8-KLeadership ChangesShareholder MattersCorporate Changes+3

TE Connectivity plc 8-K Report, Rights Modification (Jun 25, 2009)

Filed June 25, 2009For Securities:TEL

Summary

TE Connectivity plc (formerly Tyco Electronics Ltd.) announced a significant corporate event in this 8-K filing: the company effectively discontinued its existence as a Bermuda company and continued its existence as a Swiss company, effective June 25, 2009. This move, referred to as a "Swiss Continuation," changes the governing laws and the rights of security holders to be governed by Swiss articles of association and organizational regulations. For investors, this signifies a shift in the legal and regulatory framework under which the company operates, with detailed implications outlined in previously filed documents (Form S-4/A). Additionally, the company's shareholders approved an amendment and restatement of the 2007 Stock and Incentive Plan. Key amendments focus on ensuring compensation qualifies as "performance-based" under U.S. tax law (Section 162(m)), clarifying award provisions (retirement, dividend equivalents, option terms), prohibiting certain option repricing, and ensuring compliance with Section 409A of the Code. The filing also disclosed adjustments to the company's balance sheet for Swiss statutory and tax purposes, including a reverse stock split and share issuance, impacting the capital structure. Investors should review the incorporated exhibits for a comprehensive understanding of these changes.

Key Highlights

  • 1TE Connectivity plc (formerly Tyco Electronics Ltd.) transitioned from a Bermuda company to a Swiss company, effective June 25, 2009.
  • 2The rights of shareholders are now governed by Swiss articles of association and organizational regulations.
  • 3Shareholders approved amendments to the 2007 Stock and Incentive Plan to ensure compliance with U.S. tax regulations (Section 162(m) and 409A).
  • 4Key changes to the stock plan include modified retirement provisions, clarification on dividend equivalents, and restrictions on stock option repricing.
  • 5A special unaudited balance sheet was prepared reflecting adjustments for Swiss statutory and tax purposes, including a reverse stock split and share capitalization.
  • 6The company's CUSIP number changed to H8912P106 following the Swiss continuation.

Frequently Asked Questions

The primary impact is the change in the company's domicile from Bermuda to Switzerland. This means the company's legal structure and the rights of its shareholders are now governed by Swiss law and the company's Swiss articles of association and organizational regulations, replacing the previous Bermuda framework.

The amendments were primarily made to ensure that certain payments under the plan continue to qualify as 'performance-based' compensation under Section 162(m) of the Internal Revenue Code, and to ensure compliance with Section 409A of the Code. Other changes clarified award terms and vesting schedules.

This special balance sheet was created to establish the opening balance sheet for Swiss statutory and tax requirements. It includes adjustments to U.S. GAAP accounts to reflect Swiss statutory and tax regulations, such as intercompany notes, a reverse stock split, and capitalization of contributed surplus. These adjustments are not typically part of U.S. GAAP financial statements.

The change in domicile primarily affects the legal and regulatory framework. While the rights of security holders are now governed by Swiss law, the filing references detailed comparisons of shareholder rights and material tax considerations in the Form S-4/A. Investors should consult the referenced sections of the Form S-4/A and their tax advisors for specific implications on their holdings and tax reporting.