false 0001418135 0001418135 2022-04-01 2022-04-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 1, 2022

 

 

KEURIG DR PEPPER INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-33829   98-0517725

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

53 South Avenue

Burlington, Massachusetts 01803

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (781) 418-7000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

 

  ☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

symbol(s)

  

Name of each exchange

on which registered

Common Stock   KDP   The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 1, 2022, the Board of Directors (the “Board”) of Keurig Dr Pepper Inc. (the “Company” or “Keurig”) approved a succession plan pursuant to which Robert J. Gamgort will transition from his position as President and Chief Executive Officer of the Company effective as of July 29, 2022 (the “Transition Date”). Mr. Gamgort will continue to serve as Executive Chairman of the Board through July 26, 2024.

The Board has appointed Ozan Dokmecioglu, currently the Company’s Chief Financial Officer and President, International, to the role of President and Chief Executive Officer effective as of the Transition Date. The information required by Items 401(b), (d), (e) of Regulation S-K with respect to Mr. Dokmecioglu is included in the Company’s annual proxy statement filed with the U.S. Securities and Exchange Commission on April 30, 2021, and is hereby incorporated by reference herein. There are no related party transactions between Mr. Dokmecioglu and the Company reportable under Item 5.02 of Form 8-K and Item 404(a) of Regulation S-K.

Mr. Gamgort’s Letter Agreement

In connection with his transition, the Company entered into a letter agreement with Mr. Gamgort on April 5, 2022 (the “Letter Agreement”) with an employment term commencing on the Transition Date and ending on July 26, 2024 (the “Term”). Pursuant to the Letter Agreement, Mr. Gamgort will receive an annual base salary of $1,000,000 and will be eligible to receive an annual bonus at a target level of 100% of his base salary. Mr. Gamgort will also be granted a long-term incentive award on or around the Transition Date with a grant date value of $5,000,000 in the form of restricted stock units (“RSUs”) that will fully vest at the end of the Term, subject to his continued employment and other vesting conditions.

Mr. Gamgort commits in the Letter Agreement that he will continue to hold, and not sell, at least 50% of the number of shares of the Company’s common stock that he holds as of April 5, 2022 through the end of the Term. Mr. Gamgort further commits that, during the Term, he will (i) not engage in any other business, profession or occupation for compensation or which would conflict or interfere with his duties as Executive Chairman, and (ii) serve on no more than one other public company board of directors in addition to the Company.

The foregoing summary of the Letter Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Letter Agreement, a copy of which is filed as Exhibit 10.1 hereto.

Compensatory Arrangements with Mr. Dokmecioglu

In connection with his appointment as President and Chief Executive Officer, effective as of the Transition Date, Mr. Dokmecioglu will receive an annual base salary of $1,250,000 and will be eligible to receive an annual bonus at a target level of 150% of his base salary. He will be granted two long-term incentive awards: (i) in September 2022, an award of RSUs with a grant date value of $900,000, which will vest 60% on the third anniversary of the date of grant and 20% on each of the fourth and fifth anniversaries of the date of grant, and (ii) on or around the Transition Date, an award of RSUs with a grant date value of $14,000,000, which RSUs will vest in one-third installments on each of the third, fourth and fifth anniversaries of the date of grant, subject to his continued employment, maintenance of shareholdings at an amount equal to the award, and other vesting conditions.

 

Item 7.01

Regulation FD Disclosure.

A copy of the Company’s news release announcing the succession plan has been furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in the press release is being furnished, not filed, pursuant to Item 7.01. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01

Financial Statements and Exhibits.

 

  (d)

Exhibits.

 

    Exhibit No.   

Description

  10.1    Letter Agreement by and between the Company and Robert J. Gamgort dated April 5, 2022.
  99.1    Press Release issued April 5, 2022.
  104    Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

KEURIG DR PEPPER INC.
By:  

/s/ Anthony Shoemaker

Name:   Anthony Shoemaker
Title:   Chief Legal Officer, General Counsel and Secretary

Date: April 5, 2022

Exhibit 10.1

[KEURIG DR PEPPER LETTERHEAD]

April 5, 2022

Robert J. Gamgort

Dear Bob,

Pursuant to your discussions with the Board of Directors (the “Board”) of Keurig Dr Pepper Inc., a Delaware corporation (the “Company”), you will transition from your positions as Chief Executive Officer and President of the Company effective as of July 29, 2022 (the “Transition Date”). You have agreed to continue your employment as an officer of the Company after the Transition Date in the role of Executive Chairman of the Company’s Board. This letter agreement (this “Agreement”) outlines the principal terms and conditions of your employment as Executive Chairman of the Company upon and following the Transition Date. Upon and following the Transition Date, your Amended and Restated Employment Agreement effective as of July 2, 2018 will be terminated and of no further force or effect.

 

1.

