8-KOther Events

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Corporate Update (Dec 13, 2019)

Filed December 13, 2019For Securities:LHX

Summary

L3Harris Technologies, Inc. (LHX) filed an 8-K on December 13, 2019, disclosing a pre-arranged stock trading plan established by its Chairman and CEO, William M. Brown. This plan, designed for asset diversification and financial planning, allows for the exercise of employee stock options and the subsequent sale of these shares. The plan is structured to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, ensuring trades are executed without the influence of material non-public information. Key details of the plan include the exercise of 181,600 stock options granted in August 2012, with sales scheduled to begin in February 2020, contingent on a minimum price threshold. Mr. Brown will have no discretion over the execution of sales under this plan, and the transactions will be publicly reported via Form 4 and Form 144 filings. The company stated that Mr. Brown's ownership interest will remain substantially in excess of its stock ownership guidelines after these transactions.

Key Highlights

  • 1L3Harris CEO William M. Brown has established a Rule 10b5-1 trading plan for stock options.
  • 2The plan covers the exercise of 181,600 stock options granted in August 2012, expiring in August 2022.
  • 3Sales of shares from exercised options are scheduled to begin in February 2020, subject to a minimum price threshold.
  • 4The plan is intended for asset diversification and financial, estate, and tax planning.
  • 5Mr. Brown will have no control or discretion over sales executed under the plan.
  • 6Transactions will be publicly disclosed through Form 4 and Form 144 filings.
  • 7The CEO's ownership will remain significantly above company guidelines after plan execution.

Frequently Asked Questions

A Rule 10b5-1 trading plan allows company insiders to buy or sell company stock at predetermined times and prices. It must be established when the insider is not in possession of material non-public information, and it removes the insider's discretion over trades once established, thus protecting them from accusations of insider trading.

The CEO, William M. Brown, has established this plan for long-term asset diversification and personal financial, estate, and tax planning purposes. The plan is designed to allow for a gradual and prudent diversification of his investment portfolio over time.

The plan is designed to execute sales over a period of time and is subject to a minimum price threshold. The company states that the CEO's ownership interest will remain substantially in excess of L3Harris' stock ownership guidelines even after these transactions. While any sale can theoretically put downward pressure on a stock, the structured nature of a 10b5-1 plan and the CEO's continued significant ownership suggest it's a planned diversification rather than a signal of distress.

These transactions will be publicly disclosed by L3Harris Technologies, Inc. through filings of Form 4 (Statement of Changes in Beneficial Ownership) and Form 144 (Notice of Proposed Sale of Securities) with the Securities and Exchange Commission.