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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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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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(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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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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Wayne R. Sanders
Chairman of the Board
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Larry D. Young
President and Chief Executive Officer
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Date and Time:
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May 16, 2013, 10:00 a.m., Central Daylight Time
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Place of Meeting
:
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Westin Stonebriar Resort Conference Center, 1549 Legacy Drive, Frisco, Texas 75034
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Business to be conducted:
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1.
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To elect John L. Adams and Ronald G. Rogers as directors to hold office for a one-year term and until their respective successors shall have been duly elected and qualified.
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2.
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To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2013.
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3.
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To approve an advisory resolution regarding the compensation of our Named Executive Officers as disclosed in these materials.
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4.
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To re-approve the Management Incentive Plan to comply with Section 162(m) of the Internal Revenue Code and the regulations promulgated thereunder.
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5.
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To transact such other business as may properly come before the meeting.
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Adjournments and Postponements:
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Any action on the business to be conducted may be considered at the date and time of the Annual Meeting as specified above or at any time or date to which the Annual Meeting may be properly adjourned and postponed.
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Record Date:
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You are entitled to vote at the Annual Meeting if you were a stockholder of record as of the close of business on March 18, 2013.
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Voting Rights:
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A holder of shares of our common stock is entitled to one vote, in person or by proxy, for each share of our common stock on all matters properly brought before the Annual Meeting.
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By Order of the Board of Directors
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James L. Baldwin
Corporate Secretary
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•
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includes information regarding the matters that will be discussed and voted on at the Annual Meeting, and
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•
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provides information about the Company that our stockholders should consider in order to make an informed decision
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Proposal
1
:
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To elect John L. Adams and Ronald G. Rogers as directors to hold office for a one-year term and until their respective successors shall have been duly elected and qualified.
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Proposal
2
:
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To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2013.
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Proposal
3
:
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To approve an advisory resolution regarding the compensation of our Named Executive Officers as disclosed in these materials.
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Proposal
4
:
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To re-approve the Management Incentive Plan to comply with Section 162(m) of the Internal Revenue Code and the regulations promulgated thereunder.
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1.
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FOR
each of the nominees for director listed in these materials and on the proxy card;
|
2.
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FOR
the ratification of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year
2013
;
|
3.
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FOR
the approval, on an advisory basis, of the compensation of our Named Executive Officers as disclosed in this Proxy Statement; and
|
4.
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FOR
the re-approval of the Management Incentive Plan.
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2012
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|
2011
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||||||
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(in 000's)
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|||||||
Audit Fees
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$
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3,430
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(1)
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$
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3,185
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(2)
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Audit-Related Fees
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—
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—
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Tax Fees
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—
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—
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All Other Fees
|
—
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—
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Total Fees
|
$
|
3,430
|
|
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$
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3,185
|
|
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(1)
|
Audit Fees primarily relate to auditing of our 2012 consolidated financial statements, auditing the Company's assessment of its compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") as it relates to internal controls over financial reporting, assistance with our response to the SEC Staff's comment letter, statutory audits in Mexico, review of our prospectus related to a debt offering and review of our registration statement on Form S-3.
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(2)
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Audit Fees primarily relate to auditing of our 2011 consolidated financial statements, auditing the Company's assessment of its compliance with Section 404 of SOX as it relates to internal controls over financial reporting, statutory audits in Mexico and review of our prospectus related to a debt offering.
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•
|
Total direct compensation targets are designed to be competitive with companies in the markets in which we compete;
|
•
|
Compensation is generally performance based, with our overall performance judged against internal goals;
|
•
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A pay-for-performance culture links compensation to both individual and collective performance and will result in differentiated compensation;
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•
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A substantial percentage of total direct compensation is variable, or "at risk", both through annual incentive compensation and performance-based, long-term equity incentive awards (including stock options and performance-based restricted stock units); and
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•
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Equity incentive awards are used to align the interests of management with those of our stockholders.
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•
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base salary;
|
•
|
management incentive plan awards (our annual cash incentive program); and
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•
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long-term incentive awards, consisting of:
|
◦
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stock options;
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◦
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time-based restricted stock units (individually, "RSU" and collectively, "RSUs"); and
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◦
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performance-based restricted stock units (individually, "PSU" and collectively, "PSUs").
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•
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Equity Award Procedures (see "Compensation Discussion and Analysis - Long Term Incentive Awards - Equity Award Procedures" beginning on page
36
);
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•
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Stock Ownership Guidelines (see "Compensation Discussion and Analysis - Stock Ownership Guidelines" beginning on page
37
);
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•
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Insider Trading Policy (see "Compensation Discussion and Analysis - Insider Trading Policy" beginning on page
37
); and
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•
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Clawback Policy (see "Compensation Discussion and Analysis - Clawback Policy" beginning on page
37
).
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Proposal 4:
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RE-APPROVAL OF THE MANAGEMENT INCENTIVE PLAN TO COMPLY WITH SECTION 162(M) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS PROMULGATED THEREUNDER
|
•
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select the employees to be granted Performance Cash Awards (as defined in the MIP);
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•
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determine the terms of Performance Cash Awards to be made to each participant;
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•
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determine the time when Performance Cash Awards are to be granted and any conditions that must be satisfied before a Performance Cash Award is granted;
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•
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establish objectives and conditions for earning Performance Cash Awards;
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•
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determine the terms and conditions of award agreements and who must sign each award agreement;
|
•
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determine whether the conditions for earning a Performance Cash Award have been met and whether a Performance Cash Award will be paid at the end of an applicable performance period;
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•
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modify the terms of Performance Cash Awards;
|
•
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determine if, when and under what conditions payment of all or any part of a Performance Cash Award may be deferred;
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•
|
determine whether the amount or payment of a Performance Cash Award should be reduced or eliminated;
|
•
|
determine the guidelines and/or procedures for the payment of Performance Cash Awards;
|
•
|
determine whether a Performance Cash Award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether a Performance Cash Award granted to an executive officer should qualify as performance-based compensation;
|
•
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interpret and administer the MIP, including any instrument or agreement relating to, or award made under, the MIP;
|
•
|
establish, amend, suspend or waive such rules and guidelines set forth in the MIP;
|
•
|
appoint such agents as it shall deem appropriate for the proper administration of the MIP; and
|
•
|
make any other determination and take any other action that the Compensation Committee deems necessary or desirable for the administration of the MIP.
|
•
|
revenue and income measures (which include revenue, gross margin, income from operations, net income, net sales and earnings per share);
|
•
|
expense measures (which include costs of goods sold, sales, general and administrative expenses and overhead costs);
|
•
|
operating measures (which include volume, margin, breakage and shrinkage, productivity and market share);
|
•
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cash flow measures (which include net cash flow from operating activities and working capital);
|
•
|
liquidity measures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, and free cash flow);
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•
|
leverage measures (which include equity ratio and net debt);
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•
|
market measures (including those relating to market price, stock price, total stockholder return and market capitalization measures);
|
•
|
return measures (which include return on equity, return on assets and return on invested capital);
|
•
|
corporate value measures (which include compliance, safety, environmental and personnel matters); and
|
•
|
other measures such as those relating to acquisitions, dispositions or customer satisfaction.
|
Name and Position
|
|
MIP Payment
($)
|
|
Larry D. Young
|
|
1,385,461
|
|
President & CEO
|
|
|
|
Martin M. Ellen
|
|
421,438
|
|
Chief Financial Officer
|
|
|
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James J. Johnston
|
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377,428
|
|
Pres. Beverage Concentrates & Latin America Beverages
|
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Rodger L. Collins
|
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357,275
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Pres. Packaged Beverages
|
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|
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Derry L. Hobson
|
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285,685
|
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EVP Supply Chain
|
|
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All Executive Officers as a Group (10 persons)
|
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3,925,581
|
|
Non-executive Officer Employee Group (1,717 persons)
|
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38,565,879
|
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Name
|
|
Fees Earned or Paid in Cash
($)(1)
|
|
Stock Awards
($)(2)(3)
|
|
Option Awards
($)
|
|
Non-Equity Incentive Plan Compensation
($)
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
|
All Other Compensation
($)
|
|
Total
($)
|
||||||||
Wayne R. Sanders
|
|
100,000
|
|
|
210,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,930
|
|
(4
|
)
|
317,930
|
|
Terence D. Martin
|
|
100,000
|
|
|
140,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240,000
|
|
|
M. Anne Szostak
|
|
100,000
|
|
|
135,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235,000
|
|
|
John L. Adams
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
David E. Alexander
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
Pamela H. Patsley
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
Joyce M. Roché
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
Ronald G. Rogers
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
Jack L. Stahl
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
|
Michael F. Weinstein
|
|
100,000
|
|
|
110,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
(1)
|
The amounts reported in the Fees Earned or Paid in Cash column reflect fees earned in 2012, although cash fees for the first quarter of 2012 were paid in December 2011.
|
(2)
|
The amounts reported in the Stock Awards column reflect the grant date fair value associated with each respective director's RSUs granted under the Omnibus Stock Incentive Plan of 2009. Even though the RSUs may be forfeited, the amounts reported do not reflect this contingency.
|
(3)
|
The following table shows the aggregate number of outstanding RSUs for each non-employee director as of December 31,
2012
. All of these awards vest three years from their respective grant dates.
|
Name
|
|
RSUs(a)
|
|
Wayne R. Sanders
|
|
18,366
|
|
Terence D. Martin
|
|
12,031
|
|
M. Anne Szostak
|
|
9,995
|
|
John L. Adams
|
|
9,318
|
|
David E. Alexander
|
|
3,701
|
|
Pamela H. Patsley
|
|
9,318
|
|
Joyce M. Roché
|
|
5,880
|
|
Ronald G. Rogers
|
|
9,318
|
|
Jack L. Stahl
|
|
10,903
|
|
Michael F. Weinstein
|
|
__ (b)
|
|
(a)
|
The amounts reported in the RSUs column also include dividend equivalent units under the Omnibus Stock Incentive Plan of 2009.
|
(b)
|
As of the effective date of Mr. Weinstein's resignation (the "Separation Date"), the Board approved the vesting of a pro-rated amount of Mr. Weinstein's unvested RSUs based on the number of days between the award date of such RSUs and the Separation Date. On the Separation Date, 5,843 RSUs vested and shares were issued to Mr. Weinstein.
|
(4)
|
The amount reported in the All Other Compensation column represents the personal use of the corporate aircraft by Mr. Sanders. For SEC purposes, the cost of personal use of a corporate aircraft is calculated based on the aggregate incremental cost to us. We calculated the aggregate incremental cost using estimated variable costs of operating the aircraft. Fixed costs which do not change based on usage, such as pilot salaries, depreciation of aircraft and cost of maintenance, are excluded.
|
•
|
sound personal and professional integrity;
|
•
|
an inquiring and independent mind;
|
•
|
willingness to devote the required time to carrying out the duties and responsibilities of Board membership;
|
•
|
commitment to serve on the Board for several years to develop knowledge about the Company's businesses; and
|
•
|
willingness
to represent the best interests of all stockholders and observe the fiduciary duties that a director owes to the stockholders.
