E-Z-GO 2008 Annual Report Download - page 87

Notes to the Consolidated Financial Statements
74
Special charges by segment for the year ended January 3, 2009 are as follows:
Restructuring Charges
Total
Severance Contract Asset Total Other Special
(In millions) Costs Terminations Impairments Restructuring Charges Charges
Cessna $ 5 $ — $ — $ 5 $ — $ 5
Textron Systems 1 — — 1 — 1
Industrial 16 — 9 25 — 25
Finance 15 1 11 27 462 489
Corporate 6 — — 6 — 6
$ 43 $ 1 $ 20 $ 64 $ 462 $ 526
An analysis of the restructuring program and related reserve account is summarized below:
Severance Contract Asset
(In millions) Costs Terminations Impairments Total
Provisions $ 43 $ 1 $ 20 $ 64
Non-cash utilization — — (20) (20)
Cash paid (7) — — (7)
Balance at January 3, 2009 $ 36 $ 1 $ — $ 37
Severance costs are generally paid on a monthly basis over the severance period granted to each employee or on a lump sum basis. Severance
costs include outplacement costs, which are paid in accordance with normal payment terms. Contract termination costs are generally paid upon
exiting the facility or over the remaining lease term.
The specific restructuring measures and associated estimated costs are based on our best judgment under prevailing circumstances. We believe
that the restructuring reserve balance of $37 million is adequate to cover the costs presently accruable relating to activities formally identified and
committed to under approved plans as of January 3, 2009 and anticipate that all actions related to these liabilities will be completed within a
12-month period.
Note 13. Share-Based Compensation
Our 2007 Long-Term Incentive Plan (the “Plan”) supersedes the 1999 Long-Term Incentive Plan and authorizes awards to our key employees in
the form of options to purchase our shares, restricted stock, restricted stock units, stock appreciation rights, performance stock awards and other
awards. Options granted to purchase our shares have a maximum term of 10 years and generally vest ratably over a three-year period. Restricted
stock unit awards granted generally vest one-third each in the third, fourth and fifth year following the grant and generally are paid in shares of
common stock. A maximum of 12 million shares is authorized for issuance for all purposes under the Plan, plus any shares that become available
upon cancellation, forfeiture or expiration of awards granted under the 1999 Long-Term Incentive Plan. No more than 12 million shares may be
awarded pursuant to incentive stock options, and no more than 3 million shares may be awarded pursuant to restricted stock or other “full value”
awards intended to be paid in shares. The Plan also authorizes performance share units paid in cash. Payouts under performance share units vary
based on certain performance criteria generally measured over a three-year period. The performance share units vest at the end of three years. We
also provide share-based compensation awards payable in cash, including retention awards to certain executives and restricted stock units.
Through our Deferred Income Plan for Textron Key Executives (the “DIP”), we provide participants the opportunity to voluntarily defer up to 25%
of their base salary and up to 100% of annual, long-term incentive and other compensation. Effective January 1, 2008, the maximum deferred for
annual, long-term incentive and other compensation decreased to 80%. Elective deferrals may be put into either a stock unit account or an interest
bearing account. We generally contribute a 10% premium on amounts deferred into the stock unit account. Executives who are eligible to
participate in the DIP who have not achieved and/or maintained the required minimum stock ownership level are required to defer annual
incentive compensation in excess of 100% of the executive’s annual target into a deferred stock unit account and are not entitled to the 10%
premium contribution on the amount deferred. Participants cannot move amounts between the two accounts while actively employed by us and
cannot receive distributions until termination of employment.
For awards granted or modified in 2005 and prospectively, compensation costs for awards with only service conditions that vest ratably are
recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award.