-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
Mm69Raxtq0NbSPbIKS7umkk25kVkB1TUF+Rj54OYgvqIubllUXF41G5vKnET8My1
5P8B6OFA0WlnX95ZWcGnWA==
<SEC-DOCUMENT>0000021344-03-000031.txt : 20030326
<SEC-HEADER>0000021344-03-000031.hdr.sgml : 20030325
<ACCEPTANCE-DATETIME>20030326153325
ACCESSION NUMBER: 0000021344-03-000031
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 17
CONFORMED PERIOD OF REPORT: 20021231
FILED AS OF DATE: 20030326
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: COCA COLA CO
CENTRAL INDEX KEY: 0000021344
STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080]
IRS NUMBER: 580628465
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-02217
FILM NUMBER: 03618266
BUSINESS ADDRESS:
STREET 1: ONE COCA COLA PLAZA
CITY: ATLANTA
STATE: GA
ZIP: 30313
BUSINESS PHONE: 4046762121
MAIL ADDRESS:
STREET 1: ONE COCA COLA PLAZA
ZIP: 30313
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>kok03.txt
<DESCRIPTION>2002 10-K OF THE COCA-COLA COMPANY ("KO")
<TEXT>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-2217
THE COCA-COLA COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 58-0628465
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Coca-Cola Plaza 30313
Atlanta, Georgia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (404) 676-2121
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
COMMON STOCK, $.25 PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
----
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes X No
---- ----
The aggregate market value of the common equity held by non-affiliates of the
Registrant (assuming for these purposes, but without conceding, that all
executive officers and Directors are "affiliates" of the Registrant) as of June
28, 2002, the last business day of the Registrant's most recently completed
second fiscal quarter, was $121,210,276,488 (based on the closing sale price of
the Registrant's Common Stock on that date as reported on the New York Stock
Exchange).
The number of shares outstanding of the Registrant's Common Stock as of February
21, 2003, was 2,471,045,132.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Annual Report to Share Owners for the year ended
December 31, 2002, are incorporated by reference in Parts I, II and IV.
Portions of the Company's Proxy Statement for the Annual Meeting of Share Owners
to be held on April 16, 2003, are incorporated by reference in Part III.
================================================================================
<PAGE>
PART I
------
ITEM 1. BUSINESS
- ----------------
The Coca-Cola Company is the largest manufacturer, distributor and marketer
of nonalcoholic beverage concentrates and syrups in the world. Finished beverage
products bearing our trademarks, sold in the United States since 1886, are now
sold in more than 200 countries and include the leading soft drink products in
most of these countries. When used in this report, the terms "Company," "we,"
"us" or "our" mean The Coca-Cola Company and its divisions and subsidiaries.
Our business is nonalcoholic beverages -- principally soft drinks (1) but
also a variety of noncarbonated beverages.(2) We manufacture beverage
concentrates and syrups, as well as some finished beverages, which we sell to
bottling and canning operations, distributors, fountain wholesalers and some
fountain retailers. We also market and distribute juices and juice drinks and
certain water products. In addition, we have ownership interests in numerous
bottling and canning operations.
We were incorporated in September 1919 under the laws of the State of
Delaware and succeeded to the business of a Georgia corporation with the same
name that had been organized in 1892.
Our Company is one of numerous competitors in the commercial beverages
market. Of the approximately 50 billion beverage servings of all types consumed
worldwide every day, beverages bearing our trademarks ("Company Trademark
Beverages") account for more than 1.2 billion.
We believe that our success depends on our ability to connect with
consumers by creating brands they love. It further depends on the capacity of
our people, together with our bottling partners, to find new and appealing ways
to deliver those brands to thirsty people everywhere. Our Company has adopted an
approach to its business that is based on the following strategic priorities:
- Accelerate carbonated soft-drink growth, led by Coca-Cola
- Selectively broaden our family of beverage brands to drive profitable
growth
- Grow system profitability and capability together with our bottling
partners
- Serve customers with creativity and consistency to generate growth across
all channels
- Direct investments to highest-potential areas across markets
- Drive efficiency and cost effectiveness everywhere
The Company's operating structure includes the following operating
segments, the first five of which are also sometimes referred to as strategic
business units:
- North America
- Africa
- Europe, Eurasia and Middle East
- Latin America
- Asia
- Corporate
This structure is the basis for our Company's internal financial reporting. The
North America segment includes the United States, Canada and Puerto Rico.
Effective January 1, 2001, the Company's operating segments were
- ------------------
(1) As used in this report, the term "soft drinks" means nonalcoholic
carbonated beverages containing flavorings and sweeteners, excluding waters,
flavored waters and carbonated or noncarbonated teas, coffees and sports drinks.
(2) As used in this report, the term "noncarbonated beverages" means
nonalcoholic noncarbonated beverages including, but not limited to, waters and
flavored waters, juices and juice-based beverages, sports drinks, and teas and
coffees.
1
<PAGE>
geographically reconfigured and renamed. At that time, Puerto Rico was added to
the North America segment from the Latin America segment. The Middle East
Division was added to the Europe and Eurasia segment, which changed its name to
the Europe, Eurasia and Middle East segment. At the same time, the Africa and
Middle East segment, less the reclassified Middle East Division, changed its
name to the Africa segment. During the first quarter of 2001, the Asia Pacific
segment was renamed the Asia segment. During the first quarter of 2002, the
Egypt Region was reclassified from the Europe, Eurasia and Middle East segment
to the Africa segment.
At the date of this report, the heads of the strategic business units are
as follows: Alexander B. Cummings, Jr. (Africa), Mary E. Minnick (Asia), A.R.C.
"Sandy" Allan (Europe, Eurasia and Middle East), Jose Octavio Reyes (Latin
America) and Jeffrey T. Dunn (North America). See "Item X. -- Executive Officers
of the Company." The heads of the strategic business units report to Steven J.
Heyer, President and Chief Operating Officer of the Company. Steven J. Heyer
reports to Douglas N. Daft, Chairman of the Board of Directors and Chief
Executive Officer of the Company.
Except to the extent that differences between operating segments are
material to an understanding of our business taken as a whole, the description
of our business in this report is presented on a consolidated basis.
In the following table, prior period amounts have been reclassified to
conform to the current period presentation. Information about our Company's
operations for the years ended December 31, 2002, 2001 and 2000, by operating
segment, is as follows (in millions):
<TABLE>
<CAPTION>
North Europe, Eurasia Latin
America Africa and Middle East America Asia Corporate Consolidated
------- ------ --------------- ------- ---- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net operating revenues
2002 $ 6,264 $ 684 $ 5,262 $ 2,089 $ 5,054 $ 211 $ 19,564
2001 5,729 633 3,961 2,181 4,861 180 17,545
2000 5,679 624 3,929 2,024 4,949 149 17,354
Operating income
2002 1,494 224 1,612 1,033 1,820 (725) 5,458
2001 1,480 276 1,461 1,094 1,763 (722) 5,352
2000 1,409 164 1,310 908 956 (1,056) 3,691
Income before income taxes
and cumulative effect
of accounting change
2002 1,515 187 1,540 1,081 1,848 (672) 5,499
2001 1,472 262 1,413 1,279 1,808 (564) 5,670
2000 1,413 134 1,406 859 651 (1,064) 3,399
</TABLE>
For additional financial information about our operating segments and geographic
areas, see Notes 1 and 20 to the Consolidated Financial Statements, set forth on
pages 77-81 and 104-106, respectively, of our Annual Report to Share Owners for
the year ended December 31, 2002, incorporated herein by reference.
Our Company manufactures and sells soft drink and noncarbonated beverage
concentrates (sometimes referred to as beverage bases) and syrups, including
fountain syrups. We also manufacture and sell some finished beverages, both
carbonated and noncarbonated, including certain juice and juice-drink products
and water products.
Syrups are composed of sweetener, water and flavoring concentrate. We sell
the concentrates and syrups for bottled and canned beverages to authorized
bottling and canning operations. In addition to concentrates and syrups for soft
drink products and flavored noncarbonated beverages, we also sell concentrates
for purified water products such as Dasani to authorized bottling operations.
2
<PAGE>
The bottlers or canners of soft-drink products either combine the syrup
with carbonated water or combine the concentrate with sweetener, water and
carbonated water to produce finished soft drinks. The finished soft drinks are
packaged in authorized containers bearing our trademarks -- such as cans,
refillable and non-refillable glass and plastic bottles -- and are then sold to
retailers or, in some cases, wholesalers. Principally in the United States, we
manufacture fountain syrups and sell these to authorized fountain wholesalers
and some fountain retailers. (Outside the United States, fountain syrups
typically are manufactured by authorized bottlers from concentrates sold to them
by the Company.) Authorized fountain wholesalers (including certain authorized
bottlers) sell fountain syrups to fountain retailers. The fountain retailers use
dispensing equipment to mix the syrup with carbonated or still water and then
sell finished soft drinks or noncarbonated beverages to consumers in cups and
glasses.
Finished beverages manufactured by us comprise a variety of carbonated and
noncarbonated beverages. Most of these finished beverages are sold by us to
authorized bottlers or distributors, who in turn sell these products to
retailers or, in some cases, wholesalers. Both directly and through a network of
business partners, including certain Coca-Cola bottlers, Company-manufactured
juice and juice-drink products and certain water products are sold by us to
retailers and wholesalers in the United States and numerous other countries.