|
•
|
practical wisdom and mature judgment;
|
•
|
leadership;
|
•
|
interpersonal skills;
|
•
|
financial acumen;
|
•
|
broad training and experience at the policy-making level in business, finance and accounting, government, education or technology; and
|
•
|
expertise (including industry expertise) that is useful to the Company and complementary to the background and experience
|
•
|
Mr. Sanders, the Chairman of the Board,
has:
extensive leadership experience as a board chairman, chief executive officer and other executive level positions in a public company, financial acumen developed through his extensive executive experience, operational and marketing experience, consumer product company experience, and significant public company board experience (including audit and compensation committee chairmanship experience).
|
•
|
Mr. Adams has:
extensive leadership experience as a vice chairman and chief executive officer and other executive level positions in public companies, financial acumen and risk management experience developed through his chief executive officer experience, been designated by the Corporate Governance and Nominating Committee as a financial expert under SEC regulations, training as a lawyer and substantial public company board experience (including board chairmanship, risk management, audit committee and compensation committee experience).
|
•
|
Mr. Alexander has:
extensive leadership experience as a vice chairman and regional managing partner at a "Big Four" accounting firm, financial acumen and risk management experience developed through his experience in public accounting and been designated by the Corporate Governance and Nominating Committee as a financial expert under SEC regulations.
|
•
|
Mr. Martin has:
extensive leadership experience as a chief financial officer of a public company, financial acumen and risk management experience developed through his public accounting and chief financial officer experience, been designated by the Corporate Governance and Nominating Committee as a financial expert under SEC regulations and other public company board experience (including audit committee chairmanship and compensation committee experience).
|
•
|
Ms. Patsley has:
extensive leadership experience as a chairman and chief executive officer, chief financial officer and other executive level positions in public companies, financial acumen and risk management experience developed through her experience in public accounting and her chief executive officer and chief financial officer experience, been designated by the Corporate Governance and Nominating Committee as a financial expert under SEC regulations, and extensive public company board experience (including audit committee chairperson experience).
|
•
|
Ms. Roché has:
extensive leadership experience as a chief operating officer of a public company and the chief executive officer of a national nonprofit organization and considerable experience in the marketing and merchandising areas, consumer products company experience, financial acumen developed from her chief executive officer and executive officer experience, and significant public company board experience (including compensation, corporate governance, audit and public policy committee experience).
|
•
|
Mr. Rogers has:
extensive senior level executive leadership experience, substantial banking experience, financial acumen developed from his banking experience, and experience in enterprise risk management.
|
•
|
Mr. Stahl has:
extensive leadership experience as president, chief executive officer, chief operating officer and chief financial officer in public companies, beverage industry experience, financial acumen from his chief financial officer experience, and broad public company board experience.
|
•
|
Ms. Szostak has:
extensive senior level executive leadership experience with a Fortune 100 company, experience as a chief executive officer of two major bank subsidiaries of public companies, substantial banking experience, significant human resource experience, experience in risk management, and significant experience on other public company boards (including compensation committee chairperson and audit and corporate governance and nominating committee experience).
|
•
|
Mr. Young, our CEO, has:
extensive senior level executive experience as our CEO and chief operating officer, over 30 years of experience in the beverage industry and substantial sales and marketing experience.
|
•
|
formation of an Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, each comprised solely of independent directors;
|
•
|
Board requirement to annually assess the performance of the Chief Executive Officer (references in this Proxy Statement to "the Chief Executive Officer" refer generically to the person holding that title and not to any specific individual);
|
•
|
Board stewardship of our Code of Business Conduct and Ethics and Insider Trading Policy;
|
•
|
assessment of Board and director performance;
|
•
|
power to retain outside advisors; and
|
•
|
Categorical Standards of Director Independence.
|
•
|
appointing our independent auditors and monitoring their performance, qualifications and independence;
|
•
|
reviewing the quality and integrity of our consolidated financial statements and disclosures;
|
•
|
monitoring our system of internal controls over financial reporting;
|
•
|
monitoring the performance of our corporate audit department; and
|
•
|
monitoring our compliance with legal and regulatory requirements.
|
•
|
setting the compensation of the Chief Executive Officer, after consideration of the Board's evaluation of the performance of the Chief Executive Officer;
|
•
|
determining the compensation levels of our other executive officers, after consultation with the Chief Executive Officer;
|
•
|
approving and administering our executive compensation program;
|
•
|
administering our equity-based and incentive compensation plans;
|
•
|
overseeing regulatory compliance with Section 162(m) of the Code to maximize deductibility of compensation paid; and
|
•
|
reviewing and discussing with management our Compensation Discussion and Analysis for inclusion in our proxy statement or annual report, in accordance with applicable regulations.
|
•
|
conduct an analysis of compensation for our executive officers, including the Chief Executive Officer, and assess how target compensation aligned with our philosophy and objectives;
|
•
|
prepare an analysis of our executive compensation and determine its alignment with our performance in relation to our peer group;
|
•
|
develop recommendations for the Compensation Committee on the size and structure of long-term incentive awards for the Chief Executive Officer and our executive officers;
|
•
|
provide perspectives on the composition of our peer group for
2012
-
2013
;
|
•
|
assist the Compensation Committee in the review of incentive plan design, severance programs and related benefit and perquisite programs;
|
•
|
assess the Board's compensation;
|
•
|
provide the Compensation Committee ongoing advice and counsel on market compensation trends, legislative and regulatory updates and their impact on our executive compensation programs;
|
•
|
assess Mercer's independence in connection with the six factors (the "Regulatory Evaluation") set forth in the rules promulgated by the SEC and in the NYSE listing standards; and
|
•
|
assist in the preparation of the Compensation Discussion and Analysis section of our proxy statement.
|
•
|
The consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
|
•
|
The consultant is not responsible for selling other Mercer or affiliate services to the Company;
|
•
|
Mercer's professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering his or her advice and recommendations;
|
•
|
The Compensation Committee has the sole authority to retain and terminate the executive compensation consultant;
|
•
|
The consultant has direct access to the Compensation Committee without management intervention;
|
•
|
The Compensation Committee evaluates the quality and objectivity of the services provided by the consultant each year and determines whether to continue to retain the consultant; and
|
•
|
The protocols for the engagement (described below) limit how the consultant may interact with management.
|
•
|
administering the director selection process and the board committee assignments;
|
•
|
leading the development of the Company's corporate governance and developing corporate governance guidelines;
|
•
|
reviewing issues related to the relationship between the Company and its stockholders;
|
•
|
establishing and revising the Company's Code of Business Conduct and Ethics;
|
•
|
reviewing and overseeing the process of regarding succession planning of the Company's Chief Executive Officer and senior management; and
|
•
|
oversight of the Company's legislative priorities, political action committee, political activities, corporate sustainability efforts and relevant public policy issues.
|
Name
|
|
Amount and Nature of Beneficial Ownership of Common Stock
|
|
Percent of Class
|
||
BENEFICIAL OWNERS OF MORE THAN 5% OF OUR COMMON STOCK
|
|
|
|
|
||
FMR LLC(1)
|
|
21,816,684
|
|
|
10.48
|
%
|
82 Devonshire Street
Boston, MA 02109 |
|
|
|
|
||
Morgan Stanley(2)
|
|
14,571,926
|
|
|
7.00
|
%
|
1585 Broadway
New York, NY 10036 |
|
|
|
|
||
Cedar Rock Capital Ltd.(3)
|
|
13,335,590
|
|
|
6.41
|
%
|
110 Wigmore Street
London W1U 3RW United Kingdom |
|
|
|
|
||
The Vanguard Group, Inc.(4)
|
|
12,482,475
|
|
|
5.99
|
%
|
100 Vanguard Blvd
Malvern, PA 19355 |
|
|
|
|
||
BlackRock Inc.(5)
|
|
11,637,220
|
|
|
5.59
|
%
|
40 East 52nd Street
New York, NY 10022 |
|
|
|
|
||
Massachusetts Financial Services Company(6)
|
|
10,688,695
|
|
|
5.10
|
%
|
111 Huntington Avenue
Boston, MA 02199
|
|
|
|
|
||
SECURITY OWNERSHIP OF MANAGEMENT
|
|
|
|
|
||
DIRECTORS:
|
|
|
|
|
||
Wayne R. Sanders(7)
|
|
89,759
|
|
|
*
|
|
John L. Adams(8)
|
|
45,436
|
|
|
*
|
|
David E. Alexander(9)
|
|
2,000
|
|
|
*
|
|
Terence D. Martin
|
|
20,066
|
|
|
*
|
|
Pamela H. Patsley
|
|
13,436
|
|
|
*
|
|
Joyce M. Roché
|
|
1,000
|
|
|
*
|
|
Ronald G. Rogers
|
|
15,436
|
|
|
*
|
|
Jack L. Stahl
|
|
19,296
|
|
|
*
|
|
M. Anne Szostak
|
|
17,936
|
|
|
*
|
|
NAMED EXECUTIVE OFFICERS:
|
|
|
|
|
||
Larry D. Young(10)
|
|
520,051
|
|
|
*
|
|
Martin M. Ellen(10)(11)
|
|
248,928
|
|
|
*
|
|
James J. Johnston(10)
|
|
303,342
|
|
|
*
|
|
Rodger L. Collins(10)
|
|
199,747
|
|
|
*
|
|
Derry L. Hobson(10)
|
|
—
|
|
|
*
|
|
All other Executive Officers (5 persons)(10)
|
|
270,093
|
|
|
*
|
|
All Executive Officers and Directors as a Group (19 persons)
|
|
1,766,526
|
|
|
*
|
*
|
Less than 1%
|
(1)
|
Based on a Schedule 13G/A filed by the stockholder on February 14, 2013. Such stockholder has indicated that it beneficially owns and has sole dispositive power with respect to 21,816,684 shares and has the sole voting power with respect to 4,798,084 shares.
|
|
|
(2)
|
Based on a Schedule 13G/A filed jointly by Morgan Stanley and Morgan Stanley Investment Management Limited (25 Cabot Square, Canary Wharf, London E14 4QA, England) with the SEC on February 14, 2013. According to such filing, Morgan Stanley beneficially owns and has sole dispositive power with respect to 14,571,926 shares, has sole voting power with respect to 12,432,400 shares and has shared voting power with respect to 372,794 shares. Additionally, according to such filing, Morgan Stanley Investment Management Limited beneficially owns and has sole dispositive power with respect to 14,565,237 shares, has sole voting power with respect to 12,428,490 shares, and has shared voting power with respect to 372,794 shares. The securities reported by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Investment Management Limited, a wholly-owned subsidiary of Morgan Stanley.
|
|
|
(3)
|
Based on a Schedule 13G/A filed by the stockholder with the SEC on February 14, 2013. Such stockholder has indicated that it beneficially owns, has shared voting power and has shared dispositive power with respect to 13,335,590 shares.
|
|
|
(4)
|
Based on a Schedule 13G/A filed by the stockholder with the SEC on February 11, 2013. Such stockholder has indicated that it beneficially owns 12,482,475 shares, has sole voting power with respect to 371,872 shares, has sole dispositive power with respect to 12,134,061 shares and has shared dispositive power with respect to 348,414 shares.
|
|
|
(5)
|
Based on a Schedule 13G/A filed by the stockholder with the SEC on February 8, 2013. Such stockholder has indicated that it beneficially owns, has sole voting power and has sole dispositive power with respect to 11,637,220 shares.
