2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 10 DIRECTOR INDEPENDENCE The Board of Directors has determined that Ms. Bader, Messrs. Clark, Conway, Evans, Fish, Gagné, Heath, Ms. James, Messrs. 7URWWHU DQG =LHPHU DQG 0V =XEHU DUH LQGHSHQGHQW DV GH¿QHG XQGHU WKH OLVWLQJ VWDQGDUGV RI WKH 1HZ <RUN 6WRFN ([FKDQJH based on the criteria set forth in the Textron Corporate Governance Guidelines and Policies which are posted on Textron’s website DV GHVFULEHG EHORZ 7KH %RDUG KDG SUHYLRXVO\ GHWHUPLQHG WKDW 'DLQ 0 +DQFRFN DQG /RUG 3RZHOO RI %D\VZDWHU .&0* ZKR served as directors for a portion of the year, were independent under such standards as well. In making its determination, the %RDUG H[DPLQHG UHODWLRQVKLSV EHWZHHQ GLUHFWRUV RU WKHLU DI¿OLDWHV ZLWK 7H[WURQ DQG LWV DI¿OLDWHV DQG GHWHUPLQHG WKDW HDFK VXFK UHODWLRQVKLS GLG QRW LPSDLU WKH GLUHFWRU¶V LQGHSHQGHQFH 6SHFL¿FDOO\ WKH %RDUG FRQVLGHUHG WKH IDFW WKDW LQ WKH 7H[WURQ Charitable Trust made a $20,000 donation to The Marine Corps University Foundation, an organization for which Mr. Conway serves as Chairman, and a $21,000 donation to the Semper Fi Wounded Warrior Fund, an organization for which Mr. Conway’s wife serves as Board Vice President. In addition, the Board considered that, in 2017, the Textron Charitable Trust made a $50,000 donation to The Atlantic Council, an organization for which Ms. James serves as a director. Textron has supported The Atlantic Council since 2002, with the amount of its contribution being $50,000 annually since 2011. The Board determined that these donations have not compromised either director’s independence as a Textron director. LEADERSHIP STRUCTURE +LVWRULFDOO\ DV UHÀHFWHG LQ 7H[WURQ¶V &RUSRUDWH *RYHUQDQFH *XLGHOLQHV DQG 3ROLFLHV WKH %RDUG KDV GHWHUPLQHG WKDW WKH SUDFWLFH RI FRPELQLQJ WKH SRVLWLRQV RI &KDLUPDQ RI WKH %RDUG DQG &KLHI ([HFXWLYH 2I¿FHU VHUYHV WKH EHVW LQWHUHVWV RI 7H[WURQ and its shareholders. This is because the Board believes that the CEO, with his extensive knowledge of the Company’s businesses and full time focus on the business affairs of the Company, makes a more effective Chairman than an independent GLUHFWRU HVSHFLDOO\ JLYHQ WKH VL]H DQG PXOWL LQGXVWU\ QDWXUH RI WKH &RPSDQ\¶V EXVLQHVV 7KH %RDUG KDV FRPPLWWHG WR UHYLHZ DW least once every two years, whether combining these positions serves the best interests of Textron and its shareholders. The Nominating and Corporate Governance Committee recently recommended to the Board, and, in February 2018, the Board of Directors approved, changes to our Corporate Governance Guidelines and Policies such that, beginning in April WKH LQGHSHQGHQW GLUHFWRUV ZLOO KDYH WKH ÀH[LELOLW\ WR VHOHFW DQ\ GLUHFWRU DPRQJ WKHP WR VHUYH DV /HDG 'LUHFWRU 7KH /HDG 'LUHFWRU JHQHUDOO\ ZLOO EH H[SHFWHG WR VHUYH IRU D WKUHH \HDU WHUP ZLWK WKH DSSRLQWPHQW UDWL¿HG DQQXDOO\ 3UHYLRXVO\ RXU /HDG 'LUHFWRU ZDV VHOHFWHG IURP DPRQJ WKH &RPPLWWHH FKDLUV RQ D URWDWLQJ EDVLV DQG VHUYHG D RQH \HDU WHUP 7KH %RDUG EHOLHYHV WKDW PRUH ÀH[LELOLW\ LQ FKRRVLQJ WKH /HDG 'LUHFWRU ZLOO HQDEOH WKH %RDUG WR FKRRVH WKH PRVW HIIHFWLYH LQGLYLGXDO IRU WKH UROH DQG D WKUHH \HDU WHUP ZLOO SURYLGH JUHDWHU FRQWLQXLW\ IURP \HDU WR \HDU HQKDQFLQJ WKH YDOXH RI WKH /HDG 'LUHFWRU¶V UROH 7KH /HDG 'LUHFWRU LV DVVLJQHG FOHDUO\ GH¿QHG DQG H[SDQVLYH GXWLHV XQGHU RXU &RUSRUDWH *RYHUQDQFH *XLGHOLQHV DQG Policies, including (i) presiding at all meetings of the Board at which the Chairman is not present, including all executive sessions of the Board, (ii) serving, when needed, as liaison between the CEO and the independent directors, (iii) identifying, together with the CEO, key strategic direction and operational issues upon which the Board’s annual core agenda is based, (iv) discussing agenda items and time allocated for agenda items with the CEO prior to each Board meeting, including the authority to make changes and approve the agenda for the meeting, (v) determining the type of information to be provided to the directors for each scheduled Board meeting, (vi) convening additional executive sessions of the Board, (vii) determining to meet with Textron shareholders, as appropriate, after consultation with the CEO and General Counsel, and (viii) such other functions as the Board may direct. Textron’s Corporate Governance Guidelines and Policies also require that the Board meet in executive session for independent directors without management present at each regularly scheduled Board meeting. Textron’s Lead Director presides at such sessions. Additional executive sessions may be convened at any time at the request of a director, and, in such event, the Lead Director presides. During 2017, the independent directors met in executive session without management present during each of the Board’s seven meetings. Currently, Ms. Bader serves as Lead Director. The functions of the Board are carried out by the full Board, and, when delegated, by the Board committees, with each director being a full and equal participant. The Board is committed to high standards of corporate governance and its Corporate Governance Guidelines and Policies were designed, in part, to ensure the independence of the Board and LQFOXGH D IRUPDO SURFHVV IRU WKH HYDOXDWLRQ RI &(2 SHUIRUPDQFH E\ DOO QRQ PDQDJHPHQW %RDUG PHPEHUV 7KH HYDOXDWLRQ is used by the Organization and Compensation Committee as a basis to recommend the compensation of the CEO. In addition, the Audit Committee, the Nominating and Corporate Governance Committee, and the Organization and Compensation Committee are composed entirely of independent directors. Each of these committees’ charters provides that the committee may seek the counsel of independent advisors and each routinely meets in executive session without PDQDJHPHQW SUHVHQW 7KH %RDUG DQG HDFK RI LWV WKUHH SULQFLSDO FRPPLWWHHV SHUIRUP DQ DQQXDO VHOI HYDOXDWLRQ