EXHIBIT 10.6
Thursday, September 21, 2006
Rick Dobry
Electronic Copy
Dear Rick:
I am very pleased to offer you the position of Chief Supply and Manufacturing
Officer based in Tampa, Florida. This position will report to the Chief
Executive Officer, and your hire date will be effective October 23rd, 2006 or
any earlier date mutually agreed. This letter will outline some of the terms and
conditions of your employment with Cott Corporation. (the "Company"). Please
note that this is not a contract of employment or a promise of employment for
any specific term.
Your base salary will be $350,000 per year paid on a semi-monthly basis; you
will also receive an annual cash car allowance of $16,000 per year which is also
paid on a semi-monthly basis. Your performance evaluations and salary reviews
will generally be conducted on an annual basis and any increase would be a part
of the annual review process.
You are eligible to participate in the annual bonus plan to an amount equal to
100% (target level) of your base salary based upon the achievement of specified
goals. For 2006 the bonus will be pro-rated based on actual employment service.
The Maximum Payout under the bonus plan is two (2) times your base salary for
achievement of performance goals in excess of the target goals. Such performance
goals shall be established annually. However please note that the bonus plan is
entirely discretionary and the Company reserves in its absolute discretion the
right to terminate or amend any bonus scheme. We will guarantee the 2006
pro-rated bonus payment and 2007 full year payment at a minimum of 100% of
Target provided you are employed by the Company on December 31, 2007.
You shall be entitled to participate in the long-term incentive plans and
programs as made available from time to time to employees of a similar level
within the organization. For 2007 and subsequent years, in accordance with
current practices, PSU Grants to you are projected (without any guarantees or
commitment) to be based on an award amount equal to two times your base salary,
provided that, for greater certainty, such PSU Grants shall be subject to the
discretion and approval of the Human Resources and Compensation Committee of the
Board of Directors, which discretion shall in no way be fettered by the
provisions of this offer letter.
No later than 5th January 2007 you will be entitled to receive a Cash Award of
$650,000 (less appropriate withholdings) Upon receipt of this amount you will be
required to purchase Cott stock with a minimum of 50% of your net amount (i.e.
the amount you receive after tax and other applicable withholdings). Such stock
must be purchased within 30 calendar days of you receiving the cash award. We
are providing you with a 30 day window so that you can decide on your purchase
strategy. Please note that as a senior employee we will be required to know the
dates, amounts, values of such purchases immediately to ensure that we can meet
and file our insider reporting requirements. A member of the Legal Dept can
advise you as to the correct procedures to follow.
You will be required to hold the purchased stock until at least 31st June 2007
or until such date as you receive your 2007 long term incentive program grant.
You will be eligible for Cott's Benefit Program. Our Benefit Program includes
health, disability and life insurance benefits. You should note that our health
insurance plan does have a pre-existing illness provision, which limits the
amount payable for pre-existing illnesses for 12 consecutive months beginning on
your enrollment date. However, if you have been covered for health insurance by
your prior employer, you may have creditable prior coverage. In order to help
determine that please provide a HIPAA certificate from your prior employer.
Employee contributions are required for our Program. Once you are eligible to
participate in the Cott Cafeteria Plan (discussed below), your contributions
will be deducted from your paycheck on a pre-tax basis.
On the first day of the month following your completion of 90 days of
employment, you will be eligible to participate in Cott's Cafeteria Plan.
Benefits provided under our Cafeteria Plan are pre-tax deductions for medical
premiums, a Health Care Reimbursement Account and a Dependent Care Reimbursement
Account. If you participate in the Cafeteria Plan, payroll deductions for the
benefits you select under the plan are made on a pre-tax basis. Please review
the Summary Plan Description for additional information. Charlotte Pope
(Benefits Manager) will contact you to enroll you in the programs.
You will be entitled to participate in an executive annual health assessment
subject to a financial reimbursement capped at $5,000 per calendar year.
