Document:

exv10w6

EXHIBIT 10.6

 

TEXTRON SPILLOVER PENSION PLAN

 

As Amended and Restated

Effective January 1, 2009

 

 

 

Textron Spillover Pension Plan

Amended and Restated January 1, 2009

Table of Contents

	 	 	 	 	 
	Introduction
	 	 	1	 
	 
	 	 	 	 
	Article I – Definitions
	 	 	2	 
	1.01 Beneficiary
	 	 	2	 
	1.02 Benefits Committee
	 	 	2	 
	1.03 Board
	 	 	2	 
	1.04 Change in Control
	 	 	2	 
	1.05 Compensation
	 	 	3	 
	1.06 Compensation Base
	 	 	4	 
	1.07 ERISA
	 	 	4	 
	1.08 Executive Plan
	 	 	4	 
	1.09 Grandfathered Formula
	 	 	4	 
	1.10 Grandfathered Participant
	 	 	4	 
	1.11 IRC
	 	 	5	 
	1.12 Key Executive Plan
	 	 	5	 
	1.13 Participant
	 	 	5	 
	1.14 Pension Plan
	 	 	5	 
	1.15 Plan
	 	 	5	 
	1.16 Plan Administrator
	 	 	5	 
	1.17 Retirement Age
	 	 	5	 
	1.18 Separation From Service
	 	 	5	 
	1.20 Statutory Limit
	 	 	5	 
	1.21 Textron
	 	 	5	 
	1.22 Textron Company
	 	 	5	 
	1.23 Textron Retirement Program
	 	 	6	 
	1.24 Total Disability
	 	 	6	 
	 
	 	 	 	 
	Article II – Participation
	 	 	6	 
	2.01 Eligibility and Participation
	 	 	6	 
	2.02 Period of Participation
	 	 	6	 
	 
	 	 	 	 
	Article III – Spillover Pension Benefit Amounts
	 	 	6	 
	3.01 Retirement Benefits
	 	 	6	 
	3.02 Grandfathered Participants
	 	 	7	 
	3.03 Calculation of Benefits
	 	 	7	 
	3.04 Other Forms of Benefit
	 	 	8	 
	3.05 Benefit Upon Transfer of Liability
	 	 	9	 

			
	 	 	 
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Table of Contents

	 	 	 	 	 
	Article IV – Vesting
	 	 	9	 
	4.01 Vesting Schedule
	 	 	9	 
	4.02 Change in Control
	 	 	9	 
	 
	 	 	 	 
	Article V – Distribution of Benefits
	 	 	9	 
	5.01 Automatic Distributions
	 	 	9	 
	5.02 Spousal Consent
	 	 	9	 
	5.03 Time and Form of Distribution
	 	 	10	 
	5.04 Lump-sum Distribution
	 	 	11	 
	5.05 Six-Month Delay for Specified Employees
	 	 	11	 
	5.06 Automatic Cash-Out
	 	 	12	 
	5.07 Disability Benefits
	 	 	12	 
	5.08 Payment of Death Benefits
	 	 	12	 
	5.09 Administrative Delay in Payment
	 	 	13	 
	5.10 Distribution Upon Change in Control
	 	 	13	 
	5.11 Change in Payment Election
	 	 	14	 
	5.12 Rehired Participants
	 	 	15	 
	 
	 	 	 	 
	Article VI – Unfunded Plan
	 	 	16	 
	6.01 No Plan Assets
	 	 	16	 
	6.02 Top-Hat Plan Status
	 	 	16	 
	 
	 	 	 	 
	Article VII – Plan Administration
	 	 	16	 
	7.01 Plan Administrator’s Powers
	 	 	16	 
	7.02 Tax Withholding
	 	 	17	 
	7.03 Use of Third Parties to Assist with Plan Administration
	 	 	17	 
	7.04 Proof of Right to Receive Benefits
	 	 	17	 
	7.05 Claims Procedure
	 	 	17	 
	7.06 Enforcement Following a Change in Control
	 	 	18	 
	 
	 	 	 	 
	Article VIII – Amendment and Termination
	 	 	19	 
	8.01 Amendment
	 	 	19	 
	8.02 Termination
	 	 	19	 
	8.03 Distributions Upon Plan Termination
	 	 	20	 
	 
	 	 	 	 
	Article IX – Miscellaneous
	 	 	20	 
	9.01 Use of Masculine or Feminine Pronouns
	 	 	20	 
	9.02 Transferability of Plan Benefits
	 	 	20	 
	9.03 Section 409A Compliance
	 	 	21	 
	9.04 Controlling State Law
	 	 	21	 
	9.05 No Right to Employment
	 	 	21	 
	9.06 Additional Conditions Imposed
	 	 	21	 

			
	 	 	 
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Textron Spillover Pension Plan

As Amended and Restated

Effective January 1, 2009

Introduction

The Textron Spillover Pension Plan (the “Plan”) is an unfunded, nonqualified deferred compensation
arrangement. The Plan is a continuation of the defined benefit portions of the Supplemental
Benefits Plan for Textron Key Executives (the “Key Executive Plan”) and the Textron Supplemental
Benefits Plan for Executives (the “Executive Plan”). The defined benefit portions of these plans
were combined to form the Plan effective January 1, 2007. The defined contribution portions of the
Key Executive Plan and the Executive Plan were continued as separate plans on and after January 1,
2007, and were combined to form the Textron Spillover Savings Plan effective January 1, 2008. The
Textron Spillover Pension Plan was amended and restated, effective January 1, 2008, to reflect the
final regulations interpreting Section 409A of the Internal Revenue Code of 1986, as amended (the
“IRC”) and to incorporate certain other changes.

The Plan provides supplemental pension benefits for designated executives of Textron and its
affiliates who participate in the Textron Retirement Program. The Plan provides benefits that
would have been payable under one of the tax-qualified defined benefit plans in the Textron
Retirement Program if not for the limits imposed by the Internal Revenue Code. For certain
executives who participated in the Key Executive Plan or the Executive Plan on December 31, 2006,
the Plan also provides benefits based on an expanded definition of compensation, and benefits
corresponding to the grandfathered benefits under the Textron Retirement Program.

Appendix A and Appendix B of the Plan set forth the defined benefit 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. Supplemental pension benefits that were earned and
vested (within the meaning of Section 409A) before January 1, 2005, and any subsequent increase
that is permitted to be included in such amounts under Section 409A, are calculated and paid solely
as provided in Appendix A or Appendix B, whichever is applicable, and are not subject to any other
provisions of the Textron Spillover Pension Plan.

Supplemental pension benefits that were earned or vested after 2004 and before 2007 are subject to
the provisions of IRC Section 409A. These benefits are calculated under Appendix A or Appendix B,
whichever is applicable, but are paid exclusively as provided in the Textron Spillover Pension Plan
(not including any appendix to the Plan). Although the provisions of the Textron Spillover Pension
Plan generally are effective as of January 1, 2007, 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.

			
	 	 	 
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Article I — Definitions

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 designated under the Plan (including any person who is
automatically designated by the terms of the Plan) to receive any death benefit or pre-pension
survivor annuity, or survivor annuity payable with respect to a Participant. A Participant’s
trust or estate may also be the Participant’s Beneficiary for a death benefit other than a
life annuity.
	 
	1.02	 	“Benefits Committee” means the Employee Benefits Committee of Textron.
	 
	1.03	 	“Board” means the Board of Directors of Textron.
	 
	1.04	 	“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
	 
	 	(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

			
	 	 	 
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	 	(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 6.03 of Appendix A shall be used to determine whether the
event is a “Change in Control.”

	1.05	 	“Compensation” means a Participant’s annual compensation determined as follows:

	 	(a)	 	For years after 2006, Compensation means eligible annual compensation as
defined under the corresponding benefit formula in the Participant’s Pension Plan,
without regard to the Statutory Limits, subject to the modifications described in this
Section 1.05(a). For any executive who was first awarded performance share units
before October 27, 1999, Compensation shall include payments made under performance
share units (regardless of when the units are awarded); but Compensation shall not
include amounts attributable to performance share units for any executive who was
first awarded performance share units after October 26, 1999. Compensation shall
include a Participant’s elective deferrals under the Deferred Income Plan for
Textron Key Executives, the Textron Deferred

			
	 	 	 
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Income Plan for Executives, and the
Deferred Income Plan for Textron Executives (and, if applicable, shall also include
the automatic deferral of a Participant’s performance shares, performance share
units, or annual incentive bonus exceeding 100% of the target bonus), but only to
the extent that these amounts would have been included in Compensation if they had
not been deferred.

	 	(b)	 	For any individual who participated in the Key Executive Plan before 2007,
Compensation for each year before 2007 shall be determined under Section 1.03 of
Appendix A.
	 
	 	(c)	 	For any individual who participated in the Executive Plan (but not in the Key
Executive Plan) before 2007, Compensation for each year before 2007 shall be
determined under Section 1.03 of Appendix B.
	 
	 	(d)	 	If a year before 2007 is included in the Participant’s Compensation Base
under the Plan, and the Participant did not participate in the Key Executive Plan or
the Executive Plan before 2007, Compensation for that year shall be determined as
provided in Section 1.05(a), above.

	1.06	 	“Compensation Base” means a Participant’s final average compensation, determined as provided
in the Pension Plan, but substituting Compensation as defined in Section 1.05 of the Plan for
the Participant’s annual compensation under the Pension Plan.
	 
	1.07	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.08	 	“Executive Plan” means the Textron Supplemental Benefits Plan for Executives, as in effect
before January 1, 2007. The defined benefit provisions of the Executive Plan are included in
this Plan as Appendix B.
	 
	1.09	 	“Grandfathered Formula” means the benefit formula, early retirement eligibility provisions,
and early retirement factors in effect under a Participant’s Pension Plan on December 31,
2006, as used to determine benefits earned after 2006.
	 
	1.10	 	“Grandfathered Participant” means any employee who participated in either the Key Executive
Plan or the
Executive Plan as of December 31, 2006; who continued to participate in the Plan after
2006; and who did not satisfy the requirements (described in Section 3.02) to receive a
grandfathered benefit under the Textron Retirement Program.

			
	 	 	 
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	1.11	 	“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.
	 
