<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [X]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
NAME OF COMPANY
Cott Corporation
NAME OF COMPANY
Bowne
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
COTT CORPORATION
PROXY CIRCULAR
AS OF MARCH 20, 2000
INFORMATION REGARDING SOLICITATION OF PROXIES
SOLICITATION OF PROXIES
This Proxy Circular is furnished in connection with the solicitation of
proxies by the Management and the Board of Directors of Cott Corporation (the
"Company") for use at the Annual Meeting of shareowners of the Company to be
held at 9:30 a.m. on May 3, 2000 at the du Maurier Theatre Centre, 231 Queen's
Quay West, Toronto, Ontario, Canada. The purposes of the Annual Meeting are set
forth in the notice of meeting accompanying this Proxy Circular. The
solicitation will be made primarily by mail but proxies may be solicited
personally or by telephone by regular employees of the Company. The cost of the
solicitation of proxies will be borne by the Company.
Shareowner proposals for the Company's 2001 Annual Meeting of shareowners
must be received at the Company's principal executive office, 207 Queen's Quay
West, Suite 340, Toronto, Ontario, Canada M5J 1A7 (the "Company's Executive
Office"), Attention: Secretary, at least ninety days before May 3, 2001, to be
considered for inclusion in the Company's proxy statement and the form of proxy
for such meeting.
All dollar amounts in this Proxy Circular are in United States dollars,
unless otherwise stated.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are directors or officers
of the Company. EACH SHAREOWNER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT
BE A SHAREOWNER), OTHER THAN THE INDIVIDUALS NAMED IN THE ENCLOSED FORM OF
PROXY, TO REPRESENT SUCH SHAREOWNER AT THE MEETING. Such right may be exercised
by striking out the names of the persons designated in the form of proxy and by
inserting such other person's name in the space provided or by completing
another proper form of proxy, and, in either case, delivering the form of proxy
to the Secretary of the Company, c/o Montreal Trust Company, 1800 McGill College
Avenue, Montreal, Quebec, Canada, H3A 3K9, before the meeting or giving it to
the Chairman of the meeting at the meeting or any adjournment of the meeting.
A shareowner executing a proxy may revoke it by instrument in writing
executed by the shareowner or by his duly authorized attorney or, if the
shareowner is a corporation, under its corporate seal or by a duly authorized
officer or attorney of the corporation, and depositing it either at the
Company's Executive Office (Attention: Secretary), at any time up to and
including the last business day preceding the day of the meeting, or any
adjournment of the meeting, or, as to any matter on which a vote has not already
been cast pursuant to the authority conferred by the proxy, by depositing such
instrument with the Chairman of the meeting at the meeting or any adjournment of
the meeting. A shareowner may also revoke the proxy in any manner permitted by
law.
1
<PAGE> 3
EXERCISE OF DISCRETION OF PROXIES
The shares represented by properly executed proxies received by management
will be voted or withheld from voting in accordance with the directions of the
shareowners appointing them. IN THE ABSENCE OF ANY DIRECTION TO THE CONTRARY,
SUCH SHARES WILL BE VOTED: (A) FOR THE ELECTION OF DIRECTORS; AND (B) FOR THE
APPOINTMENT OF AUDITORS AND THE AUTHORIZATION OF THE DIRECTORS TO FIX THEIR
REMUNERATION, IN EACH CASE AS DESCRIBED IN THIS PROXY CIRCULAR. The enclosed
form of proxy confers discretionary authority upon the persons named therein
with respect to matters not specifically mentioned in the notice of meeting but
which may properly come before the meeting or any adjournment of the meeting and
with respect to amendments or variations of matters identified in the notice of
meeting. Management of the Company knows of no such amendments, variations or
other matters to come before the meeting other than the matters referred to in
the notice of meeting and routine matters incidental to the conduct of the
meeting. If any further or other business is properly brought before the
meeting, it is intended that such other business will be voted upon in such
manner as the person appointed as proxy then considers to be proper.
VOTING SHARES AND PRINCIPAL OWNERS THEREOF
As of March 20, 2000, 59,837,392 Common Shares and 4,000,000 Second
Preferred Shares, Series 1 ("Preferred Shares") of the Company were outstanding
and entitled to be voted at the meeting of shareowners. Each Common Share
carries the right to one vote at the meeting. Each Preferred Share carries the
right to vote on an as converted basis. As of March 20, 2000, each Preferred
Share is entitled to 1.3896774 votes per share. Owners of Common Shares and
Preferred Shares as of record at the close of business on March 28, 2000 will be
entitled to vote at the meeting, except to the extent that ownership of any such
shares has been transferred after that date and the transferee of those shares
establishes proper ownership and demands, not later than ten days before the
meeting, to be included in the list of shareowners eligible to vote at the
meeting, in which case, such transferee is entitled to vote such shares at the
meeting.
The following table sets forth the persons who, based upon publicly filed
and available documents, as of March 20, 2000, beneficially owned or exercised
control or direction over shares carrying more than 5% of the votes attached to
each class of voting shares of the Company, the approximate number of such
shares and the percentage of shares of each class of shares of the Company
entitled to vote at the meeting represented by the number of shares so owned,
controlled or directed:
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<PAGE> 4
TABLE OF VOTING SHARES AND PRINCIPAL OWNERS THEREOF
<TABLE>
<CAPTION>
PERCENTAGE OF
COMBINED COMMON
NUMBER OF COMBINED SHARES AND
COMMON SHARES AND PREFERRED SHARES
NATURE OF NUMBER AND PERCENTAGE PREFERRED SHARES (ASSUMING EXERCISE
NAME AND ADDRESS OWNERSHIP CLASS OF SHARES OF CLASS (ASSUMING EXERCISE OF OF OPTIONS AND
OR CONTROL OPTIONS AND CONVERSION CONVERSION OF
OF PREFERRED SHARES PREFERRED SHARES
HELD BY THE SHAREOWNER) HELD BY THE
SHAREOWNER)
- ------------------------- ---------- -------------------- ------- ----------------------- ----------------
<S> <C> <C> <C> <C> <C>
Thomas H. Lee Equity Fund Direct, 8,030,119 Common 13.4% 16,508,887 24.2%
IV, L.P. (1) (2) (5) Beneficial 3,212,047 Preferred 80.3%
75 State Street Ownership
26th Floor
Boston, MA
U.S.A. 02109
THL Equity Advisors IV, Indirect 11,457,903 Common 28.4% 21,583,694 30.9%
LLC(2) (3) (5) Control or 3,835,996 Preferred 95.9%
75 State Street Beneficial
26th Floor Ownership
Boston, MA
U.S.A. 02109
Thomas H. Lee(2) (4)(5) Indirect 11,867,912 Common 29.1% 22,426,621 31.9%
75 State Street Control or 4,000,000 Preferred 100%
26th Floor Beneficial
Boston, MA Ownership
U.S.A. 02109
Legg Mason, Inc. (6) Indirect 6,936,512 Common 11.6% 6,936,512 11.6%
100 Light Street Control or
P.O. Box 1476 Beneficial
Baltimore, MD Ownership
U.S.A. 21203-1476
Nancy Pencer, Stephen Indirect 4,079,808 Common 6.8% 4,079,808 6.8%
Halperin and Fraser Latta
as trustees of the Nancy
Pencer Spouse Trust(7)
Toronto, Ontario
</TABLE>
____________
[FN]
(1) Thomas H. Lee Equity Fund IV, L.P. (the "Fund") also has options to
purchase 4,015,059 Common Shares pursuant to an option agreement in favor
of the THL Entities (as defined below) from the Family Shareholders (as
defined below).
(2) Pursuant to an agreement dated November 3, 1999 between the Company and
THL, THL has, on its own behalf and on behalf of related and affiliated
entities to THL (including Advisors and Equity Fund) (the "THL Entities"),
granted to the Chairman of the Board of the Company a proxy to vote that
number of voting shares of the Company to ensure that at no time will the
THL Entities have voting rights in respect of more than 35% of the
outstanding voting shares of the Company, calculated on a fully diluted
basis. THL, on its own behalf and on behalf of the THL Entities, has also
agreed not to exercise any options to acquire additional Common Shares of
the Company if, after giving effect to such exercise, the THL Entities
would have the power to vote or hold more than 35% of the outstanding
voting shares of the Company, calculated on a fully diluted basis.