|
|
|
(6)
|
Based on a Schedule 13G filed by the stockholder with the SEC on February 12, 2013. Such stockholder has indicated that it beneficially owns and has sole dispositive power with respect to 10,688,695 shares and has sole voting power with respect to 9,030,387 shares.
|
|
|
(7)
|
The shares shown include 30,000 shares held in the name of a family trust. Mr. Sanders is a trustee of the family trust and has a pecuniary interest in the shares of the issuer held by the family trust.
|
|
|
(8)
|
The shares shown include 5,000 shares held by John L. Adams IRA Rollover and 5,000 shares held by John L. Adams SEP IRA.
|
|
|
(9)
|
The shares shown are owed by The David and Sandra Alexander Revocable Trust, and Mr. Alexander has a pecuniary interest in the trust.
|
|
|
(10)
|
Includes the following shares related to stock options, RSUs and dividend equivalent units with respect to the grants under the Omnibus Stock Incentive Plan of 2008 and the Omnibus Stock Incentive Plan of 2009 that, with respect to stock options, the Named Executive Officers and other executive officers have the right to exercise as of March 18, 2013 or will have the right to exercise within 60 days after March 18, 2013 and with respect to RSUs, such RSUs will vest within 60 days after March 18, 2013:
|
|
|
Exercisable Options
|
|
RSUs
|
|
Dividend Equivalent
Units |
||
Larry D. Young
|
|
195,948
|
|
—
|
|
|
—
|
|
Martin M. Ellen
|
|
170,973
|
|
40,691
|
|
|
3,398
|
|
James J. Johnston
|
|
220,520
|
|
—
|
|
|
—
|
|
Rodger L. Collins
|
|
132,937
|
|
—
|
|
|
—
|
|
Other Executive Officers
|
|
138,443
|
|
—
|
|
|
—
|
|
(11)
|
The shares shown are owned by Martin Robin Partners, L.P., and Mr. Ellen has a pecuniary interest in the limited partnership.
|
•
|
Total direct compensation targets are designed to be competitive with companies in the markets in which we compete;
|
•
|
Compensation is generally performance based, with our overall performance judged against internal goals;
|
•
|
A pay-for-performance culture links compensation to both individual and collective performance and will result in differentiated compensation;
|
•
|
A substantial percentage of total direct compensation is variable, or "at risk", both through annual incentive compensation and performance-based, long-term equity incentive awards (including stock options and performance-based restricted stock units); and
|
•
|
Equity incentive awards are used to align the interests of management with those of our stockholders.
|
•
|
base salary;
|
•
|
MIP awards (our annual cash incentive program); and
|
•
|
long-term incentive awards, consisting of:
|
◦
|
stock options,
|
◦
|
RSUs, and
|
◦
|
PSUs.
|
|
•
|
Net sales, as reported, increased 2%;
|
•
|
Net income, as reported, increased 4%;
|
•
|
Earnings per share, as reported, increased to $2.96 per diluted share in 2012 from $2.74 per diluted share in 2011;
|
•
|
We returned $684 million of cash to our stockholders in the form of stock repurchases in the amount of $400 million and dividends in the amount of $284 million;
|
•
|
Dividends declared in 2012 increased 12%; and
|
•
|
In February 2013, we announced a 12% increase in our dividend declared for the first quarter of 2013.
|
•
|
Equity Award Procedures (see "Compensation Discussion and Analysis - Long Term Incentive Awards - Equity Award Procedures" beginning on page
36
);
|
•
|
Stock Ownership Guidelines (see "Compensation Discussion and Analysis - Stock Ownership Guidelines" beginning on page
37
);
|
•
|
Insider Trading Policy (see "Compensation Discussion and Analysis - Insider Trading Policy" beginning on page
37
); and
|
•
|
Clawback Policy (see "Compensation Discussion and Analysis - Clawback Policy" beginning on page
37
).
|
•
|
base salary;
|
•
|
MIP;
|
•
|
long-term equity-based incentives (
both time-based and performance-based
); and
|
•
|
other benefits (
supplemental savings plan, executive service allowance, automobile allowance, executive long term disability and annual physical
).
|
*
|
Our peer group was amended in the third quarter of 2012 to include Hillshire Brands, formerly known as Sara Lee Corporation, following the spin-off of its international coffee and tea business. In addition, Beam was added as a member of our peer group.
|
Metric
|
|
CEO and
Chief Financial
Officer
|
|
Business Unit
Presidents
|
|
Other Executive Officers
|
Income from operations
|
|
60%
|
|
30%
|
|
60%
|
Net sales
|
|
40%
|
|
40%
|
|
40%
|
Segment Operating Profit ("SOP") *
|
|
—
|
|
30%
|
|
—
|
Metric
|
|
Target (100%)
|
|
Results
|
|
Payout Percentage
|
||||||
Net sales
|
|
$
|
6,080
|
|
|
$
|
5,995
|
|
|
86.0
|
|
%
|
Income from operations (1)
|
|
$
|
1,098
|
|
|
$
|
1,083
|
|
|
85.9
|
|
%
|
SOP:
|
|
|
|
|
|
|
|
|||||
Beverage Concentrates and Latin America Beverages
|
|
$
|
851
|
|
|
$
|
825
|
|
|
70.4
|
|
%
|
Packaged Beverages (1)
|
|
$
|
572
|
|
|
$
|
547
|
|
|
55.9
|
|
%
|
(1)
|
The Results reflected in this column and used to calculate the payout are based on core earnings. Core earnings is defined as results, as reported, adjusted for the unrealized mark-to-market impact of commodity derivatives and certain items that are excluded for comparison to prior year periods. The Results for Net sales and SOP: Beverages Concentrates and Latin America Beverages are as reported. Income from operations and SOP: Packaged Beverages, as reported, were impacted by certain adjustments included within the generally accepted accounting principles in the United States of America ("GAAP") to non-GAAP reconciliation for core earnings indicated in the Company's earnings release filed with the SEC on Form 8-K on February 13, 2013. A reconciliation of those reported amounts and Results is as follows (in millions):
|
|
|
Total Company Income from Operations
|
|
SOP: Packaged
Beverages
|
||||
As reported
|
|
$
|
1,092
|
|
|
$
|
539
|
|
Core earnings adjustments:
|
|
|
|
|
|
|||
Mark to Market (a)
|
|
|
(17
|
)
|
|
—
|
|
|
Depreciation Adjustment (b)
|
|
|
8
|
|
|
8
|
|
|
Results
|
|
$
|
1,083
|
|
|
$
|
547
|
|
(a)
|
Unrealized mark-to-market impact of commodity derivatives.
|
(b)
|
Depreciation adjustment associated with the reassessment of a capital lease executed prior to the separation from Cadbury.
|
•
|
Stock Options:
Stock options are granted with an exercise price equal to the closing market price of our common stock on the grant date. Stock options generally vest over a period of three years with one third becoming exercisable on each anniversary of the grant date as long as the recipient is still employed by us on the date of vesting, and generally expire after ten years. Stock options only have value if our stock price appreciates after the options are granted. Our incentive plans prohibit the repricing of any outstanding award.
|
•
|
RSUs:
Each RSU is equivalent in value to one share of our common stock and generally vest on the third anniversary of the award date. RSUs do not generally entitle the recipient to voting rights until the units vest. Holders of RSUs receive a dividend equivalent payment of additional RSUs as declared dividends are paid. These dividend equivalents are governed by the terms of the RSU agreement. The additional RSUs equal: (i) the product of the per-share cash dividend payable with respect to each share of common stock on that date, multiplied by the total number of RSUs which have not been settled or forfeited as of the record date for such dividend, divided by (ii) the closing price on the NYSE of one share of common stock on the payment date of that dividend.
|
•
|
PSUs:
In 2012, the Compensation Committee approved a PSU program. Each PSU is equivalent in value to one share of our common stock. Holders of PSUs accrue a dividend equivalent payment of additional PSUs, as declared dividends are paid, which are payable upon vesting based on the achievement of performance measures. These dividend equivalents are governed by the terms of the PSU agreement. The additional PSUs equal: (i) the product of the per-share cash dividend payable with respect to each share of common stock on that date, multiplied by the total number of PSUs which have not been settled or forfeited as of the record date for such dividend, divided by (ii) the closing price on the NYSE of one share of common stock on the payment date of that dividend. The performance period for the PSUs granted in 2012 commenced on January 1, 2012 and will end on December 31, 2014 (the "Plan Period"). Based on the achievement of the performance measures, the PSUs will vest on December 31, 2014. The performance measures are as follows:
|
a.
|
Value Appreciation (herein so called) calculated as a percentage (rounded to 2 decimals) as follows:
|
Net Income (Current Year) - Net Income (Prior Year)
|
Net Income (Prior Year)
|
b.
|
Cash Flow Yield (herein so called) calculated as a percentage (rounded to 2 decimals) as follows:
|
Cash Flow from Operations - Capital Expenditures
|
Net Income (Prior Year) x P/E
|
c.
|
Net Income (reflected as "Net income"), Cash Flow from Operations (reflected as "Net Cash provided by operating activities") and Capital Expenditures (reflected as "Purchase of Property, plant and equipment") will be as reported in the Company's Form 10-K (in the captions reflected in parenthesis above) for the applicable year, but will be adjusted for items excluded as indicated in the Company's earnings release for the applicable fiscal year ("ex-items"). If not so indicated in the earnings release, revenue amortization related to the license transactions with PepsiCo, Inc. in 2009 and with The Coca-Cola Company in 2010 will be considered as ex-items. Furthermore, all tax payments related to ex-items will be also considered ex-items in the applicable periods, including the income tax payments related to the aforementioned license transactions.
|
d.
|
P/E is the price to earnings ratio and will be fixed during the Plan Period. It will be determined by dividing (i) the Average Closing Market Price (as hereafter defined) by (ii) the Diluted Earnings per share, ex-items, for the calendar year ended on December 31 as indicated in the Company's earnings release for that calendar year. The resulting number will be the P/E to be used in the determination of the Cash Flow Yield for the Plan Period.
|
e.
|
The sum of the Value Appreciation + Cash Flow Yield ("Internal Return") will be calculated at the end of each year, with the sum of the Internal Return for each Plan Year to be divided by three (3) (the number of years in the Plan Period) to determine the average internal return (the "Average Internal Return").
|
f.
|
Payout of shares:
|
(i)
|
will be 50% of the award if the Average Internal Return is 8% ("Threshold Level");
|
(ii)
|
will be 100% of the award if the Average Internal Return is 12% ("Target Level"); and
|
(iii)
|
may increase up to 200% if the Average Internal Return is 16% ("Maximum Level").
|
•
|
Supplemental Savings Plan:
The only nonqualified deferred compensation plan sponsored by us for NEOs is the Supplemental Savings Plan (the "SSP"), a non-tax qualified defined contribution plan. The SSP is for employees who are actively enrolled in the Savings Incentive Plan ("SIP") and whose deferrals under the SIP are limited by the Code compensation limitations. Employees may elect to defer up to 75% of their base salary over the compensation limit (established in the Code) to the SSP, and we match 100% of the first 4% of base salary that is contributed by these employees. Employees participating in the SSP are always fully vested in their SSP, as well as our, contributions to the plan.
|
•
|
Executive Service Allowance:
All NEOs receive an annual allowance that can be used for obtaining financial planning, tax preparation services and other related benefits. The executive pays tax on this allowance.