The Company's beverage products include bottled and canned beverages
produced by independent and Company-owned bottling and canning operations, as
well as concentrates, syrups and some non-ready-to-drink powder products. Our
beverage products include Coca-Cola, Coca-Cola classic, caffeine free Coca-Cola,
caffeine free Coca-Cola classic, diet Coke (sold under the trademark Coca-Cola
light in many countries other than the United States), caffeine free diet Coke,
diet Coke with lemon, Vanilla Coke, diet Vanilla Coke, Cherry Coke, diet Cherry
Coke, Fanta brand soft drinks, Sprite, diet Sprite (sold under the trademark
Sprite light in many countries other than the United States), Mr. Pibb, Mello
Yello, TAB, Fresca, Barq's root beer and other flavors, Citra, POWERade,
Fruitopia, Minute Maid flavors, Aquarius, Sokenbicha, Ciel, Bonaqa, Dasani,
Lift, Thums Up, Kinley, Pop, Kuat, Qoo and other products developed for specific
countries, including Georgia brand ready-to-drink coffees, and numerous other
brands. In many countries (excluding the United States, among others) our
Company's beverage products also include Schweppes, Canada Dry, Dr Pepper and
Crush. Our Company produces, distributes and markets juice and juice-drink
products, including Minute Maid products, Simply Orange orange juice, Odwalla
and Samantha super premium juices and drinks, Five Alive refreshment beverages,
Bacardi tropical fruit mixers (manufactured and marketed under a license from
Bacardi & Company Limited), and Hi-C ready-to-serve fruit drinks. Beverage
Partners Worldwide, the Company's 50% owned joint venture with Nestle S.A.,
markets ready-to-drink teas and coffees in certain countries. Our Company is the
exclusive master distributor of Evian bottled water in the United States and
Canada. In addition, CCDA Waters, L.L.C., a 51% owned consolidated subsidiary,
has a license for the use of the Dannon and Sparkletts water brands in the
United States.
Consumer demand determines the optimal menu of Company product offerings.
Consumer demand can vary from one locale to another and can change over time
within a single locale. Employing our business strategy, and with special focus
on Coca-Cola, our Company seeks to build its existing brands and, at the same
time, to broaden its historical family of brands, products and services in order
to create and satisfy consumer demand locale by locale.
Our Company introduced a variety of new brands and products during 2002.
Vanilla Coke was rolled out initially in the United States and Canada,
commencing in May. In October, diet Vanilla Coke was introduced in the same two
countries. Vanilla Coke also was introduced in other markets including
Australia, New Zealand and Nordic markets during 2002, with more countries
planning launches for 2003. Diet Coke with lemon/Coca-Cola light with lemon was
rolled out in 20 new international markets. Among other new product
introductions, Love Body diet tea was introduced in Japan.
During 2002, we acquired certain brands or license rights for brands. These
included Risco water in Mexico, Dorna water and Valser water in Europe, the
Seagram's mixers line of soft drinks, and Rio Beverages in New Zealand.
Also during 2002, our Company broadened its collaboration with The Walt
Disney Company to market noncarbonated children's beverages.
3
<PAGE>
Our Company measures sales volume in two ways: (1) gallons and (2) unit
cases of finished products. "Gallons" is a unit of measurement for concentrates,
syrups, beverage bases, finished beverages and powders (in all cases, expressed
in equivalent gallons of syrup) for all beverage products which are reportable
as unit case volume. Most of our revenues are based on this measure of primarily
"wholesale" activity. We also measure volume in unit cases. As used in this
report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces
of finished beverage (24 eight-ounce servings); and "unit case volume" of the
Company means the number of unit cases (or unit case equivalents) of Company
trademark or licensed beverage products directly or indirectly sold by the
Coca-Cola bottling system or by the Company to customers. This volume primarily
consists of beverage products bearing Company trademarks. Also included in unit
case volume are certain products licensed to our Company or owned by Coca-Cola
system bottlers, for which our Company provides marketing support and derives
profit from the sales. Such products licensed to our Company or owned by
Coca-Cola system bottlers account for a minimal portion of total unit case
volume. Although most of our Company's revenues are not based directly on unit
case volume, we believe unit case volume is one of the measures of the
underlying strength of the Coca-Cola business system because it measures trends
at the consumer level.
In 2002, concentrates and syrups for beverages bearing the trademark
"Coca-Cola" or including the trademark "Coke" accounted for approximately 57% of
the Company's total gallon sales.
In 2002, gallon sales in the United States ("U.S. gallon sales")
represented approximately 28% of the Company's worldwide gallon sales.
Approximately 59% of U.S. gallon sales for 2002 was attributable to sales of
beverage concentrates and syrups to approximately 81 authorized bottler
ownership groups in approximately 394 licensed territories. Those bottlers
prepare and sell finished beverages bearing our trademarks for the food store
and vending machine distribution channels and for other distribution channels
supplying home and immediate consumption. Approximately 33% of 2002 U.S. gallon
sales was attributable to fountain syrups sold to fountain retailers and to
approximately 650 authorized fountain wholesalers, some of whom are authorized
bottlers. These fountain wholesalers in turn sell the syrups or deliver them on
the Company's behalf to restaurants and other fountain retailers. The remaining
approximately 8% of 2002 U.S. gallon sales was attributable to sales by the
Company of finished beverages, including juice and juice-drink products and
certain water products. Coca-Cola Enterprises Inc., including its bottling
subsidiaries and divisions ("Coca-Cola Enterprises"), accounted for
approximately 53% of the Company's U.S. gallon sales in 2002. At December 31,
2002, our Company held an ownership interest of approximately 38% in Coca-Cola
Enterprises, which is the world's largest bottler of Company Trademark
Beverages.
In 2002, gallon sales outside the United States represented approximately
72% of the Company's worldwide gallon sales. In 2002, our principal markets
outside the United States, based on gallon sales, were Mexico, Brazil, Japan and
Germany, which together accounted for approximately 25% of our worldwide gallon
sales. Approximately 90% of non-U.S. unit case volume for 2002 was attributable
to sales of beverage concentrates and syrups to authorized bottlers in
approximately 509 licensed territories, together with sales by the Company of
finished beverages other than juice and juice-drink products. Approximately 6%
of 2002 non-U.S. unit case volume was attributable to fountain syrups. The
remaining approximately 4% of 2002 non-U.S. unit case volume was attributable to
juice and juice-drink products.
In addition to conducting its own independent advertising and marketing
activities, our Company may provide promotional and marketing services and/or
funds and consultation to its bottlers and to fountain and bottle/can retailers.
In most cases we do this on a discretionary basis, under the terms of commitment
letters or agreements, even though we are not obligated to do so under the terms
of the bottling or distribution agreements between our Company and the bottlers.
Also on a discretionary basis, in most cases, the Company may develop and
introduce new products, packages and equipment to assist its bottlers, fountain
syrup wholesalers and fountain beverage retailers. The aggregate amount of funds
provided by our Company to bottlers, resellers, vendors or customers of our
Company's products, principally including participation in sales promotion
programs and volume-based incentives, was approximately $3.4 billion in 2002.
The profitability of our business outside the United States is subject to
many factors, including governmental laws, regulations and monetary policies,
economic and political conditions in the countries in which our business is
conducted, and the risk of changes in currency exchange rates and regulations.
4
<PAGE>
Bottler's Agreements and Distribution Agreements
------------------------------------------------
Separate contracts ("Bottler's Agreements") exist between our Company and
each of its bottlers regarding the manufacture and sale of soft drinks. Subject
to specified terms and conditions and certain variations, the Bottler's
Agreements generally authorize the bottler to prepare particular designated
Company Trademark Beverages, to package the same in particular authorized
containers, and to distribute and sell the same in (but generally only in) an
identified territory. The bottler is obligated to purchase its entire
requirement of concentrates or syrups for the designated Company Trademark
Beverages from the Company or Company-authorized suppliers. We typically agree
to refrain from selling or distributing or from authorizing third parties to
sell or distribute the designated Company Trademark Beverages throughout the
identified territory in the particular authorized containers; however, we
typically reserve for ourselves or our designee the right (i) to prepare and
package such beverages in such containers in the territory for sale outside the
territory and (ii) to prepare, package, distribute and sell such beverages in
the territory in any other manner or form.
The Bottler's Agreements between us and our authorized bottlers in the
United States differ in certain respects from those in the other countries in
which Company Trademark Beverages are sold. As further discussed below, the
principal differences involve the duration of the agreements; the inclusion or
exclusion of canned beverage production rights; the inclusion or exclusion of
authorizations to manufacture and distribute fountain syrups; in some cases, the
degree of flexibility on the part of the Company to determine the pricing of
syrups and concentrates; and the extent, if any, of the Company's obligation to
provide marketing support.
Outside the United States. The Bottler's Agreements between us and our
authorized bottlers outside the United States generally are of stated duration,
subject in some cases to possible extensions or renewals of the term of the
contract. Generally, these contracts are subject to termination by the Company
following the occurrence of certain designated events, including defined events
of default and certain changes in ownership or control of the bottler.
In certain parts of the world outside the United States, we have not
granted comprehensive beverage production rights to the bottlers. In such
instances, we or our designee typically sells canned (or in some cases bottled)
Company Trademark Beverages to the bottlers for sale and distribution throughout
the designated territory under distribution agreements, often on a non-exclusive
basis. A majority of the Bottler's Agreements in force between us and bottlers
outside the United States authorize the bottler to manufacture and distribute
fountain syrups, usually on a non-exclusive basis.
Our Company generally has complete flexibility to determine the price and
other terms of sale of concentrates and syrups we sell to bottlers outside the
United States. In some instances, we have agreed or may in the future agree with
the bottler with respect to concentrate pricing on a prospective basis for
specified time periods. Outside the United States, in most cases we have no
obligation to provide marketing support to the bottlers. Nevertheless, we may,
in our discretion, contribute towards bottler expenditures for advertising and
marketing. We may also elect to undertake independent or cooperative advertising
and marketing activities.
Within the United States. In the United States, with certain very limited
exceptions, the Bottler's Agreements for Coca-Cola and other cola-flavored
beverages have no stated expiration date. Our standard contracts for other soft
drink flavors and for noncarbonated beverages are of stated duration, subject to
bottler renewal rights. The Bottler's Agreements in the United States are
subject to termination by the Company for nonperformance or upon the occurrence
of certain defined events of default which may vary from contract to contract.
The so-called "1987 Contract," described below, is terminable by the Company
upon the occurrence of certain events including:
- the bottler's insolvency, dissolution, receivership or the like;
- any disposition by the bottler or any of its subsidiaries of any voting
securities of any bottler subsidiary without the consent of the Company;
- any material breach of any obligation of the bottler under the 1987
Contract; or
- except in the case of certain bottlers, if a person or affiliated group
acquires or obtains any right to acquire beneficial ownership of more
than 10% of any class or series of voting securities of the bottler
without authorization by the Company.
