UNDERWRITING AGREEMENT

 

of their principal amount (the “ Purchase Price ”), together with accrued interest, if any, from the Initial Closing Date.

 

Underwriters		Principal Amount of Firm Securities
Goldman, Sachs & Co.		$	211,500,000
J.P. Morgan Securities Inc.		211,500,000
Barclays Capital Inc.		14,625,000
Citigroup Global Markets Inc.		14,625,000
Credit Suisse Securities (USA) LLC		14,625,000
Deutsche Bank Securities Inc.		14,625,000
HSBC Securities (USA) Inc.		14,625,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated		14,625,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.		14,625,000
UBS Securities LLC		14,625,000
Total:		$	540,000,000

 

In addition, the Company hereby agrees to sell the Option Securities to the Underwriters, and the Underwriters, subject to the terms and conditions set forth herein or incorporated by reference herein, shall have the option to purchase, severally and not jointly, from the Company the Option Securities at the Purchase Price, together with accrued interest, if any, from the applicable Option Closing Date (as defined below).

 

If any Option Securities are to be purchased, the principal amount of Option Securities to be purchased by each Underwriter shall be the principal amount of Option Securities which bears the same ratio to the aggregate principal amount of Option Securities being purchased as the principal amount of Firm Securities set forth opposite the name of such Underwriter in the table above (or such number increased as set forth in Article IX of the Standard Provisions) bears to the aggregate principal amount of Firm Securities being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Option Securities as the Managers in their sole discretion shall make.

 

The Underwriters may exercise the option to purchase Option Securities at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Prospectus (the “ Option Expiration Date ”), by written notice from the Managers to the Company.  Such notice shall set forth the aggregate principal amount of Option Securities as to which the option is being exercised and the date and time when the Option Securities are to be delivered and paid for (each, an “ Option Closing Date ”), which may be the same date and time as the Initial Closing Date but shall not be earlier than the Initial Closing Date or later than the

 

2

 

fifth full business day after the date of such notice.  Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.

 

The time and date of the payment for and delivery of the Firm Securities pursuant to Article IV of the Standard Provisions, shall be at 10:00 A.M. (New York time) on May 5, 2009, or at such other time or date as shall be determined by agreement between the Company and the Managers (such date and time of delivery and payment for the Firm  Securities called the “ Initial Closing Date ” and, together with any Option Closing Date, each a “ Closing Date ”). The documents required to be delivered by Article V of the Standard Provisions shall be delivered on each Closing Date to the office of Mayer Brown LLP, counsel for the Underwriters, at 71 South Wacker Drive, Chicago, Illinois  60606, or at such other place as shall be determined by agreement between the Company and the Managers.

 

All the provisions contained in the document entitled “Textron Inc. Underwriting Agreement Standard Provisions (Debt)”, dated April 29, 2009 (the “ Standard Provisions ”), a copy of which is attached as Annex III hereto, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein.  The Registration Statement referred to in Section I of the Standard Provisions is Registration No. 333-152562. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Standard Provisions.

 

In addition to the representations and warranties in Article VII of the Standard Provisions, the Company represents and warrants to, and agrees with, each Underwriter as of the Execution Time and each Closing Date that:

 

1.                Upon issuance and delivery of the Offered Securities in accordance with this Agreement and the Indenture, the Offered Securities will be convertible at the option of the holder thereof for cash, shares of Common Stock, or a combination thereof, in accordance with the terms of the Offered Securities and the Indenture.  The shares of Common Stock, if any, initially issuable upon conversion of the Offered Securities have been duly and validly authorized and, when issued and delivered upon such conversion, will be duly and validly issued, fully paid and non-assessable, and will conform in all material respects to the description thereof contained in the Disclosure Package and the Prospectus; and the issuance of the Common Stock will not be subject to any preemptive or similar rights of any security holder of the Company.

 

2.                The Company’s Board of Directors, or an authorized committee thereof, has duly and validly adopted resolutions to reserve for issuance and will at all times require the Company to reserve and keep available for issuance, free of preemptive or other similar rights, a sufficient number of shares of Common Stock for purposes of enabling the Company to satisfy its obligations to issue Common Stock, if any, upon the conversion of the Offered Securities.

