2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 48 TRANSACTIONS WITH RELATED PERSONS ([FHSW DV GHVFULEHG EHORZ VLQFH WKH EHJLQQLQJ RI 7H[WURQ¶V ¿VFDO \HDU WKHUH KDYH EHHQ QR WUDQVDFWLRQV DQG WKHUH DUH no currently proposed transactions, in which Textron was or is to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest. Both Mr. Donnelly and Mr. Connor are licensed pilots who each own a Citation business jet which they use for both personal and business purposes. Each executive holds their aircraft through a limited liability company (“LLC”) which has entered into an Amended and Restated Hangar License and Services Agreement with the Company related to the sublease by the respective LLCs of a portion of the Company’s leased hangar space and the provision of other services. These Amended and Restated Hangar License and Services Agreements each provide that the Company will provide certain aircraft maintenance and other services, including pilot services, for the executives’ personal aircraft. Each of Mr. Donnelly and Mr. Connor pays $1,500 per month rent for the hangar space used by his aircraft. The Company pays the difference in cost for the portion of hangar space utilized by the executives’ aircraft above this $1,500 per month payment which amount is included in “All Other Compensation” in the Summary Compensation Table on page 34. Fees for maintenance, pilot services and all other services are set at market rates, and the executives’ LLCs fully reimburse the Company at such market rates. Pursuant to the Hangar Agreements, the Company permits the executives’ LLCs to purchase fuel from the Company’s bulk fuel storage facility at the discounted bulk rate paid by the Company, and the Company’s Aviation Department facilitates the executives’ SHUVRQDO ÀLJKWV DQG SHUIRUPV YDULRXV DGPLQLVWUDWLYH GXWLHV LQ FRQQHFWLRQ ZLWK WKHVH DLUFUDIW %RWK $PHQGHG DQG 5HVWDWHG Hangar License and Services Agreements have been approved by the Nominating and Corporate Governance Committee. 'XULQJ RXU ¿VFDO \HDU 0U &RQQRU¶V //& DQG 0U 'RQQHOO\¶V //& SDLG WRWDO FRVWV WR 7H[WURQ XQGHU WKHVH DJUHHPHQWV RI $54,420 and $50,169, respectively. Also, Mr. Donnelly’s LLC and Mr. Connor’s LLC each engaged Textron Aviation’s service centers to perform certain maintenance work on their aircraft during 2017 for which they paid an arms’ length price of $68,941 and $33,656, respectively. In addition, the Nominating and Corporate Governance Committee has approved Mr. Donnelly’s and Mr. Connor’s use of their personal aircraft for business travel and has adopted a revised policy which sets forth regulatory, safety, insurance and other requirements applicable to use of personal aircraft by these executives for business purposes. The policy provides for reimbursement of only direct operating expenses to the executives, subject to a cap of $150,000 annually. During our 2017 ¿VFDO \HDU GLUHFW RSHUDWLQJ H[SHQVHV IRU EXVLQHVV ÀLJKWV RQ WKH H[HFXWLYHV¶ SHUVRQDO DLUFUDIW WRWDOHG IRU 0U 'RQQHOO\ and $1,434 for Mr. Connor. Under Textron’s Corporate Governance Guidelines and Policies, all related party transactions are subject to approval or UDWL¿FDWLRQ E\ WKH 1RPLQDWLQJ DQG &RUSRUDWH *RYHUQDQFH &RPPLWWHH 5HODWHG SDUW\ WUDQVDFWLRQV UHIHUUHG WR DV ³,QWHUHVWHG 7UDQVDFWLRQV ZLWK 5HODWHG 3DUWLHV´ XQGHU WKH *XLGHOLQHV DUH JHQHUDOO\ GH¿QHG DV DQ\ WUDQVDFWLRQ DUUDQJHPHQW RU UHODWLRQVKLS or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) ZKHUH WKH &RPSDQ\ LV D SDUWLFLSDQW LQ ZKLFK WKH DJJUHJDWH DPRXQW LQYROYHG VLQFH WKH EHJLQQLQJ RI WKH &RPSDQ\¶V ODVW ¿VFDO \HDU H[FHHGV RU LV H[SHFWHG WR H[FHHG DQG DQ H[HFXWLYH RI¿FHU GLUHFWRU QRPLQHH RU JUHDWHU WKDQ EHQH¿FLDO holder or immediate family member of any of the foregoing has or will have a direct or indirect interest (other than solely as D UHVXOW RI EHLQJ D GLUHFWRU RU D OHVV WKDQ EHQH¿FLDO RZQHU RI DQRWKHU HQWLW\ ,Q GHWHUPLQLQJ ZKHWKHU WR DSSURYH RU UDWLI\ such a transaction, the committee takes into account, among other factors it deems appropriate, whether the transaction is on WHUPV QR OHVV IDYRUDEOH WKDQ WHUPV JHQHUDOO\ DYDLODEOH WR DQ XQDI¿OLDWHG WKLUG SDUW\ XQGHU WKH VDPH RU VLPLODU FLUFXPVWDQFHV and the extent of the related person’s interest in the transaction.