|
•
|
Automobile Allowance:
We provide our NEOs with an automobile allowance. This benefit provides eligible executives with an opportunity to use their car for both business and personal use in an efficient manner. The executive pays tax on this allowance.
|
•
|
Executive Long-term Disability:
We provide our NEOs with an executive long-term disability program that is supplemental to our group disability program. The executive long-term disability program provides a benefit of up to 60% of total target compensation. Total target compensation equals the sum of base pay and target performance based incentive compensation. Executives recognize imputed income for tax purposes for premiums paid for the executive long-term disability premiums.
|
•
|
Annual Physicals:
We provide our NEOs with the opportunity to have executive physicals on an annual basis.
|
•
|
If there is a restatement of the Company's financial statements filed with the SEC (other than to comply with changes in applicable accounting principles) covering any of the three fiscal years preceding the payment or grant of incentive compensation, then the Company:
|
◦
|
will, subject to the approval of the Compensation Committee, recover from each member of the Company's executive leadership team (and from each person who was a member of the executive leadership team during the three year period preceding the first day of any accounting period for which the financial statements are restated) the incentive compensation paid to that executive that was in excess of the incentive compensation that would have been paid to the executive based on the restated financial statements, with such excess to be determined by the Company and approved by the Compensation Committee, and
|
◦
|
may recover from any other award recipient, whose fraud or willful misconduct resulted in the restatement, any incentive compensation paid to that award recipient that was in excess of the incentive compensation that would have been paid to the award recipient based on the restated financial statements, with such excess to be determined by the Company.
|
•
|
If the Company determines that any award recipient is guilty of fraud or willful misconduct that would give rise to a termination for cause, but not result in a restatement of the Company's financial statements, then the Company will have the right to recover from that award recipient, any incentive compensation paid to that award recipient during the period of time the award recipient was engaged in such fraud or willful misconduct. The Compensation Committee will approve the recovery of incentive compensation from any member of the executive leadership team.
|
•
|
A significant portion (between 50% and 70%) of target total direct compensation for our executive leadership team is provided in equity, focused on long-term stock price performance and aligned with stockholder interests. With annual compensation accounting for less than half of the targeted compensation package, the structure discourages maximizing short-term financial benefits at the expense of long-term performance.
|
•
|
The relationship between fixed and variable/at-risk compensation is heavily weighted to incentives (approximately 70% to 85% is "at risk"), which is consistent with practices at our peer companies.
|
•
|
Program balance is also provided through an appropriately set cap (200% of target) that limits the upside potential of the MIP.
|
•
|
Similarly, award amounts for PSUs are appropriately capped at 200% of target, which provides incentive to achieve superior long-term performance without encouraging decisions that could jeopardize long-term sustainability.
|
•
|
Stock options provide the only uncapped opportunity in the compensation program. However, the stock options have multi-year vesting provisions, which lessens their impact on short-term risk taking for financial gain; moreover, from a value standpoint, in 2012 stock options represented less than 25% of the long-term incentive mix (23% stock options; 54% RSUs; and 23% PSUs).
|
|
|
Submitted by the
|
|
|
Compensation Committee of the Board
|
|
|
|
|
|
M. Anne Szostak, Chairperson
|
|
|
David E. Alexander
|
|
|
Joyce M. Roché
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)(1)
|
|
Option
Awards
($)(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)(3)
|
|
Nonqualified
Deferred
Compensation
Earnings
($)(4)
|
|
All Other
Compensation
($)(5)
|
|
Total
($)
|
||||||||
Larry D. Young
|
|
2012
|
|
1,075,000
|
|
|
—
|
|
|
4,388,958
|
|
|
1,310,997
|
|
|
1,385,461
|
|
|
7,434
|
|
|
368,972
|
|
|
8,536,822
|
|
President & CEO
|
|
2011
|
|
1,057,692
|
|
|
—
|
|
|
4,368,725
|
|
|
1,304,958
|
|
|
1,511,974
|
|
|
34,371
|
|
|
412,686
|
|
|
8,690,406
|
|
|
|
2010
|
|
976,923
|
|
|
—
|
|
|
3,324,983
|
|
|
1,424,995
|
|
|
1,614,251
|
|
|
14,693
|
|
|
278,551
|
|
|
7,634,396
|
|
Martin M. Ellen
|
|
2012
|
|
542,693
|
|
|
—
|
|
|
1,061,008
|
|
|
316,940
|
|
|
421,438
|
|
|
—
|
|
|
100,224
|
|
|
2,442,303
|
|
Chief Financial Officer
|
|
2011
|
|
532,692
|
|
|
—
|
|
|
1,201,168
|
|
|
358,799
|
|
|
501,647
|
|
|
—
|
|
|
85,737
|
|
|
2,680,043
|
|
|
|
2010
|
|
397,789
|
|
|
—
|
|
|
3,543,707
|
|
(6)
|
1,518,745
|
|
(6)
|
459,715
|
|
|
—
|
|
|
179,422
|
|
|
6,099,378
|
|
James J. Johnston
|
|
2012
|
|
543,831
|
|
|
—
|
|
|
1,042,524
|
|
|
311,420
|
|
|
377,428
|
|
|
31,316
|
|
|
165,710
|
|
|
2,472,229
|
|
Pres. Beverage Concentrates & Latin America Beverages
|
|
2011
|
|
532,000
|
|
|
—
|
|
|
1,101,050
|
|
|
328,894
|
|
|
424,628
|
|
|
80,687
|
|
|
182,125
|
|
|
2,649,384
|
|
|
|
2010
|
|
515,385
|
|
|
—
|
|
|
699,993
|
|
|
299,997
|
|
|
422,574
|
|
|
34,419
|
|
|
139,581
|
|
|
2,111,949
|
|
Rodger L. Collins
|
|
2012
|
|
542,020
|
|
|
—
|
|
|
1,042,524
|
|
|
311,420
|
|
|
357,275
|
|
|
—
|
|
|
107,873
|
|
|
2,361,112
|
|
Pres. Packaged Beverages
|
|
2011
|
|
528,000
|
|
|
—
|
|
|
1,101,050
|
|
|
328,894
|
|
|
297,824
|
|
|
—
|
|
|
115,151
|
|
|
2,370,919
|
|
|
|
2010
|
|
517,693
|
|
|
—
|
|
|
699,993
|
|
|
299,997
|
|
|
347,153
|
|
|
—
|
|
|
100,036
|
|
|
1,964,872
|
|
Derry L. Hobson
|
|
2012
|
|
473,386
|
|
|
—
|
|
|
680,626
|
|
|
203,315
|
|
|
285,685
|
|
|
—
|
|
|
98,587
|
|
|
1,741,599
|
|
EVP Supply Chain
|
|
2011
|
|
463,847
|
|
|
—
|
|
|
700,648
|
|
|
209,298
|
|
|
347,889
|
|
|
—
|
|
|
93,655
|
|
|
1,815,337
|
|
|
|
2010
|
|
444,231
|
|
|
—
|
|
|
559,976
|
|
|
239,995
|
|
|
329,838
|
|
|
—
|
|
|
84,158
|
|
|
1,658,198
|
|
(1)
|
The amounts reported in the Stock Awards column reflect the grant date fair value associated with awards of RSUs and PSUs to each of the NEOs (amounts do not include any RSUs and PSUs that have been paid as dividend equivalents subsequent to the date of the award). The value of the PSUs awarded is subject to the achievement of certain performance criteria at the end of the three-year performance period (see "Compensation Discussion and Analysis – Long-Term Incentive Awards – Specific Programs for
2012
" beginning on page
35
). Even though the awards may be forfeited, the amounts do not reflect this contingency. Assumptions used to calculate these amounts (disregarding forfeiture assumptions) are included in Note
14
"Stock-Based Compensation," to our Consolidated Financial Statements, which are included in our
2012
Form 10-K. For further information on the stock awards granted in fiscal year
2012
, see the Grants of Plan-Based Awards table on page
42
.
|
(2)
|
The amounts reported in the Option Awards column represent the grant date fair value associated with option grants to each of the NEOs. Even though the awards may be forfeited, the amounts do not reflect this contingency. Assumptions used to calculate these amounts (disregarding forfeiture assumptions) are included in Note
14
"Stock-Based Compensation" to our Consolidated Financial Statements, which are included in our
2012
Form 10-K. For further information on the stock option grants awarded in fiscal year
2012
, see the Grants of Plan-Based Awards table on page
42
.
|
(3)
|
The amounts reported in the Non-Equity Incentive Plan Compensation column reflect the amounts earned by each NEO under the Company's MIP.
|
(4)
|
The amounts reported in the Nonqualified Deferred Compensation Earnings column represent an estimate of the aggregate annual change in the actuarial present value of accumulated benefits under the Personal Pension Account Plan and the Pension Equalization Plan (as applicable), as described in more detail in the Pension Benefits table on page
45
. The change in the actuarial present value of the accumulated benefits under the plans was determined in accordance with GAAP. Assumptions used to calculate these amounts are included in Note
12
"Employee Benefit Plans" to our Consolidated Financial Statements, which are included in our
2012
Form 10-K.
|
(5)
|
Amounts reported in the All Other Compensation column reflect other compensation for each NEO, including, but not limited to, (i) the incremental cost to the Company of all perquisites and other personal benefits, (ii) the amount of any tax reimbursements, (iii) the amounts contributed by the Company to the tax-qualified defined contribution plans and non-tax qualified contribution plans and (iv) the amount of any insurance premiums paid by the Company.
|
|
|
Automobile
Allowance
($)
|
|
Service
Allowance
($)
|
|
Disability
Income
Premiums
($)(a)
|
|
Company
Contributions
($)(b)
|
|
Corporate
Aircraft
($)(c)
|
|
Executive
Physicals
($)
|
|
Moving
Expense
($)
|
|
Total
($)
|
||||||||
Mr. Young
|
|
35,100
|
|
|
24,000
|
|
|
6,778
|
|
|
267,365
|
|
|
35,729
|
|
|
—
|
|
|
—
|
|
|
368,972
|
|
Mr. Ellen
|
|
31,200
|
|
|
20,000
|
|
|
9,554
|
|
|
33,437
|
|
|
2,026
|
|
|
2,862
|
|
|
1,145
|
|
|
100,224
|
|
Mr. Johnston
|
|
28,600
|
|
|
19,000
|
|
|
4,665
|
|
|
109,688
|
|
|
1,174
|
|
|
2,583
|
|
|
—
|
|
|
165,710
|
|
Mr. Collins
|
|
28,600
|
|
|
19,000
|
|
|
6,074
|
|
|
47,936
|
|
|
3,064
|
|
|
3,199
|
|
|
—
|
|
|
107,873
|
|
Mr. Hobson
|
|
24,700
|
|
|
14,000
|
|
|
7,825
|
|
|
42,746
|
|
|
9,316
|
|
|
—
|
|
|
—
|
|
|
98,587
|
|
(a)
|
Includes the gross up for taxes to be paid by the NEO on the premium that was included in the NEO's income.
|
(b)
|
The amounts reported in the Company Contributions column represent our matching contributions to the tax-qualified defined contribution plans and non-tax qualified defined contribution plans. The contributions to the tax qualified defined contribution plans for
2012
are as follows: $
28,075
for Mr. Young, $
17,350
for Mr. Ellen, $
30,525
for Mr. Johnston, $
17,350
for Mr. Collins, and $
17,350
for Mr. Hobson. The contributions to the non-tax qualified defined contributions plans for
2012
are as follows: $
239,290
for Mr. Young, $
16,087
for Mr. Ellen, $
79,163
for Mr. Johnston, $
30,586
for Mr. Collins, and $
25,396
for Mr. Hobson.
|
(c)
|
For SEC purposes, the cost of personal use of a corporate aircraft is calculated based on the aggregate incremental cost to us. We calculated the aggregate incremental cost using estimated variable costs of operating the aircraft. Fixed costs which do not change based on usage, such as pilot salaries, depreciation of aircraft and cost of maintenance are excluded.
|
(6)
|
We entered into a letter of understanding with Mr. Ellen in connection with his employment in 2010. The Letter of Understanding provides that to replace the equity awards that Mr. Ellen lost when he left his previous employer, the Company awarded Mr. Ellen non-qualified stock options and RSUs (comprised of 70% RSUs and 30% stock options) with a total cash value of $3,750,000, which vest ratably over a five-year period.
