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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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Primo Water Corporation
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(Name of registrant as specified in its charter)
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(Name of person(s) filing proxy statement, if other than the registrant)
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Primo Water Corporation
4221 W. Boy Scout Blvd.
Suite 400
Tampa, Florida 33607
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The date, time and location of the Annual and Special Meeting of Shareowners;
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A list of the matters being submitted to the shareowners for approval; and
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Information concerning voting at the Annual and Special Meeting of Shareowners.
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details of the matters to be voted upon at the meeting, and
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how to exercise your right to vote even if you cannot attend the meeting.
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the notice of the meeting,
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the proxy statement for the meeting, and
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a proxy form that you may use to vote your shares without attending the meeting.
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providing shareowners with the ability to submit appropriate questions real-time via the meeting website; and
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answering questions submitted in the time allotted for the meeting (given time constraints, we may have to limit the number of questions addressed at the meeting).
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FOR the election of the nominees named in this proxy statement as directors;
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FOR the approval of the appointment of PricewaterhouseCoopers LLP as Primo’s independent registered certified public accounting firm;
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FOR the approval, on a non-binding advisory basis, of the compensation of the named executive officers, as such information is disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosure beginning on page 67 (commonly referred to as “say-on-pay”);
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FOR the confirmation, ratification and approval of Primo’s Shareholder Rights Plan described under “Approval of 2021 Rights Plan” beginning on page 68 of this proxy statement, in accordance with the resolution attached as Appendix B to this proxy statement on page B-1; and
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FOR the approval of the continuance of Primo under the Business Corporations Act (Ontario) from the Canada Business Corporations Act (the “Continuance”) described under “Approval of the Continuance” beginning on page 70 of this proxy statement, in accordance with the resolution attached as Appendix E to this proxy statement on page E-1.
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there is a proxy contest;
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the proxy contains comments clearly intended for management; or
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it is necessary to determine a proxy’s validity or to enable management and/or the Board to meet their legal obligations to shareowners or to discharge their legal duties to Primo.
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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
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persons owning or representing not less than a majority of the total number of our shares entitled to vote.
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Name and Address
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Nature of Ownership or
Control
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Number of
Shares
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Percentage of
Class(1)
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BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055
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Beneficial ownership
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11,044,035
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6.87%
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Nitorum Capital, L.P.(3)
450 Park Avenue, 7th Floor
New York, New York 10022
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Beneficial ownership
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10,546,115
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6.56%
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The Vanguard Group Inc.(4)
100 Vanguard Blvd.
Malvern, PA 19355
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Beneficial ownership
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9,510,432
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5.91%
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Integrated Core Strategies (US) LLC(5)
c/o Millennium Management LLC
666 Fifth Avenue
New York, New York 10103
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Beneficial ownership
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8,254,613
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5.13%
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(1)
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Percentage of class is based on 160,811,933 shares outstanding as of March 15, 2021.
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(2)
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Based on information reported in a Schedule 13G filed by BlackRock, Inc. on February 2, 2021 with the Securities and Exchange Commission (the “SEC”). As reported in such filing, BlackRock, Inc. is the beneficial owner of 11,044,035 shares, with sole voting power with respect to 10,834,270 shares and sole dispositive power with respect to 11,044,035 shares.
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(3)
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Based on information reported in a Schedule 13G/A filed jointly by Nitorum Capital, L.P. (“Nitorum Capital”), Nitorum GP, LLC (“Nitorum GP”), and Mr. Seth Rosen on February 16, 2021 with the SEC. As disclosed in the Schedule 13G/A, Nitorum Fund, L.P. and Nitorum Master Fund, L.P. (together, the “Nitorum Funds”) hold the common stock directly. Nitorum Capital serves as the investment adviser to the Nitorum Funds, Nitorum GP serves as the general partner of the Nitorum Funds, and Mr. Rosen serves as the Managing Partner of Nitorum Capital and the Managing Member of Nitorum GP. As indicated in the Schedule 13G/A, each of Nitorum Capital, Nitorum GP and Mr. Rosen have shared voting power and shared dispositive power over 10,546,115 shares.
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(4)
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Based on information reported in a Schedule 13G filed by The Vanguard Group Inc. (“Vanguard Group”) on February 10, 2021 with the SEC. As reported in such filing, the Vanguard Group is the beneficial owner of 9,510,432 shares, with shared voting power with respect to 785,560 shares, sole dispositive power with respect to 8,858,460 shares and shared dispositive power with respect to 651,972 shares.
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(5)
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Based on information reported in a Schedule 13G filed jointly by Integrated Core Strategies (US) LLC, Millennium Management LLC, Millennium Group Management LLC, and Israel A. Englander, on June 30, 2020 with the SEC. As reported in such filing, each of the reporting persons and entities listed in the filing are the beneficial owners of 8,254,613 shares, with shared voting power and shared dispositive power with respect to 3,065,757 shares.
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Industry
Experience
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International
Experience
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Executive
Experience
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Investment
Banking/Private
Equity/M&A
Experience
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Finance
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Accounting
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Legal
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Governance
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Britta Bomhard
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X
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X
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X
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X
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Susan E. Cates
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X
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X
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X
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X
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X
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X
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X
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Jerry Fowden
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X
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X
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X
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X
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X
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X
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Stephen H. Halperin
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X
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X
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X
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X
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Thomas J. Harrington
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X
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X
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X
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X
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X
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X
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Betty Jane Hess
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X
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X
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X
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X
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Gregory Monahan
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X
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X
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X
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X
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Mario Pilozzi
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X
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X
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X
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X
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X
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Billy D. Prim
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X
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X
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X
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X
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X
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Eric Rosenfeld
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X
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X
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X
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X
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Graham W. Savage
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X
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X
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X
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X
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X
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Steven P. Stanbrook
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X
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X
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X
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X
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X
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Nominee
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Committee Membership
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Britta Bomhard, 52, of Princeton, New Jersey, U.S.A., is the Executive Vice President and Chief Marketing Officer of Church & Dwight Co., Inc., an S&P 500 company and maker of Arm & Hammer baking soda and other branded household, personal care and specialty products. She has held this position since 2016. She previously held the role of President of Europe at Church & Dwight from 2013 to 2016. From 2005 to 2013, Ms. Bomhard held the general manager role for Energizer Holdings, Inc. in Spain & Portugal and Nordics & Austria as well as a variety of marketing roles. Prior to Energizer, Ms. Bomhard worked for Wella AG and GlaxoSmithKline in their marketing organizations. Ms. Bomhard has served on our Board since November 2018. The Board nominated Ms. Bomhard to be a director because of her background in international business with extensive experience in strategic planning, sales and marketing, operational improvement and acquisition integration.
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ESG and Nominating Committee
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Susan E. Cates, 50, of Chapel Hill, North Carolina, U.S.A., is a Partner of Leeds Equity Partners, a private equity firm investing in the Knowledge Industries, and the Managing Partner of Leeds Illuminate, the firm’s growth equity investment entity. She serves on the Board of Advisors at Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, where she co-chaired the Nominations and Governance Committee from 2016 through 2020. Ms. Cates served on the board of the legacy Primo business for six years prior to our acquisition of such business. She served on the audit committee of that board and was appointed lead independent director in January 2019. Ms. Cates served as the Chief Executive Officer of the Association of College and University Educators from 2019 to 2021, and as Chief Operating Officer of 2U, Inc., a leading provider of digital education services to universities around the world, from 2016 to 2017. Prior to joining 2U, Ms. Cates served as the President of Executive Development at UNC’s Kenan-Flagler Business School from 2008 to 2016, and as the founding Executive Director of MBA@UNC from 2010 to 2016. Prior to joining UNC, Ms. Cates was a partner with Best Associates, a Dallas-based private equity firm, where she led the identification, acquisition and oversight of multiple domestic and international companies operating in the education sector, including leading M&A efforts for Best Associates’ largest portfolio company and closing a series of acquisitions and partnerships in South America. Prior to joining Best Associates, she co-founded ThinkEquity Partners, a boutique investment bank in New York, with former colleagues from Merrill Lynch & Co. At ThinkEquity, Ms. Cates headed the education investment banking practice with responsibility for business development, client relationships and deal execution. Prior to co-founding ThinkEquity, she worked in investment banking at Merrill Lynch in New York, as well as in corporate lending at Wachovia Bank in Atlanta. She has served on our Board since May 2020. The Board nominated Ms. Cates to be a director because it believes that her extensive executive, financial and transactional experience, along with her knowledge of the legacy Primo business, will be valuable assets to the Board.
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Nominee
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Committee Membership
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Jerry Fowden, 64, of St. Petersburg, Florida, U.S.A., was our Chief Executive Officer from 2009 until the end of 2018, at which point he became our Executive Chairman. Beginning in the second quarter of 2020, he transitioned to the role of Chairman. Prior to his service as our Chief Executive Officer, he served as President of our international operating segment, Interim President North America and Interim President of our UK and European business from 2007 to 2009. Prior to joining Primo, Mr. Fowden served as Chief Executive Officer of Trader Media Group (now known as Autotrader plc) and was a member of the Guardian Media Group plc’s board of directors from 2005 to 2007. Prior to this time, Mr. Fowden served in a variety of roles at multiple companies, including global Chief Operating Officer of ABInBev S.A. Belgium, an alcoholic beverage company, Chief Executive Officer of Bass Brewers Ltd., a subsidiary of AB InBev S.A. Belgium, Managing Director of the Rank Group plc’s Hospitality and Holiday Division and member of the Rank Group plc’s board of directors, Chief Executive Officer of Hero AG’s European beverage operations and various roles within PepsiCo Inc.’s beverage operations and Mars, Incorporated’s pet food operations. Mr. Fowden currently serves on the board of directors of Constellation Brands Inc., a premium alcoholic beverage company, and is a member of its Corporate Governance Committee and Chair of its Human Resources Committee. Mr. Fowden also serves on the board of directors of British American Tobacco p.l.c., a leading consumer goods company, and is a member of its Audit Committee and its Nominations Committee. Mr. Fowden previously served as a member of the board of directors of the American Beverage Association and the British Soft Drinks Association. He has served on our Board since 2009. The Board nominated Mr. Fowden to be a director because he is our former Chief Executive Officer and has extensive international business and industry experience.
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Stephen H. Halperin, 71, of Toronto, Ontario, Canada, is of counsel at the law firm of Goodmans LLP. He was a partner with Goodmans from 1987 until his retirement from the partnership at the end of 2017. He is a member of the Board of Governors of McGill University and the nominating, governance and ethics committee of that board, and is on the board of directors of Our Family Office Ltd, a private company registered as an investment advisor under Canadian law. Mr. Halperin previously served on the board of trustees of KCP Income Fund, a custom manufacturer of national brand and retailer brand consumer products, and on the board of directors of Gluskin Sheff + Associates, Inc., a TSX-listed wealth management company. He has also served on the boards of five other publicly listed issuers. He has served on our Board since 1992. The Board nominated Mr. Halperin to be a director because he is an expert in Canadian corporate law, with over 40 years of experience counseling boards and senior management regarding corporate governance, mergers and acquisitions, compliance, disclosure, international business conduct, capital markets, corporate strategy and other relevant issues. Mr. Halperin is a Canadian resident.
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Chair, Human Resources and Compensation Committee; ESG and Nominating Committee
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Nominee
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Committee Membership
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Thomas J. Harrington, 63, of Tampa, Florida, U.S.A., was appointed as our Chief Executive Officer effective as of the beginning of 2019. Prior to his appointment, Mr. Harrington served as the Chief Executive Officer of our North America business unit since our acquisition of DS Services in December 2014 and was appointed President Route Based Services in July 2016. Prior to the acquisition, Mr. Harrington served in various roles with DS Services from 2004 to 2014, including Chief Executive Officer, President, Chief Operating Officer, West Division President, and Senior Vice President, Central Division. Prior to joining DS Services, Mr. Harrington served in various roles with Coca-Cola Enterprises, Inc. including Vice President and General Manager of Coca-Cola Enterprises New York and Chicago divisions. He also served in various sales and marketing roles with Pepperidge Farm from 1979 to 1985. Mr. Harrington previously served as a member of the board of directors of the National Automatic Merchandising Association, the International Bottled Water Association and the Water Quality Association. He has served on our Board since the beginning of 2019. The Board nominated Mr. Harrington to be a director because he is our Chief Executive Officer and has extensive international business and industry experience.
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Betty Jane (BJ) Hess, 72, of Naples, Florida, U.S.A., was Senior Vice President, Office of the President, of Arrow Electronics, Inc., an electronics distributor listed on the NYSE, for five years prior to her retirement in 2004. At Arrow Electronics, Inc., Ms. Hess was responsible for global operations and led or participated in the integration of 62 acquisitions in the United States, Europe and Asia over a 20-year period. She served on the board of directors of the ServiceMaster Company, a company providing home maintenance and lawn care services, and Harvest Power, a firm specializing in the management of organic waste. Ms. Hess is the protagonist in case studies at Harvard Business School and MIT Sloan School of Management on integration strategy and operational excellence in the supply chain at Arrow Electronics, Inc. She has served on our Board since 2004. The Board nominated Ms. Hess to be a director because it believes that her executive experience, acquisition integration expertise, leadership and communication skills are valuable assets to the board.
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Human Resources and Compensation Committee
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Nominee
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Committee Membership
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Gregory Monahan, 47, of Darien, Connecticut, U.S.A., has been a Senior Managing Director of Crescendo Partners, L.P., a New York-based investment firm, since December 2014. Prior to December 2014, he served as Managing Director of Crescendo Partners and has held various positions at Crescendo Partners since May 2005. He is also a Managing Member and Portfolio Manager for Jamarant Capital, LP, a private investment firm. Previously, he was co-founder of Bind Network Solutions, a consulting firm focused on network infrastructure and security. Mr. Monahan is currently on the board of directors of Absolute Software Corp., a leader in firmware-embedded endpoint security and management for computers and ultra-portable devices. He previously served on the board of directors of BSM Technologies Inc., a global commercial fleet telematics provider, COM DEV International Ltd., a supplier of space equipment and services, SAExploration Holdings Inc., a seismic data services company, ENTREC Corporation, a heavy haul and crane services provider, Bridgewater Systems, a telecommunications software provider, and O’Charley’s Inc., a multi-concept restaurant company. Mr. Monahan has served on our Board since June 2008. The Board nominated Mr. Monahan to be a director because it believes he possesses valuable financial expertise, including extensive expertise with capital markets transactions and investments in both public and private companies. He has served in managing roles in investment and technology consulting firms, which experience informs his judgment and risk assessment as a board member.
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Audit Committee
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Mario Pilozzi, 74, of Oakville, Ontario, Canada, was, until January 2008, President and Chief Executive Officer of Wal-Mart Canada Corp. He joined Wal-Mart Canada in 1994 as Vice-President of Hardline Merchandise and was promoted to Senior Vice-President of Merchandise and Sales, and later Chief Operating Officer, before serving as President and Chief Executive Officer. Prior to joining Wal-Mart Canada, Mr. Pilozzi held a broad range of positions with Woolworth Canada Inc. spanning more than 30 years, including the positions of Vice-President of Hardline Merchandise, Administrator of Store Openings, District Manager, Store Manager and several other key roles in Woolworth’s variety and discount-store divisions. Since his retirement in 2008, Mr. Pilozzi has served as a consultant for WalMart’s businesses in Puerto Rico, Brazil, Argentina, Chile, Mexico, China and Japan. Mr. Pilozzi has served on our Board since June 2008. The Board nominated Mr. Pilozzi to be a director because he has extensive executive experience with well-known, multinational corporations and understands the retail sales business of our retailer partners. Mr. Pilozzi is a Canadian resident.