5
<PAGE>
Under the terms of the Bottler's Agreements, bottlers in the United States
are authorized to manufacture and distribute Company Trademark Beverages in
bottles and cans. However, these bottlers generally are not authorized to
manufacture fountain syrups. Rather, our Company manufactures and sells fountain
syrups to approximately 650 authorized fountain wholesalers (including certain
authorized bottlers) and some fountain retailers. The wholesalers in turn sell
the syrups or deliver them on our behalf to restaurants and other retailers. The
wholesaler typically acts pursuant to a non-exclusive letter of appointment
which neither restricts the pricing of fountain syrups by us nor the territory
in which the wholesaler may resell in the United States.
In the United States, the form of Bottler's Agreement for cola-flavored
soft drinks that covers the largest amount of U.S. volume (the "1987 Contract")
gives us complete flexibility to determine the price and other terms of sale of
soft drink concentrates and syrups for cola-flavored Company Trademark Beverages
("Coca-Cola Trademark Beverages") and other Company Trademark Beverages. In some
instances, we have agreed or may in the future agree with the bottler with
respect to concentrate pricing on a prospective basis for specified time
periods. Bottlers operating under the 1987 Contract accounted for approximately
88% of our Company's total United States gallon sales for bottled and canned
beverages, excluding direct sales by the Company of juice and juice-drink
products and other finished beverages ("U.S. bottle/can gallon sales") in 2002.
Certain other forms of U.S. Bottler's Agreements, entered into prior to 1987,
provide for soft drink concentrates or syrups for certain Coca-Cola Trademark
Beverages to be priced pursuant to a stated formula. The oldest such form of
contract, applicable to bottlers accounting for approximately 1% of U.S.
bottle/can gallon sales in 2002, provides for a fixed price for Coca-Cola syrup
used in bottles and cans. This price is subject to quarterly adjustments to
reflect changes in the quoted price of sugar. Bottlers accounting for the
remaining approximately 11% of U.S. bottle/can gallon sales in 2002 have
contracts for certain Coca-Cola Trademark Beverages with pricing formulas
generally providing for a baseline price. This baseline price may be adjusted
periodically by the Company, up to a maximum indexed ceiling price, and is
adjusted quarterly based upon changes in certain sugar or sweetener prices, as
applicable.
We have standard contracts with bottlers in the United States for the sale
of concentrates and syrups for non-cola-flavored soft drinks and certain
noncarbonated beverages in bottles and cans; and in certain cases for the sale
of finished noncarbonated beverages in bottles and cans. All of these standard
contracts give the Company complete flexibility to determine the price and other
terms of sale.
Under the 1987 Contract and most of our other standard soft drink and
noncarbonated beverage contracts with bottlers in the United States, our Company
has no obligation to participate with bottlers in expenditures for advertising
and marketing. Nevertheless, in our discretion we may contribute toward such
expenditures and undertake independent or cooperative advertising and marketing
activities. Some U.S. Bottler's Agreements that pre-date the 1987 Contract
impose certain marketing obligations on us with respect to certain Company
Trademark Beverages.
The Company's ability to exercise its contractual flexibility to determine
the price and other terms of sale of its syrups, concentrates, and finished
beverages under various agreements described above is, both outside and within
the United States, subject to competitive market conditions.
Significant Equity Investments and Company Bottling Operations
--------------------------------------------------------------
Our Company maintains business relationships with three types of bottlers:
(1) independently owned bottlers, in which the Company has no ownership
interest; (2) bottlers in which the Company has invested and has a
noncontrolling ownership interest; and (3) bottlers in which the Company has
invested and has a controlling ownership interest. In 2002, independently owned
bottling operations produced and distributed approximately 23% of our worldwide
unit case volume. We have equity positions in 53 unconsolidated bottling,
canning and distribution operations for our products worldwide. These cost or
equity method investees produced and distributed approximately 59% of our
worldwide unit case volume in 2002. Controlled and consolidated bottling
operations produced and distributed approximately 8% of our worldwide unit case
volume in 2002. Fountain operations and The Minute Maid Company (a global
division with operations primarily in the United States and Canada) produced and
distributed the remaining approximately 10% of our worldwide unit case volume in
2002.
We make equity investments in selected bottling operations with the
intention of maximizing the strength and efficiency of the Coca-Cola system's
production, distribution and marketing systems around the world. These
6
<PAGE>
investments are intended to result in increases in unit case volume, net
revenues, and profits at the bottler level, which in turn generate increased
gallon sales for our Company's concentrate business. When this occurs, both we
and the bottlers benefit from long-term growth in volume, improved cash flows
and increased share-owner value.
The level of our investment generally depends on the bottler's capital
structure and its available resources at the time of the investment.
Historically, in certain situations, we have viewed it as advantageous to
acquire a controlling interest in a bottling operation, often on a temporary
basis. Owning such a controlling interest has allowed us to compensate for
limited local resources and has enabled us to help focus the bottler's sales and
marketing programs and assist in the development of the bottler's business and
information systems and the establishment of appropriate capital structures.
In line with our long-term bottling strategy, we may periodically consider
options for reducing our ownership interest in a bottler. One such option is to
combine our bottling interests with the bottling interests of others to form
strategic business alliances. Another option is to sell our interest in a
bottling operation to one of our equity investee bottlers. In both of these
situations, our Company continues to participate in the bottler's results of
operations through its share of the equity investee's earnings or losses.
In cases where our investments in bottlers represent noncontrolling
interests, our intention is to provide expertise and resources to strengthen
those businesses.
Significant investees that we account for by the equity method include the
following:
Coca-Cola Enterprises Inc. Our ownership interest in Coca-Cola Enterprises
was approximately 38% at December 31, 2002. Coca-Cola Enterprises is the world's
largest bottler of the Company's beverage products. In 2002, net sales of
concentrates and syrups by the Company to Coca-Cola Enterprises were
approximately $4.3 billion. Coca-Cola Enterprises also purchases high-fructose
corn syrup through the Company; however, related collections from Coca-Cola
Enterprises and payments to suppliers are not included in the Company's
consolidated statements of income. Coca-Cola Enterprises estimates that the
territories in which it markets beverage products to retailers (which include
portions of 46 states and the District of Columbia in the U.S., Canada, Great
Britain, continental France, the Netherlands, Luxembourg, Belgium and Monaco)
contain approximately 79% of the United States population, 98% of the population
of Canada, and 100% of the populations of Great Britain, continental France, the
Netherlands, Luxembourg, Belgium and Monaco.
Excluding products in post-mix (fountain) form, in 2002, approximately 62%
of the unit case volume of Coca-Cola Enterprises was Coca-Cola Trademark
Beverages, approximately 31% of its unit case volume was other Company Trademark
Beverages, and approximately 7% of its unit case volume was beverage products of
other companies. Coca-Cola Enterprises' net operating revenues were
approximately $16.9 billion in 2002.
Coca-Cola Hellenic Bottling Company S.A. ("Coca-Cola HBC"). At December 31,
2002, our ownership interest in Coca-Cola HBC was approximately 24%. Coca-Cola
HBC has bottling and distribution rights, through direct ownership or joint
ventures, in Armenia, Austria, Belarus, Bosnia, Bulgaria, Croatia, Czech
Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Northern Ireland,
Republic of Ireland, Italy, Macedonia, Moldova, Nigeria, Poland, Romania,
Russia, Slovakia, Slovenia, Switzerland, Ukraine and Yugoslavia. Coca-Cola HBC
estimates that the territories in which it markets beverage products contain
approximately 67% of the population of Italy and 100% of the populations of the
other countries named above in which Coca-Cola HBC has bottling and distribution
rights.
In 2002, Coca-Cola HBC's net sales of beverage products were approximately
U.S.$3.6 billion. In 2002, approximately 53% of the unit case volume of
Coca-Cola HBC was Coca-Cola Trademark Beverages, approximately 41% of its unit
case volume was other Company Trademark Beverages and approximately 6% of its
unit case volume was beverage products of Coca-Cola HBC or other companies.
Coca-Cola Amatil Limited ("Coca-Cola Amatil"). At December 31, 2002, our
Company's ownership interest in Coca-Cola Amatil was approximately 35%.
Coca-Cola Amatil is the largest bottler of the Company's beverage products in
Australia and also has bottling and distribution rights, through direct
ownership or joint ventures, in New Zealand, Fiji, Papua New Guinea, Indonesia
and South Korea. Coca-Cola Amatil estimates that the territories in which it
markets beverage products contain approximately 99% of the population of
Australia, 100% of the
7
<PAGE>
populations of New Zealand, Fiji and South Korea, 93% of the population of Papua
New Guinea and 98% of the population of Indonesia.
In 2002, Coca-Cola Amatil's net sales of beverage products were
approximately U.S.$1.9 billion. In 2002, approximately 58% of the unit case
volume of Coca-Cola Amatil was Coca-Cola Trademark Beverages, approximately 34%
of its unit case volume was other Company Trademark Beverages, approximately 7%
of its unit case volume was beverage products of Coca-Cola Amatil and
approximately 1% of its unit case volume was beverage products of other
companies.
Panamerican Beverages, Inc. ("Panamco"). At December 31, 2002, our Company
owned an equity interest of approximately 25% in Panamco, a Panamanian holding
company with bottling subsidiaries operating in a substantial part of central
Mexico (excluding Mexico City); greater Sao Paulo, Campinas, Santos and Matto
Grosso do Sul, Brazil; central Guatemala; most of Colombia; and all of Costa
Rica, Venezuela, Nicaragua and Panama. Panamco estimates that the territories in
which it markets beverage products contain approximately 18% of the population
of Mexico, 14% of the population of Brazil, 95% of the population of Colombia,
38% of the population of Guatemala and 100% of the populations of Costa Rica,
Venezuela, Nicaragua and Panama.
In 2002, Panamco's net sales of beverage products were approximately
U.S.$2.4 billion. In 2002, approximately 52% of the unit case volume of Panamco
was Coca-Cola Trademark Beverages, approximately 26% of its unit case volume was
other Company Trademark Beverages and approximately 22% of its unit case volume
was beverage products of Panamco or other companies.
