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EXHIBIT 10.7
October 7, 1997
Xxxx Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxx:
RE: EMPLOYMENT AND RELATED ARRANGEMENTS
This letter contains the terms and conditions upon which you have agreed to
remain in the full-time employment of Cott Corporation ("Cott") as Co-Chief
Operating Officer. This letter, once accepted by you, is intended to and shall
constitute a binding legal agreement, enforceable by and against each of us in
accordance with its terms.
1. BASE COMPENSATION. Your base salary shall be the annualized amount of
$425,000. Your base salary shall be payable in the same manner and at the same
intervals as the other senior officers of Cott. Provided that you remain in the
full-time employment of Cott, your base salary will be reviewed in April, 1998
and at the end of every twelve month period thereafter, and may be increased in
respect of any such twelve month period by the CEO, with the advice and consent
of the Human Resources, Compensation and Corporate Governance Committee of the
Board. Base salary increases will be dependent, in general, upon a variety of
factors, including rates of increase of other senior executive officers of Cott,
rates of increase and salary levels of other executives in comparable North
American industrial corporations, rates of inflation and other relevant
criteria.
2. BONUS COMPENSATION. You shall be entitled to an annual bonus of up to 50% of
your base salary in respect of any fiscal year, payable within 30 days following
the release by Cott of its year end results for such fiscal year. The bonus
amount, if any, will be based on achievable and measurable criteria which we
shall mutually agree upon within 60 days following your acceptance of this
letter and which, provided that you remain in the full-time employment of Cott,
shall be reviewed in April of each year, commencing 1998. It is intended that
such criteria will enable you to earn as much in the way of bonus compensation
as the other Co-Chief Operating Officer, provided that the bonus criteria for
you and the other Co-Chief Operating Officer will be specific to your respective
functions. You acknowledge that your bonus compensation, if any, need not
necessarily be equal to that paid, if any, to the other Co-Chief Operating
Officer. If you employment terminates prior to the end of a fiscal year, any
bonus earned in respect of that year shall be pro-rated accordingly.
3. EMPLOYEE BENEFITS AND PERQUISITES. You shall be entitled to any and all
benefits and perquisites which are from time to time available to other senior
officers of Cott, excluding the CEO.
4. STOCK OPTIONS. In addition to the options to purchase 185,000 common shares
of Cott which you currently hold (the "Existing Options"), you will receive
options to purchase
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a further 115,000 common shares (the "New Options") at a price per share of
$14.10, being the market price for shares of Cott at the close of trading on
September 3, 1997. The New Options shall be subject to and governed by the terms
and conditions of Cott's existing Employee Stock Option Plan, including vesting,
provided that:
(A) all unvested Existing Options and New Options (collectively, the
"Options") shall immediately vest upon a Change of Control (as
hereinafter defined);
(B) if, prior to the second anniversary of the date on which a Chief
Executive Officer is named to replace Xxxxxx X. Xxxxxx ("GNP") (such
date being hereinafter described as the "CEO Replacement Date") your
employment is terminated by Cott without cause or if your position,
title, duties, responsibilities and/or reporting is changed in any
material respect, or if you voluntarily leave the employment of Cott
for Good Reason (as hereinafter defined), all unvested Existing
Options shall immediately vest;
(all of (a) and (b) being subject to regulatory approval which Cott
shall use reasonable commercial efforts to obtain, failing which the
equivalent after tax value of any unvested Options shall be paid to
you within 30 days following the later of the date on which you are or
would otherwise be required to sell the Options or the date on which
you notify Cott in writing that you would have elected to dispose of
such Options if there is no requirement to do so); and
(C) if you voluntarily leave the employment of Cott other than for Good
Reason or if your employment is terminated by Cott for cause or as a
result of your death, all unvested Existing Options shall immediately
terminate and shall cease to have any further force or effect.
For the purposes of this letter, "Change of Control" shall occur if:
(I) any shareholder or group of shareholders (other than GNP) acting
jointly or in concert beneficially acquires in any transaction or
series of transactions ownership or control or direction over
more voting shares in the capital of Cott than GNP, provided such
shareholder or group beneficially owns or has control or
direction over at least 20% of such voting shares at the time of
any determination; or
(II) a majority of the individuals who serve as directors of Cott at
the commencement of any 18 month period are replaced except by
replacement directors who become directors at the initiative of
the management of Cott pursuant to a management proxy
solicitation or otherwise.
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5. TERMINATION PAYMENTS.
(A) If within either of the two year periods following the CEO Replacement
Date or a Change of Control your employment is terminated by Cott
without cause other than by reason of your death or if your position,
title, duties, responsibilities and/or reporting is changed in any
material respect, or if you voluntarily leave the employment of Cott
for Good Reason, Cott shall pay you, within 30 days following the date
of termination or change, as the case may be, an amount equal to two
times your base salary and bonuses paid to you and cash value of your
benefits and perquisites during the most recently completed twelve
calendar months prior to the date of termination.