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Audit Committee
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Nominee
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Committee Membership
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Billy D. Prim, 65, of Palm Beach Gardens, Florida, U.S.A., founded the legacy Primo business in 2004 and served on that board since inception and served as Executive Chairman from June 2017 until the closing of our acquisition of the legacy Primo business in March 2020. Prior to founding legacy Primo, Mr. Prim founded Blue Rhino Corporation, a provider of propane cylinder exchange and complementary propane and non-propane products, in March 1994 and served as its Chief Executive Officer and Chairman of the board. Mr. Prim led Blue Rhino’s initial public offering in May 1998 and remained its Chief Executive Officer until April 2004, when Blue Rhino was acquired by Ferrellgas Partners, L.P. at which time he was elected to the board of directors of Ferrellgas on which he served until November 2008. Mr. Prim previously served on the board of directors of Southern Community Bank and Trust from 1996 through 2005, its previous parent company, Southern Community Financial Corporation, and Towne Park Ltd. Mr. Prim also serves on the Wake Forest School of Business Board of Visitors and the Wake Forest Institute for Regenerative Medicine Advisory Board. He has served on our Board since May 2020. The Board nominated Mr. Prim to be a director because he has extensive business, managerial and leadership experience, as well as extensive knowledge of the legacy Primo business and substantial corporate and shareholder governance expertise.
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Nominee
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Committee Membership
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Eric Rosenfeld, 63, of New York, New York, U.S.A., has been the President and Chief Executive Officer of Crescendo Partners, L.P., a New York-based investment firm, since its formation in November 1998. Prior to forming Crescendo Partners, he held the position of Managing Director at CIBC Oppenheimer and its predecessor company Oppenheimer & Co., Inc. for 14 years. Mr. Rosenfeld currently serves as Chairman Emeritus for CPI Aerostructures Inc., a company engaged in the contract production of structural aircraft parts. He is also on the board at Pangaea Logistics Solutions Ltd., a logistics and shipping company, and Aecon Group Inc., a construction company. In addition, Mr. Rosenfeld is the CEO of Allegro Merger Corp., a shell company, and the Chief SPAC Officer of Legato Merger Corp., a special purpose acquisition company. Mr. Rosenfeld has also served as Chairman and CEO for Arpeggio Acquisition Corporation, Rhapsody Acquisition Corporation, Trio Merger Corp., Quartet Merger Corp. and Harmony Merger Corp., all blank check corporations that later merged with Hill International, Primoris Services Corporation, SAExploration Holdings Inc., Pangaea Logistics Solutions Ltd. and NextDecade Corporation, respectively. He was also a director of Canaccord Genuity Group Inc., a full-service financial services company, NextDecade Corporation, a development stage company building natural gas liquefaction plants, Absolute Software Corp., a leader in firmware-embedded endpoint security and management for computers and ultraportable devices, AD OPT Technologies Inc., an airline crew planning service, Sierra Systems Group Inc., an information technology, management consulting and systems integration firm, Emergis Inc., an electronic commerce company, Hill International, a construction management firm, Matrikon Inc., a company that provides industrial intelligence solutions, DALSA Corp., a digital imaging and semiconductor firm, HIP Interactive, a video game company, GEAC Computer Corporation, a software company, Computer Horizons Corp. (Chairman), an IT services company, Pivotal Corp, a cloud software firm, Call-Net Enterprises, a telecommunication firm, Primoris Services Corporation, a specialty construction company, and SAExploration Holdings Inc., a seismic exploration company. Mr. Rosenfeld is a regular guest lecturer at Columbia Business School and has served on numerous panels at Queen’s University Business Law School Symposia, McGill Law School, the World Presidents’ Organization and the Value Investing Congress. He is a senior faculty member at the Director’s College. He has also been a regular guest host on CNBC. Mr. Rosenfeld has served on our Board since June 2008 and is our Lead Independent Director. The Board nominated Mr. Rosenfeld to be a director because he has extensive experience serving on the boards of multinational public companies and in capital markets and mergers and acquisitions transactions. Mr. Rosenfeld also has valuable experience in the operation of a worldwide business faced with a myriad of international business issues. Mr. Rosenfeld’s leadership and consensus-building skills, together with his experience as senior independent director, make him an effective Lead Independent Director for the Board.
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Chair, ESG and Nominating Committee
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Nominee
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Committee Membership
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Graham W. Savage, 71, of Toronto, Ontario, Canada, is a corporate director. Between 2002 and 2007, Mr. Savage served as the Chairman of Callisto Capital L.P., a Toronto-based private equity firm. Prior to this, since 1998, Mr. Savage was Managing Director at Savage Walker Capital Inc., Callisto Capital L.P.’s predecessor. Between 1975 and 1996, Mr. Savage was with Rogers Communications Inc. in various positions culminating in being appointed the Senior Vice President, Finance and Chief Financial Officer, a position he held for seven years. In addition, Mr. Savage serves on the board of Postmedia Network Canada Corp. He has also previously served on the boards of Canadian Tire Corporation, Rogers Communications Inc., Alias Corp., Lions Gate Entertainment Corp. and Royal Group Technologies Limited, among others. Mr. Savage has served on our Board since February 2008. The Board nominated Mr. Savage to be a director because of his financial expertise, including expertise in the area of private equity. He is our audit committee financial expert and has served as Chief Financial Officer of a large public company. Mr. Savage also has board and committee experience at both public and private companies, and his extensive executive experience brings strong financial and operational expertise to the Board. Mr. Savage is a Canadian resident.
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Chair, Audit Committee
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Steven P. Stanbrook, 63, of Racine, Wisconsin, U.S.A., is a corporate director, currently serving on the boards of directors for Group 1 Automotive, Inc., an international automotive retailer listed on the NYSE, and Imperial Brands PLC, a multinational company listed on the London Stock Exchange. Additionally, he is an Executive Advisory Partner at Wind Point Partners, a Chicago-based private equity firm, where he serves on the Board of Directors of one of their portfolio companies, Voyant Beauty LLC, a contract manufacturer of personal and beauty care products. Mr. Stanbrook previously served on the board of directors of The Vollrath Company, LLC, a privately owned commercial and institutional foodservice equipment supplier, Hewitt Associates, Inc., a provider of human capital and management consulting services, and Chiquita Brands International, Inc., a producer and distributor of fresh fruit and produce, fruit ingredients and other processed foods, both listed on the NYSE. From 1996 to 2015, Mr. Stanbrook served in various roles at S.C. Johnson & Son, Inc., a global manufacturer of consumer products, including Chief Operating Officer, International Markets. Prior to S.C. Johnson & Son, Inc., he served as Chief Executive Officer of Sara Lee Bakery. Mr. Stanbrook has served on our Board since November 2018. The Board nominated Mr. Stanbrook to be a director because he has extensive executive experience gained through his various roles with international consumer packaged goods businesses and extensive governance experience gained from serving on the boards of multinational companies.
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Human Resources and Compensation Committee
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Name
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Fees Earned or
Paid in Cash
($)(3)(4)
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Stock Awards
($)(5)
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Total
($)
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Britta Bomhard
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83,250
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120,000
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203,250
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Susan E. Cates(1)
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54,865
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120,000
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174,865
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Jerry Fowden
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162,000
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131,831(6)
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293,831(7)
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Stephen H. Halperin(2)
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97,125
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120,000
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217,125
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Betty Jane Hess
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83,250
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120,000
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203,250
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Gregory Monahan
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83,250
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120,000
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203,250
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Mario Pilozzi(2)
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83,250
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120,000
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203,250
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Billy D. Prim(1)
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54,865
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120,000
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174,865
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Eric Rosenfeld
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120,250
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120,000
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240,250
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Graham W. Savage(2)
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101,750
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120,000
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221,750
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Steven P. Stanbrook
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83,250
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120,000
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203,250
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(1)
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Ms. Cates and Mr. Prim were appointed to the Board on May 5, 2020.
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(2)
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Messrs. Halperin, Pilozzi and Savage are compensated in Canadian dollars. The amounts paid to such individuals are converted from the U.S. dollar amounts listed above to Canadian dollar amounts at the U.S. to Canadian conversion rate in effect at the time of payment.
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(3)
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As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, all members of our Board voluntarily agreed to reduce their second quarter 2020 director cash compensation by 30%.
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(4)
|
Non-employee directors are also reimbursed for certain business expenses, including travel expenses, in connection with Board and committee meeting attendance. These amounts are not included in the above table.
|
(5)
|
Represents common shares issued in payment of the annual director long-term incentive fee for non-employee directors. The values of the awards reflect the grant date fair values, as computed in accordance with FASB ASC Topic 718 (“ASC 718”).
|
(6)
|
Includes (1) a grant with a grant date fair value of $11,831, which represents the fee for services rendered from March 28, 2020, the date Mr. Fowden transitioned to the role of Chairman of the Board, to May 5, 2020, the date of the 2020 Annual Meeting of Shareowners, and (2) a grant with a grant date fair value of $120,000, which represents the fee for services from the date of the 2020 Annual Meeting of Shareowners to the date of the 2021 Annual and Special Meeting of Shareowners.
|
(7)
|
Mr. Fowden served as Executive Chairman in the first quarter of fiscal 2020, during which time he received $289,190 as compensation for that role.
|
Category
|
| |
Annual Fees(1)
|
Annual Board retainer
|
| |
$90,000
|
Annual fee for the non-executive chair of the Board
|
| |
$150,000
|
Annual fee for chairing the:
|
| |
|
Audit Committee
|
| |
$20,000
|
Compensation Committee
|
| |
$15,000
|
ESG and Nominating Committee
|
| |
$10,000
|
Annual fee for the lead independent director
|
| |
$30,000
|
Annual long-term equity incentive fee (stock award)
|
| |
$120,000
|
(1)
|
As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, all members of our Board voluntarily agreed to reduce their second quarter 2020 director cash compensation by 30%.
|
Name
|
| |
Common Shares
Beneficially Owned,
Controlled or Directed(1)
|
| |
Options
Exercisable within
60 days
|
| |
Total
|
| |
Common Shares
Percentage of Class(2)
|
Britta Bomhard
|
| |
22,661
|
| |
—
|
| |
22,661
|
| |
*
|
Susan E. Cates
|
| |
32,515
|
| |
—
|
| |
32,515
|
| |
*
|
Jerry Fowden(3)
|
| |
1,346,464
|
| |
2,068,423
|
| |
3,414,887
|
| |
2.12%
|
Stephen H. Halperin
|
| |
118,966
|
| |
—
|
| |
118,966
|
| |
*
|
Betty Jane Hess
|
| |
108,426
|
| |
—
|
| |
108,426
|
| |
*
|
Gregory Monahan(4)
|
| |
156,629
|
| |
—
|
| |
156,629
|
| |
*
|
Mario Pilozzi
|
| |
160,176
|
| |
—
|
| |
160,176
|
| |
*
|
Billy D. Prim(5)
|
| |
1,111,429
|
| |
—
|
| |
1,111,429
|
| |
*
|
Eric Rosenfeld(6)
|
| |
843,808
|
| |
—
|
| |
843,808
|
| |
*
|
Graham W. Savage
|
| |
51,672
|
| |
—
|
| |
51,672
|
| |
*
|
Steven P. Stanbrook
|
| |
36,161
|
| |
—
|
| |
36,161
|
| |
*
|
Thomas J. Harrington(3)(7)
|
| |
480,289
|
| |
605,824
|
| |
1,086,113
|
| |
*
|
Jay Wells(3)
|
| |
242,365
|
| |
675,113
|
| |
917,478
|
| |
*
|
Charles R. Hinson(8)
|
| |
124,999
|
| |
69,962
|
| |
194,961
|
| |
*
|
David Muscato(3)
|
| |
37,962
|
| |
193,340
|
| |
231,302
|
| |
*
|
Marni Morgan Poe(3)
|
| |
198,099
|
| |
454,380
|
| |
652,479
|
| |
*
|
William “Jamie” Jamieson(3)
|
| |
18,796
|
| |
29,841
|
| |
48,637
|
| |
*
|
Directors, director nominees and executive officers as a group (consisting of 21 persons, including the directors and executive officers named above)
|
| |
5,267,099(2)
|
| |
4,215,833
|
| |
9,482,932
|
| |
5.90%
|
*
|
Less than 1%
|
(1)
|
Each director and officer has provided the information on shares beneficially owned, controlled or directed. The shareowners named in this table have sole voting and investment power over all shares shown as beneficially owned by them except as otherwise noted in the footnotes below.
|
(2)
|
Percentage of class is based on 160,811,933 shares outstanding as of March 15, 2021.
|
(3)
|
Amounts reported in the above table do not include unvested time-based restricted share units included in the amount of securities beneficially owned by such person as reported on Form 4.
|
(4)
|
Includes 27,280 shares indirectly held by Mr. Monahan through Jamarant Capital, L.P.
|
(5)
|
Includes (a) 1,073,301 common shares held by the Billy D. Prim Revocable Trust (as to which he has shared voting and investment power); (b) 15,887 common shares held by 2010 Irrevocable Trust fbo Sarcanda W. Bellissimo (as to which he has shared voting and investment power); (c) 15,887 common shares held by 2010 Irrevocable Trust fbo Anthony Gray Westmoreland (as to which he has shared voting and investment power); (d) 3,177 common shares held by the 2010 Irrevocable Trust fbo Jager Grayln Dean Bellissimo (as to which he has shared voting and investment power); and (e) 3,177 common shares held by the 2010 Irrevocable Trust fbo Joseph Alexander Bellissimo (as to which he has shared voting and investment power).
|
(6)
|
Includes 245,033 shares indirectly held by Mr. Rosenfeld through Crescendo Partners III, L.P. and 172,687 shares indirectly held by Mr. Rosenfeld through Crescendo Partners, II, L.P. Series II.
|
(7)
|
Includes 251,493 shares held indirectly by Mr. Harrington through TAH Capital LLC.
|
(8)
|
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date. Information regarding his share ownership is based on our corporate records.
|
Thomas J. Harrington
|
| |
Chief Executive Officer
|
Jay Wells
|
| |
Chief Financial Officer
|
Charles R. Hinson
|
| |
Chief Executive Officer—S&D Coffee and Tea (the “S&D CEO”)(1)
|
David Muscato
|
| |
President, North America
|
Marni Morgan Poe
|
| |
Chief Legal Officer and Secretary
|
William “Jamie” Jamieson
|
| |
Vice President, Global Chief Information Officer
|
(1)
|
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date.
|
•
|
Completed the acquisition of the legacy Primo business and divestiture of S&D, allowing us to shift to our focus to leading drinking water solutions;
|
•
|
Enhanced our recurring-revenue offering with Water Exchange, Water Refill and Water Dispensers to complement our Water Direct and Water Filtration solutions;
|
•
|
Increased household penetration of our water solutions across our global footprint;
|
•
|
Utilized our contact-free offering to safely support our customers’ health and wellness journeys;
|
•
|
Improved our digital presence with the release of our MyWater App and other digital enhancements;
|
•
|
Launched innovative new dispensers and water products to drive water consumption growth;
|
•
|
Understood customer needs and improved customer experience based on their feedback;
|
•
|
Leveraged our global footprint and scale to increase productivity, efficiencies and margins;
|
•
|
Achieved ESG milestones in 2020, as further described under the heading “Environmental, Social and Governance”; and
|
•
|
Cultivated an engaged workforce with a consistent set of values and behaviors all rallying around our new purpose.
