<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE COCA-COLA COMPANY
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF THE COCA-COLA COMPANY APPEARS HERE]
ATLANTA, GEORGIA
M. DOUGLAS IVESTER
CHAIRMAN OF THE BOARD
AND
CHIEF EXECUTIVE OFFICER
March 5, 1999
Dear Share Owner:
We cordially invite you to attend the Annual Meeting of Share Owners, which
will be held on Wednesday, April 21, 1999, at 9:00 a.m., local time, in
Wilmington, Delaware.
The following notice of meeting identifies each business item for your
action. These items and the vote the Board of Directors recommends are:
<TABLE>
<CAPTION>
ITEM RECOMMENDED VOTE
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<S> <C>
1. Election of four Directors, FOR
2. Reapproval of the Company's Long-Term Performance
Incentive Plan, FOR
3. Reapproval of the Company's Executive Performance
Incentive Plan, FOR
4. Approval of the Company's 1999 Stock Option Plan, and FOR
5. Ratification of Ernst & Young LLP as independent
auditors FOR
</TABLE>
We have also included a proxy statement that contains more information about
these items and the meeting.
If you plan to attend the meeting, please mark the appropriate box on your
proxy card to help us plan for the meeting. You will need an admission card to
attend the meeting, which you can obtain as follows:
. If your shares are registered in your name, you are a share owner of
record. Your admission card is attached to your proxy card, and you will
need to bring it with you to the meeting.
. If your shares are in the name of your broker or bank, your shares are
held in street name. You will need to ask your broker or bank for an
admission card in the form of a legal proxy to bring with you to the
meeting. If you do not receive the legal proxy in time, bring your most
recent brokerage statement with you to the meeting so that we can verify
your ownership of Company stock and admit you to the meeting. However, you
will not be able to vote your shares at the meeting without a legal proxy.
Your vote is important. We encourage you to vote by proxy so that your
shares will be represented and voted at the meeting even if you cannot attend.
All share owners can vote by written proxy card. All share owners of record
and many street name share owners also can vote by proxy via touchtone
telephone from the U.S. and Canada, using the toll-free telephone number on
your proxy card, or via the Internet using the instructions on your proxy
card. And share owners may vote in person at the meeting, as described above.
/s/ M. Douglas Ivester
M. Douglas Ivester
<PAGE>
[LOGO OF THE COCA-COLA COMPANY APPEARS HERE]
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 Playhouse Theatre, Du Pont
Building, 10th and Market Streets, Wilmington, Delaware, on Wednesday, April
21, 1999, at 9:00 a.m., local time. The purposes of the meeting are:
1. To elect four Directors to serve until the 2002 Annual Meeting of
Share Owners,
2. To reapprove the Company's Long-Term Performance Incentive Plan,
3. To reapprove the Company's Executive Performance Incentive Plan,
4. To approve the Company's 1999 Stock Option Plan,
5. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company to serve for the 1999 fiscal year, and
6. To transact such other business as may properly come before the
meeting and at any adjournments or postponements of the meeting.
The Board of Directors set February 22, 1999, as the record date for the
meeting. This means that owners of Company Common Stock at the close of
business on that date are entitled to (1) receive notice of the meeting and (2)
vote at the meeting and any adjournments or postponements of the meeting. We
will make available a list of share owners of the Company as of the close of
business on February 22, 1999, for inspection during normal business hours from
April 7 through April 20, 1999, at the offices of Morris, Nichols, Arsht &
Tunnell, 1201 North Market Street, Wilmington, Delaware. This list will also be
available at the meeting.
By Order of the Board of Directors
Susan E. Shaw
Secretary
Atlanta, Georgia
March 5, 1999
EACH SHARE OWNER IS URGED TO VOTE PROMPTLY BY SIGNING AND RETURNING THE
ENCLOSED PROXY CARD, USING THE TELEPHONE VOTING SYSTEM, OR ACCESSING THE WORLD
WIDE WEB SITE INDICATED ON YOUR PROXY CARD TO VOTE VIA THE INTERNET. IF A SHARE
OWNER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY REVOKE THE PROXY AND VOTE
THE SHARES IN PERSON.
<PAGE>
THE COCA-COLA COMPANY
ONE COCA-COLA PLAZA
ATLANTA, GEORGIA 30313
March 5, 1999
PROXY STATEMENT
FOR ANNUAL MEETING OF SHARE OWNERS
TO BE HELD APRIL 21, 1999
The Board of Directors of The Coca-Cola Company (the "Company") furnishes
you with this Proxy Statement to solicit proxies on its behalf to be voted at
the 1999 Annual Meeting of Share Owners of the Company. The meeting will be
held at The Playhouse Theatre, Du Pont Building, 10th and Market Streets,
Wilmington, Delaware, on April 21, 1999, at 9:00 a.m., local time. The proxies
also may be voted at any adjournments or postponements of the meeting.
A share owner can revoke a proxy by any one of the following three actions:
giving written notice to the Secretary of the Company, delivering a later
dated proxy or voting in person at the meeting.
The mailing address of the principal executive offices of the Company is One
Coca-Cola Plaza, Atlanta, Georgia 30313. The date on which this Proxy
Statement and form of proxy are first being sent or given to share owners is
March 5, 1999.
All properly executed written proxies and all properly completed proxies
voted by telephone or via the Internet and delivered pursuant to this
solicitation (and not revoked later) will be voted at the meeting in
accordance with the directions given in the proxy. Below is a list of the
different votes share owners may cast at the meeting pursuant to this
solicitation.
. In voting on the election of four Directors to serve until the 2002
Annual Meeting of Share Owners, share owners may vote in one of the three
following ways:
(1) in favor of all nominees,
(2) withhold votes as to all nominees, or
(3) withhold votes as to specific nominees.
. In voting on the reapproval of the Long-Term Performance Incentive Plan,
the reapproval of the Executive Performance Incentive Plan, the approval
of the 1999 Stock Option Plan, and the ratification of the appointment of
Ernst & Young LLP as independent auditors, share owners may vote in one of
the three following ways:
(1) in favor of the proposal,
(2) against the proposal, or
(3) abstain from voting on the proposal.
Share owners should specify their choice for each matter on the enclosed form
of proxy. If no instructions are given, proxies which are signed and returned
will be voted FOR the election of all nominees, FOR the proposal to reapprove
the Long-Term Performance Incentive Plan, FOR the proposal to reapprove the
Executive Performance Incentive Plan, FOR the proposal to approve the 1999
Stock Option Plan, and FOR the proposal to ratify the appointment of Ernst &
Young LLP.
Directors will be elected by a plurality. All other proposals will require
approval by a majority of the votes cast by the holders of the shares of
Company Common Stock voting in person or by proxy at the meeting. Thus,
abstentions and broker non-votes will not be included in vote totals and will
not affect the outcome of the vote.
The telephone and Internet voting procedures are designed to authenticate
share-owners' identities, to allow share owners to vote their shares and to
confirm that their instructions have been properly recorded. Specific
instructions to be followed by owners holding registered shares or shares held
under certain Company plans who are interested in voting via telephone or the
Internet are set forth on the proxy card. In many cases, street name holders
also may vote via telephone or the Internet by following instructions provided
by their broker or bank.
Only owners of record of shares of Company Common Stock at the close of
business on February 22, 1999, are entitled to vote at the meeting or
adjournments or postponements of the meeting. Each owner of record on the
record date is entitled to one vote for each share of Company Common Stock
held. On February 22, 1999, there were 2,466,516,967 shares of Company Common
Stock issued and outstanding.
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
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.
The share owners elect approximately one-third of the members of the Board of
Directors annually. The terms of Cathleen P. Black, Warren E. Buffett, M.
Douglas Ivester and Susan B. King will expire at the 1999 Annual Meeting, and
each has been nominated to stand for reelection at the meeting to hold office
until the 2002 Annual Meeting of Share Owners and his or her successor is
elected and qualified.
Should any 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. If that occurs, the persons named in the
enclosed proxy will vote proxies that would otherwise be voted for all named
nominees for the election of the 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 CATHLEEN P.
BLACK, WARREN E. BUFFETT, M. DOUGLAS IVESTER AND SUSAN B. KING AS DIRECTORS TO
HOLD OFFICE UNTIL THE 2002 ANNUAL MEETING OF SHARE OWNERS AND UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED. PROXIES RECEIVED BY THE BOARD OF
DIRECTORS WILL BE VOTED FOR ALL OF THE NOMINEES UNLESS SHARE OWNERS SPECIFY A
CONTRARY CHOICE IN THEIR PROXY.
NOMINEES FOR ELECTION TO TERM EXPIRING 2002
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CATHLEEN P. BLACK Director since 1993
New York, New York Age 54
[Photo of Ms. Black has been President, Hearst Magazines, a unit of The
Cathleen P. Hearst Corporation, a major media and communications company,
Black] since November 1995, and a director of The Hearst Corporation
since January 1996. Until that time she served as President
and Chief Executive Officer of Newspaper Association of
America, a newspaper industry organization, since May 1991.
She served as a Director of the Company from April 1990 to
May 1991, and was again elected as a Director in October
1993. She is a director of International Business Machines
Corporation.
Member of the Audit and Public Issues Review Committees of
the Board of Directors of the Company.
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WARREN E. BUFFETT Director since 1989
Omaha, Nebraska Age 68
[Photo of Mr. Buffett is Chairman of the Board of Directors and Chief
Warren E. Executive Officer of Berkshire Hathaway Inc., a diversified
Buffett] holding company, and has held these positions for more than
the past five years. He is also a director of The Gillette
Company and The Washington Post Company.
Member of the Audit and Finance Committees of the Board of
Directors of the Company.
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2
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M. DOUGLAS IVESTER Director since 1994
Atlanta, Georgia Age 51
[Photo of Mr. Ivester was elected Chairman of the Board of Directors
M. Douglas and Chief Executive Officer of the Company on October 23,
Ivester] 1997. He served as President, Chief Operating Officer and a
Director of the Company from July 1994 to October 1997 and as
President of the North America Business Sector of the Company
from September 1991 until elected to the positions of
Executive Vice President and Principal Operating
Officer/North America effective April 1993. He is a director
of Georgia-Pacific Corporation, SunTrust Banks, Inc.,
SunTrust Bank, Atlanta and SunTrust Banks of Georgia, Inc.
Chairman of the Executive Committee of the Board of Directors
of the Company.
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SUSAN B. KING Director since 1991
Durham, North Carolina Age 58
[Photo of Ms. King has been Leader in Residence, Hart Leadership
Susan B. King] Program, Sanford Institute of Public Policy, Duke University,
a program for the development and advancement of leadership
and management skills in the public and private sectors,
since January 1995. She was Senior Vice President - Corporate
Affairs of Corning Incorporated from March 1992 through April
1994, and served as President of Corning's Steuben Glass
division from 1987 to March 1992. She is a director of
Guidant Corporation.
Member of the Compensation Committee (including its
Restricted Stock and Stock Option Subcommittees) and the
Public Issues Review Committee of the Board of Directors of
the Company.
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INCUMBENT DIRECTORS -- TERM EXPIRING 2001
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HERBERT A. ALLEN Director since 1982
New York, New York Age 59
[Photo of Mr. Allen is President, Chief Executive Officer and Managing
Herbert A. Director of Allen & Company Incorporated, a privately held
Allen] investment banking firm, and has held these positions for
more than the past five years.
Chairman of the Compensation Committee and a member of the
Executive and Finance Committees of the Board of Directors of
the Company.
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3
<PAGE>
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JAMES D. ROBINSON III Director since 1975
New York, New York Age 63
[Photo of Mr. Robinson is Chairman and Chief Executive Officer of RRE
James D. Investors, LLC, a private venture investment firm and
Robinson III] Chairman of Violy, Byorum & Partners Holdings, LLC, a private
firm specializing in financial advisory and investment
banking activities in Latin America. He previously served as
Chairman and Chief Executive Officer of American Express
Company from 1977 to 1993. He is a director of Bristol-Myers
Squibb Company, Cambridge Technology Partners, First Data
Corporation and Concur Technologies, Inc.
Chairman of the Committee on Directors and a member of the
Public Issues Review Committee of the Board of Directors of
the Company.
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PETER V. UEBERROTH Director since 1986
Newport Beach, California Age 61
[Photo of Mr. Ueberroth has been an investor and Managing Director of
Peter V. The Contrarian Group, Inc., a management company, since 1989.
Ueberroth] He is a director of Ambassadors International, Inc., CB
Richard Ellis Services, Inc., Promus Hotel Corporation and
Transamerica Corporation.
Chairman of the Audit Committee and a member of the
Compensation Committee (including its Restricted Stock and
Stock Option Subcommittees) of the Board of Directors of the
Company.
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INCUMBENT DIRECTORS -- TERM EXPIRING 2000
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RONALD W. ALLEN Director since 1991
Atlanta, Georgia Age 57
[Photo of Mr. Allen is a consultant to and advisory director of Delta
Ronald W. Air Lines, Inc., a major U.S. air transportation company. He
Allen] retired as Delta's Chairman of the Board of Directors,
President and Chief Executive Officer in July 1997, and had
been its Chairman of the Board of Directors and Chief
Executive Officer since 1987. He is a director of Aaron
Rents, Inc.
Member of the Executive Committee and the Committee on
Directors of the Board of Directors of the Company.
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DONALD F. MCHENRY Director since 1981
Washington, D.C. Age 62
[Photo of Mr. McHenry is Distinguished Professor in the Practice of
Donald F. Diplomacy at the School of Foreign Service, Georgetown
McHenry] University, and a principal owner and President of The IRC
Group, LLC, a New York City and Washington, D.C. consulting
firm. He has held these positions for more than the past five
years. He is a director of AT&T Corporation, BankBoston
Corporation, International Paper Company and SmithKline
Beecham plc.
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.
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4
<PAGE>
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SAM NUNN Director since 1997
Atlanta, Georgia Age 60
[Photo of Mr. Nunn has been a partner in the law firm of King &
Sam Nunn] Spalding since January 1997. He served as a member of the
United States Senate from 1972 through 1996. He is a director
of General Electric Company, National Service Industries,
Inc., Scientific-Atlanta, Inc., Texaco Inc. and Total System
Services, Inc.
Member of the Executive and Finance Committees of the Board
of Directors of the Company.
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PAUL F. OREFFICE Director since 1985
Lake Tahoe, Nevada Age 71
[Photo of Mr. Oreffice retired as Chairman of the Board of Directors of
Paul F. The Dow Chemical Company in 1992, which position he had held
Oreffice] for more than five years.
