<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
The Coca-Cola Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
Carol Crofoot Hayes
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
(Already Paid)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
THE COCA-COLA COMPANY
ATLANTA, GEORGIA
ROBERTO C. GOIZUETA
CHAIRMAN OF THE BOARD
AND
CHIEF EXECUTIVE OFFICER
March 7, 1994
Dear Share Owner:
You are cordially invited to attend the Annual Meeting of Share Owners
which will be held on Wednesday, April 20, 1994, at 9:00 a.m., local time, in
Wilmington, Delaware.
The enclosed notice and proxy statement contain details concerning the
business to come before the meeting. You will note that the Board of Directors
of the Company recommends a vote "FOR" the election of four Directors to serve
until the 1997 Annual Meeting of Share Owners, "FOR" the proposal to adopt the
Long Term Performance Incentive Plan of The Coca-Cola Company, as amended, "FOR"
the proposal to adopt the Executive Performance Incentive Plan of The Coca-Cola
Company, and "FOR" the ratification of Ernst & Young as independent auditors of
the Company for the 1994 fiscal year. Please sign and return your proxy card in
the enclosed envelope at your earliest convenience to assure that your shares
will be represented and voted at the meeting even if you cannot attend.
To help us plan for the meeting, please mark the appropriate box on your
proxy card telling us if you will be attending. An admission card is included.
A report on the meeting will be sent to all share owners as part of the
First Quarter Progress Report.
/s/ Roberto C. Goizueta
-----------------------
ROBERTO C. GOIZUETA
<PAGE> 3
THE COCA-COLA COMPANY
NOTICE OF ANNUAL MEETING OF SHARE OWNERS
TO THE OWNERS OF COMMON STOCK
OF THE COCA-COLA COMPANY
The Annual Meeting of Share Owners of The Coca-Cola Company, a Delaware
corporation (the "Company"), will be held at the du Barry Room, Hotel du Pont,
11th and Market Streets, Wilmington, Delaware, on Wednesday, April 20, 1994, at
9:00 a.m., local time, for the following purposes:
1. To elect four Directors to serve until the 1997 Annual Meeting of
Share Owners;
2. To vote upon a proposal to approve the Long Term Performance
Incentive Plan of The Coca-Cola Company, as amended;
3. To vote upon a proposal to approve the Executive Performance
Incentive Plan of The Coca-Cola Company;
4. To ratify the appointment of Ernst & Young as independent auditors
of the Company to serve for the 1994 fiscal year; and
5. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Share owners of record at the close of business on February 21, 1994, are
entitled to notice of and to vote at the meeting and any adjournments thereof. A
list of share owners of the Company as of the close of business on February 21,
1994, will be available for inspection during normal business hours from April 6
through April 19, 1994, at the offices of Morris, Nichols, Arsht & Tunnell, 1201
North Market Street, Wilmington, Delaware.
By Order of the Board of Directors
SUSAN E. SHAW
Secretary
Atlanta, Georgia
March 7, 1994
EACH SHARE OWNER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY
PROMPTLY. IN THE EVENT A SHARE OWNER DECIDES TO ATTEND THE MEETING, HE OR SHE
MAY, IF SO DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE> 4
THE COCA-COLA COMPANY
ONE COCA-COLA PLAZA
ATLANTA, GEORGIA 30313
March 7, 1994
PROXY STATEMENT
FOR ANNUAL MEETING OF SHARE OWNERS
TO BE HELD APRIL 20, 1994
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of The Coca-Cola Company (the
"Company") to be voted at the Annual Meeting of Share Owners of the Company to
be held at the du Barry Room, Hotel du Pont, 11th and Market Streets,
Wilmington, Delaware, on April 20, 1994, at 9:00 a.m., local time, and at any
adjournments thereof.
All proxies delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice to the
Secretary of the Company, by delivering a later dated proxy or by voting in
person at the Annual Meeting.
The mailing address of the principal executive offices of the Company is
One Coca-Cola Plaza, Atlanta, Georgia 30313. The approximate date on which this
Proxy Statement and form of proxy are first being sent or given to share owners
is March 7, 1994.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. Regarding the election of Directors to serve until the 1997
Annual Meeting of Share Owners, in voting by proxy, share owners may vote in
favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees. With respect to the other proposals to be
voted upon, share owners may vote in favor of a proposal, against a proposal or
may abstain from voting. Share owners should specify their choices on the
enclosed form of proxy. If no specific instructions are given with respect to
the matters to be acted upon, the shares represented by a signed proxy will be
voted FOR the election of all nominees, FOR the proposal to approve the Long
Term Performance Incentive Plan, as amended, FOR the proposal to approve the
Executive Performance Incentive Plan and FOR the proposal to ratify the
appointment of Ernst & Young as independent auditors. The election of Directors
will require the affirmative vote of a plurality of the shares of Common Stock
voting in person or by proxy at the Annual Meeting, and approval of the Long
Term Performance Incentive Plan, as amended, approval of the Executive
Performance Incentive Plan and the ratification of the appointment of Ernst &
Young as independent auditors will each require the affirmative vote of a
majority of the shares of Common Stock of the Company voting on the respective
proposal in person or by proxy at the Annual Meeting. Thus, abstentions and
broker non-votes will not be included in vote totals and will have no effect on
the outcome of the vote.
Only owners of record of shares of Common Stock of the Company at the close
of business on February 21, 1994, are entitled to vote at the meeting or
adjournments thereof. Each owner of record on the record date is entitled to one
vote for each share of Common Stock of the Company so held. On February 21,
1994, there were 1,297,441,043 shares of Common Stock of the Company issued and
outstanding.
<PAGE> 5
ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
The Board of Directors of the Company, pursuant to the By-Laws of the
Company, has determined that the number of Directors of the Company is thirteen.
The Directors are divided into three classes, each class serving for a period of
three years, which has been the practice of the Company since 1945.
Approximately one-third of the members of the Board of Directors are
elected by the share owners annually. The Directors whose terms will expire at
the 1994 Annual Meeting of Share Owners are Ronald W. Allen, Donald F. McHenry,
Paul F. Oreffice and James B. Williams, all of whom have been nominated to stand
for reelection as Directors at the 1994 Annual Meeting of Share Owners to hold
office until the 1997 Annual Meeting of Share Owners and until their successors
are elected and qualified.
Should any one or more of these nominees become unable to serve for any
reason, or for good cause, will not serve, which is not anticipated, the Board
of Directors may, unless the Board by resolution provides for a lesser number of
Directors, designate substitute nominees, in which event the persons named in
the enclosed proxy will vote proxies that would otherwise be voted for all named
nominees for the election of such substitute nominee or nominees.
RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR RONALD W.
ALLEN, DONALD F. MCHENRY, PAUL F. OREFFICE AND JAMES B. WILLIAMS AS DIRECTORS TO
HOLD OFFICE UNTIL THE 1997 ANNUAL MEETING OF SHARE OWNERS AND UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED. PROXIES RECEIVED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS SHARE OWNERS SPECIFY IN THEIR PROXY A CONTRARY CHOICE.
<TABLE>
<S> <C> <C>
NOMINEES FOR ELECTION TO TERM EXPIRING 1997
- -------------------------------------------------------------------------------------------
- ------------------- RONALD W. ALLEN Director since 1991
- ------------------- Atlanta, Georgia Age 52
- -------------------
PHOTO OF Mr. Allen is Chairman of the Board of Directors, President and Chief
RONALD W. ALLEN Executive Officer of Delta Air Lines, Inc., a major U.S. air
OMITTED transportation company. Mr. Allen has been Chairman of the Board and
- ------------------- Chief Executive Officer since 1987, holding the additional title of
- ------------------- President from August 1990 through April 1991 and since March 1993. He
- ------------------- is a director of NationsBank Corporation.
- -------------------
Member of the Executive Committee and the Committee on Directors of
the Board of Directors of the Company.
- -------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------
- ------------------- DONALD F. MCHENRY Director since 1981
- ------------------- Washington, D.C. Age 57
- -------------------
PHOTO OF Mr. McHenry is University Research Professor of Diplomacy and
DONALD F. MCHENRY International Affairs at Georgetown University and a principal owner
OMITTED and President of The IRC Group, a New York City and Washington, D.C.
- ------------------- consulting firm. He has held these positions for more than the past
- ------------------- five years. Mr. McHenry is a director of Bank of Boston Corporation,
- ------------------- SmithKline Beecham PLC, International Paper Company and American
- ------------------- Telephone & Telegraph Company.
Chairman of the Public Issues Review Committee and a member of the
Audit Committee and the Committee on Directors of the Board of
Directors of the Company.
- -------------------------------------------------------------------------------------------
- ------------------- PAUL F. OREFFICE Director since 1985
- ------------------- Scottsdale, Arizona Age 66
- -------------------
PHOTO OF
PAUL F. OREFFICE Mr. Oreffice retired as Chairman of the Board of Directors of The Dow
OMITTED Chemical Company in 1992, which position he had held for more than
- ------------------- five years. The Dow Chemical Company is a diversified chemical,
- ------------------- metals, plastics and packaging company. He is a director of CIGNA
- ------------------- Corporation, Northern Telecom Limited and Morgan Stanley Group Inc.
- -------------------
Member of the Finance Committee and the Committee on Directors of the
Board of Directors of the Company.
- -------------------------------------------------------------------------------------------
- ------------------- JAMES B. WILLIAMS Director since 1979
- ------------------- Atlanta, Georgia Age 60
- -------------------
PHOTO OF Mr. Williams is Chairman of the Board of Directors and Chief Executive
JAMES B. WILLIAMS Officer of SunTrust Banks, Inc., a bank holding company. He assumed
OMITTED the position of Chairman of the Board of Directors in 1991 and of
- ------------------- Chief Executive Officer in 1990. He served as President in 1990 and as
- ------------------- Vice Chairman from 1984 to 1990. He is a director of Trust Company of
- ------------------- Georgia, Trust Company Bank, Genuine Parts Company, SONAT Inc., Rollins,
- ------------------- Inc., RPC Energy Services, Inc. and Georgia-Pacific Corporation.
Chairman of the Finance Committee and a member of the Executive
Committee of the Board of Directors of the Company.
- -------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C> <C>
INCUMBENT DIRECTORS -- TERM EXPIRING 1996
- -------------------------------------------------------------------------------------------
- ------------------- CATHLEEN P. BLACK Director since 1993
- ------------------- Washington, D.C. Age 49
- -------------------
PHOTO OF Ms. Black has been President and Chief Executive Officer of the
CATHLEEN P. BLACK Newspaper Association of America, a newspaper industry organization,
OMITTED since May 1991. From July 1985 to May 1991, Ms. Black was a director
- ------------------- of and Executive Vice President/Marketing for Gannett Company, Inc.
- ------------------- and publisher of USA TODAY. Ms. Black served as a Director of the
- ------------------- Company from April 18, 1990 through May 7, 1991, and was again elected
- ------------------- as a Director on October 21, 1993 to fill the vacancy caused by the
resignation of Dr. James T. Laney upon the confirmation of his
appointment as United States Ambassador to South Korea.
Member of the Public Issues Review Committee of the Board of Directors
of the Company.
- -------------------------------------------------------------------------------------------
- ------------------- WARREN E. BUFFETT Director since 1989
- ------------------- Omaha, Nebraska Age 63
- -------------------
PHOTO OF Mr. Buffett is Chairman of the Board of Directors and Chief Executive
WARREN E. BUFFETT Officer of Berkshire Hathaway Inc., a diversified holding company, and
OMITTED has held these positions for more than the past five years. From
- ------------------- August 1991 until June 1992, he assumed the additional positions of
- ------------------- Interim Chairman of the Board and Interim Chief Executive Officer of
- ------------------- both Salomon Inc and Salomon Brothers Inc. He remains a director of
- ------------------- Salomon Inc and is also a director of Capital Cities/ABC, Inc., The
Gillette Company and USAir Group, Inc.
Member of the Audit and Finance Committees of the Board of Directors
of the Company.
- -------------------------------------------------------------------------------------------
- ------------------- SUSAN B. KING Director since 1991
- ------------------- Corning, New York Age 53
- -------------------
PHOTO OF Ms. King is Senior Vice President - Corporate Affairs of Corning
SUSAN B. KING Incorporated and has held this position since March 1992. She
OMITTED previously served as President of Steuben Glass, a manufacturer and
- ------------------- retailer of fine crystal and a division of Corning Incorporated, from
- ------------------- 1987 to March 1992. Corning Incorporated is principally engaged in
- ------------------- laboratory services and the manufacture and sale of products made from
- ------------------- specialty glasses and related inorganic materials.
Member of the Compensation and Public Issues Review Committees of the
Board of Directors of the Company.
- -------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
- --------------------- WILLIAM B. TURNER Director since 1980
- --------------------- Columbus, Georgia Age 71
- ---------------------
PHOTO OF Mr. Turner is Chairman of the Executive Committee of W. C. Bradley Co.
WILLIAM B. TURNER W. C. Bradley Co. is involved in manufacturing, farming, wholesale
OMITTED building materials and sporting goods. Mr. Turner is Chairman of the
- --------------------- Board of Directors of Columbus Bank and Trust Company, is a director
- --------------------- and Chairman of the Executive Committee of Synovus Financial Corp.,
- --------------------- and is a director of Total System Services, Inc.
Member of the Executive, Compensation and Finance Committees of the
Board of Directors of the Company.
- -------------------------------------------------------------------------------------------------
INCUMBENT DIRECTORS -- TERM EXPIRING 1995
- -------------------------------------------------------------------------------------------------
- --------------------- HERBERT A. ALLEN Director since 1982
- --------------------- New York, New York Age 54
- ---------------------
PHOTO OF Mr. Allen is President, Chief Executive Officer and a director of
HERBERT A. ALLEN Allen & Company Incorporated, a privately held investment banking
OMITTED firm, and has held these positions for more than the past five years.
- ---------------------
- --------------------- Chairman of the Compensation Committee and a member of the Finance and
- --------------------- Executive Committees of the Board of Directors of the Company.
- -------------------------------------------------------------------------------------------------
- --------------------- CHARLES W. DUNCAN, JR. Director since 1981
- --------------------- Houston, Texas Age 67
- ---------------------
PHOTO OF Mr. Duncan is a private investor and has been a private investor for
CHARLES W. DUNCAN, JR. more than the past five years. He previously served as a Director of
OMITTED the Company from 1964 to 1977. Mr. Duncan is a director of American
- --------------------- Express Company, Chemical Banking Corporation, United Technologies
- --------------------- Corporation, Panhandle Eastern Corporation and Newfield Exploration
- --------------------- Company.
- ---------------------
Chairman of the Audit Committee and a member of the Executive
Committee of the Board of Directors of the Company.
- -------------------------------------------------------------------------------------------------
- --------------------- ROBERTO C. GOIZUETA Director since 1980
- --------------------- Atlanta, Georgia Age 62
- ---------------------
PHOTO OF Mr. Goizueta is Chairman of the Board of Directors and Chief Executive
ROBERTO C. GOIZUETA Officer of the Company and has held these positions since March 1981.
OMITTED Mr. Goizueta is a director of Ford Motor Company, SONAT Inc., Eastman
- --------------------- Kodak Company, SunTrust Banks, Inc. and Trust Company of Georgia.
- ---------------------
- --------------------- Chairman of the Executive Committee of the Board of Directors of the
Company.