Coca-Cola FEMSA, S.A. de C.V. ("Coca-Cola FEMSA"). At December 31, 2002,
our Company owned a 30% equity interest in Coca-Cola FEMSA, a Mexican holding
company with bottling subsidiaries in the Valley of Mexico, Mexico's
southeastern region and greater Buenos Aires, Argentina. Coca-Cola FEMSA
estimates that the territories in which it markets beverage products contain
approximately 30% of the population of Mexico and approximately 31% of the
population of Argentina.
In 2002, Coca-Cola FEMSA's net sales of beverage products were
approximately U.S.$1.7 billion. In 2002, approximately 71% of the unit case
volume of Coca-Cola FEMSA was Coca-Cola Trademark Beverages, approximately 27%
of its unit case volume was other Company Trademark Beverages and approximately
2% of its unit case volume was beverage products of Coca-Cola FEMSA or other
companies.
In December 2002, it was announced that Coca-Cola FEMSA has reached a
definitive agreement to acquire Panamco in a merger transaction expected to
close in the first half of 2003. Completion of this transaction is subject to
approval by Panamco's share owners, regulatory approvals and other closing
conditions. Immediately following completion of the merger, our Company would no
longer directly own an equity interest in Panamco, and our Company's equity
interest in Coca-Cola FEMSA would increase from 30% to approximately 40%.
Other Interests. We own a 50% interest in a joint venture with Nestle S.A.
("Nestle") and certain of its subsidiaries which is focused upon the
ready-to-drink tea and coffee businesses. The joint venture, known as Beverage
Partners Worldwide ("BPW"), currently has sales in the United States and
approximately 45 other countries. BPW serves as the exclusive vehicle through
which our Company and Nestle participate in the ready-to-drink tea and coffee
business, except in Japan. BPW markets ready-to-drink tea products under the
Nestea, Belte, Yang Guang, Nagomi and Tey trademarks, and ready-to-drink coffee
products under the Nescafe, Taster's Choice and Georgia Club trademarks. It also
operates the Mad River noncarbonated beverage business in the United States.
Other Developments
- ------------------
In November 2001, we entered into a Control and Profit and Loss Transfer
Agreement ("CPL Agreement") with Coca-Cola Erfrischungsgetraenke AG ("CCEAG"),
the largest bottler in Germany. Under the terms of the CPL Agreement, our
Company acquired management control of CCEAG. In November 2001, we also entered
into a Pooling Agreement ("Pooling Agreement") with certain share owners of
CCEAG that provided our Company with voting control of CCEAG. Both agreements
became effective as of February 2002 for a term ending no later than December
31, 2006. In return for control of CCEAG, pursuant to the CPL Agreement we
guaranteed annual payments, in lieu of dividends by CCEAG, to all other CCEAG
share owners. Additionally, all other CCEAG share
8
<PAGE>
owners entered into either a put or a put/call option agreement with the
Company, exercisable at the end of the term of the CPL Agreement at agreed
prices. At December 31, 2002, our Company's ownership interest in CCEAG was
approximately 41%. This transaction was accounted for as a business combination,
and the results of CCEAG's operations have been included in our Company's
consolidated financial statements since February 2002.
In February 2003, CCEAG announced plans to streamline its operations and to
improve efficiency in sales and distribution. Three plants operated by the
bottler will be closed but will continue to operate as distribution centers. A
new bottling plant for noncarbonated beverages will soon start operations in
Halle. Implementation of the plan will result in a headcount reduction of
approximately 900 employees.
In January 2002, our Company and Coca-Cola Bottlers Philippines, Inc.
("CCBPI") acquired from RFM Corp., a Philippine food and beverage concern
("RFM"), RFM's approximately 83% ownership interest in Cosmos Bottling
Corporation ("Cosmos"), a publicly traded Philippine beverage company. In March
2002, a tender offer was completed with our Company and CCBPI acquiring all
shares of the remaining minority share owners except for shares representing a
one percent ownership interest in Cosmos. At December 31, 2002, our direct
ownership interest in Cosmos was approximately 61%, and our indirect ownership
interest in Cosmos was approximately 13%. This transaction was accounted for as
a business combination, and the results of Cosmos' operations have been included
in our Company's consolidated financial statements since January 2002. The
Company and CCBPI have agreed to restructure the operations of Cosmos, and this
restructuring will result in our Company owning all acquired trademarks and
CCBPI owning all acquired bottling assets. This restructuring is expected to be
completed in 2003.
In April 2002, our Company entered into a master distribution agreement
with Groupe Danone ("Danone") and certain subsidiaries of Danone pursuant to
which our Company was appointed the exclusive master distributor of Evian
bottled water in the United States and Canada effective July 1, 2002. Under this
master agreement, our Company is responsible for managing market execution,
sales and distribution for Evian in the United States and Canada, including the
development of marketing plans, media planning and consumer and customer
promotions. Danone and its subsidiaries are responsible for all global product
development and brand strategy efforts for Evian, as well as providing sales and
customer service support. The stated term of the master agreement is perpetual,
subject to earlier termination in the event of default. Under this arrangement,
Evian bottled water continues to be distributed by Coca-Cola Enterprises Inc.
and other licensed Coca-Cola bottlers within the U.S. and Canada, as well as
certain other existing distributors of Evian.
In July 2002, our Company and Danone Waters of North America, Inc. ("DWNA")
formed a new company, CCDA Waters, L.L.C. ("CCDA"), for the production,
marketing and distribution of DWNA's bottled spring and source water business in
the United States. In forming CCDA, DWNA contributed assets of its retail
bottled spring and source water business in the United States. These assets
include five production facilities, a license for the use of the Dannon and
Sparkletts brands, and ownership of several value brands. Our Company made a
cash payment to acquire a controlling 51% equity interest in CCDA and is also
providing marketing, distribution and management expertise. This transaction was
accounted for as a business combination, and the results of CCDA's operations
have been included in our Company's consolidated financial statements since July
2002. This business combination expanded our water brands to include a national
offering in all sectors of the water category with purified, spring and source
waters.
In January 2003, we announced that we are integrating the operations of our
three separate business units in North America: Coca-Cola North America
(including our interest in CCDA), The Minute Maid Company (including our Odwalla
business) and Coca-Cola Fountain. Going forward, the integrated business unit
will be referred to simply as Coca-Cola North America. The integration plan
calls for the unification of information technology, human resources, sales,
marketing, finance, legal and administrative staffs to eliminate unnecessary
duplication of effort. The integration is expected to result in a headcount
reduction of approximately 1,000 people, and the identification of the
individuals is expected to be completed during the first quarter of 2003.
9
<PAGE>
Seasonality
- -----------
Sales of ready-to-drink nonalcoholic beverages are somewhat seasonal, with
the second and third calendar quarters accounting for the highest sales volumes
in the Northern Hemisphere. The volume of sales in the beverages business may be
affected by weather conditions.
Competition
- -----------
Our Company competes in the nonalcoholic beverages segment of the
commercial beverages industry. Based on internally available data and a variety
of industry sources, we believe that in 2002, worldwide sales of Company
products comprised approximately 10% of total worldwide sales of nonalcoholic
beverage products. The nonalcoholic beverages segment of the commercial
beverages industry is highly competitive, consisting of numerous firms. These
include firms that compete, like our Company, in multiple geographical areas as
well as firms that are primarily local in operation. Competitive products
include carbonates, packaged water, juices and nectars, fruit drinks and
dilutables (including syrups and powdered drinks), sports and energy drinks,
coffee and tea, still drinks and other beverages. Nonalcoholic beverages are
sold to consumers in both ready-to-drink and not-ready-to-drink form. In many of
the countries in which we do business, including the United States, PepsiCo,
Inc. is a primary competitor of ours. Other significant competitors include
Nestle S.A., Cadbury Schweppes plc, Groupe Danone and Kraft Foods Inc., among
others.
Most of our beverages business currently is in soft drinks, as that term is
defined in this report. The soft-drink business, which is part of the
nonalcoholic beverages segment, is itself highly competitive. Our Company is the
leading seller of soft-drink concentrates and syrups in the world. Numerous
firms, however, compete in that business. These consist of a range of firms,
from local to international, that compete against our Company in numerous
geographical areas.
Competitive factors with respect to our business include pricing,
advertising and sales promotion programs, product innovation, increased
efficiency in production techniques, the introduction of new packaging, new
vending and dispensing equipment and brand and trademark development and
protection.
Positive aspects of our competitive position include strong brands with a
high level of consumer acceptance, a worldwide network of bottlers and
distributors of Company products, sophisticated marketing capabilities and a
talented group of dedicated employees. Negative aspects of our competitive
position include strong competition in nearly all geographies, and, in many
countries, a concentrated retail sector with powerful buyers able to freely
choose between Company products and those of its competitors.
Raw Materials
- -------------
The principal raw material used by our business in the United States is
high-fructose corn syrup, a form of sugar, which is available from numerous
domestic sources and is historically subject to fluctuations in its market
price. The principal raw material used by our business outside the United States
is sucrose. Our Company has a specialized sweetener procurement staff and has
not experienced any difficulties in obtaining its requirements. In the United
States and certain other countries, we have authorized the use of high-fructose
corn syrup for Coca-Cola and other Company Trademark Beverages for use in both
fountain syrup and finished beverages in bottles and cans.
Generally, raw materials utilized by us in our business are readily
available from numerous sources. However, aspartame, which is usually used alone
or in combination with either saccharin or acesulfame potassium in our
low-calorie soft-drink products, is currently purchased by us primarily from The
NutraSweet Company and from Holland Sweetener. Acesulfame potassium is currently
purchased from Nutrinova Nutrition Specialties & Food Ingredients GmbH.
With regard to juice and juice-drink products, the citrus industry is
subject to the variability of weather conditions. This includes in particular
the possibility of freezes in central Florida, which may result in higher prices
and lower consumer demand for orange juice throughout the industry. Due to our
long-standing relationship with a supplier of high-quality Brazilian orange
juice concentrate, the supply of juice available that meets the Company's
standards is normally adequate to meet demand.
