2019 Proxy Statement

50 TEXTRON 2019 PROXY STATEMENT TRANSACTIONS WITH RELATED PERSONS Except as described below, since the beginning of Textron’s 201 ¿scal year, there have been no transactions and there are 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 6. 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’ personal Àights and performs various administrative duties in connection with these aircraft. Both Amended and Restated Hangar License and Services Agreements have been approved by the Nominating and Corporate Governance Committee. During our 201 ¿scal year, Mr. Donnelly’s LLC and Mr. Connor’s LLC paid total costs to Textron under these agreements of $79, 9 and $6 ,96 , 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 201 for which they were charged an arm’s length price of $ 7, 99 and $ ,955, respectively, and Mr. Connor paid TRU Simulation Training, a Textron subsidiary, $1 ,000 for his recurrent pilot training. 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 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 201 ¿scal year, direct operating expenses for business Àights on the executives’ personal aircraft totaled $55,26 for Mr. Donnelly and $1,5 for Mr. Connor. In December 201 , Textron entered into a non exclusive, non continuous Aircraft Dry Lease Agreement with Mr. Donnelly’s LLC pursuant to which the Company leases Mr. Donnelly’s aircraft in order to enable the Company to use his aircraft for business Àights on an as needed basis. This arrangement is bene¿cial to the Company as Mr. Donnelly travels frequently for business, and his aircraft is more economical for many of his Àights than the larger business jets operated by the Company’s Àight department. In addition, the Dry Lease enables the Àight department to have operational control of the aircraft while it is being Àown on Textron business Àights. The Dry Lease is for a term of one year, automatically renewable for subsequent one year terms, subject to the parties’ termination rights. The Company pays no lease payment for its use of the aircraft it is responsible only for costs directly attributable to the Textron business Àight, including hourly maintenance fees, and rent for hangar space in excess of the amount paid by Mr. Donnelly as described above. The Nominating and Corporate Governance Committee has approved the Aircraft Dry Lease Agreement. Under Textron’s Corporate Governance Guidelines and Policies, all related party transactions are subject to approval or rati¿cation by the Nominating and Corporate Governance Committee. Related party transactions, referred to as “Interested Transactions with Related Parties” under the Guidelines, are generally de¿ned as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) where the Company is a participant, in which the aggregate amount involved since the beginning of the Company’s last ¿scal year exceeds or is expected to exceed $100,000 and an executive of¿cer, director, nominee or greater than 5 bene¿cial holder or immediate family member of any of the foregoing has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 bene¿cial owner of another entity). In determining whether to approve or ratify such a transaction, the committee takes into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaf¿liated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.