|
|
Attract and retain talented executives
|
| |
•
|
| |
Provide a competitive total compensation package by taking into account base salary, opportunities for annual performance-based cash bonus compensation, and long-term compensation in the form of equity ownership
|
|
|
Motivate and reward executives
|
| |
•
|
| |
Provide a significant portion of each executive’s target total compensation in the form of equity compensation
|
|
|
|
| |
•
|
| |
Balance incentives between equity-based and cash-based compensation to support a high-performing culture
|
|
|
Provide a competitive compensation package
|
| |
•
|
| |
Benchmark our compensation against competitors and peer group, with the ultimate objective of aligning our named executive officers’ compensation with the market median of the compensation of executives performing similar functions in the competitive market and in our peer group
|
|
|
Ensure internal equity among executives
|
| |
•
|
| |
Adjust compensation based on review of job responsibilities and
individual performance in addition to market data
|
|
|
Align management and shareowner interests
|
| |
•
|
| |
Provide compensation based on short-term and long-term performance
objectives
|
|
|
Pay for performance
|
| |
•
|
| |
Provide the majority of executive pay in variable, “at-risk” incentive
awards - approximately 43% and 40% of targeted compensation in 2020
for our Chief Executive Officer and other named executive officers,
respectively, to ensure that realized pay is tied to attainment of significant
short-term and long-term operating goals
|
|
|
WHAT WE DO
|
| |
WHAT WE DO NOT DO
|
| ||||||
|
✔
|
| |
Administer a robust risk management program, which includes our Compensation Committee’s oversight of the ongoing evaluation of the relationship between our compensation programs and risk, as well as the oversight of risk by the Audit Committee on behalf of the full Board pursuant to the Audit Committee Charter
|
| |
✘
|
| |
Permit employees or directors to engage in any hedging or monetization transactions, short-term, or speculative transactions, or to hold Primo securities in a margin account or pledging Primo securities as collateral for a loan
|
|
|
✔
|
| |
Award annual incentive compensation subject to achievement of objective and pre-established performance goals tied to operational and strategic objectives
|
| |
✘
|
| |
Perform stock option re-pricing without shareowner approval
|
|
|
✔
|
| |
Benchmark executive officer compensation around the market median on all elements of target compensation against a relevant peer group
|
| |
✘
|
| |
Provide cash buyouts for underwater stock options or stock appreciation rights without shareowner approval
|
|
|
✔
|
| |
Include double trigger change in control vesting provisions for equity awards
|
| |
✘
|
| |
Provide cash compensation upon death or disability
|
|
|
✔
|
| |
Engage an independent compensation consultant that does not provide any services to management and that had no relationship with management prior to the engagement
|
| |
✘
|
| |
Provide excise tax gross-ups upon change in control
|
|
|
✔
|
| |
Use a clawback policy to allow the Board to recoup any excess annual or long-term incentive compensation paid to our current and former executive officers in the event of a required accounting restatement of a financial statement of Primo, whether or not based on misconduct, due to material non-compliance with any financial reporting requirement under the securities laws of the United States
|
| |
✘
|
| |
Provide excessive perquisites
|
|
|
✔
|
| |
Require our directors, named executive officers, and other key employees to hold a certain amount of shares received as equity compensation from Primo, with the amount set at a particular multiple of base salary
|
| |
|
| |
|
|
|
✔
|
| |
43% of Chief Executive Officer compensation is at-risk.
|
| |
✔
|
| |
40% of average named executive officer compensation is at-risk.
|
|
|
✔
|
| |
59% of Chief Executive Officer compensation is long-term.
|
| |
✔
|
| |
52% of average named executive officer compensation is long-term.
|
|
Named Executive Officer
|
| |
Fiscal Year
|
| |
Annual Bonus
Actual Payout
as Percent
of Target
|
Thomas J. Harrington
Chief Executive Officer
|
| |
2020
|
| |
73.0%
|
|
2019
|
| |
86.0%
|
||
|
2018
|
| |
37.3%
|
||
|
| |
|
| |
|
Jay Wells
Chief Financial Officer
|
| |
2020
|
| |
73.0%
|
|
2019
|
| |
86.0%
|
||
|
2018
|
| |
91.0%
|
||
|
| |
|
| |
|
Charles R. Hinson
Chief Executive Officer—S&D Coffee and Tea
|
| |
2020
|
| |
—(1)
|
|
2019
|
| |
131.0%
|
||
|
2018
|
| |
76.0%
|
||
|
| |
|
| |
|
David Muscato
President, North America
|
| |
2020
|
| |
122.0%
|
|
2019
|
| |
—(2)
|
||
|
2018
|
| |
—(2)
|
||
|
| |
|
| |
|
Marni Morgan Poe
Chief Legal Officer and Secretary
|
| |
2020
|
| |
73.0%
|
|
2019
|
| |
86.0%
|
||
|
2018
|
| |
91.0%
|
||
|
| |
|
| |
|
William “Jamie” Jamieson
Vice President, Global Chief Information Officer
|
| |
2020
|
| |
73.0%
|
|
2019
|
| |
—(2)
|
||
|
2018
|
| |
—(2)
|
(1)
|
Mr. Hinson did not receive a performance bonus in 2020 as S&D was sold in early 2020.
|
(2)
|
Messrs. Muscato and Jamieson were not named executive officers in 2019 or 2018.
|
|
Attract and retain talented executives
|
| |
•
|
| |
Provide a competitive total compensation package by taking into account
base salary, opportunities for annual performance-based cash bonus
compensation, and long-term compensation in the form of equity ownership
|
|
|
Motivate and reward executives
|
| |
•
|
| |
Provide a significant portion of each executive’s target total compensation
in the form of equity compensation
|
|
|
|
| |
•
|
| |
Balance incentives between equity-based and cash-based compensation to
support a high-performing culture
|
|
|
Provide a competitive compensation package
|
| |
•
|
| |
Benchmark our compensation against competitors and peer group, with
the ultimate objective of aligning our named executive officers’
compensation with the market median of the compensation of executives
performing similar functions in the competitive market and in Primo’s peer group
|
|
|
Ensure internal equity among executives
|
| |
•
|
| |
Adjust compensation based on review of job responsibilities and
individual performance in addition to market data
|
|
|
Align management and shareowner interests
|
| |
•
|
| |
Provide compensation based on short-term and long-term performance
objectives
|
|
|
Pay for performance
|
| |
•
|
| |
Provide the majority of executive pay in variable, “at-risk” incentive
awards - approximately 43% and 40% of targeted compensation in 2020
for our Chief Executive Officer and other named executive officers,
respectively, to ensure that realized pay is tied to attainment of significant
short-term and long-term operating goals
|
|
Removals
|
| |
Additions
|
| |
Revised Peer Group
|
AquaVenture Holdings Limited
|
| |
ADT Inc.
|
| |
ADT Inc.
|
Farmer Bros. Co.
|
| |
Franklin Electric Co., Inc.
|
| |
A.O. Smith Corporation
|
Frontier Communications Corporation
|
| |
Mueller Water Products, Inc.
|
| |
The Brink’s Company
|
|
| |
|
| |
Chemed Corporation
|
|
| |
|
| |
Cintas Corporation
|
|
| |
|
| |
Evoqua Water Technologies Corp.
|
|
| |
|
| |
Franklin Electric Co., Inc.
|
|
| |
|
| |
IDEX Corporation
|
|
| |
|
| |
Mueller Water Products, Inc.
|
|
| |
|
| |
Pentair plc
|
|
| |
|
| |
Rexnord Corporation
|
|
| |
|
| |
Rollins, Inc.
|
|
| |
|
| |
Servicemaster Global Holdings Inc.
|
|
| |
|
| |
Stericycle Inc.
|
|
| |
|
| |
Tetra Tech, Inc.
|
|
| |
|
| |
UniFirst Corporation
|
|
| |
|
| |
Watts Water Technologies Inc.
|
|
| |
|
| |
Windstream Holdings, Inc.
|
|
| |
|
| |
Xylem Inc.
|
Base salary
|
| |
Fixed pay that takes into account an individual’s role and responsibilities, experience, expertise, and individual performance, and compensates named executive officers for services rendered during the fiscal year.
|
|
| |
|
Cash Performance bonuses
|
| |
Performance-based compensation that is paid to reward attainment of annual corporate and individual performance targets.
|
|
| |
|
Long-term equity incentive awards
|
| |
Equity compensation that reinforces the link between incentives and long-term Primo performance, incentivizes our named executive officers, aligns the interests of our named executive officers with those of our shareowners, and encourages executive retention.
|
|
| |
|
Retirement benefits
|
| |
Retirement benefits that provide the opportunity for financial security in retirement consistent with programs for our broad-based employee population, including limited matching contributions under Primo’s 401(k) Plan.
|
|
| |
|
Limited perquisites and benefits
|
| |
Limited perquisites and benefits that effectively facilitate job performance, including an annual executive physical examination, a car allowance, and, in the case of the President, North America, a housing allowance.
|
Name
|
| |
2020 Base Salary
|
| |
2019 Base Salary
|
| |
% Decrease
or Increase
|
Thomas J. Harrington
|
| |
$900,000
|
| |
$850,000
|
| |
5.9%
|
Jay Wells
|
| |
$570,000
|
| |
$553,019
|
| |
3.1%
|
Charles R. Hinson
|
| |
$1,000,000
|
| |
$1,000,000
|
| |
0.0%
|
David Muscato
|
| |
$500,000
|
| |
$463,500
|
| |
7.9%
|
Marni Morgan Poe
|
| |
$425,000
|
| |
$401,300
|
| |
5.9%
|
William “Jamie” Jamieson
|
| |
$412,000
|
| |
$400,000
|
| |
3.0%
|
•
|
Develop and implement strategic and operational initiatives for long-term growth of Primo; and
|
•
|
Achieve specific financial and operational targets.
|
•
|
Implement strategic and operational initiatives for long-term growth of Primo; and
|
•
|
Achieve specific financial and operational targets.
|
•
|
Implement strategic and operational initiatives for long-term growth of Primo; and
|
•
|
Achieve specific financial and operational targets.
|
•
|
Develop and oversee legal support function for implementation of strategic and operational initiatives for long-term growth of Primo; and
|
•
|
Resolve certain litigation matters in a cost effective manner.
|
•
|
Implement strategic and operational initiatives for long-term growth of Primo.
|
Achievement
|
| |
Pre-Tax Income
|
| |
Percentage of Performance
Units Vested
|
125% of Target or greater
|
| |
$140.4 million
|
| |
200%
|
100% of Target
|
| |
$112.3 million
|
| |
100%
|
70% of Target
|
| |
$78.6 million
|
| |
40%
|
Less than 70% of Target
|
| |
Less than $78.6 million
|
| |
0%
|
Actual (continuing operations)
|
| |
$124.5 million
|
| |
144%
|
•
|
The base salary portion of compensation is designed to provide a steady income regardless of Primo’s performance so that executives do not feel pressured to focus on achievement of certain performance goals at the expense of other aspects of Primo’s business.
|
•
|
The performance goals used to determine the amount of an executive’s bonus are measures that the Compensation Committee believes drive long-term shareowner value. The Compensation Committee attempts to set ranges for these measures that promote success without encouraging excessive risk-taking to achieve short-term results.
|
•
|
The measures used to determine whether performance-based restricted share units vest are based on performance over a three-year period. The Compensation Committee believes that the three-year measurement period reinforces the link between incentives and long-term Primo performance, and the performance cycles overlap to reduce any incentive to maximize performance in a particular period at the expense of another.
|
•
|
Cash bonuses are capped at 200% of target. Similarly, vesting for performance-based restricted share units is capped at 200% of target.
|
•
|
The equity awarded to our named executive officers is a mix of performance-based restricted share units, time-based restricted share units and stock options. The Compensation Committee believes that this mix avoids having a relatively high percentage of compensation tied to one element, and that the time-based restricted share units and stock options should reduce risky behavior because these awards are designed to retain employees and because they are earned over time.
|
•
|
Compensation is balanced between short-term and long-term compensation, creating diverse time horizons.
|
•
|
The Compensation Committee believes that linking performance and the corresponding payout factor mitigates risk by avoiding situations where a relatively small amount of increased performance results in a relatively high corresponding amount of increased compensation.
|
•
|
Named executive officers are required to hold a certain amount of Primo shares, which aligns their interests with those of our shareowners.
|
•
|
We have implemented accounting policies and internal controls over the measurement and calculation of performance goals.
|
•
|
We have implemented a clawback policy, which is intended to reduce potential risks associated with our incentive plans, and thus better align the long-term interests of our named executive officers and shareowners.
|
•
|
We have a “no-hedging” policy that prohibits our directors, officers, employees and consultants from engaging in any hedging or monetization transactions, such as zero-cost collars and forward sale contracts, with respect to Primo securities.
|
•
|
We have a policy prohibiting employees from engaging in any short-term, speculative transactions involving Primo securities, including purchasing securities on margin, engaging in short sales, buying or selling put or call options, and trading in options.
|
•
|
We have a policy prohibiting employees from holding Primo securities in a margin account or pledging Primo securities as collateral for a loan.
|
•
|
The Compensation Committee approves our short-term and long-term incentive compensation programs, which mitigates risk by empowering a group of independent directors with substantial experience and expertise.
|
•
|
The Compensation Committee has engaged an outside, independent compensation consultant who is knowledgeable regarding various compensation policies and their associated risks and is free from any conflict of interest.
|
Name and Principal
Position
|
| |
Year
|
| |
Salary
($)
|
| |
Bonus
($)
|
| |
Stock
Awards(1)
($)
|
| |
Option/
SAR
Awards(2)
($)
|
| |
Non-Equity
Incentive Plan
Compensation(3)
($)
|
| |
All Other
Compensation
($)
|
| |
Total
($)
|
Thomas J. Harrington
Chief Executive Officer
|
| |
2020
|
| |
824,231(4)
|
| |
—
|
| |
3,579,266(5)
|
| |
1,847,715(5)
|
| |
722,700
|
| |
25,633(6)
|
| |
6,999,545(5)
|
|
2019
|
| |
850,000
|
| |
—
|
| |
1,562,500
|
| |
937,500
|
| |
731,000
|
| |
25,760
|
| |
4,106,760
|
||
|
2018
|
| |
802,220
|
| |
250,000
|
| |
1,437,500
|
| |
862,500
|
| |
301,253
|
| |
20,914
|
| |
3,674,387
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Jay Wells
Chief Financial Officer
|
| |
2020
|
| |
525,967(4)
|
| |
521,550(7)
|
| |
562,500
|
| |
337,500
|
| |
312,075
|
| |
25,155(8)
|
| |
2,284,747
|
|
2019
|
| |
553,019
|
| |
—
|
| |
562,500
|
| |
337,500
|
| |
356,697
|
| |
24,533
|
| |
1,834,249
|
||
|
2018
|
| |
473,051
|
| |
—
|
| |
562,500
|
| |
337,500
|
| |
322,857
|
| |
18,573
|
| |
1,714,481
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Charles R. Hinson
Chief Executive Officer—S&D Coffee and Tea(9)
|
| |
2020
|
| |
161,644
|
| |
—
|
| |
2,765,299(10)
|
| |
—
|
| |
—
|
| |
—
|
| |
2,926,943
|
|
2019
|
| |
1,000,000
|
| |
—
|
| |
—
|
| |
—
|
| |
1,310,000
|
| |
25,769
|
| |
2,335,769
|
||
|
2018
|
| |
1,000,000
|
| |
—
|
| |
468,750
|
| |
281,250
|
| |
760,000
|
| |
25,522
|
| |
2,535,522
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
David Muscato
President, North America
|
| |
2020
|
| |
455,558(4)
|
| |
457,500(7)
|
| |
468,750
|
| |
281,250
|
| |
457,500
|
| |
58,820(11)
|
| |
2,179,378
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Marni Morgan Poe
Chief Legal Officer and Secretary
|
| |
2020
|
| |
389,196(4)
|
| |
—
|
| |
437,500
|
| |
262,500
|
| |
232,688
|
| |
31,554(12)
|
| |
1,353,438
|
|
2019
|
| |
398,154
|
| |
—
|
| |
437,500
|
| |
262,500
|
| |
256,809
|
| |
16,819
|
| |
1,371,782
|
||
|
2018
|
| |
386,993
|
| |
—
|
| |
437,500
|
| |
262,500
|
| |
264,123
|
| |
18,044
|
| |
1,369,160
|
||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
William “Jamie” Jamieson
Vice President, Global Chief Information Officer
|
| |
2020
|
| |
380,246(4)
|
| |
376,980(7)
|
| |
187,500
|
| |
112,500
|
| |
225,570
|
| |
24,069(8)
|
| |
1,306,865
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
(1)
|
Stock awards made in 2020 were time-based and performance-based restricted share units granted under the Amended and Restated Equity Plan and the 2018 Equity Plan. The amounts reported in this column for 2020 reflect the aggregate grant date fair values for time-based and performance-based restricted share units computed in accordance with ASC 718, excluding the effect of estimated forfeitures. The assumptions used for the valuations are set forth in Note 9 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021. Assuming achievement of the highest level of performance for these awards, the grant date fair values of awards subject to performance conditions would have been as follows: Mr. Harrington: $2,250,000; Mr. Wells: $675,000; Mr. Muscato: $562,500; Ms. Poe: $525,000; and Mr. Jamieson: $225,000.