10
<PAGE>
Patents, Trade Secrets, Trademarks and Copyrights
- -------------------------------------------------
Our Company is the owner of numerous patents, copyrights and trade secrets,
as well as substantial know-how and technology, which we collectively refer to
in this report as "technology." This technology generally relates to our
Company's products and the processes for their production, the packages used for
its products, the design and operation of various processes and equipment used
in its business and certain quality assurance and financial software. Some of
the technology is licensed to suppliers and other parties. Our soft-drink and
other beverage formulae are among the important trade secrets of the Company.
We own numerous trademarks which are very important to our business.
Depending upon the jurisdiction, trademarks are valid as long as they are in use
and/or their registrations are properly maintained and they have not been found
to have become generic. Registrations of trademarks can generally be renewed
indefinitely as long as the trademarks are in use. The majority of our Company's
trademark license agreements are included in the Company's Bottler's Agreements.
The Company has registered and licenses the right to use its trademarks in
conjunction with certain merchandise in addition to nonalcoholic beverages.
Governmental Regulation
- -----------------------
Our Company is required to comply, and it is our policy to comply, with
applicable laws in the numerous countries throughout the world in which we do
business. In many jurisdictions, compliance with competition laws is of special
importance to us, and our operations may come under special scrutiny by
competition law authorities, due to our competitive position in those
jurisdictions.
The production, distribution and sale in the United States of many of the
Company's products are subject to the Federal Food, Drug and Cosmetic Act; the
Occupational Safety and Health Act; the Lanham Act; various environmental
statutes; and various other federal, state and local statutes and regulations
applicable to the production, transportation, sale, safety, advertising,
labeling and ingredients of such products.
A California law requires that a specific warning appear on any product
that contains a component listed by the State as having been found to cause
cancer or birth defects. The law exposes all food and beverage producers to the
possibility of having to provide warnings on their products. This is because the
law recognizes no generally applicable quantitative thresholds below which a
warning is not required. Consequently, even trace amounts of listed components
can expose affected products to the prospect of warning labels. Products
containing listed substances that occur naturally in the product or that are
contributed to the product solely by a municipal water supply are generally
exempt from the warning requirement. No Company beverage products are currently
required to display warnings under this law. However, we are unable to predict
whether an important component of a Company product might be added to the
California list in the future. We are also unable to predict whether or to what
extent a warning under this law would have an impact on costs or sales of
Company beverage products.
Bottlers of our beverage products presently offer non-refillable,
recyclable containers in all areas of the United States and Canada. Some of
these bottlers also offer refillable containers, which are also recyclable.
Measures have been enacted in various localities and states which require that a
deposit be charged for certain non-refillable beverage containers. The precise
requirements imposed by these measures vary. Other deposit, recycling or product
stewardship proposals have been introduced in various jurisdictions. We
anticipate that similar legislation or regulations may be proposed in the future
at the local, state and federal levels, both in the United States and elsewhere.
All of our Company's facilities in the United States are subject to
federal, state and local environmental laws and regulations. Compliance with
these provisions has not had, and we do not expect such compliance to have, any
material adverse effect upon our Company's capital expenditures, net income or
competitive position.
11
<PAGE>
Employees
- ---------
As of December 31, 2002, our Company employed approximately 56,000 persons,
compared to approximately 38,000 at the end of 2001. The increase in the number
of employees was primarily due to acquisitions made during 2002, including the
acquisitions of our interests in Cosmos and CCDA, plus the consolidation of
CCEAG. At the end of 2002, approximately 10,900 Company employees were located
in the United States.
Our Company, through its divisions and subsidiaries, has entered into
numerous collective bargaining agreements. We have no reason to believe that we
will not be able to renegotiate any such agreements on satisfactory terms. The
Company believes that its relations with its employees are generally
satisfactory.
Securities Exchange Act Reports
- -------------------------------
The Company maintains an Internet website at the following address:
www.coca-cola.com. We make available on or through our Internet website certain
reports and amendments to those reports that we file with the Securities and
Exchange Commission (the "SEC") in accordance with the Securities Exchange Act
of 1934 (the "Securities Exchange Act"). These include our annual reports on
Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form
8-K. We make this information available on our website free of charge as soon as
reasonably practicable after we electronically file the information with, or
furnish it to, the SEC.
ITEM 2. PROPERTIES
- ------------------
Our worldwide headquarters is located on a 35-acre office complex in
Atlanta, Georgia. The complex includes the approximately 621,000 square foot
headquarters building, the approximately 870,000 square foot Coca-Cola North
America building and the approximately 264,000 square foot Coca-Cola Plaza
building. The complex also includes several other buildings, including the
technical and engineering facilities, learning center and reception center. Our
Company leases approximately 250,000 square feet of office space at 10 Glenlake
Parkway, Atlanta, Georgia. In addition, we lease approximately 174,000 square
feet of office space at Northridge Business Park, Dunwoody, Georgia. The North
America operating segment owns and occupies an office building located in
Houston, Texas, that contains approximately 330,000 square feet. The Company has
facilities for administrative operations, manufacturing, processing, packaging,
packing, storage and warehousing throughout the United States.
As of December 31, 2002, our Company owned and operated 33 principal
beverage concentrate and/or syrup manufacturing plants located throughout the
world. In addition, we own or hold a majority interest in 39 operations with 103
principal beverage bottling and canning plants located outside the United
States. CCDA owns four production facilities and leases one production facility.
All five of these facilities are located in the United States.
The North America segment operates eight juice and juice drink production
facilities located throughout the United States and Canada. The Company also
owns a facility that manufactures juice concentrates for food service use. It
also utilizes a system of contract packers to produce and distribute certain
products in areas where the Company does not have its own manufacturing centers
or during periods when it experiences shortfalls in manufacturing capacity.
Our Company owns or leases additional real estate, including a
Company-owned office and retail building at 711 Fifth Avenue in New York, New
York and approximately 315,000 square feet of Company-owned office and technical
space in Brussels, Belgium. Additional owned or leased real estate located
throughout the world is used by the Company as office space, for bottling,
warehouse or retail operations or, in the case of some owned property, is leased
to others.
Management believes that the Company's facilities for the production of its
products are suitable and adequate, that they are being appropriately utilized
in line with past experience and that they have sufficient production capacity
for their present intended purposes. The extent of utilization of such
facilities varies based upon the seasonal demand for product. It is not possible
to measure with any degree of certainty or uniformity the productive capacity
and extent of utilization of these facilities. However, management believes that
additional production can be obtained at the existing facilities by the addition
of personnel and capital equipment and, in some facilities, the addition of
shifts of personnel or expansion of such facilities. We continuously review our
anticipated requirements
12
<PAGE>
for facilities and, on the basis of that review, may from time to time acquire
additional facilities and/or dispose of existing facilities.
ITEM 3. LEGAL PROCEEDINGS
- -------------------------
On October 27, 2000, a class action lawsuit (Carpenter's Health & Welfare
Fund of Philadelphia & Vicinity v. The Coca-Cola Company, et al.) was filed in
the United States District Court for the Northern District of Georgia alleging
that the Company, M. Douglas Ivester, Jack L. Stahl and James E. Chestnut
violated antifraud provisions of the federal securities laws by making
misrepresentations or material omissions relating to the Company's financial
condition and prospects in late 1999 and early 2000. A second, largely identical
lawsuit (Gaetan LaValla v. The Coca-Cola Company, et al.) was filed in the same
court on November 9, 2000. The Complaints allege that the Company and the
individual named officers: (1) forced certain Coca-Cola system bottlers to
accept "excessive, unwanted and unneeded" sales of concentrate during the third
and fourth quarters of 1999, thus creating a misleading sense of improvement in
our Company's performance in those quarters; (2) failed to write down the value
of impaired assets in Russia, Japan and elsewhere on a timely basis, again
resulting in the presentation of misleading interim financial results in the
third and fourth quarters of 1999; and (3) misrepresented the reasons for Mr.
Ivester's departure from the Company and then misleadingly reassured the
financial community that there would be no changes in the Company's core
business strategy or financial outlook following that departure. Damages in an
unspecified amount are sought in both Complaints.
On January 8, 2001, an order was entered by the United States District
Court for the Northern District of Georgia consolidating the two cases for all
purposes. The Court also ordered the plaintiffs to file a Consolidated Amended
Complaint. On July 25, 2001, plaintiffs filed a Consolidated Amended Complaint,
which largely repeated the allegations made in the original Complaints and added
Douglas N. Daft as an additional defendant.
On September 25, 2001, the defendants filed a Motion to Dismiss all counts
of the Consolidated Amended Complaint. On August 20, 2002, the Court granted in
part and denied in part the defendants' Motion to Dismiss. The Court also
granted the plaintiffs' Motion for Leave to Amend the Complaint. On September 4,
2002, the defendants filed a Motion for Partial Reconsideration of the Court's
August 20, 2002 ruling. This latter Motion is currently under consideration by
the Court.
On December 20, 2002, the Company filed a lawsuit (The Coca-Cola Company v.
Aqua-Chem, Inc., Civil Action No. 2002CV631-50) in the Superior Court, Fulton
County, Georgia (the "Georgia Case") seeking a declaratory judgment that the
Company has no obligation to its former subsidiary, Aqua-Chem, Inc., for any
past, present or future liabilities or expenses in connection with any claims or
lawsuits against Aqua-Chem. Subsequent to the Company's filing, on the same day
Aqua-Chem filed a lawsuit (Aqua-Chem, Inc. v. The Coca-Cola Company, Civil
Action No. 02CV012179) in the Circuit Court, Civil Division of Milwaukee County,
Wisconsin (the "Wisconsin Case"). In the Wisconsin Case, Aqua-Chem seeks a
declaratory judgment that the Company is responsible for all liabilities and
expenses in connection with certain of Aqua-Chem's general and product liability
claims arising from occurrences prior to the Company's sale of Aqua-Chem in
1981, and a judgment for breach of contract in an amount exceeding $9 million
for defense costs, expenses and settlements incurred by Aqua-Chem to date in
connection with such claims.
