2018 Proxy Statement

TEXTRON 2018 PROXY STATEMENT 52 7H[WURQ¶V 5HVWDWHG &HUWL¿FDWH RI ,QFRUSRUDWLRQ VSHFL¿FDOO\ SURKLELWV VKDUHKROGHU DFWLRQ E\ OHVV WKDQ XQDQLPRXV ZULWWHQ FRQVHQW 7KLV is to ensure that all shareholders are informed of critical matters affecting the Company and of the Board’s views before shareholder DFWLRQ LV UHTXHVWHG DQG WDNHQ DYRLGLQJ DEXVLYH VLWXDWLRQV WKDW FDQ DULVH ZKHQ VKDUHKROGHUV FDQ DFW E\ ZULWWHQ FRQVHQW VXFK DV VKRUW term shareholders acting without notice and without opportunity for all shareholders to consider a proposed action. 7H[WURQ¶V $PHQGHG DQG 5HVWDWHG %\ /DZV FRQWDLQ VXEVWDQWLDO VDIHJXDUGV WR SURWHFW WKH LQWHUHVWV RI VKDUHKROGHUV E\ UHTXLULQJ that shareholders proposing business for a shareholder vote either submit their proposals for consideration at the annual meeting pursuant to the SEC’s shareholder proposal process or provide advance notice to the Company of any proposed director nomination or proposed business. If a proposal or nomination is not included in Textron’s proxy statement, the advance QRWLFH E\ ODZ UHTXLUHV VKDUHKROGHUV WR SURYLGH FHUWDLQ LQIRUPDWLRQ DERXW WKHPVHOYHV DQ\ QRPLQHH DQG WKH SURSRVHG EXVLQHVV including a description of the proposed business, the reason for conducting the business at the meeting and disclosure of any material interest of the proponent in such proposed business. Under this process, the Company is able to make certain that all shareholders are made aware of the matters that are to be considered at a meeting of shareholders, and the Board is able to present an analysis of such proposals and its recommendations to the Company’s shareholders. Moreover, when proposals or nominations are considered at a meeting of shareholders, shareholders are assured of having an appropriate time to consider such matters, engage in dialogue with the Company and other shareholders and to vote for or against the matter. In contrast, authorizing shareholder action by written consent, as requested by the proposal, would enable a small group of shareholders to accumulate Textron shares for only a short time and use the consent procedure to take action without the procedural safeguards attendant to a shareholders’ meeting, including without notice to other shareholders and without affording all shareholders the right to vote on the matter. Without these procedural safeguards, action by written consent PD\ EH XVHG WR IRUFH ZKROHVDOH DPHQGPHQWV WR WKH &RPSDQ\¶V %\ /DZV RU WR HIIHFW RWKHU VLJQL¿FDQW FRUSRUDWH DFWLRQV without advance notice to, or participation by, all shareholders. Shareholder action by written consent as contemplated by WKH SURSRVDO ZRXOG HOLPLQDWH WKH EHQH¿WV RI DGYDQFH QRWLFH DERXW WKH SURSRQHQW RU WKH SURSRVDO DQG ZRXOG HOLPLQDWH WKH EHQH¿W RI KHDULQJ WKH YLHZV RI RWKHU VKDUHKROGHUV RU RI WKH %RDUG 7KHUHIRUH DOORZLQJ DFWLRQ E\ ZULWWHQ FRQVHQW FDQ UHVXOW LQ a majority of shareholders not being informed about the proposed action until after the action has already been taken, thereby disenfranchising those shareholders who do not have the opportunity to be informed or to participate. This could result in the taking of an action that otherwise would not have been taken if all of our shareholders were afforded the opportunity to discuss and vote on the matter. As a result, this proposal could have adverse consequences to our shareholders and the Company. Shareholder action by written consent as requested by the proposal also has the potential to create substantial confusion among our shareholders. Multiple groups of shareholders would be able to solicit written consents at any time and as often as WKH\ FKRRVH RQ PDWWHUV RI VSHFLDO LQWHUHVW WR WKHP 7KHUH DOVR LV WKH SRVVLELOLW\ WKDW FRQVHQW VROLFLWDWLRQV PD\ FRQÀLFW ZLWK RQH another or be duplicative, be disruptive to the Company’s operations and cause the Company to incur substantial expense. 0RUHRYHU LQ DGGLWLRQ WR WKH SURWHFWLRQV DQG VDIHJXDUGV SURYLGHG E\ RXU FXUUHQW JRYHUQDQFH SURFHVVHV RXU E\ ODZV SURYLGH RXU shareholders with additional rights that make adoption of this proposal unnecessary. Those rights include the right to proxy access, implemented by the Board in 2016, which allows eligible shareholders to include their own director nominees in the Company’s SUR[\ PDWHULDOV IRU FRQVLGHUDWLRQ DW RXU DQQXDO PHHWLQJ ,Q DGGLWLRQ XQGHU RXU %\ /DZV VKDUHKROGHUV ZKR KROG WZHQW\ ¿YH SHUFHQW of our outstanding shares have the right to call special meetings of shareholders if the need arises for shareholders to consider DQG YRWH RQ PDWWHUV EHWZHHQ DQQXDO PHHWLQJV 2XU %\ /DZV LPSRVH QRWLFH DQG RWKHU UHTXLUHPHQWV WR H[HUFLVH WKH ULJKW WR SUR[\ DFFHVV DQG RQ WKH VSHFLDO PHHWLQJ SURFHVV WR JXDUG DJDLQVW WKH H[HUWLRQ RI LQDSSURSULDWH LQÀXHQFH E\ VKDUHKROGHUV ZLWK VSHFLDO LQWHUHVWV WKDW PD\ EH LQFRQVLVWHQW ZLWK WKH ORQJ WHUP EHVW LQWHUHVWV RI 7H[WURQ DQG RXU VKDUHKROGHUV LQ JHQHUDO 7KH %RDUG EHOLHYHV RXU H[LVWLQJ E\ ODZ SURYLVLRQV DOORZLQJ VKDUHKROGHUV SUR[\ DFFHVV DQG WKH ULJKW WR FDOO VSHFLDO PHHWLQJV strike the right balance between the rights of shareholders to have a voice in driving the Company’s governance, on the one hand, and protecting against abusive actions that may disrupt the effective management of the Company and be detrimental to shareholder interests, on the other. In contrast, adopting this proposal and giving shareholders the ability to act by written consent would allow any shareholder, regardless of ownership interest, to initiate a potentially unlimited number of consent solicitations on any topic at any time which could enable a single shareholder to advance its own special interests to the detriment of the majority of shareholders. The Board believes that the potential for abuse and disenfranchisement of minority shareholders and other adverse consequences associated with the right to act by less than unanimous written consent RXWZHLJKV DQ\ SRWHQWLDO EHQH¿WV WR RXU VKDUHKROGHUV IURP WKLV SURSRVDO Accordingly, the Board of Directors recommends a vote AGAINST this proposal (Item 4 on the proxy card).