In addition, on the first day of a quarter following at least six months of
employment, you will be eligible for Cott's 401 (K) Savings and Retirement Plan.
You will also be eligible to participate in the Employee Share Purchase Plan
after completing ninety (90) days of employment. You are entitled to four (4)
weeks vacation. Vacation earned for 2006 will be prorated based on your date of
hire. You are encouraged to take your vacation time in the calendar year it is
earned. All earned vacation must be taken by March 31st of the year following
the one, which it is earned; otherwise it may be forfeited. If you should leave
the Company, the value of any unearned vacation taken by you will be considered
a debt to the Company. All vacation periods require the approval of your
Manager.
If your employment is terminated for any reason other than for Just Cause,
disability or death then the Company shall pay to you within 30 days of the date
of termination of employment, or if a six month delay is required to comply with
Code section 409A, on the first business day of the seventh month following the
month in which termination of employment occurred, a lump sum amount equal to
the sum of:
- An amount equal to 18 months of your annual base salary at the time of
termination of employment; and
- A Bonus payment equivalent to a twelve month period. Calculated as an
amount equal to the average of the Bonus payment for the most recent
two (2) completed fiscal years (Cap at your current Target amount)
- To the extent we may do so legally and in compliance with the
organizations benefit plans in existence from time to time, continue
medical and dental group insurance benefits (which for greater
certainty DOES NOT include short-term disability, long-term
disability, long-term care, life insurance or any other benefits) at a
level equivalent to those provided to you immediately prior to the
termination for a period of up to 18 months or until you have secured
alternative employment.
Please refer to the attached sheet for details on change of control details.
By accepting and signing this offer letter you agree that the payments outlined
above shall be in full satisfaction of all terms of termination of your
employment, including termination pay and severance pay pursuant to the
applicable employment standards or other legislation as amended from time to
time and that you shall not be
entitled to any further termination payments, damages or compensation
whatsoever. As condition precedent to any termination payment outlined above you
agree to deliver to the Company prior to any such payment, a full and final
release from all actions or claims in connection therewith in favor of the
Company, its affiliates, subsidiaries, directors, officers, employees and
agents, in the form satisfactory to the Company, acting reasonably.
Lastly Cott will provide you with relocation assistance to Tampa, Florida. The
attached document outlines the relocation package provided to you by Cott and
will also include property management services for your current home for a
period of no more than 3 months.
Prior to employment Cott requires successful completion of our pre-employment
processing. This includes a background investigation of your qualifications and
references.
PLEASE SEE THE ENCLOSED CHECKLIST OF FORMS AND DATES THE FORMS ARE DUE TO BE
TURNED IN TO OUR CHIEF PEOPLE OFFICER.
To comply with the Immigration Reform and Control Act of 1986, the Company must
verify your identity and authorization to work in the United States. Therefore,
please bring with you on your first day, either one original document from the
list A or one original document from the list B and one original document from
the list C. Acceptable documents are listed on the backside of the enclosed INS
Form I-9. If you have any difficulty in this regard, please call me immediately.
Upon acceptance of this offer, you acknowledge and agree that Cott Corporation
has the right to disclose confidential information regarding you to any third
party as required by law.
Rick, I am excited about having you join us. You have a lot to contribute to our
company. I know that you can look forward to joining a dynamic and challenging
organization with rewarding career opportunities. PLEASE INDICATE YOUR
ACCEPTANCE OF THIS OFFER BY RETURNING ONE SIGNED ORIGINAL OF BOTH THE OFFER
LETTER AND CONFIDENTIALITY AGREEMENT TO COTT BEVERAGES, ATTN: BEVERLY WEAVER, HR
ASSISTANT, 4211 W. BOY SCOUT BLVD., SUITE 290, TAMPA, FL 33607.
Yours truly,
Abilio Gonzalez
Chief People Officer
Copy to: Sher Zaman
Charlotte Pope
I accept this offer of employment and the terms identified herein.