The Company owned Aqua-Chem from 1970 to 1981. During that time frame, the
Company purchased over $400 million of insurance coverage that is available to
cover Aqua-Chem for certain product liability and other claims. Cleaver Brooks,
an Aqua-Chem subsidiary, manufactured boilers, some of which contained asbestos
gaskets. The Company sold Aqua-Chem to Lyonnaise American Holding, Inc. in 1981
under the terms of a stock sale agreement, and, following a lawsuit involving a
tax dispute, entered into a settlement agreement in 1983 with Lyonnaise and
Aqua-Chem. The 1981 and 1983 agreements, among other things, outlined the
parties' rights and obligations concerning past and future claims and lawsuits
involving Aqua-Chem.
Aqua-Chem was first named as a defendant in asbestos lawsuits in or around
1985 and, to date, has more than 100,000 claims pending against it. In October
2002, Aqua-Chem asserted that since 1985 it had incurred approximately $10
million in expenses related to these claims that were not covered by insurance.
Aqua-Chem demanded that the Company reimburse these expenses pursuant to its
interpretation of the terms of the 1981 and 1983 agreements. It also demanded
that the Company acknowledge its continuing obligations to Aqua-Chem under
13
<PAGE>
these agreements for any future liabilities and expenses that are excluded from
coverage under the applicable insurance or for which there is no insurance. The
Company disputes Aqua-Chem's interpretation of the agreements and believes it
has no past, present or future obligation to Aqua-Chem in this regard. This led
to the filing of the Georgia Case.
The parties have agreed to stay the Wisconsin Case pending final resolution
of the Georgia Case. The parties have further agreed to a six month discovery
schedule in the Georgia Case. On January 15, 2003, the court entered a consent
order in the Georgia Case setting forth the agreed discovery schedule. On
January 22, 2003, the Wisconsin Court entered a consent order submitted by the
parties staying the Wisconsin Case.
The Company believes it has substantial legal and factual defenses to
Aqua-Chem's claims and intends to vigorously prosecute the Georgia Case and
defend the Wisconsin Case.
The competition authority of the European Commission made unannounced
visits to the offices of the Company and of our bottling partners in Austria,
Belgium, Denmark, Germany and Great Britain several years ago. Similarly, the
Spanish competition authorities made unannounced visits to our own offices and
those of certain bottlers in Spain in September 2000. The European Commission
and the Spanish competition authorities continue their investigations into
unspecified market practices in their respective jurisdictions. The Company
believes it has substantial legal and factual defenses in these matters.
The Company is involved in various other legal proceedings. Management of
the Company believes that any liability to the Company which may arise as a
result of these proceedings, including the proceedings specifically discussed
above, will not have a material adverse effect on the financial condition of the
Company and its subsidiaries taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
Not applicable.
ITEM X. EXECUTIVE OFFICERS OF THE COMPANY
- -----------------------------------------
The following are the executive officers of our Company:
Alexander R.C. Allan, 58, is Executive Vice President of the Company
and President and Chief Operating Officer, Europe, Eurasia and Middle East.
Mr. Allan joined Coca-Cola Bottling Company of Johannesburg in 1968 as an
Internal Auditor. He was appointed the financial Controller for the
Southern Africa Division of The Coca-Cola Company in 1978 and Assistant
Division Manager and Finance Manager of the Southern and Central Africa
Division in 1986. From January 1986 until January 1993, he served as the
Managing Director of National Beverage Services (Pty) Ltd., a management
and services company in South Africa. In January 1993, he was appointed
President of the Middle East Division (renamed Middle East & North Africa
division in 1998). Mr. Allan was appointed President of the Middle & Far
East Group in October 1999. On March 4, 2001, Mr. Allan was named head of
the newly created Asia strategic business unit of the Company. Mr. Allan
was elected to his current position in April 2001, and was appointed
President and Chief Operating Officer of the Europe, Eurasia and Middle
East strategic business unit as of January 1, 2002.
Alexander B. Cummings, Jr., 46, is Executive Vice President of the
Company and President and Chief Operating Officer, Africa. Mr. Cummings
joined the Company in 1997 as Deputy Region Manager, Nigeria based in
Lagos, Nigeria. In 1998 he was made Managing Director/Region Manager,
Nigeria. In 2000, Mr. Cummings became President of the North West Africa
Division based in Morocco and in 2001 became President of the Africa Group
overseeing the entire African continent. Mr. Cummings was elected to his
current position in July 2002. Mr. Cummings started his career in 1982 with
The Pillsbury Company and held various positions within Pillsbury, his last
position being Vice President of Finance for all of Pillsbury's
international businesses.
Douglas N. Daft, 59, is Chairman of the Board of Directors and Chief
Executive Officer of the Company. In November 1984, Mr. Daft was
14
<PAGE>
appointed President of the Central Pacific Division. In October 1987,
he was appointed Senior Vice President, of the Pacific Group of the
International Business Sector. In December 1988, he was named President of
Coca-Cola (Japan) Company, Limited and President of the North Pacific
Division of the International Business Sector. Effective 1991, he was
elected Senior Vice President of the Company and named President of the
Pacific Group of the International Business Sector. He was appointed
President of the Middle and Far East Group in January 1995 and served in
that capacity until October 1999 when he also was given responsibilities
for the Africa Group and the Schweppes Beverages Division. He was elected
President and Chief Operating Officer and a Director of the Company in
December 1999. Mr. Daft was elected to his current positions in February
2000.
Jeffrey T. Dunn, 45, is Executive Vice President of the Company and
President and Chief Operating Officer, North America. Mr. Dunn joined the
Company in 1981. From 1985 to 1990, Mr. Dunn served in various positions in
Coca-Cola USA Fountain. In 1990, Mr. Dunn was named Vice President,
Presence Marketing, Coca-Cola USA. In 1994, he rejoined Coca-Cola USA
Fountain as Vice President, Marketing and in May 1996, was named Vice
President, Field Sales and Marketing. He was named Vice President and
General Manager, Coca-Cola USA Fountain in February 1998, and Senior Vice
President, Coca-Cola USA Fountain in June 1998. In January 2000, Mr. Dunn
was appointed Senior Vice President of The Coca-Cola North America
Marketing Division. Mr. Dunn was elected Senior Vice President of the
Company and President of the North America Group in October 2000. In March
2001, Mr. Dunn was named head of the newly created Americas strategic
business unit of the Company which included both North America and Latin
America. He was elected Executive Vice President of the Company in April
2001. In April 2002, Mr. Dunn transitioned his Latin American
responsibilities and assumed responsibility for Minute Maid North America,
in connection with the formation of the new North America strategic
business unit he now leads.
Brian G. Dyson, 67, is Vice Chairman of the Company. Mr. Dyson joined
the Company in Venezuela in 1959, and worked for many years in South
America, the Caribbean and Mexico. In 1978 he was named President of
Coca-Cola USA, the Company's U.S. soft drink division. In 1983 he was named
President of Coca-Cola North America, with responsibility for the Company's
entire North American business. In 1986 Mr. Dyson was named President and
Chief Executive Officer of Coca-Cola Enterprises, the Company's largest
bottler; and in 1991 he was named Vice Chairman of Coca-Cola Enterprises.
Mr. Dyson retired from the Coca-Cola system in 1994, but remained active as
a consultant to the Company. In August 2001, Mr. Dyson came out of
retirement and accepted the positions of Vice Chairman and Chief Operating
Officer of the Company, the latter of which he held until December 2002.
Gary P. Fayard, 50, is Executive Vice President and Chief Financial
Officer of the Company. Mr. Fayard joined the Company in April 1994. In
July 1994, he was elected Vice President and Controller. In December 1999,
he was elected Senior Vice President and Chief Financial Officer. Prior to
joining the Company, Mr. Fayard was a partner with Ernst & Young. Mr.
Fayard was elected to his current position in February 2003.
Steven J. Heyer, 50, was elected President and Chief Operating Officer
of the Company on December 11, 2002. Mr. Heyer joined the Company in April
2001 as President and Chief Operating Officer, Coca-Cola Ventures and in
April 2002 assumed leadership responsibility for Latin America. In his
current role, Mr. Heyer is responsible for overseeing all of the Company's
strategic business units. Mr. Heyer joined the Company from AOL Time
Warner, where he served since 1996 as President and Chief Operating Officer
of Turner Broadcasting System, Inc. Mr. Heyer joined TBS, Inc. in 1994 as
President of Turner Broadcasting Sales, Inc. Prior to that, Mr. Heyer was
President and Chief Operating Officer of Young & Rubicam Advertising
Worldwide, as well as Executive Vice President of Young & Rubicam, Inc. In
addition, Mr. Heyer was for 15 years with Booz Allen & Hamilton, Inc. and
served as Senior Vice President and Managing Partner of the firm's New York
office and leader of its Marketing Practice Worldwide.
Mary E. Minnick, 43, is Executive Vice President of the Company and
President and Chief Operating Officer, Asia. Ms. Minnick joined the Company
in 1983 and spent ten years working in Fountain Sales and the Bottle/Can
Division of Coca-Cola USA. In 1993, she joined Corporate Marketing. In
1996, she was appointed Vice President and Director, Middle and Far East
Marketing, and served in that capacity until 1997 when she was appointed
President of the South Pacific Division. In 2000, she was named President
of
15
<PAGE>
Coca-Cola (Japan) Company, Limited. Ms. Minnick was appointed President and
Chief Operating Officer of the Asia strategic business unit as of January
1, 2002, and was elected to her current position in February 2002.
Deval L. Patrick, 46 is Executive Vice President, General Counsel and
Secretary of the Company. He was elected to the first two positions in
April 2001 and was elected Secretary of the Company in October 2002,
effective January 1, 2003. Mr. Patrick was Assistant Attorney General of
the United States and Chief of the U.S. Justice Department's Civil Rights
Division from 1994 until 1997, where he was responsible for enforcing
federal laws prohibiting discrimination. From 1997 to 1999, Mr. Patrick was
a partner with the Boston law firm of Day Berry & Howard LLP. Mr. Patrick
joined our Company from Texaco Inc., where he served as Vice President and
General Counsel from 1999 to 2001.