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2)
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)(3)
|
|
All Other Options Awards: Number of Securities Underlying Option
(#)(4)
|
|
Exercise or Base Price of Option Awards
($/Sh)(5)
|
|
Grant Date Fair Value of Stock and Option Awards
(6)
|
||||||||||||||||
Name
|
|
Grant Date
|
|
Threshold($)
|
|
Target
($)
|
|
Maximum($)
|
|
Threshold($)
|
|
Target
($)
|
|
Maximum($)
|
|
|
|
|
||||||||||||
Larry D. Young
|
|
—
|
|
1,612,500
|
|
|
3,225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,428
|
|
|
|
|
|
|
3,077,978
|
|
||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
17,341
|
|
|
34,682
|
|
|
69,364
|
|
|
|
|
|
|
|
|
1,310,980
|
|
||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185,957
|
|
|
37.80
|
|
1,310,997
|
|
||||||
Martin M. Ellen
|
|
—
|
|
490,500
|
|
|
981,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,685
|
|
|
|
|
|
|
744,093
|
|
||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
4,192
|
|
|
8,384
|
|
|
16,768
|
|
|
|
|
|
|
|
|
316,915
|
|
||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,956
|
|
|
37.80
|
|
316,940
|
|
||||||
James J. Johnston
|
|
—
|
|
464,355
|
|
|
928,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,342
|
|
|
|
|
|
|
731,128
|
|
||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
4,119
|
|
|
8,238
|
|
|
16,476
|
|
|
|
|
|
|
|
|
311,396
|
|
||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,173
|
|
|
37.80
|
|
311,420
|
|
||||||
Rodger L. Collins
|
|
—
|
|
464,355
|
|
|
928,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,342
|
|
|
|
|
|
|
731,128
|
|
||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
4,119
|
|
|
8,238
|
|
|
16,476
|
|
|
|
|
|
|
|
|
311,396
|
|
||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,173
|
|
|
37.80
|
|
311,420
|
|
||||||
Derry L. Hobson
|
|
—
|
|
332,500
|
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,628
|
|
|
|
|
|
|
477,338
|
|
||||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
2,689
|
|
|
5,378
|
|
|
10,756
|
|
|
|
|
|
|
|
|
203,288
|
|
||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,839
|
|
|
37.80
|
|
203,315
|
|
(1)
|
The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column represent the potential payouts of annual cash incentive awards granted to our NEOs in fiscal year
2012
under the MIP subject to the achievement of certain performance measures. The actual amount of the awards made to the NEOs and paid in cash is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.
|
(2)
|
Subject to the achievement of certain performance criteria, represents the potential number of shares that may be issued to the NEO pursuant to the grant of PSU awards made in fiscal year 2012 under the Omnibus Stock Incentive Plan of 2009 (see "Compensation Discussion and Analysis – Long-Term Incentive Awards – Specific Programs for
2012
" beginning on page
35
).
|
(3)
|
Represents the number of shares subject to RSU awards made in fiscal year
2012
under the Omnibus Stock Incentive Plan of 2009. The RSU awards vest three years from the grant date.
|
(4)
|
Represents the number of shares subject to stock option grants made in fiscal year
2012
under the Omnibus Stock Incentive Plan of 2009. All options granted in fiscal year
2012
to NEOs have a term of ten years from the grant date and vest one-third on the first, second and third anniversaries of the grant date, contingent on the NEO continuing his employment with the Company through each date.
|
(5)
|
Represents the exercise price for the option awards, which were determined based on the closing share price of a share of our common stock on the date of grant.
|
(6)
|
Represents the grant date fair value of the equity incentive plan awards, which generally reflects the amount we would expense in our financial statements in accordance with GAAP over the award's vesting schedule, and does not correspond to the actual value that may be realized by or paid to the NEOs.
|
|
|
Option Awards (1)
|
|
Stock Awards (2)
|
|||||||||||||||||||||||
Name
|
|
Grant Date
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option Exercise Price ($)
|
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have not Vested (#) (3)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)(3)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(4)(#)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights That Have Not Vested (4)($)
|
|||||||
Larry D. Young
|
|
3/2/2010
|
|
|
|
|
67,954
|
|
|
|
|
31.50
|
|
|
3/2/2020
|
|
|
|
|
|
|
|
|
||||
|
3/2/2011
|
|
|
|
132,014
|
|
|
|
|
36.42
|
|
|
3/2/2021
|
|
|
|
|
|
|
|
|
||||||
|
|
3/2/2012
|
|
|
|
185,957
|
|
|
|
|
37.80
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2010
|
|
|
|
|
|
|
|
|
|
|
|
114,320
|
|
|
5,050,657
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
88,866
|
|
|
3,926,099
|
|
|
|
|
|
|
|
|||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,599
|
|
|
1,661,123
|
|
|||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
83,408
|
|
|
3,684,965
|
|
|
|
|
|
|
|
|||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,525
|
|
|
1,569,494
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Martin M. Ellen
|
|
4/1/2010(5)
|
|
45,765
|
|
|
80,643
|
|
|
|
|
35.48
|
|
|
4/1/2020
|
|
|
|
|
|
|
|
|
||||
|
4/1/2010
|
|
31,362
|
|
|
15,681
|
|
|
|
|
35.48
|
|
|
4/1/2020
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
18,150
|
|
|
36,296
|
|
|
|
|
36.42
|
|
|
3/2/2021
|
|
|
|
|
|
|
|
|
||||
|
|
3/2/2012
|
|
|
|
44,956
|
|
|
|
|
37.80
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|||||
|
|
4/1/2010(5)
|
|
|
|
|
|
|
|
|
|
|
|
47,872
|
|
|
2,114,984
|
|
|
|
|
|
|||||
|
|
4/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
27,925
|
|
|
1,233,726
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
24,433
|
|
|
1,079,449
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,337
|
|
|
456,688
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
20,163
|
|
|
890,801
|
|
|
|
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,587
|
|
|
379,373
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
James J. Johnston
|
|
5/7/2008
|
|
54,022
|
|
|
|
|
|
|
25.36
|
|
|
5/7/2018
|
|
|
|
|
|
|
|
|
|||||
|
3/2/2009
|
|
75,583
|
|
|
|
|
|
|
13.48
|
|
|
3/2/2019
|
|
|
|
|
|
|
|
|
||||||
|
|
3/2/2010
|
|
28,612
|
|
|
14,306
|
|
|
|
|
31.50
|
|
|
3/2/2020
|
|
|
|
|
|
|
|
|
||||
|
|
3/2/2011
|
|
16,636
|
|
|
33,272
|
|
|
|
|
36.42
|
|
|
3/2/2021
|
|
|
|
|
|
|
|
|
||||
|
|
3/2/2012
|
|
|
|
44,173
|
|
|
|
|
37.80
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2010
|
|
|
|
|
|
|
|
|
|
|
|
24,067
|
|
|
1,063,280
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
22,397
|
|
|
989,499
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,475
|
|
|
418,605
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
19,812
|
|
|
875,294
|
|
|
|
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,438
|
|
|
372,790
|
|
|
|
Option Awards (1)
|
|
Stock Awards (2)
|
|||||||||||||||||||||||
Name
|
|
Grant Date
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option Exercise Price ($)
|
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have not Vested (#) (3)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)(3)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (4)(#)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights That Have Not Vested (4)($)
|
|||||||
Rodger L. Collins
|
|
5/7/2008
|
|
42,022
|
|
|
|
|
|
|
25.36
|
|
|
5/7/2018
|
|
|
|
|
|
|
|
|
|||||
|
3/2/2010
|
|
28,612
|
|
|
14,306
|
|
|
|
|
31.50
|
|
|
3/2/2020
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
16,636
|
|
|
33,272
|
|
|
|
|
36.42
|
|
|
3/2/2021
|
|
|
|
|
|
|
|
|
||||
|
|
3/2/2012
|
|
|
|
44,173
|
|
|
|
|
37.80
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2010
|
|
|
|
|
|
|
|
|
|
|
|
24,067
|
|
|
1,063,280
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
22,397
|
|
|
989,499
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,475
|
|
|
418,605
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
19,812
|
|
|
875,294
|
|
|
|
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,438
|
|
|
372,790
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Derry L. Hobson
|
|
3/2/2010
|
|
|
|
11,444
|
|
|
|
|
31.50
|
|
|
3/2/2020
|
|
|
|
|
|
|
|
|
|||||
|
3/2/2011
|
|
|
|
21,172
|
|
|
|
|
36.42
|
|
|
3/2/2021
|
|
|
|
|
|
|
|
|
||||||
|
|
3/2/2012
|
|
|
|
28,839
|
|
|
|
|
37.80
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|||||
|
|
3/2/2010
|
|
|
|
|
|
|
|
|
|
|
|
19,253
|
|
|
850,597
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
14,252
|
|
|
629,653
|
|
|
|
|
|
|||||
|
|
3/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,029
|
|
|
266,361
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
12,935
|
|
|
571,468
|
|
|
|
|
|
|||||
|
|
3/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,508
|
|
|
243,343
|
|
(1)
|
Except as indicated in footnote 5, stock options vest over a period of three years with one third becoming exercisable on each anniversary of the grant date.
|
(2)
|
Except as indicated in footnote 5, RSUs vest on the third anniversary of the award date. Based on the achievement of certain performance measures, PSUs vest at the end of a three-year plan period.
|
(3)
|
Share amounts include outstanding RSUs and dividend equivalent units attributable to such RSUs. Market value is determined by multiplying the total number of shares or other rights awarded under an equity incentive plan that have not vested times $
44.18
, the closing price of a share of our common stock on the NYSE on December 31,
2012
.
|
(4)
|
Share amounts include outstanding PSUs and dividend equivalent units attributable to such PSUs. Market value is determined by multiplying the total number of shares or other rights awarded under an equity incentive plan that have not vested times $
44.18
, the closing price of a share of our common stock on the NYSE on December 31,
2012
.
|
(5)
|
Represent stock options and RSUs (including dividend equivalent units attributable to such RSUs) that were awarded to Mr. Ellen to compensate Mr. Ellen for grants forfeited at his previous employer. The stock options vest over a five-year period with one-fifth becoming exercisable on each anniversary of the grant date. The RSUs vest over a five-year period with one-fifth vesting on each anniversary date of the award.
