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Brown-Forman Corporation (NYSE:BFA, NYSE:BFB) announced Friday that its board of directors has adopted an Executive Change in Control Severance Plan, effective immediately. The plan is designed to provide severance pay and benefits to executive leadership team members and other select key employees if their employment is involuntarily terminated due to a qualifying event during a specified change in control protection period.
According to a statement in the SEC filing, the plan covers terminations occurring within a window that begins 30 days before and ends 24 months after the consummation of a change in control. Participants in the plan include all current named executive officers as defined by SEC regulations, as well as other designated key employees.
Under the plan, eligible executives who experience a qualifying termination during the protection period will receive several benefits. These include payment of any earned but unpaid annual cash bonus for the prior fiscal year, a severance payment based on a multiple of annual base salary and bonus (three times for the chief executive officer and two times for other executive team members), a pro-rata annual bonus for the year of termination, and coverage of medical insurance premiums for 18 months. The plan also provides for full vesting of any unvested deferred compensation and equity awards, outplacement services for up to 12 months, and a $10,000 lump sum for tax preparation.
Receipt of these severance benefits is contingent on the executive signing and not revoking a general release of claims in favor of Brown-Forman and agreeing to certain confidentiality and non-disparagement provisions. For participants who may have existing individual severance agreements with the company, the new plan will supersede prior arrangements in the event of a qualifying termination during the protection period.
This information is based on a statement in a press release filed with the Securities and Exchange Commission.
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