8-KLeadership ChangesExhibits & Filings

TE Connectivity plc 8-K Report, Executive Changes (Nov 9, 2007)

Filed November 9, 2007For Securities:TEL

Summary

This 8-K filing from TE Connectivity plc (then Tyco Electronics Ltd.) on November 9, 2007, primarily details the adoption of new severance and retirement plans for its U.S. officers and executives. Key among these are the Tyco Electronics Ltd. Severance Plan for U.S. Officers and Executives and the Tyco Electronics Ltd. Change in Control Severance Plan for Certain U.S. Officers and Executives, both approved by the Board of Directors on July 9, 2007. These plans outline specific severance packages, including salary and bonus continuation, health benefits, and potential vesting of stock options and restricted stock, for top executives like the CEO and CFO in cases of involuntary termination or change in control events. Additionally, the company adopted the Tyco Electronics Corporation Supplemental Savings and Retirement Plan, effective June 29, 2007. This plan allows executive officers to defer a significant portion of their salary and bonus, with the company providing matching contributions and contributions on compensation exceeding IRS limits. These filings indicate a focus on executive compensation and retention strategies during this period.

Key Highlights

  • 1Adoption of a new Severance Plan for U.S. Officers and Executives, providing salary and target bonus continuation for 18-24 months upon involuntary termination (excluding for cause, disability, or death).
  • 2Implementation of a Change in Control Severance Plan offering extended severance benefits (24-36 months), accelerated vesting of stock options and time-based restricted stock/RSUs, and continued health benefits for executives upon a change in control event combined with termination.
  • 3Specific severance periods for CEO Thomas J. Lynch (24 months under Severance Plan, 36 months under CIC Severance Plan) and CFO Terrence R. Curtin (18 months under Severance Plan, 24 months under CIC Severance Plan).
  • 4Inclusion of non-compete (1 year) and non-solicitation (2 years) covenants as conditions for receiving severance benefits.
  • 5Adoption of a Supplemental Savings and Retirement Plan, allowing executive officers to defer up to 50% of base salary and 100% of bonuses.
  • 6Company contributions to the Supplemental Savings Plan will match existing retirement plan contributions and cover compensation exceeding IRS Section 401(a)(17) limits.
  • 7All plans are subject to specific definitions of 'cause' for termination and 'change in control' for severance eligibility.

Frequently Asked Questions

The main purposes are to establish clear severance packages for U.S. officers and executives in case of involuntary termination or change in control events, and to provide a supplemental retirement savings option for these executives, thereby enhancing executive retention and compensation.

Executives must execute a general release in favor of the company and agree to covenants including confidentiality, a one-year non-compete agreement, a two-year non-solicitation of employees and customers, and non-disparagement. Benefits can be cancelled if these provisions are violated.

The Change in Control Severance Plan offers more generous benefits, including longer severance periods (36 months for CEO, 24 months for CFO), full vesting of stock options and time-based equity awards, and extended health benefits. It is triggered by a change in control followed by specific types of employment termination within a defined window.

This plan allows executives to defer a significant portion of their compensation (salary and bonus) into a retirement savings vehicle. It also includes company contributions, offering a valuable long-term incentive and a way to save on taxes for compensation that exceeds IRS limits for regular qualified retirement plans.