(B) If at the end of either of the two year periods following the CEO
Replacement Date or Change of Control, you voluntarily leave the
employment of Cott other than for Good Reason, Cott shall pay you,
within 30 days following the end of such two year period, an amount
equal to your base salary and bonuses paid to you and cash value of
your benefits and perquisites during the most recently completed
twelve calendar months prior to the end of such period.
If you receive any of the termination payments contemplated by this
paragraph 5, you shall not otherwise be entitled to any other payments,
compensation or damages whatsoever resulting from the termination of your
employment.
6. CAUSE. Whenever used in this letter, "cause" means:
(A) the willful and continued failure by you substantially to perform your
duties with Cott (other than any such failure resulting from your
incapacity due to physical or mental illness or any such actual or
anticipated failure resulting from termination by you for Good Reason)
after a written demand for substantial performance is delivered to you
by the board of directors of Cott (the "Board"), which demand
specifically identifies the manner the Board believes that you have
not substantially performed your duties and you failed to correct such
failure to perform your duties within 30 days after such written
demand is delivered to you; or
(B) the willful engaging by you in conduct that is demonstrably and
materially injurious to Cott, monetarily or otherwise, and no act or
failure to act on your part shall be deemed "willful" unless done, or
admitted to be done, by you not in good faith and without reasonable
belief that your action or omission was in the best interests of Cott.
"Good Reason" shall mean the occurrence, without your express written
consent, any of the following:
(A) Inconsistent Duties - a meaningful and detrimental alteration in your
position of in the nature or status of your responsibilities from
those currently in effect;
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(B) Reduction in Remuneration - a reduction by Cott in your annual base
salary or a material adverse change in the methodology of determining
whether a bonus is payable;
(C) Relocation - the relocation of the office of Cott where you are
currently employed to a location that is more than 50 miles away from
such location, or Cott requiring you to be based more than 50 miles
away from such location (except for required travel on Cott's business
to an extent substantially consistent with your customary business
travel obligations in the ordinary course of business); and
(D) Benefits and Perquisites - the failure of Cott to continue to provide
you, in all material respects, with benefits and perquisites which are
from time to time available to other senior officers of Cott,
excluding the CEO.
7. ENTIRE AGREEMENT. This agreement constitutes the entire agreement between you
and Cott relative to the subject matter hereof.
8. GOVERNING LAW. The agreement resulting from your acceptance of this letter
shall be governed by and construed in accordance with the laws of the Province
of Ontario and federal laws of Canada applicable therein.
9. NOTICES. Wherever notice is required or desired to be given hereunder, it
shall be deemed given when physically delivered to Cott (Attention: The
Secretary) at its address on this letter (or at such other place as Cott may
notify you from time to time) and if to you at your principle residence at the
time of the giving of such notice.
10. In the event of termination, Cott will pay for 5 months of professional
outplacement services at a maximum of $50,000.
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If the foregoing accurately sets forth the terms of our understanding
relative to the subject matter hereof, please so signify by signing and
returning to the undersigned a duplicate original of this letter.
Yours very truly,
COTT CORPORATION
Per: /s/ Fraser Latta
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ACCEPTED AND AGREED TO THIS
27 day of October, 1997.
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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COTT CORPORATION
000-000 Xxxxx'x Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
PRIVATE & CONFIDENTIAL December 19, 1997
Xxxx Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxx:
Reference is hereby made to a certain letter agreement between yourself and
Cott Corporation dated October 7, 1997 (the "Agreement"), and in particular to
Section 5 thereof.
This will confirm that the reference to "the cash value of your benefits"
contained in Section 5 of the Agreement is intended to mean the cash value of
what it would have cost you to purchase benefits for yourself and your family
(other than through a group plan) which are equal to those benefits provided for
you and your family by Cott Corporation during the relevant period.
In all other respects the terms of the Agreement shall continue to apply.
Yours very truly,
COTT CORPORATION
Per: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chairman of the Human Resources,
Compensation and Corporate Governance
Committee
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May 1, 1998
Fraser Latta
Vice Chairman
Cott Corporation
000 Xxxxx'x Xxxx X, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Fraser:
RE: EMPLOYMENT AGREEMENT
In reviewing my October 7, 1997 Employment Agreement, I noticed that while
subsection 4(a) dealing with my options to all of the options, subsections 4(b)
and 4(c) only refer to my original 185,000 options but not the additional
115,000 new options. It is my understanding that it was the intention that those
two subsections should refer to all of my options and not just the 185,000
options.
