2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 12 7H[WURQ¶V $PHQGHG DQG 5HVWDWHG %\ /DZV FRQWDLQ D SURYLVLRQ ZKLFK LPSRVHV FHUWDLQ UHTXLUHPHQWV XSRQ QRPLQDWLRQV IRU GLUHFWRUV made by shareholders at the annual meeting of shareholders or a special meeting of shareholders at which directors are to be elected. Shareholders wishing to nominate an individual for director at the annual meeting must submit timely notice of nomination within the time limits described below under the heading “Shareholder Proposals and Other Matters for 2019 Annual Meeting” RQ SDJH WR WKH FRPPLWWHH F R 7H[WURQ¶V 6HFUHWDU\ DORQJ ZLWK WKH LQIRUPDWLRQ GHVFULEHG LQ RXU %\ /DZV The committee annually reviews the Board of Directors’ composition, the appropriate size of the Board, the results of the review of the Board’s overall performance and the strategy of the Company to determine future requirements for Board members. All candidates are evaluated against those requirements and the criteria for membership to the Board set forth in the Corporate *RYHUQDQFH *XLGHOLQHV DQG 3ROLFLHV LQFOXGLQJ L H[HPSODU\ SHUVRQDO HWKLFV DQG LQWHJULW\ LL VSHFL¿F VNLOOV DQG H[SHULHQFH DOLJQHG ZLWK 7H[WURQ¶V VWUDWHJLF GLUHFWLRQ DQG RSHUDWLQJ FKDOOHQJHV DQG WKDW FRPSOHPHQW WKH RYHUDOO FRPSRVLWLRQ RI WKH %RDUG LLL FRUH EXVLQHVV FRPSHWHQFLHV RI KLJK DFKLHYHPHQW DQG D UHFRUG RI VXFFHVV LY ¿QDQFLDO OLWHUDF\ DQG D KLVWRU\ RI PDNLQJ JRRG EXVLQHVV GHFLVLRQV DQG H[SRVXUH WR EHVW SUDFWLFHV Y LQWHUSHUVRQDO VNLOOV WKDW PD[LPL]H JURXS G\QDPLFV LQFOXGLQJ UHVSHFW IRU RWKHUV YL VWURQJ FRPPXQLFDWLRQV VNLOOV DQG FRQ¿GHQFH WR DVN WRXJK TXHVWLRQV DQG YLL HQWKXVLDVP IRU 7H[WURQ DQG VXI¿FLHQW WLPH WR EH IXOO\ HQJDJHG 7KH FRPPLWWHH PXVW DOVR WDNH LQWR DFFRXQW RXU %\ /DZV ZKLFK SURYLGH WKDW QR SHUVRQ VKDOO be elected a director who has attained the age of 75. In addition, the Guidelines and Policies provide that a substantial majority of the Company’s directors must be independent under the standards of the New York Stock Exchange. All recommendations of nominees to the Board by the committee are made solely on the basis of merit. ,Q PDNLQJ LWV UHFRPPHQGDWLRQV RQ %RDUG FRPSHQVDWLRQ WKH FRPPLWWHH DQQXDOO\ UHYLHZV WKH GLUHFWRU FRPSHQVDWLRQ DQG EHQH¿WV program and consults with independent board compensation advisors, as appropriate. The following six independent directors presently comprise the committee: Ms. Bader (Chair), Mr. Conway, Mr. Evans, Mr. Fish, Ms. James and Ms. Zuber. The Board of Directors has determined that each member of the committee is independent under the New York Stock Exchange listing standards. During 2017, the committee met three times. ORGANIZATION AND COMPENSATION COMMITTEE The Organization and Compensation Committee pursuant to its charter, as amended in December 2015, (i) approves FRPSHQVDWLRQ DUUDQJHPHQWV LQFOXGLQJ PHULW VDODU\ LQFUHDVHV DQG DQ\ DQQXDO DQG ORQJ WHUP LQFHQWLYH FRPSHQVDWLRQ ZLWK UHVSHFW WR WKH &KLHI ([HFXWLYH 2I¿FHU DQG RWKHU H[HFXWLYH RI¿FHUV RI WKH &RPSDQ\ LL RYHUVHHV DQG ZKHUH DSSURSULDWH DSSURYHV FRPSHQVDWLRQ DUUDQJHPHQWV DSSOLFDEOH WR RWKHU FRUSRUDWH RI¿FHUV LLL DPHQGV DQ\ H[HFXWLYH FRPSHQVDWLRQ SODQ RU QRQTXDOL¿HG GHIHUUHG FRPSHQVDWLRQ SODQ RI WKH &RPSDQ\ DQG LWV VXEVLGLDULHV WR WKH VDPH H[WHQW WKDW WKH SODQ PD\ EH DPHQGHG E\ WKH %RDUG LY DGPLQLVWHUV WKH H[HFXWLYH FRPSHQVDWLRQ SODQV DQG QRQTXDOL¿HG GHIHUUHG FRPSHQVDWLRQ SODQV RI WKH &RPSDQ\ DQG LWV VXEVLGLDULHV Y DSSURYHV WKH &KLHI ([HFXWLYH 2I¿FHU¶V DQG RWKHU H[HFXWLYH RI¿FHUV¶ UHVSRQVLELOLWLHV DQG SHUIRUPDQFH DJDLQVW SUH HVWDEOLVKHG SHUIRUPDQFH JRDOV DQG YL SODQV IRU WKH VXFFHVVLRQ of the Company’s management. A copy of the committee’s charter is posted on Textron’s website, www.textron.com , under “Investors—Corporate Governance—Committee Charters,” and is also available in print upon request to Textron’s Secretary. See the Compensation Discussion and Analysis (CD&A), beginning on page 20 for more information on the committee’s processes and the role of management and consultants in determining the form and amount of executive compensation. The following six independent directors presently comprise the committee: Mr. Trotter (Chair), Mr. Fish, Mr. Gagné, Mr. Heath, Mr. Ziemer and Ms. Zuber. The Board of Directors has determined that each member of the FRPPLWWHH LV LQGHSHQGHQW DV GH¿QHG XQGHU WKH 1HZ <RUN 6WRFN ([FKDQJH OLVWLQJ VWDQGDUGV DSSOLFDEOH WR FRPSHQVDWLRQ committee members. During 2017, the committee met six times. RISK OVERSIGHT The Board oversees the Company’s enterprise risk management process. Management reviews the process, including LGHQWL¿FDWLRQ RI NH\ ULVNV DQG VWHSV WDNHQ WR DGGUHVV WKHP ZLWK WKH IXOO %RDUG RQ D SHULRGLF EDVLV 7KHVH UHYLHZV occur at an annual dedicated risk management session and as part of the Board’s annual review of the Company’s strategy. Although the full Board is responsible for this oversight function, the Organization and Compensation Committee, the Nominating and Corporate Governance Committee and the Audit Committee assist the Board in discharging its oversight duties.