 

3.                The statements set forth in the Disclosure Package and the Prospectus under the captions “Certain United States federal income tax consequences,” “Description of Capital Stock” and “Description of convertible note hedge and warrant transactions” are accurate in all material respects and fairly present the information provided.

 

3

 

4.                The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive or similar rights; except as described in or expressly contemplated by the Disclosure Package and the Prospectus, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

 

5.                The Call Spread Documentation has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally, except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and except as the enforcement of indemnification and contribution provisions contained therein may be limited by applicable law or the application of principles of public policy.

 

6.                No person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Offered Securities.

 

7.                The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.

 

In addition to the Company’s covenants in Article VI of the Standard Provisions, the Company covenants as follows:

 

1.                The Company will use its best efforts to effect the listing of the Common Stock, if any, issuable upon conversion of the Offered Securities on the New York Stock Exchange.

 

2.                The Company will pay all expenses and fees incurred in connection with the listing of the Common Stock, if any, issuable upon conversion of the Offered Securities on the New York Stock Exchange and the cost and charges of any transfer agent and any registrar.

 

4

 

3.                Between the Execution Time and the Option Expiration Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion rate of the Offered Securities.

 

4.                For a period of 90 days after the date of the Prospectus, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Managers.  The foregoing sentence shall not apply to (a) the Offered Securities to be sold hereunder and any shares of Common Stock of the Company issued upon conversion of the Offered Securities, (b) the Common Stock to be sold in the Company’s concurrent offering of Common Stock, (c) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security in each such case outstanding on the date hereof and referred to in the Disclosure Package and the Prospectus or granted in accordance with clause (d) of this paragraph 4, (d) any shares of Common Stock issued, or options to purchase common stock granted, pursuant to existing equity compensation plans described in the Disclosure Package and the Prospectus, (e) any shares of Common Stock contributed to the Company’s 401(k) plans in effect as of the date hereof, based on a dollar amount that is consistent with the Company’s prior contributions to such plans or (f) the Call Spread Transactions.

 

In addition to the conditions contained in Article V of the Standard Provisions, the obligations of the Underwriters’ to purchase the Offered Securities shall be subject to the following:

 

1.                The form of opinion of the counsel for the Company, to be delivered pursuant to paragraph (c) of Article V of the Standard Provisions and attached as Exhibit A thereto, will be modified to include the following additional opinions:

 

(a)           The shares of Common Stock, if any, initially issuable upon conversion of the Offered Securities have been duly authorized and validly reserved for issuance and, when issued and delivered upon such conversion in accordance with the Indenture, will be duly and validly issued, fully paid and non-assessable, and will conform in all material respects to the description thereof contained in the Disclosure Package and the Prospectus; and the issuance of the Common Stock will not be subject to any preemptive rights of any security holder of the Company under the Delaware General Corporation Law or the Certificate of Incorporation of the Company.

 

(b)          The Company’s Board of Directors, or an authorized committee thereof, has duly and validly adopted resolutions to reserve for issuance, and to require the Company to reserve and keep available for issuance, free of preemptive or other similar rights, a sufficient number of shares of Common Stock for purposes of enabling the Company

 

5

 

to satisfy its obligations to issue Common Stock, if any, upon the conversion of the Offered Securities.

 

(c)           The Company has an authorized capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus under the heading “Capitalization”; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each Significant Subsidiary owned, directly or indirectly, by the Company have been duly and validly authorized and issued, are fully paid and non-assessable except as otherwise described in the Registration Statement, the Disclosure Package and the Prospectus.

 

2.                Paragraph (d) of Article V of the Standard Provisions, governing the opinion of the special counsel for the Company, will be modified to include an opinion to the effect that the statements set forth in the Disclosure Package and the Prospectus under the captions “Description of Capital Stock” and “Description of convertible note hedge and warrant transactions,” to the extent that such statements purport to constitute summaries of the legal matters or agreements referred to therein, are accurate in all material respects.

 

In addition, such opinion shall state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants for the Company and with representatives of the Underwriters and counsel for the Underwriters at which the contents of the Registration Statement, the Disclosure Package and the Prospectus and related matters were discussed and on the basis of the foregoing, no facts have come to the attention of such counsel that cause such counsel to believe that (i) the Registration Statement, at the Effective Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus, as of its date and, as amended or supplemented, if applicable, as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Disclosure Package, as of the Execution Time, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express any opinion as to the financial statements, schedules and other financial, accounting and statistical data that has been included in or excluded from the Registration Statement, the Disclosure Package or the Prospectus or that part of the Registration Statement that constitutes the Statement of Eligibility on Form T-1 under the Trust Indenture Act of the Trustee.