Jose Octavio Reyes, 50, is Executive Vice President of the Company and
President and Chief Operating Officer, Latin America. He began his career
with The Coca-Cola Company in 1980 in Coca-Cola de Mexico as Manager of
Strategic Planning. In 1986 he was Manager of Sprite and diet Coke brands
at Corporate Headquarters. In 1990 he was appointed Marketing Director for
the Brazil Division, and later became Marketing and Operations Vice
President for the Mexico Division. Mr. Reyes assumed the role of Deputy
Division President for the Mexico Division in January 1996 and was named
Division President for the Mexico Division in May 1996. In 2000, Venezuela,
Colombia, Central America and Costa Rica were incorporated into the
Division. Mr. Reyes assumed his position as President and Chief Operating
Officer, Latin America in December 2002, and was elected to his current
position in February 2003.
Clyde C. Tuggle, 40, is Senior Vice President, Worldwide Public
Affairs and Communications, of the Company. Mr. Tuggle joined the Company
in 1989 in Corporate Issues Communications. From 1992 to 1998, he served as
executive assistant to then Chairman and Chief Executive Officer Roberto C.
Goizueta, managing business activities, external affairs, and
communications related to the Office of the Chairman. In 1998, he
transferred to the Central European Division, where he held a variety of
positions, including director of Operations Development, deputy to the
division president, and Austria region manager. In 2000, Mr. Tuggle
returned to Atlanta as executive assistant to Chairman and Chief Executive
Officer Doug Daft and was elected Vice President. He was appointed Director
of Worldwide Public Affairs and Communications in 2001. In 2002, he took on
additional responsibilities, including Government Affairs, North American
Public Relations & Communications and Strategic Event Services. Mr. Tuggle
was elected to his current position in February 2003.
The Executive Committee is responsible for setting policy and establishing
strategic direction for the Company. At the date of this report, the 11
executive officers named above comprise the members of the Executive Committee.
All executive officers serve at the pleasure of the Board of Directors.
There is no family relationship between any of the executive officers of the
Company.
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHARE-OWNER
MATTERS
- ---------------------------------------------------------------------------
"Financial Review Incorporating Management's Discussion and Analysis" on
pages 45 through 72, "Selected Financial Data" for the years 2001 and 2002 on
page 110, "Stock Prices" on page 109 and "Common Stock," "Stock Exchanges" and
"Dividends" under the heading "Share-Owner Information" on page 114 of the
Company's Annual Report to Share Owners for the year ended December 31, 2002
(the "Company's 2002 Annual Report to Share Owners"), are incorporated herein by
reference.
During the fiscal year ended December 31, 2002, no equity securities of the
Company were sold by the Company which were not registered under the Securities
Act of 1933, as amended.
The subsection under the heading "Executive Compensation" entitled "Equity
Compensation Plan Information" on pages 33 and 34 of the Company's Proxy
Statement for the Annual Meeting of Share Owners to be
16
<PAGE>
held April 16, 2003 (the "Company's 2003 Proxy Statement"), is incorporated into
Item 12 of this report by reference.
ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------
"Selected Financial Data" for the years 1998 through 2002, on pages 110 and
111 of the Company's 2002 Annual Report to Share Owners, is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------
"Financial Review Incorporating Management's Discussion and Analysis" on
pages 45 through 72 of the Company's 2002 Annual Report to Share Owners, is
incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
"Financial Risk Management" on pages 51 and 52, and Note 10 to the
Consolidated Financial Statements on pages 90 through 92, of the Company's 2002
Annual Report to Share Owners, are incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------
The following consolidated financial statements of the Company and its
subsidiaries, included in the Company's 2002 Annual Report to Share Owners, are
incorporated herein by reference:
Consolidated Statements of Income - Years ended December 31, 2002, 2001
and 2000.
Consolidated Balance Sheets - December 31, 2002 and 2001.
Consolidated Statements of Cash Flows - Years ended December 31, 2002,
2001 and 2000.
Consolidated Statements of Share-Owners' Equity - Years ended December
31, 2002, 2001 and 2000.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
"Quarterly Data (Unaudited)" on page 108 of the Company's 2002 Annual
Report to Share Owners, is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
- ---------------------------------------------------------------------------
Not applicable.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -----------------------------------------------------------
For information on Directors and executive officers of the Company, the
subsection under the heading "Election of Directors" entitled "Board of
Directors" on pages 6 through 11 and under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" on page 15 of the Company's 2003 Proxy Statement
is incorporated herein by reference. See Item X in Part I of this report for
information regarding executive officers of the Company.
17
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------
The subsection under the heading "Election of Directors" entitled
"Information about Committees, Meetings and Compensation of Directors" on pages
17 through 20, the portion of the section entitled "Executive Compensation" set
forth on pages 23 through 31, and the subsection entitled "Compensation
Committee Interlocks and Insider Participation" on page 41 of the Company's 2003
Proxy Statement, are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -----------------------------------------------------------------------
The subsection under the heading "Executive Compensation" entitled "Equity
Compensation Plan Information" on pages 33 and 34 of the Company's 2003 Proxy
Statement, is incorporated herein by reference.
The subsections under the heading "Election of Directors" entitled
"Ownership of Equity Securities in the Company" on pages 12 through 14 and
"Principal Share Owners" on pages 15 and 16, and the subsection under the
heading "Certain Investee Companies" entitled "Ownership of Securities in
Enterprises" on page 42 of the Company's 2003 Proxy Statement, are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------
The subsections under the heading "Election of Directors" entitled
"Information about Committees, Meetings and Compensation of Directors" and
"Certain Transactions and Relationships" on pages 17 through 22, the subsection
under the heading "Executive Compensation" entitled "Compensation Committee
Interlocks and Insider Participation" on page 41 and the section under the
heading "Certain Investee Companies" on pages 41 and 42 of the Company's 2003
Proxy Statement, are incorporated herein by reference.
ITEM 14. CONTROLS AND PROCEDURES
- --------------------------------
We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the Company's Securities Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, as ours are
designed to do, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
During the 90-day period prior to the date of this report, an evaluation
was performed under the supervision and with the participation of our Company's
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based upon that evaluation, the Chief Executive Officer
and the Chief Financial Officer concluded that our disclosure controls and
procedures were effective. Subsequent to the date of this evaluation, there have
been no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls, and no corrective
actions taken with regard to significant deficiencies or material weaknesses in
such controls.
PART IV
-------
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
- -----------------------------------------------------------------------
(a) 1. Financial Statements
The following consolidated financial statements of The Coca-Cola
Company and subsidiaries, included in the Company's 2002 Annual Report
to Share Owners, are incorporated by reference in Part II, Item 8:
Consolidated Statements of Income - Years ended December 31, 2002,
2001 and 2000.
18
<PAGE>
Consolidated Balance Sheets - December 31, 2002 and 2001.
Consolidated Statements of Cash Flows - Years ended December 31, 2002,
2001 and 2000.
Consolidated Statements of Share-Owners' Equity - Years ended December
31, 2002, 2001 and 2000.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. The following consolidated financial statement schedule of The Coca-Cola
Company and subsidiaries is included in Item 15(d):
Schedule II - Valuation and Qualifying Accounts.
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable and,
therefore, have been omitted.
3. Exhibits
Exhibit No.
- ----------
2.1 Control and Profit and Loss Transfer Agreement, dated November 21,
2001, between Coca-Cola GmbH and Coca-Cola Erfrischungsgetraenke AG
-- incorporated herein by reference to Exhibit 2 of the Company's
Form 10-Q Quarterly Report for the quarter ended March 31, 2002.
(With regard to applicable cross references in this report, the
Company's Current, Quarterly and Annual Reports are filed with the
Securities and Exchange Commission under File No. 1-2217.)
3.1 Certificate of Incorporation of the Company, including Amendment of
Certificate of Incorporation, effective May 1, 1996 -- incorporated
herein by reference to Exhibit 3 of the Company's Form 10-Q
Quarterly Report for the quarter ended March 31, 1996.
3.2 By-Laws of the Company, as amended and restated through January 30,
2003.
4.1 The Company agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of any instrument defining the
rights of holders of long-term debt of the Company and all of its
consolidated subsidiaries and unconsolidated subsidiaries for which
financial statements are required to be filed with the Securities
and Exchange Commission.
10.1.1 The Key Executive Retirement Plan of the Company, as amended -
incorporated herein by reference to Exhibit 10.2 of the Company's
Form 10-K Annual Report for the year ended December 31, 1995.*
10.1.2 Third Amendment to the Key Executive Retirement Plan of the Company,
dated as of July 9, 1998 -- incorporated herein by reference to
Exhibit 10.1.2 of the Company's Form 10-K Annual Report for the year
ended December 31, 1999.*
10.1.3 Fourth Amendment to the Key Executive Retirement Plan of the
Company, dated as of February 16, 1999 -- incorporated herein by
reference to Exhibit 10.1.3 of the Company's Form 10-K Annual Report
for the year ended December 31, 1999.*
19
<PAGE>
Exhibit No.