Member of the Finance Committee and the Compensation
Committee (including its Restricted Stock and Stock Option
Subcommittees) and the Committee on Directors of the Board of
Directors of the Company.
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JAMES B. WILLIAMS Director since 1979
Atlanta, Georgia Age 65
[Photo of Mr. Williams retired in March 1998 as Chairman of the Board
James B. of Directors and Chief Executive Officer of SunTrust Banks,
Williams] Inc., a bank holding company, which positions he had held for
more than the past five years. He continues to serve as a
director and Chairman of the Executive Committee of SunTrust
Banks, Inc. and is also a director of Genuine Parts Company,
Georgia-Pacific Corporation, Rollins, Inc., RPC, Inc. and
Sonat Inc.
Chairman of the Finance Committee and a member of the
Executive Committee of the Board of Directors of the Company.
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5
<PAGE>
OWNERSHIP OF EQUITY SECURITIES IN THE COMPANY
The following table sets forth information regarding beneficial ownership of
Company 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, all as of February 22, 1999.
<TABLE>
<CAPTION>
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED SHARES/18/
- ---- ------------------ -----------
<S> <C> <C>
Herbert A. Allen................................ 9,368,875/1/ *
Ronald W. Allen................................. 13,194/2/ *
Cathleen P. Black .............................. 15,541/3/ *
Warren E. Buffett............................... 200,004,396/4/ 8.1%
Susan B. King................................... 12,915/5/ *
Donald F. McHenry............................... 29,023/6/ *
Sam Nunn........................................ 2,039/7/ *
Paul F. Oreffice................................ 109,252/8/ *
James D. Robinson III........................... 16,298/9/ *
Peter V. Ueberroth.............................. 88,605/10/ *
James B. Williams............................... 106,053,931/11/ 4.3%
M. Douglas Ivester.............................. 5,334,915/12/ *
Jack L. Stahl................................... 1,282,326/13/ *
Douglas N. Daft................................. 969,748/14/ *
James E. Chestnut............................... 437,379/15/ *
Ralph H. Cooper................................. 1,031,801/16/ *
All Directors and Executive Officers as a
Group (25 Persons) ............................ 329,575,298/17/ 13.4%
</TABLE>
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* Less than 1% of issued and outstanding shares of Company Common Stock.
/1/ Includes 2,347,920 shares owned by Allen & Company Incorporated ("ACI").
Also includes 21,000 shares owned by Allen Capital International L.P. and
149,000 shares owned by Allen Capital L.P., each of which is an affiliate of
ACI's parent company, 258,938 shares which represent Mr. Allen's children's
interests in a partnership and 74,478 shares owned by his children; Mr. Allen
has disclaimed beneficial ownership of such shares. Does not include 200,000
shares held by ACI's pension plan, over which he does not have voting or
investment power. Also includes 1,851 phantom shares accrued under the
Deferred Compensation Plan for Non-Employee Directors.
/2/ Includes 2,000 shares owned by Mr. Allen's wife and 300 shares owned by
her children; Mr. Allen has disclaimed beneficial ownership of such shares.
Also includes 894 phantom shares accrued under the Deferred Compensation Plan
for Non-Employee Directors.
/3/ Includes 10,000 shares jointly owned with Ms. Black's husband. Also
includes 5,341 phantom shares accrued under the Deferred Compensation Plan for
Non-Employee Directors.
/4/ Shares owned indirectly through subsidiaries of Berkshire Hathaway Inc.,
the capital stock of which is owned 31.5% by Mr. Buffett and three trusts of
which he is trustee but in which he has no beneficial interest and 2.4% by his
wife. Also includes 4,396 phantom shares accrued under the Deferred
Compensation Plan for Non-Employee Directors.
/5/ Includes 915 phantom shares accrued under Ms. King's account under the
Deferred Compensation Plan for Non-Employee Directors.
/6/ Includes 410 shares owned by Mr. McHenry's grandchildren. Also includes
3,107 phantom shares accrued under the Deferred Compensation Plan for Non-
Employee Directors.
/7/ Includes 1,039 phantom shares accrued under Mr. Nunn's account under the
Deferred Compensation Plan for Non-Employee Directors.
/8/ Includes 1,019 shares owned by Mr. Oreffice's wife. Also includes 5,731
phantom shares accrued under the Deferred Compensation Plan for Non-Employee
Directors.
6
<PAGE>
/9/ Does not include 4,617,880 shares owned by three trusts of which Mr.
Robinson is a beneficiary. Also includes 4,298 phantom shares accrued under
the Deferred Compensation Plan for Non-Employee Directors.
/10/ Includes 22,000 shares owned by a trust of which Mr. Ueberroth is one
of two trustees and a beneficiary, 10,000 shares owned by his wife, 8,000
shares held by a foundation of which he is one of six directors and 12,000
shares held by an investment trust for his children. Also includes 15,605
phantom shares accrued under the Deferred Compensation Plan for Non-Employee
Directors.
/11/ Includes 90,139,562 shares owned by four foundations of which Mr.
Williams is, in all cases, one of five trustees, and 15,844,700 shares owned
by a foundation of which he is one of three trustees. Also includes 19,669
phantom shares accrued under the Deferred Compensation Plan for Non-Employee
Directors.
/12/ Includes 104,456 shares credited to Mr. Ivester's accounts under
The Coca-Cola Company Thrift & Investment Plan, 1,950,000 shares which are
subject to transfer restrictions and one share owned by his wife. Also
includes 2,400,000 shares which may be acquired upon the exercise of options
which are presently exercisable or which will become exercisable on or before
April 30, 1999.
/13/ Includes 38,637 shares credited to Mr. Stahl's accounts under
The Coca-Cola Company Thrift & Investment Plan, 406,000 shares which are
subject to transfer restrictions, 46,884 shares owned by his wife and 2,863
shares owned by his children. Does not include 3,200 shares owned by a trust
of which he is a beneficiary. Also includes 538,500 shares which may be
acquired upon the exercise of options which are presently exercisable or which
will become exercisable on or before April 30, 1999.
/14/ Includes 4,686 shares credited to Mr. Daft's accounts under
The Coca-Cola Company Thrift & Investment Plan, 200,000 shares which are
subject to transfer restrictions and 15,000 shares held by a foundation of
which he is sole trustee. Also includes 418,667 shares which may be acquired
upon the exercise of options which are presently exercisable or which will
become exercisable on or before April 30, 1999. Also includes 239 shares owned
by his son and 55,200 shares held by two trusts of which his wife is sole
trustee; Mr. Daft has disclaimed beneficial ownership of such shares.
/15/ Includes 2,596 shares credited to Mr. Chestnut's accounts under
The Coca-Cola Company Thrift & Investment Plan, 137,500 shares which are
subject to transfer restrictions, 1,500 shares owned by his wife and 900
shares owned by his children. Also includes 273,301 shares which may be
acquired upon the exercise of options which are presently exercisable or which
will become exercisable on or before April 30, 1999.
/16/ Includes 57,394 shares credited to Mr. Cooper's accounts under
The Coca-Cola Company Thrift & Investment Plan, 190,000 shares which are
subject to transfer restrictions, 800 shares owned by one of his children and
17,942 shares held in trusts for his children. Also includes 357,334 shares
which may be acquired upon the exercise of options which are presently
exercisable or which will become exercisable on or before April 30, 1999.
/17/ Includes 5,568,610 shares which may be acquired upon the exercise of
options which are presently exercisable or which will become exercisable on or
before April 30, 1999. Includes the phantom units listed in the above
footnotes.
/18/ Phantom units accrued under the Deferred Compensation Plan for Non-
Employee Directors and shares which may be acquired upon the exercise of
options are not counted as outstanding shares in calculating these
percentages.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and related regulations
of the Securities and Exchange Commission (the "SEC") require the Company's
executive officers and directors and certain persons who own more than ten
percent of Company Common Stock to file reports of their ownership of Company
Common Stock with the SEC and the New York Stock Exchange (the "NYSE"). The
regulations also require these persons to furnish the Company with copies of
all Section 16(a) reports they file. Based on the Company's review of the
copies of those reports received and written representations from each such
person who did not file an annual report with the SEC (Form 5) that no annual
report was due, the Company believes that all filing requirements applicable
to such persons have been complied with in 1998, except that James E.
Chestnut, Senior Vice President, filed a late Form 4 Report of Changes in
Beneficial Ownership of Securities with the SEC and the NYSE disclosing the
acquisition of 150 shares of Company Common Stock.
7
<PAGE>
PRINCIPAL SHARE OWNERS
Set forth in the table below is information as of December 31, 1998 with
respect to persons known to the Company to be the beneficial owners of more
than five percent of the Company's issued and outstanding stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED OF CLASS
---------------- ------------------ --------
<S> <C> <C>
Berkshire Hathaway Inc./1/ 200,000,000 8.1%
1440 Kiewit Plaza
Omaha, Nebraska 68131
SunTrust Banks, Inc./2/ 151,135,261 6.1%
303 Peachtree Street
Atlanta, Georgia 30308
</TABLE>
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/1/ Berkshire Hathaway Inc., a diversified holding company, has informed the
Company that certain of its subsidiaries hold an aggregate of 200,000,000
shares of Company Common Stock. The capital stock of Berkshire Hathaway Inc.
is beneficially owned 31.5% by Warren E. Buffett and three trusts of which he
is a trustee but in which he has no beneficial interest and 2.4% by his wife.
All of such shares of the Company are included in the share ownership of Mr.
Buffett disclosed in the table of beneficial ownership of securities above.
/2/ SunTrust Banks, Inc. ("SunTrust"), a bank holding company, has informed
the Company that, as of December 31, 1998, certain subsidiaries of SunTrust
held either individually or in various fiduciary and agency capacities an
aggregate of 151,135,261 shares, of which 102,868,765 shares, or 4.17% of
Company 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. SunTrust Bank, Atlanta owns individually 25,373,952 shares of
Company Common Stock, SunTrust Banks of Georgia, Inc. owns individually
12,212,544 shares of Company Common Stock and Preferred Surety Corporation, a
direct subsidiary of SunTrust Banks of Georgia, Inc. and an indirect
subsidiary of SunTrust, owns individually 10,680,000 shares of Company Common
Stock as to which SunTrust may be deemed a beneficial owner. Of the shares
held in fiduciary or agency capacities, such subsidiaries of SunTrust have
sole voting power with respect to 85,601,605 shares, shared voting power with
respect to 12,617,774 shares, sole investment power with respect to 55,489,634
shares and shared investment power with respect to 32,587,735 shares. As to
the shares described above, SunTrust has further informed the Company that
93,774,124 of such shares, or 3.8% of Company Common Stock, are held in
various fiduciary and agency capacities by SunTrust Bank, Atlanta, which is a
direct subsidiary of SunTrust Banks of Georgia, Inc. and an indirect
subsidiary of SunTrust.
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. All committees except the Executive Committee are composed entirely
of outside Directors. The members of each Committee are indicated on pages 2
through 5 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, to the
extent prohibited by law, amending the By-Laws of the Company or adopting or
recommending to the share owners of the Company any matter required by the
Delaware General Corporation Law to be submitted to share owners for approval.
The Executive Committee did not meet in 1998.
The Finance Committee reviews and recommends to the Board of Directors the
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 all of the financial operations of the Company.
The Finance Committee met five times in 1998.
8
<PAGE>
The Audit Committee 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 1998.
The Compensation Committee reviews and approves all salary arrangements and
other remuneration for officers of the Company. It or its subcommittees also
are responsible for review of certain benefit plans and for administration of
the Stock Option Plans, the Long-Term Performance Incentive Plan, the
Executive Performance Incentive Plan and the Restricted Stock Award Plans. The
Compensation Committee met four times in 1998, the Stock Option Subcommittee
met four times and the Restricted Stock Subcommittee met three times.
The Committee on Directors recommends to the Board of Directors candidates
for election to the Board of Directors. It also 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 1998. Share owners who wish the Committee on Directors to consider
their recommendations for nominees for the position of Director should submit
their recommendations in writing to the Committee in care of the Company's
Secretary at the Company's principal executive offices.
The Public Issues Review Committee 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 once in 1998.
In 1998, the Board of Directors held six meetings and Committees of the
Board of Directors held a total of 16 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 1998.
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. During 1998, outside Directors received
an annual retainer fee of $50,000, and $1,500 for each Board meeting or
Committee meeting attended. The chairman of each Committee received an
additional annual retainer fee of $5,000. In October 1998, the Directors'
compensation programs were amended to provide that, effective as of January 1,
1999, non-management Directors' compensation would consist of an annual
retainer of $125,000, payable $50,000 in cash and $75,000 in share units
accrued to the existing or new account of each Director under the Deferred
Compensation Plan for Non-Employee Directors (the "Deferred Compensation
Plan"), plus a $3,000 committee chairman fee and a $1,000 meeting attendance
fee.
Also effective as of January 1, 1999, the Directors' Retirement Plan was
terminated and account balances were vested. The vested account balances were
credited in share units to the existing or new account of each Director under
the Deferred Compensation Plan. The former Directors' Retirement Plan provided
that all Directors who were not employees of the Company and who, upon their
retirement from the Board of Directors, (i) had served at least five years on
the Board of Directors, and (ii) were at least 55 years old on the date of
such retirement, would be entitled to an annual retirement benefit equal to
the annual retainer then payable to the Directors.
The Deferred Compensation Plan provides that outside Directors may elect to
defer receipt of all or part of their annual cash retainer fee until a date or
dates no earlier than the year following the year in which they leave the
Board. Under this plan, retainer fees may be deferred in phantom shares of
Company Common Stock, which accrue phantom dividends on those phantom shares,
or cash. Cash deferrals are credited with interest at the prime lending rate
of SunTrust Bank, Atlanta while phantom shares appreciate (or depreciate) as
would an actual share of stock purchased on the deferral date. After a
participant's service as a Director terminates, cash deferrals will be paid in
cash, and phantom share deferrals will be paid in shares of Company Common
Stock.
9
<PAGE>
In addition, the Company provides certain insurance 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 Company business. The Company also provides health and
dental coverage. Costs to the Company for all such benefits for 1998 totaled
$37,491.
In 1998, the Company entered into a one-year agreement with The IRC Group,
LLC ("IRC"), a company of which Donald F. McHenry, a Director of the Company,
is President and a principal owner. Under this agreement, IRC provides
consulting services to the Company on international affairs and business
activities and is paid $185,000. The Company expects to use the services of
IRC in 1999.