In addition, my interpretation of subsection 5(a) is that, in the circumstances
mentioned in that subsection, I would receive two times my base salary, two
times bonuses paid to me and two times the cash value of my benefits and
perquisites during the most recently completed twelve calendar months prior to
the date of my termination.
I would appreciate it if you would sign below to confirm those two provisions of
my Employment Agreement.
Regards,
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
COO, North America
The foregoing is agreed to this 1st day of May, 1998.
COTT CORPORATION
By: /s/ Fraser Xxxxx
Xxxxxx Xxxxx
Vice Chairman
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September 14, 1998
Xxxx Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxx:
RE: EMPLOYMENT AND RELATED ARRANGEMENTS
This letter confirms our agreement concerning certain amendments to your
agreement dated October 7, 1997, as modified by a letter dated December 19, 1997
and as further modified by an agreement dated May 1, 1998 (collectively, the
"Original Agreement").
Pursuant to the Original Agreement, your current position is that of Co-Chief
Operating Officer of Cott Corporation, with responsibility for our North
American business. This confirms that we have agreed that, effective today, your
title is changed to Executive Vice President Cott Corporation and that you will
be the President of Cott Canada. In that role, you will have responsibility for
all aspects of Cott's Canadian beverage business and will report directly to the
President and Chief Executive Officer of Cott Corporation.
In addition to the above change in title, we have agreed to the following
changes to the Original Agreement:
1. BASE COMPENSATION - Your base compensation will be increased to $450,000
per annum.
2. BONUS COMPENSATION - Your annual bonus entitled will be increased such that
you will now have the ability to earn up to 100% of your base salary as
bonus, rather than 50%. The second to last and third to last sentences of
clause 2 of the Original Agreement, which refer to the other Co-Chief
Operating Officer of Cott Corporation, are of no further force or effect.
3. EXISTING STOCK OPTIONS - This will confirm that all of your Existing
Options and New Options (as defined in the Original Agreement) have, as a
result of a Change of Control (also as defined in the Original Agreement)
having occurred, have fully vested. Pursuant to the terms of the Cott
Corporation Common Share Option Plan, in the event that your employment is
terminated other than as a result of your death you will have 60 days from
the last day of your employment in which to exercise such Existing Options
and New Options. We agree to use our best efforts to obtain regulatory
approval to a change to the Existing Options and New Options such that in
the event that a termination payment is payable to you pursuant to clause 5
of the Original Agreement you will have a period of
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12 months from the date you cease to be an employee in which to exercise
any or all of the Existing Options and New Options. Unless and until such
regulatory approval is obtained the exercise of any such options following
your ceasing to be an employee shall continue to be governed by the terms
of our Common Share Option Plan.
4. NEW STOCK OPTION GRANT - I am pleased to advise you that the Human
Resources and Compensation Committee of the Board has approved the grant to
you of an additional 50,000 options, vesting over 3 years at 30%, 30% and
40%. Additional paper work will be provided to you shortly with respect to
these options. This new grant of stock options is subject to you signing a
confidentiality agreement in the form attached.
5. GENERAL - In all other respects, the terms and conditions of the Original
Agreement shall remain in full force and effect, unamended.
Xxxx, I am thrilled that you have agreed to stay on with me and the rest of the
"Cott Power" team as we face the challenges of the future. I am confident that
we will be successful.
If I have accurately stated the terms of our agreement, please sign and return
the enclosed duplicate original of this letter, along with the signed
confidentiality agreement.
Yours very truly,
Cott Corporation
Per: /s/ Xxxxx X. Xxxxx, III
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Xxxxx X. Xxxxx, III
President and CEO
ACCEPTED AND AGREED TO THIS 21ST DAY OF SEPTEMBER, 1998.
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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June 25, 1999
Xxxx Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxx:
RE: EMPLOYMENT AND RELATED ARRANGEMENTS
This letter confirms our agreement concerning certain amendments to your
agreement dated October 7, 1997 (the "Original Agreement"), as modified by a
letter dated December 19, 1997, as further modified by an agreement dated May 1,
1998 and as further modified by an agreement dated September 14, 1998
(collectively, the "Employment Agreement").
The Employment Agreement is hereby amended as follows:
1. Section 5(a) of the Original Agreement is amended by changing the reference
to "two years" in the first line to "three years"; and
2. Section 5(b) of the Original Agreement is amended by changing the reference
to "two years" in the first line to "three years".
In all other respects, the terms and conditions of the Employment Agreement
shall remain in full force and effect, unamended.
If I have accurately stated the terms of our agreement, please sign and return
the enclosed duplicate original of this letter.
Yours very truly,
Cott Corporation
Per: /s/ Xxxxx Xxxxxx
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ACCEPTED AND AGREED TO THIS 29TH DAY OF JUNE, 1999.
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