(3) THL Equity Advisors IV, LLC ("Advisors") may be deemed to have indirect
beneficial ownership of 9,089,991 Common Shares and 3,835,996 Preferred
Shares owned by Thomas H. Lee Equity Fund IV, L.P. ("Equity Fund"), Thomas
H. Lee Foreign Fund IV, L.P. ("Foreign Fund") and Thomas H. Lee Foreign
Fund IV-B, L.P. ("Foreign Fund B") in the aggregate, as the general partner
of each of the foregoing entities. Advisors, pursuant to a voting agreement
with Granite 95 Holdings, Inc., Granite LB Limited, 151797 Canada Inc. and
151793 Canada Inc. (collectively the "Family Shareholders") has the right
to vote 4,467,912 Common Shares owned by such entities and thus may be
deemed to have an indirect beneficial ownership of such shares. Advisors,
pursuant to a Stockholders Agreement with Paine Webber Capital and PW
Partners 1997, L.P. (the "PW Entities") has the right to vote 500,000
Common Shares and 200,000 Preferred Shares owned by the PW Entities, and
thus may be deemed to have indirect beneficial ownership of such shares. As
a result of the foregoing relationships, Advisors may also be deemed to
have indirect beneficial ownership of options to purchase 4,794,995 Common
Shares.
</FN>
3
<PAGE> 5
_______________
[FN]
(4) Thomas H. Lee ("THL") may be deemed to have an indirect beneficial
ownership of 9,089,991 Common Shares and 3,835,996 Preferred Shares owned
by Equity Fund, Foreign Fund and Foreign Fund B as a result of serving as
the General Director of Advisors, the general partner of such entities. THL
may also be deemed to have indirect beneficial ownership of 4,467,912
Common Shares owned by the Family Shareholders as a result of being General
Director of Advisors, which in turn has the right to vote the Common Shares
owned by the Family Shareholders. THL may also be deemed to have indirect
beneficial ownership of 140,252 Common Shares and 56,104 Preferred Shares
owned by THL Coinvestors III-A, LLC, of which THL serves as the Managing
Member. THL may also be deemed to have an indirect beneficial ownership of
52,319 Common Shares and 20,928 Preferred Shares owned by Thomas H. Lee
Charitable Investment Partnership of which THL serves as general partner.
As a result of the foregoing relationships, THL may also be deemed to have
indirect beneficial ownership of options to purchase 5,000,000 Common
Shares.
(5) The number and percentage of Common Shares, Preferred Shares and combined
Common Shares and Preferred Shares held by each of the Fund, Advisors and
THL are calculated, in part, by aggregating the Common Shares, Preferred
Shares and options (pursuant to the Voting Agreement with the Family
Shareholders) exercisable into Common Shares owned by them or over which
they exercise control or direction. Due to various ownership, contractual
and management relationships among the Fund, Advisors and THL described
above, the number and percentage of shares held by each of them is
partially duplicative and should therefore be considered individually and
not cumulatively.
(6) Direct, registered ownership is held by the following subsidiaries of Legg
Mason, Inc.: Legg Mason Fund Adviser, Inc., Legg Mason Wood Walker, Inc.,
Legg Mason Capital Management, Inc., and Legg Mason Trust, fsb.
(7) Nancy Pencer, Fraser Latta and Stephen Halperin, as trustees of the Nancy
Pencer Spouse Trust (the "Spouse Trust") have indirect control over
4,079,808 Common Shares through the Spouse Trust's holdings of various
private corporations; 3,279,808 of these shares are subject to the Voting
Agreement discussed in footnote 5 above. The Spouse Trust may also be
deemed to have control or direction over 2,400,000 Common Shares owned by
Penbro Limited Partnership of which the Spouse Trust indirectly owns and
controls the general partner; 800,000 of these shares are included in the
4,079,808 total above, representing the Spouse Trust's indirect one-third
interest as a limited partner of Penbro Limited Partnership.
</FN>
QUORUM
A quorum for the transaction of business at the meeting is at least two
persons personally present, each being a shareowner entitled to vote at the
meeting or a duly appointed proxy for an absent shareowner so entitled, and
persons holding or representing not less than one-third of the total number of
votes attaching to the shares of the Company entitled to vote at the meeting.
ELECTION OF DIRECTORS
Unless such authority is withheld, the persons named in the enclosed form
of proxy intend to vote for the election of the eleven nominees to the Board of
Directors whose names are set forth below. All of the nominees are now members
of the Board of Directors and have been since the dates indicated. Management
does not contemplate that any of the nominees will be unable to serve as a
director but, if that should occur for any reason, the persons named in the
enclosed form of proxy reserve the right to vote for one or more other nominees
in their discretion, unless the shareowner has specified in the proxy that such
shareowner's shares are to be withheld from voting in the election of directors.
Each director elected will hold office until the next annual election of
directors, unless his term of office ends earlier in accordance with the
by-laws.
As of March 20, 2000, the executive officers and directors, as a group (24
individuals) beneficially own 4,720,645 Common Shares (7.61% of Common Shares
outstanding) and 86,972 Preferred Shares (3.02% of Preferred Shares outstanding)
(including for purposes of calculating Common Shares, the Common Shares
underlying the Preferred Shares and options to acquire beneficial ownership of
2,067,670 Common Shares that are vested or will vest on or before May 19, 2000).
The figures in this paragraph include the shares reported below with respect to
each of the nominees and the Named Executive Officers and should be read in
conjunction with the footnotes to such disclosure.
The following table and the notes thereto set forth the name and age of
each director, each of whom is a nominee, all major positions and offices with
the Company presently held by such person, the year in which he became a
director of the Company, the number of Common Shares and Preferred Shares of the
Company beneficially owned by him or over which he exercises control or
direction as of March 20, 2000 (determined in accordance with the immediately
preceding paragraph) and the names of those public companies of which he is also
a director. Each nominee has been engaged in the occupation or employment
described immediately next to his name for more than 5 years, except where
indicated.
4
<PAGE> 6
TABLE OF DIRECTORS
<TABLE>
<CAPTION>
PREFERENCE
MAJOR POSITIONS AND OFFICES COMMON SHARES SHARES PERCENTAGE
NAME (AND AGE) WITH THE COMPANY AND DIRECTOR BENEFICIALLY OWNED, PERCENTAGE BENEFICIALLY OWNED OF CLASS
PRINCIPAL OCCUPATION SINCE CONTROLLED OR OF CLASS CONTROLLED OR
DIRECTED(1) DIRECTED(1)
-------------- -------------------- -------- ------------------- ---------- ------------------ --------
<S> <C> <C> <C> <C> <C> <C>
Colin J. Adair (2) Director; Director, Merrill 1986 184,900 (2) 0.31% - -
(57) Lynch Canada, Inc.
(investment dealer)
John Bennett Director; Chief Executive 1998 10,000 0.02% - -
(54) Officer, Benvest Capital Inc.
(merchant bank) (3)
C. Hunter Boll(4) Director; Principal Managing 1998 447,020 (6) 0.74% 86,972 (6) 2.17%
(44) Director, Thomas H. Lee
Partners, L.P. (securities
investment partnership) (5)
Serge Gouin Chairman of the Company; Vice 1986 277,650 (7) 0.46% - -
(57) Chairman, Salomon Smith
Barney Canada, Inc.
(investment dealer) (7)
Thomas M. Hagerty(4) Director; Principal Managing 1998 447,020 (6) 0.74% 86,972 (6) 2.17%
(37) Director, Thomas H. Lee
Partners, L.P. (securities
investment partnership) (8)
Stephen H. Halperin(4)(9) Director; Partner, Goodman 1992 45,000 0.08% - -
(50) Phillips & Vineberg (law
firm) (10)
David V. Harkins(4) Director; Principal Managing 1998 447,020 (6) 0.74% 86,972 (6) 2.17%
(58) Director, Thomas H. Lee
Partners, L.P. (securities
investment partnership) (11)
True H. Knowles Director; Corporate Director 1996 85,000 (12) 0.14% - -
(63)
Fraser D. Latta(9) Vice-Chairman of the Company; 1991 1,434,066 (13) 2.34% - -
(45) Corporate Director(13)
Donald G. Watt Director; Chairman, 1992 21,628 0.04% - -
(64) The Watt Group Inc.
(marketing and design company)
Frank E. Weise III Director; President and Chief 1998 1,149,794 (14) 1.89% - -
(55) Executive Officer of the
Company
</TABLE>
5
<PAGE> 7
(1) The information as to shares of each nominee beneficially owns or over
which he exercises control or direction, not being within the knowledge of
the Company, has been furnished by the nominees.
(2) Prior to a company merger that took place on September 18, 1998, Mr. Adair
held the position of Senior Vice President and Resident Director at Midland
Walwyn, Inc. Includes the right to acquire an additional 50,000 Common
Shares of the Company on or before May 19, 2000 pursuant to the exercise of
options granted under the Company's Common Share Option Plan.