- -------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
- ------------------------ JAMES D. ROBINSON, III Director since 1975
- ------------------------ New York, New York Age 58
- ------------------------
PHOTO OF Mr. Robinson is President of J.D. Robinson Inc., a financial services
JAMES D. ROBINSON, III and investment company, and senior advisor to Trust Company of the
OMITTED West, an insurance and investment management firm. He previousl
- ------------------------ served as Chairman of the Board of Directors and Chief Executive
- ------------------------ Officer of American Express Company from 1977 to 1993. Mr. Robinson is
- ------------------------ a director of Bristol-Myers Squibb Company, Union Pacific Corporation,
- ------------------------ First Data Corporation and SCI Television, Inc.
Chairman of the Committee on Directors and a member of the Public
Issues Review Committee of the Board of Directors of the Company.
- -------------------------------------------------------------------------------------------------
- ------------------------ PETER V. UEBERROTH Director since 1986
- ------------------------ Newport Beach, California Age 56
- ------------------------
PHOTO OF Mr. Ueberroth has been an investor and Managing Director of The
PETER V. UEBERROTH Contrarian Group, Inc., a management company, since 1989. He was
OMITTED Commissioner of Major League Baseball from 1984 until March 1989.
- ----------------------- Mr. Ueberroth is a director of Morrison Knudsen Corporation,
- ----------------------- Transamerica Corporation and Adia Services, Inc.
- -----------------------
Member of the Compensation and Audit Committees of the Board of
Directors of the Company.
- -------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 10
OWNERSHIP OF EQUITY SECURITIES IN THE COMPANY
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock by each Director, the Company's five most highly
compensated executive officers and the Directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED SHARES
- ----------------------------------- ------------------ -----------
<S> <C> <C>
Herbert A. Allen................... 4,709,721(1) *
Ronald W. Allen.................... 4,000 *
Cathleen P. Black.................. 5,100 *
Warren E. Buffett.................. 93,400,000(2) 7.2%
Charles W. Duncan, Jr.............. 3,492,624(3) *
Susan B. King...................... 4,000 *
Donald F. McHenry.................. 10,117 *
Paul F. Oreffice................... 100,000(4) *
James D. Robinson, III............. 6,000(5) *
William B. Turner.................. 16,539,036(6) 1.3%
Peter V. Ueberroth................. 34,000(7) *
James B. Williams.................. 45,618,731(8) 3.5%
Roberto C. Goizueta................ 36,331,934(9) 2.8%
M. Douglas Ivester................. 1,721,066(10) *
John Hunter........................ 607,410(11) *
Jack L. Stahl...................... 430,939(12) *
E. Neville Isdell.................. 406,074(13) *
All Directors and Executive
Officers as a Group (27
persons)......................... 188,266,491(14) 14.5%
</TABLE>
- ------------
* Less than 1% of issued and outstanding shares of Common Stock of the
Company.
(1) Includes 150,545 shares owned by a trust of which Mr. Allen is one of
three trustees, 37,372 shares owned by certain members of Mr. Allen's family,
1,173,960 shares owned by Allen & Company Incorporated ("ACI"), and 15,000
shares owned by Allen Capital L.P., an affiliate of ACI's parent company. Does
not include 100,000 shares held by ACI's pension plan, over which Mr. Allen does
not have voting or investment power.
(2) Shares owned indirectly through wholly and majority owned subsidiaries
of Berkshire Hathaway Inc., the capital stock of which is owned 41.6% by
Mr. Buffett and a trust of which he is trustee but in which he has no beneficial
interest, and 3.2% by Mr. Buffett's wife.
(3) Includes 42,576 shares owned by Mr. Duncan's wife, 152,388 shares owned
by a partnership of which Mr. Duncan is a general and limited partner and
168,000 shares owned by a trust of which Mr. Duncan is one of three trustees.
Does not include 12,000 shares owned by a foundation of which Mr. Duncan is one
of five directors and as to which he disclaims beneficial ownership.
(4) Includes 27,000 shares owned by a trust of which Mr. Oreffice is the
trustee and his wife is a beneficiary.
(5) Does not include 2,403,450 shares owned by two trusts of which
Mr. Robinson is a beneficiary.
(6) Includes 14,328,000 shares owned by a company of which Mr. Turner is a
director and a significant shareholder, 732 shares owned by his wife and
2,182,332 shares owned by a foundation of which Mr. Turner is one of several
trustees. Does not include 112,896 shares owned by a trust of which Mr. Turner
is a beneficiary.
(7) Includes 20,000 shares owned by a trust of which Mr. Ueberroth is one
of two trustees and a beneficiary, 4,000 shares owned by his wife and 1,000
shares held by a charitable foundation of which he is one of two trustees.
7
<PAGE> 11
(8) Includes 27,666,861 shares owned by two foundations of which
Mr. Williams is, in both cases, one of five trustees, and 17,926,870 shares
owned by a foundation of which Mr. Williams is one of five trustees, another
of whom is Mr. Goizueta.
(9) Includes 176,559 shares credited to Mr. Goizueta's accounts under The
Coca-Cola Company Thrift Plan, 5,616,000 shares which are subject to transfer
restrictions, 17,926,870 shares owned by a foundation of which Mr. Goizueta is
one of five trustees, another of whom is Mr. Williams, and 9,019,305 shares
owned by a foundation of which Mr. Goizueta is one of three trustees. Also
includes 1,300,000 shares which may be acquired upon the exercise of options,
all of which are presently exercisable.
(10) Includes 47,735 shares credited to Mr. Ivester's accounts under The
Coca-Cola Company Thrift Plan and 700,000 shares which are subject to transfer
restrictions. Also includes 913,331 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 1994.
(11) Includes 5,315 shares credited to Mr. Hunter's accounts under The
Coca-Cola Company Thrift Plan and 265,000 shares which are subject to transfer
restrictions. Also includes 282,295 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 1994. Includes 6,430 shares owned by one of
his children.
(12) Includes 16,675 shares credited to Mr. Stahl's accounts under The
Coca-Cola Company Thrift Plan and 183,000 shares which are subject to transfer
restrictions. Also includes 211,999 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 1994. Includes 7,265 shares owned by his wife
and 800 shares owned by his children. Does not include 1,600 shares owned by a
trust of which he is a beneficiary.
(13) Includes 1,408 shares credited to Mr. Isdell's accounts under The
Coca-Cola Company Thrift Plan and 137,500 shares which are subject to transfer
restrictions. Also includes 266,666 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 1994, and 500 shares owned by his daughter.
(14) Includes 4,300,349 shares which may be acquired upon the exercise of
options which are presently exercisable or which will become exercisable on or
before April 30, 1994.
SunTrust Banks, Inc. ("SunTrust"), 25 Park Place, N.E., Atlanta, Georgia
30303, a bank holding company, has informed the Company that, as of December 31,
1993, certain subsidiaries of SunTrust held either individually or in various
fiduciary and agency capacities an aggregate of 119,427,239 shares or 9.2% of
the Company's issued and outstanding Common Stock as of that date. Of such
shares, 95,293,991 shares of the Company's Common Stock are held in various
fiduciary and agency capacities as to which SunTrust and certain of its
subsidiaries may be deemed beneficial owners, but as to which SunTrust and such
subsidiaries disclaim any beneficial interest. Of such shares held in fiduciary
or agency capacities, the subsidiaries have sole voting power with respect to
38,612,651 shares, shared voting power with respect to 27,953,156 shares, sole
investment power with respect to 28,224,098 shares and shared investment power
with respect to 44,535,903 shares. As to the shares described above, SunTrust
has further informed the Company that 90,375,920 of such shares or 7.0% of the
Company's Common Stock are held in various fiduciary and agency capacities by
Trust Company Bank, which is a direct subsidiary of Trust Company of Georgia and
an indirect subsidiary of SunTrust. Trust Company Bank owns individually
12,686,976 shares of the Company's Common Stock, Trust Company of Georgia owns
individually 6,106,272 shares of the Company's Common Stock and Preferred Surety
Corporation, a direct subsidiary of Trust Company of Georgia and an indirect
subsidiary of SunTrust, owns individually 5,340,000 shares of the Company's
Common Stock as to which SunTrust may be deemed a beneficial owner.
Berkshire Hathaway Inc. ("Berkshire"), 1440 Kiewit Plaza, Omaha, Nebraska
68131, a diversified holding company, the capital stock of which is beneficially
owned 41.6% by Warren E. Buffett and a trust of which he is a trustee but in
which he has no beneficial interest, and 3.2% by Mr. Buffett's wife,
8
<PAGE> 12
Susan T. Buffett, has informed the Company that certain wholly or majority owned
subsidiaries of Berkshire hold an aggregate of 93,400,000 shares or
approximately 7.2% of the Company's current issued and outstanding Common Stock.
COMMITTEES OF THE BOARD OF DIRECTORS; MEETINGS AND COMPENSATION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
established an Executive Committee, a Finance Committee, an Audit Committee, a
Compensation Committee, a Committee on Directors and a Public Issues Review
Committee. The members of these Committees are indicated in the preceding
section of this Proxy Statement.
The Executive Committee, during the intervals between meetings of the Board
of Directors, may exercise the powers of the Board of Directors except with
respect to a limited number of matters, which include amending the Certificate
of Incorporation or the By-Laws of the Company, adopting an agreement of merger
or consolidation for the Company and recommending to the share owners of the
Company a merger of the Company, the sale of all or substantially all of the
assets of the Company or the dissolution of the Company. The Executive Committee
did not meet in 1993.
The Finance Committee, which is composed entirely of outside Directors,
reviews and recommends to the Board of Directors the financial policies of the
Company formulated by management with respect to the financial affairs and
accounting policies of the Company. The Finance Committee has oversight of the
budget and of all of the financial operations of the Company. The Finance
Committee met five times in 1993.
The Audit Committee, which is composed entirely of outside Directors,
recommends to the Board of Directors the engagement of the independent auditors
of the Company and reviews with the independent auditors the scope and results
of the Company's audits, the Company's internal accounting controls and the
professional services furnished by the independent auditors to the Company. The
Audit Committee met three times in 1993.
The Compensation Committee, which is composed entirely of outside
Directors, reviews and approves all salary arrangements and other remuneration
for officers of the Company, and it will be responsible for the administration
of the Executive Performance Incentive Plan if such plan is approved by the
share owners. It also is responsible for review of certain benefit plans and for
administration of the Stock Option Plans, the Annual Performance Incentive Plan,
the Long Term Performance Incentive Plan and the Restricted Stock Award Plans.
The Compensation Committee met five times in 1993.
The Committee on Directors, which is composed entirely of outside
Directors, recommends to the Board of Directors candidates for election to the
Board of Directors and reviews matters relating to potential conflicts of
interest and Directors' fees and retainers. The Committee on Directors will
consider recommendations for nominees for directorships submitted by share
owners. The Committee on Directors met three times in 1993.
The Public Issues Review Committee, which is composed entirely of outside
Directors, reviews Company policy and practice relating to significant public
issues of concern to share owners, the Company, the business community and the
general public. The Public Issues Review Committee met one time in 1993.
In 1993, the Board of Directors held seven meetings and Committees of the
Board of Directors held a total of seventeen meetings. Overall attendance at
such meetings was 97%. All of the Directors attended more than 75% of the
aggregate of all meetings of the Board of Directors and the Committees on which
they served during 1993.
Officers of the Company who are also Directors do not receive any fee or
remuneration for services as members of the Board of Directors or of any
Committee of the Board of Directors. Non-management Directors receive a retainer
fee of $50,000 per annum, $1,500 for each Board meeting attended and
9
<PAGE> 13
$1,500 for each Committee meeting attended. The chairman of each Committee
receives an additional retainer fee of $5,000 per annum. Non-management
Directors may elect to defer receipt of all or part of their annual retainer fee
until a date or dates no earlier than the year following the year in which their
service as a Director terminates.
In addition, the Company provides certain insurance and retirement benefits
to members of the Board of Directors who are not employees of the Company,
including $30,000 term life insurance for each Director, $100,000 group
accidental death and dismemberment insurance and $200,000 group travel accident
insurance coverage while traveling on bona fide Company business. Health and
dental coverage is also provided. Costs to the Company for all such benefits for
1993 totaled $56,814. The Directors' Retirement Plan, as amended, provides that
all Directors who are not employees of the Company and who, upon their
retirement from the Board of Directors, (i) have served at least five years on
the Board of Directors, and (ii) are at least 55 years old on the date of such
retirement, shall be entitled to an annual retirement benefit equal to the
annual retainer then payable to the Directors. Such retirement benefit will be
paid to the retired Director or his or her surviving spouse for a period of time
not to exceed the retired Director's total number of years of service on the
Board of Directors or the retired Director may elect, no less than one year
prior to retirement, to receive a lump sum payment upon retirement or
pre-retirement death.
In 1993, the Company entered into a one-year agreement with The IRC Group
("IRC"), a company of which Donald F. McHenry, a Director of the Company, is
President and a substantial share owner. Under this agreement, IRC provides
consulting services to the Company on international affairs and business
activities and is paid $185,000. The Company contemplates utilizing the services
of and paying a similar amount to IRC in 1994.
CERTAIN TRANSACTIONS
James B. Williams, a Director of the Company, is Chairman of the Board and
Chief Executive Officer of SunTrust. Subsidiary banks of SunTrust engage in
ordinary course of business banking transactions with the Company and its
subsidiaries, including the making of loans on customary terms. Trust Company
Bank, a subsidiary of SunTrust, serves as agent for a syndicate of banks for a
$200,000,000 credit facility dated December 22, 1993 for The Coca-Cola Bottling
Company of New York, Inc. ("CCNY") which was, at that time, a temporary
majority-owned subsidiary of the Company. Pursuant to that facility, Trust
Company Bank also committed to lend CCNY up to $55,700,000 and CCNY paid to
SunTrust and Trust Company Bank in 1993 an aggregate of $608,500 in related
fees. CCNY also paid to SunTrust and Trust Company Bank in 1993 an aggregate of
$106,404 in connection with a bridge loan, a revolving credit facility and
letter of credit agreements, all of which were repaid or terminated by CCNY by
December 31, 1993. In the opinion of management, the terms of such arrangements
are fair and reasonable and as favorable to CCNY as could have been obtained
from a wholly unrelated party. Trust Company Bank also holds in its portfolio
equipment leases pursuant to which the Company paid $135,305 in 1993 for the
lease of trailers used to haul syrup. A SunTrust subsidiary leases office space
in a building owned by a Company subsidiary and located at 711 Fifth Avenue, New
York, New York. The current lease was modified in 1993 to extend the expiration
date, originally set for 1995 under a 1990 extension, to 1997, and to set a new
escalating scale of base rental amounts. In 1993, the Company subsidiary was
paid approximately $58,000, and will be paid an estimated $115,600 in 1994 and
escalating payments in future years, under the renegotiated lease. In the
opinion of management, the lease terms are fair and reasonable and as favorable
to the Company as those which could have been obtained from unrelated third
parties at the time of its execution.
See "Committees of the Board of Directors; Meetings and Compensation of
Directors" above and "Compensation Committee Interlocks and Insider
Participation" on page 23.