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||
|
|
Number of Shares Acquired on Exercise
|
|
Value Realized on Exercise
|
|
Number of Shares Acquired on Vesting
|
|
Value Realized on Vesting
|
||||
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
||||
Larry D. Young
|
|
100,778
|
|
|
2,454,055
|
|
|
198,685
|
|
|
7,510,293
|
|
|
|
66,007
|
|
|
589,244
|
|
|
|
|
|
||
|
|
135,908
|
|
|
1,881,918
|
|
|
|
|
|
||
Martin M. Ellen
|
|
8,000
|
|
|
79,920
|
|
|
15,578
|
|
|
632,778
|
|
James J. Johnston
|
|
|
|
|
|
49,670
|
|
|
1,877,526
|
|
||
Rodger L. Collins
|
|
59,100
|
|
|
1,597,621
|
|
|
49,670
|
|
|
1,877,526
|
|
|
|
12,000
|
|
|
223,890
|
|
|
|
|
|
||
|
|
16,483
|
|
|
503,350
|
|
|
|
|
|
||
Derry L. Hobson
|
|
22,395
|
|
|
543,831
|
|
|
44,152
|
|
|
1,668,945
|
|
|
|
22,890
|
|
|
221,527
|
|
|
23,936
|
|
|
963,424
|
|
|
|
10,588
|
|
|
50,377
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of Years of
Credited Service (#)(1) |
|
Present Value of
Accumulated Benefit ($)(2) |
|
Payments During
Last Fiscal Year ($) |
|||
Larry D. Young
|
|
Personal Pension Account Plan
|
|
2.67
|
|
|
42,052
|
|
|
—
|
|
|
|
Pension Equalization Plan
|
|
2.67
|
|
|
309,896
|
|
|
—
|
|
James J. Johnston
|
|
Personal Pension Account Plan
|
|
16.09
|
|
|
338,990
|
|
|
—
|
|
|
|
Pension Equalization Plan
|
|
16.09
|
|
|
414,782
|
|
|
—
|
|
(1)
|
Pay and future service credits were frozen as of December 31, 2008 for our personal pension account plan (the "PPA Plan") and our pension equalization plan (the "PEP"). For further information, see "Pension Benefits - Personal Pension Account Plan" and "Pension Benefits- Pension Equalization Plan." Each of Mr. Young's and Mr. Johnston's years of service with us prior to the date the PPA Plan and the PEP were frozen is the same as the number of years of credited service under each of the PPA Plan and the PEP.
|
(2)
|
The actuarial present value of benefits accumulated under the respective plans in accordance with the assumptions included in Note
12
"Employee Benefit Plans," to our audited Consolidated Financial Statements, which are included in our
2012
Form 10-K. These amounts assume that each NEO retires at age 65. The discount rate used to determine the present value of accumulated benefits is 4.05%. The present values assume no pre-retirement mortality and utilize the RP2000 healthy white collar male and female tables, projected to calendar year 2020.
|
Name
|
|
Executive Contributions in Last
Fiscal Year
($)(1)
|
|
Registrant Contributions in Last
Fiscal Year ($)(2) |
|
Aggregate
Earnings
in Last
Fiscal Year
($)(3)
|
|
Aggregate Withdrawals/ Distributions
($)
|
|
Aggregate Balance at Last FYE
($)(4)
|
|||||
Larry D. Young
|
|
1,589,050
|
|
|
239,290
|
|
|
191,483
|
|
|
—
|
|
|
2,961,395
|
|
Martin M. Ellen
|
|
11,708
|
|
|
16,087
|
|
|
3,454
|
|
|
—
|
|
|
54,767
|
|
James J. Johnston
|
|
26,445
|
|
|
79,163
|
|
|
43,874
|
|
|
—
|
|
|
520,387
|
|
Rodger L. Collins
|
|
178,875
|
|
|
30,586
|
|
|
111,870
|
|
|
—
|
|
|
1,133,031
|
|
Derry L. Hobson
|
|
22,339
|
|
|
25,396
|
|
|
84,679
|
|
|
—
|
|
|
1,059,544
|
|
Larry D. Young
|
$
|
222,013
|
|
Martin M. Ellen
|
$
|
23,830
|
|
James J. Johnston
|
$
|
75,438
|
|
Rodger L. Collins
|
$
|
17,695
|
|
Derry L. Hobson
|
$
|
17,138
|
|
(1)
|
Aggregate amount of contributions made by our NEOs to the SSP in fiscal year
2012
.
|
(2)
|
Aggregate amount of the Company's contributions to the NEOs' accounts under the SSP in fiscal year
2012
. The amounts reported in this column are included in executive compensation of the NEO reported in the Summary Compensation Table.
|
(3)
|
Aggregate amount of earnings credited to the NEOs' accounts under the SSP in fiscal year
2012
. The amounts reported in this column are not included in executive compensation of the NEO reported in the Summary Compensation Table.
|
(4)
|
The amounts in this column that were reported as executive compensation in the Summary Compensation Table for fiscal years prior to (and not including) 2012 were as follows: $435,616 for Mr. Young; $11,508 for Mr. Ellen; $172,424 for Mr. Johnston; $97,162 for Mr. Collins; and $63,299 for Mr. Hobson. Mr. Ellen and Mr. Hobson were not NEOs in certain of those prior years and the amounts reflected in this footnote do not reflect any executive compensation that would have been included in the Summary Compensation Table if they had been an NEO in those prior years in which they were not an NEO.
|
•
|
willful failure to substantially perform his duties,
|
•
|
breach of a duty of loyalty toward the Company,
|
•
|
commission of an act of dishonesty toward the Company, theft of our corporate property, or usurpation of our corporate opportunities,
|
•
|
unethical business conduct including any violation of law connected with the executive's employment, or
|
•
|
conviction of any felony involving dishonest or immoral conduct; and
|
•
|
our failure to perform any of our material obligations under the employment agreement,
|
•
|
a relocation by us of the executive's principal place of employment to a site outside a 50 mile radius of the current site of the principal place of employment, or
|
•
|
the failure by a successor acquirer to assume the employment agreement.
|
(1)
|
salary continuation for up to 15 months equal to his annual base salary and 125% of his target award under the MIP (subject to mitigation for new employment);
|
(2)
|
a lump sum salary payment equal to 15 months of his annual base salary; and
|
(3)
|
a lump sum cash payment equal to 125% of his target award under the MIP.
|
(1)
|
salary continuation for up to nine months equal to his annual base salary and 75% of his target award under the MIP (subject to mitigation for new employment);
|
(2)
|
a lump sum salary payment equal to nine months of his annual base salary; and
|
(3)
|
a lump sum cash payment equal to 75% of his target award under the MIP.
|
(1)
|
Mr. Ellen will receive a lump sum severance payment equal to 4.0 times his annual base salary, while Mr. Johnston and Mr. Collins will receive a lump sum severance payment equal to 3.5 times their annual base salary; and
|
(2)
|
a lump sum cash payment equal to their MIP payment, pro-rated through the employment termination date and based on the actual performance targets achieved for the year in which such termination of employment occurred and payable when such awards are paid under the plan to all employees.
|
•
|
The tables include estimates of amounts that would have been paid to: (i) Mr. Young and Mr. Hobson assuming a termination event occurred on December 31,
2012
and (ii) Mr. Ellen, Mr. Johnston and Mr. Collins in the event they terminate their employment voluntarily or with Disqualifying Conditions or their employment is terminated involuntarily without Disqualifying Conditions on December 31,
2012
. The employment of these NEOs did not actually terminate on December 31,
2012
, and as a result, these NEOs did not receive any of the amounts shown in the tables below. The actual amounts to be paid to a NEO in connection with a termination event can only be determined at the time of such termination event.
|
•
|
The tables assume that the price of a share of our common stock is $
44.18
per share, the closing market price per share on the NYSE on December 31,
2012
.
|
•
|
Each NEO is entitled to receive amounts earned during the term of his employment regardless of the manner of termination. These amounts include accrued base salary, accrued vacation time and other employee benefits to which the NEO was entitled on the date of termination, and are not shown in the tables below.
|
•
|
For purposes of the tables below, the specific definitions of "cause" and "good reason" are defined in the executive employment agreements for Messrs. Young and Hobson and are described in the section entitled "Executive Employment Agreements" beginning on page
47
.
|
•
|
To receive the benefits under the executive employment agreements, Mr. Young and Mr. Hobson are each respectively required to provide a general release of claims against us and our affiliates. The benefits are also subject to mitigation for new employment. In addition, if Mr. Young or Mr. Hobson receives severance payments under his executive employment agreement, he will not be entitled to receive any severance benefits under our Severance Pay Plan.
|
•
|
The tables are as of December 31,
2012
.