CERTAIN TRANSACTIONS
James B. Williams, a Director of the Company, retired as Chairman of the
Board and Chief Executive Officer of SunTrust in March 1998, and continues to
serve as a director and Chairman of the Executive Committee 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, for which the Company paid fees totaling $466,200 in
1998. SunTrust Bank, Atlanta, a subsidiary of SunTrust, has extended a $100
million line of credit and a letter of credit to the Company, for which the
Company paid fees totaling $89,400 in 1998. SunTrust Bank, Atlanta also holds
equipment leases under which the Company paid $288,400 in 1998 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. A subsidiary of the Company acquired that building in 1982 as
an incidental part of a much larger transaction. In 1998, the Company
subsidiary was paid $296,000 and will be paid an estimated $297,000 in 1999
under the terms of the current lease. In the opinion of management, the terms
of such banking and credit arrangements and lease 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 their execution.
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. ("Berkshire Hathaway"). In 1998, the Company paid $295,500 to a
Berkshire Hathaway subsidiary for leased office space. Berkshire Hathaway also
holds a significant equity interest in American Express Company. In 1998, the
Company paid fees for credit card memberships, business travel and other
services in the ordinary course of business to subsidiaries of that company.
Sam Nunn is a partner in the law firm King & Spalding. King & Spalding
rendered legal services to the Company and its subsidiaries in 1998 and is
expected to render services to the Company and its subsidiaries in 1999.
James D. Robinson III is Chairman of Violy, Byorum & Partners Holdings, LLC,
a private firm specializing in financial advisory and investment banking
activities in Latin America. This firm provided advisory services to the
Company and its subsidiaries in 1998 in connection with a proposed transaction
and is expected to render services to the Company and its subsidiaries in
1999.
See "Committees of the Board of Directors; Meetings and Compensation of
Directors" on pages 8-10 and "Compensation Committee Interlocks and Insider
Participation" on page 21.
10
<PAGE>
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in
1998 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
ANNUAL COMPENSATION RESTRICTED UNDERLYING ALL OTHER
-------------------------- STOCK OPTIONS/SAR LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS/2/ AWARDS/3/ AWARDS(#) PAYOUTS/5/ SATION/6/
- --------------------------- ---- ---------- ---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
M. Douglas Ivester 1998 $1,250,000 $1,500,000 $16,875,000/4/ 0 $ 702,000 $142,799
Chairman of the 1997 856,250 2,000,000 8,840,625/4/ 0 1,072,855 102,857
Board and Chief 1996 725,000 1,200,000 7,387,500/4/ 0 797,877 85,530
Executive Officer/1/
Jack L. Stahl 1998 465,000 275,000 2,700,000/4/ 0 429,300 61,716
Senior Vice 1997 452,250 315,000 0 87,000 659,547 61,663
President 1996 422,000 300,000 0 90,000 659,547 54,356
Douglas N. Daft 1998 415,250 275,000 2,700,000/4/ 0 351,900 33,749
Senior Vice 1997 385,000 315,000 0 87,000 440,568 31,941
President 1996 364,583 285,000 0 95,000 440,568 23,070
James E. Chestnut 1998 365,000 275,000 2,531,250/4/ 0 351,900 28,125
Senior Vice 1997 338,750 300,000 707,250/4/ 55,000 544,968 18,413
President 1996 307,500 275,000 1,477,500/4/ 60,000 NA 16,125
Ralph H. Cooper 1998 374,583 225,000 2,025,000/4/ 0 277,200 30,579
Senior Vice 1997 360,000 250,000 0 50,000 440,568 29,091
President 1996 332,500 215,000 0 55,000 440,568 24,344
</TABLE>
- --------
/1/ Mr. Ivester was elected Chairman of the Board and Chief Executive
Officer of the Company on October 23, 1997, and such event is reflected in the
compensation amounts disclosed for 1997. Prior to that time, Mr. Ivester
served as President and Chief Operating Officer of the Company.
/2/ The amounts in the Bonus column for 1998 for Messrs. Ivester, Stahl,
Daft and Chestnut were discretionary awards granted by the Compensation
Committee in consideration of the contributions of these executive officers
during 1998. Amounts in that column for 1997 and 1996 for Messrs. Ivester and
Daft included both discretionary awards and awards under the Executive
Performance Incentive Plan and for Messrs. Stahl and Chestnut were awards
under the Executive Performance Incentive Plan. Under the Executive
Performance Incentive Plan approved by the share owners of the Company in
1994, cash awards are made to participants based upon the individual's
contributions to the improvement of operating results, growth, profitability
and efficient operation of the Company. Awards are paid to participants
annually during the year following the plan year after certification of
performance goals. 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, prorated to reflect the
number of months a participant was employed in the plan year. No awards were
made to any executives under the Executive Performance Incentive Plan for
1998. The amounts in the Bonus column for Mr. Cooper for 1998, 1997 and 1996
were awards under the Annual Incentive Performance Plan ("Annual Plan"). Under
the Annual Plan (which does not cover any executive who is selected to
participate in the Executive Performance Incentive Plan), the Compensation
Committee uses economic profit growth, unit case volume and personal
performance measures to determine awards.
/3/ 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
11
<PAGE>
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 to executive officers lapse when the recipient retires, becomes
disabled or dies, or upon a change in control. Currently, restrictions on
awards granted to executive officers 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 recipient 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.
The shares awarded under these plans have been adjusted, as necessary, to
reflect the 2-for-1 stock splits that occurred on May 1, 1996, May 1, 1992 and
May 1, 1990, and the 3-for-1 stock split that occurred on June 16, 1986. Under
these plans, Mr. Ivester was originally awarded 689,000 shares, which,
adjusted for such stock splits, at the end of 1998 aggregated 1,950,000 shares
(value at year end equaled $130,650,000, which is 328% of the value at grant
dates); Mr. Stahl was originally awarded 112,000 shares, which, adjusted for
such stock splits, at the end of 1998 aggregated 406,000 shares (value at year
end equaled $27,202,000, which is 396% of the value at grant dates); Mr. Daft
was originally awarded 95,000 shares, which, adjusted for such stock splits,
at the end of 1998 aggregated 200,000 shares (value at year end equaled
$13,400,000, which is 205% of the value at grant dates); Mr. Chestnut was
originally awarded 108,500 shares, which, adjusted for such stock splits, at
the end of 1998 aggregated 137,500 shares (value at year end equaled
$9,212,500, which is 142% of the value at grant dates); and Mr. Cooper was
originally awarded 70,000 shares, which, adjusted for such stock splits, at
the end of 1998 aggregated 190,000 shares (value at year end equaled
$12,730,000, which is 281% of the value at grant dates). The restricted stock
was awarded pursuant to the 1983 Restricted Stock Award Plan and the 1989
Restricted Stock Award Plan.
Dividends on all stock awards are paid at the same rate as paid to all share
owners. The 1983 Restricted Stock Award Plan provides for the Company to make
cash payments to recipients of awards made under 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.
/4/ These restricted stock awards were made pursuant to the 1989 Restricted
Stock Award Plan. Thus, as was discussed in footnote 3, all income taxes
resulting from these awards are the responsibility of the recipient.
/5/ Includes the entire amount of the awards for the three-year periods
ending December 31, 1998, 1997 and 1996, respectively, although one-half of
each such amount is subject to forfeiture if the recipient leaves the employ
of the Company prior to December 31, 2000, and December 31, 1999,
respectively, except by reason of retirement, death or disability or unless
pursuant to a change in control.
/6/ For 1998, includes for Mr. Ivester: $4,800 contributed by the Company to
The Coca-Cola Company Thrift & Investment Plan (the "Thrift Plan," described
below), $117,411 accrued under The Coca-Cola Company Supplemental Benefit Plan
(the "Supplemental Plan," described below), and $20,588 in above-market
interest credited on amounts deferred under the Company's 1986 Compensation
Deferral and Investment Program (the "CDIP," described below); for Mr. Stahl:
$4,800 contributed by the Company to the Thrift Plan, $36,328 accrued under
the Supplemental Plan, and $20,588 in above-market interest credited on
amounts deferred under the CDIP; for Mr. Daft: $4,800 contributed by the
Company to the Thrift Plan and $28,949 accrued under the Supplemental Plan;
for Mr. Chestnut: $4,800 contributed by the Company to the Thrift Plan, and
$23,325 accrued under the Supplemental Plan; and for Mr. Cooper: $4,800
contributed by the Company to the Thrift Plan, and $25,779 accrued under the
Supplemental Plan.
The Thrift Plan is a tax-qualified defined contribution plan intended to
satisfy the requirements of Section 401(k) of the Internal Revenue Code of
1986. The Company contributes to each participant's account maintained under
the Thrift Plan an 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) $160,000 for 1998, 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
12
<PAGE>
theoretical Company matching contribution under the Thrift Plan for each
participant, without regard to the legally imposed maximum, and the maximum
contribution permitted under law is used to determine the number of
theoretical shares of Company Common Stock which would have been purchased for
the participant's account in the absence of the IRS limitation on participant
earnings of $160,000 for 1998. The value of the accumulated theoretical
shares, including dividends, is paid in cash to the individual at termination
of employment. A participant will forfeit all rights to future benefits under
the Supplemental Plan if the participant engages in competition with the
Company following termination of employment.
The CDIP 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 $50,000 of the compensation earned between May 1986 and
April 1987. Effective January 1, 1998, the rate was set at 14% per annum. At
enrollment, each participant elected a method of distribution either (a) as a
level annuity payable from the date of retirement until attainment of age 80,
or (b) split between pre-retirement payments commencing no earlier than 1993
and a level annuity payable from the date of retirement until attainment of
age 80. Participants are allowed to make a one-time election to defer the
commencement of monthly annuity payments until the earlier of age 65 or death.
This election is, generally, only effective if the participant terminates
employment at least one year after making the election and after reaching
early retirement age under the Company's pension plan. If a participant
terminates employment prior to early retirement age, the amounts credited,
generally, will be paid out in a lump sum in cash when the participant no
longer is an employee of the Company or of any participating subsidiary.
OPTION AWARDS: No option awards were made to Mr. Ivester and the other four
most highly compensated executive officers in 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES/1/
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS/SARS
UNEXERCISED AT FY-END ($)
OPTIONS/SARS AT (BASED ON
FY-END (#) $67 PER SHARE)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED/2/ UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- --------------- --------------------
<S> <C> <C> <C> <C>
M. Douglas Ivester 599,260 $36,994,939/3/ 2,400,000/ $106,483,750/
0 0
Jack L. Stahl 248,000 15,229,499/4/ 518,832/ 18,461,521/
78,168 838,604
Douglas N. Daft 40,000 3,010,312/5/ 398,445/ 15,933,246/
79,555 863,754
James E. Chestnut -- -- 260,523/ 8,409,382/
50,277 545,751
Ralph H. Cooper 8,792 518,041/6/ 345,667/ 14,741,245/
45,833 498,427
</TABLE>
- --------
/1/ The share numbers, and market and exercise prices have been adjusted, as
necessary, for the 2-for-1 stock splits that occurred on May 1, 1996, May 1,
1992 and May 1, 1990.
/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 Company Common Stock from the option grant date to the option
exercise date. No cash is realized until the shares received upon exercise of
an option are sold.
/3/ The exercise price of the stock option was $4.64063, which is equal to
the fair market value of a share of Company Common Stock on the date of grant,
which was July 21, 1988.
/4/ The exercise prices of the stock options were $4.64063 for 200,000
shares and $5.35156 for 48,000 shares, which is equal to the fair market value
of a share of Company Common Stock on the grant dates, which were July 21,
1988 and November 23, 1988, respectively.
/5/ The exercise price of the stock option was $9.30469, which is equal to
the fair market value of a share of Company Common Stock on the date of grant,
which was March 21, 1990.
/6/ The exercise price of the stock option was $4.64063, which is equal to
the fair market value of a share of Company Common Stock on the date of grant,
which was July 21, 1988.
13
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR/1/
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS/2/
NUMBER OF OR OTHER UNDER NON-STOCK PRICE-
SHARES, UNITS PERIOD UNTIL BASED PLANS
OR OTHER MATURATION OR -------------------------------
NAME RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM
- ---- ------------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
M. Douglas Ivester...... 1,375,000 3 years $343,750 $1,375,000 $2,406,250
Jack L. Stahl........... 488,000 3 years 122,000 488,000 854,000
Douglas N. Daft......... 488,000 3 years 122,000 488,000 854,000
James E. Chestnut....... 391,000 3 years 97,750 391,000 684,250
Ralph H. Cooper......... 311,000 3 years 77,750 311,000 544,250
</TABLE>
- --------
/1/ Effective January 1, 1982, and as amended and approved in 1994 by share
owners of the Company, the Company has established a Long-Term Performance
Incentive Plan. The Compensation Committee, which administers the plan, awards
incentive compensation to certain executive and senior officers of the
Company. The Committee determines a base for each participant. The base is
calculated on the participant's salary grade midpoint and level of
responsibility, for a three-year plan period, and the base cannot be increased
for that period. The Committee also sets a matrix which contains the target
levels for the two performance measures: "Growth in Unit Case Sales" and
"Growth in Economic Profit." Actual awards are determined after the end of the
three-year period and range from 0% to 175% of the participant's base. The
plan is not based on the price of Company 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, retirement or a change in control of the Company during
such two-year period. The participant is entitled to accrue 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 .25 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 1.75 times the targeted
amount.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ASSUMED AVERAGE ANNUAL YEARS OF CREDITED SERVICE WITH THE COMPANY
COMPENSATION FOR FIVE-YEAR ------------------------------------------------------
PERIOD PRECEDING RETIREMENT 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 500,000 $ 175,000 $ 200,000 $ 225,000 $ 250,000 $ 275,000
1,000,000 350,000 400,000 450,000 500,000 550,000
1,500,000 525,000 600,000 675,000 750,000 825,000
2,000,000 700,000 800,000 900,000 1,000,000 1,100,000
2,500,000 875,000 1,000,000 1,125,000 1,250,000 1,375,000
3,000,000 1,050,000 1,200,000 1,350,000 1,500,000 1,650,000
3,500,000 1,225,000 1,400,000 1,575,000 1,750,000 1,925,000
4,000,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000
4,500,000 1,575,000 1,800,000 2,025,000 2,250,000 2,475,000
5,000,000 1,750,000 2,000,000 2,250,000 2,500,000 2,750,000
</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 or later based on an employee's
assumed average annual compensation for the five-year period preceding
retirement and assuming actual retirement on January 1, 1999. The benefits
listed in the table are not subject to any reduction for Social Security or
other offset amounts.
