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.