10
<PAGE> 14
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in
1993 and the two prior fiscal years to the Company's Chief Executive Officer and
the Company's four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
SECURITIES
UNDERLYING ALL
ANNUAL COMPENSATION RESTRICTED OPTIONS/ OTHER
NAME AND PRINCIPAL ------------------------------ STOCK SAR LTIP COMPEN-
POSITION YEAR SALARY BONUS(4) AWARDS(5) AWARDS(#) PAYOUTS(8) SATION(9)
- --------------------- ---- ---------- ---------- ----------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Roberto C. Goizueta 1993 $1,454,000(3) $2,200,000 0 0 $1,380,816 $138,724
Chairman of the 1992 1,401,000(3) 1,800,000 0 0 1,290,528 130,815
Board & Chief 1991 1,242,000(3) 1,900,000 $56,000,000(6) 0 1,005,120 --(10)
Executive Officer
M. Douglas Ivester(1) 1993 520,000 270,000 0 320,000 492,696 47,613
Executive Vice 1992 467,500 228,000 0 100,000(7) 473,796 40,890
President 1991 445,000 240,000 0 120,000(7) 379,620 --(10)
John Hunter(2) 1993 486,250 240,000 654,375(6) 245,000 361,920 25,740
Executive Vice 1992 393,750 228,000 2,084,375(6) 0 287,520 47,716
President 1991 317,333 240,000 1,120,000 0 230,400 --(10)
Jack L. Stahl 1993 355,000 180,000 654,375(6) 30,000 492,696 58,019
Senior Vice 1992 325,000 175,000 0 60,000(7) 391,500 49,126
President & Chief 1991 272,500 175,000 1,680,000 0 0 --(10)
Financial Officer
E. Neville Isdell 1993 318,625 168,000 763,438(6) 15,000 329,088 42,788
Senior Vice 1992 298,750 155,000 0 40,000(7) 287,520 16,619
President 1991 280,000 140,000 840,000 0 230,400 --(10)
</TABLE>
- ------------
(1) Compensation for 1993 reflects 8-1/2 months of service in new position
as Principal Operating Officer of the North America Business Sector.
(2) Compensation for 1993 reflects 8-1/2 months of service in new position
as Principal Operating Officer of the International Business Sector.
(3) Includes $180,000 in deferred compensation. The Company credits $15,000
monthly to a deferred account for Mr. Goizueta on the Company's books. Amounts
credited to the account plus interest thereon will be paid to him in ten annual
installments, commencing one year after termination of his employment with the
Company. In the event of Mr. Goizueta's disability or death prior to payment of
all amounts deferred under this agreement, the balance will be paid to
Mr. Goizueta or his beneficiary.
(4) Under the Annual Performance Incentive Plan, cash awards are made to
participants based upon the individual's contribution to the attainment of
overall Company objectives and individual goals. Awards are paid to participants
annually during the year following the Annual Performance Incentive Plan year.
In the event of a change in control, participants earn the right to receive
awards equal to the target percentage of their annual salaries as if their
performance goals had been met, pro-rated to reflect the number of months a
participant was employed in the plan year.
(5) Share owners should be aware that the Company's restriction periods are
significantly longer than those customarily found in restricted stock award
plans. For example, restrictions on one named executive officer's first award
under the 1983 Restricted Stock Award Plan will not lapse, assuming he does not
die or become disabled and that no change in control occurs, for a minimum of 22
years and a maximum of 32 years from the date of grant.
Under the 1983 Restricted Stock Award Plan, restrictions on awards granted
prior to 1991 lapse when the participant retires, becomes disabled or dies, or
upon a change in control. Currently, restrictions
11
<PAGE> 15
on awards granted in and after 1991 pursuant to the 1983 Restricted Stock Award
Plan and awards granted pursuant to the 1989 Restricted Stock Award Plan lapse
when the participant retires at or after age 62 on a date which is at least five
years from the award date, becomes disabled or dies, or upon a change in
control. Restrictions on the award granted under the 1982 Restricted Stock Award
Agreement between the Company and Mr. Goizueta lapse when the recipient retires,
becomes disabled or dies, or upon a change in control.
The aggregate restricted stock holdings at the end of 1993 for Mr. Goizueta
were 5,616,000 shares (value at year end equaled $250,614,000, which is 284% of
the value at grant dates); for Mr. Ivester, 700,000 shares (value at year end
equaled $31,237,500, which is 478% of the value at grant dates); for Mr. Hunter,
265,000 shares (value at year end equaled $11,825,625, which is 183% of the
value at grant dates); for Mr. Stahl, 183,000 shares (value at year end equaled
$8,166,375, which is 196% of the value at grant dates); and for Mr. Isdell,
137,500 shares (value at year end equaled $6,135,938, which is 216% of the value
at grant dates). The restricted stock was awarded pursuant to the 1983
Restricted Stock Award Plan, the 1989 Restricted Stock Award Plan, and the 1982
Restricted Stock Award Agreement.
Dividends on all stock awards are paid at the same rate as paid to all
share owners. The 1983 Restricted Stock Award Plan and the 1982 Restricted Stock
Award Agreement provide for the Company to make cash payments to recipients of
awards made pursuant to these plans in amounts equal to the recipients' income
tax liability on these awards when the restrictions lapse. Receipt of these cash
payments also causes recipients to incur income tax liability, but no cash
payments are made to the recipients to offset this liability. No cash payments
for reimbursement of any income tax liability are provided under the 1989
Restricted Stock Award Plan.
The shares awarded under these plans have been adjusted, as necessary, to
reflect the 2-for-1 stock split that occurred on May 1, 1992, the 2-for-1 stock
split that occurred on May 1, 1990, and the 3-for-1 stock split that occurred on
June 16, 1986.
(6) These Restricted Stock Awards were made pursuant to the 1989 Restricted
Stock Award Plan. Thus, as was discussed in footnote 5, all income taxes
resulting from these awards are the responsibility of the recipient.
(7) Adjusted, as necessary, for the 2-for-1 stock split that occurred on
May 1, 1992, and the 2-for-1 stock split that occurred on May 1, 1990.
(8) Includes the entire amount for the three-year period ending December
31, 1993, although one-half of such amount is subject to forfeiture if the
recipient leaves the employ of the Company prior to December 31, 1995 except by
reason of retirement, death or disability (or unless pursuant to a change in
control).
(9) For 1993, includes: for Mr. Goizueta: $7,075 contributed by the Company
to The Coca-Cola Company Thrift Plan (the "Thrift Plan", described below),
$120,354 accrued under The Coca-Cola Company Supplemental Benefit Plan (the
"Supplemental Plan", described below), and $11,295 in above-market interest
earned on amounts deferred under the Company's 1986 Compensation Deferral and
Investment Program (the "CDIP", described below); for Mr. Ivester: $7,075
contributed by the Company to the Thrift Plan, $28,573 accrued under the
Supplemental Plan, and $11,965 in above-market interest earned on amounts
deferred under the CDIP; for Mr. Hunter: $7,075 contributed by the Company to
the Thrift Plan and $18,665 accrued under the Supplemental Plan; for Mr. Stahl:
$7,075 contributed by the Company to the Thrift Plan, $14,697 accrued under the
Supplemental Plan, and $11,965 in above-market interest earned on amounts
deferred under the CDIP; and for Mr. Isdell: $7,075 contributed by the Company
to the Thrift Plan, and $11,431 accrued under the Supplemental Plan. As to
Messrs. Hunter, Isdell and Stahl, who serve or have served as directors of
Coca-Cola Amatil Limited, in which the Company holds a temporary majority
interest, includes the fee paid by such company to each director for his service
in the year indicated: to Mr. Hunter for 1992, approximately U.S.$25,248; to
Mr. Isdell for 1993, approximately U.S.$24,282; and to Mr. Stahl for 1992,
approximately U.S.$25,248,
12
<PAGE> 16
and for 1993, approximately U.S.$24,282. The Company plays no role in the
determination or authorization of such fees.
Under the Thrift Plan, the Company contributes to each participant's
account maintained under the Thrift Plan an annual amount of Company stock equal
to 100% of the participant's contributions to the Thrift Plan but not more than
3% of (a) the participant's earnings or (b) $235,840 for 1993, whichever is
lower.
The Supplemental Plan provides a benefit to any eligible individual for
whom the 3% matching contribution would otherwise be in excess of the maximum
permitted under the Thrift Plan. The difference between the theoretical Company
matching contribution under the Thrift Plan for each participant, without regard
to the legally imposed maximum, and the maximum contribution permitted under the
law is used to determine the number of theoretical shares of Common Stock of the
Company which would have been purchased for the participant's account in the
absence of the IRS limitation of $235,840 for 1993. The value of the accumulated
theoretical shares, including dividends, is paid in cash to the individual at
termination of employment.
The CDIP, as amended, permitted salaried employees of the Company and
certain of its subsidiaries whose base annual salary was at least $50,000, to
defer, on a one-time basis, up to $50,000 of the compensation earned between May
1986 and April 1987. Amounts deferred are expected to be credited with annual
compound interest at a variable annual rate of at least 16%. The rate for the
period from May 1993 through April 1994 is 16.28%. The amounts credited will be
paid out when the participant no longer is an employee of the Company or, at the
option of the participant, (a) as a level annuity payable from the date of
retirement until attainment of age 80, or (b) split between pre-retirement
payments commencing no earlier than 1993 and a level annuity payable from the
date of retirement until attainment of age 80. Participants who elect to retire
prior to age 65 may elect to defer commencement of their payments to the earlier
of their death or their 65th birthday.
(10) Under the Securities and Exchange Commission rules on executive
compensation disclosure, no disclosure regarding items included in this column
is required for the 1991 fiscal year.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF STOCK PRICE APPRECIATION
% OF TOTAL FOR OPTION TERM (10 YEARS)*
NUMBER OF OPTIONS/ -------------------------------------------
SECURITIES SARS
UNDERLYING GRANTED TO EXERCISE 5%
OPTIONS/SARS EMPLOYEES OR BASE -----------------------------
GRANTED IN FISCAL PRICE EXPIRATION PRICE PER AGGREGATE
NAME (#) YEAR ($/SHARE) DATE SHARE VALUE
- -------------------- ------------ ---------- --------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Roberto C. Goizueta 0 -- -- -- --
M. Douglas Ivester 200,000(2) $39.875 (2) 4/14/03 $ 65.00 $5,024,250(3)
120,000(2) 4.8% 43.8125(2) 10/20/03 71.41 3,312,225(3)
John Hunter 200,000(2) 39.875 (2) 4/14/03 65.00 5,024,250(3)
45,000(2) 3.7% 43.8125(2) 10/20/03 71.41 1,242,084(3)
Jack L. Stahl 30,000(2) .4% 43.8125(2) 10/20/03 71.41 828,056(3)
E. Neville Isdell 15,000(2) .2% 43.8125(2) 10/20/03 71.41 414,028(3)
All Share Owners as a Group $ 65.00 $32,593,653,280
71.41 35,812,148,820
Named executives' portion of assumed value gained by all share owners $ 65.00 .0003
71.41 .00016
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM (10 YEARS)*
------------------------------------------
10%
------------------------------------------
PRICE PER AGGREGATE
NAME SHARE VALUE
- -------------------- ------------------------------------------
<S> <C> <C>
Roberto C. Goizueta --
M. Douglas Ivester $103.28 $12,680,250(3)
113.47 8,359,425(3)
John Hunter 103.28 12,680,250(3)
113.47 3,134,784(3)
Jack L. Stahl 113.47 2,089,856(3)
E. Neville Isdell 113.47 1,044,928(3)
All Share Owners as a Group $103.28 $82,260,172,570
113.47 90,383,042,280
Named executives' portion of assumed value gained by all share owners $103.28 .0003
113.47 .00016
</TABLE>
- ------------
* The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates as set by the Securities and Exchange Commission and are
not intended to forecast future price appreciation of the Common Stock of the
Company. The gains reflect a future value based upon growth at these prescribed
rates. The Company did not use an alternative formula for a grant date
valuation, an approach which would state gains at present, and therefore lower,
value. The Company is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or volatile factors.
13
<PAGE> 17
It is important to note that options have value to the listed executives
and to all option recipients only if the stock price advances beyond the grant
date price shown in the table during the effective option period.
(1) No SARs were awarded in the 1993 fiscal year.
(2) These awards were made pursuant to the 1991 Stock Option Plan. Under
this plan, the option price must be not less than 100% of the fair market value
of the Company's Common Stock on the date the option is granted. The fair market
value of a share of the Company's Common Stock is the average of the high and
low market prices at which a share of stock was sold on the date of grant. Stock
options awarded may not be exercised during the first twelve months after the
date of grant. Thereafter, options may be exercised only to the extent of a
fraction, the numerator of which is the number of whole months from the date of
grant and the denominator of which is thirty-six. All unexercisable stock
options granted pursuant to the plan become exercisable upon an optionee's
retirement, death, disability or upon a change in control. The plan allows
shares of Common Stock of the Company to be used to satisfy any resulting
Federal, State and local tax liabilities, but does not provide for a cash
payment by the Company for income taxes payable as a result of the exercise of a
stock option award. This plan is the same in all material respects as the 1983
Stock Option Plan and the 1987 Stock Option Plan.
(3) Not discounted to present value. Using a discount rate of 7%, the
present value of the assumed potential realizable value of Mr. Ivester's awards
are $2,554,074 and $1,683,767 at a 5% annual rate of stock price appreciation
and $6,445,996 and $4,249,508 at a 10% annual rate of stock price appreciation.
The present value of the assumed potential realizable value of Mr. Hunter's
awards are $2,554,074 and $631,413 at a 5% annual rate of stock price
appreciation and $6,445,996 and $1,593,565 at a 10% annual rate of stock price
appreciation. The present value of the assumed potential realizable value of
Mr. Stahl's award is $420,942 at a 5% annual rate of stock price appreciation
and $1,062,377 at a 10% annual rate of stock price appreciation. The present
value of the assumed potential realizable value of Mr. Isdell's award is
$210,471 at a 5% annual rate of stock price appreciation and $531,188 at a 10%
annual rate of stock price appreciation.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES(1)
NUMBER OF VALUE OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS/SARS
UNEXERCISED AT FY-END ($)
OPTIONS/SARS AT (BASED ON
FY-END (#) $44.625 PER SHARE)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED(2) UNEXERCISABLE UNEXERCISABLE
- ---------------------- --------------- --------------- --------------- --------------------
<S> <C> <C> <C> <C>
Roberto C. Goizueta 300,000 $9,478,125(3) 1,300,000/0 $ 45,946,875/0
M. Douglas Ivester -- -- 822,221/ 23,598,889/
377,779 1,425,986
John Hunter -- -- 230,000/ 8,129,063/
245,000 986,563
Jack L. Stahl 6,000 $ 229,594(4) 205,333/ 6,249,541/
56,667 117,710
E. Neville Isdell -- -- 262,222/ 8,560,277/
32,778 74,411
</TABLE>
- ------------
(1) The share numbers, and market and exercise prices have been adjusted,
as necessary, for the 2-for-1 stock split that occurred on May 1, 1992, the
2-for-1 stock split that occurred on May 1, 1990, and the 3-for-1 stock split
that occurred on June 16, 1986.
14
<PAGE> 18
(2) An individual, upon exercise of an option, does not receive cash equal
to the amount contained in the Value Realized column of this table. Instead, the
amounts contained in the Value Realized column reflect the increase in the price
of the Company's Common Stock from the option award date to the option exercise
date. No cash is realized until the shares received upon exercise of an option
are sold.
No named executive officer sold shares of the Company's Common Stock in
1993, or has done so at any time since becoming an executive officer.
Mr. Goizueta has not sold any shares of Company Common Stock in more than 20
years.
(3) The exercise price of the stock option was $9.28125, which is equal to
the fair market value of a share of the Company's Common Stock on the date of
grant, which was July 21, 1988.
(4) The exercise price of the stock option was $4.35938, which is equal to
the fair market value of a share of the Company's Common Stock on the date of
grant, which was November 1, 1983.
