Summary
TE Connectivity Ltd. (TEL) filed an 8-K on December 15, 2015, to announce the execution of new employment contracts for its executive officers, effective January 1, 2016. These new agreements replace the expiring fiscal 2014 contracts. The primary change is the discontinuation of severance benefits under the U.S. Severance Plan and Change in Control Severance Plan for executives, a move necessitated by Swiss regulations regarding executive compensation that took effect in January 2014. While severance is eliminated, the new contracts specify a notice period of up to twelve months for termination by the company without cause, and executives will receive twelve months' pay in exchange for non-compete and non-solicitation covenants. These new contracts do not have a specified termination date.
Key Highlights
- 1TE Connectivity entered into new employment contracts for executive officers, effective January 1, 2016.
- 2The new contracts replace existing fiscal 2014 employment agreements.
- 3Severance benefits under the U.S. Severance Plan and Change in Control Severance Plan are eliminated for executives in the new contracts.
- 4The elimination of severance is in response to Swiss Ordinance Against Excessive Compensation.
- 5New contracts include a notice period of up to 12 months for termination by the company without cause.
- 6Executives will receive 12 months' pay for agreeing to non-compete and non-solicitation covenants.
- 7The new employment contracts do not have a defined termination date.