14
<PAGE>
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 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) $160,000 for 1998 (the limit set by the Internal
Revenue Code of 1986), whichever is lower, times the employee's years of
credited service. 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. Those limitations in 1998 include a maximum annual
benefit at age 65 of $125,000. If a participant terminates employment before
early retirement age (for any reason other than death), the participant will
forfeit the portion of the Supplemental Plan pension benefit attributable to
credited service after December 31, 1993, unless the Compensation Committee of
the Board of Directors decides otherwise. In addition, a participant will
forfeit all rights to future pension benefits under the Supplemental Plan if
the participant competes against the Company following termination of
employment. If a participant is entitled to a pension benefit from the
Retirement Plan because of termination of employment for any reason within two
years after 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.
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 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. Eligibility for
early retirement benefits under the Key Executive Plan starts 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
may commence when the participant reaches age 65. These vested benefits are
payable on termination of employment. 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. There is also a benefit to a participant's surviving
spouse if the participant dies after retirement. A participant will forfeit
all rights to future benefits under the Key Executive Plan if the participant
competes against the Company following termination of employment. 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, 1998, for the
persons named in the Summary Compensation Table are as follows: Mr. Ivester,
19.2 years; Mr. Stahl, 19.5 years; Mr. Daft, 22.3 years; Mr. Chestnut, 26.4
years; and Mr. Cooper, 28.9 years.
15
<PAGE>
The Company has made previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that incorporate
future filings, including this Proxy Statement, in whole or in part. However,
the following Performance Graph and the Report of the Compensation Committee
of the Board of Directors of The Coca-Cola Company and its Subcommittees 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
TOTAL RETURN
STOCK PRICE PLUS REINVESTED DIVIDENDS
[PERFORMANCE GRAPH APPEARS HERE]
THE
MEASUREMENT PERIOD COCA-COLA THE FOOD, BEVERAGE
(FISCAL YEAR ENDING) COMPANY S&P 500 AND TOBACCO*
- -------------------- --------- ------- --------------
Measurement PT -
12/31/93 $100 $100 $100
FYE 12/31/94 $117 $101 $106
FYE 12/31/95 $172 $139 $149
FYE 12/31/96 $246 $171 $178
FYE 12/31/97 $314 $228 $236
FYE 12/31/98 $318 $293 $262
* 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:
Anheuser-Busch Companies, Inc., Brown-Forman Corporation, Adolph Coors
Company, Coca-Cola Enterprises Inc., PepsiCo, Inc., Whitman Corporation,
Archer-Daniels-Midland Company, Bestfoods, Campbell Soup Company, ConAgra,
Inc., Dole Food Company, Inc., General Mills, Inc., H.J. Heinz Company,
Hershey Foods Corporation, Hormel Foods Corporation, Kellogg Company,
McCormick & Company, Incorporated, Nabisco Holdings Corp., The Quaker Oats
Company, Ralston Purina Company, Sara Lee Corporation, Tyson Foods, Inc.,
Wm. Wrigley Jr. Company, Philip Morris Companies Inc., Universal
Corporation and UST Inc.
16
<PAGE>
The Wall Street Journal periodically changes the companies reported as a
part of the Food, Beverage and Tobacco Groups of companies. At the time the
Company's 1998 Proxy Statement was published, the Groups excluded Tyson Foods,
Inc., which is now included, and CPC International, Inc., which is now
reported as Bestfoods.
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1993.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF THE COCA-COLA COMPANY
AND ITS SUBCOMMITTEES ON EXECUTIVE COMPENSATION
In accordance with 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 and related subcommittees (the
"Committees") offer 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 Committees 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 Committees adhere 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 base
salary, annual incentives and employee benefits.
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 cases
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 supports 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 is based heavily 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 officers named in the
compensation table, other executive officers or other key individuals covered
by the executive compensation plans of the Company. Further, the Committees do
not follow the principles in a mechanical fashion; rather, the Committees use
experience and judgment in determining the mix of compensation for each
individual. The Committees believe that current compensation practices and
levels meet the principles described herein.
These principles have guided executive compensation practices since the
early 1980's, and the Committees believe the performance of the Company during
this period validates the appropriateness of the principles.
The sections that follow illustrate these principles.
17
<PAGE>
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, and to
cumulatively provide a level of total compensation 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 companies exhibiting leadership in the performance measures over
sustained periods are selected as benchmarks for the Company's total
compensation standards.
The philosophy underlying each category is discussed herein.
BASE SALARY. Base salary for the executive officer group is targeted within
the third quartile of the range for the comparator group. Increases in base
salary are at competitive levels but occur at frequencies ranging from 15
months to 36 months, depending upon performance, time in job, level of pay,
participation in other long-term compensation programs and other factors. The
lag between increases in base pay is designed to ensure that focus remains on
the long-term portion of the total compensation package. Increases in base pay
are determined by individual performance rather than Company performance, and
are based on subjective evaluations of all factors.
Base salary for Mr. Ivester was not increased in 1998. Mr. Ivester's last
increase was in November 1997 and reflected his being named Chairman of the
Board.
With individual variation, base pay for the executive officer group
generally falls within the targeted third quartile. Mr. Ivester's base pay
falls in the lower portion of the third quartile.
ANNUAL INCENTIVES. The Company has maintained the Annual Performance
Incentive Plan, and 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. For those executive officers
participating in the Executive Performance Incentive Plan, the Compensation
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 certain key executives, including participating executive
officers. The actual award is based on economic profit growth, unit case
volume increases and personal performance, and may be greater or less than
the target annual incentive. Below a threshold level of performance, no
awards may be granted. Generally, economic profit growth and unit case
volume increases are weighted higher than personal performance, but the
weightings may be adjusted to take into account unusual circumstances.
Opportunities are targeted within the third quartile of the range of the
comparator group.
EXECUTIVE PERFORMANCE INCENTIVE PLAN. This plan was approved by share
owners in 1994. The Committees may approve some or all of the executive
officers for participation in this plan each year, and executive officers
selected for participation are not eligible for participation in the Annual
Performance Incentive Plan. Target annual incentives are established for
each approved executive officer. The award is
18
<PAGE>
based on earnings per share gain, unit case volume increases and change in
share of soft drink sales, and may be greater or less than the target
annual incentive set under this plan. Nearly 95% of the award is determined
from equal weightings on volume growth and earnings per share, with the
remaining amount determined by market share change. 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 within the third quartile of the range of the
comparator group.
Competitive 1998 annual incentive data is not yet available. Measured
against historical competitive standards, cumulative annual incentives paid
to executive officers generally fell within the targeted third quartile,
with individual variation.
Mr. Ivester earned an annual incentive award of $1,500,000 for 1998, all
of which was paid as a discretionary award. The award reflects both the
Company's performance in 1998 and the Committee's confidence in Mr.
Ivester's leadership in difficult times.
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 for executive officers in the top (fourth)
quartile of the comparator group range. Because base salary and annual
incentives are targeted within the third quartile, the compensation focus for
executive officers is clearly on long-term incentives. The scope of long-term
incentive opportunities targeted for each executive officer is determined
first by the difference between the desired level of total compensation and
the combined amount of base salary, employee benefits and annual incentives.
The actual long-term incentive amount is influenced by both individual and
Company performance.
Factors which influence decisions regarding what form of long-term
incentives to grant to a particular executive officer include individual
performance, 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.
In keeping with the principles set forth at the beginning of this report, in
1996 the Compensation Committee established stock ownership guidelines for
officers and key employees of the Company. The guidelines for stock ownership
range from stock worth two to ten times base salary, depending on job level,
and are particularly aggressive compared to guidelines set by other companies.
Only stock purchased by the individual is considered for purposes of meeting
the ownership guidelines. Stock granted as matching contributions in the
Thrift Plan or as restricted stock is not considered in measuring compliance
with the guidelines. Penalties in the form of reduced future option grants may
be applied to those who do not meet the guidelines within five years of
becoming covered by the guidelines.
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, grants
made 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.
In 1998, Mr. Ivester was granted 250,000 shares of restricted stock, his
only form of equity grant, as a reflection of his performance and effective
leadership of the Company. Executive officers, as a group, received 555,000
shares of restricted stock in 1998.
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.
19
<PAGE>
Approximately 8,200 employees received option grants in 1997. This number
grew to approximately 8,900 in 1998. The number of persons eligible to
receive options continues to expand. As recently as 1992, stock options
were granted to only 1,900 employees.
Executives are encouraged to hold shares received upon the exercise of
the options, linking their interests to those of share owners.
In 1998, Mr. Ivester did not receive stock options.
LONG-TERM PERFORMANCE INCENTIVE PLAN. The Long-Term Performance Incentive
Plan is a three-year performance plan. The two performance measures in the
current plan are unit case volume growth and growth in economic profit. The
plan, as amended and submitted for share-owner approval, includes those two
performance measures plus two additional performance measures--operating
profit margin and share of sales--and provides that the Committee may, at
the beginning of a performance period, designate two or more of such
measures to apply in calculating long-term incentive awards for such
period. The Compensation Committee believes that these factors are the key
contributors, over time, to the creation of share-owner value. Below a
threshold level of performance, no awards can be earned. Restrictions are
attached on one-half of any award earned for two years after the end of the
performance period. 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.
Mr. Ivester earned an award of $702,000 for the performance period ended
December 31, 1998. Actual growth in unit case volume and economic profit
for the three-year period determined the amount of this award, which fell
below the middle 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 are designed to
provide a safety net of protection against the financial catastrophes that can
result from illness, disability or death, and to provide a reasonable level of
retirement income based on years of service with the Company. 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.
TAX COMPLIANCE POLICY. 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. If certain conditions are met, including the
removal of positive discretion in the determination of individual rewards,
compensation may be excluded from consideration of the $1 million limit. The
policy of the Committees related to this Act is to establish and maintain a
compensation program which maximizes the creation of long-term share-owner
value.
In 1994, share owners approved the Executive Performance Incentive Plan and
a revised Long-Term Performance Incentive Plan, both of which meet the
conditions necessary for exclusion from consideration of non-deductibility.
Both plans are being presented to share owners for approval again in 1999 as
required to maintain the deductibility of compensation paid pursuant to such
plans. The Company's Stock Option Plan by its terms meets the necessary
conditions, and the new 1999 Stock Option Plan is being submitted for share-
owner approval so that it will also meet the necessary conditions. The actions
taken evidence the approach of the Committees to comply with the intent of
this Act. It must be noted, however, that the Committees are obligated to the
Board and the share owners of the Company to recognize and reward performance
which increases the value of the Company. Accordingly, the Committees will
continue to exercise discretion in those instances where the mechanistic
approaches necessary under tax law considerations would compromise the
interests of share owners.
20
<PAGE>
SUBCOMMITTEES. Based on requirements of various tax and securities rules and
regulations, two subcommittees of the Compensation Committee (the Restricted
Stock Subcommittee and the Stock Option Subcommittee) met and took action in
1998.
SUMMARY. The Committees believe 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
Committees caution 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
Paul F. Oreffice
Peter V. Ueberroth
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company is composed entirely of the four
outside Directors named as signatories to the Compensation Committee report
above, as was the case during fiscal 1998. Compensation Committee members do
not have any non-trivial professional, familial or financial relationship with
the CEO, other executive officers or the Company, other than his or her
directorship.
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
Managing 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 located at 711 Fifth Avenue, New York, New York. A
subsidiary of the Company acquired that building in 1982 as an incidental part
of a much larger transaction. The current lease, as modified from time to
time, was entered into in 1985. In 1998, ACI paid approximately $2.4 million
under the lease and it is expected that ACI will pay a similar amount in 1999
under the terms of the current lease. In the opinion of management, the terms
of the lease, as modified, 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.
CERTAIN INVESTEE COMPANIES
The Company currently holds approximately 40% of the issued and outstanding
shares of Coca-Cola Enterprises Inc. ("Coca-Cola Enterprises"), approximately
43% of the issued and outstanding shares of Coca-Cola Amatil Limited
("Coca-Cola Amatil"), and approximately 50.5% of the issued and outstanding
shares of Coca-Cola Beverages plc ("Coca-Cola Beverages") (Coca-Cola
Enterprises, Coca-Cola Amatil and Coca-Cola Beverages are referred to as the
"Investee Companies").
CERTAIN TRANSACTIONS WITH THE INVESTEE COMPANIES
James B. Williams, a Director of the Company, retired as Chairman of the
Board and Chief Executive Officer of SunTrust in March 1998, and continues to
serve as a director and Chairman of the Executive Committee of SunTrust.
Subsidiary banks of SunTrust engaged in ordinary course of business banking
transactions in 1998, and are expected to engage in similar transactions in
1999, with Coca-Cola Enterprises and its subsidiaries, including the making of
loans on customary terms, for which fees of approximately $766,900 were paid
in 1998.
Warren E. Buffett, a Director of the Company, is Chairman of the Board of
Directors, Chief Executive Officer and a major share owner of Berkshire
Hathaway Inc., which company holds a significant equity interest
21
<PAGE>
in American Express Company. Coca-Cola Enterprises paid fees to American
Express Company for credit card memberships, business travel and other
services in the ordinary course of business to subsidiaries of that company.
OWNERSHIP OF SECURITIES IN THE INVESTEE COMPANIES
The following table sets forth information regarding ownership of the stock
of the Investee Companies by the Directors, the Company's five most highly
compensated executive officers and the Directors and executive officers of the
Company as a group who own any shares of such stock, all as of February 18,
1999.
<TABLE>
<CAPTION>
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME COMPANY BENEFICIALLY OWNED SHARES/6/
- ---- ------- ------------------ -----------
<S> <C> <C> <C>
Herbert A. Allen......... Coca-Cola Enterprises 5,616,218/1/ 1.32%
Donald F. McHenry........ Coca-Cola Enterprises 1,004 *
Peter V. Ueberroth....... Coca-Cola Enterprises 3,032/2/ *
M. Douglas Ivester....... Coca-Cola Enterprises 53,330/3/ *
Coca-Cola Amatil 3,125 *
Coca-Cola Beverages 3,125 *
Jack L. Stahl............ Coca-Cola Enterprises 3,000 *
Coca-Cola Amatil 3,906 *
Coca-Cola Beverages 3,906 *
Douglas N. Daft.......... Coca-Cola Amatil 4,618 *
Coca-Cola Beverages 4,520 *
James E. Chestnut........ Coca-Cola Amatil 1,367 *
Coca-Cola Beverages 1,337 *
Ralph H. Cooper.......... Coca-Cola Enterprises 2,000/4/ *
All Directors and
Executive Officers as a
Group (25 Persons)...... Coca-Cola Enterprises 5,682,502/5/ 1.34%
Coca-Cola Amatil 13,016 *
Coca-Cola Beverages 29,763 *
</TABLE>
- --------
*Less than 1% of issued and outstanding shares of common stock of the
indicated entity.