|
Name
|
|
Compensation Element
|
|
Termination for Cause or Not for Good Reason
|
|
Death
|
|
Disability
|
|
Termination Without Cause or for Good Reason
|
|
CIC
|
|
Termination Without Cause or For Good Reason following CIC (9)
|
|||||||||||||||
Larry D. Young
|
|
Salary Continuation Payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,359,375
|
|
(1
|
)
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
Lump Sum Cash Payments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,343,750
|
|
(2
|
)
|
—
|
|
|
7,917,165
|
|
|||||||||
|
|
Lump Sum Target Award MIP Payment
|
—
|
|
|
—
|
|
|
—
|
|
|
2,015,625
|
|
(3
|
)
|
—
|
|
|
—
|
|
|||||||||
|
|
Lump Sum 2012 MIP Payment
|
—
|
|
|
1,612,500
|
|
(4
|
)
|
1,612,500
|
|
(4
|
)
|
1,385,461
|
|
(4
|
)
|
—
|
|
|
1,612,500
|
|
|||||||
|
|
Medical, Dental and Vision Benefits Continuation
|
—
|
|
|
—
|
|
|
—
|
|
|
12,405
|
|
(5
|
)
|
—
|
|
|
29,772
|
|
|||||||||
|
|
Outplacement Services
|
—
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
||||||||||
|
|
Accelerated Equity Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
RSUs(6)
|
|
—
|
|
|
12,661,811
|
|
|
8,191,610
|
|
|
8,191,610
|
|
|
12,661,811
|
|
|
12,661,811
|
|
|||||||||
|
|
PSUs(7)
|
|
—
|
|
|
1,450,823
|
|
|
1,450,823
|
|
|
1,450,823
|
|
|
3,230,618
|
|
|
3,230,618
|
|
|||||||||
|
|
Stock Options(8)
|
|
—
|
|
|
3,072,491
|
|
|
1,472,444
|
|
|
1,472,444
|
|
|
3,072,491
|
|
|
3,072,491
|
|
|||||||||
|
|
TOTAL
|
$
|
—
|
|
|
$
|
18,797,625
|
|
|
$
|
12,727,377
|
|
|
$
|
19,306,493
|
|
|
$
|
18,964,920
|
|
|
$
|
28,599,357
|
|
Name
|
|
Compensation Element
|
|
Termination for Cause or Not for Good Reason
|
|
Death
|
|
Disability
|
|
Termination Without Cause or for Good Reason
|
|
CIC
|
|
Termination Without Cause or For Good Reason following CIC (9)
|
|||||||||||||||
Martin M. Ellen
|
|
Salary Continuation Payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||
|
|
Lump Sum Cash Payments
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
2,180,000
|
|
(2
|
)
|
—
|
|
|
4,905,713
|
|
|||||||
|
|
Lump Sum Target Award MIP Payment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
Lump Sum 2012 MIP Payment
|
—
|
|
|
490,500
|
|
(4
|
)
|
490,500
|
|
(4
|
)
|
421,438
|
|
(4
|
)
|
—
|
|
|
490,500
|
|
|||||||
|
|
Medical, Dental and Vision Benefits Continuation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,394
|
|
||||||||||
|
|
Outplacement Services
|
—
|
|
|
—
|
|
|
—
|
|
|
7,250
|
|
|
—
|
|
|
7,250
|
|
||||||||||
|
|
Accelerated Equity Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
RSUs (6)
|
|
—
|
|
|
5,319,095
|
|
|
2,560,335
|
|
|
2,560,335
|
|
|
5,319,095
|
|
|
5,319,095
|
|
|||||||||
|
|
PSUs(7)
|
|
—
|
|
|
384,424
|
|
|
384,424
|
|
|
384,424
|
|
|
836,107
|
|
|
836,107
|
|
|||||||||
|
|
Stock Options(8)
|
|
—
|
|
|
1,405,625
|
|
|
475,091
|
|
|
475,091
|
|
|
1,405,625
|
|
|
1,405,625
|
|
|||||||||
|
|
TOTAL
|
$
|
—
|
|
|
$
|
7,599,644
|
|
|
$
|
3,910,350
|
|
|
$
|
6,028,538
|
|
|
$
|
7,560,827
|
|
|
$
|
12,989,684
|
|
Name
|
|
Compensation Element
|
|
Termination for Cause or Not for Good Reason
|
|
Death
|
|
Disability
|
|
Termination Without Cause or for Good Reason
|
|
CIC
|
|
Termination Without Cause or For Good Reason following CIC (9)
|
|||||||||||||||
James J. Johnson
|
|
Salary Continuation Payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||
|
|
Lump Sum Cash Payments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,912,050
|
|
(2
|
)
|
—
|
|
|
3,977,608
|
|
|||||||||
|
|
Lump Sum Target Award MIP Payment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
Lump Sum 2012 MIP Payment
|
—
|
|
|
464,355
|
|
(4
|
)
|
464,355
|
|
(4
|
)
|
377,428
|
|
(4
|
)
|
—
|
|
|
464,355
|
|
|||||||
|
|
Medical, Dental and Vision Benefits Continuation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,675
|
|
||||||||||
|
|
Outplacement Services
|
—
|
|
|
—
|
|
|
—
|
|
|
7,250
|
|
|
—
|
|
|
7,250
|
|
||||||||||
|
|
Accelerated Equity Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
RSUs (6)
|
|
—
|
|
|
2,928,074
|
|
|
1,851,743
|
|
|
1,851,743
|
|
|
2,928,074
|
|
|
2,928,074
|
|
|||||||||
|
|
PSUs(7)
|
|
—
|
|
|
359,333
|
|
|
359,333
|
|
|
359,333
|
|
|
791,441
|
|
|
791,441
|
|
|||||||||
|
|
Stock Options(8)
|
|
—
|
|
|
721,415
|
|
|
336,572
|
|
|
336,572
|
|
|
721,415
|
|
|
721,415
|
|
|||||||||
|
|
TOTAL
|
$
|
—
|
|
|
$
|
4,473,177
|
|
|
$
|
3,012,003
|
|
|
$
|
4,844,376
|
|
|
$
|
4,440,930
|
|
|
$
|
8,924,818
|
|
Name
|
|
Compensation Element
|
|
Termination for Cause or Not for Good Reason
|
|
Death
|
|
Disability
|
|
Termination Without Cause or for Good Reason
|
|
CIC
|
|
Termination Without Cause or For Good Reason following CIC (9)
|
|||||||||||||||
Rodger L. Collins
|
|
Salary Continuation Payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||
|
|
Lump Sum Cash Payments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,912,050
|
|
(2
|
)
|
—
|
|
|
4,089,864
|
|
|||||||||
|
|
Lump Sum Target Award MIP Payment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
Lump Sum 2012 MIP Payment
|
—
|
|
|
464,355
|
|
(4
|
)
|
464,355
|
|
(4
|
)
|
357,275
|
|
(4
|
)
|
—
|
|
|
464,355
|
|
|||||||
|
|
Medical, Dental and Vision Benefits Continuation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,043
|
|
||||||||||
|
|
Outplacement Services
|
—
|
|
|
—
|
|
|
—
|
|
|
7,250
|
|
|
—
|
|
|
7,250
|
|
||||||||||
|
|
Accelerated Equity Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
RSUs (6)
|
|
—
|
|
|
2,928,074
|
|
|
1,851,743
|
|
|
1,851,743
|
|
|
2,928,074
|
|
|
2,928,074
|
|
|||||||||
|
|
PSUs(7)
|
|
—
|
|
|
359,333
|
|
|
359,333
|
|
|
359,333
|
|
|
791,441
|
|
|
791,441
|
|
|||||||||
|
|
Stock Options(8)
|
|
—
|
|
|
721,415
|
|
|
336,572
|
|
|
336,572
|
|
|
721,415
|
|
|
721,415
|
|
|||||||||
|
|
TOTAL
|
$
|
—
|
|
|
$
|
4,473,177
|
|
|
$
|
3,012,003
|
|
|
$
|
4,824,223
|
|
|
$
|
4,440,930
|
|
|
$
|
9,027,442
|
|
Name
|
|
Compensation Element
|
|
Termination for Cause or Not for Good Reason
|
|
Death
|
|
Disability
|
|
Termination Without Cause or for Good Reason
|
|
CIC
|
|
Termination Without Cause or For Good Reason following CIC (9)
|
|||||||||||||||
Derry L. Hobson
|
|
Salary Continuation Payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
605,625
|
|
(1
|
)
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
Lump Sum Cash Payments
|
—
|
|
|
—
|
|
|
—
|
|
|
356,250
|
|
(2
|
)
|
—
|
|
|
1,615,000
|
|
|||||||||
|
|
Lump Sum Target Award MIP Payment
|
—
|
|
|
—
|
|
|
—
|
|
|
249,375
|
|
(3
|
)
|
—
|
|
|
—
|
|
|||||||||
|
|
Lump Sum 2012 MIP Payment
|
—
|
|
|
332,500
|
|
(4
|
)
|
332,500
|
|
(4
|
)
|
285,685
|
|
(4
|
)
|
—
|
|
|
332,500
|
|
|||||||
|
|
Medical, Dental and Vision Benefits Continuation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,443
|
|
(5
|
)
|
—
|
|
|
19,848
|
|
|||||||||
|
|
Outplacement Services
|
—
|
|
|
—
|
|
|
—
|
|
|
7,250
|
|
|
—
|
|
|
7,250
|
|
||||||||||
|
|
Accelerated Equity Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
RSUs (6)
|
|
—
|
|
|
2,051,763
|
|
|
1,346,679
|
|
|
1,346,679
|
|
|
2,051,763
|
|
|
2,051,763
|
|
|||||||||
|
|
PSUs(7)
|
|
—
|
|
|
230,369
|
|
|
230,369
|
|
|
230,369
|
|
|
509,793
|
|
|
509,793
|
|
|||||||||
|
|
Stock Options(8)
|
|
—
|
|
|
493,397
|
|
|
240,174
|
|
|
240,174
|
|
|
493,397
|
|
|
493,397
|
|
|||||||||
|
|
TOTAL
|
$
|
—
|
|
|
$
|
3,108,029
|
|
|
$
|
2,149,722
|
|
|
$
|
3,328,850
|
|
|
$
|
3,054,953
|
|
|
$
|
5,029,551
|
|
(1)
|
The amounts shown represent salary continuation for Mr. Young in an amount equal to (a) 15 months of his annual base salary and (b) 125% of his target award under the MIP; and for Mr. Hobson in an amount equal to (x) 9 months of his of annual base salary and (y) 75% of his target award under the MIP, in each case, according to the terms of their respective executive employment agreements.
|
(2)
|
The amounts shown represent lump sum cash payments equal (a) 15 months of his annual base salary for Mr. Young and 9 months of his annual base salary for Mr. Hobson under their executive employment agreements and (b) 400%, 350% and 350% of the annual base salary for each of Mr. Ellen, Mr. Johnston and Mr. Collins, respectively, under the Company's Severance Pay Plan.
|
(3)
|
The amounts shown represent lump sum payments under the MIP equal to 125% of the target award for Mr. Young, and 75% of the target award for Mr. Hobson under their respective executive employment agreements.
|
(4)
|
The amounts shown under the "Death" and "Disability" columns represent each NEO's target award under the MIP, pro-rated through the assumed employment termination date. The amounts shown under the "Termination Without Cause or for Good Reason" column represents lump sum cash payments equal to each NEO's
2012
MIP payment, pro-rated through the assumed employment termination date and based on the actual performance targets achieved for the year in which such assumed termination of employment occurred. The amounts are paid to Messrs. Young and Hobson under their executive employment agreements and to Messrs. Ellen, Johnston and Collins under the Company's Severance Pay Plan.
|
(5)
|
The amounts shown represent the combined cash value of benefits continuation over the salary continuation period under the executive employment agreements of Mr. Young and Mr. Hobson.
|
(6)
|
The amounts shown represent the value of unvested RSU awards and dividend equivalent units under the Omnibus Stock Incentive Plan of 2008 and the Omnibus Stock Incentive Plan of 2009 that vest under the occurrence of the specific event.
|
(7)
|
The amounts shown represent the value of unvested PSU awards and dividend equivalent units under the Omnibus Stock Incentive Plan of 2009 that vest under the occurrence of the specific event. The PSU awards are calculated at target performance levels.
|
(8)
|
The amounts shown represent the value of the unvested stock options under the Omnibus Stock Incentive Plan of 2008 and the Omnibus Stock Incentive Plan of 2009 that vest under the occurrence of the specific event. These stock options remain exercisable for 90 days from the employment termination date.
|
(9)
|
The amounts shown represent the value to be delivered to an executive upon a termination without cause by the employer or a termination for good reason by the employee within a 2-year period following a CIC under the CIC Plan. As discussed in "Post-Termination Compensation--Change in Control" on page
49
, termination payments may be reduced by an amount not to exceed 10% to avoid the excise tax and corresponding 280G gross up payment. Mr. Hobson's termination payments were not sufficient to trigger a 280G gross up payment. The termination payment for Mr. Young has been reduced by $145,335 so that no excise tax is owed and thus no 280G gross up payment is required. The amounts shown in the lump sum cash payments row equal the sum of (i) 300%, 275%, 250%, 250% and 200% of annual base salary and target award under the MIP for Mr. Young, Mr. Ellen, Mr. Johnston, Mr. Collins and Mr. Hobson, respectively and (ii) the estimated 280G gross up payment of $2,058,088 for Mr. Ellen, $1,450,970 for Mr. Johnston and $1,563,226 for Mr. Collins. The full acceleration value of equity awards is also included due to the CIC event that preceded the termination under this scenario.