 

3.                The Managers shall have received on the Closing Date an opinion of Davis Polk & Wardwell, special product counsel to the Underwriters, dated the Closing Date, with respect to such matters as the Managers may reasonably require.

 

6

 

All communications hereunder will be in writing and effective only on receipt, and, if sent to the Manager, will be mailed, delivered or telefaxed to J.P. Morgan Securities Inc., 383 Madison Avenue, 4th Floor, New York, NY 10179, Attention: Equity Syndicate Desk, facsimile: (212) 622-8358 and to Goldman, Sachs & Co., 85 Broad Street, 23rd Floor, New York, New York 10004, Attention: Registration Department, facsimile: (212) 902-3000; or, if sent to the Company, will be mailed, delivered or telefaxed to Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903, Attention: Mary F. Lovejoy, Vice President and Treasurer, facsimile (401) 457-3533.

 

7

 

	Very truly yours,
	By:	/s/ Goldman, Sachs & Co.
		(Goldman, Sachs & Co.)
	J.P. MORGAN SECURITIES INC.
	By:	/s/ Bill Contente
	Name:		Bill Contente
	Title:		Managing Director
	On behalf of the several Underwriters

 

 

Accepted:
TEXTRON INC.
By:	/s/ Mary F. Lovejoy
Name:		Mary F. Lovejoy
Title:		Vice President and Treasurer

 

 

Convertible Notes UA Signature Page

 

 

Annex I

 

Form of Final Term Sheet

 

Pricing Term Sheet		Filed pursuant to Rule 433
dated April 29, 2009		Registration File No. 333-152562
		Supplementing the Preliminary
		Prospectus Supplements
		dated April 28, 2009
		(To Prospectus dated July 28, 2008)

 

Textron Inc.
Concurrent Offerings of

 

20,700,000 Shares of Common Stock, par value $0.125 per share
(the “Common Stock Offering”)

 

and

 

$540,000,000 principal amount of
4.50% Convertible Senior Notes due 2013
(the “Convertible Senior Notes Offering”)

 

The information in this pricing term sheet relates only to the Common Stock Offering and Convertible Senior Notes Offering and should be read together with (i) the preliminary prospectus supplement dated April 28, 2009 relating to the Common Stock Offering, including the documents incorporated by reference therein, (ii) the preliminary prospectus supplement dated April 28, 2009 relating to the Convertible Senior Notes Offering, including the documents incorporated by reference therein, and (iii) the related base prospectus dated July 28, 2008, each filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, Registration Statement No. 333-152562.

 

Issuer:		Textron Inc., a Delaware corporation.
Ticker / Exchange for Common Stock:		TXT / The New York Stock Exchange (“NYSE”).
Trade Date:		April 29, 2009.
Settlement Date:		May 5, 2009.
Common Stock Offering
Title of Securities:		Common stock, par value $0.125 per share, of the Issuer.
Shares Offered and Sold:		20,700,000 (or a total of 23,805,000 if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full).
Public Offering Price:		$10.50 per share / approximately $217.4 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).
Underwriting Discounts and Commissions:		$0.4725 per share / approximately $9.8 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).

 

I-1

 

Proceeds, Before Expenses, to the Issuer:		$10.0275 per share / approximately $207.6 million total (excluding the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock).
Use of Proceeds:		The Issuer estimates that the net proceeds from the Common Stock Offering will be approximately $207.6 million ($238.7 million if the underwriters exercise their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in full), after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer. The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions. The Issuer intends to use the remainder of the net proceeds from the Common Stock Offering, together with the net proceeds from the Convertible Senior Notes Offering, to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt.
Estimated Net Proceeds:		The Issuer expects to raise approximately $731.4 million in net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer, assuming no exercise of either the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock in the Common Stock Offering or the underwriters’ option to purchase up to $60,000,000 principal amount of Convertible Senior Notes in the Convertible Senior Notes Offering.
Capitalization:		The following table replaces the table set forth on page S-29 of the preliminary prospectus supplement for the Common Stock Offering:

 

I-2

 

		As of April 4, 2009
		(unaudited)						As further
($ in millions)		Actual			As adjusted(1)			adjusted(2)
Cash and cash equivalents		$	1,691		$	1,858		$	2,382
Manufacturing group:
Current portion of long-term debt and short-term debt		$	5		$	5		$	5
Convertible senior notes		—			—			540
Other long-term debt		2,870			2,870			2,870
Total Manufacturing debt		2,875			2,875			3,415
Total Finance debt		7,954			7,954			7,954
Total debt		10,829			10,829			11,369
Shareholders’ equity:
Capital stock		34			37			37
Capital surplus		1,127			1,291			1,291
Retained earnings		3,106			3,106			3,106
Accumulated other comprehensive loss		(1,423		)	(1,423		)	(1,423		)
Cost of treasury shares		(376		)	(376		)	(376		)
Total shareholders’ equity		2,468			2,635			2,635
Total capitalization		$	13,297		$	13,464		$	14,004

 

(1) After giving effect to the issuance and sale of the 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under “Use of proceeds” in the preliminary prospectus supplement for the Common Stock Offering. (2) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes, after deducting the underwriting discounts and commissions and before offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes).

 

Commissions and Discounts:		The underwriters have advised the Issuer that they propose to initially offer the shares of the Issuer’s common stock directly to the public at the Public Offering Price and to dealers at that price less a concession not in excess of $0.2677 per share. After the initial public offering of the shares of the Issuer’s common stock to the public, the Public Offering Price and other selling terms may be changed by the underwriters.
		The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their option to purchase up to 3,105,000 additional shares of the Issuer’s common stock.

 

I-3

 

		Per share			Without option			With option
Public offering price		$	10.5000		$	217,350,000.00		$	249,952,500.00
Underwriting discount		$	0.4725		$	9,780,750.00		$	11,247,862.50
Proceeds, before expenses, to the Issuer		$	10.0275		$	207,569,250.00		$	238,704,637.50

 

		The expenses of the Common Stock Offering and the Convertible Senior Notes Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.
Joint Book-Running Managers:		Goldman, Sachs & Co. and J.P. Morgan Securities Inc.
Co-Managers:		Citigroup Global Markets Inc, Barclays Capital Inc, UBS Securities LLC, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce Fenner & Smith Incorporated, HSBC Securities (USA) Inc. and The Bank of Tokyo Mitsubishi UFJ, Ltd.
Convertible Senior Notes Offering
Convertible Senior Notes:		4.50% Convertible Senior Notes due 2013.
Aggregate Principal Amount Offered:		$540,000,000 principal amount of Convertible Senior Notes (or a total of $600,000,000 principal amount of Notes if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full).
Public Offering Price:		$1,000 per Note / $540 million total.
Underwriting Discounts and Commissions:		$30 per Note / $16.2 million total.
Proceeds, Before Expenses, to the Issuer:		$970 per Note / $523.8 million total.
Maturity:		The Convertible Senior Notes will mature on May 1, 2013, unless earlier converted or repurchased by the Issuer at the holder’s option upon a fundamental change.
Interest Rate:		4.50% per year.
Interest Payment Dates:		Interest will accrue from the Settlement Date or from the most recent date to which interest has been paid or duly provided for, and will be payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009, to holders of record at 5:00 p.m., New York City time, on the immediately preceding April 15 or October 15, as the case may be.
NYSE Closing Stock Price on April 29, 2009:		$10.81 per share of the Issuer’s common stock.
Reference Price:		$10.50 per share of the Issuer’s common stock, the Public Offering Price per share in the Common Stock Offering.
Conversion Premium:		25% above the Reference Price.