	1.12	 	“Key Executive Plan” means the Supplemental Benefits Plan for Textron Key Executives, as in
effect before January 1, 2007. The defined benefit provisions of the Key Executive Plan are
included in this Plan as Appendix A.
	 
	1.13	 	“Participant” means an employee of Textron who is eligible to participate in the Plan
pursuant to Section 2.01 and whose participation has not been terminated as provided in
Section 2.02.
	 
	1.14	 	“Pension Plan” means a tax-qualified defined benefit plan that is part of the Textron
Retirement Program, including (but not limited to) the Bell Helicopter Textron Retirement Plan
(part of the Bell Helicopter Textron Master Retirement Plan), the Textron Pension Plan for
Cessna Employees (Addendum F to the Textron Master Retirement Plan), and the Textron Pension
Plan (Addendum A to the Textron Master Retirement Plan).
	 
	1.15	 	“Plan” means this Textron Spillover Pension Plan, as amended and restated from time to time.
	 
	1.16	 	“Plan Administrator” means Textron or its designees, as described in Section 7.01.
	 
	1.17	 	“Retirement Age” means the age specified by the Participant for the commencement of benefits
under this Plan, which may be age 55, 62, or 65.
	 
	1.18	 	“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.
	 
	1.19	 	“Statutory Limit” means any limit on benefits under tax-qualified defined benefit plans
imposed by IRC Section 401(a)(17) or Section 415.
	 
	1.20	 	“Textron” means Textron Inc., a Delaware corporation, and any successor to Textron Inc.
	 
	1.21	 	“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).

			
	 	 	 
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	1.22	 	“Textron Retirement Program” means a floor-offset retirement arrangement consisting of a
floor benefit provided under a Pension Plan and an offset benefit provided under the Textron
Inc. Retirement Account Plan.
	 
	1.23	 	“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).

Article II — Participation

	2.01	 	Eligibility and Participation. An individual who is a participant in a Pension Plan
shall become a Participant in the Plan upon either: (a) (1) being designated by Textron’s
Chief Executive Officer and Chief Human Resources Officer as an eligible executive and (2)
having compensation, as defined in the Pension Plan, that exceeds the limit of IRC Section
401(a)(17), or (b) participating in the Deferred Income Plan for Textron Executives.
	 
	2.02	 	Period of Participation. Except as provided in the following sentence, once an
individual becomes a Participant under Section 2.01 above, the individual shall remain a
Participant (even if his or her compensation, as defined in the Pension Plan, subsequently
falls below the IRC Section 401(a)(17) limit) until the individual’s benefit under the Plan is
fully distributed, or until the individual’s participation in the Plan is terminated by the
Board (or by the Chief Executive Officer and the Chief Human Resources Officer) effective as
of the following January 1. 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 becomes
a Participant after 2008 pursuant to Section 2.01.

Article III — Spillover Pension Benefit Amounts

	3.01	 	Retirement Benefits. The benefit payable under the Plan to a Participant who is not
a Grandfathered Participant shall be (a) the benefit that would have been payable under the
Pension Plan if the Statutory Limits were ignored and Compensation Base were determined as
provided under Section 1.06, minus (b) the benefit that actually would be payable under the
Pension Plan at the same time and in the same form. In addition to the benefit described in
the preceding sentence, a Participant who is designated pursuant to Appendix C shall be
eligible to receive a wrap-around pension benefit determined as provided in Appendix C,
subject to the vesting requirements and other terms and conditions specified in Appendix C.

			
	 	 	 
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	3.02	 	Grandfathered Participants. Under the Textron Retirement Program, a new Pension Plan
formula became effective on January 1, 2007. Any Participant who, as of January 1, 2007, was
vested, and whose age and years of service combined were at least 55, was grandfathered in his
or her prior Pension Plan formula, early retirement eligibility provisions, and early
retirement factors. For service after 2006, a Participant who was grandfathered under the
Textron Retirement Program will receive the greater of the benefit determined under the new
Pension Plan formula and the benefit determined as if the Grandfathered Formula had remained
in effect after 2006. Textron wishes to provide a comparable benefit under this Plan for
certain Participants who participated in the Key Executive Plan or the Executive Plan on
December 31, 2006, but who did not satisfy the requirements to be grandfathered under the
Textron Retirement Program. Accordingly, the benefit payable under the Plan to any
Participant who is a Grandfathered Participant as defined in Section 1.10 shall be (a) the
greater of (i) the benefit determined under the Pension Plan formula applicable to the
Participant and (ii) the benefit that would have accrued under the Pension Plan if the
Grandfathered Formula had remained in effect after 2006, determined in each case without
regard to the Statutory Limits and using Compensation Base as defined in Section 1.06, minus
(b) the benefit that actually would be payable under the Pension Plan (without using the
Grandfathered Formula) at the same time and in the same form.

	3.03	 	Calculation of Benefits. In determining benefits for any purpose under the Plan, and
in determining benefits under the Pension Plan for purposes of calculating benefits under the
Plan, the following rules shall apply:

	 	(a)	 	All benefits shall be determined without taking into account any offset for
the value of the Participant’s account under the Textron Inc. Retirement Account Plan.
	 
	 	(b)	 	If a benefit under the Plan commences before or after the Participant’s
normal retirement age under the Pension Plan, the benefit under the Plan and under the
Pension Plan shall be actuarially adjusted for early or late commencement as provided
in the Pension Plan.
	 
	 	(c)	 	When a benefit under the Plan is reduced by the corresponding benefit under
the Pension Plan, the reduction shall be determined as if the Pension Plan benefit
were commencing at the same time and were payable in the same form as the benefit
under the Plan, regardless of whether the Participant has elected a different time or
form of payment for the Pension Plan benefit.
	 
	 	(d)	 	If it is necessary to determine the present value of a Participant’s benefit
for purposes of Section 5.06 (concerning automatic cash-out of small

			
	 	 	 
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benefits), the
present value shall be based on (i) the Participant’s early retirement benefit, if the
Participant is eligible for early retirement, (ii) the Plan benefit commencing at the
Participant’s age 65, if the Participant is not eligible for early retirement or has
suffered a Total Disability, or (iii) the survivor annuity or death benefit, if the
Participant has died; provided, however, that clause (ii) shall apply in calculating
the automatic cash-out under Section 5.06 for any Participant who was, as of December
31, 2008, a member of the Management Committee even if the Participant is eligible for
early retirement. If it is necessary to determine the present value of a
Participant’s benefit under any other provision of the Plan, the present value shall
be based on the Plan benefit commencing at the Participant’s age 65 (or the
Participant’s death, in the case of a survivor annuity or death benefit). In each
case, present value shall be determined using the 1994 Group Annuity Reserving Table
(unisex) based on a blend of 50% of the male mortality rates and 50% of the female
mortality rates (if mortality is applicable in the calculation) and an interest rate
of 7%.

	 	(e)	 	A Participant’s benefit determined under Section 3.01 or Section 3.02 shall
be increased as provided in Section 5.04(c) if the Participant’s lump-sum ratio
determined under that section exceeds 100%. If the Participant’s benefit is paid in a
form other than a lump sum, the actuarial
assumptions specified in subparagraph (d), above, shall be used to convert the
enhanced value of the Participant’s benefit to an annuity at age 65; the
assumptions specified subparagraph (b) and (c), above, and in Section 3.04, below,
shall be used to convert the additional age-65 annuity to the actual form of
payment. If the Participant dies before the Participant’s Separation From Service,
the lump-sum ratio shall be determined at the time of the Participant’s death; if
the lump-sum ratio is greater than 100%, the enhanced value of the Participant’s
benefit shall be used to calculate any pre-pension survivor annuity or death
benefit payable to the Participant’s Beneficiary.
	 
	 	(f)	 	Benefits earned before 2007 under the defined benefit portions of the Key
Executive Plan or the Executive Plan shall be calculated solely as provided in
Appendix A or Appendix B, whichever is applicable.

	3.04	 	Other Forms of Benefit. Termination benefits, pre-retirement or post-retirement
death benefits (including any death benefit and any surviving spouse benefit provided by a
Textron Company at its sole cost through a Pension Plan), pre-pension survivor annuity
benefits, post-pension survivor annuity benefits, disability benefits, and other optional
forms of payment or ancillary benefits shall be based on the Participant’s benefit under the
Plan, determined as provided in Section 3.01 or 3.02 and Section 3.03, and shall include any
actuarial reduction,

			
	 	 	 
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charge, survivor percentage, or other adjustment applicable to the
corresponding form of payment under the Pension Plan.

	3.05	 	Benefit Upon Transfer of Liability. In the event Textron transfers liability for a
Participant’s benefit under a Pension Plan to another qualified plan, the Plan benefits under
this Article III shall be determined as of the date of such transfer, unless otherwise
determined by Textron in its sole discretion.

Article IV — Vesting

	4.01	 	Vesting Schedule. Participants shall vest in the Plan in the same manner as is
provided for under the Pension Plan.
	 
	4.02	 	Change in Control. In the event of a Change in Control, if a Participant is employed
by a Textron Company on the date of the Change in Control, all benefits accrued by the
Participant as of the date of the Change in Control shall become fully vested.

Article V — Distribution of Benefits

	5.01	 	Automatic Distributions. Unless a Participant elected a different time and form of
payment before 2008 under Section 5.11(d), below, the Participant’s benefit shall commence as
of the later of age 55 or the first day of the seventh month following Separation From
Service, and shall be paid in the form of a single life annuity if the Participant is single
when the distribution commences, or in the form of an actuarially equivalent joint and 50%
surviving spouse annuity if the Participant is married when the distribution commences. The
benefits of a Participant whose benefits vest after his Separation From Service shall commence
on the later of the (1) the date that would have applied if his benefits had been vested at
his Separation From Service, or (2) the first day of the month following the date on which his
benefits vest. A Participant may change the automatic time or form of distribution to another
time or form of distribution that is available under this Article V, subject to the spousal
consent requirement in Section 5.02, below, and the rules governing changes in distribution
elections in Section 5.11, below. A Participant shall be deemed to have elected the automatic
time and form of distribution unless the Participant changes his payment election as provided
in Article V.