|
(2)
|
The values of option awards reflect the grant date fair values, as computed in accordance with ASC 718. The assumptions used for the valuations are set forth in Note 9 to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended January 2, 2021.
|
(3)
|
The amounts under the Non-Equity Incentive Plan Compensation column reflect amounts earned under Primo’s annual performance bonus plan.
|
(4)
|
As part of our broad-based effort to respond to the coronavirus (COVID-19) outbreak, these executive officers voluntarily agreed to reduce their second quarter 2020 base salaries by 30%.
|
(5)
|
On August 4, 2020, we amended each of the Amended and Restated Equity Plan and the 2018 Equity Plan to provide for defined criteria for a retirement along with continued vesting of equity awards upon a retirement. Mr. Harrington meets the criteria for retirement under the Equity Plans, and as a result, we incurred incremental compensation expense associated with the modification of his outstanding awards. The incremental fair values of the modified awards computed as of the modification date are included in the Stock Awards and Option/SAR Awards columns, even though the grant date fair values for such equity awards are or have been reported in the Summary Compensation Table for prior fiscal years. Accordingly, the Summary Compensation Table shows a significant increase in the total compensation for fiscal 2020 for Mr. Harrington. This increase in compensation relates to accounting charges resulting from the modification of Mr. Harrington’s equity awards, and not an increase in the realizable value of the awards. The table below sets forth equity modification charges required by the applicable accounting rules and the total compensation amounts for fiscal 2020 after excluding such modification charges:
|
Name
|
| |
Time-Based
Restricted
Share Unit
Modification
Charge
|
| |
Performance-
Based
Restricted
Share Unit
Modification
Charge
|
| |
Options
Modification
Charge
|
| |
Total
Modification
Charge
|
| |
Total
(Without Equity
Accounting
Modification
Charge)
|
Thomas J. Harrington
|
| |
$504,379
|
| |
$1,199,887
|
| |
$722,715
|
| |
$2,426,981
|
| |
$4,572,564
|
(6)
|
Represents a car allowance, 401(k) match, and annual medical exam.
|
(7)
|
Represents the grant date fair value of a bonus payable in common shares in connection with the legacy Primo acquisition based upon attainment of (1) a specified percentage target under Primo’s annual cash performance bonus plan for the Primo Water North America business, and (2) a specified annualized 2020 synergy target. The gross number of common shares ultimately issued (Mr. Wells: 29,922, Mr. Muscato 26,247, and Mr. Jamieson 21,628) was calculated based on the closing share price on February 12, 2021, the date that achievement of the performance target was certified by the Compensation Committee.
|
(8)
|
Includes a car allowance, phone allowance, 401(k) match, and annual medical exam.
|
(9)
|
On February 28, 2020, we completed the sale of all of the equity of our S&D Coffee and Tea business to Westrock Coffee Company, LLC, and Mr. Hinson ceased to be an executive officer of Primo on that date.
|
(10)
|
The amounts in the column represent (a) common shares issued to Mr. Hinson in connection with the sale of S&D with a grant date fair value of $2,516,180, and (b) $249,119 in incremental fair value on outstanding awards that were accelerated upon the closing of the sale resulting in a modification of such awards.
|
(11)
|
Includes a car allowance, 401(k) match, annual medical exam, and a $35,000 housing allowance.
|
(12)
|
Includes a car allowance, phone allowance, and 401(k) match.
|
•
|
eligibility to earn bonuses based upon the achievement of agreed-upon criteria established from time to time by the Compensation Committee; and
|
•
|
customary allowances and limited perquisites.
|
Name
|
| |
Grant
Date
|
| |
Board
Approval
Date
|
| |
Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards(1)
|
| |
Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2)
|
| |
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or
Units(3)
(#)
|
| |
All
Other
Option
Awards:
Number of
Securities
Underlying
Options(4)
(#)
|
| |
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
| |
Grant
Date
Fair
Value of
Stock
Awards
and
Options(5)
($)
|
||||||||||||
|
| |
|
| |
|
| |
Threshold
($)
|
| |
Target
($)
|
| |
Maximum
($)
|
| |
Threshold
(#)
|
| |
Target
(#)
|
| |
Maximum
(#)
|
| |
|
| |
|
| |
|
| |
|
Thomas J. Harrington
|
| |
—
|
| |
—
|
| |
495,000
|
| |
990,000
|
| |
1,980,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
28,409
|
| |
71,022
|
| |
142,044
|
| |
—
|
| |
—
|
| |
—
|
| |
1,125,000
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
47,348
|
| |
—
|
| |
—
|
| |
750,000
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
236,344
|
| |
15.84
|
| |
1,125,000
|
Jay Wells
|
| |
—
|
| |
—
|
| |
213,750
|
| |
427,500
|
| |
855,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
| |
5/5/2020
|
| |
5/5/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
29,922
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
427,500(6)
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
8,522
|
| |
21,306
|
| |
42,612
|
| |
—
|
| |
—
|
| |
—
|
| |
337,500
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
14,204
|
| |
—
|
| |
—
|
| |
225,000
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
70,903
|
| |
15.84
|
| |
337,500
|
Charles R. Hinson
|
| |
2/28/2020
|
| |
2/13/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
176,574(7)
|
| |
—
|
| |
—
|
| |
2,516,180
|
David Muscato
|
| |
—
|
| |
—
|
| |
187,500
|
| |
375,000
|
| |
750,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
| |
5/5/2020
|
| |
5/5/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
26,247
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
375,000(6)
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
7,102
|
| |
17,755
|
| |
35,510
|
| |
—
|
| |
—
|
| |
—
|
| |
281,250
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
11,837
|
| |
—
|
| |
—
|
| |
187,500
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
59,086
|
| |
15.84
|
| |
281,250
|
Marni Morgan Poe
|
| |
—
|
| |
—
|
| |
159,375
|
| |
318,750
|
| |
637,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
6,628
|
| |
16,571
|
| |
33,142
|
| |
—
|
| |
—
|
| |
—
|
| |
262,500
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
11,047
|
| |
—
|
| |
—
|
| |
175,000
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
55,147
|
| |
15.84
|
| |
262,500
|
William “Jamie” Jamieson
|
| |
—
|
| |
—
|
| |
154,500
|
| |
309,000
|
| |
618,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
| |
5/5/2020
|
| |
5/5/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
21,628
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
309,000(6)
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
2,841
|
| |
7,102
|
| |
14,204
|
| |
—
|
| |
—
|
| |
—
|
| |
112,500
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,734
|
| |
—
|
| |
—
|
| |
75,000
|
|
| |
12/9/2020
|
| |
12/9/2020
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
23,634
|
| |
15.84
|
| |
112,500
|
(1)
|
The amounts in these columns show the range of possible cash payouts under our annual performance bonus plan for achievement of specified levels of performance in fiscal 2020. With respect to our named executive officers, amounts reported in these columns are calculated solely based on EBITDA, operating free cash flow, and revenue targets, and assume no adjustment to bonus levels based on achievement of individual performance targets. For additional information related to the annual cash incentive awards including performance goals, measures and weighting, see the “Compensation Discussion and Analysis” section of this proxy statement.
|
(2)
|
The amounts in these columns represent performance-based restricted share unit awards. The performance-based restricted share unit awards vest based upon the achievement of average annual ROIC and aggregate revenues over a three-year period beginning on the first day of Primo’s 2021 fiscal year and ending on the last day of Primo’s 2023 fiscal year (weighted 75% and 25%, respectively). The amounts included in the “Target” column reflect the total number of shares that would be issued at the end of the three-year performance period if 100% of the “target” ROIC and revenues are achieved. The amounts included in the “Maximum” column reflect the total number of shares that would be issued at the end of the three-year performance period if 125% of the “target” ROIC and revenues are achieved.
|
(3)
|
The amounts in this column represent grants of time-based restricted share units. Time-based restricted share units granted in 2020 vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(4)
|
The amounts in this column represent grants of stock options. Stock options granted in 2020 vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(5)
|
Unless otherwise noted, the “Grant Date Fair Value of Stock Awards and Options” column shows the full grant date fair values of the stock options and performance- and time-based restricted share units granted in fiscal 2020. The grant date fair values of the awards are determined under ASC 718 and represent the amounts we would expense in our financial statements over the vesting schedule for the awards. In accordance with SEC rules, the amounts in this column reflect the actual ASC 718 accounting cost without reduction for estimates of forfeitures related to service-based vesting conditions. The assumptions used for determining values are set forth in Note 9 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021. The amounts reflect our accounting for these grants and do not correspond to the actual values that may be realized by the named executive officers.
|
(6)
|
Common shares ultimately issued Mr. Wells: 29,922, Mr. Muscato 26,247, and Mr. Jamieson 21,628 were calculated based on the closing share price on February 12, 2021, the date that achievement of the performance target was certified by the Compensation Committee. Represents the grant date fair value of a bonus payable in common shares in connection with the legacy Primo acquisition based upon attainment of (1) a specified percentage target under Primo’s annual cash performance bonus plan for the Primo Water North America business, and (2) a specified annualized 2020 synergy target.
|
(7)
|
On February 28, 2020, we completed the sale of our S&D Coffee and Tea subsidiary. This award represents common shares issued to Mr. Hinson in connection with the sale.
|
|
| |
OPTION AWARDS
|
| |
STOCK AWARDS
|
|||||||||||||||
Name
|
| |
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
| |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
| |
Option
Exercise
Price
($)
|
| |
Option
Expiration
Date
|
| |
Type of Award
|
| |
Equity Incentive Plan
Awards: Number of
Unearned Shares,
Units or Other Rights
That Have Not Vested
(#)
|
| |
Equity Incentive Plan
Awards: Market or
Payout Value of Unearned
Shares, Units or Other
Rights That Have Not
Vested ($)(1)
|
Thomas J. Harrington
|
| |
—
|
| |
236,344(2)
|
| |
15.84
|
| |
12/9/2030
|
| |
—
|
| |
—
|
| |
—
|
|
| |
91,642(3)
|
| |
183,284(3)
|
| |
13.67
|
| |
12/11/2029
|
| |
—
|
| |
—
|
| |
—
|
|
| |
143,034(4)
|
| |
71,518(4)
|
| |
14.68
|
| |
12/11/2028
|
| |
—
|
| |
—
|
| |
—
|
|
| |
108,921(5)
|
| |
—
|
| |
17.50
|
| |
12/7/2027
|
| |
—
|
| |
—
|
| |
—
|
|
| |
204,280(6)
|
| |
—
|
| |
10.40
|
| |
12/6/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
57,947(7)
|
| |
—
|
| |
16.99
|
| |
8/11/2026
|
| |
|
| |
|
| |
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
71,022(8)
|
| |
1,113,625
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
47,348(9)
|
| |
742,417
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
68,580(10)
|
| |
1,075,334
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
30,480(11)
|
| |
477,926
|
|
| |
|
| |
|
| |
|
| |
|
| |
Performance-Based RSU
|
| |
58,753(12)
|
| |
921,247
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
13,056(13)
|
| |
204,718
|
Jay Wells
|
| |
—
|
| |
70,903(2)
|
| |
15.84
|
| |
12/9/2030
|
| |
—
|
| |
—
|
| |
—
|
|
| |
32,991(3)
|
| |
65,982(3)
|
| |
13.67
|
| |
12/11/2029
|
| |
—
|
| |
—
|
| |
—
|
|
| |
55,970(4)
|
| |
27,985(4)
|
| |
14.68
|
| |
12/11/2028
|
| |
—
|
| |
—
|
| |
—
|
|
| |
69,242(5)
|
| |
—
|
| |
17.50
|
| |
12/7/2027
|
| |
—
|
| |
—
|
| |
—
|
|
| |
78,793(6)
|
| |
—
|
| |
10.40
|
| |
12/6/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
57,947(7)
|
| |
—
|
| |
16.99
|
| |
8/11/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
197,774(14)
|
| |
—
|
| |
11.22
|
| |
2/19/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
47,093(15)
|
| |
—
|
| |
9.25
|
| |
2/25/2025
|
| |
—
|
| |
—
|
| |
—
|
|
| |
52,734(16)
|
| |
—
|
| |
8.00
|
| |
2/13/2024
|
| |
—
|
| |
—
|
| |
—
|
|
| |
41,959(17)
|
| |
—
|
| |
9.29
|
| |
5/2/2023
|
| |
—
|
| |
—
|
| |
—
|
|
| |
40,610(18)
|
| |
—
|
| |
6.58
|
| |
2/21/2022
|
| |
|
| |
|
| |
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
21,306(8)
|
| |
334,078
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
14,204(9)
|
| |
222,719
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
24,689(10)
|
| |
387,124
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
10,973(11)
|
| |
172,057
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
22,990(12)
|
| |
360,483
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
5,109(13)
|
| |
80,109
|
Charles R. Hinson
|
| |
69,962(19)
|
| |
—
|
| |
14.68
|
| |
12/11/2028
|
| |
—
|
| |
—
|
| |
—
|
David Muscato
|
| |
—
|
| |
59,086(2)
|
| |
15.84
|
| |
12/9/2030
|
| |
—
|
| |
—
|
| |
—
|
|
| |
27,492(3)
|
| |
54,986(3)
|
| |
13.67
|
| |
12/11/2029
|
| |
|
| |
|
| |
|
|
| |
110,565(20)
|
| |
110,565(20)
|
| |
14.58
|
| |
4/16/2028
|
| |
—
|
| |
—
|
| |
—
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
17,755(8)
|
| |
278,398
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
11,837(9)
|
| |
185,604
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
20,574(10)
|
| |
322,600
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
9,144 (11)
|
| |
143,378
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
61,728(21)
|
| |
967,895
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
20,576(22)
|
| |
322,632
|
Marni Morgan Poe
|
| |
—
|
| |
55,147(2)
|
| |
15.84
|
| |
12/9/2030
|
| |
—
|
| |
—
|
| |
—
|
|
| |
25,659(3)
|
| |
51,320(3)
|
| |
13.67
|
| |
12/11/2029
|
| |
—
|
| |
—
|
| |
—
|
|
| |
43,532(4)
|
| |
21,766(4)
|
| |
14.68
|
| |
12/11/2028
|
| |
—
|
| |
—
|
| |
—
|
|
| |
52,515(5)
|
| |
—
|
| |
17.50
|
| |
12/7/2027
|
| |
—
|
| |
—
|
| |
—
|
|
| |
62,013(6)
|
| |
—
|
| |
10.40
|
| |
12/6/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
57,947(7)
|
| |
—
|
| |
16.99
|
| |
8/11/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
73,844(14)
|
| |
—
|
| |
11.22
|
| |
2/19/2026
|
| |
—
|
| |
—
|
| |
—
|
|
| |
37,064(15)
|
| |
—
|
| |
9.25
|
| |
2/25/2025
|
| |
—
|
| |
—
|
| |
—
|
|
| |
41,504(16)
|
| |
—
|
| |
8.00
|
| |
2/13/2024
|
| |
—
|
| |
—
|
| |
—
|
|
| |
32,598(17)
|
| |
—
|
| |
9.29
|
| |
5/2/2023
|
| |
—
|
| |
—
|
| |
—
|
|
| |
27,704(18)
|
| |
—
|
| |
6.58
|
| |
2/21/2022
|
| |
|
| |
|
| |
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
16,571(8)
|
| |
259,833
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
11,047(9)
|
| |
173,217
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
19,202(10)
|
| |
301,087
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
8,534(11)
|
| |
133,813
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Performance-Based RSU
|
| |
17,881(12)
|
| |
280,374
|
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
Time-Based RSU
|
| |
3,974(13)
|
| |
62,312
|
(1)
|
The market value shown has been calculated based on the closing price of our common shares on the NYSE as of December 31, 2020 ($15.68), the last business day of our 2020 fiscal year.
|
(2)
|
This amount represents stock options granted on December 9, 2020, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(3)
|
This amount represents stock options granted on December 11, 2019, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(4)
|
This amount represents stock options granted on December 11, 2018, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(5)
|
This amount represents stock options granted on December 7, 2017, which vested in three equal installments on the first, second and third anniversaries of the grant date.