/s/ Rick Dobry September 22, 2006
- ------------------------------------- DATE
RICK DOBRY
TERMINATION UPON A CHANGE OF CONTROL.
If, upon a Change of Control, or as a consequence of the Change of Control prior
to the Change of Control, or within twelve (12) months following a Change of
Control, your employment is terminated without Just Cause or if you terminate
your employment for Good Reason, you shall be entitled to the following
payments;
- An amount equal to twenty four (24) months of your annual base salary
at the time of termination of employment; and
- A Bonus payment equivalent to a twenty four (24) month period.
Calculated as an amount equal to the average of the Bonus payment for
the most recent two (2) completed fiscal years.
Plus you shall be entitled to have all unvested rights and entitlements under
the Corporation's Performance Share Unit Plan, Executive Incentive Share
Purchase Plan and Stock Appreciation Rights Plan, accelerated under such plans
such that such rights and entitlements shall fully vest to the maximum extent
permitted under such plans.
For the purposes of this Agreement, a "Change of Control" shall mean the
occurrence of any one or more of the following:
(i) a take-over bid (within the meaning of the Securities Act (Ontario)), other
than a take-over bid exempt from the requirements of Part XX of such Act,
pursuant to subsections 93(1)(b) or (c) thereof, is completed in respect of
more than twenty percent (20%) of the Corporation's common shares and the
majority of the members who were members of the Board of Directors of the
Corporation prior to completion of such take-over bid are replaced within
sixty (60) days following the completion of such take-over bid;
(ii) any of the following occur: (A) any consolidation, merger or amalgamation
of the Corporation with or into any other corporation whereby the voting
shareholders of the Corporation immediately prior to such event receive
less than fifty percent (50%) of the voting shares of the consolidated,
merged or amalgamated corporation; (B) a sale by the Corporation of all or
substantially all of the Corporation's undertakings or assets; (C) a
proposal by or with respect to the Corporation being made in connection
with a liquidation, dissolution or winding up of the Corporation; (D) any
reorganization, reverse stock split or recapitalization of the Corporation
that would result in a Change of Control as otherwise defined herein; or
(E) any transaction or series of related transactions having, directly or
indirectly, the same effect as any of the foregoing.
The determination of whether payments made upon a Change of Control constitute a
parachute payment, as provided in (i) above, and, if so, the amount to be paid
to you shall be made by an independent auditor (the "Auditor") jointly selected
by the Corporation and the Executive and paid by the Corporation. The Auditor
shall be a nationally recognized United States public accounting firm. If you
and the Corporation cannot agree on the firm to serve as the Auditor, then you
and the Corporation shall each select one accounting firm and those two firms
shall jointly select the accounting firm to serve as the Auditor.
Notwithstanding anything to the contrary, however, in the event that the
foregoing parachute payment determination shall be challenged by the Internal
Revenue Service, the final resolution of such challenge (by way of settlement or
court decision) shall govern for purposes of computing any applicable limitation
under (i) above, and you shall repay to the Corporation any adjustment amount
that results from such recomputation, together with interest on such adjustment
amount computed at the applicable Federal rate as of the date of the original
payment to the you under (i) above.
Termination for Good Reason after a Change of Control
You may terminate your employment at any time for Good Reason upon the
occurrence of any of the following;
i. A material diminution in your title or duties or assignment to you of
materially inconsistent duties;
ii. A reduction in your current base salary or target bonus opportunity as
a percentage of base salary except for reductions applicable to all
senior management;
iii. A change in the reporting structure so that you no longer report
directly to the CEO
iv. Relocation of your principal place of employment to a location other
than Tampa, Florida area unless such relocation is effected at the
request or approval of yourself
v. A material breach by Cott of any provisions of the offer letter; or
vi. The failure of Cott to obtain the assumption in writing of its
obligation to perform this offer letter by any successor to all or
substantially all of the business or assets of the company within
fifteen (15) days after a merger, consolidation, sale, or similar
transaction unless you have personally received the opinion of counsel
to Cott that such transaction does not have an adverse legal effect on
the your rights hereunder.