	5.02	 	Spousal Consent. If a Participant is married when he or she makes a distribution
election (including a change in a prior distribution election), the Participant must have the
written consent of his or her spouse in order to elect any form of payment other than a joint
and 50% surviving spouse annuity. If a Participant elects to receive a distribution in the
form of an annuity, and the Participant marries or re-marries after the date of the
distribution election, the Participant

			
	 	 	 
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shall automatically receive an actuarially equivalent
joint and 50% surviving spouse annuity unless his or her current spouse consents in writing to
a different form of distribution. Except as provided in the two preceding sentences, if a
Participant has designated a person other than his or her spouse as a Beneficiary, the
Participant may change the Beneficiary designation without the consent of his or her spouse.
A change in the Beneficiary designation alone (without a corresponding change in the time or
form of distribution) shall not be subject to the requirements of Section 5.11(b).

	5.03	 	Time and Form of Distribution. Subject to Section 5.01, a Participant may elect a
time and form of distribution specified below for the portion of the Participant’s benefit
under the Plan that is earned or vested after 2004 (including any portion of the Participant’s
benefit that was earned or vested after 2004 under Appendix A or Appendix B). Any portion of
the Participant’s benefit that was earned and vested before 2005 shall be calculated and paid
solely as provided in Appendix A or Appendix B, whichever is applicable, and shall not be
subject to this Article V.

	 	(a)	 	A lump-sum distribution of the portion of the benefit determined under
Section 5.04, payable on the first day of the seventh month following the
Participant’s Separation From Service, with the remainder of the benefit (if any)
payable as an annuity under subsection (c), below.
	 
	 	(b)	 	A lump-sum distribution of the portion of the benefit determined under
Section 5.04, payable on the later of (1) the first day of the seventh month following
the Participant’s Separation From Service or (2) attainment of Retirement Age, with
the remainder of the benefit (if any) payable as an annuity under subsection (c),
below.
	 
	 	(c)	 	A joint and 50% survivor annuity, a joint and 75% survivor annuity, a joint
and 100% survivor annuity, a single life annuity, or any other actuarially-equivalent
single life annuity or joint and survivor annuity that the Participant is eligible to
elect under the Participant’s Pension Plan, commencing on the later of (1) the first
day of the seventh month following the Participant’s Separation From Service or (2)
attainment of Retirement Age.

A Participant’s benefit under the Plan will be paid pursuant to the most recent valid
election in effect at the time of his Separation From Service (including an election the
Participant is deemed to have made under the terms of the Plan), except as provided in
Section 5.06 (automatic cash-out of small benefits), Section 5.07 (payments following Total
Disability), Section 5.08 (payments following death), Section 5.09 (administrative
adjustments), Section 5.10 (payments following a Change in Control), and Section 5.11(c)
(distributions before 2008).

			
	 	 	 
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	5.04	 	Lump-sum Distribution. A Participant may elect to receive a lump-sum distribution
with respect to a portion of his benefit determined as follows:

	 	(a)	 	If the Participant is not a Grandfathered Participant, the Plan Administrator
shall determine the ratio, as of the Participant’s Separation From Service, of (i) the
value of the Participant’s account under the Retirement Account Plan to (ii) the
present value of the benefit the Participant earned under the Pension Plan after 2006
(without taking into account any offset for the value of the Participant’s account
under the Retirement Account Plan).
	 
	 	(b)	 	If the Participant is a Grandfathered Participant, the Plan Administrator
shall determine the ratio in subsection (a), above, as if the Participant had
satisfied the requirements to be grandfathered under the Textron Retirement Program,
and had earned a benefit under the Pension Plan after
2006 equal to the greater of the Participant’s actual post-2006 Pension Plan
benefit and the benefit determined as if the Grandfathered Formula had remained in
effect after 2006. This paragraph shall apply solely for purposes of determining
a Grandfathered Participant’s lump-sum ratio, and not for purposes of determining
the amount of the Grandfathered Participant’s benefit under the Plan (except to the
extent that the lump-sum ratio results in an enhancement of the Participant’s
benefit under subsection (c)).
	 
	 	(c)	 	The Plan Administrator shall apply the lump-sum ratio determined under
subsection (a) or (b), whichever is applicable, to the present value (determined as of
the date of the distribution) of the portion of the Participant’s benefit under the
Plan that accrued after 2006. The percentage of the present value determined by the
lump-sum ratio shall be payable in a lump sum, and (except as provided in the
following sentence) the remaining portion of Participant’s benefit payable under this
Article V shall be paid as an annuity. If the ratio determined under subsection (a)
or (b) is greater than 100%, the present value of the Participant’s benefit under the
Plan that accrued after 2006 shall be increased by a corresponding amount, and the
Participant’s entire benefit under the Plan that was earned or vested after 2004
(including the enhancement) shall be payable in a lump sum; but no portion of the
Participant’s benefit under the Plan that accrued before 2007 shall be enhanced by the
lump-sum ratio.

	5.05	 	Six-Month Delay. If a Participant’s benefit is paid as a result of the Participant’s
Separation From Service, the benefit shall not commence or be paid under this Article V
earlier than six months after the date of the Participant’s Separation From Service. A
benefit paid as a result of the Participant’s Separation From

			
	 	 	 
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	 	Page 11

 

 

Service shall be calculated as
if it commenced or was paid on the first day of the month following the Separation From
Service. Any payments that otherwise would have been made during the initial six-month period
shall be paid in a lump sum, without interest, on the first day of the seventh month after the
Participant’s Separation From Service.

	5.06	 	Automatic Cash-Out. If the present value of the benefit earned or vested after 2004
(or the present value of the Beneficiary’s pre-pension survivor annuity earned or vested after
2004, in the case of the Participant’s death) is $150,000 or less at the earliest of the
Participant’s Separation From Service, Total Disability, or death, then the Participant’s
entire benefit earned or vested after 2004 (or the Beneficiary’s entire benefit earned or
vested after 2004, in the case of the Participant’s death) shall be distributed in a single
lump-sum payment (1) on the first day of the seventh
month after the Participant’s Separation From Service, (2) on the first day of the month
that is at least 30 days after the Participant’s Total Disability, or (3) on the first
business day of the first month that begins at least 90 days after the Participant’s death
(subject, however, to the following sentence). If a Participant’s Separation From Service
or death occurs before 2008, and the Participant’s benefit has not commenced as provided in
Section 5.11(c), the lump-sum payment described in the preceding sentence shall be made on
the first business day of January in 2008; provided that no such lump-sum payment paid as a
result of a Separation From Service will be made earlier than the first day of the seventh
month after the Participant’s Separation From Service. A distribution under this Section
5.06 shall be made without regard to any payment election the Participant has made (or is
deemed to have made) under Section 5.01 or Section 5.11.
	 
	5.07	 	Disability Benefits. Except as provided in Section 5.06 (automatic cash-out of small
benefits), if a Participant suffers a Total Disability, the Participant’s benefit under the
Plan shall commence or be paid, in the form the Participant elected (or is deemed to have
elected), on the first day of the month following the later of the Participant’s Total
Disability or attainment of age 65.
	 
	5.08	 	Payment of Death Benefits.

	 	(a)	 	If a Participant dies before his benefit under the Plan has commenced, and
the Participant would be eligible for a pre-pension survivor annuity under the Pension
Plan if he died before his benefit commencement date, the Participant’s Beneficiary
shall receive an annuity for the life of the Beneficiary, commencing on the first
business day of the month following the later of (i) 90 days after the Participant’s
death or (ii) the date on which the Participant would have reached age 55 (subject to
Section 5.06 concerning the automatic cash-out of small benefits). The Participant’s

			
	 	 	 
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	 	Page 12

 

 

Beneficiary must be a person who would have been eligible to receive the corresponding
pre-pension survivor annuity under the Pension Plan.

	 	(b)	 	If a Participant dies before his benefit under the Plan has commenced, and
the Participant would be eligible for a 60-month period certain death benefit under
the Pension Plan if he died before his benefit commencement date, the Participant’s
Beneficiary shall receive an amount equal to the present value of the corresponding
monthly payments under the Plan, paid in a lump sum on the first business day of the
first month that begins at least 90 days after the Participant’s death.
	 
	 	(c)	 	If a Participant dies less than 60 months after his benefit under the Plan
has commenced, and the Participant would be eligible for a 60-month period certain
death benefit under the Pension Plan if he died after his benefit commencement date,
the Participant’s Beneficiary shall receive an amount equal to the present value of
the corresponding monthly payments under the Plan for a number of months equal to 60
minus the number of monthly payments made to the Participant before his death, paid in
a lump sum on the first business day of the first month that begins at least 90 days
after the Participant’s death.
	 
	 	(d)	 	The amount of any pre-pension survivor annuity or death benefit shall be
determined as provided in Section 3.04. Any post-retirement death benefit under
Section 5.08(c) shall be based solely on the portion of the Participant’s benefit that
is payable as an annuity, and shall not include the value of any benefit the
Participant has received as a lump sum.

	5.09	 	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 5.09.
	 
	5.10	 	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 present value
of all benefits earned or vested after 2004 shall be paid in a lump sum in cash on the first
business day of the month following the Change

			
	 	 	 
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	 	Page 13

 

 

in Control. If a Participant’s Separation From
Service occurred before the Change in Control, the lump sum payment under this Section 5.10
shall not be made earlier than six months after the Participant’s Separation From Service.

	5.11	 	Change in Payment Election. Any election of a time or form of payment under Article
V, or any change in a prior election, is subject to the approval of the Plan Administrator.
If a Participant changes the time or form of payment previously elected, the new
election must apply to the Participant’s entire benefit under the Plan that is earned or
vested after 2004, and must comply with the following rules:

	 	(a)	 	Election Between Life Annuities. If another actuarially-equivalent
life annuity (within the meaning of IRC Section 409A) is available to a Participant
under Section 5.03(c), a Participant, at any time before the first annuity payment is
made, may change his election from one life annuity to another actuarially-equivalent
life annuity commencing at the same time.
	 