(3) Mr. Bennett is a director of Benvest Capital Inc. and CMN International
Inc.
(4) Pursuant to an agreement between the Company and the THL Entities, the
Company has agreed to cause to be nominated for election to the board of
directors up to four nominees of the THL Entities. Messrs. Halperin, Boll,
Hagerty and Harkins are the nominees of the THL Entities.
(5) Mr. Boll is a director of Big V Supermarkets, Inc., United Industries
Corporation, TransWestern Publishing LP, Freedom Securities Corp. and
Metris Companies, Inc.
(6) Held indirectly through THL-Coinvestors III-B, LLC. Messrs. Boll, Hagerty
and Harkins disclaim beneficial ownership of such shares except to the
extent of their pecuniary interest in THL-Coinvestors III-B, LLC. For the
purposes of calculating the number of Common Shares beneficially owned,
each Preferred Share held is assumed to have been converted into Common
Shares and each option held is assumed to have been exercised. Each
Preferred Share has been assumed to have been converted into 1.3896774
Common Shares.
(7) Mr. Gouin is a director of Astral Communications Inc., Cossette
Communication Group Inc., Onex Corporation, Siemens Canada Limited and Toon
Boom Technologies Inc. Includes the right to acquire an additional 50,000
Common Shares of the Company on or before May 19, 2000 pursuant to the
exercise of options granted under the Company's Common Share Option Plan.
(8) Mr. Hagerty is a director of Metris Companies, Inc., Freedom Securities
Corp. and Syratech Corporation.
(9) Messrs Halperin and Latta, together with Nancy Pencer, serve as trustees of
the Spouse Trust which has indirect control over 4,079,808 Common Shares
through the Spouse Trust's holdings of various private corporations;
3,279,808 of these shares are subject to the Voting Agreement. The Spouse
Trust may also be deemed to have control or direction over 2,400,000 Common
Shares owned by Penbro Limited Partnership, of which the Spouse Fund
indirectly owns and controls the general partner; 800,000 of these Common
Shares, representing the Spouse Trust's indirect one-third interest as a
limited partner of Penbro Limited Partnership, are included in the
4,079,808 total above.
(10) Mr. Halperin is a director of AT & T Canada Inc.
(11) Mr. Harkins is a director of First Security Services Corp., Conseco, Inc.,
Fisher Scientific International, Inc., Freedom Securities Corp., Metris
Companies, Inc., Stanley Furniture Company, Inc. and Syratech Corporation.
(12) Includes the right to acquire an additional 75,000 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
(13) Mr. Latta is a director of The Rose Corporation. Includes the right to
acquire an additional 50,000 Common Shares of the Company on or before May
19, 2000 pursuant to the exercise of options granted under the Company's
Common Share Option Plan.
(14) Includes the right to acquire an additional 913,901 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
APPOINTMENT OF AUDITORS
Unless such authority is withheld, the persons named in the enclosed form
of proxy intend to vote at the annual meeting of shareowners for the appointment
of PricewaterhouseCoopers LLP, Chartered Accountants, 145 King Street West,
Toronto, Ontario, M5H 1V3, as auditors of the Company to hold office until the
close of the next annual meeting of shareowners, and to authorize the directors
of the Company to fix their remuneration.
One or more representatives of PricewaterhouseCoopers LLP will be present
at the meeting, will have an opportunity to make a statement as he or she may
desire and will be available to respond to appropriate questions.
6
<PAGE> 8
INDEBTEDNESS OF DIRECTORS AND OFFICERS
As of March 20, 2000, the aggregate indebtedness to the Company and its
subsidiaries of all officers, directors and employees of the Company not entered
into in connection with the purchase of securities of the Company or any of its
subsidiaries was (Cdn.) $457,372.
The particulars of certain of such indebtedness are set out below(1):
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION INVOLVEMENT OF COMPANY LARGEST AMOUNT OUTSTANDING AMOUNT OUTSTANDING AS AT
OR SUBSIDIARY DURING 1999 (CDN. $) MARCH 20, 2000 (CDN. $)
--------------------------- ---------------------- -------------------------- ------------------------
<S> <C> <C> <C>
Paul Richardson Loan from Company $220,000 $220,000(2)
Executive Vice President
Global Procurement and
Innovation
</TABLE>
(1) For US regulatory purposes, separate disclosure is required for executive
officers and directors, and members of their immediate families, who are
indebted to the Company for amounts in excess of $60,000. For Canadian
regulatory purposes, separate disclosure is required for any director,
executive officer or senior officer who is indebted to the Company for an
amount in excess of (Cdn.) $25,000, which is not considered routine
indebtedness. Routine indebtedness includes loans that are fully secured by
a mortgage against the debtor's residence.
(2) The loan is partially secured against Common Shares of the Company, is
repayable on demand and bears a zero rate of interest.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Seven of the directors, Colin J. Adair, W. John Bennett, C. Hunter Boll,
Serge Gouin, Thomas M. Hagerty, David V. Harkins and True Knowles are unrelated
and outside directors, as they are neither members of management nor possess any
interest, business or other relationship (other than interests and relationships
arising from shareholdings) which is capable of inhibiting the performance of
their fiduciary duties to the Company. Stephen H. Halperin is an outside
director but, as a partner in a law firm which provides ongoing legal services
to the Company, may be considered to be a related director. Fraser D. Latta is
an unrelated and outside director but was (prior to August 1998) a member of
senior management of the Company. Donald G. Watt is an outside director but, as
Chairman of The Watt Group Inc., which has a 10 year creative services agreement
with the Company, may be considered to be a related director. Frank E. Weise is
a related inside director as he is an employee and officer of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Act"), and
regulations of the Securities and Exchange Commission ("SEC") thereunder require
the Company's executive officers and directors and persons who beneficially own
more than 10% of the Company's Common Shares, as well as certain affiliates of
such persons, to file initial reports of ownership and monthly transactions
reports covering any changes in ownership with the SEC and the National
Association of Securities Dealers. Executive officers, directors and persons
owning more than 10% of the Company's Common Shares are required by SEC
regulations to furnish the Company with all such reports they file. The Company
became a domestic issuer under United States securities laws after the end of
its fiscal year ending January 1, 2000. Accordingly, the filing requirements in
Section 16(a) of the Act were not applicable to the Company's executive
officers, directors and owners of more than 10% of the Company's Common Shares
in that fiscal year.
7
<PAGE> 9
EXECUTIVE SHARE OWNERSHIP
The following table sets forth information concerning the beneficial
ownership of Common Shares as of March 20, 2000 in respect of each of the
individuals who were at January 1, 2000 the Chief Executive Officer and the
other four most highly compensated executive officers (the "Named Executive
Officers") of the Company and its subsidiaries:
<TABLE>
<CAPTION>
NAME, AGE AND PRINCIPAL POSITION COMMON SHARES
BENEFICIALLY OWNED
-------------------------------- -------------
<S> <C>
Frank E. Weise III (55)
President and Chief Executive Officer 1,149,794(1)
Mark Benadiba (46)
Executive Vice President, 380,000(2)
President, Cott Beverages Canada
David G. Bluestein (54)
Executive Vice President, 162,500(3)
President, Cott Beverages USA
Paul R. Richardson (43)
Executive Vice President, 136,000(4)
Global Procurement & Innovation
Raymond P. Silcock (49)
Executive Vice President and 120,000(5)
Chief Financial Officer
</TABLE>
(1) Includes the right to acquire an additional 913,901 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
(2) Includes the right to acquire an additional 330,000 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
(3) Includes the right to acquire an additional 112,500 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
(4) Includes the right to acquire an additional 96,500 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
(5) Includes the right to acquire an additional 60,000 Common Shares of the
Company on or before May 19, 2000 pursuant to the exercise of options
granted under the Company's Common Share Option Plan.
For information on the Identification of Executive Officers, see "Executive
Officers of the Company" in Part III found on page 12 of the Company's "Annual
Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934",
for fiscal year ended January 1, 2000, which is incorporated into this Proxy
Circular by reference.