There shall be no termination for Good Reason without written notice from you
describing the basis for the termination and the company having a reasonable
period to cure.
Tuesday, October 24, 2006
FOR THE ATTENTION OF: Rick Dobry
Dear Rick:
As I have discussed with you we need you to sign our Confidentiality / Non
Compete Agreement which we have in place for all C-Executives. In addition I
need to reconfirm that we use the title of Chief Manufacturing and Supply Chain
Officer instead of Chief Supply and Manufacturing Officer which was stated in
your offer letter.
Please sign below to indicate that you have received this letter and also
initial each page of the attachment and return it to Sher Zaman at Queens Quay
as soon as possible. If you have any questions or concerns, by all means please
give me a call.
Yours truly,
/s/ Abilio Gonzalez
- -------------------------------------
Abilio Gonzalez
Chief People Officer
AGREED:
/s/ Rick Dobry October 26, 2006
- ------------------------------------- DATE
RICK DOBRY
APPENDIX
1. CONFIDENTIALITY.
(a) The Executive acknowledges that in the course of carrying out, performing
and fulfilling his obligations to the Corporation, the Executive will have
access to and will be entrusted with information that would reasonably be
considered confidential to the Corporation or its Affiliates, the disclosure of
which to competitors of the Corporation or its Affiliates or to the general
public, will be highly detrimental to the best interests of the Corporation or
its Affiliates. Such information includes, without limitation, trade secrets,
know-how, marketing plans and techniques, cost figures, client lists, software,
and information relating to employees, suppliers, customers and persons in
contractual relationship with the Corporation. Except as may be required in the
course of carrying out his duties hereunder, the Executive covenants and agrees
that he will not disclose, for so long as he is employed by the Corporation or
its Affiliates or at any time thereafter, any such information to any person or
entity, other than to the directors, officers, employees or agents of the
Corporation that have a need to know such information, nor shall the Executive
use or exploit, directly or indirectly, such information for any purpose other
than for the purposes of the Corporation nor will he disclose nor use for any
purpose, other than for those of the Corporation or its Affiliates any other
information which he may acquire during his employment with respect to the
business and affairs of the Corporation or its Affiliates. Notwithstanding all
of the foregoing, the Executive shall be entitled to disclose such information
if required pursuant to a subpoena or order issued by a court, arbitrator or
governmental body, agency or official, provided that the Executive shall first
have:
(i) notified the Corporation;
(ii) consulted with the Corporation on the advisability of taking steps to
resist such requirements; and
(iii) if the disclosure is required or deemed advisable, cooperated with
the Corporation in an attempt to obtain an order or other assurance (at the
Corporation's expense) that such information will be accorded confidential
treatment.
(b) For the purposes of this Agreement, (i) "Affiliate" shall mean, with respect
to any person or entity (herein the "first party"), any other person or entity
that directs or indirectly controls, or is controlled by, or is under common
control with, such first party. The term "control" as used herein (including the
terms "controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to: (A) vote fifty percent (50%) or more of
the outstanding voting securities of such person or entity, or (B) otherwise
direct or significantly influence the management or policies of such person or
entity by contract or otherwise; (ii) "Executive" shall mean Rick Dobry; and (C)
"Corporation" shall mean Cott Corporation.
2. INVENTIONS. The Executive acknowledges and agrees that all right, title and
interest in and to any information, trade secrets, advances, discoveries,
improvements, research materials and data bases (collectively, "discoveries")
made or conceived by the Executive prior to or during his employment relating to
the business or affairs of the Corporation, shall belong to the Corporation. In
connection with the foregoing, the Executive agrees to execute any assignments
and/or acknowledgements as may be requested by the Corporation from time to
time.
3. CORPORATE OPPORTUNITIES. Any business opportunities related to the business
of the Corporation which become known to the Executive during his employment
hereunder must be fully disclosed and made available to the Corporation by the
Executive, and the Executive agrees not to take or attempt to take any action if
the result would be to divert from the Corporation any opportunity which is
within the scope of its business.