 

I-4

 

Initial Conversion Price:		Approximately $13.1250 per share of the Issuer’s common stock.
Initial Conversion Rate:		76.1905 shares of the Issuer’s common stock per $1,000 principal amount of the Convertible Senior Notes.
Conversion Trigger Price:		Approximately $17.0625, which is 130% of the Initial Conversion Price.
Settlement Method Election Deadline:		The references to “February 18, 2013” on page S-49 of the preliminary prospectus supplement for the Convertible Senior Notes Offering shall be replaced with “February 15, 2013.”
Use of Proceeds:		The Issuer estimates that the net proceeds from the Convertible Senior Notes Offering will be approximately $523.8 million (or a total of approximately $582.0 million if the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes is exercised in full), after deducting the underwriting discounts and commissions and before estimated offering expenses. The Issuer intends to use the net proceeds from the Convertible Senior Notes Offering and the Common Stock Offering to increase the Issuer’s liquidity and for general corporate purposes, including the repayment of consolidated debt. The Issuer intends to use approximately $40.5 million of the net proceeds from the Common Stock Offering for the cost of the convertible note hedge transactions after such cost is partially offset from the sale of the warrant transactions.
Capitalization:		The following table replaces the table set forth on page S-39 of the preliminary prospectus supplement for the Convertible Senior Notes Offering:

 

		As of April 4, 2009
		(unaudited)						As further
($ in millions)		Actual			As adjusted(1)			adjusted(2)
Cash and cash equivalents		$	1,691		$	2,215		$	2,382
Manufacturing group:
Current portion of long-term debt and short-term debt		$	5		$	5		$	5
Convertible senior notes offered hereby		—			540			540
Other long-term debt		2,870			2,870			2,870
Total Manufacturing debt		2,875			3,415			3,415
Total Finance debt		7,954			7,954			7,954
Total debt		10,829			11,369			11,369
Shareholders’ equity:
Capital stock		34			34			37
Capital surplus		1,127			1,127			1,291
Retained earnings		3,106			3,106			3,106
Accumulated other comprehensive loss		(1,423		)	(1,423		)	(1,423		)
Cost of treasury shares		(376		)	(376		)	(376		)
Total shareholders’ equity		2,468			2,468			2,635
Total capitalization		$	13,297		$	13,837		$	14,004

 

I-5

 

(1) After giving effect to the issuance and sale of $540,000,000 principal amount of the Convertible Senior Notes in the Convertible Senior Notes Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ over-allotment option to purchase up to $60,000,000 principal amount of additional Convertible Senior Notes). (2) After giving effect to the issuance and sale of 20,700,000 shares of the Issuer’s common stock in the Common Stock Offering, after deducting the underwriting discounts and commissions and before estimated offering expenses payable by the Issuer (assuming no exercise of the underwriters’ option to purchase up to 3,105,000 additional shares of the Issuer’s common stock) and after the application of the net proceeds in the manner described under ‘‘Use of proceeds’’ in the preliminary prospectus supplement for the Convertible Senior Notes Offering.

 

Commissions and Discounts:		The underwriters have advised the Issuer that they propose to initially offer the Convertible Senior Notes at a price of 100% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any, and to dealers at that price less a concession not in excess of 1.5% of the principal amount of the Notes, plus accrued interest from the Settlement Date, if any.
		The following table shows the Public Offering Price, underwriting discounts and commissions and proceeds to the Issuer, before estimated offering expenses payable by the Issuer. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.

 

		Per Note		Without Option			With Option
Public offering price		100	%	$	540,000,000		$	600,000,000
Underwriting discount		3	%	$	16,200,000		$	18,000,000
Proceeds, before expenses, to the Issuer		97	%	$	523,800,000		$	582,000,000

 

		The expenses of the Convertible Senior Notes Offering and the Common Stock Offering, not including the underwriting discounts and commissions, are estimated to be $600,000 and are payable by the Issuer.
Joint Book-Running Managers:		Goldman, Sachs & Co. and J.P. Morgan Securities Inc.
Co-Managers:		HSBC Securities (USA) Inc., The Bank of Tokyo Mitsubishi UFJ, Ltd., Merrill Lynch, Pierce Fenner & Smith Incorporated, Citigroup Global Markets Inc, Barclays Capital Inc, Deutsche Bank Securities Inc., UBS Securities LLC and Credit Suisse Securities (USA) LLC.
CUSIP Number:		882303 BN0
Adjustment to Shares Delivered upon Conversion upon a Make-Whole Fundamental Change:		The following table sets forth the number of additional shares of the Issuer’s common stock by which the conversion rate shall be increased for certain conversions in connection with a make-whole fundamental

 

I-6

 

change based on the stock price and effective date for such make-whole fundamental change:

 

		Stock Price
Effective Date		$10.50		$11.00		$12.00		$14.00		$16.00		$18.00		$20.00		$22.00		$24.00		$26.00		$30.00		$40.00		$50.00		$60.00		$80.00		$100.00
May 5, 2009		19.0476		17.5421		14.6253		10.6336		8.1267		6.4612		5.3008		4.4544		3.8158		3.3145		2.5816		1.5316		0.9661		0.6172		0.2334		0.0570
May 1, 2010		19.0476		16.5446		13.4495		9.3539		6.8968		5.3392		4.3069		3.5805		3.0469		2.6387		2.0538		1.2237		0.7718		0.4891		0.1752		0.0314
May 1, 2011		19.0476		15.5067		12.0861		7.7414		5.3405		3.9464		3.0900		2.5287		2.1401		1.8525		1.4494		0.8764		0.5548		0.3491		0.1163		0.0072
May 1, 2012		19.0476		14.7186		10.3462		5.4842		3.2037		2.1239		1.5838		1.2832		1.0933		0.9579		0.7652		0.4717		0.2979		0.1833		0.0480		0.0000
May 1, 2013		19.0476		14.7186		7.1429		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000

 

The exact stock prices and effective dates may not be set forth in the table above, in which case if the stock price is between two stock price amounts in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock price amounts and the two dates, as applicable, based on a 365-day year. If the stock price is:

 

greater than $100.00 per share (subject to adjustment), the conversion rate will not be increased; or

 

less than $10.50 per share (subject to adjustment), the conversion rate will not be increased.

 

Notwithstanding the foregoing, in no event will the total number of shares of the Issuer’s common stock issuable upon conversion exceed 95.2381 per $1,000 principal amount of the Convertible Senior Notes (which number shall equal the quotient obtained by dividing $1,000 by the closing sale price of the Issuer’s common stock on the Pricing Date), subject to adjustments in the same manner as the conversion rate as set forth under “Description of notes—Conversion rate adjustments” in the preliminary prospectus supplement dated April 28, 2009 for the Convertible Senior Notes Offering.

 

Convertible Note Hedge and Warrant Transactions
Convertible Note Hedge and Warrant Transactions:		The convertible note hedge transactions cover, subject to anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. Separately and concurrently with entering into the convertible note hedge transactions, the Issuer entered into warrant transactions whereby the Issuer sold to each of the hedge counterparties warrants to acquire, subject to customary anti-dilution adjustments, approximately 41,142,870 shares of the Issuer’s common stock. The warrant transactions have an initial strike price equivalent to 150% of the Reference Price. The cost of the convertible note hedge transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $40.5 million.

 

 

The Issuer has filed a registration statement (including preliminary prospectus supplements each dated April 28, 2009 and an accompanying prospectus dated July 28, 2008) with the Securities and Exchange Commission, or SEC, for the offerings to which this communication relates. Before you invest, you should read the relevant preliminary prospectus supplement, the accompanying prospectus and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offerings. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, copies may be obtained from Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad Street, New York, NY 10004, call toll-free (866) 471-2526, or fax (212) 902-9316, or email prospectus-ny@ny.email.gs.com; or from

 

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J.P. Morgan Securities Inc., National Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, (718) 242-8002.

 

This communication should be read in conjunction with the preliminary prospectus supplements dated April 28, 2009 and the accompanying prospectus. The information in this communication supersedes the information in the relevant preliminary prospectus supplement and the accompanying prospectus to the extent inconsistent with the information in such preliminary prospectus supplement and the accompanying prospectus.

 

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED.  SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.

 

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Annex II

 

Issuer Free Writing Prospectuses

 

1.  Press release, dated April 28, 2009, filed with the Commission on April 29, 2009 pursuant to Rule 433(d).

 

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Annex III

 

Textron Inc. Underwriting Agreement Standard Provisions (Debt)

 

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Annex II

 

TEXTRON INC.

 

 

UNDERWRITING AGREEMENT

STANDARD PROVISIONS (DEBT)

 

 

Dated: April 29, 2009

 

 

From time to time, Textron Inc., a Delaware corporation (the “ Company ”), may enter into one or more underwriting agreements that provide for the sale of any of the Securities referred to below to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement relating to the Offered Securities referred to below (the “ Underwriting Agreement ”). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as this Agreement. Unless defined in Article XI hereof or otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined.