|
(6)
|
This amount represents stock options granted on December 6, 2016, which vested in three equal installments on the first, second and third anniversaries of the grant date.
|
(7)
|
This amount represents stock options granted on August 11, 2016, which vested in three equal installments on the first, second and third anniversaries of the grant date.
|
(8)
|
This amount represents performance-based restricted share units granted on December 9, 2020. The performance-based restricted share unit awards vest based upon the achievement of average annual ROIC and aggregate revenues over a three-year period beginning on the first day of Primo’s 2021 fiscal year and ending on the last day of Primo’s 2023 fiscal year (weighted 75% and 25%, respectively). The payout percentage of the performance-based restricted share units and the related unrecognized compensation cost is subject to change based on the level of targeted ROIC and revenues that is achieved during such period. The amounts included reflect the total number of shares that would be issued at the end of the three-year performance period if Primo achieves 100% of the “target” ROIC and revenue levels.
|
(9)
|
This amount represents time-based restricted share units granted on December 9, 2020, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(10)
|
This amount represents performance-based restricted share units granted on December 11, 2019. The performance-based restricted share units vest based on the achievement of a specified target level of cumulative pre-tax income for the period beginning on December 29, 2019 and ending on the last day of our 2021 fiscal year. The payout percentage of the performance-based restricted share units and the related unrecognized compensation cost is subject to change based on the level of targeted pre-tax income that is achieved during such period. The amounts included reflect the total number of shares that would be issued at the end of the three-year performance period if Primo achieves 100% of the “target” pre-tax income level.
|
(11)
|
This amount represents time-based restricted share units granted on December 11, 2019, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(12)
|
This amount represents performance-based restricted share units granted on December 11, 2018. The performance-based restricted share units vest based on the achievement of a specified target level of cumulative pre-tax income for the period beginning on December 30, 2018 and ending on the last day of our 2021 fiscal year. The payout percentage of the performance-based restricted share units and the related unrecognized compensation cost is subject to change based on the level of targeted pre-tax income that is achieved during such period. The amounts included reflect the total number of shares that would be issued at the end of the three-year performance period if Primo achieves 100% of the “target” pre-tax income level.
|
(13)
|
This amount represents time-based restricted share units granted on December 11, 2018, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(14)
|
This amount represents stock options granted on February 19, 2016, which vested in three equal installments on the first, second and third anniversaries of the grant date.
|
(15)
|
This amount represents stock options granted on February 25, 2015 that vested on the last day of our 2017 fiscal year.
|
(16)
|
This amount represents stock options granted on February 13, 2014 that vested on the last day of our 2016 fiscal year.
|
(17)
|
This amount represents stock options granted on May 2, 2013 that vested on the last day of our 2015 fiscal year.
|
(18)
|
This amount represents stock options granted on February 21, 2012 that vested on the last day of our 2014 fiscal year.
|
(19)
|
This amount represents stock options granted on December 11, 2018 that fully vested upon the closing of the sale of S&D.
|
(20)
|
This amount represents stock options granted on April 16, 2018, which vest in four equal installments on the first, second, third and fourth anniversaries of the grant date.
|
(21)
|
This amount represents performance-based restricted share units granted on April 16, 2018. The performance-based restricted share units vest based on the achievement of a specified target level of cumulative pre-tax income for the period beginning on December 31, 2017 and ending on the last day of our 2021 fiscal year. The payout percentage of the performance-based restricted share units and the related unrecognized compensation cost is subject to change based on the level of targeted pre-tax income that is achieved during such period. The amounts included reflect the total number of shares that would be issued at the end of the four-year performance period if Primo achieves 100% of the “target” pre-tax income level.
|
(22)
|
This amount represents time-based restricted share units granted on April 16, 2018, which vest in four equal installments on the first, second, third and fourth anniversaries of the grant date.
|
(23)
|
This amount represents stock options granted on April 1, 2019, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
(24)
|
This amount represents performance-based restricted share units granted on April 1, 2019. The performance-based restricted share units vest based on the achievement of a specified target level of cumulative pre-tax income for the period beginning on December 30, 2018 and ending on the last day of our 2021 fiscal year. The payout percentage of the performance-based restricted share units and the related unrecognized compensation cost is subject to change based on the level of targeted pre-tax income that is achieved during such period. The amounts included reflect the total number of shares that would be issued at the end of the three-year performance period if Primo achieves 100% of the “target” pre-tax income level.
|
(25)
|
This amount represents time-based restricted share units granted on April 1, 2019, which vest in three equal installments on the first, second and third anniversaries of the grant date.
|
|
| |
Option Awards
|
| |
Stock Awards
|
||||||
Name
|
| |
Number of Shares
Acquired on Exercise
(#)
|
| |
Value Realized
on Exercise
($)
|
| |
Number of Shares
Acquired on Vesting
(#)(1)
|
| |
Value Realized
on Vesting
($)(2)
|
Thomas J. Harrington
|
| |
—
|
| |
—
|
| |
78,163
|
| |
1,305,022
|
Jay Wells
|
| |
—
|
| |
—
|
| |
72,217
|
| |
1,233,886
|
Charles R. Hinson
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
David Muscato
|
| |
—
|
| |
—
|
| |
41,107
|
| |
626,294
|
Marni Morgan Poe
|
| |
—
|
| |
—
|
| |
32,282
|
| |
543,506
|
William “Jamie” Jamieson
|
| |
—
|
| |
—
|
| |
25,142
|
| |
421,010
|
(1)
|
This amount includes (a) time-based restricted share units granted in 2017, the last installment of which vested on the third anniversary of the grant date, time-based restricted share units granted in 2018, one-third of which vested on the second anniversary of the grant date, and time-based restricted share units granted in 2019, one-third of which vested on the first anniversary of the grant date, (b) performance-based restricted share units granted in 2017, which vested in February 2021 upon certification by the Compensation Committee that the pre-tax income target with respect to such awards was achieved at the 144% level, and (c) with respect to Messrs. Wells, Muscato and Jamieson, common shares issued as a bonus in connection with the legacy Primo acquisition based upon attainment of (i) a specified percentage target under Primo’s annual cash performance bonus plan for the Primo Water North America business, and (ii) a specified annualized 2020 synergy target.
|
(2)
|
With respect to time-based restricted share units granted in 2017, the value realized on vesting has been calculated by utilizing the closing price of our common shares on the NYSE as of the applicable vesting date (December 7, 2020 ($15.49)). With respect to time-based restricted share units granted in 2018, the value realized on vesting has been calculated by utilizing the last closing price of our common shares on the NYSE as of the applicable vesting dates (April 16, 2020 ($9.36) and December 11, 2020 ($15.86)). With respect to time-based restricted share units granted in 2019, the value realized on vesting has been calculated by utilizing the last closing price of our common shares on the NYSE as of the applicable vesting date (April 1, 2020 ($8.92) and December 11, 2020 ($15.86)). With respect to performance-based restricted share units granted in 2017 and the common shares issued as a bonus to Messrs. Wells, Muscato and Jamieson in connection with the legacy Primo acquisition, the value realized on vesting has been calculated by utilizing the closing price of our common shares on the NYSE as of February 12, 2021 ($17.43), the date the Compensation Committee certified that the targets with respect to such awards were achieved.
|
Equity Plans
|
| |
Accelerated Vesting
($)(1)
|
Thomas J. Harrington
|
| |
4,975,186
|
Jay Wells
|
| |
1,717,178
|
David Muscato
|
| |
2,452,651
|
Marni Morgan Poe
|
| |
1,335,556
|
William “Jamie” Jamieson
|
| |
604,322
|
(1)
|
Includes the value, based on the closing price of our common shares on the NYSE as of December 31, 2020 ($15.68), the last business day of our 2020 fiscal year, of common shares issuable pursuant to (i) time-based restricted share units granted in 2018, 2019 and 2020 that had not vested as of January 2, 2021, and (ii) performance-based restricted share units granted in 2019 and 2020, assuming the performance objectives applicable to such awards were satisfied at the “target” level of performance. Stock options granted in 2020 are not included in the table above, as the exercise price of such options exceeded the closing price of our common shares on the NYSE as of December 31, 2020.
|
Equity Plans
|
| |
Equity Awards
($)(1)
|
Thomas J. Harrington
|
| |
2,382,654
|
Jay Wells
|
| |
847,144
|
David Muscato
|
| |
1,720,905
|
Marni Morgan Poe
|
| |
658,882
|
William “Jamie” Jamieson
|
| |
289,063
|
(1)
|
Includes the value, based on the closing price of our common shares on the NYSE as of December 31, 2020 ($15.68), the last business day of our 2020 fiscal year, of common shares issuable pursuant to: (i) time-based restricted share units granted in 2018, 2019 and 2020 that had not vested as of January 2, 2021, and (ii) performance-based restricted share units granted in 2019 and 2020. Because the performance periods for the performance-based restricted share units granted to our named executive officers in 2019 and 2020 have not yet been completed, the number of common shares issuable pursuant to performance-based restricted share units that such named executive officers would have been entitled to on January 2, 2021 cannot be determined. As a result, this column includes the value of such performance-based restricted share units on a pro rata basis, assuming achievement of the performance goals at “target” and a share value equal to the closing price of our common shares on the NYSE as of December 31, 2020 ($15.68). Stock options granted in 2020 are not included in the table above, as the exercise price of such options exceeded the closing price of our common shares on the NYSE as of December 31, 2020.
|
(i)
|
the willful failure of the participant to properly carry out the participant’s duties and responsibilities or to adhere to Primo’s policies after written notice by Primo of the failure to do so, and such failure remaining
|
(ii)
|
theft, fraud, dishonesty or misappropriation by the participant, or the gross negligence or willful misconduct by the participant, involving the property, business or affairs of Primo, or in the carrying out of the participant’s duties, including, without limitation, any breach by the participant of the representations, warranties and covenants contained in the participant’s employment agreement. if applicable, or Article 7 of the Amended and Restated Severance Plan;
|
(iii)
|
the participant’s conviction of or plea of guilty to a criminal offense that involves fraud, dishonesty, theft or violence;
|
(iv)
|
the participant’s breach of a fiduciary duty owed to Primo; or
|
(v)
|
the participant’s refusal to follow the lawful written reasonable and good faith direction of the Board.
|
(i)
|
a material diminution in the participant’s title or duties or assignment to the participant of materially inconsistent duties;
|
(ii)
|
a reduction in the participant’s then current annual base salary or target bonus opportunity as a percentage of annual base salary, unless such reduction in target bonus opportunity is made applicable to all participants serving in substantially the same capacity as the participant;
|
(iii)
|
relocation of the participant’s principal place of employment to a location that is more than 50 miles away from the participant’s principal place of employment on the date upon which the participant became a participant, unless such relocation is effected at the request of the participant or with the participant’s approval;
|
(iv)
|
a material breach by Primo of any provisions of the Amended and Restated Severance Plan, or any employment agreement to which the participant and Primo are parties, after written notice by the participant of the breach and such failure remaining uncorrected following an opportunity for Primo to correct such failure within ten days of the receipt of such notice; or
|
(v)
|
the failure of Primo to obtain the assumption in writing of its obligation to perform the Amended and Restated Severance Plan by any successor to all or substantially all of the business or assets of Primo within fifteen days after a merger, consolidation, sale or similar transaction.
|
|
| |
Cash
Severance
($)
|
| |
Non Equity
Incentive
Plan
Payment
($)
|
| |
Medical
Continuation
($)
|
| |
Equity
Awards
($)
|
| |
Total
($)
|
Thomas J. Harrington
|
| |
3,780,000
|
| |
722,700
|
| |
23,082
|
| |
2,382,654
|
| |
6,908,436
|
Jay Wells
|
| |
1,246,875
|
| |
312,075
|
| |
24,755
|
| |
847,144
|
| |
2,430,848
|
David Muscato
|
| |
1,093,750
|
| |
457,500
|
| |
—
|
| |
1,720,905
|
| |
3,272,155
|
Marni Morgan Poe
|
| |
929,688
|
| |
232,688
|
| |
24,755
|
| |
658,882
|
| |
1,846,012
|
William “Jamie” Jamieson
|
| |
721,000
|
| |
225,570
|
| |
24,755
|
| |
289,063
|
| |
1,260,387
|
|
| |
Cash
Severance
($)
|
| |
Non Equity
Incentive
Plan
Payment
($)
|
| |
Medical
Continuation
($)
|
| |
Accelerated
Vesting
($)
|
| |
Total
($)
|
Thomas J. Harrington
|
| |
3,780,000
|
| |
722,700
|
| |
23,082
|
| |
4,975,186
|
| |
9,500,968
|
Jay Wells
|
| |
1,246,875
|
| |
312,075
|
| |
24,755
|
| |
1,717,178
|
| |
3,300,883
|
David Muscato
|
| |
1,093,750
|
| |
457,500
|
| |
—
|
| |
2,452,651
|
| |
4,003,901
|
Marni Morgan Poe
|
| |
929,688
|
| |
232,688
|
| |
24,755
|
| |
1,335,556
|
| |
2,522,686
|
William “Jamie” Jamieson
|
| |
721,000
|
| |
225,570
|
| |
24,755
|
| |
604,322
|
| |
1,575,646
|
Plan
|
| |
Number of Common Shares
to be Issued upon Exercise
of Outstanding Options,
Warrants and Rights
(a)
|
| |
Weighted-average Exercise
Price of Outstanding Options,
Warrants and Rights
(b)
|
| |
Number of Common Shares
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)
|
Equity Compensation Plans Approved by Security Holders(1)
|
| |
8,848,298(2)
|
| |
US$13.07(3)
|
| |
6,149,299(4)
|
Equity Compensation Plans Not Approved by Security Holders
|
| |
—
|
| |
—
|
| |
—
|
Total
|
| |
8,848,298(2)
|
| |
US$13.07(3)
|
| |
6,149,299(4)
|
(1)
|
Equity compensation plans approved by security holders include the Amended and Restated Equity Plan, which was approved on April 30, 2013, and amended on February 18, 2015, May 3, 2016 and March 13, 2020, and the 2018 Equity Plan, which was approved on May 1, 2018 and amended on March 13, 2020 and then on August 4, 2020 pursuant to Amendment No. 2 to the Primo Water Corporation 2018 Equity Incentive Plan (the “Amendment No. 2”). Pursuant to the Amendment No. 2, the following amendments were made to the 2018 Equity Incentive Plan: (i) including a retirement age and service concept; (ii) amending existing awards to continue vesting in the event of a retirement; (iii) adding a provision to allow options to be exercisable for up to three years post-termination (but not to extend beyond the initial expiry); (iv) adding restrictive covenants to future awards that will operate to enforce the retirement concept; and (v) amending the change of control provisions. A complete copy of Amendment No. 2 is available on the SEDAR website maintained by the Canadian securities regulators at www.sedar.com and the EDGAR website maintained by the SEC at www.sec.gov. The Board adopted Amendment No. 2 pursuant to section 17(a) of the 2018 Equity Incentive Plan and no further shareholder approval was required.
|
(2)
|
Represents 546,821 shares pursuant to time-based restricted share units, 1,031,344 shares pursuant to performance-based restricted share units, and 7,270,133 shares pursuant to stock options granted (and not exercised, forfeited or cancelled, as applicable) under the Equity Plans. If any of the shares to be issued pursuant to time-based restricted share units, performance-based restricted share units, or stock options are forfeited, expired, or are cancelled or settled without the issuance of shares, they will return to the pool of shares available for issuance under the Equity Plans. As of March 15, 2021, there were 8,535,672 shares to be issued upon the vesting or exercise of outstanding time-based restricted share units, performance-based restricted share units and stock options under the Equity Plans.
|
(3)
|
Represents the weighted-average exercise price of stock options granted under the Equity Plans.