	 	(b)	 	Modification of Election. If a Participant wishes to change the form
of payment for his benefit or to elect a different Retirement Age, and the new
election does not satisfy the requirements of subsection (a) (concerning elections
between life annuities) or the transition rules in subsection (d) (concerning
elections before December 31, 2007), the Participant’s new payment election must
satisfy the requirements of this subsection (b). A Participant may change his
election under this subsection (b) only if the new election:

	 	(1)	 	is made at least twelve months before the date when payment
of the benefit would otherwise commence;
	 
	 	(2)	 	defers the date on which payment will commence by at least
five years from the commencement date applicable to his previous election;
	 
	 	(3)	 	does not cause payments triggered by attainment of Retirement
Age to commence at an age other than other than 55, 60, 62, 65, 67, or 70; and
	 
	 	(4)	 	does not cause payments triggered by Separation From Service
to commence more than 5 years and seven months after Separation From Service.

If a Participant’s payments (before the new election) commence at the later of
Retirement Age or six months after Separation From Service, the

			
	 	 	 
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	 	Page 14

 

 

Participant may
choose to apply the election of a new time of payment to only one of the two
alternative payment events.

	 	(c)	 	Distributions Before 2008. If a Participant’s Pension Plan benefit
commences before 2008, the Participant’s benefit under the Plan that was earned or
vested after 2004 shall be paid at the same time and in the same form as the
Participant’s Pension Plan benefit, as provided under the Key Executive Plan and the
Executive Plan as in effect on October 3, 2004.
	 
	 	(d)	 	One-Time Election During 2007. If a Participant’s Pension Plan
benefit does not commence before 2008, the Participant may make a special election
during 2007 to receive the benefit that is earned or vested after 2004 under one of
the distribution options in Section 5.03. The Participant may not make a new election
under this subsection if the election would accelerate payment of the Participant’s
benefit into the year of the new election. If the Participant’s Pension Plan benefit
commences after the date of the new election, but before 2008, the new election shall
be ineffective and the Participant’s benefit shall be paid as provided in subsection
(c), above. An election under this subsection 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 (d) (such as a requirement that a
Participant who participates in more than one nonqualified defined benefit plan elect
the same annuity form of payment under all plans); but the election shall not be
required to comply with the requirements of subsection (b), above (concerning changes
in payment elections) or Section 5.02 (concerning spousal consent). The Plan
Administrator may also allow an employee who is not yet a Participant, but who might
become a Participant in the future, to elect a distribution option under this
subsection (d) for any benefit the employee might later earn under this Plan. An
employee shall not have a right to receive any benefit under the Plan until he becomes
a Participant, even if the employee has previously filed an election designating the
time and form of payment for any benefit he might earn if he becomes eligible to
participate in the Plan.

	5.12	 	Rehired Participants. If a Participant has a Separation From Service and is later
rehired by a Textron Company, the following rules shall apply:

	 	(a)	 	If the Participant had not earned a vested benefit under the Plan at the time
of his first Separation From Service, but the Participant returns to service with a
Textron Company and earns a vested benefit after his return to service, the
Participant’s benefit under the Plan shall be paid as provided in the Plan upon his
death, Total Disability, or subsequent Separation

			
	 	 	 
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	 	Page 15

 

 

From Service, ignoring (for purposes
of determining the time and form of payment of his benefit) his first Separation From
Service.

	 	(b)	 	If the Participant had earned a vested benefit under the Plan at the time of
his first Separation From Service, the vested benefit that the Participant had earned
at the time of his first Separation From Service shall be paid at the same time and in
the same form that would have applied if the Participant had not returned to service.
Any additional vested benefit that the Participant earns after his return to service
shall be paid as provided in
the Plan upon his death, Total Disability, or subsequent Separation
From Service,
ignoring (for purposes of determining the time and form of payment of his
additional vested benefit) his first Separation From Service.
	 
	 	(c)	 	The break-in-service rules and other terms of the Pension Plan shall
determine to what extent (if at all) any service or compensation the Participant had
earned at the time of his first Separation From Service is forfeited or is taken into
account in calculating the amount of the Participant’s benefit under the Plan after
his return to service.

Article VI — Unfunded Plan

	6.01	 	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.

	6.02	 	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 VII — Plan Administration

	7.01	 	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 7.05, any
actions by Textron shall be final, conclusive and binding on each Participant and all persons
claiming by, through

			
	 	 	 
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	 	Page 16

 

 

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.

	7.02	 	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.
	 
	7.03	 	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.
	 
	7.04	 	Proof of Right to Receive Benefits. Textron may require proof of death or Total
Disability of any Participant, former Participant or Beneficiary and evidence of the right of
any person to receive any Plan benefit.
	 
	7.05	 	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 7.05 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

			
	 	 	 
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	 	Page 17

 

 

Claimant of the reason for the
extension and the expected response date. 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 a
civil action under Section 502(a) of ERISA.

	7.06	 	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

			
	 	 	 
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	Amended and Restated January 1, 2009
	 	Page 18

 

 

“person” or “group” described in Section
1.04 shall be liable, jointly and severally, to reimburse the Participant or Beneficiary for
the Participant’s or Beneficiary’s 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 VIII — Amendment and Termination

	8.01	 	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 and
who has not been designated by Textron’s Chief Executive Officer and Chief Human Resources
Officer as a key executive.

	 	(a)	 	No amendment, modification, or suspension shall reduce a Participant’s
accrued benefit as determined under Section 3.01 or Section 3.02 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.

An amendment to the Pension Plan that affects the benefits provided under this Plan shall
not be deemed to be an amendment to this Plan, and shall not be subject to the restrictions
in subsections (a) and (b), provided that the amendment to the Pension Plan applies to a
broad cross-section of participants in the Pension Plan, and not only or primarily to
Participants in this Plan.

	8.02	 	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

			
	 	 	 
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	Amended and Restated January 1, 2009
	 	Page 19

 

 

the Plan
shall reduce a Participant’s accrued benefit as determined under Section 3.01 or Section 3.02
and Section 3.03 immediately before the effective date of the termination.

	8.03	 	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 or Beneficiary’s vested benefit in a lump sum, to the extent permitted
under IRC Section 409A. All payments that may be made pursuant to this Section 8.03 shall be
made no earlier than the thirteenth month and no later than the twenty-fourth month after the
termination of the Plan. Textron may not accelerate payments pursuant to this Section 8.03 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 8.03, 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 IX — Miscellaneous

	9.01	 	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.
	 
	9.02	 	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) of the Code 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, and (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.
	 
	 	(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

			
	 	 	 
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	 	Page 20

 

 

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.

	9.03	 	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.
	 
	9.04	 	Controlling State Law. This Plan shall be construed in accordance with the laws of
the State of Delaware.
	 
	9.05	 	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.
	 
	9.06	 	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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	 	Page 21

 

 

 

TEXTRON SPILLOVER PENSION PLAN

 

APPENDIX A

(as amended and restated

effective January 1, 2009)

 

Defined Benefit Provisions

 of the

 Supplemental Benefits Plan for 

Textron Key Executives

(As in effect before January 1, 2007)

 

 

 

Textron Spillover Pension Plan

Appendix A — Key Executive Plan

Table of Contents

	 	 	 	 	 
	Introduction
	 	 	1	 
	 
	 	 	 	 
	Article I—Definitions
	 	 	2	 
	 
	 	 	 	 
	Article II—Participation
	 	 	4	 
	 
	 	 	 	 
	Article III—Supplemental Pension Benefits
	 	 	4	 
	 
	 	 	 	 
	Article IV—Unfunded Plan
	 	 	4	 
	 
	 	 	 	 
	Article V—Plan Administration
	 	 	5	 
	 
	 	 	 	 
	Article VI—Miscellaneous
	 	 	6	 

			
	 	 	 
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	 	Table of Contents (Appendix A)
	Amended and Restated January 1, 2009
	 	Page i

 

 

 Textron Spillover Pension Plan

Appendix A — Key Executive Plan

Introduction

	A.	 	Key Executive Plan
	 	 	(As In Effect Before 2007)

Before 2007, the Supplemental Benefits Plan for Textron Key Executives (the “Key Executive Plan”)
was a separate unfunded, nonqualified deferred compensation arrangement for designated key
executives of Textron and its affiliates. The Key Executive Plan supplemented key executives’
benefits under Textron’s tax-qualified defined benefit plans and tax-qualified defined contribution
plans by providing benefits that exceeded the statutory limits under the Internal Revenue Code
(“IRC”). The Key Executive Plan also provided supplemental pension benefits based on certain
elements of key executives’ compensation that were not included in pensionable compensation under
the tax-qualified defined benefit plans.

	B.	 	Textron Spillover Pension Plan
	 	 	(Effective January 1, 2007)

Effective January 1, 2007, the defined benefit portion of the Key Executive Plan was separated from
the defined contribution portion of the Key Executive Plan. The defined benefit portion of the Key
Executive Plan continued as part of the Textron Spillover Pension Plan, and the defined
contribution portion of the Key Executive Plan continued as a separate plan, the Supplemental
Savings Plan for Textron Key Executives.

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

The portion of Appendix A that follows this Introduction sets forth the defined benefit 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. Key executives’ supplemental pension benefits that
were earned and vested (within the meaning of Section 409A) before January 1, 2005, and any
subsequent increase that is permitted to be included in such amounts 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 Textron Spillover Pension Plan.

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
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
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

			
	 	 	 
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be liable for any adverse tax consequence suffered by a Participant or beneficiary if a Key
Executive Protected Benefit becomes subject to Section 409A.

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

Supplemental pension benefits earned by key executives after 2004, and supplemental pension
benefits 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, 2007, the
benefits shall be calculated under the provisions of the Key Executive Plan set forth in this
Appendix A, using the benefit formulas in the Pension Plans as in effect before 2007, modified as
provided in Appendix A. However, any benefits earned or vested under the Key Executive Plan after
2004 shall be paid exclusively as provided in the Textron Spillover Pension Plan (not including any
appendix to the Textron Spillover Pension Plan), 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
Textron Spillover Pension Plan generally are effective as of January 1, 2007, the provisions that
govern the distribution of benefits earned or vested after 2004 under the Key Executive Plan are
effective as of January 1, 2005.

Key Executive Plan

The text that follows sets forth the defined benefit provisions of the Key Executive Plan as in
effect on October 3, 2004. 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 Textron Spillover Pension Plan, and
terms defined elsewhere in the Textron Spillover Pension Plan do not apply to Appendix A. No
additional benefits shall accrue under Appendix A after 2006.