8
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation earned for services rendered during each of the last
three financial years in respect of the Named Executive Officers of the Company
and its subsidiaries:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ----------------------------------
AWARDS
-----------------------
SECURITIES
OTHER ANNUAL UNDER RESTRICTED ALL OTHER
NAME AND PRINCIPAL YEAR SALARY BONUS(2) COMPENSATION OPTIONS SHARES OR LTIP COMPENSATION(5)
POSITION (1) ($) ($) (3) GRANTED RESTRICTED PAYOUTS ($)
(#) (4) SHARE UNITS
------------------ ---- ------ -------- ------------ ------- --------- ---- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank E. Weise III 1999 435,000 425,000 - - - 250,000 - - - - - - 429,159 (6)
President and Chief
Executive Officer 1998 240,425 (7) 175,000 - - - 1,300,000 - - - - - - 943
1997 - - - - - - - - - - - - - - - - - - - - -
Mark Benadiba 1999 301,500 301,500 - - - 50,000 - - - - - - 301,847 (8)
Executive Vice
President, 1998 273,502 - - - - - - 50,000 - - - - - - 391
President, Cott
Beverages Canada 1997 319,303 - - - - - - 115,000 - - - - - - 561
David G. Bluestein 1999 360,000 350,000 - - - 175,000 - - - - - - 410,777 (9)
Executive Vice
President, 1998 91,538 255,278 - - - 200,000 - - - - - - 707
President, Cott
Beverages USA 1997 - - - - - - - - - - - - - - - - - - - - -
Paul R. Richardson 1999 330,000 160,000 - - - 50,000 - - - - - - 220,354 (10)
Executive Vice
President, Global 1998 302,549 (7) 50,000 - - - - - - - - - - - -
Procurement & 322,534 (11)
Innovation 1997 333,683 - - - - - - 108,000 - - - - - - 943
Raymond P. Silcock 1999 285,000 275,000 - - - 100,000 - - - - - - 275,957 (12)
Executive Vice
President and Chief 1998 76,154 163,693 - - - 100,000 - - - - - -
Financial Officer 650
1997 - - - - - - - - - - - - - - - - - - - - -
</TABLE>
(1) The year 1999 refers to the fiscal year that ended January 1, 2000. Upon
the amalgamation of the Company and certain of its wholly-owned
subsidiaries on January 3, 1999, the fiscal year end of the Company was
changed to the Saturday closest to December 31 in each year. Accordingly,
the year 1998 refers to the eleven month period that ended January 2, 1999.
The year 1997 refers to the fiscal year that ended January 31, 1998.
(2) "Bonus" includes the bonus payable under the Company's Executive Incentive
Compensation Plan for Company Executives. The bonuses were earned in 1999
but paid in 2000. See heading "Compensation Principles".
(3) The value of perquisites and benefits for each Named Executive Officer is
less than the lesser of (Cdn.) $50,000 and 10% of total annual salary and
bonus.
9
<PAGE> 11
(4) Granted pursuant to the Cott Corporation Common Share Option Plan, 1986 as
amended. All outstanding unvested options immediately vest upon a change of
control as defined in the Plan.
(5) Figures in this column include premiums paid by the Company or its
subsidiaries for term life insurance for each Named Executive Officer.
(6) Includes $425,000, which has been paid to a Trustee to purchase shares on
behalf of the Named Executive Officer which will vest over a three year
period pursuant to the "1999 Executive Incentive Share Compensation Plan",
under heading "Long Term Incentives".
(7) Includes contributions made to the 401(K) plan for which disclosure was not
required in respect of 1997 and 1998, when the Company was a foreign issuer
under United States securities law and accordingly was not required to
report such amounts.
(8) Includes $301,500, which has been paid to a Trustee to purchase shares on
behalf of the Named Executive Officer which will vest over a three year
period pursuant to the "1999 Executive Incentive Share Compensation Plan",
under heading "Long Term Incentives".
(9) Includes $350,000, which has been paid to a Trustee to purchase shares on
behalf of the Named Executive Officer which will vest over a three year
period pursuant to the "1999 Executive Incentive Share Compensation Plan",
under heading "Long Term Incentives" and a relocation allowance of $58,333.
(10) Includes $160,000, which has been paid to a Trustee to purchase shares on
behalf of the Named Executive Officer which will vest over a three year
period pursuant to the "1999 Executive Incentive Share Compensation Plan",
under heading "Long Term Incentives" and a relocation allowance of $59,658.
(11) Includes a one-time payment of $320,000 for termination of a prior
employment agreement. The restructured employment agreement was not entered
into until after the 1998 proxy filing date.
(12) Includes $275,000, which has been paid to a Trustee to purchase shares on
behalf of the Named Executive Officer which will vest over a three year
period pursuant to the "1999 Executive Incentive Share Compensation Plan",
under heading "Long Term Incentives".
The following table sets forth individual grants of stock options during
the fiscal year ended January 1, 2000 to the Named Executive Officers to whom
options were granted:
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
SECURITIES OPTIONS MARKET VALUE POTENTIAL
UNDER GRANTED TO EXERCISE OR OF SECURITIES REALIZABLE VALUE AT
NAME OPTIONS EMPLOYEES BASE PRICE UNDERLYING EXPIRATION ASSUMED ANNUAL
GRANTED(3) IN (CDN.$/SECURITY) OPTIONS ON THE DATE RATES OF STOCK
(#) FINANCIAL DATE OF GRANT PRICE APPRECIATION
YEAR (CDN.$/SECURITY) FOR OPTION TERM
5%($) 10%($)
- ------------------ ---------- ----------- ---------------- -------------- ------------ --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank E. Weise III 250,000(4) 21.5% 5.95(1) 5.95(1) May 6, 2006 415,908 969,242
Mark Benadiba 50,000 4.3% 5.95(1) 5.95(1) May 6, 2006 83,182 193,848
David G. Bluestein 175,000 15.1% 5.95(1) 5.95(1) May 6, 2006 291,136 678,470
Paul R. Richardson 25,000 2.15% 5.95(1) 5.95(1) May 6, 2006 41,591 96,924
25,000 2.15% 6.00(2) 6.00(2) Oct 14, 2006 41,207 96,030
Raymond P. Silcock 100,000 8.6% 5.95(1) 5.95(1) May 6, 2006 166,363 387,697
TOTAL 625,000 53.7%
</TABLE>
(1) (US) $4.09 based upon conversion at an exchange rate of 1.456 at the date
of grant.
(2) (US) $4.05 based upon conversion at an exchange rate of 1.4819 at the date
of grant.
(3) These options, unless otherwise expressly indicated, have a seven year term
and are exercisable (on a cumulative basis) as to 30% of the optioned
shares on or after the first anniversary of the date of the grant, 30% of
the optioned shares on or after the second anniversary of the date of the
grant and an additional 40% of the optioned shares on or after the third
anniversary of the date of the grant.
(4) Options held by Mr. Weise to acquire 41,680 Common Shares were exercisable
as of November 6, 1999, the six month anniversary of the date of the grant.
Options to acquire an additional 6,944 Common Shares are exercisable, on a
cumulative basis, on the sixth day of each month for 30 months following
November 6, 1999.
10
<PAGE> 12
The following table sets forth, in respect of the Named Executive Officers,
details of all exercises of options during the fiscal year ended January 1, 2000
and the number and value of unexercised options on an aggregated basis as at
such date:
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SECURITIES AGGREGATE VALUE UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NAME ACQUIRED ON REALIZED JANUARY 1, 2000 JANUARY 1, 2000
EXERCISE (CDN.$) (#) (CDN.$)
(#) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------ ----------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Frank E. Weise III - - 698,626/851,374 374,404/1,550,595(1)
Mark Benadiba - - 315,000/85,000 0/385,000(2)
David G. Bluestein - - 60,000/315,000 0/1,347,500(3)
Paul R. Richardson - - 64,000/146,000 0/385,000(4)
Raymond P. Silcock - - 30,000/170,000 0/770,000(5)
</TABLE>
(1) 259,283/1,073,819 if converted to USD as of January 1, 2000 at rate of
$1.444.
(2) 0/266,620 if converted to USD as of January 1, 2000 at the above rate.
(3) 0/933,172 if converted to USD as of January 1, 2000 at the above rate.
(4) 0/266,620 if converted to USD as of January 1, 2000 at the above rate.
(5) 0/533,241 if converted to USD as of January 1, 2000 at the above rate.
TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITY AND EXECUTIVE
EMPLOYMENT CONTRACTS
Each of the Named Executive Officers is a party to an agreement with the
Company that calls for, among other things, certain payments to be made to such
Named Executive Officer upon the termination of his employment without cause.