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS(2)
SHARES, UNITS PERIOD UNTIL UNDER NON-STOCK PRICE-BASED PLANS
OR OTHER MATURATION OR ---------------------------------------
NAME RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM
- -------------------- ------------- -------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Roberto C. Goizueta 1,219,680 3 years $ 182,952 $1,219,680 $1,463,616
M. Douglas Ivester 478,800 3 years 71,820 478,800 574,560
John Hunter 478,800 3 years 71,820 478,800 574,560
Jack L. Stahl 435,240 3 years 65,286 435,240 522,288
E. Neville Isdell 290,720 3 years 43,608 290,720 348,864
</TABLE>
- ---------------
(1) Effective January 1, 1982, and as later amended, the Company
established a Long Term Performance Incentive Plan. The Compensation Committee,
which administers the plan, awards incentive compensation to certain senior
officers and key executives of the Company if performance targets set for the
Company, as measured by the average return on equity and the compounded annual
growth in income from continuing operations over three years, are met. The plan
is not based on the price of the Company's Common Stock. Subject to continued
employment of the participant, unless death, disability or retirement occurs,
one-half of each award earned is paid at the close of each three-year
performance period. Payment of the other half of each award, the "Restricted
Award", is deferred for two years and is subject to forfeiture if the
participant's employment with the Company terminates for any reason other than
death, disability or retirement in such two-year period. The participant is
entitled to receive interest on the Restricted Award during such two-year
period, calculated at rates not in excess of prevailing market interest rates.
Upon a change in control of the Company, all awards or portions of awards earned
up until such date become fully vested and payable, and additional payments will
be made in an amount equal to the participant's liability for any taxes
attributable to such payments.
(2) The threshold amount is equal to .15 times the targeted payout, and if
actual Company performance falls below certain parameters, no payouts are made.
The target amount is earned if specified performance targets are achieved. The
maximum amount that can be earned is 1.2 times the targeted amount.
15
<PAGE> 19
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE WITH
ASSUMED AVERAGE ANNUAL THE COMPANY
COMPENSATION FOR FIVE-YEAR -------------------------------------------------------
PERIOD PRECEDING RETIREMENT 10 YEARS 20 YEARS 30 YEARS 40 YEARS
- --------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 500,000 $ 150,000 $ 200,000 $ 250,000 $ 295,346
1,000,000 300,000 400,000 500,000 594,096
1,500,000 450,000 600,000 750,000 892,846
2,000,000 600,000 800,000 1,000,000 1,191,596
2,500,000 750,000 1,000,000 1,250,000 1,490,346
3,000,000 900,000 1,200,000 1,500,000 1,789,096
3,500,000 1,050,000 1,400,000 1,750,000 2,087,846
4,000,000 1,200,000 1,600,000 2,000,000 2,386,596
4,500,000 1,350,000 1,800,000 2,250,000 2,685,346
5,000,000 1,500,000 2,000,000 2,500,000 2,984,096
5,500,000 1,650,000 2,200,000 2,750,000 3,282,846
6,000,000 1,800,000 2,400,000 3,000,000 3,581,596
</TABLE>
This table sets forth the annual retirement benefits payable under the
Employee Retirement Plan of The Coca-Cola Company (the "Retirement Plan",
described below), the retirement portion of the Supplemental Plan and The
Coca-Cola Company Key Executive Retirement Plan (the "Key Executive Plan",
described below) upon retirement at age 65 based on an employee's assumed
average annual compensation for the five-year period preceding retirement and
assuming actual retirement on January 1, 1994. The benefits listed in the table
are not subject to any reduction for Social Security or other offset amounts.
Generally, compensation utilized for pension formula purposes includes
salary and annual bonus reported in the Summary Compensation Table. Awards under
the Long Term Performance Incentive Plan are also included in the computation of
benefits under the Retirement Plan, the Key Executive Plan and the Supplemental
Plan. Company contributions received under the Company's Thrift Plan and
Supplemental Plan are not included in the calculation of the named executive's
compensation for purposes of the pension benefit.
The Retirement Plan is a tax-qualified defined benefit plan and, subject to
certain maximum and minimum provisions, bases pension benefits on a percentage
of (a) the employee's final average compensation (the five highest consecutive
calendar years of compensation out of the employee's last eleven years of
credited service) or (b) $235,840 for 1993, whichever is lower, times the
employee's years of credited service. Service and age requirements for early
retirement and benefit reductions for early retirement are reduced for
participants who terminate for any reason within two years after a change in
control. The term "compensation" includes salary, overtime, commissions and
performance incentive awards of the participants.
The Supplemental Plan also provides a benefit to eligible persons whenever
100% of their pension benefits under the Retirement Plan are not permitted to be
funded or paid through that plan because of limits imposed by the Internal
Revenue Code of 1986, which limitations were $115,641 in 1993. If a participant
is entitled to a pension benefit from the Retirement Plan because of termination
of employment for any reason within two years subsequent to a change in control,
then the change in control provisions in the Retirement Plan will apply to the
calculation of the participant's pension benefit under the Supplemental Plan.
These vested benefits are payable on termination of employment. Benefits accrued
after such date will continue to vest under the terms of the Supplemental Plan
as in effect prior to its amendment.
The Key Executive Plan provides certain executive and other key senior
officers of the Company annually, upon retirement, 20% of the average pay,
including awards pursuant to the Long Term Performance Incentive Plan, for the
five highest consecutive years out of the employee's last eleven years
16
<PAGE> 20
of credited service, increased 1% for each year of vested service with the
Company up to a maximum of 35 years (i.e., up to 55%). The amount any
participant will receive under the Key Executive Plan will be reduced, dollar
for dollar, by amounts payable under the Retirement Plan and the Supplemental
Plan. Eligibility for early retirement benefits under the Key Executive Plan
commences when the participant has completed ten years of service with the
Company and is 55 years old, or when the participant reaches age 60. Normal
retirement benefits commence when the participant reaches age 65. If a
participant should die prior to retirement, his or her surviving spouse will
receive accrued benefits under the Key Executive Plan, less any other survivor
income benefits payable under the Retirement Plan and the Supplemental Plan.
There is also a benefit to a participant's surviving spouse if the participant
dies after retirement. These vested benefits are payable on termination of
employment. Benefits accrued after such date will continue to vest under the
terms of the Key Executive Plan as in effect prior to its amendment. In the
event of a change in control, all benefits accrued to participants would
immediately vest and, if a participant's employment terminates within two years
after a change in control, his or her benefits would be paid in cash in a lump
sum. In certain cases, such benefits are calculated assuming continuation of
employment to the first date on which the employee would have satisfied the
eligibility requirements with assumed increases of 8% per annum in covered
compensation. Also in such event, the Company will pay the employee an
additional amount equal to the liability, if any, under Section 4999 of the
Internal Revenue Code of 1986, attributable to lump sum payments under the Key
Executive Plan.
The respective years of credited service as of December 31, 1993, for the
persons named in the Summary Compensation Table are as follows: Mr. Goizueta,
39.5 years; Mr. Ivester, 14.2 years; Mr. Hunter, 18.4 years; Mr. Stahl, 14.5
years; and Mr. Isdell, 26.2 years.
As reported in previous Proxy Statements, the Company entered into an
Incentive Unit Agreement with Mr. Goizueta in 1988. Each Incentive Unit is
equal to the market value of one share of the Company's Common Stock, and is
payable, in cash, upon the recipient's death, retirement, disability or upon a
change in control of the Company. Dividends are not paid on Incentive Units.
The 1988 Incentive Unit Agreement provides for the Company to make a cash
payment to the recipient of the award made pursuant to this plan in an amount
equal to the recipient's income tax liability on this award when the
restrictions lapse. Receipt of this cash payment also causes the recipient to
incur income tax liability, but no cash payment is made to the recipient to
offset this liability. Under this agreement, 800,000 Incentive Units were
awarded to Mr. Goizueta. The units awarded under this agreement have been
adjusted to reflect the 2-for-1 stock split that occurred on May 1, 1992, and
the 2-for-1 stock split that occurred on May 1, 1990. The award was made in
1988 and no further award can be made pursuant to the Incentive Unit Agreement.
As reported in previous Proxy Statements, the Company entered into a
Performance Unit Agreement with Mr. Goizueta in 1985. Pursuant to this
agreement, Mr. Goizueta received 1,440,000 Performance Units. The value of each
Performance Unit is equal to the increase in the market value of a share of the
Company's Common Stock over $5.15625, the price of a share of the Company's
Common Stock on January 2, 1985. The number of Performance Units and the base
price thereof reflect adjustments for the 2-for-1 stock split that occurred on
May 1, 1992, the 2-for-1 stock split that occurred on May 1, 1990, and the
3-for-1 stock split that occurred on June 16, 1986. The value of the Performance
Units will be determined and paid in cash as of the date of the recipient's
retirement, death or disability, or upon a change in control of the Company. The
award was made in 1985 and no further award can be made pursuant to the
Performance Unit Agreement.
17
<PAGE> 21
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Performance
Graph and the Report of the Compensation Committee of The Coca-Cola Company on
Executive Compensation shall not be incorporated by reference into any such
filings.
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
THE COCA-COLA COMPANY, S&P 500 INDEX AND FOOD,
BEVERAGE AND TOBACCO GROUPS
[GRAPH OMITTED]
TOTAL RETURN
STOCK PRICE PLUS REINVESTED DIVIDENDS
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) KO S&P FBT
<S> <C> <C> <C>
Measurement Pt.-12/31/88 $100 $100 $100
FYE 12/31/89 $177 $132 $143
FYE 12/31/90 $217 $127 $164
FYE 12/31/91 $381 $166 $238
FYE 12/31/92 $403 $179 $244
FYE 12/31/93 $436 $197 $216
</TABLE>
* Based on information for a self-constructed peer group of the Food,
Beverage and Tobacco Groups of companies as published in The Wall Street
Journal, which includes the following companies, but from which the Company has
been excluded:
McCormick & Company, Incorporated., Gerber Products Company,
Campbell Soup Company, ConAgra, Inc., General Mills, Inc.,
Archer Daniels Midland Company, Kellogg Company, CPC
International Inc., Geo. A. Hormel & Co., Hershey Foods
Corporation, The Quaker Oats Company, Dean Foods Company,
Lance, Inc., Borden, Inc., Flowers Industries, Inc., Wm.
Wrigley Jr. Co., Sara Lee Corporation, Dole Food Company, Inc.,
Inc., Pet Incorporated, H.J. Heinz Co., Ralston Purina Company,
Tyson Foods, Inc., Ralston-Continental Group, Anheuser-Busch
Companies, Inc., Brown-Forman Corporation, Coca-Cola Bottling
Co. Consolidated, Coca-Cola Enterprises Inc., PepsiCo, Inc.,
Whitman Corporation, Adolph Coors Co., American Brands, Inc.,
Philip Morris Companies Inc., UST Inc., Universal Corp.
18
<PAGE> 22
The Company's performance graph in its 1993 proxy statement included A&W
Brands, Inc., which company is no longer reported as a part of the Food,
Beverage and Tobacco Groups of companies as published in The Wall Street
Journal. Also, Universal Corp., Adolph Coors Co., H.J. Heinz Co., Ralston Purina
Company, Ralston-Continental Group, and Tyson Foods, Inc. were not included in
the Company's 1993 performance graph and are now reported as a part of the Food,
Beverage and Tobacco Groups of companies as published in The Wall Street
Journal.
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1988.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF THE COCA-COLA COMPANY
ON EXECUTIVE COMPENSATION
In accordance with the proxy statement rules adopted in 1992 by the
Securities and Exchange Commission, as amended in 1993, the Compensation
Committee of the Board of Directors of The Coca-Cola Company offers this report
regarding compensation policies for executive officers and the Chief Executive
Officer of the Company.
The Company's primary objective is to maximize share-owner value over time.
To accomplish this objective, the Company has adopted a comprehensive business
strategy. The overall goal of the Compensation Committee is to develop executive
compensation policies and practices which are consistent with and linked to the
Company's strategic business objectives.
There are certain principles to which the Committee adheres in structuring
the compensation packages of executive officers. They are as follows:
LONG-TERM AND AT-RISK FOCUS: The majority of pay for senior executive
officers should be composed of long-term, at-risk pay to focus management
on the long-term interests of share owners. Less emphasis is placed on
salary and annual incentives.
EQUITY ORIENTATION: Equity-based plans should comprise a major part
of the at-risk portion of total compensation to instill ownership thinking
and to link compensation to corporate performance and share-owner
interests. Consistent with this philosophy, the Company encourages and in
some plans requires executives to hold stock delivered through equity-based
plans.
MANAGEMENT DEVELOPMENT: To support the Board of Directors in
fulfilling its responsibility of identifying future business leaders,
compensation opportunities should be structured to attract and retain those
individuals who can maximize the creation of share-owner value. The
compensation structure should support the Company's philosophy of moving
potential leaders throughout the system, exposing them to many types of
markets and operations.
COMPETITIVENESS: The Company emphasizes total compensation
opportunities and focuses less attention on the competitive posture of each
component of compensation. The development of at-risk pay policies is
driven more by Company strategy than by competitive practice. Over time,
the level of the Company's competitiveness in compensation opportunities
should be based on the Company's stock price performance relative to other
large companies. In line with this principle, current total compensation
competitiveness is targeted in the top quartile of the range of total
compensation of a comparator group of companies described in the next
section of this report.
These principles apply to compensation policies for all executive officers,
and there is no differentiation in application to named officers in the
compensation table, other executive officers or other key individuals covered by
the executive compensation plans of the Company. Further, the Committee does not
follow the principles in a mechanical fashion; rather, the Committee uses its
experience and judgment in determining the mix of compensation for each
individual.
19
<PAGE> 23
As reported in the 1993 proxy statement, these principles have guided
Committee action since a restructuring of the executive compensation approach
was adopted in 1983. In the period following the adoption of the current
executive compensation approach, share-owner value has increased by more than
$50 billion. By year-end 1993, the Company became the fourth largest company
overall and the largest consumer goods company in terms of market capitalization
in the country.
A feature of the Omnibus Budget Reconciliation Act of 1993 limits
deductibility of certain compensation for the Chief Executive Officer and the
additional four executive officers who are highest paid and employed at year end
to $1 million per year, effective for tax years beginning on or after January 1,
1994. The policy of this Committee related to this Act is to establish and
maintain a compensation program which maximizes the creation of long-term
share-owner value. Action will be taken to qualify most compensation approaches
to ensure deductibility except in those limited cases where the Committee
believes share-owner interests are best served by retaining flexibility of
approach.
Past growth becomes a future challenge to improvement, as accomplishment
translates immediately into expectation. This axiom came clearly into focus for
The Coca-Cola Company in 1993, a time of transition and preparation for future
results.
Donald R. Keough retired as President and Chief Operating Officer of the
Company in April 1993. John Hunter and M. Douglas Ivester assumed the
operational responsibilities previously held by Mr. Keough. Under the guidance
of Roberto C. Goizueta, the new leadership team is committed to the same
standards of excellence that have been established over the last decade.
For precisely this reason, the Committee affirms its commitment to
continuing the compensation policies that have contributed to past success and
which ensure continuity of executive leadership.
The sections that follow illustrate these policies.