/1/Includes 5,383,400 shares owned by Allen & Company Incorporated ("ACI").
Also includes 160,518 shares which represent Mr. Allen's children's interests
in a partnership and 27,000 shares owned by his children; Mr. Allen has
disclaimed beneficial ownership of such shares. Does not include 105,000
shares held by ACI's pension plan over which Mr. Allen does not have voting or
investment power.
/2/Shares are owned by a trust of which Mr. Ueberroth is one of two
trustees.
/3/Includes 630 shares jointly owned with Mr. Ivester's parents and 9,950
phantom units issued under the Coca-Cola Enterprises Inc. Deferred
Compensation Plan for Non-Employee Director Compensation. Also includes 2,388
shares owned by his wife and 255 shares jointly owned by his wife and his
mother-in-law; Mr. Ivester has disclaimed beneficial ownership of such shares.
/4/Shares are owned by Mr. Cooper's wife.
/5/Includes 1,415 shares which may be acquired upon the exercise of
currently exercisable options. Includes 1,503 phantom shares as well as the
phantom shares listed in the above footnotes.
/6/Phantom units issued under the Coca-Cola Enterprises Inc. Deferred
Compensation Plan for Non-Employee Director Compensation and shares which may
be acquired upon the exercise of options are not counted as outstanding in
calculating these percentages.
22
<PAGE>
PROPOSAL TO REAPPROVE THE
LONG-TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY, AS AMENDED
(ITEM 2)
The Long-Term Performance Incentive Plan of The Coca-Cola Company was
approved by the share owners at the 1994 Annual Meeting. That Plan, as amended
and restated (the "Long-Term Plan") is being submitted for reapproval by the
share owners because reapproval by share owners every five years is required
to meet the conditions necessary for the Company to exclude awards under the
Long-Term Plan from the $1 million limit on the Company's deductions from
federal income taxes. On February 17, 1999 the Compensation Committee
recommended that the Board adopt the Long-Term Plan and on February 18, 1999
the Board of Directors adopted the Long-Term Plan and directed that the Long-
Term Plan be submitted to the share owners for reapproval at the 1999 Annual
Meeting. The Long-Term Plan will be reapproved upon the affirmative vote of a
majority of the votes cast by holders of the shares of Company Common Stock
voting in person or by proxy at the Annual Meeting.
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
certain other senior officers of the Company ("Eligible Officers"), which
encourages them to more closely identify with share-owner interests and to
achieve financial results consistent with the Company's long range business
plans. It also provides a vehicle to attract and retain key executives who are
responsible for moving the business forward.
SUMMARY DESCRIPTION OF THE LONG-TERM PLAN
The following summary of the Long-Term Plan is qualified in its entirety by
the text of the Long-Term Plan, which is attached as Exhibit A. The Long-Term
Plan is 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
Related Companies (as defined in the Plan) 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 select at
least two performance criteria from the following four alternatives:
"Growth in Unit Case Sales," "Operating Profit Margin," "Share of Sales"
and "Growth in Economic Profit," all according to methods specified in the
Long-Term Plan. The Long-Term Plan allows the application of an independent
inflation/deflation and/or exchange rate indices to the calculation of
Economic Profit, to eliminate any effect of inflation/deflation or exchange
rate from the calculation, if the Committee so specifies when a Performance
Period is initiated. When the Committee selects the criteria, it also will
indicate the target levels for performance. The actual awards are
determined after the end of the three-year period and would range from 0%
to 175% 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.
23
<PAGE>
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 will be
forfeited if the participant's employment with the Company terminates other
than upon death, leave of absence, disability, retirement or change in
control unless the Committee in its discretion otherwise determines.
BENEFITS. The amounts that were 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 and to other persons
participating in the plan for fiscal 1998 are as follows:
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($) OF TOTAL AWARD
----------------- -------------------------------
<S> <C>
M. Douglas Ivester $ 702,000
Jack L. Stahl 429,300
Douglas N. Daft 351,900
James E. Chestnut 351,900
Ralph H. Cooper 277,200
Executive Group (including the persons
named above) 4,062,600
Non-Executive Director Group 0
Non-Executive Officer Employee Group 0
</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 officers.
AMENDMENT AND TERMINATION OF THE LONG-TERM PLAN. The Committee may
terminate the Long- Term Plan, 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, leave of absence, death, disability or a change in control, the
Committee may in its discretion determine that the participant will not be
entitled to receive any award, otherwise the participant will receive a
pro-rated award. Generally, the Committee anticipates that it will use its
negative discretion so that those participants who choose to leave the
Company during a performance period will receive no award for such period.
Should the participant's employment terminate for any reason other than
retirement, leave of absence, 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, unless the
Committee, in its discretion, decides to pay the second half of the award.
If the participant's employment is terminated during a three-year period
for death, leave of absence, disability or retirement, the Committee will
award a pro-rated amount to such participant (or his/her estate). If the
participant's employment is terminated by reason of retirement, leave of
absence, death or disability during the two-year period, the second half of
the award will be paid to such participant (or his/her estate).
Any pro-rated amount would be paid in the year following termination
whether or not the performance period has ended under the Long-Term Plan.
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, including the Executive Performance Incentive
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Plan and the 1999 Stock Option Plan. 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).
FEDERAL INCOME TAX CONSEQUENCES. Under present federal income tax laws,
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
REAPPROVE 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 REAPPROVE THE
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY, AS AMENDED
(ITEM 3)
The Executive Performance Incentive Plan of The Coca-Cola Company was
approved by the share owners at the 1994 Annual Meeting. That Plan, as amended
and restated (the "Executive Plan") is being submitted for reapproval by the
share owners because reapproval by share owners every five years is required
to meet the conditions necessary for the Company to exclude rewards under the
Executive Plan from the $1 million limit on the Company's deductions from
federal income taxes. On February 17, 1999 the Compensation Committee
recommended that the Board adopt the Executive Plan and on February 18, 1999
the Board of Directors adopted the Executive Plan and directed that the
Executive Plan be submitted to the share owners for reapproval at the 1999
Annual Meeting. The Executive Plan will be reapproved upon the affirmative
vote of a majority of the votes cast by holders of the shares of Company
Common Stock voting in person or by proxy at the Annual Meeting.
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 following Summary of the Executive Plan is qualified in its entirety to
the text of the Executive Plan, which is attached as Exhibit B. The Executive
Plan is 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 or senior officer of the
Company (approximately 15 persons), including executive officers who are
also Directors of the Company. Eligibility for participation in the
Executive Plan is limited to executive and senior 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 year. Any person
who is a participant
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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 any 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 matrices, with volume
growth and changes in earnings per share of Company Common Stock from the
prior year to the current year as measures, that references the Company as
a whole, or other operating groups of the Company as appropriate, all in
accordance with the methods set forth in the Executive Plan.
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.
BENEFITS. No awards were made to the Company's Chairman and Chief
Executive Officer, the other four most highly compensated executive
officers, or to other current executive officers who participated in the
plan, for fiscal 1998. No amounts are payable to employees other than
executive and senior 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, including the Long-Term Plan and the 1999 Stock Option
Plan. 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.
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
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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
REAPPROVE THE EXECUTIVE 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 COCA-COLA COMPANY 1999 STOCK OPTION PLAN
(ITEM 4)
DESCRIPTION OF THE PLAN AND VOTE REQUIRED
On February 17, 1999, the Stock Option Subcommittee of the Compensation
Committee recommended that the Board of Directors adopt The Coca-Cola Company
1999 Stock Option Plan (the "1999 Plan"). On February 18, 1999, the Board of
Directors adopted the 1999 Plan and directed that the 1999 Plan be submitted
to the share owners at the 1999 Annual Meeting. The 1999 Plan will become
effective upon the affirmative vote of a majority of the votes cast by holders
of the shares of Company Common Stock voting in person or by proxy at the
Annual Meeting.
The purpose of the 1999 Plan is to advance the interests of the Company by
encouraging and enabling acquisition of a financial interest in the Company by
its officers and other key employees. The 1999 Plan is intended to aid the
Company in attracting and retaining key employees, to stimulate the efforts of
such employees and to strengthen their desire to remain in the Company's
employ.
No awards will be made under The Coca-Cola Company 1991 Stock Option Plan
after the 1999 Plan is approved.
SUMMARY DESCRIPTION OF THE 1999 PLAN
The following summary of the 1999 Plan is qualified in its entirety by
reference to the text of the 1999 Plan, which is attached as Exhibit C. The
1999 Plan would be administered by the Stock Option Subcommittee of the Board
of Directors. Eligibility requirements for the members of the Subcommittee
shall comply with the provisions of Rule 16b-3 promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act") or any successor
rule or regulation. The Subcommittee has full and final authority, in its
discretion, to select the key employees who would be granted stock options and
would determine the number of shares subject to each option, the duration of
each option and the terms and conditions of each option granted.
The major provisions of the 1999 Plan are as follows:
ELIGIBILITY. The Subcommittee is authorized to grant stock options to any
officer, including officers who are also Directors of the Company, and to
other key employees of the Company and its Majority-Owned Related Companies
(as defined in the 1999 Plan). In certain circumstances, the Committee also
may grant stock options to key employees of Related Companies (as defined
in the 1999 Plan).
OPTION PRICE. The option price will be 100% of the fair market value of
the Company's Common Stock on the date the option is granted. Fair market
value for purposes of the 1999 Plan is the average of the high and low
market price of the Company's Common Stock as reported on the New York
Stock Exchange Composite Transaction listing on the relevant date.
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DURATION OF OPTIONS. Each stock option will terminate on the date fixed
by the Subcommittee, which shall be not more than (a) ten years after the
date of the grant for ISOs (defined below) and (b) fifteen years after the
date of grant for options that are not ISOs.
VESTING. Options become exercisable when they have vested. The period
before the options become exercisable is sometimes called the accrual
period. Generally, no portion of any option is exercisable for a period of
12 months after the date of grant, and the Subcommittee specifies other
vesting provisions at the time of grant. All options automatically become
exercisable in full in the event of a Change in Control (as defined in the
1999 Plan, which definition is substantially identical to the definitions
of Change in Control contained in the Long-Term Plan and the Executive
Plan), death or disability of the optionee or as decided by the
Subcommittee. Upon retirement options held at least one year shall become
exercisable in full.
EXERCISE PERIOD. The exercise period for ISOs (as defined below) granted
under the 1999 Plan may not exceed 10 years from the date of grant and, for
options that are not ISOs, 15 years from the date of grant. If an
optionee's employment by the Company is terminated for any reason, except
death, disability or retirement, the optionee has six months in which to
exercise an option (but only to the extent exercisable immediately after
termination) unless the option by its terms expires earlier. Termination or
other changes in employment status affects the exercise period. The
Subcommittee has the right to alter the terms of any option at grant or
while outstanding pursuant to the terms of the 1999 Plan except the Option
Price. The occurrence of a Change in Control while an optionee is an
employee shall have no effect on the duration of the exercise period.
PAYMENT. Payment for stock purchased on the exercise of a stock option
must be made in full at the time the stock option is exercised. Cashless
exercises are permitted, where Merrill, Lynch, Pierce, Fenner & Smith,
which administers option exercises, sells some of the shares acquired upon
exercise and delivers the proceeds to the Company within three business
days of the exercise. Also, Company Common Stock which has been held by the
optionee at least six months may be tendered in payment for the exercise
price. The 1999 Plan allows U.S. taxpayers to use shares of Common Stock
withheld upon exercise to satisfy U.S. federal, state and local income tax
liabilities due to the exercise.
SHARES THAT MAY BE ISSUED UNDER THE 1999 PLAN. A maximum of 120,000,000
shares of the Company's Common Stock--which number may be adjusted as
described below--would be issued or transferred pursuant to stock options
granted under the 1999 Plan. If any stock option terminates or is canceled
for any reason without having been exercised in full, the shares of stock
not issued or transferred will then become available for additional grants
of options. The shares available represent approximately 4.865% of the
Company's Common Stock issued and outstanding on February 22, 1999. The
number of shares available under the 1999 Plan is subject to adjustment in
the event of any stock split, stock dividend, recapitalization, spin-off or
other similar action. No individual may be awarded stock options on more
than 5% of the shares authorized under the 1999 Plan, as adjusted.
ESTIMATE OF BENEFITS. The number of stock options that would be awarded
to the Company's Chief Executive Officer and the other four most highly
compensated executive officers of the Company pursuant to the 1999 Plan are
not currently determinable. No option awards were made to the Company's
Chief Executive Officer and the four other most highly compensated
executive officers in 1998. In 1998, 100,000 stock options under the 1991
Plan were granted to all current executive officers as a group and
approximately 17 million options were granted to approximately 8,900 other
employees, including all current officers who are not executive officers.
No awards were made to Directors who are not executive officers.
FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND THE OPTIONEES
INCENTIVE STOCK OPTIONS. Some of the options granted under the 1999 Plan may
constitute "Incentive Stock Options" ("ISOs") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended
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(the "Code"). Under present federal tax laws, there will be no federal income
tax consequences to either the Company or an optionee upon the grant of an
ISO, nor will an optionee's exercise of an ISO result in federal income tax
consequences to the Company. Although an optionee will not realize ordinary
income upon his exercise of an ISO, the excess of the fair market value of the
Common Stock acquired at the time of exercise over the option price may
constitute an adjustment in computing alternative minimum taxable income under
Section 56 of the Code and, thus, may result in the imposition of the
"alternative minimum tax" pursuant to Section 55 of the Code on the optionee.
If an optionee does not dispose of Common Stock acquired through an ISO within
one year of the ISO's date of exercise, any gain realized upon a subsequent
disposition of Common Stock will constitute long-term capital gain to the
optionee. If an optionee disposes of the Common Stock within such one-year
period, an amount equal to the lesser of (i) the excess of the fair market
value of the Common Stock on the date of exercise over the option price or
(ii) the actual gain realized upon such disposition will constitute ordinary
income to the optionee in the year of the disposition. Any additional gain
upon such disposition will be taxed as short-term capital gain. The Company
will receive a deduction in an amount equal to the amount constituting
ordinary income to an optionee.
NONSTATUTORY OPTIONS. Certain stock options which do not constitute ISOs
("nonstatutory options") may be granted under the 1999 Plan. Under present
federal income tax regulations, there will be no federal income tax
consequences to either the Company or the optionee upon the grant of a
nonstatutory option. However, the optionee will realize ordinary income upon
the exercise of a nonstatutory option in an amount equal to the excess of the
fair market value of the Common Stock acquired upon the exercise of such
option over the option price, and the Company will receive a corresponding
deduction. The gain, if any, realized upon a subsequent disposition of such
Common Stock will constitute short- or long-term capital gain, depending on
the optionee's holding period.