|
(4)
|
Represents the number of shares available for future issuance under the Equity Plans. Based on the share counting methodology provided for in the Equity Plans, shares issued under each of the Equity Plans, respectively, will be applied to reduce the maximum number of shares remaining available for issuance under each of the Equity Plans, respectively; provided that the total number of shares available for issuance will be reduced 2.0 shares for each share issued pursuant to “full value” awards made after April 30, 2013 or May 1, 2018 for the Amended and Restated Equity Plan and the 2018 Equity Plan, respectively. “Full value” awards include any awards other than options or stock appreciation rights. “Full value” awards that lapse or are forfeited are returned to the pool at the same 2.0 multiple at which they were debited. As of January 2, 2021, there were 4,904,618 full value awards that were issued after April 30, 2013 under the Equity Plans, which reduce the shares available for future issuance under the Equity Plans by 9,809,236. As of March 15, 2021, approximately 195,919 shares remained available for issuance under the Amended and Restated Equity Plan and 5,799,380 shares remained available for issuance under the 2018 Equity Plan.
|
•
|
adopting a strategic planning process;
|
•
|
identifying the principal risks for Primo and implementing appropriate risk management systems;
|
•
|
succession planning and monitoring of senior management;
|
•
|
ensuring that we have in place a communications policy to enable us to communicate effectively and in a timely manner with our shareowners, other stakeholders and the public generally; and
|
•
|
maintaining the integrity of our internal control and management information systems.
|
•
|
oversees Primo’s Enterprise Risk Management (“ERM”) program and requests reports from management on its monitoring and mitigation of risks;
|
•
|
discusses with management the relationship between Primo’s risk appetite and business strategies; and
|
•
|
reviews major financial risk exposures and oversees the guidelines and policies used to govern the ERM program.
|
•
|
The Audit Committee oversees the ERM program guidelines and policies, and considers Primo’s major financial risk exposures as well as risks associated with financial reporting and fraud.
|
•
|
The Compensation Committee considers executive officer succession planning as well as major compensation-related risks when reviewing our compensation strategy, plans and programs.
|
•
|
The ESG and Nominating Committee considers our Board’s succession planning and our corporate governance matters.
|
•
|
produce timely, complete and accurate information on our operations and business and on any other specific matter that may, in management’s opinion, have material consequences for us, our shareowners and other stakeholders;
|
•
|
act on a timely basis and make appropriate decisions with regard to our operations, in accordance with all the relevant requirements and obligations and in compliance with our policies, with a view to increasing shareowner value;
|
•
|
apply a rigorous budget process and closely monitor our financial performance in terms of the annual budget approved by the Board;
|
•
|
develop and implement a strategic plan in light of trends in the market; and
|
•
|
promote high ethical standards and practices in conducting our business.
|
•
|
reviewing and assessing Primo’s strategy, initiatives and policies relating to environmental, social and governance matters that are significant to Primo and receiving updates with respect thereto from management;
|
•
|
developing and maintaining a set of corporate governance principles applicable to Primo and monitoring, on behalf of the Board, Primo’s approach to corporate governance issues;
|
•
|
reviewing periodically and recommending changes to the governing documents and the mandates of the Board committees;
|
•
|
establishing and articulating qualifications, desired background, expertise (including risk assessment skills), diversity considerations, and other selection criteria for the members of the Board or any Board committee;
|
•
|
advising the Board regarding the appropriate number of directors, and identifying and recommending the nomination of new members to the Board and its committees from time to time and nominees for each annual meeting of shareowners (and as such functions as a nominating committee);
|
•
|
in the event that a director’s principal employment responsibilities change (except for internal promotions within his or her organization) and that director volunteers to resign from the Board as required pursuant to the Corporate Governance Guidelines, recommending to the Board whether or not to request such resignation;
|
•
|
when a director receives an invitation to serve on the board of directors of another publicly traded company, reviewing and determining whether to approve, with input from Primo’s Chairman, Chief Executive Officer and Chief Legal Officer, the proposed directorship in accordance with the Corporate Governance Guidelines;
|
•
|
advising the Board with respect to the Board’s leadership structure and the positions held by the members of the Board;
|
•
|
ensuring that management develops, implements and maintains appropriate orientation and education programs for directors and schedules periodic presentations for directors to ensure the Board is aware of major business trends and industry and corporate governance practices;
|
•
|
developing and recommending to the Board for approval an annual self-evaluation process of the Board and its committees (including each member thereof) and management;
|
•
|
monitoring the quality of the relationship between management and the Board and recommending any areas for improvement;
|
•
|
reporting on corporate governance as required by all applicable public disclosure requirements;
|
•
|
reviewing and assessing annually Primo’s Corporate Governance Guidelines;
|
•
|
reviewing and, as appropriate, modifying the Code of Business Conduct and Ethics, and pre-approving any request for a waiver of such Code;
|
•
|
reviewing all related party transactions, whether or not reportable pursuant to applicable U.S. and Canadian securities laws and regulations;
|
•
|
reviewing, on at least an annual basis, the way in which Primo’s corporate governance is being evaluated by relevant external organizations and publications;
|
•
|
developing and administering a mandatory retirement age policy;
|
•
|
being responsible for those matters assigned to it under Primo’s Code of Business Conduct and Ethics and Code of Ethics for Senior Officers;
|
•
|
reviewing and reassessing the adequacy of the ESG and Nominating Committee’s charter annually and recommending any proposed changes to the Board for approval;
|
•
|
reviewing and assessing the ESG and Nominating Committee’s own performance on an annual basis and reporting regularly to the Board regarding the results of the ESG and Nominating Committee’s activities; and
|
•
|
retaining, to the extent it deems necessary or appropriate, outside consultants and other outside advisors to the Committee at the expense of Primo, including any search firm engaged to identify potential candidates for directorship — and instructing any such search firm to seek to include diverse candidates in terms of race, gender, geography, thought, viewpoints, backgrounds, skills, experience and expertise.
|
•
|
each director should be an individual of the highest character and integrity;
|
•
|
each director should have sufficient experience to enable the director to make a meaningful contribution to the Board and to Primo;
|
•
|
each director should have sufficient time available to devote to our affairs in order to carry out his or her responsibilities as a director;
|
•
|
each person who is nominated as an independent director should meet all of the criteria established for independence under applicable securities or stock exchange laws, rules or regulations;
|
•
|
whether the residency of the nominee will impact residency and qualification requirements under applicable legislation relating to the composition of the Board and its committees; and
|
•
|
whether the person is being nominated, or is precluded from being nominated, to fulfill any contractual obligation we may have.
|
•
|
the name, age, principal occupation and contact information of the nominee;
|
•
|
whether the nominee is a resident Canadian within the meaning of the Canada Business Corporations Act (the “CBCA”);
|
•
|
the class or series and number of shares of Primo that are controlled or that are owned beneficially or of record by the nominee as of the record date for the meeting of shareowners (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
|
•
|
any relationships, agreements or arrangements between the nominee or any of its affiliates and the nominating shareowner, any person acting jointly or in concert with the nominating shareowner or any of their respective affiliates;
|
•
|
any other information relating to the nominee that would be required to be disclosed in a dissident’s proxy statement in connection with solicitations of proxies for election of directors pursuant to the CBCA and applicable securities laws; and
|
•
|
duly completed personal information form in respect of the nominee in the form prescribed by the NYSE and TSX.
|
•
|
the name and record address of the nominating shareowner;
|
•
|
the class or series and number of shares of Primo which are controlled or which are owned beneficially or of record by the nominating shareowner as of the record date for the meeting of shareowners (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
|
•
|
any derivatives or other economic or voting interests in Primo and any hedges implemented with respect to the nominating shareowners’ interests in Primo;
|
•
|
any proxy, contract, arrangement, understanding or relationship pursuant to which the nominating shareowner has a right to vote any shares of Primo;
|
•
|
whether the nominating shareowner intends to deliver a proxy statement and form of proxy to any shareowners of Primo in connection with the election of directors; and
|
•
|
any other information relating to the nominating shareowner that would be required to be made in a dissident’s proxy statement in connection with solicitations of proxies for election of directors pursuant to the CBCA and applicable securities laws.
|
•
|
recommending to the independent members of the Board the annual compensation of the Chief Executive Officer, including base salary, incentive bonus structure, targets, pay-out levels, long-term incentive awards and perquisites;
|
•
|
establishing the annual compensation of the direct reports to the Chief Executive Officer;
|
•
|
periodically reviewing with the Board and approving short-term and long-term incentive compensation programs and equity-based plans, including general plan administration such as determining eligibility, and setting targets;
|
•
|
reviewing and recommending to the board the remuneration to be paid to non-employee members of the Board;
|
•
|
reviewing all executive compensation disclosure before such information is publicly disclosed by Primo; and
|
•
|
evaluating whether and to what extent Primo’s compensation policies or practices create incentives that affect risk taking.
|
•
|
overall Board performance and areas of focus including strategic and business issues, challenges, and opportunities;
|
•
|
Board meeting logistics;
|
•
|
CEO, senior management and Director succession planning;
|
•
|
Board Committee structure and composition (including whether the Board leadership structure continues to be optimal for Primo and its shareowners);
|
•
|
Board culture;
|
•
|
Board composition; and
|
•
|
management performance, including quality of materials, provided to the Directors.
|
•
|
the sufficiency of their charters;
|
•
|
whether Committee members possess the right skills and experiences or whether additional education or training is required;
|
•
|
whether there are sufficient meetings covering the right topics; and
|
•
|
whether meeting materials are effective, among other matters.
|
•
|
CEO Communications. Our Board receives monthly communications from our CEO with updates on our global performance and strategy and information on other relevant developments.
|
•
|
Committee Chairs and Other Directors. Our committee chairs regularly communicate with management to discuss the development of meeting agendas and presentations. The Chair of our Audit Committee communicates regularly with our independent auditor, Chief Financial Officer, Chief Accounting Officer, and the Head of Internal Audit; the Chair of our ESG and Nominating Committee communicates regularly with our Chief Legal Officer and Secretary; and the Chair of the Compensation Committee communicates regularly with our Vice President Corporate Human Resources.
|
•
|
Other Communications to the Board, Committees, Committee Chairs, and Other Directors. In between Board and committee meetings, directors receive prompt updates from management on developing matters.
|
•
|
Reference Materials. Directors also regularly receive quarterly strategy updates, securities analysts’ reports, investor communications, company publications, news articles, and other reference materials.
|
•
|
The time requirement and workload of the proposed directorship, including the precise role and any associated committee or other associated obligations.
|
•
|
Any existing or potential conflicts of interest.
|
•
|
Any legal or regulatory considerations associated with the proposed directorship.
|
•
|
If the director in question intends to resign from any other public company board, and if so, the timing of such resignation and whether this will be publicly disclosed at the time of taking up the proposed directorship.
|
•
|
The limit on the number of directorships set forth herein.
|
•
|
Any other factors that may compromise the director’s ability to fully perform his or her duties to Primo.
|
•
|
We received certifications from the Alliance for Water Stewardship (“AWS”) for our Diamond Spring site in Pennsylvania and our Wekiva Spring site in Florida;
|
•
|
We achieved carbon neutral certification for our U.S. operations;
|
•
|
We achieved carbon neutral certification for our European subsidiary, Eden Springs, for the ninth consecutive year;
|
•
|
We continue to replace older model diesel vehicles in our delivery fleet with propane-powered vehicles that deliver greater fuel efficiency and help lower our greenhouse gas emissions; and
|
•
|
We remain on target to reach full AWS compliance of all key owned spring sources by 2025.
|
|
| |
Fees ($)
|
|||
|
| |
2020
|
| |
2019
|
Audit Fees (including out-of-pocket expenses)
|
| |
5,075,900
|
| |
3,896,200
|
Audit-Related Fees
|
| |
28,000
|
| |
—
|
Tax Fees
|
| |
1,073,700
|
| |
477,100
|
All Other Fees
|
| |
82,700
|
| |
11,500
|
Total
|
| |
6,260,300
|
| |
4,384,800
|
•
|
For audit services, the independent auditor is to provide the Audit Committee with an engagement letter for each fiscal year outlining the scope of the audit services proposed to be performed. If agreed to by the Audit
|
•
|
For non-audit services, management and the independent auditor will periodically submit to the Audit Committee for approval in advance a description of particular non-audit services. Management and the independent auditor will each confirm to the Audit Committee that each proposed non-audit service is permissible under applicable legal requirements. The Audit Committee must approve permissible non-audit services in order for Primo to engage the independent auditor for such services. The Audit Committee will be informed routinely as to the non-audit services actually provided by the independent auditor pursuant to this process.
|
•
|
If management proposes that the Audit Committee engage the independent auditor to provide a non-audit service that is not contemplated or approved by the Audit Committee pursuant to the process outlined above, management will submit the request to the Audit Committee. Management and the independent auditor will each confirm to the Audit Committee that such non-audit service is permissible under all applicable legal requirements. Management will also provide an estimate of the cost of such non-audit service. The Audit Committee must approve the engagement for the non-audit service and the fees for such service prior to our engagement of the independent auditor for the purposes of providing such non-audit service.
|
•
|
Director Residency Requirements. In contrast to the CBCA, once the Amendments come into force, the OBCA will not require a company’s board of directors to be comprised of at least 25% Canadian residents. While this has not been an issue for Primo in the past, continuing to the OBCA would provide Primo with greater flexibility in structuring the composition of its Board going forward, including in respect of seeking diverse candidates.
|
•
|
Update to Advance Notice Policy. The Proposed Articles and By-Laws include slightly updated advance notice requirements for nominations of directors by shareowners that are relatively less restrictive than Primo’s existing Advance Notice By-Law originally adopted in 2013. The updated advance notice requirements in the Proposed Articles and By-Laws reflect guidance of the Toronto Stock Exchange.
|
•
|
Notice–and–Access Delivery. Under the OBCA, Primo will be able to more readily employ the use of notice-and-access delivery procedures under applicable Canadian securities laws since, unlike under the CBCA, Primo will no longer need to seek exemptive relief to use such procedures. Notice-and-access delivery procedures allow for the posting of shareowner meeting materials to Primo’s website and SEDAR in lieu of sending such materials to shareowners by mail. This will allow Primo to continue to limit its printing and mailing costs for future shareowner meetings.
|
•
|
the Proposed Articles, as set out in Appendix C, will provide that Primo’s authorized share capital shall consist of (a) an unlimited number of common shares; (b) an unlimited number of first preferred shares, issuable in series (“First Preferred Shares”); and (c) an unlimited number of second preferred shares, issuable in series (“Second Preferred Shares”), removing from the existing articles the (x) first series of First Preferred Shares, designated as Series A Convertible First Preferred Shares; (y) second series of First Preferred Shares, designated as Series B Non-Convertible First Preferred Shares; and (z) first series of Second Preferred Shares, designated as convertible, participating voting Second Preferred Shares, Series 1, to maintain flexibility in Primo’s capital structure, while also removing series of shares that are no longer outstanding; and
|
•
|
the Proposed By-Law No. 1, as set out in Appendix D, will amend the existing by-laws in respect of the Advance Notice By-Law, as detailed below.
|
a)
|
Primo must obtain the approval of its shareowners of the Continuance by way of the Continuance Resolution, in the form of a special resolution approved by not less than sixty-six and two-thirds percent (66 2/3%) of the votes cast by the shareowners in person or by proxy at the meeting;
|
b)
|
Primo must make a written application to the director under the CBCA (the “CBCA Director”) for consent to continue under the OBCA, such written application to establish to the satisfaction of the Director that the proposed Continuance will not adversely affect Primo’s creditors or shareowners;
|
c)
|
Once the Continuance Resolution is passed and Primo has obtained the consent of the CBCA Director, Primo must apply to the director under the OBCA (the “OBCA Director”) for a certificate of continuance (the “Certificate of Continuance”);
|
d)
|
On the date shown on the Certificate of Continuance, Primo will become a company registered under the OBCA as if it had been incorporated under the OBCA; and
|
e)
|
Primo must then file a copy of the Certificate of Continuance with the CBCA Director and receive a certificate of discontinuance under the CBCA (the “Certificate of Discontinuance”).
|
a)
|
the company possesses all the property, rights, privileges and franchises and is subject to all the liabilities, including civil, criminal and quasi-criminal, and all contracts, disabilities and debts of the foreign corporation;
|
b)
|
a conviction against, or ruling, order or judgment in favor of or against, the foreign corporation may be enforced by or against the company; and
|
c)
|
the company shall be deemed to be the party plaintiff or the party defendant, as the case may be, in any civil action commenced by or against the foreign corporation.