COMPONENTS OF EXECUTIVE COMPENSATION
The four primary components of executive compensation are:
- Base Salary
- Annual Incentives
- Long Term Incentives
- Benefits
Each category is offered to key executives in various combinations,
structured in each case to meet varying business objectives, to cumulatively
provide a level of total compensation that places in the top (fourth) quartile
of the range of total compensation offered by a comparator group. The companies
selected for comparison of total compensation differ from those included in the
Performance Graph in an earlier section of this proxy statement, because the
Company seeks talent from a broader group of companies than the Food, Beverage
and Tobacco Groups against which performance is compared.
Total compensation comparators are selected by screening large, public
companies for such performance characteristics as profit growth and return on
equity. Those which exhibit leadership in the performance measures over
sustained periods are selected for purposes of benchmarking the Company's total
compensation standards.
The philosophy underlying each category is discussed herein.
BASE SALARY. Base salary is targeted at the third quartile of the range
for the comparator group. Increases in base salary are at competitive levels but
occur at frequencies ranging from 12 months to 36 months, depending upon time in
job, level of pay and other factors. Increases in base pay are determined by
individual performance rather than Company performance.
Base salary for Mr. Goizueta was not changed during 1993.
20
<PAGE> 24
ANNUAL INCENTIVES. The Company has maintained the Annual Performance
Incentive Plan, and has adopted the Executive Performance Incentive Plan
effective January 1, 1994. Executive officers may be selected for participation
in either, but not both of these plans. The Committee reserves the right to
grant discretionary bonuses based on subjective evaluation of each executive
officer's individual performance. Each Plan is described below.
ANNUAL PERFORMANCE INCENTIVE PLAN. Target annual incentives are
established for each key executive, including participating executive
officers, in the form of percentage of base pay. The actual award is based
on profit growth, unit volume increase and personal performance, and may be
greater or less than the target annual incentive. Generally, profit growth
and unit volume increase are weighted slightly higher than personal
performance, but the Committee may adjust weightings to take into account
unusual circumstances. Opportunities are targeted at the third quartile of
the range of the comparator group.
EXECUTIVE PERFORMANCE INCENTIVE PLAN. This Plan is being recommended
for share-owner approval in 1994. The Committee may approve some or all of
the executive officers for participation in the Plan each year, and
executive officers selected for participation shall not be eligible for
participation in the Annual Performance Incentive Plan. Target annual
incentives are established for each approved executive officer. The award
is based on operating profit growth (for those directly in charge of an
operating unit), earnings per share gain (for all other participants), unit
volume increase and change in share of carbonated soft drink sales, and may
be greater or less than the target annual incentive. With share-owner
approval, payments from this Plan are intended to qualify as tax-deductible
performance-based compensation under the terms of Section 162(m) of the
Internal Revenue Code of 1986. Opportunities are targeted at the third
quartile of the range of the comparator group.
Mr. Goizueta was granted an annual incentive award of $2,200,000 for
1993. This award was determined considering consolidated Company volume
performance that fell below the targeted level, market share gains and
profit performance that exceeded targeted levels and personal performance
worthy of specific comment. Mr. Goizueta presided over and guided the
significant transition in operational leadership. The Committee believes
that the skillful execution of this leadership transition sets the stage
for future business and stock price growth, and considered it the major
factor in the individual performance portion of Mr. Goizueta's annual
incentive.
Annual incentives from various plans may be earned by about 3,500
employees each year.
LONG TERM INCENTIVES. Long term incentives comprise the largest portion of
the total compensation package for executive officers. There are three forms of
long term incentives utilized for executive officers, including stock options,
restricted stock and long term incentive plans with cash awards. In any given
year, an executive officer may be offered participation in a single plan or in a
combination of plans.
As framed by the guiding principles listed earlier, the Company targets a
level of total compensation in the top (fourth) quartile of the comparator group
range. Because base salary and annual incentives are targeted in the third
quartile, the compensation focus for executive officers is clearly on long term
incentives, and the target is in the top quartile of the comparator group. The
size of grants is determined first by the difference between desired level of
total compensation and the combined amount of base salary and annual incentives,
and then by adjustment for recent Company performance.
Factors which influence decisions regarding what form of long term
incentives to grant to a particular executive officer include tenure with the
Company, history of past grants, time in current job and level of, or
significant changes in, responsibility. These subjective criteria are used for
determining grant type for all executive officers.
21
<PAGE> 25
Each form of long term incentive is discussed below.
RESTRICTED STOCK. The Restricted Stock Award Plans are designed to
focus executives, including executive officers, on the long term
performance of the Company for the duration of their careers. Contrary to
competitive practice, grants of restricted shares are subject to forfeiture
until retirement, death, disability or a change in control. In addition,
all grants after July 1991 are forfeited if separation from the Company
occurs before age 62 and before five years have elapsed from the date of
the grant. These features result in the Company's ability to retain,
throughout their entire careers, those individuals who are key to the
creation of share-owner value.
Currently, 61 key employees hold shares of restricted stock.
In 1993, no award of restricted stock was made to Mr. Goizueta, and no
further awards to Mr. Goizueta are contemplated.
STOCK OPTIONS. Options provide executives with the opportunity to buy
and maintain an equity interest in the Company and to share in the
appreciation of the value of the stock. Stock options only have value if
the stock price appreciates in value from the date the options are granted.
Over 2,300 employees are eligible to receive option grants.
Executives are encouraged to hold shares received upon the exercise of
the options, linking their interests to those of share owners. In fact,
none of the named executives in this proxy statement has sold shares of
Company stock during the entire period covered by the statement
(1991-1993), nor since becoming an executive officer. Mr. Goizueta has not
sold any Company stock in over 20 years.
Mr. Goizueta did not receive a stock option grant in 1993.
LONG TERM PERFORMANCE INCENTIVE PLAN. The Long Term Performance
Incentive Plan is a three-year performance plan. The Plan has previously
measured performance against a matrix pairing return on equity and growth
in income from continuing operations, and awards have varied based on the
Company's level of attainment against these parameters. Below a threshold
of performance, no awards could be earned. Restrictions are attached on
one-half of any award earned for two years after the end of the performance
period.
Looking forward, the Committee believes that share-owner interests are
best served by changing the key performance measures that underpin this
Plan. Share-owner approval is requested in this proxy statement for a
revision to the Plan which would establish unit case volume growth and
growth in economic profit as the appropriate performance measures. The
Committee believes that these factors are the key contributors, over time,
to the creation of share-owner value. The role of this Plan is to maintain
executive focus on the drivers of the business at all times, regardless of
periodic distortions in the capital markets caused by external factors.
The weight of each factor varies throughout the matrix. Considering
the entire matrix, each factor carries approximately a 50% weight.
Currently, 16 key employees participate in the long term incentive
plan described above.
Mr. Goizueta earned an award of $1,380,816 for the performance period
ended December 31, 1993. Actual growth in Income from Continuing Operations
and Return on Equity determined the amount of this award, which fell in the
high end of the spectrum of potential awards.
BENEFITS. Benefits offered to key executives serve a different purpose
than do the other elements of total compensation. In general, they provide a
safety net of protection against the financial catastrophes that can result from
illness, disability or death. Benefits offered to key executives are largely
those that are offered to the general employee population, with some variation,
primarily to promote tax efficiency and replacement of benefit opportunities
lost due to regulatory limits.
22
<PAGE> 26
SUMMARY. The Committee believes the executive compensation policies and
programs described in this Report serve the interests of the share owners and
the Company. Pay delivered to executives is intended to be linked to, and
commensurate with, Company performance and with share-owner expectations. The
Committee cautions that the practice and the performance results of the
compensation philosophy described herein should be measured over a period
sufficiently long to determine whether strategy development and implementation
are in line with, and responsive to, share-owner expectations.
Herbert A. Allen, Chairman
Susan B. King
William B. Turner
Peter V. Ueberroth
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Herbert A. Allen, who serves as Chairman of the Compensation Committee of
the Company's Board of Directors, is President, Chief Executive Officer and a
director of Allen & Company Incorporated ("ACI") and a principal share owner of
ACI's parent. ACI has leased and subleased office space since 1977 in the
building now owned by a subsidiary of the Company and located at 711 Fifth
Avenue, New York, New York. The current lease was entered into in 1985 and in
February 1994 was modified to extend the original 1997 expiration date to 2006,
to provide for the rental of additional office space and to set a new escalating
scale of base rental amounts, commencing in 1994, for such space. In 1993, ACI
paid approximately $2.3 million under this lease and it is expected ACI will pay
approximately $1.5 million in 1994, and escalating payments in future years,
under the terms of the new lease. In the opinion of management, the terms of the
lease agreement are fair and reasonable and as favorable to the Company as those
which could have been obtained from unrelated third parties at the time of its
execution.
Mr. Allen, directly and indirectly, holds an approximate 41% equity
interest in Excalibur Technologies Corporation ("Excalibur"). In 1992, the
Company entered into an agreement with Excalibur to purchase a software product
and support services for the Company's information management systems, pursuant
to which agreement the Company contemplates making a payment of approximately
$480,000 in 1994. In the opinion of management, the terms of the agreement with
Excalibur are fair and reasonable and as favorable to the Company as those which
could have been obtained from unrelated third parties for a comparable product
and services at the time of its execution.
THE MAJOR INVESTEE COMPANIES
The Company holds approximately 43.5% of the issued and outstanding shares
of common stock of Coca-Cola Enterprises Inc. ("Coca-Cola Enterprises"),
approximately 30% of Coca-Cola Bottling Co. Consolidated ("Coca-Cola
Consolidated"), approximately 51% of Coca-Cola Amatil Limited ("Coca-Cola
Amatil"), approximately 49% of Coca-Cola Beverages Ltd. ("Coca-Cola Beverages")
and approximately 30% of Coca-Cola FEMSA, S.A. de C.V. ("Coca-Cola FEMSA").
CERTAIN TRANSACTIONS WITH COCA-COLA ENTERPRISES AND COCA-COLA BEVERAGES
James B. Williams, a Director of the Company, is Chairman of the Board of
Directors and Chief Executive Officer of SunTrust. Subsidiary banks of SunTrust
engaged in ordinary course of business banking transactions in 1993, and are
expected to engage in similar transactions in 1994, with Coca-Cola Enterprises
and its subsidiaries, including the making of loans on customary terms. In April
1993, Trust Company Bank, a subsidiary of SunTrust, participated in a syndicate
of lenders which provided a senior credit facility to Coca-Cola Beverages in the
aggregate amount of Cdn.$440 million. Trust Company Bank's commitment was
Cdn.$50 million, for which it received fees of Cdn.$105,000. In February 1994,
the amount of its commitment was increased to Cdn.$55 million. Also in February
1994, the syndicate agreed to amend the credit facility and extended the
maturity date; in connection therewith, Trust Company Bank received fees of
Cdn.$110,000.
Warren E. Buffett, a Director of the Company, is Chairman of the Board of
Directors, Chief Executive Officer and the major share owner of Berkshire
Hathaway Inc., which company holds a significant equity interest in Salomon Inc.
Salomon Brothers Inc, a subsidiary of Salomon Inc, served as underwriter for
$250 million of debentures offered by Coca-Cola Enterprises in September 1993,
for which it received approximately $1.1 million in underwriting discounts. In
addition, Salomon Brothers
23
<PAGE> 27
Inc delivered a fairness opinion to Coca-Cola Enterprises in an acquisition for
which it received $250,000, and entered into a $250 million swap transaction
with that company for the purpose of trading fixed for floating rate debt.
Berkshire Hathaway Inc. holds a significant equity interest in Capital
Cities/ABC, Inc., to which Coca-Cola Enterprises paid approximately $195,000 in
1993 for media broadcast charges.
OWNERSHIP OF SECURITIES IN COCA-COLA ENTERPRISES, COCA-COLA CONSOLIDATED,
COCA-COLA AMATIL, COCA-COLA BEVERAGES AND COCA-COLA FEMSA
The following table sets forth information regarding ownership of the
common stock of Coca-Cola Enterprises, Coca-Cola Consolidated, Coca-Cola Amatil,
Coca-Cola Beverages and Coca-Cola FEMSA of each Director, the Company's five
most highly compensated executive officers and the Directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME ENTITY BENEFICIALLY OWNED SHARES
- ----------------------------------------- ------------------------ ------------------- -----------
<S> <C> <C> <C>
Herbert A. Allen......................... Coca-Cola Enterprises 2,715,004(1) 2.1%
Charles W. Duncan, Jr.................... Coca-Cola Enterprises 40,000(2) *
Peter V. Ueberroth....................... Coca-Cola Enterprises 4,000(3) *
Coca-Cola Consolidated 2,000(3) *
Roberto C. Goizueta...................... Coca-Cola Enterprises 5,000 *
M. Douglas Ivester....................... Coca-Cola Enterprises 12,460(4) *
Coca-Cola Amatil 2,500 *
Jack L. Stahl............................ Coca-Cola Enterprises 1,000 *
Coca-Cola Amatil 2,500 *
E. Neville Isdell........................ Coca-Cola Enterprises 2,000 *
Coca-Cola Amatil 1,368 *
Coca-Cola FEMSA 500(5) *
All Directors and Executive Officers as a
group (27 persons)..................... Coca-Cola Enterprises 2,779,464 2.1%
Coca-Cola Consolidated 2,000 *
Coca-Cola Amatil 9,045 *
Coca-Cola Beverages 1,100 *
Coca-Cola FEMSA 1,500(5) *
</TABLE>
- ------------
* Less than 1% of issued and outstanding shares of common stock of the
indicated entity.
(1) Includes 2,596,600 shares owned by Allen & Company Incorporated
("ACI"), 91,304 shares owned by a trust of which Mr. Allen is one of three
trustees and 12,000 shares owned by members of Mr. Allen's family. Does not
include 35,000 shares held by ACI's pension plan over which Mr. Allen does not
have voting or investment power.
(2) Includes 10,000 shares owned by a partnership of which Mr. Duncan is a
general and limited partner.
(3) As to Coca-Cola Enterprises, such shares are owned by two trusts of
which Mr. Ueberroth is a trustee or director and a beneficiary. As to Coca-Cola
Consolidated, such shares are owned by a trust of which Mr. Ueberroth is a
trustee and a beneficiary.
(4) Includes 210 shares jointly owned with Mr. Ivester's parents, 796
shares owned by his wife and 85 shares owned by his mother-in-law.
(5) Denotes number of American Depositary Receipts.
24
<PAGE> 28
PROPOSAL TO APPROVE THE
LONG TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY, AS AMENDED
(ITEM 2)
On February 16, 1994, the Compensation Committee of the Board of Directors
of the Company unanimously approved the amendment of the Long Term Performance
Incentive Plan of The Coca-Cola Company (the "Long Term Plan"), and the Board of
Directors directed that the Long Term Plan be submitted to the share owners at
the 1994 Annual Meeting. The Long Term Plan will become effective upon the
affirmative vote of a majority of the shares of Common Stock of the Company
voting at the Annual Meeting. Awards made in February 1994 for the 1994-1996
period will be null and void if the Long Term Plan is not approved by the share
owners of the Company. The Long Term Plan, as amended, differs from the current
plan primarily in performance measures employed.
The purpose of the Long Term Plan is to advance the interests of the
Company by providing a competitive level of incentive for executive officers and
up to five additional senior officers of the Company ("Eligible Officers"),
which will encourage them to more closely identify with share-owner interests
and to achieve financial results consistent with the Company's long range
business plans. It will also provide a vehicle to attract and retain key
executives who are responsible for moving the business forward.
SUMMARY DESCRIPTION OF THE LONG TERM PLAN
The Long Term Plan will be administered by the Compensation Committee of
the Board of Directors or a subcommittee of the Compensation Committee (the
"Committee") consisting of not less than two Directors of the Company.
