Filing Overview
BellRing Brands, Inc. filed a Form 8-K dated January 7, 2020, reporting an executive compensation arrangement adopted effective January 1, 2020. The report relates to the period ended December 31, 2019 and was filed under Item 5.02(e).
Business Context and Material Action
BellRing Brands, LLC, a subsidiary of BellRing Brands, Inc., adopted an Executive Severance Plan covering certain executives of BellRing Brands, LLC and its subsidiaries, including certain named executive officers of BellRing Brands, Inc.
Severance Benefits
- Termination outside a Change in Control: A lump-sum payment equal to 39 weeks of base pay plus one week of base pay for each year of service.
- Termination following a Change in Control: A lump-sum payment equal to 78 weeks of base pay plus one week of base pay for each year of service.
- Business Change: Comparable Change in Control benefits may apply to qualifying terminations occurring within two years after a Business Change.
- Bonus: A prorated Senior Management Bonus Program award may be payable based on full weeks worked during the fiscal year, subject to achievement of performance criteria.
- Healthcare: Contributions toward COBRA continuation coverage for up to 12 weeks.
- Outplacement: Services for a period determined by the employer, not exceeding two years.
Financial Metrics and Liquidity
The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or other operating performance metrics. It also does not quantify the potential cost of the severance arrangements.
Guidance, Risks, and Unusual Items
The plan applies to involuntary terminations without Cause and, in specified circumstances, employee terminations for Good Reason. Actual obligations will depend on the number of covered participants, their base pay, years of service, applicable bonus performance, and whether a Change in Control or Business Change occurs.
The filing states that the plan description is not complete. BellRing Brands expects to file the full plan as an exhibit to its Quarterly Report on Form 10-Q for the quarter ended December 31, 2019.
Key Facts to Verify
- Review the complete Executive Severance Plan when filed with the Form 10-Q.
- Verify the definitions of Cause, Good Reason, Change in Control, and Business Change.
- Assess which named executive officers and other employees are covered participants.
- Evaluate potential severance exposure based on executive compensation, tenure, and applicable transaction scenarios.
- Confirm whether any qualifying terminations or related payments have occurred or are expected.