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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 13, 2006
COTT CORPORATION
(Exact name of registrant as specified in its charter)
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| CANADA
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000-19914
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None |
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| (State or other jurisdiction
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(Commission
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(IRS Employer |
| of incorporation)
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File Number)
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Identification No.) |
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| 207 Queen’s Quay West, Suite 340, Toronto, Ontario
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M5J 1A7 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code (416) 203-3898
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On May 15, 2006, Cott Corporation (the “Company”) announced that Brent Willis had accepted an
offer to become the Company’s President and Chief Executive Officer and a member of its Board of
Directors, effective May 16, 2006. The Company and Mr. Willis are finalizing and negotiating the
terms of his employment and expect to enter into an employment agreement. Mr. Willis is
currently employed by the Company subject to the terms of an offer letter dated May 13, 2006 (the
“Offer Letter”), the material terms of which are discussed in Item 5.02 and incorporated herein by
reference.
Effective May 13, 2006 and according to the terms of a termination letter (the “Termination
Letter”) agreed to by the parties, the Company terminated the employment of
John K. Sheppard as the Company’s President and Chief Executive Officer and from his role as an
officer of the Company and its affiliates, subsidiaries and associated companies. Mr. Sheppard has
also resigned as a director of the Company and its affiliates, subsidiaries and associated
companies in which he held such a position.
Pursuant to the Termination Letter, the Company will pay Mr. Sheppard a lump sum payment of
his accrued salary and accrued vacation through his May 13, 2006 termination date. The Company
will also pay Mr. Sheppard severance of two times his base salary plus two times his target bonus
for a total lump sum payment of $2,300,000, less applicable withholdings, to be paid within thirty
days of termination of employment. In addition, Mr. Sheppard is entitled to a pro-rated bonus for
2006 of $275,000, less applicable statutory deductions and, provided
the insurer(s) and the applicable insurance policies permit,
Mr. Sheppard is also entitled to the continuation of his current group
insurance benefits for a period of time. Mr. Sheppard also agreed to release the Company from any liability arising
from or related to his employment or other engagement with the Company or the termination of such
employment or engagement. Mr. Sheppard has confirmed that his
non-competition and non-solicitation covenants to the Company will
apply for 24 months following the termination of his employment
and has agreed to be bound by confidentiality and non-disparagement
covenants.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
On May 15, 2006, the Company announced that Brent Willis had accepted an offer to become the
Company’s President and Chief Executive Officer and a member of its Board of Directors, effective
May 16, 2006. The Company and Mr. Willis are finalizing and negotiating the terms of his
employment and expect to enter into an employment agreement. Mr. Willis is currently employed by
the Company subject to the terms of the Offer Letter, the material terms of which are discussed
below.
From
July 2005 to May 2006, Mr. Willis, age 46, served as Zone President of InBev Asia
Pacific (multinational beer company). From July 2003 to June 2005, he served as Chief
Commercial Officer of InBev, and from June 2002 to September 2003, he was Chief Marketing and Sales
Officer of Interbrew, an InBev predecessor company. From August 2001 to May 2002, Mr. Willis was a
principal with the Chicago Consulting Group (marketing consultants), and from January 2001 to July
2001, he served as Chief Marketing Officer of Kmart Inc. In addition, Mr. Willis has previously
served in various senior management positions with The Coca-Cola Company and Kraft Foods Inc. Mr.
Willis does not currently
serve on the Board of Directors of any other public companies besides the Company.
There are no family relationships between Mr. Willis and any directors or executive officers
of the Company, and there have not been any related party transactions in which the amounts
involved exceeded $60,000 with Mr. Willis within the past year, nor are there any such transactions
currently proposed, other than as set out in the Offer Letter.
Under the Offer Letter, the Company will pay Mr. Willis a base salary of $700,000 per year.
