended to be subject to Section 409A, no Textron Company (nor any
director, officer, or other representative of a Textron Company) shall be liable for any adverse
tax consequence suffered by a Director or Beneficiary if a Protected Benefit becomes subject to
Section 409A.

			
	B.	 	Benefits Subject To Section 409A

(Earned or Vested From 2005 Through 2007)

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

			
	 	 	 
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	 	Appendix A

Page 1

 

 

including this Appendix A), and shall not be subject to any provision of Appendix A that relates to
the payment or distribution of benefits. Although the provisions of the Deferred Income Plan for
Non-Employee Directors generally are effective as of January 1, 2008, the provisions that govern
the distribution of benefits earned or vested after 2004 under the Plan are effective as of January
1, 2005.

Section 3.3 requires a Director to make an election before the end of 2007 to receive the
Director’s Account under one of the distribution options in Section 3.3. This election provision
is effective as of July 25, 2007, the date on which the Plan was adopted by the Board of Directors
of Textron Inc.

Deferred Income Plan

for Non-Employee Directors

The text that follows sets forth the provisions of the Plan as in effect on October 3, 2004, and as
modified thereafter in certain respects that do not constitute “material modifications” for
purposes of IRC Section 409A. The defined terms in Appendix A relate only to the provisions set
forth in Appendix A: they do not apply to any other provisions of the Deferred Income Plan for
Non-Employee Directors, and terms defined elsewhere in the Deferred Income Plan for Non-Employee
Directors do not apply to Appendix A. No additional benefits shall accrue or be deferred under
Appendix A after December 31, 2007.

ARTICLE I — PARTICIPATION

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

ARTICLE II — DEFERRED INCOME ACCOUNTS

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

			
	 	 	 
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	 	Appendix A

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

ARTICLE III — PAYMENTS

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

			
	 	 	 
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	 	Appendix A

Page 3

 

 

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

			
	 	 	 
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	 	Appendix A

Page 4

 

 

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

ARTICLE IV — MISCELLANEOUS

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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Appendix A

Page 5

 

 

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

			
	 	 	 
	Deferred Income Plan for Non-Employee Directors 

Amended and Restated January 1, 2009
	 	Appendix A

Page 6

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