Article I—Definitions

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

	1.01	 	“Benefits Committee” means the Employee Benefits Committee of Textron.
	 
	1.02	 	“Board” means the Board of Directors of Textron.
	 
	1.03	 	“Compensation” means a Key Executive’s annual compensation determined as follows:

	 	(a)	 	For years before 2006, except as provided in subsections (b) and (c),
Compensation means base salary, accrued annual incentive compensation, performance
units, and performance share units, whether or not deferred under the Deferred Income
Plan for Textron Key Executives or the Textron Deferred Income Plan for Executives.
For 2006, Compensation
shall be determined as provided in the preceding sentence, modified

			
	 	 	 
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(except as
provided in subsection (c)) to include the greater of the Participant’s annual
incentive compensation accrued in 2006 or the Participant’s annual incentive
compensation paid in 2006.

	 	(b)	 	For any Key Executive who is first awarded performance share units after
October 26, 1999, performance share units shall not be included in Compensation.
	 
	 	(c)	 	For Key Executives who are members of the Textron Pension Plan for Cessna
Employees (Addendum F to the Textron Master Retirement Plan), Compensation means
“Final Average Monthly Salary” as defined in that plan. “Final Average Monthly Salary”
shall include incentive compensation paid by Textron and shall exclude long-term
incentive compensation and shall be calculated without regard to Statutory Limits or
deferrals.
	 
	 	(d)	 	Compensation does not include any award under the Textron Quality Management
Plan or the Supplemental Bonus Plan for Textron Financial Corporation Executives.

	1.04	 	“Deferral Plans” means the Textron Deferred Income Plan for Textron Key Executives and the
Textron Deferred Income Plan for Executives, as amended and restated from time to time.
	 
	1.05	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.06	 	“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.
	 
	1.07	 	“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.
	 
	1.08	 	“Pension Plan” means the Bell Helicopter Textron Retirement Plan, the Textron Pension Plan
for Cessna Employees, the Textron Master Retirement Plan, or an Included Plan that is a
defined benefit plan.
	 
	1.09	 	“Plan” means this Supplemental Benefits Plan for Textron Key Executives, as amended and
restated from time to time.
	 
	1.10	 	“Statutory Limit” means any limit on benefits under, or annual additions to, qualified plans
imposed by Section 401(a)(17) or 415 of the Internal Revenue Codes of 1954 or 1986, as amended
from time to time.

			
	 	 	 
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	1.11	 	“Textron” means Textron Inc., a Delaware corporation, and any successor of
Textron Inc.
	 
	1.12	 	“Textron Company” means Textron or any company controlled by or under common control with
Textron.

Article II—Participation

	2.01	 	A Key Executive shall participate in this Plan if her benefits under a Pension Plan are
limited by one or more Statutory Limits. In addition, a Key Executive shall participate in
this Plan if her receipt of any compensation is deferred under the Deferral Plans.

Article III—Supplemental Pension Benefits

	3.01	 	Textron shall pay on account of each Participant who begins to receive payments under one or
more of the Pension Plans the amount, if any, by which (1) the normal, early or vested
retirement pension that would have been payable on the Participant’s account under the Pension
Plans, using Compensation as defined in this Plan, exceeds (2) the normal, early or vested
retirement pension calculated under the Pension Plans on the Participant’s account.
	 
	3.02	 	Textron shall pay to the beneficiary designated by the Participant under each Pension Plan
the amount, if any, by which (1) the death benefit that would have been payable under that
Pension Plan on the Participant’s account using Compensation as defined in this Plan exceeds
(2) the death benefit which is actually payable under that Pension Plan on the Participant’s
account. For the purposes of this Section, the term “death benefit” shall include any period
certain death benefit and any surviving spouse benefit provided by a Textron Company at its
sole cost through a Pension Plan.
	 
	3.03	 	In the event Textron transfers the liability of a Pension Plan on account of a Participant to
another qualified plan, the supplemental pension or death benefits under Sections 3.01 and
3.02, respectively, shall be determined as of such transfer, unless otherwise decided by
Textron in its sole discretion.

Article IV—Unfunded Plan

	4.01	 	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

			
	 	 	 
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	 	Appendix A
	Amended and Restated January 1, 2009
	 	Page 4

 

 

neither the Participants whose lives are insured nor their beneficiaries shall have any
ownership rights in such policies of insurance.

	4.02	 	This Plan is intended in part to provide benefits for a select group of management employees
who are highly compensated, within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of
ERISA, and in part to be an excess benefit plan, pursuant to Section 3(36) of ERISA.
	 
	4.03	 	No Participant shall be required or permitted to make contributions to this Plan.

Article V—Plan Administration

	5.01	 	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
5.05, 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.
	 
	5.02	 	(a)  Except as provided in subsections (b) and (c), below, the payment of any benefit under
Article III shall be made at the same time, in the same manner, to the same persons and in the
same proportions, as is made the payment or distribution under the related Pension Plan, or
otherwise as determined by the Benefits Committee in its sole discretion. Textron may withhold
from benefits and accounts under this Plan, any taxes or other amounts required by law to be
withheld. Except as provided in subsection (b), below, no benefit shall be paid to any
Participant while employed by Textron.

	  (b)	 	Each benefit then computed under Article III shall become due and payable to
the respective Participants and beneficiaries immediately upon a Change in Control as
defined in Section 6.03. For purposes of Section 5.02, the present value of a benefit
computed under Article III shall be based on the appropriate actuarial assumptions and
factors set forth in the related Pension Plan and, if no interest rate assumption has
been set forth for any purpose, an interest rate of six percent per year.
	 
	  (c)	 	Effective for payments commencing on or after January 1, 2008, the Benefits
Committee has exercised its discretion pursuant to subsection (a) to determine that no
distribution under the Plan shall commence or be paid earlier than six months after
the date of the Participant’s separation from

			
	 	 	 
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	 	Page 5

 

 

service. Any payments that otherwise
would have been made during the six-month period shall be paid in a lump sum, without
interest, on the first day of the first month that begins after the six-month period.

	5.03	 	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 so taken, suffered or omitted shall be conclusive upon each of them
and upon all other persons interested in this Plan.
	 
	5.04	 	Textron may require proof of death or total disability of any Participant, former Participant
or beneficiary and evidence of the right of any person to receive any Plan benefit.
	 
	5.05	 	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and
resolved pursuant to the claims procedure in Section 7.05 of the Textron Spillover Pension
Plan.

Article VI—Miscellaneous

	6.01	 	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.
	 
	6.02	 	(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, and (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.

(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

			
	 	 	 
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	 	Page 6

 

 

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.

	6.03	 	Notwithstanding any Plan 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:

	 	(1)	 	shall reduce an amount payable under Article III of this Plan immediately
before the effective date of the amendment, modification, suspension or termination;
or
	 
	 	(2)	 	shall be made to Section 5.02 or 6.03 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 and to pay
prejudgment interest on any recovery as provided in Section 7.06 of the Textron Spillover
Pension Plan.

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

			
	 	 	 
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	 	Appendix A
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	 	Page 7

 

 

outstanding immediately prior thereto continuing to
represent (either by 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.

	6.04	 	This Plan shall be construed in accordance with the laws of the State of Delaware.
	 
	6.05	 	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.
	 
	6.06	 	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.

			
	 	 	 
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	 	Appendix A
	Amended and Restated January 1, 2009
	 	Page 8exv10w7

EXHIBIT 10.7

 

SUPPLEMENTAL RETIREMENT PLAN

FOR TEXTRON KEY EXECUTIVES

 

As Amended and Restated

Effective January 1, 2009

 

 

 

Supplemental Retirement Plan 

for Textron Key Executives

As Amended and Restated

Effective January 1, 2009

Table of Contents

	 	 	 	 	 
	Introduction
	 	 	1	 
	 
	 	 	 	 
	Article I—Definitions
	 	 	2	 
	1.01 Average Compensation
	 	 	2	 
	1.02 Beneficiary
	 	 	2	 
	1.03 Benefits Committee
	 	 	2	 
	1.04 Board
	 	 	2	 
	1.05 Change in Control
	 	 	2	 
	1.05 Compensation
	 	 	3	 
	1.07 IRC
	 	 	4	 
	1.08 Key Executive
	 	 	4	 
	1.09 Normal Form of Benefit
	 	 	4	 
	1.10 Participant
	 	 	4	 
	1.11 Pension Plan
	 	 	4	 
	1.12 Plan
	 	 	5	 
	1.13 Separation From Service
	 	 	5	 
	1.14 Surviving Spouse
	 	 	5	 
	1.15 Textron
	 	 	5	 
	1.16 Textron Company
	 	 	5	 
	1.17 Total Disability
	 	 	5	 
	 
	 	 	 	 
	Article II—Benefit
	 	 	5	 
	2.01 Target Benefit
	 	 	5	 
	2.02 Reductions in Target Benefit
	 	 	5	 
	2.03 Early Retirement Factors
	 	 	6	 
	2.04 Payment of Benefits
	 	 	7	 
	2.05 Pre-Pension Surviving Spouse Annuity
	 	 	9	 
	2.06 Administrative Adjustments in Payment Date
	 	 	9	 
	2.07 Distribution Upon Change in Control
	 	 	9	 
	 
	 	 	 	 
	Article III—Unfunded Plan
	 	 	10	 
	3.01 No Plan Assets
	 	 	10	 
	3.02 Top-Hat Plan Status
	 	 	10	 
	3.02 No Contributions
	 	 	10	 

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Table of Contents

Page i

 

 

	 	 	 	 	 
	Article IV—Plan Administration
	 	 	10	 
	4.01 Plan Administrator’s Powers
	 	 	10	 
	4.02 Tax Withholding
	 	 	11	 
	4.03 Use of Third Parties to Assist with Plan Administration
	 	 	11	 
	4.04 Proof of Right to Receive Benefits
	 	 	11	 
	4.05 Claims Procedure
	 	 	11	 
	4.06 Enforcement Following a Change in Control
	 	 	13	 
	 
	 	 	 	 
	Article V—Amendment and Termination
	 	 	13	 
	5.01 Amendment
	 	 	13	 
	5.02 Termination
	 	 	13	 
	5.03 Distributions Upon Plan Termination
	 	 	14	 
	 
	 	 	 	 
	Article VI—Miscellaneous
	 	 	14	 
	6.01 Use of Masculine or Feminine Pronouns
	 	 	14	 
	6.02 Transferability of Plan Benefits
	 	 	14	 
	6.03 Section 409A Compliance
	 	 	15	 
	6.04 Controlling State Law
	 	 	15	 
	6.05 No Right to Employment
	 	 	15	 
	6.06 Additional Conditions Imposed
	 	 	15	 

			
	 	 	 
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Supplemental Retirement Plan

for Textron Key Executives

As Amended and Restated

Effective January 1, 2009

Introduction

The Supplemental Retirement Plan for Textron Key Executives (the “Plan”) is an unfunded,
nonqualified deferred compensation arrangement. The Plan provides supplemental retirement benefits
for designated Key Executives of Textron and its affiliates.

