2018 Proxy Statement

43 TEXTRON 2018 PROXY STATEMENT LLL WKH IRUFHG UHORFDWLRQ RI 0U 'RQQHOO\¶V SULQFLSDO RI¿FH LY D UHGXFWLRQ LQ 0U 'RQQHOO\¶V VDODU\ RU RWKHU EHQH¿WV Y WKH IDLOXUH of the Company to deliver to Mr. Donnelly a satisfactory written agreement from any successor to the Company to assume and agree to perform under the letter agreement, or (vi) other material breach by Textron of the letter agreement. Upon a termination “not for cause,” or for “Good Reason,” Mr. Donnelly would be entitled to his vested or accrued obligations as well as the following: • &DVK 6HYHUDQFH %HQH¿W &RPSULVHG RI – Two times the sum of (i) base salary and (ii) the greater of (a) the termination year target annual cash incentive compensation DQG E WKH DYHUDJH DQQXDO FDVK LQFHQWLYH FRPSHQVDWLRQ HDUQHG GXULQJ WKH ODVW WKUHH ¿VFDO \HDUV SDLG LQ PRQWKO\ installments over two years ± $ SUR UDWHG DQQXDO FDVK LQFHQWLYH FRPSHQVDWLRQ SD\PHQW EDVHG RQ DFWXDO SHUIRUPDQFH IRU WKH \HDU RI WHUPLQDWLRQ SDLG LQ a lump sum in the year following termination • 7UHDWPHQW RI /RQJ 7HUP ,QFHQWLYH $ZDUGV – Unvested stock options would be subject to full vesting acceleration for that portion of the awards that would have vested within two years after termination ± 368V ZRXOG YHVW SUR UDWD • %HQH¿WV XQGHU 5HWLUHPHQW 3ODQV ± &UHGLW IRU DQ DGGLWLRQDO WZR DQG RQH KDOI \HDUV RI DJH DQG VHUYLFH DQG FRPSHQVDWLRQ XQGHU DOO GH¿QHG EHQH¿W W\SH UHWLUHPHQW plans (including the SPP) ± $ OXPS VXP SD\PHQW HTXDO WR WZR WLPHV WKH DPRXQW RI PD[LPXP &RPSDQ\ DQQXDO FRQWULEXWLRQ RU PDWFK WR DQ\ GH¿QHG FRQWULEXWLRQ W\SH SODQ LQ ZKLFK WKH H[HFXWLYH SDUWLFLSDWHV • Continuation of Insurance Coverage: Continued coverage (or the cash equivalent thereof) for two years under the Company’s WHUP OLIH LQVXUDQFH DQG ORQJ WHUP GLVDELOLW\ LQVXUDQFH SODQV DQG WR WKH H[WHQW HOLJLEOH RQ WKH GDWH RI WHUPLQDWLRQ XQGHU WKH accidental death and dismemberment insurance and dependent life insurance plans OTHER NEOS 7KH 6HYHUDQFH 3ODQ IRU 7H[WURQ .H\ ([HFXWLYHV LQ ZKLFK HDFK RI WKH RWKHU 1(2V SDUWLFLSDWHV SURYLGHV VHYHUDQFH SD\ IRU involuntary termination only if the executive signs a release provided in and required by the plan document. This severance pay is equal to the sum of: (i) the executive’s annual rate of base salary at the date of severance, and (ii) the larger of (a) the average of his or her three most recent actual awards of annual incentive compensation (whether or not deferred) and (b) his or her current target incentive compensation under the annual incentive compensation plan. PAYMENTS MADE UPON A TERMINATION IN CONNECTION WITH A “CHANGE IN CONTROL” Mr. Donnelly A “change in control” termination would occur if Mr. Donnelly experiences a “not for cause” termination during the period beginning 180 days before a change in control and ending on the second anniversary of the change in control. Mr. Donnelly’s OHWWHU DJUHHPHQW ZLWK WKH &RPSDQ\ SURYLGHV FHUWDLQ VHYHUDQFH EHQH¿WV LQ WKH HYHQW RI D ³FKDQJH LQ FRQWURO´ WHUPLQDWLRQ )RU purposes of Mr. Donnelly’s letter agreement, a “change in control” means the occurrence of any of the following events: (i) any person unrelated to Textron acquires more than 30% of Textron’s then outstanding voting stock, (ii) a majority of the members of WKH %RDUG RI 'LUHFWRUV DUH UHSODFHG LQ DQ\ WZR \HDU SHULRG RWKHU WKDQ LQ VSHFL¿F FLUFXPVWDQFHV LLL WKH FRQVXPPDWLRQ RI D PHUJHU or consolidation of Textron with any other corporation, other than a merger or consolidation in which Textron’s voting securities outstanding immediately prior to such merger or consolidation continue to represent at least 50% of the combined voting securities of Textron or such surviving entity immediately after such merger or consolidation, or (iv) shareholder approval of an agreement for the sale or disposition of all or substantially all of Textron’s assets or a plan of complete liquidation. Upon a termination in connection with a “change in control,” Mr. Donnelly would be entitled to his vested or accrued obligations as well as the following: • &DVK 6HYHUDQFH %HQH¿W 3D\DEOH LQ D /XPS 6XP &RPSULVHG RI – Three times base salary ± 3UR UDWHG SRUWLRQ RI WKH JUHDWHU RI L WKH WHUPLQDWLRQ \HDU WDUJHW DQQXDO FDVK LQFHQWLYH FRPSHQVDWLRQ DQG LL WKH SULRU \HDU annual cash incentive compensation – Three times the greater of (i) the average annual cash incentive compensation over the three years prior to the earlier of the change of control or the termination and (ii) the termination year target annual cash incentive compensation