The federal income tax consequences described in this section are based on
laws and regulations in effect on February 22, 1999, and there is no assurance
that the laws and regulations will not change in the future and affect the tax
consequences of the matters discussed in this section.
TERMINATION OF AND AMENDMENTS TO THE 1999 PLAN; NO REPRICING OR REPLACING
OPTIONS WITHOUT A SHARE OWNER VOTE
The Board of Directors may terminate or amend the 1999 Plan from time to
time in any manner permitted by applicable laws and regulations, except that
no additional shares of the Company's Common Stock may be allocated to the
1999 Plan, and no outstanding option may be repriced or replaced, without the
approval of the share owners.
MARKET PRICE OF THE COMPANY'S COMMON STOCK
The average of the high and low market price of the Company's Common Stock
as reported on the New York Stock Exchange Composite Transactions listing for
February 26, 1999, was $63.78125 per share.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE 1999 STOCK OPTION 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 5)
The Board of Directors of the Company, upon the recommendation of the Audit
Committee, has appointed the firm of Ernst & Young LLP to serve as independent
auditors of the Company for the fiscal year ending
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December 31, 1999, subject to ratification of this appointment by the share
owners of the Company. Ernst & Young LLP has served as independent auditors of
the Company for many years and is 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 LLP 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 votes cast by the holders of the shares
of Company Common Stock 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 LLP, 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 LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE 1999 FISCAL YEAR. PROXIES RECEIVED BY THE BOARD OF DIRECTORS
WILL BE VOTED FOR THE PROPOSAL UNLESS SHARE OWNERS SPECIFY A CONTRARY CHOICE
IN THEIR PROXIES.
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: (1) as necessary to meet applicable legal requirements and
to assert or defend claims for or against the Company; (2) in case of a
contested proxy solicitation; (3) if a share owner makes a written comment on
the proxy card or otherwise communicates his/her vote to management; or (4) 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 $25,000 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.
Directors, officers and employees of the Company may also solicit proxies by
mail, telephone and personal contact. They will not receive any additional
compensation for these activities.
SHARE-OWNERS' PROPOSALS
Proposals of share owners intended to be presented at the 2000 Annual
Meeting of Share Owners must be received by the Company on or before November
2, 1999, 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
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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.
OTHER INFORMATION
Management does not know of any items other than those referred to in the
accompanying Notice of Annual Meeting of Share Owners which may properly come
before the meeting or other matters incident to the conduct of the meeting.
Should the election of any person as a Director in place of a nominee named in
this proxy statement who becomes unable to serve or for good cause will not
serve properly come before the meeting, the proxies received will be voted for
substitute nominee(s) designated by the Board of Directors or if no such
substitute nominees are designated by the Board of Directors then in
accordance with the discretion of the proxy holders. As to any other item or
proposal that may properly come before the meeting, including voting on a
proposal omitted from this 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 this 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 5, 1999
----------------
THE ANNUAL REPORT TO SHARE OWNERS OF THE COMPANY FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1998, 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.
----------------
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EXHIBIT A
LONG-TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
as amended and restated effective April 21, 1999
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 will 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 will determine which of the eligible key employees of the Company
and its Related Companies (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 will, 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 will make determinations and will 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 will be final and conclusive for all
purposes and upon all persons including, but without limitation, the Company,
its Related Companies, the Committee, the Board, officers, the affected
employees of the Company and/or its Related Companies, and any participant or
former participant under the Plan, as well as their respective successors in
interest.
SECTION 3. ELIGIBILITY
The Chief Executive Officer, the President (if any), each executive officer
and such other senior officers of the Company as the Committee may designate
(the executive officers and designated senior officers, together "Eligible
Officers") will be eligible to participate in the Plan, but no individual will
have a right to participate. Long-Term Incentive Awards may be granted to such
Eligible Officers of the Company and its Related Companies as determined in
the sole discretion of the Committee. The term "Related Company" or "Related
Companies" will mean any corporation or business organization in which the
Company owns, directly or indirectly, during the relevant time, either (i) 50%
or more of the voting stock or capital where such entity is not publicly held,
or (ii) an interest which causes the other entity's financial results to be
consolidated with the Company's financial results for financial reporting
purposes.
SECTION 4. GRANTS OF LONG-TERM INCENTIVE AWARDS
(a) Annual Selection by the Committee of Participants. Annually,
participants will be selected within 90 days 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
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Committee, the Chief Executive Officer will 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 will commence on the
first day of January of the applicable year. A new three-year Performance
Period will commence each year.
(b) Calculation of Performance Incentive Base. Annually, within 90 days
after the beginning of a Performance Period, the Committee will calculate
the participant's Performance Incentive Base for that Performance Period.
The Performance Incentive Base will 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 CRITERIA
Performance will be measured based upon two or more objective criteria for
each Performance Period. Criteria will be measured annually over the three-
year Performance Period. Within 90 days of the beginning of a Performance
Period, the Committee shall specify which of the following criteria will apply
during such Performance Period, together with those factors related to such
criteria as are noted below as well as any applicable matrices, schedules or
formulae applicable to weighting of such criteria in determining performance:
(a) Growth in Unit Case Sales. The annual compound "growth in Unit Case
Sales" will 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) Operating Profit Margin. "Operating Profit Margin" for a calendar
year will be determined by the Controller using the following formula:
consolidated operating profit as a percent of consolidated revenues
excluding Company-owned bottling operations and after adjustment for
deviations from budgeted exchange rates.
(c) Share of Sales. "Share of Sales" will be determined by the Controller
using the following formula: percent of the total unit case volume for the
soft-drink category (or such other category or categories as the Committee
specifies at the time it selects the criterion for a Performance Period) of
the commercial beverages industry.
(d) Growth in Economic Profit. "Growth in Economic Profit" shall be
determined for each calendar year in accordance with the definition of
Economic Profit provided by the Controller and approved by the Committee
within 90 days of the start of the Performance Period in which it would
apply. At such time, the Committee may, but is not obligated to, specify an
independent inflation/deflation index and/or exchange rate index that will
be applied to the calculation of Economic Profit to eliminate any effect of
inflation and/or exchange rates on the calculation of Economic Profit.
SECTION 6. AWARD DETERMINATION
Awards will be determined after the close of each Performance Period, based
upon measures established by the Committee in accordance with Section 5 of
this Plan.
In no event will any Long-Term Incentive Award to a participant for any
Performance Period exceed the amount of $3,500,000, excluding interest on any
Contingent Award, deferred Vested Cash Award or deferred Contingent Award.
The Committee may, in its sole discretion, reduce the amount of any Long-
Term Incentive Award or refuse to pay any Long-Term Incentive Award.
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SECTION 7. PAYMENT OF LONG-TERM INCENTIVE AWARDS
(a) Conditions to Payment of Long-Term Incentive Awards. Prior to the
payment of any Long-Term Incentive Award, the Committee will certify the
performance under the applicable criteria. In addition, no Long-Term
Incentive Award will be payable pursuant to this Plan until share-owner
approval of the Plan (within the meaning of Code Section 162(m)) has been
received. Long-Term Incentive Awards are subject to forfeiture as provided
below.
(b) All Payments Are In Cash. Long-Term Incentive Awards will be paid in
cash, at the times provided in Section 7 (c) and portions of awards are
subject to forfeiture until paid, as provided below.
(c) Timing of Payment of Long-Term Incentive Awards. Long-Term Incentive
Awards will be paid in two installments as provided in subsections (c) (1)
and (c) (2) below except as otherwise provided in this Plan.
(1) The Vested Cash Award. One-half of the Long-Term Incentive Award
(the "Vested Cash 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 Long-Term Incentive Award. The date on which the certification is
made is called the "Award Certification Date" in this Plan.
(2) Contingent Award. The second half of the Long-Term Incentive Award
is referred to herein as the "Contingent Award." The Contingent Award, plus
interest at the Applicable Interest Rate (as defined below) thereon from
the Award Certification Date, will 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 applicable Performance Period, provided that such
Contingent Award has not been forfeited as set forth in the following
sentence. The Contingent Award will be forfeited to the Company (unless the
Committee in its sole discretion otherwise determines) if, within two years
from the end of the Performance Period, the participant terminates his or
her employment with the Company (for reasons other than death, leave of
absence, retirement or disability, as such events may be defined by the
Committee). If a participant retires, is granted a leave of absence,
becomes disabled or dies after the end of the Performance Period but prior
to the expiration of such two-year period, the participant or his or her
estate shall be entitled to receive the whole Contingent Award, with
interest accruing only through and including the date of such event, within
60 days of the date of such event.
(d) Deferral of Vested Cash Awards or Contingent Awards. All Vested Cash
Awards will be paid in cash at the time prescribed in subparagraph (c)(1)
above, unless the Committee has received and, in its sole discretion,
approved a request to defer payment of the Vested Cash Award. All
Contingent Awards will be paid in cash at the time prescribed in
subparagraph (c)(2) above, unless the Committee has received and, in its
sole discretion, approved a request to defer payment of the Contingent
Award. Committee approval of a request to defer payment of a Vested Cash
Award or a Contingent Award must be granted no later than the last day of
the second year of the Performance Period. All requests to defer payments
of a Vested Cash Award or a Contingent Award, must specify an election as
to the timing for receipt of the deferred amounts, from among the following
options:
(1) full cash payment at a date not less than one year from the Award
Certification Date nor more than one year after the date of retirement,
(2) equal annual installments over a period not to exceed fifteen
years, commencing not less than one year from the date of retirement, or
(3) full cash payment upon retirement.
Any amounts deferred will bear interest from the Award Certification Date.
Notwithstanding any election to defer a Vested Cash Award or a Contingent
Award, in the event of a participant's death, all amounts elected to
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be deferred will 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) Applicable Interest Rate. Contingent Awards and deferred Vested Cash
Awards will bear interest calculated at a rate, called the "Applicable
Interest Rate," determined pursuant to rules promulgated by the Committee,
provided that in no event may the Applicable Interest Rate constitute
interest which is "above-market" as set forth in Item 402 of Regulation S-K
(or any successor provision) promulgated by the Securities and Exchange
Commission.
(f) Withholding for Taxes. The Company will have the right to deduct from
all Long-Term Incentive Award payments any taxes required to be withheld
with respect to such payments.
(g) 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, will be paid in full to the participant's estate.
SECTION 8. TERMINATION OF EMPLOYMENT DURING A PERFORMANCE PERIOD
(a) For Reasons Other Than Retirement, Leave of Absence, Disability or
Death. If the participant's employment by the Company or a Related Company
terminates for any reason (other than retirement, leave of absence,
disability or death) during any Performance Period, the Committee may in
its discretion determine that the participant will not be entitled to any
Long-Term Incentive Award for that Performance Period; otherwise the
participant will receive a prorated Long-Term Incentive Award calculated in
accordance with Section 8(c). Generally, the Committee will use its
negative discretion so that those participants who choose to leave the
Company during a Performance Period will receive no Long-Term Incentive
Award for such Performance Period.
(b) For Retirement, Leave of Absence, Disability or Death. If a
participant's employment with the Company or a Related Company terminates
during a Performance Period because of retirement, leave of absence,
disability or death during any Performance Period, the participant (or his
or her estate in the event of death) will be entitled to a prorated Long-
Term Incentive Award calculated in accordance with Section 8(c).
(c) Calculation and Payment of Prorated Long-Term Incentive Awards for
Termination During a Performance Period. Any prorated Long-Term Incentive
Award to be paid in accordance with Section 8 (a) or (b) will be calculated
as if the Performance Period ended on the last day of the year in which the
participant's employment terminated. The Committee will certify performance
based upon the applicable criteria as if the Performance Period has ended.
The portion of the Long-Term Incentive Award to be paid to the participant
or his or her estate would then be determined by multiplying the Long-Term
Incentive Award amount times a fraction, the numerator of which will be the
number of months of the Performance Period that elapsed prior to the
termination of employment (rounding up to the next whole number) and the
denominator of which will be 36. The prorated amount would be paid within
sixty days after the Award Certification Date for such prorated Long-Term
Incentive Award. Such prorated amount will be paid in a lump sum so that
there will be no Contingent Award owing to the participant or his or her
estate and no ability to defer payment of such prorated Long-Term Incentive
Award.
SECTION 9. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN
The Board or the Committee may terminate the Plan at any time. From time to
time, the Board or the Committee may suspend the Plan, in whole or in part.
From time to time, the Board or the Committee may amend the Plan, 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
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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 Long-Term Incentive Award.
SECTION 10. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant thereto will
be governed by the laws of the State of Georgia and construed in accordance
therewith.
SECTION 11. EFFECT ON BENEFIT PLANS
Long-Term Incentive Awards will be included in the computation of benefits
under the Employee Retirement Plan, Overseas Retirement Plan and other
retirement plans maintained by the Company under which the Participant may be
covered and the Thrift and Investment Plan, subject to all applicable laws and
in accordance with the provisions of those plans.
Long-Term Incentive Awards will 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
(a) each participant's Long-Term Incentive Awards accrued through the
date of such Change in Control for each Performance Period then in effect
automatically will become nonforfeitable on such date,
(b) the Committee immediately after the date of such Change in Control
will determine each participant's Long-Term Incentive Award accrued through
the end of the calendar month which immediately precedes the date of such
Change in Control, and such determination will be made based on a formula
established by the Committee which computes such Long-Term Incentive 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 will be based on a comparison
(for the Plan Year which includes the Change in Control) of the actual
performance versus budgeted performance for each criteria applicable to the
Long-Term Incentive Award for the full calendar months (in such Plan Year)
which immediately precede the Change in Control, multiplied by (3) a
fraction, the numerator of which will 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 will be thirty-six,
(c) each participant's accrued Long-Term Incentive 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 SunTrust Bank, Atlanta, accrued on such Long-Term Incentive 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 (or
any successor provision) will 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 will be deemed
attributable to such payment under Section 12(c), and the Company promptly
on written demand from the participant (or, if he is dead, from his estate)
will pay to him (or, if he is dead, to his estate) an amount equal to such
excise tax.
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A "Change in Control" for purposes of this Section 12 will 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 January 1, 1999,
provided that such a change in control will 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 as in effect on January 1, 1999) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act as in
effect on January 1, 1999) 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 will 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 will 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 will 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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EXHIBIT B
EXECUTIVE PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
as amended and restated effective April 21, 1999
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 and senior 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 20% of the voting stock or capital.
d. "Board of Directors" means the Board of Directors of
The Coca-Cola 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" will have the meaning set forth in Section V(a) hereof.