|
a)
|
amend its articles to add, remove or change any provisions restricting or constraining the issue, transfer or ownership of shares of that class;
|
b)
|
amend its articles to add, remove or change any restriction upon the business or businesses that the company may carry on;
|
c)
|
amalgamate with another company (other than for vertical or horizontal short-form amalgamations);
|
d)
|
be continued under the laws of another jurisdiction;
|
e)
|
sell, lease or exchange all or substantially all its property; or
|
f)
|
carry out a going-private transaction.
|
|
| |
|
|
| |
MARNI MORGAN POE
|
|
| |
Chief Legal Officer and
|
|
| |
Secretary
|
1.
|
the shareholder rights plan of Primo Water Corporation (the “Company”) be continued, and the Amended and Restated Shareholder Rights Plan Agreement dated as of May 4, 2021 between the Company and Computershare Investor Services Inc., as rights agent (the “2021 Rights Plan”), which amends and restates the Shareholder Rights Plan Agreement dated as of May 1, 2018 between the Company and Computershare Investor Services Inc., as rights agent, and which confirms shareholder protection rights to holders of common shares that are outstanding at the Record Time (as defined in the 2021 Rights Plan) on the terms set out in the 2021 Rights Plan, and continues the issuance of the Rights thereafter to holders of newly issued common shares until the termination or expiration of the 2021 Rights Plan, be and is hereby reconfirmed, ratified and approved; and
|
2.
|
any one director or officer of the Company is hereby authorized and directed for and on behalf of the Company to execute and to deliver all documents and take such actions as such person may determine to be necessary or advisable to implement this resolution, the execution of any such document or the doing of any such other action being conclusive evidence of such determination.
|
For Ministry Use Only
À l'usage exclusif du ministère
|
| |
Ontario Corporation Number
Numéro de la société en Ontario
|
| |
|
|
| |
|
|
| |
|
| |
|
| |
|
|
| |
7.
|
The director(s) is/are: / Administrateur(s) :
First name, middle names and surname
Prénom, autres prénoms et nom de famille
|
| |
Address for service, giving Street & No. or R.R. No.,
Municipality, Province, Country and Postal Code
Domicile élu, y compris la rue et le numéro ou le numéro de
la R.R., le nom de la municipalité, la province, le pays et le
code postal
|
| |
Resident Canadian
State ‘Yes’ or ‘No’
Résident canadien
Oui/Non
|
|||
|
| |
Graham W. Savage
|
| |
28 Oriole Road, Toronto, Ontario, Canada M4V 2E8
|
| |
Yes
|
| |
|
|
|
| |
|
|
| |
|
| |
|
| |
|
|
| |
Stephen Howard Halperin
|
| |
10 Bellair Street, Apt 1902, Toronto, Ontario, Canada M5R 1N6
|
| |
Yes
|
| |
|
|
|
| |
|
|
| |
|
| |
|
| |
|
|
| |
Jerry Fowden
|
| |
100 1st Avenue North, Unit 3003, St., Petersburg, Florida, United States 33701
|
| |
No
|
| |
|
|
|
| |
|
|
| |
|
| |
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Eric Stuart Rosenfeld
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1 Osborn Road, Harrison, New York, United States 10528
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No
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Thomas Harrington
|
| |
2620 N Dundee Street, Tampa, Florida, United States 33629
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No
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Mario Pilozzi
|
| |
11 Bronte Road, Unit 421, Oakville, Ontario, Canada L6L 0E1
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Yes
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8.
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Restrictions, if any, on business the corporation may carry on or on powers the corporation may exercise.
Limites, s'il y a lieu, imposées aux activités commerciales ou aux pourvoirs de la société.
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None
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ANNEX / ANNEXE
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7.
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The director(s) of the corporation are: Administrateur(s)
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First name, initials and surname
Prénom, initiales et nom de famille
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Address for service, giving Street & No. or R.R. No., Municipality and Postal Code.
Domicile élu, y compris la rue et le numéro, le numéro de
la R.R., ou le nom de la municipalité et le code postal
|
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Resident Canadian State Yes or No
Résident canadien Oui/Non
|
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|
| |
Britta Bomhard
|
| |
30 Robert Road, Princeton, New Jersey, United States 08540
|
| |
No
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| |||||
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Betty J. Hess
|
| |
3166 Olympia Lane, Naples, Florida, United States 34114
|
| |
No
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|
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Gregory Rush Monahan
|
| |
43 Christie Hill Road, Darien, Connecticut, United States 06820
|
| |
No
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| ||||||
|
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Steven P. Stanbrook
|
| |
3063 Michigan Boulevard, Racine, Wisconsin, United States 53403
|
| |
No
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Susan E. Cates
|
| |
213 Copper Beech Court, Chapel Hill, North Carolina, United States 27517
|
| |
No
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| ||||||
|
| |
Billy Dean Prim
|
| |
11125 Green Bayberry Drive, Palm Beach Gardens, Florida, United States 33418
|
| |
No
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9.
|
The classes and any maximum number of shares that the corporation is authorized to issue:
Catégories et nombre maximal, s'il y a lieu, d'actions que la société est autorisée à émettre :
|
|||||||||
|
| |
|
||||||||||
|
| |
|
The Corporation is authorized to issue the following classes of shares:
|
|||||||||
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| ||||||||||||
|
| |
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(a) an unlimited number of first preferred shares, issuable in series (“First Preferred Share”);
|
|||||||||
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| |
|
||||||||||
|
| |
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(b) an unlimited number of second preferred shares, issuable in series (“Second Preferred Shares”); and
|
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| |
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||||||||||
|
| |
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(c) an unlimited number of common shares (“Common Shares”).
|
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|
| |
10.
|
Rights, privileges, restrictions and conditions (if any) attaching to each class of shares and directors authority with respect to any class of shares which may be issued in series:
|
|||||||||
|
| |
|
Droits, privilèges, restrictions et conditions, s'il y a lieu, rattachés à chaque catégorie d'actions et pouvoirs des administrateurs relatifs à chaque catégorie d'actions qui peut être émise en série :
|
|||||||||
|
| |
|
||||||||||
|
| |
|
See pages 4A to 4I attached hereto.
|
|||||||||
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| |
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||||||||||
|
| |
|
1.0
|
FIRST PREFERRED SHARES
|
(i)
|
provisions, if any, with respect to the rights of the holders of the First Preferred Shares of such series to receive notice of or to attend any meeting of the shareholders of the Corporation or to vote at any such meeting;
|
(ii)
|
whether any dividends shall be payable on the First Preferred Shares of such series and, if dividends are to be payable thereon, the rate, amount or method of calculation of preferential dividends, whether fixed or fluctuating, whether cumulative or non-cumulative, whether such dividends are payable in money or by the issue of fully paid shares of the Corporation, the currency or currencies of payment, the date or dates and places of payment of preferential dividends and the date or dates from which such preferential dividends shall accrue;
|
(iii)
|
the rights of the Corporation if any, to purchase or redeem the First Preferred Shares of such series, and the purchase or redemption price or the method of calculating the same, and the terms and conditions of any such purchase or redemption;
|
(iv)
|
provisions, if any, with respect to the rights of the holders of the First Preferred Shares of such series to tender such shares to the Corporation for purchase by the Corporation and to oblige the Corporation to make such purchase;
|
(v)
|
the conversion rights, if any;
|
(vi)
|
the terms and conditions of any share purchase plan or sinking fund with respect to the First Preferred Shares of such series; and
|
(vii)
|
the restrictions, if any, respecting payment of dividends on the Second Preferred Shares, the Common Shares or on any other shares of the Corporation ranking junior to the First Preferred Shares;
|
2.0
|
SECOND PREFERRED SHARES
|
(i)
|
provisions, if any, with respect to the rights of the holders of the Second Preferred Shares of such series to receive notice of or to attend any meeting of the shareholders of the Corporation or to vote at any such meeting;
|
(ii)
|
whether any dividends shall be payable on the Second Preferred Shares of such series and, if dividends are to be payable thereon, the rate, amount or method of calculation of preferential dividends, whether fixed or fluctuating, whether cumulative or non-cumulative, whether such dividends are payable in money or by the issue of fully paid shares of the Corporation, the currency or currencies of payment, the date or dates and places of payment of preferential dividends and the date or dates from which such preferential dividends shall accrue;
|
(iii)
|
the rights of the Corporation, if any, to purchase or redeem the Second Preferred Shares of such series, and the purchase or redemption price or the method of calculating the same, and the terms and conditions of any such purchase or redemption;
|
(iv)
|
provisions, if any, with respect to the rights of the holders of the Second Preferred Shares of such series to tender such shares to the Corporation for purchase by the Corporation and to oblige the Corporation to make such purchases;
|
(v)
|
the conversion rights, if any;
|
(vi)
|
the terms and conditions of any share purchase plan or sinking fund with respect to the Second Preferred Shares of such series; and
|
(vii)
|
the restrictions, if any, respecting payment of dividends on the Common Shares or on any other shares of the Corporation ranking junior to the Second Preferred Shares;
|
3.0
|
COMMON SHARES
|
(i)
|
effect an exchange, reclassification or cancellation of all or part of the Common Shares;
|
(ii)
|
create a new class of shares equal or superior to the Common Shares; or
|
(iii)
|
increase any maximum number of authorized shares of any class of shares having rights or privileges equal or superior to the Common Shares,
|
|
| |
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|
| |
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| |
|
|||
|
| |
11.
|
The issue, transfer or ownership of shares is/is not restricted and the restrictions (if any) are as follows:
L'émission, le transfert ou la propriété d'actions est/n'est pas restreint. Les restrictions, s'il y a lieu, sont les suivantes :
|
|||||||||
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| |||||
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| |
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None
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|
| |
12.
|
Other provisions, (if any):
Autres dispositions s'il y a lieu :
|
|||||||||
|
| |
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|
|||||||||
|
| |
|
See page 6A attached hereto.
|
|||||||||
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|
|
12.
|
Other provisions, if any
|
(a)
|
borrow money upon the credit of the Corporation and limit or increase the amount to be borrowed;
|
(b)
|
issue, reissue, sell or pledge bonds, debentures, notes or other evidences of indebtedness, guarantees or securities of the Corporation, whether secured or unsecured;
|
(c)
|
to the extent permitted by the Act, give guarantees on behalf of the Corporation to secure performance of any obligation of any person or give, directly or indirectly, financial assistance to any person on behalf of the Corporation by means of a loan, guarantee or otherwise;
|
(d)
|
mortgage, hypothecate, pledge or otherwise, the real or personal, movable or immovable property of the Corporation, currently owned or subsequently acquired, including book debts, rights, powers, franchises and undertakings, to secure any present or future debt obligations or any money borrowed or other debt, liability or obligation of the Corporation, including any bonds, debentures, notes, create a security interest in all or any of debenture stock, other evidences of indebtedness, guarantees or securities of the Corporation which it is by law entitled to issue; and
|
(e)
|
delegate to one or more of the directors or officers of the Corporation all or any of the powers conferred by the foregoing provisions to such extent and in such manner as the Board of Directors shall determine at the time of each such delegation.
|
|
| |
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|||
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13.
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The corporation has complied with subsection 180(3) of the Business Corporations Act.
La société s'est conformée au paragraphe 180(3) de la Loi sur les sociétés par actions.
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14.
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The continuation of the corporation under the laws of the Province of Ontario has been properly authorized under the laws of the jurisdiction in which the corporation was incorporated/amalgamated or previously continued on Le maintien de la société en vertu des lois de la province de l'Ontario a été dûment autorisé en vertu des lois de l'autorité législative sous le régime de laquelle la société a été constituée ou fusionnée ou antérieurement maintenue le
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Year, Month, Day
année, mois, jour
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15.
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The corporation is to be continued under the Business Corporations Act to the same extent as if it had been incorporated thereunder.
Le maintien de la société en vertu de la Loi sur les sociétés par actions a le même effet que si la société avait été constituée en vertu de cette loi.
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These articles are signed in duplicate.
Les présents statuts sont signés en double exemplaire.
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Primo Water Corporation
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Name of Corporation / Dénomination sociale de la société
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By / Par
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Signature / Signature
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Print name of signatory / Nom du signataire en lettres moulées
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Description of Office / Fonction
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These articles must be signed by a director or officer of the corporation (e.g. president, secretary)
Ces statuts doivent être signés par un administrateur ou un dirigeant de la société (p. ex. : président, secrétaire).
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(a)
|
borrow money upon the credit of the Corporation and limit or increase the amount to be borrowed;
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(b)
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issue, reissue, sell or pledge bonds, debentures, notes or other evidences of indebtedness, guarantees or securities of the Corporation, whether secured or unsecured;
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(c)
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to the extent permitted by the Act, give guarantees on behalf of the Corporation to secure performance of an obligation of any person or give, directly or indirectly, financial assistance to any person on behalf of the Corporation by means of a loan, guarantee or otherwise; and
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(d)
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mortgage, hypothecate, pledge or otherwise create a security interest in all or any of the real or personal, moveable or immoveable property of the Corporation, currently owned or subsequently acquired, including book debts, rights, powers, franchises and undertakings, to secure any present or future debt obligations or any money borrowed or other debt or liability of the Corporation, including any bonds, debentures, notes, debenture stock, other evidences of indebtedness, guarantees or securities of the Corporation which it is by law entitled to issue. Nothing in this section limits or restricts the borrowing of money by the Corporation on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Corporation.
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(a)
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acted honestly and in good faith with a view to the best interests of the Corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the Corporation’s request; and
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(b)
|
in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.
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(a)
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by or at the direction of the board of directors of the Corporation, including pursuant to a notice of meeting,
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(b)
|
by or at the direction or request of one or more shareowners pursuant to a proposal submitted to the Corporation in accordance with applicable laws or a requisition of meeting submitted to the directors in accordance with applicable laws, or
|
(c)
|
by any person (a “nominating shareowner”) who, at the close of business on the date of the giving of the notice provided for below and on the record date for determining shareowners entitled to vote at such meeting, is a registered holder or beneficial owner of shares that are entitled to be voted at such meeting and complies with the notice and other procedures set forth in this by-law.
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(a)
|
in the case of an annual meeting of shareowners, not less than 30 nor more than 60 days prior to the date of the annual meeting of shareowners; provided, however, that if the annual meeting of shareowners is
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(b)
|
in the case of a special meeting of shareowners (which is not also an annual meeting of shareowners), not later than the close of business on the 15th day following the day on which the public announcement of the date of the special meeting of shareowners is first made by the Corporation.
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(a)
|
as to each person whom the nominating shareowner proposes to nominate for election as a director:
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(i)
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the name, age, business address and residential address of the nominee,
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(ii)
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the principal occupation or employment of the nominee,
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(iii)
|
the class or series and number of shares of the Corporation which are controlled or which are owned beneficially or of record by the nominee as of the record date for the meeting of shareowners (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice,
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(iv)
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any relationships, agreements or arrangements, including financial, compensation and indemnity related relationships, agreements or arrangements, between the nominee or any of its affiliates and the nominating shareowner, any person acting jointly or in concert with the nominating shareowner or any of their respective affiliates, and
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(v)
|
any other information relating to the nominee that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and applicable securities laws; and
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(b)
|
as to the nominating shareowner giving the notice,
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(i)
|
the name and record address of the nominating shareowner,
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(ii)
|
the class or series and number of shares of the Corporation which are controlled or which are owned beneficially or of record by the nominating shareowner as of the record date for the meeting of shareowners (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice,
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(iii)
|
any derivatives or other economic or voting interests in the Corporation and any hedges implemented with respect to the nominating shareowners’ interests in the Corporation,
|
(iv)
|
any proxy, contract, arrangement, understanding or relationship pursuant to which the nominating shareowner has a right to vote any shares of the Corporation,
|
(v)
|
whether the nominating shareowner intends to deliver a proxy circular and form of proxy to any shareowners of the Corporation in connection with the election of directors, and
|
(vi)
|
any other information relating to the nominating shareowner that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and applicable securities laws.
