8-KMaterial AgreementsExhibits & Filings

Johnson Controls International plc 8-K Report, Material Agreement (Sep 16, 2008)

Filed September 16, 2008For Securities:JCI

Summary

This 8-K filing from Tyco International Ltd., filed on September 16, 2008, reports a material amendment to its 2004 Stock and Incentive Plan, approved on September 10, 2008. The key change clarifies the conditions under which equity awards vest upon a change of control of the company. Specifically, the amendment stipulates that equity awards will not automatically accelerate vesting solely due to a change of control. Instead, vesting acceleration will only occur if the award recipient experiences an involuntary termination within a defined window surrounding the change of control event (60 days prior to up to two years after). This change is significant for executive compensation and aligns severance provisions with change-of-control events, potentially impacting the financial implications for both the company and its employees in such scenarios.

Key Highlights

  • 1Tyco International Ltd. amended its 2004 Stock and Incentive Plan.
  • 2The amendment, approved on September 10, 2008, clarifies the conditions for equity award vesting acceleration.
  • 3Vesting acceleration upon a change of control is no longer automatic.
  • 4Acceleration now requires an involuntary termination of the award grantee within a specific timeframe around a change of control.
  • 5The defined window for involuntary termination is 60 days prior to and up to two years following a change of control.
  • 6This amendment impacts how equity compensation is handled in potential merger or acquisition scenarios.
  • 7The filing is an 8-K, indicating a material event that requires prompt disclosure to investors.

Frequently Asked Questions

The main purpose of this 8-K filing is to report a material amendment to Tyco International Ltd.'s 2004 Stock and Incentive Plan, specifically concerning the vesting of equity awards upon a change of control.

The amendment clarifies that vesting of equity awards will not automatically accelerate just because a change of control occurs. Vesting acceleration will only happen if the employee who received the award is involuntarily terminated within a period starting 60 days before the change of control and ending two years after it.

The filing references the definition of 'change of control' as defined within the Plan itself. While this specific 8-K doesn't detail the definition, it's a defined term that would typically refer to events like mergers, acquisitions, or significant shifts in company ownership or control.

This amendment likely aims to provide more certainty and alignment regarding executive compensation in the event of a change of control. It prevents automatic windfall payouts for executives solely based on a change of control, tying accelerated vesting to continued employment and subsequent termination, which can be seen as a more standard practice in corporate governance.