Term. You will serve as the Company’s Executive Chairman beginning on the Transition Date and concluding on July 26, 2024 (such period, the “Term”), unless terminated earlier pursuant to the terms of this Agreement.

 

2.

Base Salary. During the Term, your annualized base salary will be $1,000,000 (the “Base Salary”). Your Base Salary will be paid in bi-weekly installments, consistent with the payroll schedule in place for all active employees as in effect from time to time.

 

3.

Annual Bonus. You will be eligible to participate in the Company’s Short Term Incentive Plan (STIP) in accordance with the terms in effect at the time of the payout. Your target annual bonus during the Term will be 100% of your Base Salary. The program’s annual performance metrics will be based on achievement of specific financial targets set by the Company, which will be consistent with the financial targets established for the Company’s Chief Executive Officer , as determined by the Company in its sole discretion. Your 2022 STIP payout will be pro-rated based on your time, salary and bonus targets in the CEO position and subsequently the Executive Chair position.

 

4.

Long-Term Incentives.

 

  (a)

On or around the Transition Date, you will be granted a one-time award under the Keurig Dr Pepper Group Inc. Omnibus Stock Incentive Plan of 2019 in the form of time-based Restricted Stock Units with a grant date value of $5 million (the “LTI Award”), which will vest in full on the last day of the Term, subject to your continued employment with the Company through such vesting date. In the event your employment is terminated by the Company without Cause as defined in the Company’s Severance Pay Plan for Executives (as such plan may be amended in the future, the “Severance Plan”) prior to the last day of the Term, the LTI Award will be subject to pro-rata vesting. The LTI Award will be governed by and subject to the terms of an award agreement to be provided to you under separate cover.

  (b)

Your previously granted Company equity awards will remain outstanding and eligible to vest in accordance with the applicable plan documents and governing award agreements. For the avoidance of doubt, your previously granted Company equity awards will be subject to pro-rata vesting (i) upon your retirement on or after attaining age 60 or (ii) upon any termination of employment by you or by the Company without Cause, in either case occurring at any time after May 2, 2021.

 

5.

Benefits. You will be eligible to participate in the Company’s benefit plans for salaried employees including medical, dental and vision plans, short-term and long-term disability programs, life insurance, savings and retirement plans. The Company reviews its benefits and incentive plans and programs periodically, and those plans and programs are subject to change at the Company’s sole discretion.

 

6.

Business and Travel Expenses. The Company will reimburse your reasonable travel, entertainment and other business expenses incurred during the Term, in accordance with the Company’s policies as in effect from time to time. At your discretion, air travel for business or personal purposes as authorized by the Board or in accordance with the Company’s policies as in effect from time to time may be by private jet and the Company will provide, pay for, or reimburse you for such expenses in accordance with the Company’s policies as in effect from time to time; provided, however, that the Company will not provide you with any type of gross-up or other tax protection related to any such personal travel.

 

7.

Other Terms.

 

  (a)

Restrictive Covenants. You hereby acknowledge and agree that you are and will continue to be bound by the restrictive covenants set forth in your equity award agreements.

 

  (b)

Current Stock Holdings. You agree that you will continue to hold, and not sell, at least 50% of the number of shares of the Company’s common stock that you hold as of the date hereof (4,528,186 shares), through the expiration of the Term.

 

  (c)

Duties. You agree that you will devote such of your business time and attention to the performance of your duties hereunder as is required to carry out the responsibility of your role, and you will not engage in any other business, profession, or occupation for compensation or otherwise which would conflict or interfere with the performance of such services. You agree that you will limit your external public company directorships (other than the Company) to one, and to request the consent of the Board before accepting any such directorship.

 

  (d)

Company Policies. You agree that you shall continue to be subject to, and comply with, all Company policies, including its Code of Conduct.

 

2

  (e)

Severance Plan. You will participate in the Company’s Severance Plan, as amended by the Company on or prior to the Transition Date.

 

8.

Miscellaneous. This Agreement may not be modified or amended except by a written agreement, signed by the Company and by you. This Agreement will be construed and enforced under and be governed in all respects by the laws of the State of Texas, without regard to the conflict of laws principles thereof. With respect to any claim or dispute related to or arising under this Agreement, the parties hereto hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Collin County, Texas. EACH PARTY HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

[Remainder of page is intentionally blank.]

 

3

To confirm your acceptance of the terms of this Agreement, please return a signed copy of this document.

Sincerely,

KEURIG DR PEPPER INC.