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Marni Morgan Poe
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Corporate Secretary
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1.
|
the continuance of Primo Water Corporation (the “Company”), a corporation existing under the laws of Canada, to the Business Corporations Act (Ontario) (“OBCA”) pursuant to Section 188 of the Canada Business Corporations Act (“CBCA”) and Section 180 of the OBCA, is hereby authorized and approved and the Company is hereby authorized to apply to the director of corporations under the OBCA (“Director”) for authorization to be continued as if it had been constituted under the OBCA, and to continue its existence under the OBCA (the “Continuance”) on such date as the directors of the Company may determine, which may, in the discretion of the directors of the Company, be a date following the coming into force of those amendments to the OBCA pursuant to Ontario’s Bill 213 – The Better for People, Smarter for Business Act, 2020;
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2.
|
the form of articles of continuance, the full text of which is attached as Appendix C to the Company’s proxy statement dated March 25, 2021 (the “Proxy”) is hereby approved, and the Company is hereby authorized to file the articles of continuance with the Director together with any notices and other documents prescribed by the OBCA necessary to continue the Company as if it had been incorporated under the laws of the Province of Ontario;
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3.
|
subject to the Continuance becoming effective, and without affecting the validity of any act of the Company under its existing by-laws (the “Existing By-Laws”), the Existing By-Laws are hereby repealed and replaced with the new By-Law No. 1 of the Company, the full text of which is attached as Appendix D (the “Proposed By-Law No. 1”) to the Proxy, together with such changes or amendments thereto as any director or officer of the Company determines appropriate, the conclusive evidence of such determination being the execution of the Proposed By-Law No. 1 by a director or officer of the Company;
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4.
|
notwithstanding that this resolution has been passed (and the Continuance adopted) by the shareowners of the Company, the directors of the Company are hereby authorized and empowered without further notice to or approval of the shareowners of the Company (i) to amend the articles of continuance to the extent permitted by law, and/or (ii) not to proceed with the Continuance; and
|
5.
|
any one director or officer of the Company is hereby authorized and directed for and on behalf of the Company to execute, and to deliver all documents and take such actions as such person officer may determine to be necessary or advisable to implement this resolution, the execution of any such document or the doing of any such other action being conclusive evidence of such determination to be conclusively evidenced by the taking of any such actions.
|
1.
|
Satisfy itself as to the integrity of the Chief Executive Officer and other senior officers and that the Chief Executive Officer and other senior officers create a culture of integrity throughout the Corporation.
|
2.
|
Review and approve the annual operating plan (including the capital budget), long- and short-term strategic plans (which take into account, among other things, the opportunities and risks facing the Corporation’s business) and business objectives of the Corporation that are submitted by management and monitor the implementation by management of the strategic plan.
|
3.
|
Identify and review the principal business risks of the Corporation’s business and oversee, with the assistance of the Audit Committee, the implementation and monitoring of appropriate risk management systems and the monitoring of risks.
|
4.
|
Ensure, with the assistance of the ESG and Nominating Committee, the effective functioning of the Board of Directors and its committees in compliance with the corporate governance requirements of stock exchange listing rules and applicable law, and that such compliance is reviewed periodically by the ESG and Nominating Committee.
|
5.
|
Develop the Corporation’s approach to corporate governance. The ESG and Nominating Committee shall develop a set of corporate governance principles and guidelines that are specifically applicable to the Corporation. The Board of Directors shall review and approve the principles and guidelines applicable to the Corporation and its officers, directors, and employees, including the Code of Ethics for Senior Officers and the Code of Business Conduct and Ethics.
|
6.
|
Satisfy itself that internal controls and management information systems for the Corporation are in place, are evaluated as part of the internal auditing process and reviewed periodically at the initiative of the Audit Committee.
|
7.
|
Assess the performance of the Corporation’s executive officers, including establishing and monitoring appropriate systems for succession planning as set forth in the Corporate Governance Guidelines of the Corporation (including appointing, training and monitoring senior management) and for periodically monitoring the compensation levels of such executive officers based on determinations and recommendations made by the Human Resources and Compensation Committee.
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8.
|
Ensure that the Corporation has in place a policy for effective communication with shareowners, other stakeholders and the public generally.
|
9.
|
Review and, where appropriate, approve the recommendations made by the various committees of the Board of Directors, including, without limitation, to: select nominees for election to the Board; appoint directors to fill vacancies on the Board of Directors; appoint and replace, as applicable, the chairman, the lead independent director, the members of the various committees of the Board of Directors and the chair of each such committee; and establish the form and amount of director compensation.
|
•
|
Conduct a review and evaluation of the performance of the Board of Directors and its members, its committees and their members, including the compliance of the Board of Directors with this mandate and of the committees with their respective charters.
|
•
|
Review and assess the adequacy of this mandate.
|
1.
|
Report regularly to the Board by means of written or oral reports, submission of minutes of Committee meetings or otherwise, from time to time or whenever it shall be called upon to do so, including a review of any issues that arise with respect to the quality and integrity of the Corporation’s financial statements, the Corporation’s compliance with legal and regulatory requirements, the performance and independence of the Corporation’s independent auditor, and the performance of the internal auditors.
|
2.
|
Meet as often as it determines necessary, but not less frequently than quarterly. The Committee shall meet separately in person, by videoconference or telephonically, periodically, with management (including the Chief Financial Officer and Chief Accounting Officer), the internal auditors and the independent auditor, and have such other direct and independent interaction with such persons from time to time as the members of the Committee deem appropriate. The Committee may request any officer or employee of the Corporation or the Corporation’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The time at which, and the place where, the meetings of the Committee shall be held, the calling of meetings and the procedure in all respects of such meeting shall be determined by the Committee, unless otherwise provided for in the by-laws of the Corporation or otherwise determined by resolution of the Board.
|
3.
|
Meet privately with management and the independent auditor (together or separately), as frequently as the Committee deems appropriate for the Committee to fulfill its responsibilities, to discuss any concerns of the Committee, management or the independent auditors.
|
4.
|
Meet to review and discuss the annual audited financial statements with management and the independent auditor, including the Corporation’s specific disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and recommend to the Board whether the audited financial statements should be included in the Corporation’s Form 10-K.
|
5.
|
Meet to review and discuss the quarterly financial statements with management and the independent auditor prior to filing the Corporation’s Form 10-Q, including the results of the independent auditor’s review of the Corporation’s quarterly financial statements.
|
6.
|
Discuss with management and the independent auditor significant financial accounting and reporting issues, complex or unusual transactions and judgments made in connection with the preparation of the Corporation’s financial statements, including any significant changes in the Corporation’s selection or application of accounting principles and the implementation thereof.
|
7.
|
Review and discuss with management and the independent auditor any issues as to the adequacy of the Corporation’s internal controls, any special steps adopted in light of material control deficiencies and the adequacy of disclosures about changes in internal control over financial reporting and engage in resolution thereof.
|
8.
|
Prepare the audit report required by the rules of the U.S. Securities and Exchange Commission to be included in the Corporation’s annual proxy circular and any other Committee reports required by applicable U.S. or Canadian securities laws or stock exchange listing requirements or rules.
|
9.
|
Discuss with management the Corporation’s earnings press releases (including the use of any “pro forma” or “adjusted” non-GAAP information) prior to the public disclosure thereof by the Corporation, as well as financial information and earnings guidance provided to analysts and rating agencies.
|
10.
|
Discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures, if any, on the Corporation’s financial statements.
|
11.
|
Review disclosures made to the Committee by the Corporation’s Chief Executive Officer and Chief Financial Officer during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Corporation’s internal controls.
|
12.
|
Review and discuss with management (including the senior internal audit executive) and the independent auditor the Corporation’s internal controls report and the independent auditor’s attestation of the report prior to the filing of the Corporation’s Form 10-K.
|
13.
|
Oversee the risk management activities of the Corporation, which will include holding periodic discussions with management regarding the Corporation’s guidelines and policies with respect to risk assessment, risk management, and major strategic, financial and operational risk exposures such as fraud, data privacy and security, environmental, competitive and regulatory risks. The Committee shall receive regular reports regarding such risks and the steps management has taken to monitor and control any exposure resulting from such risks. The Committee shall, on at least an annual basis, facilitate a discussion with the Board regarding the Corporation’s risk management function and the Corporation’s major strategic, financial and operational risk exposures.
|
14.
|
Review and discuss with the Board and others as it deems appropriate any litigation, claim or other contingency that could have a material effect upon the financial position or operating results of the Corporation.
|
15.
|
Oversee the Corporation’s insurance programs, any renewals or replacements thereof, including in respect of directors’ and officers’ insurance and indemnification for members of the Board.
|
16.
|
Subject to compliance with the requirements of applicable laws, have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareowner ratification). The Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor and advisors retained by the Committee (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The independent auditor shall report directly to the Committee.
|
17.
|
Before the engagement of the independent auditor and at least annually thereafter, review and discuss with the independent auditor the independent auditor’s written communications to the Committee regarding the relationships between the auditor and the Corporation that, in the auditor’s professional judgment, may reasonably be thought to bear on its independence and affirming in writing to the Committee that the auditor is independent.
|
18.
|
Review with the independent auditor any audit problems or difficulties and management’s response. This review should include a discussion of (i) any restrictions on the scope of the independent auditor’s activities
|
19.
|
Subject to compliance with the requirements of applicable laws, set clear hiring policies for employees or former employees and partners or former partners of the current and former independent auditor.
|
20.
|
At least annually, obtain and review a report from the independent auditor describing: (i) the independent auditor’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the auditor, and any steps taken to deal with any such issues; and (iii) all relationships between the independent auditor and the Corporation (to assess the auditor’s independence).
|
21.
|
Based on the above mentioned report and the independent auditor’s work throughout the year, evaluate the qualifications, performance and independence of the independent auditor, and select the Corporation’s auditor for the next year, subject to shareowner ratification. In this evaluation, the Committee shall: (i) consider whether the independent auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the independent auditor’s independence; (ii) evaluate the lead partner of the independent auditor’s team and make sure that there is a regular rotation of the lead partner, and consider whether, in order to assure continuing auditor independence, there should be regular rotation of the independent auditing firm on a regular basis; (iii) evaluate the independent auditor’s team; and (iv) take into account the opinions of management and internal auditors. The Committee shall present its conclusions with respect to the independent auditor to the Board.
|
22.
|
Review and discuss quarterly reports from the independent auditor (required by Section 10A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), on: (i) all critical accounting policies and practices to be used; (ii) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) related to material items that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (iii) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences. Additionally, the Committee shall review with the independent auditor the matters required to be discussed under the standards of the Public Company Accounting Oversight Board.
|
23.
|
Pre-approve all permitted auditing services and non-audit services (including the fees and terms thereof) to be performed for the Corporation or its subsidiary entities by its independent auditor. Notwithstanding the foregoing, the Chair of the Committee shall be permitted to pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Corporation or its subsidiary entities by its independent auditor; provided that any such pre-approvals shall be subject to ratification by the Committee at its next meeting. This permission is also subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to the completion of the audit. The Committee shall review and discuss with the independent auditor the nature and scope of any tax services to be approved, as well as the potential effects of the provision of such services on the auditor’s independence.
|
24.
|
Meet with the independent auditor prior to the annual audit to review and discuss the planning and staffing of the audit.
|
25.
|
The senior internal audit executive will report directly to the Chair of the Committee and administratively on a dotted line to the Corporation’s Chief Financial Officer. The Committee will review and advise management on the selection and removal of the senior internal audit executive.
|
26.
|
Review the significant reports to management prepared by the internal audit department and management’s responses.
|
27.
|
Periodically review, with the independent auditor, the internal audit department’s responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.
|
28.
|
Periodically review, with the senior internal audit executive, any significant difficulties, disagreements with management, or scope restrictions encountered in the course of the function’s work.
|
29.
|
Annually review and recommend changes (if any) to the internal audit charter.
|
30.
|
Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated.
|
31.
|
Establish procedures for: (i) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls and auditing matters, and (ii) the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
|
32.
|
Periodically review and discuss with management, the internal auditors, and the independent auditor the overall adequacy and effectiveness of the Corporation’s legal, regulatory and ethical compliance programs, including the Corporation’s Code of Business Conduct and Ethics and Code of Ethics for Senior Officers. The Committee shall periodically receive from management confirmation of its compliance with material legal and regulatory compliance requirements. The Committee shall advise the Board with respect to the Corporation’s policies and procedures regarding compliance with applicable laws and regulations and with the Corporation’s Code of Business Conduct and Ethics and Code of Ethics for Senior Officers. Consistent with these responsibilities, the Committee shall encourage continuous improvement of, and shall foster adherence to, the Corporation’s policies, procedures, and practices at all levels. The Committee shall also provide for open communication among the independent auditor, management, the internal audit function, and the Board.
|
33.
|
Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Corporation’s financial statements or accounting policies.
|
34.
|
Discuss with the Corporation’s Chief Legal Officer legal matters that may have a material impact on the financial statements or the Corporation’s compliance policies and internal controls.
|
35.
|
In order to properly carry out its responsibilities, have the authority, without seeking Board approval and to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Corporation shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services for the Corporation and to any advisors employed by the Committee, as well as the funding levels for the ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
|
36.
|
Upon the recommendation of the ESG and Nominating Committee, the Board shall elect annually from among its members a committee to be known as the “Audit Committee” to be composed of at least three independent directors, none of whom shall: (i) accept directly or indirectly from the Corporation or any subsidiary of the Corporation any consulting, advisory or other compensatory fee, other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or as a part-time chair or vice-chair of the Board or any Board committee; (ii) be affiliated with the Corporation or any of its affiliates; (iii) be officers or employees of the Corporation or of any of its affiliates, or have been an officer or employee of the Corporation, any of its affiliates or the independent auditor in the three years prior to being appointed to the Committee; or (iv) be an immediate family member of any of these persons.
|
37.
|
Each member of the Committee shall meet the independence, experience and financial literacy requirements of any stock exchange upon which the Corporation’s stock is listed from time to time and in accordance with U.S. and Canadian securities laws, including applicable listing standards. At least one member of the Committee shall be an “audit committee financial expert” (as defined by the U.S. Securities and Exchange Commission).
|
38.
|
Committee members shall not simultaneously serve on the audit committees of more than two other public companies unless the Board determines that simultaneous service on more than two other audit committees would not impair such member’s ability to effectively serve on the Committee. If such a determination is made, it must be disclosed in the Corporation’s annual proxy circular.
|
39.
|
A majority of the members of the Committee shall constitute a quorum. No business may be transacted by the Committee except at a meeting of its members at which a quorum of the Committee is present (in person or by means of telephone or video conference whereby each participant has the opportunity to speak to and hear one another) or by a resolution in writing signed by all the members of the Committee.
|
40.
|
Each member of the Committee shall hold such office until the next annual meeting of shareowners after election as a member of the Committee. However, any member of the Committee may be removed or replaced at any time by the Board, with or without cause, and shall cease to be a member of the Committee as soon as such member ceases to be a director or otherwise ceases to be qualified to be a member of the Committee. The Board shall fill Committee member vacancies by appointing a member from the Board. If a vacancy on the Committee exists, the remaining members shall exercise all the Committee’s powers so long as a quorum exists.
|
41.
|
Upon the recommendation of the ESG and Nominating Committee, the Board shall elect a member of the Committee to act as Chair of the Committee (the “Chair”). In the absence of the Chair from any meeting of the Committee, the members of the Committee shall appoint one of their number to act as Chair of the meeting. The Chair will appoint a secretary who will keep minutes of all meetings (the “Secretary”), which shall be circulated to members of the Board upon completion. The Secretary need not be a member of the Committee or a director and can be changed by simple notice from the Chair.
|
42.
|
The members of the Committee shall be entitled to receive such remuneration for acting as members of the Committee as the Board may from time to time determine.
|
43.
|
The Committee may form and delegate authority to subcommittees consisting of one or more members of the Committee when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant preapprovals shall be presented to the full Committee at its next scheduled meeting.
|
44.
|
At least annually, the Committee shall review and reassess the adequacy of this charter. The Committee shall annually review and assess the Committee’s own performance.
|