He will also be eligible to participate in the Company’s short-term executive bonus plan with an
annual target bonus equal to his base salary, as well as the opportunity to earn up to 200% of base
salary based on Company and personal performance. His bonus for 2006 will be prorated based on
actual employment during 2006. Mr. Willis will also be eligible to participate in the Company’s
long-term incentive plan with an annual target award equal to 200% of his base salary. His award
under the long-term incentive plan for 2006 will be paid in cash, prorated for actual employment
during 2006, and must be used to purchase common shares of the Company, which shares must be held
for three years and which are subject to forfeiture if his employment is terminated prior to the
third anniversary thereof, under certain circumstances.
As an inducement to enter into employment with the Company and in order to compensate Mr.
Willis for certain benefits to which he would have been entitled at his previous employer, Mr.
Willis will receive (i) a cash bonus of $945,000, (ii) an equity award of $3,176,375, to vest in
three equal installments on the first three anniversaries of the grant (the “Equity Signing Bonus”)
and (iii) participation in the Company’s Performance Share Unit Plan (the “PSU Plan”) by way of a
grant with a market value equal to $1,500,000, subject to the vesting provisions of the PSU Plan
(the “PSU Signing Bonus”). Mr. Willis will also be entitled to reimbursement for relocation
expenses, supplemental disability benefits, reimbursement for certain legal and financial expenses
incurred in entering into the Offer Letter and to participate in the employee benefit plans
available to the Company’s executives generally.
If the Company terminates Mr. Willis’ employment for cause or he resigns, the Company will pay
him an amount equal to his accrued base salary through the date of termination. If the Company
terminates him without cause or he resigns for good reason, Mr. Willis will be entitled to (i) his
accrued base salary through the date of termination, (ii) his bonus, prorated through the date of
termination and based on his target bonus, (iii) a lump sum severance amount equal to two years of
base salary plus bonus, based on his target bonus, (iv) vesting of his PSU Plan Signing Bonus to
the maximum extent permitted under the plan, (v) vesting of his Equity Signing Bonus and (vi)
continuation of insurance benefits for twenty-four months or until they are replaced by a new
employer.
If Mr. Willis’ employment is terminated without cause in the event of a change of control of
the Company, Mr. Willis would receive (i) a lump sum payment of thirty-six months of base salary
and target bonus, (ii) vesting of his entitlements under the Company’s long-term incentive plans,
in accordance with those plans, (iii) acceleration of vesting of the Equity Signing Bonus and (iv)
continuation of insurance benefits for thirty-six months.
Mr. Willis
will be subject to standard confidentiality undertakings and will
also be subject to non-competition, non-solicitation, and
non-disparagement restrictions during the term of employment and for
a period of two years following termination.
On May 13, 2006 in connection with Mr. Willis’s appointment described above and as
more fully described in Item 1.01 above, the Company terminated the employment of John K. Sheppard
as the Company’s President and Chief Executive Officer and from his roles as an officer of the
Company and its affiliates, subsidiaries and associated companies. Mr. Sheppard also resigned as a
director of the Company and its affiliates, subsidiaries and associated companies in which he held
such a position.
A copy of the press release announcing Mr. Willis’s appointment and Mr. Sheppard’s departure
is furnished as Exhibit 99.1 to this report and is hereby incorporated by reference.
On May 17, 2006, the Company announced that the Board of Directors of the Company appointed
George A. Burnett to the Board of Directors effective June 1, 2006. There have not been any
related party transactions in which the amounts involved exceeded $60,000 with Mr. Burnett within
the past year, nor are there any such transactions currently proposed. At this time, Mr. Burnett
has not been appointed to serve on any committees of the Board.
A copy of the press release announcing Mr. Burnett’s appointment is furnished as Exhibit 99.2
to this report and hereby incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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99.1 |
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Press release dated May 15, 2006. |
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99.1 |
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Press release dated May 17, 2006. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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COTT CORPORATION |
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Date: May 18, 2006
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By: |
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/s/
Mark R. Halperin |
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Mark R. Halperin |
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Senior Vice President, |
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General Counsel and Secretary |
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EXHIBIT INDEX
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Description |
99.1
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Press release dated May 15, 2006. |
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99.2
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Press release dated May 17, 2006. |