2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 42 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 7KH GLVFXVVLRQ DQG WDEOHV EHORZ UHÀHFW WKH DPRXQW RI FRPSHQVDWLRQ WKDW ZRXOG EHFRPH SD\DEOH WR HDFK RI WKH 1(2V RWKHU than Ms. Johnson) under existing plans and arrangements if the named executive’s employment had terminated and/or a change LQ FRQWURO KDG RFFXUUHG RQ 'HFHPEHU WKH ODVW EXVLQHVV GD\ RI 7H[WURQ¶V ¿VFDO \HDU ,QIRUPDWLRQ LV SURYLGHG ZLWK respect to the following termination scenarios—voluntary, “for cause”, death or disability, “not for cause” or “good reason”, change in control—and is based upon the named executive’s compensation and service levels as of such date and, if applicable, based on the Company’s closing stock price on that date. In addition, in connection with any future actual termination of employment, the Company may determine to enter into an DJUHHPHQW RU WR HVWDEOLVK DQ DUUDQJHPHQW SURYLGLQJ DGGLWLRQDO EHQH¿WV RU DPRXQWV RU DOWHULQJ WKH WHUPV RI EHQH¿WV GHVFULEHG below, as the Organization and Compensation Committee believes appropriate. The actual amounts that would be paid upon a NEO’s termination of employment can be determined only at the time of such executive’s separation from the Company. Due to WKH QXPEHU RI IDFWRUV WKDW DIIHFW WKH QDWXUH DQG DPRXQW RI DQ\ EHQH¿WV SURYLGHG XSRQ WKH HYHQWV GLVFXVVHG EHORZ DQ\ DFWXDO amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, the Company’s share price and the executive’s age. PAYMENTS MADE UPON A VOLUNTARY TERMINATION BY AN EXECUTIVE Voluntary termination occurs when the NEO leaves the Company at his or her own will (e.g., voluntary resignation or retirement). Upon a voluntary termination executives are entitled only to their vested or accrued obligations. Additionally, because Ms. Duffy is retirement eligible under the terms of grants made prior to 2014 (at least 20 years of service to Textron) as of December 30, 2017, XSRQ KHU YROXQWDU\ WHUPLQDWLRQ KHU 568V LVVXHG SULRU WR ZRXOG DFFHOHUDWH DQG YHVW SUR UDWD PAYMENTS MADE UPON A TERMINATION “FOR CAUSE” BY THE COMPANY A “for cause” termination occurs when a NEO is separated from Textron after engaging in one or more activities including, but not limited to: (i) conviction of, or pleading nolo contendere RU JXLOW\ WR D IHORQ\ RWKHU WKDQ D WUDI¿F LQIUDFWLRQ RU D FULPH LQYROYLQJ vicarious liability under certain circumstances), (ii) willful misrepresentation, fraud or dishonesty for personal enrichment at the expense of Textron, (iii) willful misconduct or behavior, willful violation of the Company’s Business Conduct Guidelines, or breach RI WKH 1(2¶V ¿GXFLDU\ GXWLHV LQ HDFK FDVH WKDW UHVXOWV LQ PDWHULDO KDUP WR 7H[WURQ RU LY ZLOOIXO IDLOXUH WR DWWHPSW WR SHUIRUP KLV RU her duties or willful failure to attempt to follow the legal written direction of the Board. Upon a termination “for cause,” each of the NEOs would be entitled only to their vested or accrued obligations. PAYMENTS MADE UPON A TERMINATION IN CONNECTION WITH DEATH OR DISABILITY Upon a termination in connection with death or disability, each of the NEOs would be entitled to their vested or accrued obligations as well as the following: • 568V LVVXHG SULRU WR ZRXOG DFFHOHUDWH DQG YHVW SUR UDWD DQG 568V LVVXHG LQ RU ODWHU ZRXOG YHVW LQ IXOO XSRQ WKH occurrence of the event. • 368V ZRXOG DFFHOHUDWH DQG YHVW SUR UDWD • ,Q WKH HYHQW RI GLVDELOLW\ RSWLRQV ZRXOG UHPDLQ H[HUFLVDEOH XQWLO WKH RULJLQDO H[SLUDWLRQ GDWH LQ WKH HYHQW RI GHDWK WKH\ UHPDLQ exercisable until the earlier of the remaining term of the option or 12 months after the date of death. Unvested stock options LVVXHG LQ RU ODWHU ZRXOG YHVW LQ IXOO RSWLRQV ZRXOG EH H[HUFLVDEOH XQWLO WKH HDUOLHU RI ¿YH \HDUV DIWHU GLVDELOLW\ GHDWK RU WKH remaining term of the option. • )XOO YHVWLQJ RI EHQH¿WV XQGHU WKH 7H[WURQ 6DYLQJV 3ODQ 663 ',3 DQG 5HWLUHPHQW $FFRXQW 3ODQ PAYMENTS MADE UPON A “NOT FOR CAUSE” TERMINATION BY THE COMPANY OR BY AN EXECUTIVE FOR “GOOD REASON” Mr. Donnelly A “not for cause” termination (also called “involuntary termination”) occurs when employment ends either at the initiation of Textron, but without circumstances that would indicate a “for cause” situation, or at the initiation of the executive for “Good 5HDVRQ ´ 0U 'RQQHOO\¶V OHWWHU DJUHHPHQW ZLWK WKH &RPSDQ\ SURYLGHV FHUWDLQ VHYHUDQFH EHQH¿WV LQ WKH HYHQW RI D ³QRW IRU FDXVH´ or “Good Reason” termination. “Good Reason” means the occurrence of one or more of the following: (i) the assignment to Mr. Donnelly of duties that are materially inconsistent with his position, (ii) the material reduction of Mr. Donnelly’s position,