4. RESTRICTIVE COVENANTS.
(a) The Executive will not at any time, without the prior written consent of the
Corporation, during the term of the Executive's employment by the Corporation or
its Affiliates and for a period of eighteen (18) months after the termination of
the Executive's employment (regardless of the reason for such termination),
either individually or in partnership, jointly or in conjunction with any person
or persons, firm, association, syndicate, company or corporation, whether as
agent, shareholder, employee, consultant, or in any manner whatsoever, directly
or indirectly:
(i) anywhere in the Territory, engage in, carry on or otherwise have any
interest in, advise, lend money to, guarantee the debts or obligations of,
permit the Executive's name to be used in connection with any business
which is competitive to the Business or which provides the same or
substantially similar services as the Business; and/or
(ii) for the purpose of competing with any business of the Corporation,
solicit, interfere with, accept any business from or render any services to
anyone who is a client or a prospective client of the Corporation or any
Affiliate at the time the Executive ceased to be employed by the
Corporation or who was a client during the twelve (12) months immediately
preceding such time; and/or
(iii) solicit or offer employment to any person employed or engaged by the
Corporation or any Affiliate at the time the Executive ceased to be
employed or engaged by the Corporation or who was an employee or engaged
during the twelve (12) month period immediately preceding such time.
(b) For the purposes of the Agreement:
(i) "Territory" shall mean the countries in which the Corporation and its
subsidiaries conduct the Business;
(ii) "Business" shall mean the business of manufacturing, selling or
distributing carbonated carbonated soft drinks, juices, water and other
non-alcoholic beverages to the extent such other non-alcoholic beverages
contribute, or are contemplated or projected to contribute, materially to
the profits of the Corporation at the time of the Executive's termination
of employment.
(c) Nothing in this Agreement shall prohibit or restrict the Executive from
holding or becoming beneficially interested in up to one percent (1%) of any
class of securities in any corporation provided that such class of securities
are listed on a recognized stock exchange.
4. INSIDER POLICIES. The Executive will comply with all applicable securities
laws and the Corporation's Insider Trading Policy and Insider Reporting
Procedures (copies of which have been provided to the Executive) in respect of
securities of the Corporation issued or acquired by the Executive.
6. NON-DISPARAGEMENT. The Executive shall not disparage the Corporation or any
of its affiliates, directors, officers, employees, or other representatives in
any manner and shall in all respects avoid any negative criticism of the
Corporation, provided that nothing herein shall be construed to prevent or
restrict the Executive from making any truthful statements in response to
comments about the Executive made by the Corporation and provided further that
nothing contained in this Section 6 shall in any way derogate from the
Executive's obligation of confidentiality owed to the Corporation under Section
1 hereof or otherwise.
7. GENERAL PROVISIONS.
(a) The Executive acknowledges and agrees that in the event of a breach of the
covenants, provisions and restrictions in this Appendix, the Corporation's
remedy in the form of monetary damages will be inadequate and that the
Corporation shall be and is hereby authorized and entitled, in addition to all
other rights and remedies available to it, to apply for and obtain from a court
of competent jurisdiction interim and permanent injunctive relief and an
accounting of all profits and benefits arising out of such breach.
(b) The parties acknowledge that the restrictions in this Appendix are
reasonable in all of the circumstances and the Executive acknowledges that the
operation of restrictions contained in this Appendix may seriously constrain his
freedom to seek other remunerative employment. If any of the restrictions are
determined to be unenforceable as going beyond what is reasonable in the
circumstances for the protection of the interests of the Corporation but would
be valid, for example, if the scope of their time periods or geographic areas
were limited, the parties consent to the court making such modifications as may
be required and such restrictions shall apply with such modifications as may be
necessary to make them valid and effective.
(c) Each and every provision of Sections 1 through 7 of this Appendix shall
survive the termination of the Executive's employment (regardless of the reason
or such termination).