|
Plan Category
|
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
|
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
|
Number of
Securities
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (Excluding
Securities
Reflected in Initial
Column) (3)
|
||||
Equity Compensation Plans approved by stockholders
|
|
|
|
|
|
|
||||
Omnibus Stock Incentive Plan of 2009(1)
|
|
4,444,360
|
|
|
$
|
14.22
|
|
|
—
|
|
Omnibus Stock Incentive Plan of 2008(2)
|
|
242,664
|
|
|
20.69
|
|
|
14,807,612
|
|
|
Equity Compensation Plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
4,687,024
|
|
|
14.55
|
|
|
14,807,612
|
|
(1)
|
Represents 2,431,103 RSUs that have been awarded, 254,013 PSUs that have been awarded and 1,759,244 stock options that have been granted under the Omnibus Stock Incentive Plan of 2009. The stock options have a weighted average exercise price of $35.92 and weighted average remaining contractual term of 8.26 years.
|
|
|
(2)
|
Represents 242,664 stock options that have been granted under the Omnibus Stock Incentive Plan of 2008. The stock options have a weighted average exercise price of $20.69 and weighted average remaining contractual term of 5.67 years.
|
|
|
(3)
|
Represents awards authorized for future grants under the Omnibus Stock Incentive Plan of 2009.
|
|
|
Submitted by the
|
|
|
Audit Committee of the Board:
|
|
|
|
|
|
Terence D. Martin (Chairman)
|
|
|
John L. Adams
|
|
|
Pamela H. Patsley
|
|
|
|
|
|
By Order of the Board of Directors
|
|
|
|
|
|
James L. Baldwin
Corporate Secretary
|
|
|
March 25, 2013
|
1.
|
Plan
. This Dr Pepper Snapple Group, Inc. Management Incentive Plan (this "Plan") was adopted by Dr Pepper Snapple Group, Inc., a Delaware corporation (the "Company"), to reward certain employees of the Company or its Subsidiaries by enabling them to receive performance-based cash compensation.
|
2.
|
Objectives
. This Plan is designed to attract and retain employees of the Company and its Subsidiaries and to stimulate the active interest of such persons in the development and financial success of the Company and its Subsidiaries. These objectives are to be accomplished by making cash awards under this Plan based on the achievement of certain performance goals. All awards payable under this Plan to Executive Officers are intended to be deductible by the Company under Section 162(m) (as such terms are defined below).
|
3.
|
Definitions
. As used herein, the terms set forth below shall have the following respective meanings:
|
4.
|
Eligibility
. All Employees are eligible for Performance Cash Awards under this Plan in the sole discretion of the Committee.
|
5.
|
Administration
.
|
(a)
|
Authority of the Committee
. This Plan shall be administered by the Committee, which shall have the powers vested in it by the terms of this Plan, such powers to include the authority (within the limitations described in this Plan):
|
•
|
to select the Employees to be granted Performance Cash Awards under this Plan;
|
•
|
to determine the terms of Performance Cash Awards to be made to each Participant;
|
•
|
to determine the time when Performance Cash Awards are to be granted and any conditions that must be satisfied before a Performance Cash Award is granted;
|
•
|
to establish objectives and conditions for earning Performance Cash Awards;
|
•
|
to determine the terms and conditions of Award Agreements (which shall not be inconsistent with this Plan) and who must sign each Award Agreement;
|
•
|
to determine whether the conditions for earning a Performance Cash Award have been met and whether a Performance Cash Award will be paid at the end of an applicable performance period;
|
•
|
except as otherwise provided in paragraph 10, to modify the terms of Performance Cash Awards made under this Plan;
|
•
|
to determine if, when and under what conditions payment of all or any part of a Performance Cash Award may be deferred;
|
•
|
to determine whether the amount or payment of a Performance Cash Award should be reduced or eliminated;
|
•
|
to determine the guidelines and/or procedures for the payment of Performance Cash Awards;
|
•
|
to determine whether a Performance Cash Award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether a Performance Cash Award granted to an Executive Officer should qualify as performance-based compensation;
|
•
|
to interpret and administer this Plan any instrument or agreement relating to, or Award made under this Plan;
|
•
|
to establish, amend, suspend, or waive such rules and guidelines;
|
•
|
to appoint such agents as it shall deem appropriate for the proper administration of this Plan; and
|
•
|
to make any other determination and take any other action that the Committee deems necessary or desirable for the administration of this Plan.
|
(b)
|
Limitation of Liability
. No member of the Committee or officer of the Company to whom the Committee has delegated authority in accordance with the provisions of paragraph 6 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute.
|
6.
|
Delegation of Authority
. Except with respect to matters under Section 162(m) that are required to be determined or established by the Committee to qualify Performance Cash Awards to Executive Officers as qualified "performance-based compensation" the Committee may delegate to the Chief Executive Officer and to other senior officers of the Company or to such other committee of the Board its duties under this Plan pursuant to such conditions or limitations as the Committee may establish.
|
7.
|
Performance Cash Awards
.
|
(a)
|
The Committee shall determine the type or types of Performance Cash Awards to be made under this Plan and shall designate from time to time the Participants who are to be the recipients of such Performance Cash Awards. Each Performance Cash Award shall be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Committee in its sole discretion. All or part of a Performance Cash Award may be subject to conditions established by the Committee, which may include, but are not limited to, continuous service with the Company and its Subsidiaries. Upon the termination of employment by a Participant, any deferred, unvested or unpaid Performance Cash Awards shall be treated as set forth in the applicable Award Agreement.
|
(i)
|
Nonqualified Performance Cash Awards
. Performance Cash Awards granted to Employees that are not intended to qualify as qualified performance-based compensation under Section 162(m) shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.
|
(ii)
|
Qualified Performance Cash Awards
. Performance Cash Awards granted to Executive Officers under this Plan that are intended to qualify as qualified performance-based compensation under Section 162(m) shall be paid on account of the attainment of one or more pre-established, objective Performance Goals established and administered by the Committee in accordance with Section 162(m) prior to the earlier to occur of (x) 90 days after the commencement of the period of service to which the Performance Goal relates and (y) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. Such a Performance Goal may be based on one or more business criteria that apply to an Executive Officer, one or more business units, divisions or sectors of the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies. A Performance Goal may include one or more of the following and need not be the same for each Executive Officer:
|
•
|
revenue and income measures (which include revenue, gross margin, income from operations, net income, net sales and earnings per share);
|
•
|
expense measures (which include costs of goods sold, sales, general and administrative expenses and overhead costs);
|
•
|
operating measures (which include volume, margin, breakage and shrinkage, productivity and market share);
|
•
|
cash flow measures (which include net cash flow from operating activities and working capital);
|
•
|
liquidity measures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, and free cash flow);
|
•
|
leverage measures (which include equity ratio and net debt);
|
•
|
market measures (including those relating to market price, stock price, total shareholder return and market capitalization measures);
|
•
|
return measures (which include return on equity, return on assets and return on invested capital);
|
•
|
corporate value measures (which include compliance, safety, environmental and personnel matters); and
|
•
|
other measures such as those relating to acquisitions, dispositions or customer satisfaction.
|
(b)
|
The Committee shall adjust the Performance Goals (either up or down) and the level of the Performance Cash Award that a Participant may earn under this Plan, to the extent permitted pursuant to Section 162(m), if it determines that the occurrence of external changes or other unanticipated business conditions have materially affected the fairness of the goals and have unduly influenced the Company’s ability to meet them, including without limitation, events such as material acquisitions, changes in the capital structure of the Company, and extraordinary accounting changes.
In addition, Performance Goals and Performance Cash Awards shall be calculated without regard to any changes in accounting standards that may be required by the Financial Accounting Standards Board after such Performance Goals are established. Further, in the event a period of service to which a Performance Goal relates is less than 12 months, the Committee shall have the right, in its sole discretion, to adjust the Performance Goals and the level of Performance Cash Award opportunity.
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(c)
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Notwithstanding anything to the contrary contained in this Plan, the amount payable to a Participant under this Plan in respect of any one-year period shall not exceed $5,000,000.
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8.
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Performance Cash Award Payment
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(a)
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General
. With the approval of the Committee and subject to paragraph 8(b), payment of Performance Cash Awards shall be made in the form of cash and shall be paid on March 15
th
of the year following the year in which Performance Goals are achieved. The payment of a Performance Cash Award may include such restrictions as the Committee shall determine.
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(b)
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Deferral
. Amounts payable in respect of Performance Cash Awards may be deferred and paid in accordance with the terms of the Company's Supplemental Savings Plan (or any successor plan), subject to the terms and conditions of such plan as it may be amended from time to time.
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9.
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Taxes
. The Company shall have the right to deduct applicable taxes from any Performance Cash Award payment and withhold, at the time of delivery or vesting of cash under this Plan, an appropriate amount of cash for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes.
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10.
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Amendment, Modification, Suspension or Termination
. The Board or the Committee may amend, modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that (i) no amendment or alteration that would materially adversely affect the rights of any Participant under any Performance Cash Award previously granted to such Participant shall be made without the consent of such Participant and (ii) no amendment or alteration shall be effective prior to its approval by the shareholders of the Company to the extent shareholder approval is otherwise required by applicable legal requirements.
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11.
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Assignability
. Unless otherwise determined by the Committee in the Award Agreement, no Performance Cash Award or any other benefit under this Plan shall be assignable or otherwise transferable. Any attempted assignment of a Performance Cash Award or any other benefit under this Plan in violation of this paragraph 11 shall be null and void.
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12.
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Adjustments
. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board may make such adjustments to Performance Cash Awards or other provisions for the disposition of Awards as it deems equitable, and shall be authorized, in its sole discretion, (i) to provide for the substitution of a new Performance Cash Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Board determines) for a Performance Cash Award or the assumption of the Performance Cash Award, (ii) to provide, prior to the transaction, for the acceleration of the vesting of the Performance Cash Award or (iii) to cancel any such Performance Cash Awards and to deliver to the Participants cash in an amount that the Board shall determine in its sole discretion.
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13.
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Unfunded Plan
. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be represented by cash or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to a Performance Cash Award of cash or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan.
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14.
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Section 409A of the Code
. It is intended that the payment of Performance Cash Awards under this Plan shall satisfy the short-term deferral exclusion from Section 409A, unless deferred in accordance with paragraph 8(b) in which case the Performance Cash Award shall be subject to the terms of the Company's Supplemental Savings Plan, which is designed to be in compliance with Section 409A.
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15.
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Governing Law
. This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Delaware.
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16.
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No Right to Employment
. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or a Subsidiary
to terminate any Participant's employment or other service relationship at any time, nor confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves the Company or any Subsidiary.
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17.
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Tax Consequences
. Nothing in this Plan or an Award Agreement shall constitute a representation by the Company to an Employee regarding the tax consequences of any Performance Cash Award received by an Employee under this Plan. Although the Company may endeavor to (i) qualify a Performance Cash Award for favorable U.S. or foreign tax treatment or (ii) avoid adverse tax treatment (e.g. under Section 409A), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or unavoidable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Performance Cash Awards under this Plan.
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18.
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Successors
. All obligations of the Company under this Plan with respect to Performance Cash Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
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19.
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Effectiveness
. This Plan is effective May 19, 2009. This Plan shall continue in effect for a term of 10 years, unless sooner terminated by action of the Board.
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DR PEPPER SNAPPLE GROUP, INC.
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By:
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/s/ Lawrence N. Solomon
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Lawrence N. Solomon
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Executive Vice President, Human Resources
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