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 or senior 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 will be
automatically entitled to participate in the Plan in any Plan Year. Any person
who has been designated a Participant for a particular Plan Year will be
ineligible to participate in the Annual Performance Incentive Plan of the
Company for such Plan Year.
The fact that an executive or senior officer has been designated eligible to
participate in the Plan in one Plan Year does not assure that such 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 such officer will receive an Award in any Plan Year.
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The Committee will determine an executive or senior officer's participation
in the Plan prior to the time when substantial services as an executive or
senior officer relating to the Plan Year are rendered. In the case of an
employee who becomes an executive or senior officer after the commencement of
the Plan Year, the Committee will determine whether the employee will become a
Participant for the Plan Year during which he became an executive or senior
officer.
V. DETERMINATION OF GOALS
a. Within 90 days after the beginning of each Plan Year, the Committee will
determine a dollar amount for each Participant which will represent a
percentage of the Participant's annual salary and level of responsibility (the
"Opportunity") for that Plan Year. The Opportunity cannot be increased for the
Plan Year. The Committee will also, at the time the Opportunity is determined,
construct a matrix in which one axis will consist of volume growth as compared
to budget and the other axis will consist of the change in earnings per share
of the Common Stock of The Coca-Cola Company from the immediately prior Plan
Year to the current Plan Year. These factors are given approximate equal
weight. The Committee will construct a matrix pairing volume growth, although
the actual targets for performance may vary, for each of (i) the Company as a
whole, and (ii) other operating groups of the Company as specified by the
Committee in each case, with earnings per share change. For each matrix, the
intersection of axes on each matrix will be a percentage which will be
multiplied against the Opportunity.
In the event that a Participant is assigned an Opportunity following the
time at which Opportunities are normally established for the Plan Year due to
placement in an executive or senior position after the start of the Plan Year,
the Committee will adopt a matrix with respect to such Opportunity. Volume
growth and earnings per share gain under the matrix will be determined by
comparing (1) volume and earnings per share for the period commencing on the
first day of the calendar month in which the Participant becomes an executive
or senior officer and ending on the last day of the Plan Year, to (2) volume
and earnings per share for the same calendar months during the preceding Plan
Year.
After completion of the Plan Year, volume growth, operating profit and
earnings per share will be calculated for the Company and for operating groups
as required for the appropriate period, and applied to the appropriate
matrices. The resulting percentage will then be multiplied against the
Opportunity. The resulting dollar amount will be further adjusted by
increasing the result by 5% if share of carbonated soft drink sales (as
defined by the Committee at the time of its determination of Opportunities for
the Plan Year) increased for the Company or the operating group 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 will be
performed only on the matrix relating to the Company's consolidated results.
For the executive or senior officers whose responsibilities fall under the
specified operating groups of the Company, the Award will 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 relevant operating groups.
Participants who change executive positions during the Plan Year and who
retain the Opportunity initially set for them will have their Award determined
by prorating the portion of the Award that would be derived under each
applicable matrix for the portion of the year during which such matrix applies
to the Participant. If a matrix does not exist with respect to the
Participant's new executive or senior position, the portion of his Award
relating to the new position will be determined with reference to the matrix
for the Company's consolidated results.
b. Attainment of performance goals for a particular Plan Year will 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 will be determined by the
Committee. The date on which the Committee certifies the attainment of
performance goals and determines the Awards is called the "Award Certification
Date."
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VI. LIMITATION ON AWARDS
No Award for any Plan Year to a Participant will exceed $3,000,000.
VII. METHOD OF PAYMENT OF AWARDS
All Awards will be paid in cash within 60 days of the Award Certification
Date unless the Committee has, no later than the grant of an Award, received
and, in its sole discretion, approved 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 Award Certification Date nor
more than one year after the Award Certification Date.
Any request to defer receipt of an Award will specify the particular option
chosen. Any amount deferred in accordance with the above options will bear
interest at the prime rate of SunTrust Bank, Atlanta 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 will in no
case constitute interest which is "above-market" as set forth in Item 402 of
Regulation S-K (or any successor provision) promulgated by the Securities and
Exchange Commission.
The Company will have 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.
A Participant who retires, is granted a leave of absence or whose employment
is otherwise terminated prior to the end of such Plan Year will 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 will 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 Employee
Retirement Plan, Overseas Retirement Plan and other retirement plans
maintained by the Company under which the Participant may be covered and the
Thrift and Investment Plan, subject to all applicable laws and in accordance
with the provisions of those plans.
Awards will 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 will, 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 will make determinations and will 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
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the Plan and the specific conditions and provisions of the Awards granted
hereunder by the Committee will 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 at any time. From time to
time the Committee may suspend the Plan, in whole or in part. From time to
time, the Board or the Committee may amend the Plan, 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.
XI. APPLICABLE LAW
The Plan and all rules and determinations made and taken pursuant hereto
will 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
prior to the end of the Plan Year 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 will 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 will be the number of full calendar months he
is an employee of the Company during such Plan Year and the denominator of
which will 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 will 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, will 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 January 1, 1999,
provided that such a change in control will 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 as in effect on January 1, 1999) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act as in effect
on January 1, 1999) 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 will be changed, converted or exchanged (other
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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 will 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 will 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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EXHIBIT C
THE COCA-COLA COMPANY
1999 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of The Coca-Cola Company 1999 Stock Option Plan (the "Plan") is
to advance the interest of The Coca-Cola Company (the "Company") and its
Related Companies (as defined in Section 2) by encouraging and enabling the
acquisition of a financial interest in the Company by officers and other key
employees of the Company or its Related Companies. In addition, the Plan is
intended to aid the Company and its Related Companies in attracting and
retaining key employees, to stimulate the efforts of such employees and to
strengthen their desire to remain in the employ of the Company and its Related
Companies.
SECTION 2. DEFINITIONS
"Business Day" means a day on which the New York Stock Exchange is open for
securities trading.
"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 under the Securities Exchange Act of 1934 ("1934 Act") as in
effect on January 1, 1999, 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 1934 Act), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act as in
effect on January 1, 1999) 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 (2) 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 the KO Common
Stock (as defined below) 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 times
as a Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
"Committee" means a committee appointed by the Board of Directors in
accordance with the Company's By-Laws from among its members. Unless and
until its members are not qualified to serve on the Committee pursuant to
the provisions of the Plan, the Stock Option Subcommittee of the Board
shall function as the Committee. Eligibility requirements for members of
the Committee shall comply with Rule 16b-3 under the 1934 Act, or any
successor rule or regulation.
"Disabled" or "Disability" means the optionee meets the definition of
"disabled" under the terms of the Company's Long Term Disability Income
Plan in effect on the date in question, whether or not the optionee is
covered by such plan.
"ISO" means an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.
"KO Common Stock" means The Coca-Cola Company Common Stock, par value $.25
per share.
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"Majority-Owned Related Company" means a Related Company in which the
Company owns, directly or indirectly, 50% or more of the voting stock of
capital on the date an Option is granted.
"NSO" means a stock option that does not constitute an ISO.
"Options" means ISOs and NSOs granted under this Plan.
"Related Company" or "Related Companies" means corporation(s) or other
business organization(s) in which the Company owns, directly or indirectly,
20% or more of the voting stock or capital at the relevant time.
"Retire" means to enter Retirement.
"Retirement" means an employee's termination of employment on a date which
is on or after the earliest date on which such employee would be eligible
for an immediately payable benefit pursuant to (i) for those employees
eligible for participation in the Company's Supplemental Retirement Plan,
the terms of that Plan and (ii) for all other employees, the terms of the
Employee Retirement Plan (the "ERP"), whether or not the employee is
covered by the ERP.
SECTION 3. OPTIONS
The Company may grant ISOs and NSOs to those persons meeting the eligibility
requirements in Section 6.
SECTION 4. ADMINISTRATION
The Plan shall be administered by the Committee. No person, other than
members of the Committee, shall have any discretion concerning decisions
regarding the Plan. The Committee shall determine the key employees of the
Company and its Related Companies (including officers, whether or not they are
directors) to whom, and the time or times at which, Options will be granted;
the number of shares to be subject to each Option; the duration of each
Option; the time or times within which the Option may be exercised; the
cancellation of the Option (with the consent of the holder thereof); and the
other conditions of the grant of the Option, at grant or while outstanding,
pursuant to the terms of the Plan. The provisions and conditions of the
Options need not be the same with respect to each optionee or with respect to
each Option.
The Committee may, 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 may make determinations and may take such
other action in connection with or in relation to 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 Options granted hereunder by the Committee,
shall be final and conclusive for all purposes and upon all persons including,
but without limitation, the Company, its Related Companies, the Committee, the
Board, officers and the affected employees of the Company and/or its Related
Companies, optionees and the respective successors in interest of any of the
foregoing.
SECTION 5. STOCK
The KO Common Stock to be issued, transferred and/or sold under the Plan
shall be made available from authorized and unissued KO Common Stock or from
the Company's treasury shares. The total number of shares of KO Common Stock
that may be issued or transferred under the Plan pursuant to Options granted
thereunder may not exceed 120,000,000 shares (subject to adjustment as
described below). Such number of shares shall be subject to adjustment in
accordance with Section 5 and Section 11. KO Common Stock subject to any
unexercised portion of an Option which expires or is canceled, surrendered or
terminated for any reason may again be subject to Options granted under the
Plan.
SECTION 6. ELIGIBILITY
Options may be granted to employees of the Company and its Majority-Owned
Related Companies. No employee shall be granted the right to acquire, pursuant
to Options granted under the Plan, more than 5 % of the aggregate number of
shares of KO Common Stock originally authorized under the Plan, as adjusted
pursuant to Section 11. Also, the Committee may grant Options to particular
employee(s) of a Related Company, who within
2
<PAGE>
the past eighteen (18) months were employee(s) of the Company or a Majority-
Owned Related Company, and in rare instances to be determined by the Committee
in its sole discretion, employees of a Related Company who have not been
employees of the Company or a Majority-Owned Related Company within the past
eighteen (18) months.
SECTION 7. AWARDS OF OPTIONS
Except as otherwise specifically provided in this Plan, Options granted
pursuant to the Plan shall be subject to the following terms and conditions:
(a) Option Price. The option price shall be 100% of the fair market value
of the KO Common Stock on the date of grant. The fair market value of a
share of KO Common Stock shall be the average of the high and low market
prices at which a share of KO Common Stock shall have been sold on the date
of grant, or on the next preceding trading day if such date was not a
trading date, as reported on the New York Stock Exchange Composite
Transactions listing.
(b) Payment. The option price shall be paid in full at the time of
exercise, except as provided in the next sentence. If an exercise is
executed by Merrill Lynch, Pierce, Fenner & Smith using the cashless
method, the exercise price shall be paid in full no later than the close of
business on the third Business Day following the exercise.
Payment may be in cash or, upon conditions established by the Committee,
by delivery of shares of KO Common Stock owned for at least six (6) months
by the optionee.
The optionee, if a U.S. taxpayer, may elect to satisfy Federal, state and
local income tax liabilities due by reason of the exercise by the
withholding of shares of KO Common Stock.
If shares are delivered to pay the option price or if shares are withheld
for U.S. taxpayers to satisfy such tax liabilities, the value of the shares
delivered or withheld shall be computed on the basis of the reported market
price at which a share of KO Common Stock most recently traded prior to the
time the exercise order was processed. Such price will be determined by
reference to the New York Stock Exchange Composite Transactions listing.
(c) Exercise May Be Delayed Until Withholding is Satisfied. The Company
may refuse to exercise an Option if the optionee has not made arrangements
satisfactory to the Company to satisfy the tax withholding which the
Company determines is necessary to comply with applicable requirements.
(d) Duration of Options. The duration of Options shall be determined by
the Committee, but in no event shall the duration of an ISO exceed ten (10)
years from the date of its grant or the duration of an NSO exceed fifteen
(15) years from the date of its grant.
(e) Other Terms and Conditions. Options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the
Committee shall determine appropriate from time to time, including vesting
provisions; provided, however, that, except in the event of a Change in
Control or the Disability or death of the optionee, no Option shall be
exercisable in whole or in part for a period of twelve (12) months from the
date on which the Option is granted. The grant of an Option to any employee
shall not affect in any way the right of the Company and any Related
Company to terminate the employment of the holder thereof.
(f) ISOs. The Committee, with respect to each grant of an Option to an
optionee, shall determine whether such Option shall be an ISO, and, upon
determining that an Option shall be an ISO, shall designate it as such in
the written instrument evidencing such Option. If the written instrument
evidencing an Option does not contain a designation that it is an ISO, it
shall not be an ISO.
The aggregate fair market value (determined in each instance on the date
on which an ISO is granted) of the KO Common Stock with respect to which
ISOs are first exercisable by any optionee in any calendar year shall not
exceed $100,000 for such optionee. If any subsidiary or Majority-Owned
Related Company of the Company shall adopt a stock option plan under which
options constituting ISOs may be granted, the fair market value of the
stock on which any such incentive stock options are granted and the times
at which
3
<PAGE>
such incentive stock options will first become exercisable shall be taken into
account in determining the maximum amount of ISOs which may be granted to the
optionee under this Plan in any calendar year.
SECTION 8. NONTRANSFERABILITY OF OPTIONS
No Option granted pursuant to the Plan shall be transferable otherwise than
by will or by the laws of descent and distribution. During the lifetime of an
optionee, the Option shall be exercisable only by the optionee personally or
by the optionee's legal representative.