The major provisions of the Long Term Plan are as follows:
Eligibility. The Committee has full and final authority, in its
discretion, to determine those Eligible Officers of the Company and its
affiliates to whom awards will be granted for any three-year period under
the Long Term Plan, and the other conditions of the grant of such awards.
Specifically, the Committee is authorized to grant awards to any Eligible
Officer of the Company, including officers who are also Directors of the
Company (a maximum of approximately 20 persons).
Limitation of Benefits. No participant may receive an award in excess
of $3,500,000 for a three-year performance period. Interest which is not
"above-market" (as defined in Item 402 of Regulation S-K promulgated by the
Securities and Exchange Commission) may be paid on the contingent portion
of an award and on any portion of an award voluntarily deferred.
Determination of Benefits. The Committee shall determine a base for
each participant, calculated on the participant's salary grade midpoint and
level of responsibility, for the three-year period. The base cannot be
increased for that three-year period. The Committee shall also set a matrix
which contains the target levels for the two performance measures: "Growth
in Unit Case Sales" and "Growth in Economic Profit", as defined in the Long
Term Plan. Growth in Economic Profit is generally defined as growth in net
operating profit after taxes less a capital charge, where the capital
charge is computed by multiplying average operating capital invested by the
weighted average cost of capital. The actual awards are determined after
the end of the three-year period and would range from 0% to 150% of the
participant's base. The Committee shall certify the results of the
performance measures and calculate the effects of these performance
measures on the participant's base. The Committee has discretion to reduce
the amount of any award or to refuse to pay any award.
Payment of Awards. One-half of the award shall be paid in cash to the
participant after the amount of the award for the three-year period is
determined by the Committee. The second half of the award is payable in
cash to the participant after two years following the end of the final year
of the related performance period, provided that the award has not been
forfeited due to the
25
<PAGE> 29
participant's termination of employment with the Company by reason other
than death, disability, retirement or a change in control of the Company.
Estimate of Benefits. The amounts that will be awarded to the
Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company pursuant to the Long Term
Plan are not currently determinable. However, if the Long Term Plan had
been in effect in 1993, which constituted the third year of the 1991-1993
three-year period, the amounts of the awards which would have been granted
to persons who will participate in the plan for the three-year period
beginning in 1994 are as follows:
<TABLE>
<CAPTION>
DOLLAR VALUE ($)
NAME AND POSITION OF TOTAL AWARD
-------------------------------------------------------------- ----------------
<S> <C>
Roberto C. Goizueta $1,158,696
Chairman of the Board and
Chief Executive Officer
M. Douglas Ivester 500,261
Executive Vice President
John Hunter 500,261
Executive Vice President
Jack L. Stahl 413,478
Senior Vice President and
Chief Financial Officer
E. Neville Isdell 276,184
Senior Vice President
Executive Group (including the persons named above) 5,360,147
Non-Executive Director Group 0
Non-Executive Officer Employee Group 892,012
</TABLE>
No amounts are payable to employees other than Eligible Officers and no
amounts are payable to Directors of the Company who are not also executive
officers.
Amendment and Termination of the Long Term Plan. The Committee may
terminate the Long Term Plan, in whole or in part, may suspend the Long
Term Plan, in whole or in part from time to time, and may amend the Long
Term Plan from time to time, including the adoption of amendments deemed
necessary or desirable to correct any defect or supply an omission or
reconcile any inconsistency in the Long Term Plan or in any award granted
thereunder so long as share owner approval has been obtained if required by
Section 162(m) of the Internal Revenue Code of 1986 (the "Code"). No
amendment, termination or modification of the Long Term Plan may in any
manner affect awards theretofore granted without the consent of the
participant unless the Committee has made a determination that an amendment
or modification is in the best interest of all persons to whom awards have
theretofore been granted, but in no event may such amendment or
modification result in an increase in the amount of compensation payable
pursuant to such award.
Termination of Employment. If the participant's employment terminates
during a three-year performance period for any reason other than
retirement, death or disability (or unless pursuant to a change in
control), that participant is not entitled to receive any award but the
Committee may, in its discretion, award a pro-rated amount to such
participant. The Committee will award a pro-rated amount at the end of any
three-year performance period to any participant who dies, retires or
becomes disabled during the three-year performance period. Should the
participant's employment terminate for any reason other than retirement,
death or disability (or unless pursuant to a change in control) during the
two-year period following the performance period, the participant forfeits
the second half of the award. The Committee, in its discretion, may decide
to pay the second half of the award. If the participant's employment is
terminated by reason of retirement, death or disability during the two-year
period, the second half of the award will be paid.
26
<PAGE> 30
Change in Control. The Long Term Plan contains a change in control
provision substantially identical to that contained in several of the
Company's plans. The purpose of the provision is to ensure that
participants would receive amounts which they would otherwise be entitled
to earn for any already commenced three-year period in the event of a
change in control. The Long Term Plan provides for the Company to reimburse
participants, in the event of a change in control, for taxes payable
pursuant to Section 4999 of the Code (golden parachute taxes). The
definition of "Change in Control" is attached hereto as Appendix A.
Federal Income Tax Consequences. Under present federal income tax
regulations, participants will realize ordinary income equal to the amount
received in the year of receipt. The Company will receive a deduction for
the amount constituting ordinary income to the participant, provided that
the Long Term Plan satisfies the requirements of Code Section 162(m), which
limits the deductibility of nonperformance-related compensation paid to
certain corporate executives. It is the Company's intention that the Long
Term Plan be constructed and administered in a manner which maximizes the
deductibility of compensation for the Company under Code Section 162(m).
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE LONG TERM PERFORMANCE INCENTIVE PLAN, AS AMENDED. PROXIES RECEIVED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHARE OWNERS SPECIFY IN THEIR
PROXIES A CONTRARY CHOICE.
PROPOSAL TO APPROVE THE
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
(ITEM 3)
On February 16, 1994, the Compensation Committee of the Board of Directors
of the Company unanimously approved the adoption of the Executive Performance
Incentive Plan of The Coca-Cola Company (the "Executive Plan"), and the Board of
Directors directed that the Executive Plan be submitted to the share owners at
the 1994 Annual Meeting. The Executive Plan will become effective upon the
affirmative vote of a majority of the shares of Common Stock of the Company
voting at the Annual Meeting. Targets set in February 1994 for the applicable
performance period shall be null and void and no payments pursuant thereto may
be made if the Executive Plan is not approved by the share owners of the
Company.
The purpose of the Executive Plan is to promote the interests of the
Company by providing incentive for participating executive officers who
contribute to the improvement of operating results of the Company and to reward
outstanding performance on the part of those individuals whose decisions and
actions most significantly affect the growth, profitability and efficient
operation of the Company.
SUMMARY DESCRIPTION OF THE EXECUTIVE PLAN
The Executive Plan will be administered by the Compensation Committee of
the Board of Directors or a subcommittee of the Compensation Committee (the
"Committee") consisting of not less than two Directors of the Company.
The major provisions of the Executive Plan are as follows:
Eligibility. The Committee has full and final authority, in its
discretion, to determine those executive officers of the Company and its
affiliates to whom awards will be granted under the Executive Plan, and the
other conditions of the grant of such awards. Specifically, the Committee
is authorized to grant awards to any executive officer of the Company,
including executive officers who are also Directors of the Company
(approximately 15 persons). Eligibility for participation in the Executive
Plan is limited to executive officers who are selected in the sole
discretion of the Committee. No person is automatically entitled to
participate in the Executive Plan in any plan
27
<PAGE> 31
year. Any person who is a participant in the Executive Plan will be
ineligible to participate in the Annual Performance Incentive Plan of the
Company for such plan year.
Limitation of Benefits. No participant may receive an award in excess
of $3,000,000 for any performance period. Interest which is not
"above-market" (as defined in Item 402 of Regulation S-K promulgated by the
Securities and Exchange Commission) may be paid on the contingent portion
of an award and on any portion of an award voluntarily deferred.
Determination of Benefits. The Committee shall determine a
dollar-denominated "opportunity" for each participant, based on the
participant's salary and level of responsibility. The opportunity cannot be
increased for the plan year. The Committee shall also determine a matrix
pairing volume growth and operating profit growth for each operating unit.
The Committee shall also determine a matrix pairing volume growth for each
of (i) the Company as a whole, (ii) the International Business Sector and
(iii) the North America Business Sector, in each case, with earnings per
share gain for the Company as a whole. Each matrix results in a percentage
to be applied against the opportunity. After the end of the performance
period, the Committee shall certify the results, which will then be further
adjusted up or down 5% depending on whether share of carbonated soft drink
sales (as defined by the Committee) for the participant's area has
increased or decreased by at least 1% of the prior share. Awards are
payable in cash only.
Participants who have staff functions shall have their awards
determined by the matrix applicable to the Company as a whole. Executive
officers who are responsible for an operating unit shall have their awards
determined 80% by that unit's results and 20% by consolidated Company
results. The executive officers with responsibility for the North America
Business Sector and the International Business Sector shall have their
awards determined 70% by the matrix for the North America Business Sector
and the matrix for the International Business Sector, respectively, and 30%
by the matrix for the Company as a whole.
The Committee has discretion to reduce the amount of any award or to
refuse to pay any award under the Executive Plan.
Payment of Awards. All awards shall be paid in cash within sixty
days of the certification of performance goals and the resulting
determination of the award unless the Committee has, prior to the grant of
an award, received and approved, in its sole discretion, a request by a
participant to defer receipt of the award in accordance with the plan.
Estimate of Benefits. The amounts that will be paid pursuant to the
Executive Plan are not currently determinable. The amounts that would have
been awarded to the Company's Chief Executive Officer, the other four most
highly compensated executive officers, and to all current executive
officers who will participate in the plan, for fiscal 1993 if the Executive
Plan had been in effect are as follows:
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($)
------------------------------------------------------ ----------------
<S> <C>
Roberto C. Goizueta $1,558,200
Chairman of the Board and
Chief Executive Officer
M. Douglas Ivester 206,941
Executive Vice President
John Hunter 190,916
Executive Vice President
Jack L. Stahl 139,125
Senior Vice President and
Chief Financial Officer
</TABLE>
28
<PAGE> 32
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($)
------------------------------------------------------ ----------------
<S> <C>
E. Neville Isdell 130,893
Senior Vice President
Executive Group (including the persons named above) 2,867,268
Non-Executive Director Group 0
Non-Executive Officer Employee Group 0
</TABLE>
No amounts are payable to employees other than executive officers and no
amounts are payable to Directors of the Company who are not also executive
officers.
Amendment and Termination of the Executive Plan. The Committee may
terminate the Executive Plan, in whole or in part, may suspend the
Executive Plan, in whole or in part from time to time, and may amend the
Executive Plan from time to time, including the adoption of amendments
deemed necessary or desirable to correct any defect or supply an omission
or reconcile any inconsistency in the Executive Plan or in any award
granted thereunder so long as share owner approval has been obtained if
required by Code Section 162(m). No amendment, termination or modification
of the Executive Plan may in any manner affect awards theretofore granted
without the consent of the participant unless the Committee has made a
determination that an amendment or modification is in the best interest of
all persons to whom awards have theretofore been granted, but in no event
may such amendment or modification result in an increase in the amount of
compensation payable pursuant to such award.
Termination of Employment. Should the participant's employment with
the Company terminate for any reason during the plan year, other than by
reason of a change in control, the participant's award shall be pro-rated
to reflect the participant's actual term of service. The Committee, in its
sole discretion, may reduce or refuse to pay such pro-rated award.
Change in Control. The Executive Plan contains a change in control
provision substantially identical to that contained in several of the
Company's plans. The purpose of the provision is to ensure that
participants would receive amounts to which they would otherwise be
entitled to earn in the event of a change in control. The definition of
"Change in Control" is attached hereto as Appendix A.
Federal Income Tax Consequences. Under present federal income tax
regulations, participants will realize ordinary income equal to the amount
of the award received in the year of receipt. The Company will receive a
deduction for the amount constituting ordinary income to the participant,
provided that the Executive Plan satisfies the requirements of Code Section
162(m), which limits the deductibility of nonperformance-related
compensation paid to certain corporate executives. It is the Company's
intention that the Executive Plan be constructed and administered in a
manner which maximizes the deductibility of compensation for the Company
under Code Section 162(m).
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE EXECUTIVE PERFORMANCE INCENTIVE PLAN. PROXIES RECEIVED BY THE BOARD
OF DIRECTORS WILL BE SO VOTED UNLESS SHARE OWNERS SPECIFY IN THEIR PROXIES A
CONTRARY CHOICE.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 4)
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the firm of Ernst & Young to serve as independent
auditors of the Company for the fiscal year ending December 31, 1994, subject to
ratification of this appointment by the share owners of the Company. Ernst &
Young has served as independent auditors of the Company for many years and is
29
<PAGE> 33
considered by management of the Company to be well qualified. The Company has
been advised by that firm that neither it nor any member thereof has any
financial interest, direct or indirect, in the Company or any of its
subsidiaries in any capacity.
One or more representatives of Ernst & Young will be present at this year's
Annual Meeting of Share Owners, will have an opportunity to make a statement if
he or she desires to do so and will be available to respond to appropriate
questions.
Ratification of the appointment of the independent auditors requires the
affirmative vote of a majority of the shares of Common Stock of the Company
voting in person or by proxy at the Annual Meeting of Share Owners. If the share
owners should not ratify the appointment of Ernst & Young, the Board of
Directors will reconsider the appointment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE 1994 FISCAL YEAR. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHARE OWNERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
PROXY PROCEDURE AND
EXPENSES OF SOLICITATION
The Company will continue its long-standing practice of holding the votes
of all share owners in confidence from the Company, its Directors, officers and
employees except (i) as necessary to meet applicable legal requirements and to
assert or defend claims for or against the Company; (ii) in case of a contested
proxy solicitation; (iii) in the event that a share owner makes a written
comment on the proxy card or otherwise communicates his/her vote to management;
or (iv) to allow the independent inspectors of election to certify the results
of the vote. The Company will also continue, as it has for many years, to retain
an independent tabulator to receive and tabulate the proxies and independent
inspectors of election to certify the results.
All expenses incurred in connection with the solicitation of proxies will
be borne by the Company. The Company has engaged Georgeson & Company to assist
with the solicitation of proxies for an estimated fee of $19,000 plus expenses.
The Company will reimburse brokers, fiduciaries and custodians for their costs
in forwarding proxy materials to beneficial owners of Common Stock held in their
names.
Solicitation may be undertaken by mail, telephone and personal contact by
Directors, officers and employees of the Company without additional
compensation.
SHARE-OWNERS' PROPOSALS
Proposals of share owners/shareholders intended to be presented at the 1995
Annual Meeting of Share Owners must be received by the Company on or before
November 7, 1994 to be eligible for inclusion in the Company's proxy statement
and proxy relating to that meeting.
According to the By-Laws of the Company, a proposal for action to be
presented by any share owner at an annual or special meeting of share owners
shall be out of order unless specifically described in the Company's notice to
all share owners of the meeting and the matters to be acted upon thereat or
unless the proposal shall have been submitted in writing to the Chairman of the
Board of Directors and received at the principal executive offices of the
Company at least 60 days prior to the date of such meeting, and such proposal
is, under law, an appropriate subject for share-owner action.