 

I.

 

The Company proposes to issue from time to time (i) senior debt securities (the “ Senior Securities ”) to be issued pursuant to the provisions of the Indenture, dated as of September 10, 1999, between the Company and The Bank of New York Mellon Trust Company, N.A, as successor trustee to The Bank of New York thereunder (the “ Trustee ”) , as the same may be from time to time amended or supplemented (the “ Indenture ”), (ii) subordinated debt securities (the “ Subordinated Securities ”) to be issued pursuant to the provisions of the Indenture and (iii) junior subordinated securities (the “ Junior Subordinated Securities ”) to be issued pursuant to the provisions of the Indenture. The term “ Securities ” means the Senior Securities, the Subordinated Securities and the Junior Subordinated Securities. The Securities will have varying designations, maturities, rates and times of payment of interest, selling prices and redemption terms.

 

The Company has filed with the Securities and Exchange Commission (the “ Commission ”) the registration statement, including a prospectus relating to the Securities, on Form S-3 that is identified in the Underwriting Agreement and has filed with, or will file with, the Commission pursuant to Rule 424 a prospectus supplement specifically relating to the Securities offered thereby (the “ Offered Securities ”). Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 that were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be; and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Prospectus, as the case may be, deemed to be incorporated therein by reference.

 

1

 

The term “ Underwriters’ Securities ” means the Offered Securities to be purchased by the Underwriters herein. The term “ Contract Securities ” means the Offered Securities, if any, to be purchased pursuant to the delayed delivery contracts referred to below.

 

II.

 

If the Prospectus provides for sales of Offered Securities pursuant to delayed delivery contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to delayed delivery contracts substantially in the form of Schedule I attached hereto (“ Delayed Delivery Contracts ”) but with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are to be with institutional investors approved by the Company and of the types set forth in the Prospectus. On the Closing Date, the Company will pay the Managers as compensation, for the accounts of the Underwriters, the fee set forth in the Underwriting Agreement in respect of the principal amount of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts.

 

If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the Contract Securities shall be deducted from the Offered Securities to be purchased by the several Underwriters and the aggregate principal amount of Offered Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount of Offered Securities set forth opposite each Underwriter’s name in the Underwriting Agreement, except to the extent that the Managers determine that such reduction shall be otherwise and so advise the Company.

 

III.

 

The Company is advised by the Managers that the several Underwriters propose to make a public offering of their respective portions of the Underwriters’ Securities as soon after this Agreement is entered into as in the Managers’ judgment is advisable. The terms of the public offering of the Underwriters’ Securities are set forth in the Prospectus.

 

IV.

 

Payment for the Underwriters’ Securities shall be made by wire transfer of immediately available funds to an account designated by the Company, upon delivery to the Managers for the respective accounts of the several Underwriters of the Underwriters’ Securities registered in such names and in such

 

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denominations as the Managers shall request in writing not less than two full business days prior to the date of delivery. Delivery of the Underwriters’ Securities shall be made through the facilities of The Depository Trust Company unless the Managers shall otherwise instruct.

 

V.

 

The obligations of the Underwriters to purchase the Offered Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:

 

(a)            The Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by paragraph (c) of Article VI hereof, and any other material required to be filed by the Company pursuant to Rule 433(d), shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened.

 

(b)            Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Prospectus (exclusive of any amendment or supplement thereto):

 

(i)             there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto); and the Managers shall have received, on the Closing Date, a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. Such certificate will also provide that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. The officer making such certificate may rely upon the best of his or her knowledge as to proceedings pending or threatened;

 

(ii)            there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential

 

3

 

downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company’s securities by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2); and

 

(iii)           there shall not have occurred any change in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Disclosure Package and the Prospectus (exclusive of any supplement thereto) that, in the judgment of the Managers, is material and adverse and that makes it, in the judgment of the Managers, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Disclosure Package and the Prospectus (exclusive of any supplement thereto).

 

(c)            The Managers shall have received on the Closing Date an opinion of counsel for the Company identified in Exhibit A hereto, dated the Closing Date, to the effect set forth in Exhibit A.

 

(d)            The Managers shall have rece