01—Abstract
Summary
Summary of the 8-K filed March 4, 2020. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) filed an 8-K on March 4, 2020, detailing the adoption of new severance plans, effective March 1, 2020.
The primary focus is the implementation of the L3Harris Technologies, Inc. Executive Change in Control Severance Plan (CIC Severance Plan) and the L3Harris Technologies, Inc. Severance Pay Plan. These plans aim to provide structured severance benefits to executives and employees under specific termination scenarios, particularly in the event of a change in control.
02—Key points
Key Highlights
- Adoption of a new Executive Change in Control Severance Plan (CIC Severance Plan) effective March 1, 2020.
- Implementation of a broader Severance Pay Plan for regular, full-time employees, effective March 1, 2020.
- CIC Severance Plan provides benefits upon termination without cause or by the employee for good reason within two years post-change in control.
- Severance benefits under the CIC plan for officers include two times base salary and target bonus, pro-rata target bonus, continued health benefits, and financial planning services.
- The Severance Pay Plan offers benefits for involuntary termination without cause, including a lump sum payment and 12 months of COBRA coverage at active employee rates for officers.
- Specific exclusion of the CEO and COO (as of January 1, 2020) from automatic participation in the CIC Severance Plan, unless expressly designated by the Committee.
- The new plans supersede or run concurrently with legacy change-in-control arrangements, with specific provisions for participants of prior Harris or L3 Technologies plans.
03—Questions
Frequently Asked Questions
What is the main purpose of the new severance plans?
The main purpose is to provide defined severance benefits to executives and employees in the event of specific employment terminations, particularly those related to a 'change in control' for the CIC Severance Plan, and involuntary termination without cause for the general Severance Pay Plan. This offers a degree of financial security and clarity for affected employees.
Who is eligible to participate in the Executive Change in Control Severance Plan (CIC Severance Plan)?
The CIC Severance Plan is designed for officers (including executive officers) and certain other executives of the Company. However, the CEO and COO as of January 1, 2020, are explicitly excluded from automatic participation unless specifically designated by the Compensation Committee. Participants in legacy change-in-control arrangements from Harris Corporation or L3 Technologies will transition to this plan after their existing arrangements expire.
What are the key benefits provided under the CIC Severance Plan for officers in case of a qualifying termination?
For officers, a qualifying termination (by the company without cause or by the officer for good reason within two years of a change in control) entitles them to a lump sum cash payment equal to two times their base salary and target bonus. They also receive a pro-rata target bonus, continued medical, dental, and vision plan participation for two years, and continued financial/tax planning services for the remainder of the termination year and the following year.
Does the new Severance Pay Plan apply to all employees?
The Severance Pay Plan provides benefits for regular, full-time employees terminated involuntarily without cause. However, it includes specific provisions for officers (including executive officers). Importantly, employees who are already entitled to severance benefits under an individual agreement or another plan (including change-in-control benefits) will not receive benefits under this Severance Pay Plan.
04—Continue