30
<PAGE> 34
OTHER INFORMATION
As to any other matter or proposal that may properly come before the
meeting, including voting for the election of any person as a Director in place
of a nominee named herein who becomes unable to serve or for good cause will not
serve and voting on a proposal omitted from the proxy statement pursuant to the
rules of the Securities and Exchange Commission, it is intended that proxies
received will be voted in accordance with the discretion of the proxy holders.
The form of proxy and the proxy statement have been approved by the Board
of Directors and are being mailed and delivered to share owners by its
authority.
SUSAN E. SHAW
Secretary
Atlanta, Georgia
March 7, 1994
---------------------
THE ANNUAL REPORT TO SHARE OWNERS OF THE COMPANY FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1993, WHICH INCLUDES FINANCIAL STATEMENTS, HAS BEEN MAILED TO SHARE
OWNERS OF THE COMPANY. THE ANNUAL REPORT DOES NOT FORM ANY PART OF THE MATERIAL
FOR THE SOLICITATION OF PROXIES.
---------------------
31
<PAGE> 35
GRAPHICS APPENDIX LIST
PROXY STATEMENT DATED MARCH 7, 1994
FOR THE ANNUAL MEETING OF SHARE OWNERS
OF THE COCA-COLA COMPANY
TO BE HELD APRIL 20, 1994
<TABLE>
<CAPTION>
EDGAR VERSION TYPESET VERSION
<S> <C>
Pages 2 through 6 -- Pages 2 through 6 --
photos of Directors omitted a photo of each Director accompanies text
for each Director
Page 18 -- Page 18 --
performance graph omitted; a chart performance graph, including the chart
setting out the data points for such setting out data points for such graph
graph is included in both the paper copy
and the EDGAR version
</TABLE>
<PAGE> 36
APPENDIX A
A "Change in Control" shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") as in effect on November 15, 1988, provided that such a change
in control shall be deemed to have occurred at such time as (i) any "person" (as
that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities representing 20% or more of the combined
voting power for election of directors of the then outstanding securities of the
Company or any successor of the Company; (ii) during any period of two
consecutive years or less, individuals who at the beginning of such period
constituted the Board of Directors of the Company cease, for any reason, to
constitute at least a majority of the Board of Directors, unless the election or
nomination for election of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; (iii) the share owners of the Company approve any
merger or consolidation as a result of which its stock shall be changed,
converted or exchanged (other than a merger with a wholly-owned subsidiary of
the Company) or any liquidation of the Company or any sale or other disposition
of 50% or more of the assets or earning power of the Company; or (iv) the share
owners of the Company approve any merger or consolidation to which the Company
is a party as a result of which the persons who were share owners of the Company
immediately prior to the effective date of the merger or consolidation shall
have beneficial ownership of less than 50% of the combined voting power for
election of directors of the surviving corporation following the effective date
of such merger or consolidation; provided, however, that no Change in Control
shall be deemed to have occurred if, prior to such time as a Change in Control
would otherwise be deemed to have occurred, the Board of Directors determines
otherwise.
<PAGE> 37
<TABLE>
<CAPTION>
THE COCA-COLA COMPANY
<S> <C>
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R OF THE COCA-COLA COMPANY
O
X The undersigned, having received the Notice of Annual Meeting and Proxy Statement, hereby (i) appoints
Y Herbert A. Allen, Susan B. King and William B. Turner, and each of them, proxies with full power of
substitution, for and in the name of the undersigned, to vote all shares of Common Stock of The Coca-Cola
Company owned of record by the undersigned, and (ii) directs Trust Company Bank, Trustee under The
Coca-Cola Company Thrift Plan, Trustee under the Coca-Cola Enterprises Inc. Savings Investment Plan,
and Trustee under the Caribbean Refrescos, Inc. Thrift Plan, to vote in person or by proxy all shares of
Common Stock of The Coca-Cola Company allocated to any accounts of the undersigned under such Plans, and
which the undersigned is entitled to vote, in each case, on all matters which may come before the 1994
Annual Meeting of Share Owners to be held at the du Barry Room, Hotel du Pont, 11th and Market Streets,
Wilmington, Delaware, on April 20, 1994, at 9:00 a.m., local time, and any adjournments thereof, unless
otherwise specified herein. The proxies, in their discretion, are further authorized to vote for the
election of a person to the Board of Directors if any nominee named herein becomes unable to serve or for
good cause will not serve, are further authorized to vote on matters which the Board of Directors does not
know a reasonable time before making the proxy solicitation will be presented at the meeting, and are
further authorized to vote on other matters which may properly come before the 1994 Annual Meeting and any
adjournments thereof.
Election of Directors:
Nominees (terms expiring in 1997):
Ronald W. Allen, Donald F. McHenry, Paul F. Oreffice, James B. Williams
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE REVERSE SIDE), SEE REVERSE
BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' SIDE
RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
FOLD AND DETACH HERE
</TABLE>
<PAGE> 38
/x/ PLEASE MARK
YOUR VOTES AS
IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" ALL OF THE BOARD OF DIRECTORS'
NOMINEES AND "FOR" PROPOSALS 2, 3 AND 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 3. Adoption of
Directors the Executive / / / / / /
(See reverse) Performance
Incentive
For, except vote withheld from the Plan.
following nominee(s):
---------------------------------
FOR AGAINST ABSTAIN
2. Adoption of the Long / / / / / / 4. Ratification of the FOR AGAINST ABSTAIN
Term Performance appointment of / / / / / /
Incentive Plan, as Ernst & Young as
amended. independent auditors.
Do you plan to attend
the Annual Meeting? / / / /
YES NO
Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such.
----------------------------------------------------
----------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
FOLD AND DETACH HERE
================================================================================
ADMISSION TICKET
ANNUAL MEETING
OF
SHARE OWNERS OF THE COCA-COLA COMPANY
WEDNESDAY, APRIL 20, 1994
9:00 A.M.
DU BARRY ROOM
HOTEL DU PONT
11TH AND MARKET STREETS
WILMINGTON, DELAWARE
AGENDA
- Election of four Directors
- Adoption of Long Term Performance Incentive Plan, as amended
- Adoption of Executive Performance Incentive Plan
- Ratification of appointment of Ernst & Young as independent auditors
- Transaction of such other business as may properly come before the meeting
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING,
WHETHER OR NOT YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR
SHARES ARE REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL THE PROXY
CARD ABOVE.
IF YOU PLAN TO ATTEND THE 1994 ANNUAL MEETING OF SHARE OWNERS, PLEASE MARK
THE APPROPRIATE BOX ON THE PROXY CARD ABOVE. PRESENT THIS TICKET TO THE
COCA-COLA COMPANY REPRESENTATIVE AT THE ENTRANCE TO THE DU BARRY ROOM.
<PAGE> 39
THE FOLLOWING DOCUMENT IS BEING FILED IN RESPONSE TO THE REQUIREMENTS OF
SCHEDULE 14A, ITEM 10, INSTRUCTION 3, AND DOES NOT CONSTITUTE A PART OF THE
PROXY STATEMENT DATED MARCH 7, 1994 OF THE COCA-COLA COMPANY DISSEMINATED TO
ITS SHARE OWNERS WITH RESPECT TO ITS ANNUAL MEETING OF SHARE OWNERS TO BE HELD
APRIL 20, 1994.
LONG TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
Section 1. Purpose
The purpose of the Long Term Performance Incentive Plan of The
Coca-Cola Company (the "Plan") is to advance the interests of The Coca-Cola
Company (the "Company") by providing a competitive level of incentive for
eligible senior executives which will encourage them to more closely identify
with share-owner interests and to achieve financial results consistent with the
Company's long range business plans. It will also provide a vehicle to attract
and retain key executives who are responsible for moving the business forward.
Section 2. Administration
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company or a subcommittee thereof (the "Committee")
consisting of not less than two members of the Board of Directors. The
Committee shall determine which of the eligible key employees of the Company
and its Affiliates (as hereinafter defined) to whom, and the time or times at
which, Long Term Incentive Awards will be granted under the Plan, and the other
conditions of the grant of the Long Term Incentive Awards. The provisions and
conditions of the grants of Long Term Incentive Awards need not be the same
with respect to each grantee or with respect to each Long Term Incentive Award.
The Committee shall, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and shall make determinations and shall take such
other action in connection with or in relation to accomplishing the objectives
of the Plan as it deems necessary or advisable. Each determination or other
action made or taken pursuant to the Plan, including interpretation of the Plan
and the specific conditions and provisions of the Long Term Incentive Awards
granted hereunder by the Committee shall be final and conclusive for all
purposes and upon all persons including, but without limitation, the Company,
<PAGE> 40
its Affiliates, the Committee, the Board, officers and the affected employees
of the Company and/or its Affiliates and their respective successors in
interest.
Section 3. Eligibility
The Chief Executive Officer, the President (if any), each executive
officer and up to five additional senior officers of the Company ("Eligible
Officers") shall be eligible to participate in the Plan, but no individual
shall have a right to participate. Long Term Incentive Awards may be granted
to such Eligible Officers of the Company and its Affiliates as determined in
the sole discretion of the Committee. The term "Affiliates" shall mean any
corporation or business organization in which the Company owns, directly or
indirectly, twenty-five percent or more of the voting stock or capital during
the time to which the granting of the Long Term Incentive Award applies.
Section 4. Grants of Long Term Incentive Awards
(a) Annual Selection by the Committee of Participants. Annually,
participants shall be selected prior to or shortly after the beginning of a
three-year performance period ("Performance Period") in accordance with Section
162(m) of the Internal Revenue Code of 1986 (the "Code"). Following such
selection by the Committee, the Chief Executive Officer shall advise such
Eligible Officers that they are participants in the Plan for a Performance
Period. Each Performance Period will be of three years duration and shall
commence on the first day of January of the applicable year. A new three-year
Performance Period shall commence each year.
(b) Calculation of Performance Incentive Base. Annually, the
Committee shall calculate the participant's Performance Incentive Base for the
Performance Period then beginning. The Performance Incentive Base shall be the
participant's salary grade midpoint at the time of notification, times a
percentage predicated upon the participant's relative responsibility level
within the Company. The percentage will be progressively higher for
correspondingly higher levels of responsibility within the Company. Once the
Performance Incentive Base (i.e., the employee's salary grade midpoint and the
applicable percentage) is determined at the commencement of each Performance
Period, that Performance Incentive Base will not change for that Performance
Period.
Section 5. Performance Criterion
The measures of performance are objective and shall be based on two
criteria measured annually over the three-year Performance
- 2 -
<PAGE> 41
Period. The criteria are (i) the Company's compounded average annual "growth
in Unit Case Sales" over the Performance Period and (ii) the compounded annual
"growth in Economic Profit" over the Performance Period.
(a) Growth in Unit Case Sales. The annual compound "growth in
Unit Case Sales" shall mean the growth in the number of cases of 24 8 oz.
(U.S.) servings sold during a year compared to the number sold in the previous
year, as determined by the Controller.
(b) Growth in Economic Profit. "Growth in Economic Profit" for
each calendar year shall be determined in accordance with the definition of
Economic Profit in Accountant-in-Charge Memorandum Number 1987-10, as issued
and updated from time to time by the Corporate Controller's Group of the
Company and as in effect as of the beginning of each Performance Period.
Growth in Economic Profit is generally defined as growth in net operating
profit after taxes less a capital charge, where the capital charge is computed
by multiplying average operating capital invested by the weighted average cost
of capital.
Section 6. Award Determination
Awards will be determined after the close of each Performance Period
from an award matrix, based upon the two performance criteria, which matrix
shall be adopted by the Committee at the inception of each Performance Period.
The amount of an Award will equal the product of the Participant's Performance
Incentive Base and the percentage derived from the award matrix. In no event
shall an Award to a participant for any Performance Period exceed the amount of
$3,500,000, excluding interest on any Contingent Award or Vested Cash Award
deferred in accordance with Section 7(d). The Committee may, in its sole
discretion, reduce the amount of any Award or refuse to pay any Award.
Section 7. Payment of Awards
(a) Conditions to Payment of Awards. Prior to the payment of any
Award, the Committee shall certify the appropriate level of growth in Unit Case
Sales and Economic Profit to be used in determining the amount of such Award.
In addition, no Award shall be payable pursuant to this Plan until share owner
approval of the Plan (within the meaning of Code Section 162(m)) has been
received.
(b) Awards. Awards shall be paid in cash.
- 3 -
<PAGE> 42
(c) The Vested Cash Award. One-half of the Award will be paid in
cash to each participant within sixty days after the date on which the
Committee certifies the criteria and makes the Award (the "Vested Cash Award").
The second half of the Award is referred to herein as the "Contingent Award",
and it shall be paid to each participant in the manner described in (e) below.
(d) Deferral of Vested Cash Awards. All Vested Cash Awards shall
be paid in cash at the time prescribed in subparagraph (c) above, unless the
Committee has received and approved, in its sole discretion, prior to the grant
of such Award, a request to defer payment. If such request to defer is
approved by the Committee, the participant may elect to receive deferred
payments of the Vested Cash Award from among the following options. Such
election shall be made at the time the request to defer is made.
(i) Full cash payment at a date not less than one year
from the date of the Vested Cash Award, nor more than one year after
the date of retirement,
(ii) Equal annual installments over a period not to exceed
fifteen years, commencing not less than one year from the date of the
Vested Cash Award, or
(iii) Upon retirement.
Any amounts deferred shall bear interest from the date a Vested Cash Award is
granted to the date of payment, such interest to be calculated pursuant to
rules promulgated by the Committee, but in no event shall constitute interest
which is "above-market" as set forth in Item 402 of Regulation S-K promulgated
by the Securities and Exchange Commission. Notwithstanding any election to
defer an Award as provided above, in the event of a participant's death, all
amounts elected to be deferred shall be paid in full to the executor or
administrator of a participant's estate within a reasonable time after notice
to the Committee of such participant's death.
(e) Payment and Forfeiture of Contingent Award. The Contingent
Award, plus interest thereon in accordance with the formula referred to in
Section 7(d) from the date of such Contingent Award as determined by the
Committee, shall be paid in cash to each participant within sixty days after
the expiration of the second year following the end of the final year of the
related Performance Period, provided that such Contingent Award has not been
forfeited as set forth in the following sentence. The Contingent Award shall
be forfeited to the Company (unless the Committee in its sole discretion shall
otherwise determine) if, within two years from the date the Contingent Award is
granted, the participant terminates his or her employment with
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the Company (for reasons other than death, retirement or disability as such
disability may be determined by the Committee).
(f) Retirement, Death or Disability During Forfeiture Period. If,
within two years after the end of a Performance Period for which a participant
receives a Contingent Award, the participant retires, dies or becomes disabled,
such participant (or his or her estate) shall be paid the full Contingent
Award.
(g) Deferral of Contingent Award. The participant may elect to
defer receipt of the Contingent Award at the same time and in the same manner
as provided with respect to the Vested Cash Award in subparagraph (d) above.
(h) Withholding for Taxes. The Company shall have the right to
deduct from all Long Term Incentive Award payments any taxes required to be
withheld with respect to such payments.
(i) Payments to Estates. Long Term Incentive Awards and earnings
thereon, if any, to the extent that they are due to a participant pursuant to
the provisions hereof and which remain unpaid at the time of the participant's
death, shall be paid in full to the executor or administrator of the
participant's estate.
Section 8. Termination of Employment During any
Performance Period
(a) Termination for Reasons Other Than Retirement, Death or
Disability. If the participant's employment by the Company or an Affiliate
terminates for any reason (other than retirement, death or disability) during
any Performance Period, that participant shall not be entitled to any Long Term
Incentive Award for that Performance Period but may receive a pro-rated portion
of the Long Term Incentive Award calculated in accordance with Section 8(b)
below if the Committee so determines in its discretion.
