Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On
Restrictive Covenants. The Severance Agreement contains non-competition provisions continuing through a restriction period. The restriction period is 12 months in the case of termination by the Company for cause or by Executive without good reason. The restriction period is 24 months (36 months in the case of the CEO) in the case of a termination by the Company without cause or by Executive for good reason. In the case of a 12-month restriction period (termination for cause or voluntary resignation without good reason), the non-competition provisions shall apply broadly with respect to industry participants. In the case of a 24-month or 36-month restriction period (termination without cause or for good reason), the non-competition provisions shall only apply with respect to a list of industry participants identified in, or pursuant to, the Severance Agreement. During the applicable restriction period, the Executive will be subject to covenants with respect to non-solicitation, non-disparagement, and non-endorsement of competing products. The Executives are also subject to a perpetual confidentiality covenant.
Executive Severance. In the event the Company terminates an Executive without cause or an Executive terminates for good reason, the Company shall provide the Executive with the following payments and benefits:
• 18 months of annual base salary (24 months in the case of the CEO), paid in equal periodic installments on the Company's regular payroll dates; • 150% (200% in the case of the CEO) of the Executive's target annual cash incentive, paid in equal periodic installments over the salary continuation period; • the annual cash incentive with respect to any fiscal year completed prior to the termination date but not yet paid, paid in a lump sum on the date such cash incentive is paid to other employees; • to the extent Executive elects health benefit continuation under COBRA, continued participation in Beacon's health plan at active employee rates for 12 months (18 months in the case of the CEO); and • continued vesting in all unvested equity awards that are scheduled to vest in the 12-month period following the termination date.
Executive's receipt of the above payments and benefits is conditioned upon the execution and delivery, not subsequently revoked, of a waiver and release of claims.
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