Appendix A of the Plan 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. Supplemental
retirement benefits that were 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 these amounts
under IRC Section 409A, are calculated and paid solely as provided in Appendix A, and are not
subject to any other provisions of the Supplemental Retirement Plan for Textron Key Executives.

Supplemental retirement benefits that were earned or vested after 2004 and before January 1, 2008,
are subject to the provisions of IRC Section 409A. These supplemental retirement benefits are paid
exclusively as provided in the Supplemental Retirement Plan for Textron Key Executives (not
including any appendix to the Plan). Although the provisions of the Supplemental Retirement Plan
for Textron Key Executives generally are effective as of January 1, 2009, the provisions that
govern the distribution of benefits earned or vested after 2004 under the Plan are effective as of
January 1, 2005, and the amended definition of “Compensation” is effective as of January 1, 2007.

			
	 	 	 
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Article I—Definitions

Whenever used 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	 	“Average Compensation” means the average of a Participant’s Compensation during the five
consecutive years in which the Compensation is highest, determined using the same averaging
methodology that is used to determine “Compensation Base” in Addendum A of the Textron Master
Retirement Plan.
	 
	1.02	 	“Beneficiary” means the person who is entitled under this Plan to receive a payment that
would have been made to a Participant or Surviving Spouse during his or her lifetime, if the
Participant or Surviving Spouse dies before the payment is made.
	 
	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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Amended and Restated January 1, 2009
	 	Page 2

 

 

	 	(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 1.05 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, the
enhancement or accelerated vesting of the Participant’s benefit, or restrictions on
amendments to the Plan), the definition set forth in Section 5.04 of Appendix A shall be
used to determine whether the event is a “Change in Control.”

	1.06	 	“Compensation” means a Participant’s annual compensation determined as follows:

	 	(a)	 	For years after 2006, Compensation means eligible annual compensation as
defined under the current benefit formula in the tax-qualified Pension
Plan that covers the Participant, without regard to the statutory limits in IRC
Section 401(a)(17) and IRC Section 415, subject to the modifications described in
this Section 1.06(a). For any executive who was first

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 3

 

 

	 	 	 	awarded performance share
units before October 27, 1999, Compensation shall include payments made under
performance share units (regardless of when the units are awarded); but
Compensation shall not include amounts attributable to performance share units for
any executive who was first awarded performance share units after October 26, 1999.
Compensation shall include a Participant’s elective deferrals under the Deferred
Income Plan for Textron Key Executives, the Textron Deferred Income Plan for
Executives, and the Deferred Income Plan for Textron Executives (and, if
applicable, shall also include the automatic deferral of a Participant’s
performance share units or annual incentive bonus exceeding 100% of the target
bonus), but only to the extent that these amounts would have been included in
Compensation if they had not been deferred.
	 
	 	(b)	 	For any individual who participated in the Plan before 2007, Compensation for
each year before 2007 shall be determined under Section 1.04 of Appendix A.
	 
	 	(c)	 	If a year before 2007 is included in the Participant’s Compensation Base
under the Plan, and the Participant did not participate in the Plan before 2007,
Compensation for that year shall be determined as provided in Section 1.06(a), above.

	1.07	 	“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.
	 
	1.08	 	“Key Executive” means an employee of a Textron Company who has been and continues to be
designated as a Key Executive by Textron’s Chief Executive Officer and Chief Human Resources
Officer.
	 
	1.09	 	“Normal Form of Benefit” means (a) a single life annuity for the life of the Participant, in
the case of a Key Executive who became a Participant on or after July 23, 1998, and (b) a
joint and 50% survivor annuity, in the case of a Key Executive who became a Participant before
July 23, 1998.
	 
	1.10	 	“Participant” means a Key Executive selected by Textron’s Chief Executive Officer (or, in the
case of the Chief Executive Officer, selected by the Organization and Compensation Committee
of the Board) for participation in this Plan.
	 
	1.11	 	“Pension Plan” means a tax-qualified or nonqualified defined benefit plan maintained by a
Textron Company (including any predecessor plans, but excluding this Plan) in which the Key
Executive has participated. “Pension Plan” includes, but is not limited to, the Bell
Helicopter Textron Retirement Plan (part of the Bell Helicopter Textron Master Retirement
Plan), the Textron Pension Plan

			
	 	 	 
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	 	 	(Addendum A to the Textron Master Retirement Plan), and the
Textron Spillover Pension Plan.
	 
	1.12	 	“Plan” means this Supplemental Retirement Plan for Textron Key Executives, as amended and
restated from time to time.
	 
	1.13	 	“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.
	 
	1.14	 	“Surviving Spouse” means the person to whom a Participant is married (in a marriage
recognized under federal law) on the day of the Participant’s death while active or on the
dates of the Participant’s retirement and death.
	 
	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 within the meaning of IRC Section 414(b) or (c).
	 
	1.17	 	“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).

Article II—Benefit

	2.01	 	Target Benefit. Subject to Sections 2.02 and 2.03, the maximum benefit provided to a
Participant who qualifies for benefits under this Plan is an annuity commencing upon
Separation From Service or Total Disability equal to 50% of Average Compensation (the “Target
Benefit”) less the offsets and adjusted by the Early Retirement Factors as set out below.
	 
	2.02	 	Reductions in Target Benefit.

	 	(a)	 	Prior Employers’ Plans. The Target Benefit shall be reduced by the
monthly amount of any tax-qualified or nonqualified defined benefit payable to the
Participant as a single life annuity at age 65 from a plan or arrangement sponsored by
a prior employer other than a Textron Company. The monthly benefit payable under a
prior employer plan shall be converted, if necessary, to a single life annuity
commencing at age 65, using the actuarial assumptions or factors specified in the
prior employer plan (or, if no conversion basis is available from the prior employer,
using comparable actuarial assumptions or factors from Addendum A of the

			
	 	 	 
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	 	 	 	Textron
Master Retirement Plan). It shall be the obligation of each Participant to disclose
to Textron, before the Participant’s Separation From Service, any amounts that might
be used under this section to reduce the benefits provided by this Plan. Such
disclosure shall include information on annuity payments and lump-sum cash payments
from other plans.
	 
	 	(b)	 	Early Retirement Factors. The net Target Benefit after reduction for
benefits provided under any prior employer plans shall then be multiplied by the Early
Retirement Factor as set out in Section 2.03 below.
	 
	 	(c)	 	Pension Plans. The product of the net Target Benefit times the Early
Retirement Factor shall then be reduced by any and all amounts payable to the
Participant upon Separation From Service or Total Disability under any qualified or
nonqualified Pension Plan. For purposes of the preceding sentence, the calculation
shall be performed assuming that all benefits under this Plan and under any qualified
or nonqualified Pension Plan commence on the first day of the month following the
Participant’s Separation From Service or Total Disability, even if the commencement of
the benefit is delayed by the Participant’s election or by the terms of the plan. The
reduction shall be based on a benefit under each Pension Plan that is payable in the
same form as the Participant’s Normal Form of benefit under this Plan; and the benefit
under each Pension Plan shall be converted to that form and, if applicable, reduced
for early commencement based on the actuarial assumptions and factors used in the
Pension Plan. In the case of any Pension Plan that is part of the Textron Retirement
Program, which is a tax-qualified floor-offset arrangement, the reduction in the net
Target Benefit under this Plan shall be determined without taking into account any
offset in the Pension Plan benefit for the value of the Participant’s account under
the Textron Inc. Retirement Account Plan.

	2.03	 	Early Retirement Factors. The Participant’s benefits under this Plan shall be based
on the Participant’s age at Separation From Service, Total Disability, or death, in accordance
with the following schedule:

	 	 	 
	 	 	Early Retirement
	Age at Retirement	 	Factors
	65
	 	100%
	64
	 	90%
	63
	 	80%
	62
	 	70%
	61
	 	60%
	60
	 	50%
	Less Than 60
	 	0%

			
	 	 	 
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	 	 	The Organization and Compensation Committee of the Board shall, in its sole discretion,
have the authority to provide a Participant with an enhanced benefit pursuant to a separate
written agreement.
	 
	2.04	 	Payment of Benefits.

	 	(a)	 	Benefit Commencement Date. Any benefit to which a Participant is
entitled under the Plan shall be paid in the Normal Form of Benefit, or in an
actuarially equivalent life annuity elected by the Participant pursuant to subsection
(e), below. The Participant’s benefit shall be calculated as if it commenced on the
first day of the month following the Participant’s Separation From Service or Total
Disability.
	 
	 	(b)	 	Six-Month Delay. In the case of a benefit payable upon Separation
From Service, the benefit shall commence on the first day of the seventh month
following the Participant’s Separation From Service, and any monthly payments that
would have been due during the intervening six months shall be paid in a lump sum,
without interest, on the first day of the seventh month after the Participant’s
Separation From Service. The Participant may designate a Beneficiary to receive the
payments for the months before the Participant’s death in the event of the
Participant’s death after Separation From Service and before the expiration of the
six-month delay.
	 
	 	(c)	 	Disability Benefits. In the case of a benefit payable upon Total
Disability, the benefit shall commence on the first day of the month following the
later of the Participant’s Total Disability or attainment of age 65.
	 
