Firefly Aerospace Inc. 8-K

What Happened
Firefly Aerospace’s Compensation Committee adopted an Executive Severance Plan on February 25, 2026 to provide a standardized framework for severance payments and related benefits for eligible officers and management employees. Participation begins once an executive signs the Plan’s participation agreement. The Plan supplements (but does not duplicate) any severance in existing employment agreements.

Key Details

• Eligibility and timing: generally requires at least one full year of continuous service as of termination (waived for qualifying terminations during the 24‑month Change in Control Protection Period).
• Cash severance: lump sum equal to the executive’s annual base salary (CEO receives 2× salary for qualifying terminations during the Change in Control Protection Period).
• Bonus treatment: CEO receives target annual bonus (2× target during Change in Control Protection Period); other executives receive prorated or performance-based bonus treatment depending on termination date and whether in the Change in Control Protection Period.
• Health continuation: Company pays the difference between COBRA cost and active employee contribution for up to 1 year (2 years for CEO in the Change in Control Protection Period).
• Equity vesting: for qualifying terminations outside the Change in Control Protection Period, time‑based RSUs generally accelerate for 1 year and performance RSUs vest prorated based on actual performance; during the Change in Control Protection Period (or on death), all unvested time‑based and performance awards vest immediately.
• Conditions and taxes: severance is generally subject to signing a release; no tax “gross-up” is provided. If payments would trigger Section 280G excise tax, payments will be either reduced to avoid the tax or paid in full with the executive bearing the tax—whichever gives the executive the better after‑tax result.

Why It Matters
This Plan creates clearer, uniform severance and equity outcomes for Firefly’s executives, which can reduce negotiation friction and litigation risk on terminations. For investors, the Plan could increase near‑term cash and equity dilution exposure in the event of executive departures or a change in control (due to lump‑sum payouts and accelerated vesting). The absence of a tax gross‑up and the 280G accommodation limits potential outsized corporate costs from golden parachute taxes. The Plan is filed as Exhibit 10.1 to the company’s 8‑K.