 

By: /s/ Mary Beth DeNooyer                    

   

Name: Mary Beth DeNooyer

   

Date: April 5, 2022

Title: Chief Human Resources Officer

   

Acknowledged and Agreed:

 

/s/ Robert J. Gamgort                                

   

Robert J. Gamgort

   

Date: April 5, 2022

 

4

Exhibit 99.1

 

 

LOGO

KEURIG DR PEPPER ANNOUNCES CEO SUCCESSION PLAN

CFO Ozan Dokmecioglu to become CEO later this year

CEO Bob Gamgort to remain Executive Chairman for two years to support the transition

BURLINGTON, Mass. and FRISCO, Texas, April 5, 2022 – Keurig Dr Pepper Inc. (NASDAQ: KDP) today announced a CEO transition plan that leverages the successful partnership between Chairman & CEO Bob Gamgort and CFO Ozan Dokmecioglu to ensure continuity of the Company’s leadership and strategic direction, while strengthening KDP’s focus on deploying its exceptional discretionary free cash flow to create shareholder value.

The KDP Board of Directors has appointed Ozan Dokmecioglu, currently Chief Financial Officer & President of International, as the Company’s next Chief Executive Officer, effective July 29, 2022. Dokmecioglu will join the Company’s Board of Directors at that time. Bob Gamgort, currently Chairman and CEO, has committed to serve as Executive Chairman of KDP for two years.

The announcement follows the successful completion of KDP’s three-year merger integration period, including building the strength of the management team, and provides clarity on succession with a thoughtful transition plan. It also reflects the unique opportunity ahead for KDP to drive significant value creation through strategic capital allocation, following the completion in 2021 of the Company’s deleveraging phase, and a heightened focus on continued operational excellence in a challenging and unpredictable macroeconomic environment.

Gamgort and Dokmecioglu will work in close partnership, as they have since the take-private transaction of Keurig Green Mountain in 2016 and subsequent merger with the Dr Pepper Snapple Group, collaborating on driving the strategic direction of the Company and maximizing the value creation potential of KDP. As CEO, Dokmecioglu will lead the execution of the Company’s strategy and ensure continued operational excellence, both of which have enabled KDP to meet or exceed its public commitments, while Gamgort, as Executive Chairman, will lead the Board of Directors and oversee the deployment of KDP’s significant discretionary cash flow. KDP’s talented and experienced senior team will continue in their current roles, with the process for recruiting a CFO to succeed Dokmecioglu already underway.

Commenting on the announcement, Gamgort stated, “I am excited to partner with Ozan, our leadership team and the KDP Board of Directors to drive continued growth and value creation. As we move into the next chapter for our modern beverage company, we’re establishing a leadership team that can guide the success of KDP well into the future.”

As part of the transition, Gamgort and KDP have entered into an agreement for his role as Executive Chairman, in which Gamgort has committed to remaining a significant investor in KDP, maintaining at least half of his KDP shareholdings during his tenure as Executive Chairman.

“I am honored to assume the role of KDP CEO at this important time for our Company and look to the future excited by the enormous potential that lies ahead,” stated Dokmecioglu. “I am grateful for the ongoing partnership with Bob and the support of our Board of Directors and leadership team, as we continue to work together to drive outsized value creation,” he added.

KDP Lead Independent Director Paul Michaels stated, “We are pleased to appoint Ozan as our next CEO after a thorough succession planning process, including the consideration of internal and external candidates. Ozan is an exceptionally strong leader with the skills, experience, values and perspective to lead KDP into the future. We are also fortunate to have Bob in a position to continue working closely with Ozan and the leadership team over the next few years.”

About Keurig Dr Pepper

Keurig Dr Pepper (KDP) is a leading beverage company in North America, with annual revenue approaching $13 billion and approximately 27,000 employees. KDP holds leadership positions in soft drinks, specialty coffee and tea, water, juice and juice drinks and mixers, and markets the #1 single serve coffee brewing system in the U.S. and Canada. The Company’s portfolio of more than 125 owned, licensed and partner brands is designed to satisfy virtually any consumer need, any time, and includes the owned brands of Keurig®, Dr Pepper®, Green Mountain Coffee Roasters®, Canada Dry®, Snapple®, Bai®, Mott’s®, CORE® and The Original Donut Shop®. Through its powerful sales and distribution network, KDP can deliver its portfolio of hot and cold beverages to nearly every point of purchase for consumers. The Company is committed to sourcing, producing and distributing its beverages responsibly through its Drink Well. Do Good. corporate responsibility platform, including efforts around circular packaging, efficient natural resource use and supply chain sustainability. For more information, visit www.keurigdrpepper.com.

FORWARD LOOKING STATEMENTS

Certain statements contained herein are “forward-looking statements” within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as “outlook,” “guidance,” “anticipate,” “expect,” “believe,” “could,” “estimate,” “feel,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” “would,” and similar words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially.

Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K and subsequent filings with the SEC. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law.

Investor Contact:

Steve Alexander

Keurig Dr Pepper

T: 972-673-6769 / steve.alexander@kdrp.com

Media Contact:

Katie Gilroy

T: 781-418-3345 / katie.gilroy@kdrp.com

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