(b) Death, Disability or Retirement During Performance Period. If
a participant retires, dies or becomes disabled during any Performance Period,
the amount of the Long Term Incentive Award shall be calculated as provided in
Sections 4, 5 and 6 as if the Performance Period ended on the last day of the
year in which the participant retired, died or became disabled. Such Long Term
Incentive Award will then be paid all in cash within sixty days after the date
on which the independent public accountants of the Company issue their report
on the financial statements of the Company for the last year of the Performance
Period. The amount of the Long Term Incentive Award will be prorated by a
fraction, the numerator of which shall be the
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number of whole calendar months in the period commencing with the first month
of the Performance Period and ending with the whole calendar month immediately
preceding the date of retirement, death or disability, and the denominator of
which will be thirty-six.
Section 9. Amendments, Modification and Termination
of the Plan
The Board or the Committee may terminate the Plan, in whole or in
part, may suspend the Plan, in whole or in part from time to time, and may
amend the Plan from time to time, including the adoption of amendments deemed
necessary or desirable to correct any defect or supply an omission or reconcile
any inconsistency in the Plan or in any Long Term Incentive Award granted
hereunder so long as share owner approval has been obtained if required by Code
Section 162(m). No amendment, termination or modification of the Plan may in
any manner affect Long Term Incentive Awards theretofore granted without the
consent of the participant unless the Committee has made a determination that
an amendment or modification is in the best interest of all persons to whom
Long Term Incentive Awards have theretofore been granted, but in no event may
such amendment or modification result in an increase in the amount of
compensation payable pursuant to such award.
Section 10. Governing Law
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
Section 11. Effect on Benefit Plans
Awards will be included in the computation of benefits under the
Employees' Retirement Plan, Overseas Retirement Plan and other retirement plans
maintained by the Company under which the Participant may be covered and the
Thrift Plan, subject to all applicable laws and in accordance with the
provisions of those plans.
Awards shall not be included in the computation of benefits under any
Group Life Insurance Plan, Travel Accident Insurance Plan, Personal Accident
Insurance Plan or under Company policies such as severance pay and payment for
accrued vacation, unless required by applicable laws.
Section 12. Change in Control
If there is a Change in Control (as hereinafter defined) while the
Plan remains in effect, then
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<PAGE> 45
(a) each participant's Award accrued through the date of such
Change in Control for each Performance Period then in effect
automatically shall become nonforfeitable on such date,
(b) the Committee immediately after the date of such Change in
Control shall determine each participant's Award accrued through the
end of the calendar month which immediately precedes the date of such
Change in Control, and such determination shall be made based on a
formula established by the Committee which computes such Award using
(1) actual performance data for each full Plan Year in each
Performance Period for which such data is available and (2) projected
data for each other Plan Year, which projection shall be based on a
comparison (for the Plan Year which includes the Change in Control)
of the actual performance versus budgeted performance for compound
unit case sales growth for the full calendar months (in such Plan
Year) which immediately precede the Change in Control and the actual
performance versus budget performance for the compound growth in
Economic Profit for such period multiplied by (3) a fraction, the
numerator of which shall be the number of full calendar months in
each such Performance Period before the date of the Change in Control
and the denominator of which shall be thirty-six,
(c) each participant's accrued Award (as determined under Section
12(b) and his then unpaid Vested Cash Award and Contingent Award(s)
under Section 7 (computed with interest at the weighted prime rate at
Trust Company Bank, Atlanta, Georgia, accrued on such awards under
Section 7 through the date of such Change in Control but in no event
constituting an "above-market" rate of interest as set forth in Item
402 of Regulation S-K promulgated by the Securities and Exchange
Commission) shall be paid to him in a lump sum in cash promptly after
the date of such Change in Control in lieu of any other additional
payments under the Plan for the related Performance Periods, and
(d) any federal golden parachute payment excise tax paid or
payable under Section 4999 of the Code, or any successor to such
Section, by a participant for his taxable year for which he reports
the payment made under Section 12(c) on his federal income tax return
shall be deemed attributable to such payment under Section 12(c), and
the Company promptly on written
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<PAGE> 46
demand from the participant (or, if he is dead, from his estate)
shall pay to him (or, if he is dead, to his estate) an amount equal
to such excise tax.
A "Change in Control" for purposes of this Section 12 shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for election of directors
of the then outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or less, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease, for any reason, to constitute at least a majority of the Board
of Directors, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; (iii) the
share owners of the Company approve any merger or consolidation as a result of
which its stock shall be changed, converted or exchanged (other than a merger
with a wholly-owned subsidiary of the Company) or any liquidation of the
Company or any sale or other disposition of 50% or more of the assets or
earning power of the Company; or (iv) the share owners of the Company approve
any merger or consolidation to which the Company is a party as a result of
which the persons who were share owners of the Company immediately prior to the
effective date of the merger or consolidation shall have beneficial ownership
of less than 50% of the combined voting power for election of directors of the
surviving corporation following the effective date of such merger or
consolidation; provided, however, that no Change in Control shall be deemed to
have occurred if, prior to such time as a Change in Control would otherwise be
deemed to have occurred, the Board of Directors determines otherwise.
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<PAGE> 47
THE FOLLOWING DOCUMENT IS BEING FILED IN RESPONSE TO THE REQUIREMENTS OF
SCHEDULE 14A, ITEM 10, INSTRUCTION 3, AND DOES NOT CONSTITUTE A PART OF THE
PROXY STATEMENT DATED MARCH 7, 1994 OF THE COCA-COLA COMPANY DISSEMINATED TO
ITS SHARE OWNERS WITH RESPECT TO ITS ANNUAL MEETING OF SHARE OWNERS TO BE HELD
APRIL 20, 1994.
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
I. Plan Objective
The purpose of the Executive Performance Incentive Plan of The
Coca-Cola Company is to promote the interests of The Coca-Cola Company by
providing additional incentive for participating executive officers who
contribute to the improvement of operating results of the Company and to reward
outstanding performance on the part of those individuals whose decisions and
actions most significantly affect the growth and profitability and efficient
operation of the Company.
II. Definitions
The terms used herein will have the following meanings:
a. "Plan" means this Executive Performance Incentive Plan of The
Coca-Cola Company.
b. "Code" means the Internal Revenue Code of 1986, as amended.
c. "Company" means The Coca-Cola Company and any corporation or
other business organization in which the Company owns, directly or
indirectly, at least 25 percent of the voting stock or capital.
d. "Board of Directors" means the Board of Directors of the
Company.
e. "Committee" means the Compensation Committee of the Board of
Directors or a subcommittee thereof consisting of not less than two
members of the Board of Directors.
f. "Opportunity" shall have the meaning set forth in Section V(a)
hereof.
<PAGE> 48
g. "Award" means an award, with adjustments (if any), paid
pursuant to the provisions of the Plan.
h. "Plan Year" means the 12 month period beginning January 1 and
ending December 31.
i. "Participant" means an executive officer who is selected for
participation by the Committee.
III. Administration of the Plan
The Committee will have full power and authority to interpret and
administer the Plan in accordance with the rules and determinations adopted by
it.
IV. Eligibility
Eligibility for participation in the Plan is limited to executive
officers who are selected in the sole discretion of the Committee. No person
is automatically entitled to participate in the Plan in any Plan Year. Any
person who is a Participant for a particular Plan Year shall be ineligible to
participate in the Annual Performance Incentive Plan of the Company for such
Plan Year.
The fact that an executive officer is eligible to participate in the
Plan in one Plan Year does not assure that such executive officer will be
eligible to participate in any subsequent year. The fact that an executive
officer participates in the Plan for any Plan Year does not mean that the
executive officer will receive an Award in any Plan Year.
The Committee will determine an executive officer's participation in
the Plan prior to the time when substantial services relating to the Plan Year
are rendered.
V. Determination of Goals
a. For each Plan Year, the Committee shall determine a dollar
amount for each Participant which shall represent a percentage of the
Participant's annual salary and level of responsibility (the "Opportunity").
The Opportunity cannot be increased for the plan year. The Committee shall
also, at the time the Opportunity is determined, construct a matrix in which
one axis shall consist of volume growth as compared to budget and the other
axis shall consist of operating profit growth as compared to budget for each
operating unit. These factors are given approximate equal weight. The
Committee shall construct a matrix pairing volume growth, although the actual
targets for
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<PAGE> 49
performance may vary, for each of (i) the Company as a whole, (ii) the North
America Business Sector, and (iii) the International Business Sector, in each
case, with earnings per share gain. For each matrix, the intersection of axes
on each matrix shall be a percentage which shall be multiplied against the
Opportunity.
After completion of the Plan Year, volume growth, operating profit and
earnings per share shall be calculated for the Company, operating units and
business sectors as required, and applied to the appropriate grids. The
resulting percentage shall then be multiplied against the Opportunity. The
resulting dollar amount shall be further adjusted by increasing the result by
5% if share of carbonated soft drink sales (as defined by the Committee)
increased for the business unit covered by the grid by at least 1% and
decreased by 5% if such share decreased by at least 1% of the prior share.
For the Chief Executive Officer, the President (if any) and other
executive officers with staff functions, the above- described calculations
shall be performed only on the grid relating to the Company's consolidated
results. For the executive officers having responsibility for the Company's
North America Business Sector and the International Business Sector, the Award
shall be determined 30% by the above calculation performed on the Company's
consolidated results and 70% based on the results of the matrix for the North
America Business Sector and the International Business Sector, respectively.
For an executive officer who heads an operating unit, his award shall be based
20% of the above calculation performed on the matrix for the Company's
consolidated results and 80% based on the matrix for the operating unit's
results.
b. Attainment of performance goals for a particular Plan Year
shall be certified by the Committee and Awards will be paid for such Plan Year
at such time following the end of the Plan Year as shall be determined by the
Committee.
VI. Limitation on Awards
No Award for any Plan Year to a Participant shall exceed $3,000,000.
VII. Method of Payment of Awards
All Awards shall be paid in cash within 60 days of the certification
of performance goals and the resulting determination of the Award unless the
Committee has, prior to the grant of an Award, received and approved, in its
sole discretion,
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<PAGE> 50
a request by a Participant to defer receipt of any Award in accordance with the
following options:
a. An option to receive full cash payment at a date, specified in
the request, not less than one year from the date of the Award
nor more than one year after the Participant's date of
retirement; or
b. An option to receive the Award in equal annual installments
over a period, specified in the request, of not more than 15
years, such period commencing not less than one year from the
date of the Award nor more than one year after the
Participant's date of retirement.
Any request to defer receipt of an Award shall specify the particular
option chosen. Any amount deferred in accordance with the above options shall
bear interest at the prime rate of Trust Company Bank as in effect from time to
time from the date on which Awards which have not been deferred in accordance
with this Section VII are paid to the date of payment, but interest shall in no
case constitute interest which is "above-market" as set forth in Item 402 of
Regulation S-K promulgated by the Securities and Exchange Commission.
The Company has the right to deduct from any payment, in whole or in
part, of an Award, any taxes required to be withheld with respect to such
payment.
An employee who is selected as a Participant after the beginning of a
Plan Year or a Participant who retires, is granted a leave of absence or whose
employment is otherwise terminated prior to the end of such Plan Year shall
have his Award pro-rated to reflect his actual term of service. The Committee,
in its sole discretion, may reduce or refuse to pay such pro-rated Award.
Awards and interest thereon, if any, which are due to a Participant
and which remain unpaid at the time of his or her death shall be paid in full
to the executor or administrator of such Participant's estate within 90 days
from the date of the Participant's death.
VIII. Effect on Benefit Plans
Awards will be included in the computation of benefits under the
Employees' Retirement Plan, Overseas Retirement Plan and other retirement plans
maintained by the Company under which the Participant may be covered and the
Thrift Plan, subject to all
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<PAGE> 51
applicable laws and in accordance with the provisions of those plans.
Awards shall not be included in the computation of benefits under any
Group Life Insurance Plan, Travel Accident Insurance Plan, Personal Accident
Insurance Plan or under Company policies such as severance pay and payment for
accrued vacation, unless required by applicable laws.
IX. Determinations of the Committee
The Committee shall, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and shall make determinations and shall take such
other action in connection with or in relation to accomplishing the objectives
of the Plan as it deems necessary or advisable. Each determination or other
action made or taken pursuant to the Plan, including interpretation of the Plan
and the specific conditions and provisions of the Awards granted hereunder by
the Committee shall be final and conclusive for all purposes and upon all
persons including, but without limitation, the Participants, the Company, the
Committee, the Board of Directors, the officers, the affected employees of the
Company and their respective successors in interest. The Committee has full
discretion to reduce the amount of any Award or to refuse to pay any Award.
X. Amendment and Termination
The Board or the Committee may terminate the Plan, in whole or in
part, may suspend the Plan, in whole or in part from time to time, and may
amend the Plan from time to time, including the adoption of amendments deemed
necessary or desirable to correct any defect or supply an omission or reconcile
any inconsistency in the Plan or in any Award granted hereunder so long as
share owner approval has been obtained if required by Code Section 162(m). No
amendment, termination or modification of the Plan may in any manner affect
Awards theretofore granted without the consent of the Participant unless the
Committee has made a determination that an amendment or modification is in the
best interest of all persons to whom Awards have theretofore been granted, but
in no event may such amendment or modification result in an increase in the
amount of compensation payable pursuant to such Award.
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<PAGE> 52
XI. Applicable Law
The Plan and all rules and determinations made and taken pursuant
hereto shall be governed by the laws of the State of Georgia and construed
accordingly.
XII. Change in Control
Except as set forth herein, the Committee has no obligation to pay any
amounts under the Plan to a Participant who leaves the employ of the Company
for any reason. If there is a Change in Control (as defined in this Section
XII) at any time during a Plan Year, the Committee promptly shall determine the
Award which would have been payable to each Participant under the Plan for such
Plan Year if he had continued to work for the Company for such entire year and
all goals established under Section V had been met in full for such Plan Year,
and such Award multiplied by a fraction, the numerator of which shall be the
number of full calendar months he is an employee of the Company during such
Plan Year and the denominator of which shall be 12 or the number of full
calendar months the Plan is in effect during such Plan Year, whichever is less.
The payment of a Participant's nonforfeitable interest in his Award under this
Section XII shall be made in cash as soon as practicable after his employment
by the Company terminates or as soon as practicable after the end of such Plan
Year, whichever comes first.
A "Change in Control", for purposes of this Section XII, shall mean a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for election of directors
of the then outstanding securities of the Company or any successor of the
Company; (ii) during any period of two consecutive years or less, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease, for any reason, to constitute at least a majority of the Board
of Directors, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; (iii) the
share owners of the Company approve any merger or consolidation as a result of
which its stock shall be changed, converted or exchanged (other than a merger
with a wholly-owned subsidiary of the Company) or any
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<PAGE> 53
liquidation of the Company or any sale or other disposition of 50% or more of
the assets or earning power of the Company; or (iv) the share owners of the
Company approve any merger or consolidation to which the Company is a party as
a result of which the persons who were share owners of the Company immediately
prior to the effective date of the merger or consolidation shall have
beneficial ownership of less than 50% of the combined voting power for election
of directors of the surviving corporation following the effective date of such
merger or consolidation; provided, however, that no Change in Control shall be
deemed to have occurred if, prior to such time as a Change in Control would
otherwise be deemed to have occurred, the Board of Directors determines
otherwise.
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