8-KLeadership Changes

Johnson Controls International plc 8-K Report, Executive Changes (Jul 16, 2012)

Filed July 16, 2012For Securities:JCI

Summary

This 8-K filing from Tyco International Ltd., dated July 16, 2012, primarily concerns changes to executive compensation arrangements in anticipation of a significant corporate restructuring. The company announced its intention to separate into three independent publicly-traded entities. In light of this impending separation, Tyco's Board of Directors, acting on the recommendation of its Compensation Committee, approved the conversion of outstanding performance share units (PSUs) into restricted stock units (RSUs). The conversion is based on performance achieved up to the end of the third fiscal quarter (June 29, 2012). The resulting RSUs will retain the original vesting schedules of the PSUs, typically a three-year cliff vesting from the grant date. The specific conversion ratio will be determined by the Compensation Committee following its review and certification of performance results, expected in August 2012. Upon vesting, these RSUs will be settled in Tyco stock. This move is a critical step in aligning executive incentives with the upcoming demerger and ensuring continuity in compensation structures during this transformative period.

Key Highlights

  • 1Tyco International Ltd. is preparing for a separation into three independent publicly-traded companies.
  • 2Performance Share Units (PSUs) are being converted into Restricted Stock Units (RSUs).
  • 3The conversion is based on performance achieved through the end of the third fiscal quarter of 2012 (June 29, 2012).
  • 4The resulting RSUs will be subject to the original vesting provisions of the PSUs, generally three-year cliff vesting from the grant date.
  • 5The final conversion ratio will be determined by the Compensation Committee in August 2012 after reviewing performance results.
  • 6Vested RSUs will be settled in Tyco stock.
  • 7This action is a direct consequence of the proposed corporate separation strategy.

Frequently Asked Questions

The main purpose of this filing is to report on changes to Tyco International's executive compensation, specifically the conversion of performance share units into restricted stock units, in preparation for the company's planned separation into three independent entities.

The performance share units will be converted into restricted stock units based on the performance achieved through June 29, 2012. The exact number of restricted stock units each performance share unit will convert into will be determined by the Compensation Committee in August 2012, based on certified performance results.

The restricted stock units resulting from the conversion will be subject to the same vesting provisions as the original performance share units, which are generally a three-year cliff vesting from the date of grant.

Upon vesting, the restricted stock units will be settled by delivering Tyco stock.