	 	(d)	 	Form of Payment. Any form of benefit payable other than the Normal
Form of Benefit shall be the actuarial equivalent of the Normal Form of Benefit,
calculated using the actuarial assumptions and factors in the Textron Master
Retirement Plan. For any individual who becomes a
Participant after July 23, 1998, benefit payments under the Plan will be reduced if
the Participant elects a 50%, 75%, or 100% joint and survivor benefit or joint and
surviving spouse benefit. The joint and survivor factors are the same factors
provided by Addendum A of the Textron Master Retirement Plan.
	 
	 	(e)	 	Payment Election. A Participant who wishes to elect a form of
payment other than the Normal Form of Benefit must complete and return a written
distribution election form acceptable to the Benefits Committee before the
Participant’s Separation From Service or Total Disability. Subject to the

			
	 	 	 
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	 	 	 	spousal
consent requirement in subsection (f), below, the Participant may elect any
actuarially equivalent life annuity (within the meaning of IRC Section 409A) that is
available under Addendum A of the Textron Master Retirement Plan at the Participant’s
benefit commencement date under this Plan, regardless of whether the Participant
participates in Addendum A or elects the same form of payment under Addendum A.
	 
	 	(f)	 	Spousal Consent. For any individual who becomes a Participant after
July 23, 1998, if the Participant is married when he or she makes a distribution
election (including a change in a prior distribution election), the Participant must
have the written consent of his or her spouse in order to elect any form of payment
other than a joint and 50% surviving spouse annuity. If the Participant marries or
re-marries after the date of the distribution election, the Participant shall
automatically receive an actuarially equivalent joint and 50% surviving spouse annuity
unless his or her current spouse consents in writing to a different form of
distribution.
	 
	 	(g)	 	Spillover Pension Plan.

	 	(i)	 	If a Participant in this Plan is entitled to receive a
retirement benefit or pre-pension surviving spouse annuity under the Textron
Spillover Pension Plan or any other nonqualified Pension Plan that would be
subtracted from the Participant’s benefit under Section 2.02(c) of this Plan,
the amount of the benefit shall be calculated under the Textron Spillover
Pension Plan (or other nonqualified Pension Plan), but the benefit shall be
paid exclusively at the time and in the form provided under this Plan, as if
the other plan’s benefit were part of the Participant’s benefit under this
Plan. The preceding sentence shall apply even if the Participant is not
otherwise eligible to receive any retirement benefit or pre-pension surviving
spouse annuity under this Plan (for example, because he retired before his
benefit under this Plan vested or because his benefit under this Plan is fully
offset by his Pension Plan benefits).
	 
	 	(ii)	 	If a Participant’s Separation From Service, Total Disability,
or death occurs before the earliest date on which he would be entitled to a
benefit under this Plan, his retirement benefit under the Textron Spillover
Pension Plan or other nonqualified Pension Plan shall commence on the
Participant’s earliest retirement date under this Plan, as if he had retired
on that date. In the case of a Separation From Service, the retirement
benefit under the Textron Spillover Pension Plan or other nonqualified Pension
Plan shall be subject to the six-month delay in subsection (b). The
retirement benefit under the Textron Spillover Pension Plan or other
nonqualified Pension Plan shall be actuarially adjusted, using the

			
	 	 	 
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	 	 	 	actuarial
assumptions and factors in the other plan, to reflect the actual commencement
date under this Plan.
	 
	 	(iii)	 	If a Participant is entitled to a death benefit or other
benefit under the Textron Spillover Pension Plan or other nonqualified Pension
Plan that is not provided under this Plan and that would not in any
circumstance be subtracted from the Participant’s benefit under Section
2.02(c) of this Plan, the benefit shall be paid as provided in the Textron
Spillover Pension Plan or other nonqualified Pension Plan.

	2.05	 	Pre-Pension Surviving Spouse Annuity. If a Participant dies after age 60 and prior
to benefit commencement under this Plan, the Participant’s Surviving Spouse will receive an
annuity equal to the amount the spouse would have received if the Participant had requested a
joint and 50% surviving spouse annuity and had retired the day before he died. The
pre-pension surviving spouse annuity payable under this section shall commence on the first
business day of the first month that begins at least 90 days after the Participant’s death.
	 
	2.06	 	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 2.06.
	 
	2.07	 	Distribution Upon Change in Control.

	 	(a)	 	Benefit Enhancement. If the Participant’s Separation From Service,
Total Disability, or death occurs after a Change in Control, the Participant shall, in
lieu of the benefit payable under the preceding sections of this Article II, receive a
benefit equal to the actuarial present value at Separation From Service, Total
Disability, or death of the benefit the Participant would have received had the
Participant terminated employment at age 65, based upon the Participant’s Average
Compensation as of the date of Separation From Service, Total Disability, or death.
The present value shall be determined using the 1994 Group Annuity Reserving Table
(unisex) based on a blend of 50% of the male mortality rates and 50% of the female
mortality rates and an interest rate of 7%. Any pre-pension surviving

			
	 	 	 
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	 	Page 9

 

 

	 	 	 	spouse annuity
or pre-pension survivor annuity payable upon the Participant’s death after a Change in
Control shall be based on the Participant’s enhanced benefit calculated under this
subsection.
	 
	 	(b)	 	Distribution. If the Participant’s Separation From Service, Total
Disability, or death occurs within 24 months after the Change in Control, and if the
Change in Control also qualifies as a “change in control” under IRC Section 409A, the
enhanced benefit shall be paid in a lump sum. If the Participant’s Separation From
Service, Total Disability, or death occurs more than 24 months after the Change in
Control, or if the Change in Control does not qualify as a “change in control” under
IRC Section 409A, the enhanced benefit shall be paid in the Normal Form or as an
actuarially equivalent life annuity elected by the Participant. In either case, the
enhanced benefit shall commence (or, in the case of a lump sum, shall be paid) on the
applicable benefit commencement date specified in Section 2.04 or Section 2.05.

Article III—Unfunded Plan

	3.01	 	No Plan Assets. 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 Surviving Spouses or Beneficiaries shall have any ownership rights in such policies
of insurance.
	 
	3.02	 	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”).
	 
	3.03	 	No Contributions. No Participant shall be required or permitted to make
contributions to this Plan.

Article IV—Plan Administration

	4.01	 	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 4.05, any
actions by Textron shall be final,

			
	 	 	 
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Amended and Restated January 1, 2009
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	 	 	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. The Organization and Compensation
Committee of the Board shall render all decisions under this Plan (including participation,
Plan benefits, and benefit distributions) affecting Textron’s Chief Executive Officer.
	 
	4.02	 	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.
	 
	4.03	 	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.
	 
	4.04	 	Proof of Right to Receive Benefits. Textron may require proof of death or Total
Disability of any Participant, former Participant, Surviving Spouse, or Beneficiary and
evidence of the right of any person to receive any Plan benefit.
	 
	4.05	 	Claims Procedure. A Participant, Surviving Spouse, or Beneficiary who believes that
he is being denied a benefit to which he is entitled under the Plan (referred to in this
Section 4.05 as a “Claimant”) may file a written request with the Benefits Committee setting
forth the claim. The Benefits Committee (or the Organization and Compensation Committee of
the Board, in the case of a claim involving

			
	 	 	 
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Textron’s Chief Executive Officer) shall consider
and resolve the claim as set forth below.

	 	(a)	 	Time for Response. Upon receipt of a claim, the Committee shall
advise the Claimant that a response will be forthcoming within 90 days. The 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. The Committee shall respond to the claim within the
specified period.
	 
	 	(b)	 	Denial. If the claim is denied in whole or part, the 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 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 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 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 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

			
	 	 	 
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	 	 	 	benefits; and (3) the Claimant’s right to bring a
civil action under Section 502(a) of ERISA.

	4.06	 	Enforcement Following a Change in Control. If, after a Change in Control, any claim
is made or any litigation is brought by a Participant, Surviving Spouse, or Beneficiary to
enforce or interpret any provision contained in this Plan, Textron and the “person” or “group”
described in Section 1.05 shall be liable, jointly and severally, to reimburse the
Participant, Surviving Spouse, or Beneficiary for the Participant’s, Surviving Spouse’s, or
Beneficiary’s reasonable attorney’s fees and costs incurred during the Participant’s,
Surviving Spouse’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, Surviving Spouse,
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, Surviving Spouse, 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 V—Amendment and Termination

	5.01	 	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.

	 	(a)	 	No amendment, modification, or suspension shall reduce a Participant’s
accrued benefit as determined under Article II 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.

	 	 	An amendment to a Pension Plan that affects the benefits provided under this Plan shall not
be deemed to be an amendment to this Plan, and shall not be subject to the restrictions in
subsections (a) and (b), provided that the amendment to the Pension Plan applies to a broad
cross-section of participants in the Pension Plan, and not only or primarily to
Participants in this Plan.
	 
	5.02	 	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

			
	 	 	 
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Amended and Restated January 1, 2009
	 	Page 13

 

 

	 	 	the Plan
shall reduce a Participant’s accrued benefit as determined under Article II immediately before
the effective date of the termination.
	 
	5.03	 	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 benefit in a lump sum, to the extent permitted under IRC Section
409A. All payments that may be made pursuant to this Section 5.03 shall be made no earlier
than the thirteenth month and no later than the twenty-fourth month after the termination of
the Plan. Textron may not accelerate payments pursuant to this Section 5.03 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 5.03, 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 VI—Miscellaneous

	6.01	 	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.
	 
	6.02	 	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) of the Code 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, and (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.
	 
	 	(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

			
	 	 	 
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Amended and Restated January 1, 2009
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	 	 	 	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, Surviving Spouse, or
Beneficiary.

	6.03	 	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.
	 
	6.04	 	Controlling State Law. This Plan shall be construed in accordance with the laws of
the State of Delaware.
	 
	6.05	 	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.
	 