Frank E. Weise has an employment agreement with the Company which expires
on January 31, 2002 and which provides for an annual base salary at a rate not
less than the amount reported in the Summary Compensation Table for 1999. Mark
Benadiba, David G. Bluestein and Raymond P. Silcock have individual contracts of
employment with the Company for an unspecified term, which also provide for
annual base salaries at rates not less than the amounts reported in the Summary
Compensation Table for 1999. Each of these agreements provides for the payment
to the applicable Named Executive Officer of bonuses consistent with market and
industry standards from time to time and which are based upon the achievement of
agreed upon criteria established from time to time by the Human Resources and
Compensation Committee. The agreements also provide for customary allowances and
perquisites. The Company provides both short-term and long term incentive
programs in which each of the Named Executive Officers participates. Subject to
the terms of the employment contracts for the respective Named Executive
Officers, the level of participation is determined by the Human Resources and
Compensation Committee at their sole discretion and varies by Named Executive
Officer.
Upon termination of Mr. Weise's employment without cause or upon a deemed
termination, Mr. Weise shall be entitled to receive from the Company severance
equal to the greater of: (a) two times the average of his base salary and
bonuses over the prior two years; and (b) his base salary and bonuses (based on
prior years) over the balance of the term. In the event Mr. Weise's employment
is terminated without cause or is deemed terminated following a change of
control (defined to mean any person or group of persons acquiring more than 50%
of the outstanding voting shares of the Company, a sale by the Company of all or
substantially all of the Company's undertakings and assets or the voluntary
liquidation, dissolution or winding-up of the Company), Mr. Weise shall be
11
<PAGE> 13
entitled to receive a payment equal to 36 months of his base salary,
continuation of his benefits for a period of 36 months (or a cash equivalent)
and the average of the bonuses paid to him over the prior two years.
In the event of Mr. Benadiba's termination without cause (other than by
reason of Mr. Benadiba's death) or deemed termination, within three years
following July 8, 1998 (the "Window Period"), Mr. Benadiba is entitled to
receive two times his base salary, bonuses and the cash value of benefits and
perquisites during the previous 12 months. If Mr. Benadiba voluntarily
terminates his employment at the end of the Window Period, Mr. Benadiba shall be
entitled to receive his base salary and bonus and the cash value of benefits and
perquisites during the previous 12 months.
In the event of the termination of Mr. Bluestein or Mr. Silcock for any
reason other than just cause, they will receive a severance payment equal to 24
months base salary and bonuses and car allowances and the cash value of his
benefits (excluding short and long term disability and out of country benefits)
for such 24 month period.
Mr. Richardson's agreement provides that his employment may be terminated
by either himself or the Company at any time on 30 days written notice. Upon
such termination or upon Mr. Richardson's death, Mr. Richardson will receive a
severance payment equal to 24 months base salary and bonuses plus the cash value
of all benefits and perquisites and the average of any other remuneration during
the previous 24 month period. This agreement with Mr. Richardson replaced a
triggered termination agreement that would have paid Mr. Richardson three times
his average annual salary, bonus and benefits during the two years prior to the
trigger date. One-third of that payment was made to Mr. Richardson during fiscal
1999 and is reported in the Summary Compensation Table.
HUMAN RESOURCES AND COMPENSATION COMMITTEE.
The members of the Human Resources and Compensation Committee of the Board
of Directors (the "Committee") are Colin J. Adair (Chairman), David V. Harkins
and Stephen H. Halperin. None of the members of the Committee is an officer or
employee of the Company or any of its subsidiaries.
REPORT ON EXECUTIVE COMPENSATION.
The Committee, within the parameters of the existing arrangements described
below, is responsible for, among other things, reviewing and determining the
annual salary, options, bonus and other compensation levels of the Chief
Executive Officer of the Company and, following discussions with the Chief
Executive Officer of the Company and after receiving his recommendations, the
other executive officers of the Company.
COMPENSATION PRINCIPLES.
The Company is committed to the philosophy of partnership and to sharing
the benefits of success with those who help the Company grow. The Company's
strength and ability to sustain growth is based on an organization which
perceives people as its single most important asset. The Committee's philosophy
is to provide sufficient compensation opportunities for executives of the
Company in order to attract, retain and motivate the best possible management
team to lead the Company in the achievement of both its short and long-term
performance goals. The Committee believes that compensation significantly based
on performance is more likely to enhance the continuing financial success of the
Company, which leads to the improvement of shareowner value. In furtherance of
these goals, the Company has adopted an annual bonus plan, an employee share
option plan, an employee share purchase savings plan and an executive share
incentive plan to increase the risk/reward ratio of its executive compensation
program, to focus management on long-term strategic issues, and to align
management's interests with those of the shareowners of the Company in the
sustained growth of shareowner value.
COMPENSATION ELEMENTS AND DETERMINATION PROCESS.
12
<PAGE> 14
Compensation for executive officers of the Company consists of a base
salary, opportunities for bonus cash compensation, and long-term compensation in
the form of stock options, a share purchase savings plan and an executive
incentive share compensation plan. Each of the Named Executive Officers has a
written agreement with the Company (see "Termination of Employment, Change in
Responsibilities and Executive Employment Contracts"). In respect of the base
salary of these executives, the Committee's role is to determine the increase,
if any, that would be appropriate. The Company's arrangement with each of the
executives described under "Termination of Employment, Change in
Responsibilities and Executive Employment Contracts" was negotiated between
management and each of them and approved by the Committee. In reviewing and
determining executive compensation, the Committee examines each component
individually as well as total compensation as a whole. Each executive officer's
compensation is determined with reference to an assessment of relevant industry
norms, experience, past performance, level of responsibility and personal
requirements and expectations. Salary levels are reviewed periodically and
adjustments may be made, if warranted, after an evaluation of executive and
company performance, salary increase trends in the Company's geographic
marketplace, current salary competitive positioning, and any increase in
responsibilities assumed by the executive. To aid in its assessments and with
its ongoing responsibilities, the Committee has, from time to time, retained
independent consultants to advise on compensation matters. As noted above, in
appropriate circumstances, cash compensation may be augmented by the payment of
bonuses with the intention that overall compensation be more closely aligned to
an individual's performance, or the profitability of the business unit for which
the individual is accountable.
LONG-TERM INCENTIVES.
The Committee considers long-term incentives to be an essential component
of executive compensation to ensure a proper balance between short and long-term
considerations and the enhancement of shareowner value.
Option Plan.
Under the Company's 1986 Common Share Option Plan, as amended (the "Option
Plan") an aggregate of 12,000,000 Common Shares (less the number of Common
Shares in respect of which other compensation related options have been granted)
are reserved for issuance to eligible directors, senior officers, employees and
service providers of the Company and its subsidiaries. The grant of options and
the issuance of shares under the Option Plan are subject to the following
limitations: (i) the number of Common Shares subject to outstanding options may
not exceed 10% of the Common Shares of the Company outstanding from time to
time; (ii) the aggregate number of shares reserved for issuance to any one
person pursuant to options granted under the Option Plan and any other share
compensation arrangement shall not exceed 5% of the aggregate number of Common
Shares outstanding on the date of grant; (iii) the aggregate number of Common
Shares which may be issued, within a one year period, pursuant to options
granted under the Option Plan and any other share compensation arrangement (A)
to insiders, shall not exceed 10% of the aggregate number of Common Shares
outstanding on the date of grant, and (B) to any one insider, together with such
insider's associates, shall not exceed 5% of the aggregate number of Common
Shares outstanding on the date of grant, excluding, in each case, Common Shares
issued pursuant to share compensation arrangements over the preceding one year
period. Options to acquire Common Shares are granted at the closing price on The
Toronto Stock Exchange on the last trading day preceding the date of grant.
Options are non-transferable and have a term of not more than ten years. If a
participant ceases to be a director, senior officer, employee or service
provider of the Company, all unexercised options of such participant will expire
on the earlier of: (i) the expiry date of such options; (ii) 60 days following
the date the participant ceases to be a director, officer, employee or service
provider (the "termination date"), or in the event of the death of a
participant, 365 days following the date of the death of such participant; and
(iii) subject to regulatory approval, 4 years from the date of total and
permanent disability or the retirement of a participant, and then only with
respect to options that are vested as of the termination date (and all unvested
options vest upon the death of a participant). Eligibility to participate in the
Option Plan, the number of shares for which options are granted, and the vesting
period for each option are determined by the Committee. As of March 20, 2000,
there were approximately 712 holders of options under the Option Plan.
Share Purchase Savings Plan.
13
<PAGE> 15
The Company maintains an employee share purchase savings plan (the
"Purchase Plan") which is available to regular full-time and part-time Canadian
employees who have completed three months of continuous employment. Under the
Purchase Plan, employees contribute, through payroll deductions, a maximum of 3%
of their base salary or regular earnings. These contributions are used to
purchase shares of the Company on the open market. The Company matches
two-thirds of the contributions made by an employee and these contributions are
also used to purchase shares of the Company on the open market. Shares purchased
with the contributions of the Company vest over five years in 20% increments per
year, so long as an employee maintains his or her original contribution in the
Purchase Plan.
