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 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.
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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.
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,
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(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 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.
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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 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
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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.
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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Long-Term Performance Incentive Plan - Coca-Cola Co.
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