Who is covered by the new Flex Ltd. Executive Severance Plan?

The plan covers senior-level employees of Flex Ltd., including the Chief Financial Officer and other named executive officers, but specifically excludes the Chief Executive Officer.

What events trigger severance benefits under the plan?

Severance benefits are triggered if the company terminates an employee's employment without "cause", or if an employee terminates their employment for "good reason", as defined within the plan. The employee must also sign and comply with a transition and release agreement.

What are the main components of the severance package?

The severance package includes 12 months of continued base salary and benefits, continued vesting of equity and deferred compensation awards during the transition period, payment of earned quarterly bonuses and a pro-rated portion of the annual bonus, and accelerated vesting of certain awards for one year after the transition period, subject to further agreements and compliance with restrictive covenants.

Are there any obligations for employees receiving severance?

Yes, employees must enter into a transition and release agreement, which includes obligations such as discharging transition duties, complying with non-competition, non-solicitation, non-disclosure, and cooperation provisions. Violation of these obligations can lead to cessation of benefits and clawback rights for the company.

FLEX 8-K: Leadership Changes

Summary

Flex Ltd. (FLEX) announced on January 18, 2019, the adoption of the Flex Ltd. Executive Severance Plan by its Compensation Committee. This plan is designed to provide a framework for severance benefits to senior-level employees, excluding the CEO, in specific termination scenarios. The plan outlines benefits in cases of termination by the Company without cause or by an employee for good reason, contingent upon the execution of a transition and release agreement. Key benefits include salary and benefits continuation for 12 months, continued vesting of equity and deferred compensation awards during the transition period, and pro-rated bonus payments. Additionally, the plan provides for accelerated vesting of certain awards for one year post-transition, subject to further release agreements and continued compliance with restrictive covenants.

Key Highlights

1Flex Ltd. has established an Executive Severance Plan for senior employees (excluding CEO).
2The plan applies to terminations without "cause" by the company or for "good reason" by the employee.
3Severance benefits include 12 months of continued base salary and benefits.
4Continued vesting of restricted stock units, performance-based awards, and deferred compensation during the severance period.
5Bonus payments will include full quarterly bonuses for completed quarters and pro-rated annual bonuses.
6Accelerated vesting of certain equity and deferred compensation awards for one year post-transition period, subject to further conditions.
7Employees must enter into and comply with transition and release agreements, including non-compete and non-solicitation clauses.

FLEX LTD. 8-K Report, Executive Changes (Jan 18, 2019)

Summary

Key Highlights

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