Executive Incentive Share Compensation Plan.
The Committee established the 1999 Executive Incentive Share Compensation
Plan (the "Incentive Plan") for the purpose of rewarding certain employees of
the Company, as designated by the Committee, for exceeding one hundred percent
(100%) of their respective annual performance objectives (the "Annual
Objectives").
The Company contributes an amount (as determined appropriate by the
Committee) to a trust on behalf of Participants in the Incentive Plan who exceed
their Annual Objectives. The trust is administered by a third party at arm's
length from the Company. The trust purchases the Company's Common Shares on the
open market, equal to the total amount contributed by the Company. Once
purchased, the trustee determines the number of Common Shares acquired on behalf
of each Participant based upon the amount contributed to the trust on behalf of
each Participant.
Subject to the provisions of the Incentive Plan, the Common Shares in the
trust vest over a period of three years in favor of those Participants in
respect of whom the amount was originally contributed: 30% of the Common Shares
attributed to a Participant vest on January 1st of each of the two years
immediately following the year in which Common Shares were purchased on behalf
of the Participant and 40% vest on January 1st of the 3rd year following the
year in which the Common Shares were purchased on behalf of the Participant.
Subject to the provisions of the Incentive Plan, if the employment of a
Participant is terminated prior to the final vesting of the Common Shares
attributed to such Participant, such Participant's unvested Common Shares shall,
unless the Committee determines otherwise, be reallocated in favor of those
Participants in respect of whom the amount was originally contributed.
SUMMARY
The Committee is ultimately responsible for determining, affirming or
amending the level and nature of executive compensation of the Company. The
Committee has access, at the expense of the Company, to independent, outside
compensation consultants for both advice and competitive data for the purpose of
making such determinations. The Committee believes that the compensation
policies and programs as outlined above ensure that levels of executive
compensation truly reflect the performance of the Company, thereby serving the
best interests of the shareowners.
Submitted by the Human Resources and Compensation Committee.
COLIN J. ADAIR, Chairman
DAVID V. HARKINS
STEPHEN H. HALPERIN
14
<PAGE> 16
SHAREOWNER RETURN PERFORMANCE GRAPH
The following graph shows changes over the past five year period in the
value of (Cdn.) $100 (assuming reinvestment of dividends) invested in: (1) the
Company's Common Shares; (2) The Toronto Stock Exchange's 300 Total Return
Index; and (3) a peer group of publicly traded companies in the bottling
industry comprised of Coca-Cola Enterprises Inc., Coca-Cola Bottling Co.
Consolidated, National Beverage Corp. and Whitman Corporation. The closing price
of the Company's Common Shares as of December 31, 1999 on The Toronto Stock
Exchange was (Cdn.) $7.70 and on NASDAQ was $5.25.
<TABLE>
<CAPTION>
DATE JAN-95 JAN-96 JAN-97 JAN-98 DEC-98 DEC-99
- ---- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
COTT COMMON SHARES 100 67 86 99 43 60
TSE 300 INDEX 100 124 156 176 173 228
PEER GROUP 100 134 217 311 366 207
</TABLE>
COMPENSATION OF DIRECTORS
The total amount paid to directors in their capacity as such during the
fiscal year ended January 1, 2000 was (Cdn.) $239,831 (including a (Cdn.)
$100,000 annual retainer paid to the Chairman of the Board). Such outside
directors (other than the Chairman) are entitled to be paid an annual fee of
(Cdn.) $15,000. Outside directors (other than the Chairman) are also entitled to
receive (Cdn.) $1,000 per board meeting attended in person or (Cdn.) $500 per
board meeting attended via telephone. Outside directors (other than the
Chairman) are also entitled to receive an annual fee of (Cdn.) $1,000 per
committee meeting attended in person or (Cdn.) $500 per committee meeting
attended via telephone or in conjunction with a board meeting. Directors are
reimbursed for their travelling expenses in connection with board or committee
meeting attendance. Committee Chairmen are entitled to receive (Cdn.) $3,000 as
an annual retainer. During the fiscal year that ended January 1, 2000, Mr.
Halperin did not receive the annual fee or per meeting fees described above. He
was compensated for the time he spent at Board and Committee meetings and any
related preparatory and follow up work, along with any related disbursements,
through billings submitted by his law firm to the Company. Commencing in 2000,
Mr. Halperin will be entitled to the same compensation as the other outside
directors. (See "Composition of the Board").
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company provides insurance for the benefit of the directors and
officers of the Company and its subsidiaries against liability incurred by them
in these capacities. The current annual policy limit is $35,000,000.
15
<PAGE> 17
Protection is provided to directors and officers for wrongful acts or omissions
done or committed during the course of their duties as such. The insurance
excludes from coverage illegal acts and acts which result in personal profit.
Under the policy, individual directors and officers are reimbursed for losses
incurred in their capacities as such, subject to a deductible of $2,000,000 for
securities claims suits arising in the United States, and $250,000 for all other
claims. The deductible is the responsibility of the Company. The annual premium
of $92,505 was paid by the Company.
CORPORATE GOVERNANCE
GENERAL
The Toronto Stock Exchange (the "Exchange") has adopted a series of
guidelines for effective corporate governance (the "Guidelines") and has
required listed companies annually to disclose their approach to corporate
governance and the conformity of their corporate governance practices with the
Guidelines. The Guidelines address matters such as the constitution and
independence of corporate boards, the functions to be performed by boards and
their committees and the effectiveness and education of board members. The Board
of Directors of the Company (the "Board") is committed to instituting and
maintaining such policies, procedures and organizational structures as are
required to ensure that its corporate governance approach best serves the
interests of all shareowners.
The statements set out below identify the corporate governance practices
adopted by the Company which are consistent with the Guidelines, except where
otherwise indicated.
BOARD RESPONSIBILITY FOR STEWARDSHIP OF THE COMPANY
The Board has explicitly assumed responsibility for the stewardship of the
Company, including, in this regard: (i) the adoption of a strategic planning
process; (ii) the identification of the principal risks for the Company and the
implementation of appropriate risk management systems; (iii) succession planning
and monitoring of senior management; (iv) ensuring that the Company has in place
a communications policy to enable it to communicate effectively with
shareowners, other stakeholders and the public generally; and (v) the integrity
of the Company's internal control and management information systems. All
decisions materially affecting the Company, its business and operations,
including long-term strategic and operational planning must be approved by the
Board prior to implementation. Each year management prepares a statement of
objectives, plans, performance standards and policies for the Company, which is
submitted to the Corporate Governance Committee and the full Board for their
review and approval prior to implementation.
In order to effectively discharge its responsibilities, the Board has
established from its membership, three committees: the Audit Committee, the
Human Resources and Compensation Committee and the Corporate Governance
Committee. Each Board member is entitled to retain independent consultants, at
the expense of the Company, to assist them in carrying out their functions with
the Company. During 1999, the Board met 11 times.
COMPOSITION OF THE BOARD
The Guidelines recommend that a majority of the directors be "unrelated".
According to the Guidelines, an "unrelated" director is a director who is
independent of management and is free from any interest and any business or
other relationship which could, or could reasonably be perceived to, materially
interfere with the director's ability to act with a view to the best interests
of the Company, other than interests and relationships arising from
shareholding. The Guidelines also recommend that the board should include a
number of directors who do not have interests in or relationships with either
the Company or any significant shareowner of the Company and which fairly
reflect the investment in the Company by shareowners other than any significant
shareowner. The Board believes that it is appropriately constituted to meet the
Guidelines in these respects.
16
<PAGE> 18
The articles of the Company permit a minimum of three and a maximum of
fifteen directors. Currently, the Board is comprised of eleven individuals, a
number that the Board considers to be adequate given the size of the Company and
the nature of its shareowner constituency.
Although three (3) of the nominees of the Board, Messrs. Harkins, Boll and
Hagerty, are officers of Thomas H. Lee Company, a shareowner holding a
significant equity interest in the Company, the Board believes that it is
properly constituted to fairly reflect the investment of all shareowners in the
Company.
BOARD CHAIRMAN SEPARATE FROM MANAGEMENT
Neither the Chairman nor the Vice-Chairman of the Board of the Company is a
member of management. At all meetings of the Board and Committees of the Board,
the opportunity exists for any outside Board member to request that all members
of management, including management Directors, be excused so that any matter may
be discussed without any representative of management being present.