	6.06	 	Additional Conditions Imposed. Textron (through the Organization and Compensation
Committee of the Board), 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.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Page 15

 

 

 

SUPPLEMENTAL RETIREMENT PLAN

FOR TEXTRON KEY EXECUTIVES

 

APPENDIX A

 

Provisions of the

Supplemental Retirement Plan

for Textron Key Executives

(As in effect before January 1, 2008)

 

 

 

Supplemental Retirement Plan 

for Textron Key Executives

Appendix A — Prior Plan Provisions

Table of Contents

	 	 	 	 	 
	Introduction
	 	 	2	 
	 
	 	 	 	 
	Article I—Definitions
	 	 	3	 
	1.01 Beneficiary
	 	 	3	 
	1.02 Benefits Committee
	 	 	3	 
	1.03 Board
	 	 	3	 
	1.04 Compensation
	 	 	3	 
	1.05 Key Executive
	 	 	3	 
	1.06 Normal Form of Benefit
	 	 	3	 
	1.07 Participant
	 	 	3	 
	1.08 Pension Plan
	 	 	3	 
	1.09 Plan
	 	 	3	 
	1.10 Surviving Spouse
	 	 	4	 
	1.11 Textron
	 	 	4	 
	1.12 Textron Company
	 	 	4	 
	 
	 	 	 	 
	Article II—Benefit
	 	 	4	 
	 
	 	 	 	 
	Article III—Unfunded Plan
	 	 	5	 
	 
	 	 	 	 
	Article IV—Plan Administration
	 	 	6	 
	 
	 	 	 	 
	Article V—Miscellaneous
	 	 	7	 

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Table of Contents (Appendix A)

Page i

 

 

Supplemental Retirement Plan 

for Textron Key Executives

Appendix A — Prior Plan Provisions

Introduction

The Supplemental Retirement Plan for Textron Key Executives (the “Plan”) is an unfunded,
nonqualified deferred compensation arrangement. The Plan provides supplemental retirement benefits
for designated Key Executives of Textron and its affiliates. The Plan was amended and restated,
effective as of January 1, 2008, to comply with Section 409A of the Internal Revenue Code of 1986,
as amended (“IRC”).

			
	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 Plan as
in effect on October 3, 2004, when IRC Section 409A was enacted as part of the American Jobs
Creation Act of 2004. Key Executives’ supplemental retirement benefits that were 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 these amounts under IRC 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 Supplemental Retirement Plan for Textron Key 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,
Surviving Spouse, 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)

Supplemental retirement benefits that were earned by Key Executives after 2004, and Supplemental
retirement benefits 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 prior Plan provisions 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 Supplemental Retirement

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 2

 

 

Plan for Textron Key Executives (not 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 Supplemental Retirement Plan for Textron Key Executives generally are effective
as of January 1, 2008, the provisions that govern the distribution of benefits earned or vested
after 2004 under the prior Plan provisions are effective as of January 1, 2005.

Article I—Definitions

Whenever used 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, accrued annual incentive compensation, performance units,
and performance share units, whether or not deferred under the Deferred Income Plan for
Textron Key Executives or Textron Deferred Income Plan for Executives. However, for any Key
Executive who is first awarded performance share units after October 26, 1999, performance
share units shall not be included in Compensation. Compensation does not include awards under
the Supplemental Bonus Plan for Textron Financial Corporation Executives or the Textron
Quality Management Plan. “Average Compensation” means the average of a Participant’s
Compensation during the five consecutive years in which the Compensation is highest.
	 
	1.05	 	“Key Executive” means an employee of a Textron Company who has been and continues to be
designated as a Key Executive by Textron’s Chief Executive Officer and Chief Human Resources
Officer.
	 
	1.06	 	“Normal Form of Benefit” means a life annuity unless the Participant was designated a
Participant in this Plan prior to July 23, 1998, in which case the Normal Form of Benefit
shall be a Joint and 50% Survivor annuity.
	 
	1.07	 	“Participant” means a Key Executive selected by Textron’s Chief Executive Officer for
participation in this Plan.
	 
	1.08	 	“Pension Plan” means the Bell Helicopter Textron Retirement Plan, the Textron Master
Retirement Plan, or an included plan.
	 
	1.09	 	“Plan” means this Restated Supplemental Retirement Plan for Textron Key Executives, as
amended and restated from time to time.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 3

 

 

	1.10	 	“Surviving Spouse” means a Participant’s spouse who is married to the Participant on the day
of the Participant’s death while active or on the dates of the Participant’s retirement and
death.
	 
	1.11	 	“Textron” means Textron Inc., a Delaware corporation, and any successor of Textron Inc.
	 
	1.12	 	“Textron Company” means Textron or any company controlled by or under common control with
Textron.

Article II—Benefit

	2.01	 	Subject to Sections 2.02 and 2.03, the maximum benefit provided to Participants who qualify
for benefits under this Plan is an annuity commencing upon retirement equal to 50% of Average
Compensation (the “Target Benefit”) less the offsets and adjusted by the Early Retirement
Factors as set out below.
	 
	2.02	 	The Target Benefit shall be reduced by any nonqualified or qualified pension plan benefits
payable at age 65 from a prior employer other than a Textron employer. The reduction for any
prior employer plans shall be the actuarial equivalent of a life annuity. The net Target
Benefit after reduction for any prior employer plans shall then be multiplied by the Early
Retirement Factor as set out in Section 2.03 below. The product of the net Target Benefit
times the Early Retirement Factor shall then be reduced by any and all amounts payable to the
Participant at the time of retirement under any qualified or nonqualified Pension Plan. The
reduction for all Pension Plans shall be a Normal Form of Benefit based on the tables in the
Pension Plan. It shall be the obligation of each Participant to disclose to Textron any
amounts that might be used under this section to reduce the benefits provided by this Plan.
Such disclosure shall include information on annuity payments and lump-sum cash payments from
other plans.

	2.03	 	The Participant’s benefits under this Plan shall be based on the Participant’s age at
retirement (including death or disability) in accordance with the following schedule:

	 	 	 
	 	 	Early Retirement
	Age at Retirement	 	Factors
	65
	 	100%
	64
	 	90
	63
	 	80
	62
	 	70
	61
	 	60
	60
	 	50
	Less Than 60
	 	0

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 4

 

 

	 	 	The Organization and Compensation Committee of the Board shall, in its sole discretion,
have the authority to provide a Participant with an enhanced benefit.
	 
	2.04	 	The Normal Form of Benefit shall be a life annuity unless the Participant was designated a
Participant in this Plan prior to July 23, 1998, in which case the Normal Form of Benefit
shall be a Joint and 50% Survivor annuity. The payment of any benefit under Section 2.01
shall be paid in the Normal Form of Benefit or otherwise as determined by Textron’s Chief
Executive Officer in his sole discretion after considering any form of payment requested by
the Participant, Surviving Spouse, or other Beneficiary entitled to receive the benefits. Any
form of benefit payable other than the Normal Form shall be the actuarial equivalent of the
Normal Form using the factors in the Textron Master Retirement Plan. For any individual who
becomes a Participant after July 23, 1998, their benefit payments will be reduced if they
elect a 50% or a 100% Joint and Survivor Benefit. The Joint and Survivor factors are the same
factors provided by the Textron Master Retirement Plan.
	 
	2.05	 	If a Participant dies after age 60 and prior to benefit commencement under this Plan, the
Participant’s Surviving Spouse will receive an annuity equal to the amount the Spouse would
have received assuming the Participant had requested a Joint and 50% Survivor annuity and
retired the day before he died.

Article III—Unfunded Plan

	3.01	 	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.
	 
	3.02	 	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”).
	 
	3.03	 	No Participant shall be required or permitted to make contributions to this Plan.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 5

 

 

Article IV—Plan Administration

	4.01	 	(a) 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 respective
provisions hereof. Textron may from time to
time establish rules of the administration of
this Plan and the transaction of its business.
Subject to Section 4.03, any action by Textron
shall be final, conclusive, and binding on each
Participant and all persons claiming by,
through, or under any Participant.
	 
	 	 	(b) Notwithstanding any provision in this Plan to the contrary, the Organization and
Compensation Committee of the Board shall render all decisions under this Plan (including
participation, Plan benefits, and benefit distributions) affecting Textron’s Chief
Executive Officer.
	 
	 	 	 (c) 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.
	 
	 	 	(d) Notwithstanding any provision to the contrary, no benefit shall be paid to any
Participant while employed by Textron.
	 
	4.02	 	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 so taken, suffered, or omitted shall be conclusive upon each of them
and upon all other persons interested in this Plan.
	 
	4.03	 	Textron may require proof of death or total disability of any Participant, former Participant
or beneficiary and evidence of the right of any person to receive any Plan benefit.
	 
	4.04	 	Claims under this Plan shall be filed in writing with Textron, and shall be reviewed and
resolved pursuant to the claims procedure in Section 4.05 of the Supplemental Retirement Plan
for Textron Key Executives.
	 
	4.05	 	Textron shall withhold from benefits paid under this Plan any taxes or other amounts required
to be withheld by law.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 6

 

 

Article V—Miscellaneous

	5.01	 	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.
	 
	5.02	 	(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) of the Code 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, and (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.
	 
	 	 	(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, Surviving Spouse, or
Beneficiary.
	 
	5.03	 	Notwithstanding any Plan 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 notification of
such action; provided, however, that no amendment, modification, suspension, or termination:

	 	(a)	 	Shall reduce an amount payable under Article II before the effective date of
the amendment, modification, suspension or termination; or
	 
	 	(b)	 	Shall be made to Section 5.04 following a Change in Control.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 7

 

 

	5.04	 	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 at the Bankers Trust Company prime interest rate on any money award or
judgment obtained by the Participant or beneficiary. In the event that the Participant
retires or his employment otherwise terminates at any time after a “Change in Control” as
defined below, the Participant shall, in lieu of the benefit payable under Article II, receive
a benefit equal to the actuarial present value at termination of the benefit the Participant
would have received had the Participant terminated employment at age 65, based upon the
Participant’s Average Compensation as of the date of her termination. If the Participant
terminates within 24 months after the Change in Control, such benefit shall be paid in a lump
sum. If the Participant terminates more than 24 months after the Change in Control, then the
Participant shall be paid in an annuity. The Benefits Committee shall select the discount
rate and mortality table to be used in determining the actuarial present values.
	 
	 	 	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 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.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 8

 

 

	5.05	 	This Plan shall be construed in accordance with the laws of the State of Delaware.
	 
	5.06	 	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 any capacity with, or as an employee of, any Textron Company.

			
	 	 	 
	Supplemental Retirement Plan for Textron Key Executives 

Amended and Restated January 1, 2009
	 	Appendix A

Page 9

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