SECTION 9. EFFECT OF TERMINATION OF EMPLOYMENT, OTHER CHANGES OF EMPLOYMENT OR
EMPLOYER STATUS, DEATH, RETIREMENT OR A CHANGE IN CONTROL
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
EVENT IMPACT ON VESTING IMPACT ON EXERCISE PERIOD
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Employment terminates All options become immediately Option expiration date provided
upon Disability vested in grant continues to apply
- --------------------------------------------------------------------------------------------------------
Employment terminates Option held at least 12 full Option expiration date provided
upon Retirement calendar months become in grant continues to apply
immediately vested; options held
less than 12 full calendar months
are forfeited
- --------------------------------------------------------------------------------------------------------
Employment terminates All options become immediately Right of executor, administrator
upon death vested of estate (or other transferee
permitted by Section 8)
terminates on earlier of (1) 12
months from the date of death,
or (2) the expiration date
provided in the Option
- --------------------------------------------------------------------------------------------------------
Employment terminates All options become immediately Option expiration date provided
upon Change in Control vested in grant continues to apply
- --------------------------------------------------------------------------------------------------------
Termination of employment Unvested options are forfeited Expires upon earlier of 6 months
for other reasons (Optionees from termination date or option
should be aware that the expiration date provided in grant
receipt of severance does
not extend their termination
date)
- --------------------------------------------------------------------------------------------------------
US military leave Vesting continues during leave Option expiration date provided
in grant continues to apply
- --------------------------------------------------------------------------------------------------------
Eleemosynary service Committee's discretion Committee's discretion
- --------------------------------------------------------------------------------------------------------
US FMLA leave of Vesting continues during leave Option expiration date provided
absence in grant continues to apply
- --------------------------------------------------------------------------------------------------------
Company investment in Unvested options are forfeited Expires upon earlier of 6 months
optionee's employer falls from termination date or option
under 20% (this constitutes expiration date provided in grant
a termination of employment
under the Plan, effective
the date the investment
falls below 20%)
OR
employment is transferred
to an entity in which the
Company's ownership interest
is less than 20%
- --------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
EVENT IMPACT ON VESTING IMPACT ON EXERCISE PERIOD
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Employment transferred to Vesting continues after Option expiration date provided
to Related Company transfer in grant continues to apply
- ---------------------------------------------------------------------------------------------------
Death after employment has Not applicable Right of executor, administrator
terminated but before of estate (or other transferee
option has expired (note permitted by Section 8) terminates
that termination of on earlier of (1) 12 months from
employment may have the date of death, or (2) the
resulted in a change to Option expiration that applied
the original option expiration at the date of death (note that
date provided in the grant) termination of employment may
have resulted in a change to the
original option expiration date
provided in the grant)
- ---------------------------------------------------------------------------------------------------
</TABLE>
In the case of other leaves of absence not specified above, optionees will
be deemed to have terminated employment (so that options unvested will expire
and the option exercise period will end on the earlier of 6 months from the
date the leave began or the option expiration date provided in the grant),
unless the Committee identifies a valid business interest in doing otherwise
in which case it may specify what provisions it deems appropriate in its sole
discretion; provided that the Committee shall have no obligation to consider
any such matters.
Notwithstanding the foregoing provisions, the Committee may, in its sole
discretion, establish different terms and conditions pertaining to the effect
of an optionee's termination on the expiration or exercisability of Options at
the time of grant or (with the consent of the affected optionee) outstanding
Options. However, no Option can have a term of more than fifteen years.
SECTION 10. NO RIGHTS AS A SHARE OWNER
An optionee or a transferee of an optionee pursuant to Section 8 shall have
no right as a share owner with respect to any KO Common Stock covered by an
Option or receivable upon the exercise of an Option until the optionee or
transferee shall have become the holder of record of such KO Common Stock, and
no adjustments shall be made for dividends in cash or other property or other
distributions or rights in respect to such KO Common Stock for which the
record date is prior to the date on which the optionee or transferee shall
have in fact become the holder of record of the share of KO Common Stock
acquired pursuant to the Option.
SECTION 11. ADJUSTMENT IN THE NUMBER OF SHARES AND IN OPTION PRICE
In the event there is any change in the shares of KO Common Stock through
the declaration of stock dividends, or stock splits or through
recapitalization or merger or consolidation or combination of shares or
spin-offs or otherwise, the Committee or the Board shall make such adjustment,
if any, as it may deem appropriate in the number of shares of KO Common Stock
available for Options as well as the number of shares of KO Common Stock
subject to any outstanding Option and the option price thereof. Any such
adjustment may provide for the elimination of any fractional shares which
might otherwise become subject to any Option without payment therefor.
SECTION 12. AMENDMENTS, MODIFICATIONS AND TERMINATION OF THE PLAN
The Board or the Committee may terminate the Plan at any time. From time to
time, the Board or the Committee may suspend the Plan, in whole or in part.
From time to time, the Board or the Committee may amend the Plan, in whole or
in part, including the adoption of amendments deemed necessary or desirable to
qualify the Options under the laws of various countries (including tax laws)
and under rules and regulations promulgated by the Securities and Exchange
Commission with respect to employees who are subject to the provisions of
Section
5
<PAGE>
16 of the 1934 Act, or to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or in any Option granted thereunder,
or for any other purpose or to any effect permitted by applicable laws and
regulations, without the approval of the share owners of the Company. However,
in no event may additional shares of KO Common Stock be allocated to the Plan
or any outstanding option be repriced or replaced without share-owner
approval. Without limiting the foregoing, the Board of Directors or the
Committee may make amendments applicable or inapplicable only to participants
who are subject to Section 16 of the 1934 Act.
No amendment or termination or modification of the Plan shall in any manner
affect any Option theretofore granted without the consent of the optionee,
except that the Committee may amend or modify the Plan in a manner that does
affect Options theretofore granted upon a finding by the Committee that such
amendment or modification is in the best interest of holders of outstanding
Options affected thereby. Grants of ISOs may be made under this Plan until
February 18, 2009 or such earlier date as this Plan is terminated, and grants
of NSOs may be made until all of the 120,000,000 shares of KO Common Stock
authorized for issuance hereunder (adjusted as provided in Sections 5 and 11)
have been issued or until this Plan is terminated, whichever first occurs. The
Plan shall terminate when there are no longer Options outstanding under the
Plan, unless earlier terminated by the Board or by the Committee.
SECTION 13. 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.
6
<PAGE>
[RECYCLED PAPER LOGO APPEARS HERE]
<PAGE>
(THE COCA-COLA COMPANY LOGO APPEARS HERE)
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
Y Statement, hereby (i) appoints Herbert A. Allen, Paul F. Oreffice and
James B. Williams, 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 SunTrust Bank, Atlanta, Trustee under the
Lansing Matched Employee Savings and Investment 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 Plan, and which the undersigned
is entitled to vote, in each case, on all matters which may come before the
1999 Annual Meeting of Share Owners to be held at The Playhouse Theatre, Du
Pont Building, 10th and Market Streets, Wilmington, Delaware, on April 21,
1999, at 9:00 a.m., local time, and any adjournments or postponements
thereof, unless otherwise specified herein. The proxies, in their
discretion, are further authorized to vote (x) 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, (y) on matters which the Board of
Directors did not know would be presented at the meeting by a reasonable
time before the proxy solicitation was made, and (z) on other matters which
may properly come before the 1999 Annual Meeting and any adjournments or
postponements thereof.
Election of Directors:
Nominees (terms expiring in 2002):
(1) Cathleen P. Black, (2) Warren E. Buffett, (3) M. Douglas Ivester
and (4) Susan B. King.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE -----------
APPROPRIATE BOXES (SEE REVERSE SIDE), BUT YOU NEED NOT MARK SEE REVERSE
ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD SIDE
OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR -----------
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
ANNUAL MEETING OF SHARE OWNERS OF THE COCA-COLA COMPANY
=======================================================================
AGENDA
. Election of four Directors
. Reapproval of the Company's Long-Term Performance Incentive Plan
. Reapproval of the Company's Executive Performance Incentive Plan
. Approval of the Company's 1999 Stock Option Plan
. Ratification of the appointment of Ernst & Young LLP 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 ON THE REVERSE SIDE.
- --------------------------------------------------------------------------------
(ADMISSION TICKET ON REVERSE)
(BRING THE ADMISSION TICKET WITH YOU IF ATTENDING THE MEETING)
DIRECTIONS TO THE PLAYHOUSE THEATRE:
From Baltimore, the Delaware Memorial Bridge or downstate Delaware:
Take I-95 North to Wilmington Exit 7 marked "Route 52, Delaware Avenue." From
right lane take Exit 7 onto Adams Street. At the third traffic light on Adams
Street, turn right onto 11th Street. At Delaware Avenue intersection stay
left, continuing on 11th Street. Follow 11th Street through four traffic
lights. The Playhouse Theatre is on the right in the Du Pont Building.
From Commodore Barry Bridge (New Jersey), or Philadelphia on I-95 South,
or I-476 (The Blue Route), or Route 202 (if traveling Route 202, follow
Route 202 to intersection with I-95 South):
Follow I-95 South to Exit 7A marked "Route 52, South Delaware Avenue" (11th
Street). Follow exit road (11th Street) to intersection with Delaware Avenue
marked "52 South, Business District." At Delaware Avenue intersection stay
left, continuing on 11th Street. Follow 11th Street through four traffic
lights. The Playhouse Theatre is on the right in the Du Pont Building.
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY SIGNED 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, 4 AND 5.
-----------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS
-----------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Reapproval of the [ ] [ ] [ ]
Directors Long-Term Performance
(see reverse) Incentive Plan, as
amended
For, except vote withheld from 3. Reapproval of the [ ] [ ] [ ]
the following nominee(s): Executive Performance
Incentive Plan, as
_______________________________ amended
4. Approval of the 1999 [ ] [ ] [ ]
Stock Option Plan
5. Ratification of the [ ] [ ] [ ]
appointment of Ernst &
Young LLP as independent
auditors
-----------------------------------------------------------------------------
SPECIAL ACTION |
----------------
Mark here to discontinue Annual
Report mailing for this account
(for multiple-account holders only) [ ]
-------------------------------------------------
If available in the future, Mark here
would you be interested in if you plan
receiving your proxy to attend
materials electronically? [ ] the Annual
Meeting [ ]
-------------------------------------------------
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
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
(BRING THIS TICKET WITH YOU IF ATTENDING THE MEETING)
ADMISSION TICKET
ANNUAL MEETING OF SHARE OWNERS
OF THE COCA-COLA COMPANY
WEDNESDAY, APRIL 21, 1999
9:00 A.M., LOCAL TIME
THE PLAYHOUSE THEATRE
DU PONT BUILDING
10TH AND MARKET STREETS
WILMINGTON, DELAWARE
<PAGE>
(THE COCA-COLA COMPANY LOGO APPEARS HERE)
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
Y Statement, hereby (i) appoints Herbert A. Allen, Paul F. Oreffice and James
B. Williams, 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
(a) Merrill Lynch Trust Company, FSB, Trustee under The Coca-Cola Company
Thrift & Investment Plan, and/or (b) SunTrust Bank, Atlanta, Trustee under
the Coca-Cola Enterprises Inc. Matched Employee Savings and Investment
Plan, and/or (c) Oriental Bank & Trust, 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 1999 Annual
Meeting of Share Owners to be held at The Playhouse Theatre, Du Pont
Building, 10th and Market Streets, Wilmington, Delaware, on April 21, 1999,
at 9:00 a.m., local time, and any adjournments or postponements thereof,
unless otherwise specified herein. The proxies, in their discretion, are
further authorized to vote (x) 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, (y) on matters which the Board of Directors did not
know would be presented at the meeting by a reasonable time before the
proxy solicitation was made, and (z) on other matters which may properly
come before the 1999 Annual Meeting and any adjournments or postponements
thereof.
Election of Directors:
Nominees (terms expiring in 2002):
(1) Cathleen P. Black, (2) Warren E. Buffett, (3) M. Douglas Ivester
and (4) Susan B. King.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE -----------
APPROPRIATE BOXES (SEE REVERSE SIDE), BUT YOU NEED NOT MARK SEE REVERSE
ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD SIDE
OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR -----------
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
ANNUAL MEETING OF SHARE OWNERS OF THE COCA-COLA COMPANY
=======================================================================
AGENDA
. Election of four Directors
. Reapproval of the Company's Long-Term Performance Incentive Plan
. Reapproval of the Company's Executive Performance Incentive Plan
. Approval of the Company's 1999 Stock Option Plan
. Ratification of the appointment of Ernst & Young LLP 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 ON THE REVERSE OR TO USE OUR TELEPHONE OR INTERNET VOTING SYSTEM.
FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS, SEE REVERSE
-------------------------------------------------------------------------------
(ADMISSION TICKET ON REVERSE)
(BRING THE ADMISSION TICKET WITH YOU IF ATTENDING THE MEETING)
DIRECTIONS TO THE PLAYHOUSE THEATRE:
From Baltimore, the Delaware Memorial Bridge or downstate Delaware:
Take I-95 North to Wilmington Exit 7 marked "Route 52, Delaware Avenue." From
right lane take Exit 7 onto Adams Street. At the third traffic light on Adams
Street, turn right onto 11th Street. At Delaware Avenue intersection stay
left, continuing on 11th Street. Follow 11th Street through four traffic
lights. The Playhouse Theatre is on the right in the Du Pont Building.
From Commodore Barry Bridge (New Jersey), or Philadelphia on I-95 South,
or I-476 (The Blue Route), or Route 202 (if traveling Route 202, follow
Route 202 to intersection with I-95 South):
Follow I-95 South to Exit 7A marked "Route 52, South Delaware Avenue" (11th
Street). Follow exit road (11th Street) to intersection with Delaware Avenue
marked "52 South, Business District." At Delaware Avenue intersection stay
left, continuing on 11th Street. Follow 11th Street through four traffic
lights. The Playhouse Theatre is on the right in the Du Pont Building.
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY SIGNED 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, 4 AND 5.
-----------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS
-----------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Reapproval of the [ ] [ ] [ ]
Directors Long-Term Performance
(see reverse) Incentive Plan, as
amended
For, except vote withheld from 3. Reapproval of the [ ] [ ] [ ]
the following nominee(s): Executive Performance
Incentive Plan, as
_______________________________ amended
4. Approval of the 1999 [ ] [ ] [ ]
Stock Option Plan
5. Ratification of the [ ] [ ] [ ]
appointment of Ernst &
Young LLP as independent
auditors
-----------------------------------------------------------------------------
SPECIAL ACTION |
----------------
Mark here to discontinue Annual
Report mailing for this account
(for multiple-account holders only) [ ]
-------------------------------------------------
If available in the future, Mark here
would you be interested in if you plan
receiving your proxy to attend
materials electronically? [ ] the Annual
Meeting [ ]
-------------------------------------------------
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
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Dear Share Owner:
The Coca-Cola Company encourages you to take advantage of convenient ways by
which you can vote your shares. You can vote your shares electronically through
the Internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically you must use the control number. The control
number is the series of numbers printed in the box above, just below the
perforation. This control number must be used to access the system.
1. To vote over the Internet:
. Log on to the Internet and go to the web site http://www.vote-by-net.com
2. To vote over the telephone:
. On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683)
24 hours a day, 7 days a week.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
(BRING THIS TICKET WITH YOU IF ATTENDING THE MEETING)
ADMISSION TICKET
ANNUAL MEETING OF SHARE OWNERS
OF THE COCA-COLA COMPANY
WEDNESDAY, APRIL 21, 1999
9:00 A.M., LOCAL TIME
THE PLAYHOUSE THEATRE
DU PONT BUILDING
10TH AND MARKET STREETS
WILMINGTON, DELAWARE