FUNCTIONING OF THE BOARD INDEPENDENT OF MANAGEMENT
The Guidelines suggest that every board should have in place appropriate
structures and procedures to ensure that the board can function independently of
management. Through each of the Human Resources and Compensation Committee, the
Corporate Governance Committee and the Audit Committee, with the mandates
described below, a structure has been put in place to so enable the Board to
function independent of management. The Board oversees the establishment and
function of all Committees, the appointment of their members and their conduct.
The Human Resources and Compensation Committee
The Human Resources and Compensation Committee is comprised of three
directors, Colin J. Adair (Chairman), Stephen H. Halperin and David V. Harkins.
Mr. Adair and Mr. Harkins are unrelated, outside directors. Mr. Halperin may be
considered to be a related director (see heading "Certain Relationships and
Related Transactions"). The terms of reference of the Human Resources and
Compensation Committee include reviewing and recommending the level of
compensation for senior officers and directors of the Company, including the
Chief Executive Officer, and reviewing and approving incentive compensation to
be allocated to employees of the Company, including such senior officers and for
reviewing the compensation to members of the Board. The Human Resources and
Compensation Committee has also been charged with the responsibility of annually
reviewing and reporting to the Board on the organizational structure of the
Company and ensuring that an appropriate succession plan is in place. The Human
Resources and Compensation Committee met on 6 occasions during fiscal 1999.
The Corporate Governance Committee
The Corporate Governance Committee is comprised of three directors. Serge
Gouin (Chairman) and Thomas M. Hagerty are unrelated outside directors. Stephen
H. Halperin may be considered to be a related director as indicated above. The
Corporate Governance Committee is responsible for developing and monitoring the
Company's approach to corporate governance issues in general. Specifically, the
Corporate Governance Committee has been given responsibility for:
- - reviewing and recommending changes to the mandates of the other committees
of the Board;
- - ensuring compliance with and a response to the Guidelines;
- - identifying and nominating new members to the Board and its committees, and
as such functions as a nominating committee;
- - educating new members of the Board as to the business of the Company;
- - monitoring and assessing the individual and collective effectiveness of the
Board;
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<PAGE> 19
- - monitoring the relationship between management of the Company and the Board
and recommending any areas for improvement; and
- - reviewing the written objectives of the Chief Executive Officer of the
Company and providing guidance as to the development of corporate
strategies.
The Corporate Governance Committee considers suggestions as to nominees for
directors from any source, including any shareowner. Recommendations for
nominations by shareowners should be submitted to the Company's Secretary at the
Company's Executive Office. The Corporate Governance Committee met on two (2)
occasions during 1999.
The Audit Committee
The Audit Committee is comprised of three directors, C. Hunter Boll
(Chairman), Fraser Latta and W. John Bennett, each of whom is an unrelated
outside director. Quarterly and annual financial statements of the Company are
reviewed by the Audit Committee and discussed with management and form the basis
of formal reports thereon to the entire Board. The Audit Committee is also
responsible for monitoring the Company's internal accounting controls and
information gathering systems, including those relating to the statutory
obligations of the Company and for reviewing the performance and the
remuneration of the Company's independent auditors. In fulfilling its
responsibilities, the Audit Committee is in direct communication with those
responsible for the Company's finances and independent external auditors to
discuss specific matters, if needed. The Audit Committee met on six (6)
occasions during fiscal 1999.
ALLOCATION OF RESPONSIBILITIES BETWEEN THE BOARD AND MANAGEMENT
There is no specific mandate for the Board, since the Board has plenary
power. Any responsibility which is not delegated to senior management or a
committee of directors remains with the full Board. The Board has approved a job
description for the Chief Executive Officer which specifically outlines the
responsibilities of this position. One such responsibility of the Chief
Executive Officer is to prepare on behalf of management a written statement of
management's objectives, plans, standards of performance and policies. This
report is reviewed and approved by each of the Human Resources and Compensation
Committee and the entire Board.
BOARD'S EXPECTATIONS OF MANAGEMENT
The Board expects management to pursue the following objectives: (i)
produce timely, complete and accurate information on the Company's operations
and business as well as on any other specific matter which might, in its
opinion, have material consequences for the Company and its shareowners; (ii)
act on a timely basis and make appropriate decisions with regard to the
Company's operations, in accordance with all the relevant requirements and
obligations and in compliance with the Company's policies, with a view to
increasing shareowner value; (iii) apply a rigorous budget process and closely
monitor the Company's financial performance in terms of the annual budget
approved by the Board; and (iv) develop and implement the Company's strategic
plan in light of trends in market.
SHAREOWNER COMMUNICATIONS
The Company seeks to maintain a transparent and accessible exchange of
information with all of its shareowners and other stakeholders with regard to
the Company's business and performance, subject to the requirements of all
applicable laws and any other limitations of a legal or contractual nature. In
addition to the required public filings, the Company regularly distributes
information to its shareowners and the investment community through quarterly
reports, annual reports and press releases as appropriate from time to time.
18
<PAGE> 20
Questions, comments and suggestions, either verbal or in writing, may be
addressed directly to the Company at its Executive Office or may be addressed
directly to the attention of members of senior management at the Company's
annual meetings.
AVAILABILITY OF DISCLOSURE DOCUMENTS
The Company will provide to any person or company, upon request to its
Secretary, a copy of:
(a) the annual information form of the Company for the fiscal year ended
January 1, 2000, together with a copy of any document or pertinent
pages of any document, incorporated therein by reference;
(b) the comparative financial statements of the Company for the fiscal
year ended January 1, 2000, and the report of its auditors thereon;
(c) this Proxy Circular; and
(d) the Company's Annual Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934, for the fiscal year ended January 1,
2000.
APPROVAL
The contents of this Proxy Circular and the sending thereof have been
approved by resolution of the Board of Directors of the Company.
March 21, 2000 MARK R. HALPERIN
Senior Vice-President,
General Counsel and Secretary
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<PAGE> 21
C O T T C O R P O R A T I O N
PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT AND THE BOARD OF DIRECTORS AND SHOULD
BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND THE PROXY
CIRCULAR.
The undersigned owner of Common Shares of COTT CORPORATION (the "Company")
hereby appoints Serge Gouin, or failing him, Frank E. Weise, or
(* see Note 1)
as proxy for the undersigned to attend, act and vote on behalf of the
undersigned at the ANNUAL MEETING OF SHAREOWNERS of the Company to be held on
the 3rd day of May, 2000 and at every adjournment thereof in the same manner, to
the same extent and with the same powers as if the undersigned were present at
the said meeting or any adjournments thereof and without limiting the general
authorization and powers hereby given, each of the persons named as proxy is
specifically directed to vote as follows:
1. VOTE FOR [ ] OR WITHHOLD [ ] from voting for the election of directors;
2. VOTE FOR [ ] OR WITHHOLD [ ] from voting for the appointment of auditors
and the authorization of the directors to fix their remuneration;
3. in his/her discretion with respect to amendments or variations to matters
identified above or upon such other matters as may properly come before the
Meeting;
hereby revoking any proxy previously given.
C O R P O R A T I O N C O T T
PROCURATION
LA PRESENTE PROCURATION EST SOLLICITEE PAR LA DIRECTION ET LE CONSEIL
D'ADMINISTRATION ET DOIT ETRE LUE A LA LUMIERE DE L'AVIS DE L'ASSEMBLEE ET DE LA
CIRCULAIRE DE SOLLICITATION DE PROCURATIONS CI-JOINTS.
Le soussigne, porteur d'actions ordinaires de CORPORATION COTT (la << societe
>>), constitue par les presentes Serge Gouin, ou a defaut, Frank E. Weise ou
(* voir la Note 1)
a titre de fonde de pouvoir du soussigne afin d'assister, d'agir et de voter en
son nom a l'ASSEMBLEE ANNUELLE DES ACTIONNAIRES de la societe devant etre tenue
le 3 mai 2000 et a toute assemblee de reprise, de la meme maniere, dans la meme
mesure et avec les memes pouvoirs que si le soussigne etait lui-meme present a
ladite assemblee ou a toute assemblee de reprise; toutefois, sans nullement
limiter la portee generale du mandat et des pouvoirs conferes par les presentes,
le soussigne donne expressement a chacune des personnes nommees a titre de
fondes de pouvoir instructions d'exercer ses droits de vote de la facon indiquee
ci-dessous :
1. VOTER POUR [ ] OU S'ABSTENIR DE VOTER [ ] a l'egard de l'election des
administrateurs;
2. VOTER POUR [ ] OU S'ABSTENIR DE VOTER [ ] a l'egard de la nomination des
verificateurs et de l'autorisation des administrateurs a fixer leur
remuneration;
3. a sa discretion a l'egard des modifications aux questions indiquees
ci-dessus ou a l'egard de toute autre question qui pourrait etre
regulierement soumise aux deliberations de l'assemblee;
et revoque par les presentes toute procuration donnee anterieurement.
20
<PAGE> 22
*NOTE 1 : VOUS AVEZ LE DROIT DE NOMMER, POUR VOUS REPRESENTER A L'ASSEMBLEE
ANNUELLE DES ACTIONNAIRES, UNE AUTRE PERSONNE (QUI N'EST PAS TENUE D'ETRE
ELLE-MEME UN ACTIONNAIRE) QUE LES PERSONNES DESIGNEES PAR LA DIRECTION. SI VOUS
DESIREZ CONSTITUER A TITRE DE FONDE DE POUVOIR UNE AUTRE PERSONNE QUE SERGE
GOUIN OU FRANK E. WEISE, LES PERSONNES DESIGNEES PAR LA DIRECTION, VOUS DEVEZ
BIFFER LEURS NOMS ET INSCRIRE DANS L'ESPACE PREVU A CETTE FIN LE NOM DE LA
PERSONNE QUE VOUS DESIREZ CONSTITUER COMME FONDE DE POUVOIR.
*NOTE 2 : Si le present formulaire de procuration n'est pas date dans l'espace
prevu a cette fin, il est repute porter la date de sa mise a la poste par la
direction de la societe.
FAIT le _______ jour de _________________________ 2000.
(* voir la note 2)
SIGNATURE : ___________________________________________________
NOM EN LETTRES MOULEES : ______________________________________
(L'actionnaire qui est une societe doit apposer son sceau.)
(Veuillez dater et signer la presente procuration et la retourner sans delai
dans l'enveloppe fournie a cette fin.)
*NOTE 1: YOU HAVE THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A SHAREOWNER)
TO REPRESENT YOU AT THE ANNUAL MEETING OF SHAREOWNERS OTHER THAN THE MANAGEMENT
NOMINEES. IF YOU DESIRE TO DESIGNATE AS PROXY A PERSON OTHER THAN SERGE GOUIN OR
FRANK E. WEISE, THE MANAGEMENT NOMINEES, YOU SHOULD STRIKE OUT THEIR NAMES AND
INSERT IN THE SPACE PROVIDED THE NAME OF THE PERSON YOU DESIRE AS PROXY.
*NOTE 2: If this form of proxy is not dated in the space provided, it is deemed
to bear the date on which it was mailed by the management of the Company.
DATED this _______ day of _________________________ , 2000.
(* see Note 2)
SIGNATURE : ___________________________________________________
PRINT NAME: ___________________________________________________
(Corporate shareowners should affix seal)
(Please date, sign and promptly return this proxy in the envelope provided.)
21
<PAGE> 23
C O T T C O R P O R A T I O N
PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT AND THE BOARD OF DIRECTORS AND SHOULD
BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTICE OF MEETING AND THE PROXY
CIRCULAR.
The undersigned owner of Second Preferred Shares, Series 1 of COTT CORPORATION
(the "Company") hereby appoints Serge Gouin, or failing him, Frank E. Weise, or
- --------------------------------------------------------------------------------
(* see Note 1)
as proxy for the undersigned to attend, act and vote on behalf of the
undersigned at the ANNUAL MEETING OF SHAREOWNERS of the Company to be held on
the 3rd day of May, 2000 and at every adjournment thereof in the same manner, to
the same extent and with the same powers as if the undersigned were present at
the said meeting or any adjournments thereof and without limiting the general
authorization and powers hereby given, each of the persons named as proxy is
specifically directed to vote as follows:
1. VOTE FOR [ ] OR WITHHOLD [ ] from voting for the election of directors;
2. VOTE FOR [ ] OR WITHHOLD [ ] from voting for the appointment of auditors
and the authorization of the directors to fix their remuneration;
3. in his/her discretion with respect to amendments or variations to matters
identified above or upon such other matters as may properly come before the
Meeting;
hereby revoking any proxy previously given.
C O R P O R A T I O N C O T T
PROCURATION
LA PRESENTE PROCURATION EST SOLLICITEE PAR LA DIRECTION ET LE CONSEIL
D'ADMINISTRATION ET DOIT ETRE LUE A LA LUMIERE DE L'AVIS DE L'ASSEMBLEE ET DE LA
CIRCULAIRE DE SOLLICITATION DE PROCURATIONS CI-JOINTS.
Le soussigne, porteur d'actions privilegiees de second rang, serie 1 de
CORPORATION COTT (la << societe >>), constitue par les presentes Serge Gouin, ou
a defaut, Frank E. Weise ou
- --------------------------------------------------------------------------------
(* voir la Note 1)
a titre de fonde de pouvoir du soussigne afin d'assister, d'agir et de voter en
son nom a l'ASSEMBLEE ANNUELLE DES ACTIONNAIRES de la societe devant etre tenue
le 3 mai 2000 et a toute assemblee de reprise, de la meme maniere, dans la meme
mesure et avec les memes pouvoirs que si le soussigne etait lui-meme present a
ladite assemblee ou a toute assemblee de reprise; toutefois, sans nullement
limiter la portee generale du mandat et des pouvoirs conferes par les presentes,
le soussigne donne expressement a chacune des personnes nommees a titre de
fondes de pouvoir instructions d'exercer ses droits de vote de la facon indiquee
ci-dessous :
1. VOTER POUR [ ] OU S'ABSTENIR DE VOTER [ ] a l'egard de l'election des
administrateurs;
2. VOTER POUR [ ] OU S'ABSTENIR DE VOTER [ ] a l'egard de la nomination des
verificateurs et de l'autorisation des administrateurs a fixer leur
remuneration;
3. a sa discretion a l'egard des modifications aux questions indiquees
ci-dessus ou a l'egard de toute autre question qui pourrait etre
regulierement soumise aux deliberations de l'assemblee;
et revoque par les presentes toute procuration donnee anterieurement.
22
<PAGE> 24
*NOTE 1 : VOUS AVEZ LE DROIT DE NOMMER, POUR VOUS REPRESENTER A L'ASSEMBLEE
ANNUELLE DES ACTIONNAIRES, UNE AUTRE PERSONNE (QUI N'EST PAS TENUE D'ETRE
ELLE-MEME UN ACTIONNAIRE) QUE LES PERSONNES DESIGNEES PAR LA DIRECTION. SI VOUS
DESIREZ CONSTITUER A TITRE DE FONDE DE POUVOIR UNE AUTRE PERSONNE QUE SERGE
GOUIN OU FRANK E. WEISE, LES PERSONNES DESIGNEES PAR LA DIRECTION, VOUS DEVEZ
BIFFER LEURS NOMS ET INSCRIRE DANS L'ESPACE PREVU A CETTE FIN LE NOM DE LA
PERSONNE QUE VOUS DESIREZ CONSTITUER COMME FONDE DE POUVOIR.
*NOTE 2 : Si le present formulaire de procuration n'est pas date dans l'espace
prevu a cette fin, il est repute porter la date de sa mise a la poste par la
direction de la societe.
FAIT le ________ jour de __________________ 2000.
(* voir la note 2)
SIGNATURE : ____________________________________________
NOM EN LETTRES MOULEES : _______________________________
(L'actionnaire qui est une societe doit apposer son sceau.)
(Veuillez dater et signer la presente procuration et la retourner sans delai
dans l'enveloppe fournie a cette fin.)
*NOTE 1: YOU HAVE THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A SHAREOWNER)
TO REPRESENT YOU AT THE ANNUAL MEETING OF SHAREOWNERS OTHER THAN THE MANAGEMENT
NOMINEES. IF YOU DESIRE TO DESIGNATE AS PROXY A PERSON OTHER THAN SERGE GOUIN OR
FRANK E. WEISE, THE MANAGEMENT NOMINEES, YOU SHOULD STRIKE OUT THEIR NAMES AND
INSERT IN THE SPACE PROVIDED THE NAME OF THE PERSON YOU DESIRE AS PROXY.
*NOTE 2: If this form of proxy is not dated in the space provided, it is deemed
to bear the date on which it was mailed by the management of the Corporation.
DATED this______________day of_________________ , 2000.
(* see Note 2)
SIGNATURE : _______________________________________________
PRINT NAME: _______________________________________________
(Corporate shareowners should affix seal)
(Please date, sign and promptly return this proxy in the envelope provided.)
23