- ----------
10.1.4 Fifth Amendment to the Key Executive Retirement Plan of the Company,
dated as of January 25, 2000 -- incorporated herein by reference to
Exhibit 10.1.4 of the Company's Form 10-K Annual Report for the year
ended December 31, 1999.*
10.2 Supplemental Disability Plan of the Company, as amended and restated
effective January 1, 2003.*
10.3 The Performance Incentive Plan of the Company, as amended --
incorporated herein by reference to Exhibit 10.4 of the Company's
Form 10-K Annual Report for the year ended December 31, 1995.*
10.4 1991 Stock Option Plan of the Company, as amended and restated
through April 20, 1999 -- incorporated herein by reference to
Exhibit 10.2 of the Company's Form 10-Q Quarterly Report for the
quarter ended March 31, 1999.*
10.5 1999 Stock Option Plan of the Company, as amended and restated
through February 20, 2002 -- incorporated herein by reference to
Exhibit 10.1 of the Company's Form 10-Q Quarterly Report for the
quarter ended March 31, 2002.*
10.6 2002 Stock Option Plan of the Company, adopted as of April 17, 2002
-- incorporated herein by reference to Exhibit 10.4 of the Company's
Form 10-Q Quarterly Report for the quarter ended March 31, 2002.*
10.7 1983 Restricted Stock Award Plan of the Company, as amended through
February 17, 2000 -- incorporated herein by reference to Exhibit
10.7 of the Company's Form 10-K Annual Report for the year ended
December 31, 1999.*
10.8 1989 Restricted Stock Award Plan of the Company, as amended and
restated through March 1, 2002 -- incorporated herein by reference
to Exhibit 10 of the Company's Form 10-Q Quarterly Report for the
quarter ended September 30, 2002.*
10.9.1 Compensation Deferral & Investment Program of the Company, as
amended, including Amendment Number Four dated November 28, 1995 --
incorporated herein by reference to Exhibit 10.13 of the Company's
Form 10-K Annual Report for the year ended December 31, 1995.*
10.9.2 Amendment Number 5 to the Compensation Deferral & Investment Program
of the Company, effective as of January 1, 1998 -- incorporated
herein by reference to Exhibit 10.8.2 of the Company's Form 10-K
Annual Report for the year ended December 31, 1997.*
10.10 Executive Medical Plan of The Coca-Cola Company, as amended and
restated effective January 1, 2001.*
10.11 Supplemental Benefit Plan of the Company, as amended and restated
effective January 1, 2002.*
10.12 Retirement Plan for the Board of Directors of the Company, as
amended -- incorporated herein by reference to Exhibit 10.22 of the
Company's Form 10-K Annual Report for the year ended December 31,
1991.*
10.13 Deferred Compensation Plan for Non-Employee Directors of the
Company, adopted as of October 16, 1997 -- incorporated herein by
reference to Exhibit 10.12 of the Company's Form 10-K Annual Report
for the year ended December 31, 1997.*
20
<PAGE>
Exhibit No.
- ----------
10.14 Long Term Performance Incentive Plan of the Company, as amended and
restated effective April 21, 1999 -- incorporated herein by
reference to Exhibit 10.4 of the Company's Form 10-Q Quarterly
Report for the quarter ended March 31, 1999.*
10.15 Executive Performance Incentive Plan of the Company, as amended and
restated effective April 21, 1999 -- incorporated herein by
reference to Exhibit 10.5 of the Company's Form 10-Q Quarterly
Report for the quarter ended March 31, 1999.*
10.16.1 Letter Agreement, dated December 6, 1999, between the Registrant and
M. Douglas Ivester -- incorporated herein by reference to Exhibit
10.17.1 of the Company's Form 10-K Annual Report for the year ended
December 31, 1999.*
10.16.2 Letter Agreement, dated December 15, 1999, between the Registrant
and M. Douglas Ivester -- incorporated herein by reference to
Exhibit 10.17.2 of the Company's Form 10-K Annual Report for the
year ended December 31, 1999.*
10.16.3 Letter Agreement, dated February 17, 2000, between the Registrant
and M. Douglas Ivester -- incorporated herein by reference to
Exhibit 10.17.3 of the Company's Form 10-K Annual Report for the
year ended December 31, 1999.*
10.17 Group Long-Term Performance Incentive Plan of the Company, as
amended and restated effective February 17, 2000 -- incorporated
herein by reference to Exhibit 10.18 of the Company's Form 10-K
Annual Report for the year ended December 31, 1999.*
10.18 Executive Incentive Plan of the Company, adopted as of February 14,
2001 -- incorporated herein by reference to Exhibit 10.19 of the
Company's Form 10-K Annual Report for the year ended December 31,
2000.*
10.19 Form of United States Master Bottle Contract, as amended, between
the Company and Coca-Cola Enterprises Inc. ("Coca-Cola Enterprises")
or its subsidiaries - incorporated herein by reference to Exhibit
10.24 of Coca-Cola Enterprises' Annual Report on Form 10-K for the
fiscal year ended December 30, 1988 (File No. 01-09300).
10.20.1 Employment Agreement, dated as of February 21, 2001, between the
Company and Deval L. Patrick -- incorporated herein by reference to
Exhibit 10.21.1 of the Company's Form 10-K Annual Report for the
year ended December 31, 2001.*
10.20.2 Letter, dated January 4, 2002, from the Company to Deval L. Patrick
-- incorporated herein by reference to Exhibit 10.21.2 of the
Company's Form 10-K Annual Report for the year ended December 31,
2001.*
10.21.1 Employment Agreement, dated March 2, 2001, between the Company and
Steven J. Heyer -- incorporated herein by reference to Exhibit
10.22.1 of the Company's Form 10-K Annual Report for the year ended
December 31, 2001.*
10.21.2 Letter, dated January 4, 2002, from the Company to Steven J. Heyer
-- incorporated herein by reference to Exhibit 10.22.2 of the
Company's Form 10-K Annual Report for the year ended December 31,
2001.*
10.22 Letter Agreement, dated March 31, 2001, between the Company and Jack
L. Stahl -- incorporated herein by reference to Exhibit 10.4 of the
Company's Form 10-K Annual Report for the year ended March 31,
2001.*
21
<PAGE>
Exhibit No.
- ----------
10.23 Letter Agreement, dated June 12, 2001, between the Company and
Joseph R. Gladden, Jr. -- incorporated herein by reference to
Exhibit 10.24 of the Company's Form 10-K Annual Report for the year
ended December 31, 2001.*
10.24 Letter Agreement, dated August 22, 2001, between the Company and
Charles S. Frenette -- incorporated herein by reference to Exhibit
10.25 of the Company's Form 10-K Annual Report for the year ended
December 31, 2001.*
10.25 Letter Agreement, dated August 22, 2001, between The Coca-Cola
Export Corporation and Charles S. Frenette -- incorporated herein by
reference to Exhibit 10.26 of the Company's Form 10-K Annual Report
for the year ended December 31, 2001.*
10.26 Letter Agreement, dated September 17, 2001, between the Company and
Brian G. Dyson -- incorporated herein by reference to Exhibit 10.27
of the Company's Form 10-K Annual Report for the year ended December
31, 2001.*
10.27 Letter, dated October 17, 2001, from the Company to James E.
Chestnut -- incorporated herein by reference to Exhibit 10.28 of the
Company's Form 10-K Annual Report for the year ended December 31,
2001.*
10.28 Resolutions of the Compensation Committee of the Company's Board of
Directors, dated October 17, 2001, pertaining to A.R.C. (Sandy)
Allan -- incorporated herein by reference to Exhibit 10.29 of the
Company's Form 10-K Annual Report for the year ended December 31,
2001.*
10.29 Deferred Compensation Plan of the Company, adopted December 20, 2001
effective as of June 1, 2002 -- incorporated herein by reference to
Exhibit 10.30 of the Company's Form 10-K Annual Report for the year
ended December 31, 2001.*
10.30 Letter Agreement, dated October 24, 2002, between the Company and
Carl Ware.*
10.31 The Coca-Cola Export Corporation Employee Share Plan, effective as
of March 13, 2002.*
10.32 Employees' Savings and Share Ownership Plan of Coca-Cola Ltd.,
effective as of January 1, 1990.*
10.33 Share Purchase Plan -- Denmark, effective as of 1991.*
12.1 Computation of Ratios of Earnings to Fixed Charges for the years
ended December 31, 2002, 2001, 2000, 1999 and 1998.
13.1 Portions of the Company's 2002 Annual Report to Share Owners
expressly incorporated by reference herein: Pages 45 through 106,
108 through 111, 114 and the inside back cover (definitions of
"Dividend Payout Ratio," "Economic Profit," "Net Capital," "Net
Debt," "Return on Capital," "Return on Common Equity," "Total
Capital" and "Total Market Value of Common Stock").
21.1 List of subsidiaries of the Company as of December 31, 2002.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this report.
99.1 Cautionary Statement Relative to Forward-Looking Statements.
- -------------------------------------------------------------------------------
* Management contracts and compensatory plans and arrangements required to
be filed as exhibits pursuant to Item 15(c) of this report.
22
<PAGE>
(b) Reports on Form 8-K
During the fourth quarter of 2002, the Company filed two reports on
Form 8-K:
(1) Report on Form 8-K dated November 13, 2002.
Item 9. Regulation FD Disclosure:
Certifications of the Principal Executive Officer and the Principal
Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(2) Report on Form 8-K dated December 11, 2002.
Item 5. Other Items. This report attached the Company's press release
dated December 11, 2002 reporting the election of Steven J.
Heyer as President and Chief Operating Officer of the Company.
(c) Exhibits - The response to this portion of Item 15 is submitted as a
separate section of this report.
(d) Financial Statement Schedule - The response to this portion of Item 15
is submitted as a separate section of this report.
23
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE COCA-COLA COMPANY
(Registrant)
By: /s/ DOUGLAS N. DAFT
---------------------
DOUGLAS N. DAFT
Chairman, Board of Directors, Chief
Executive Officer and a Director
Date: March 26, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ DOUGLAS N. DAFT *
- ----------------------------------- ------------------------------------
DOUGLAS N. DAFT RONALD W. ALLEN
Chairman, Board of Directors, Chief Director
Executive Officer and a Director
(Principal Executive Officer)
March 26, 2003 March 26, 2003
/s/ GARY P. FAYARD *
- ----------------------------------- ------------------------------------
GARY P. FAYARD CATHLEEN P. BLACK
Executive Vice President and Chief Director
Financial Officer
(Principal Financial Officer)
March 26, 2003 March 26, 2003
/s/ CONNIE D. McDANIEL *
- ----------------------------------- ------------------------------------
CONNIE D. McDANIEL WARREN E. BUFFETT
Vice President and Controller Director
(Principal Accounting Officer)
March 26, 2003 March 26, 2003
* *
- ----------------------------------- ------------------------------------
HERBERT A. ALLEN BARRY DILLER
Director Director
March 26, 2003 March 26, 2003
24
<PAGE>
* *
- ----------------------------------- ------------------------------------
SUSAN BENNETT KING PAUL F. OREFFICE
Director Director
March 26, 2003 March 26, 2003
* *
- ----------------------------------- ------------------------------------
DONALD F. MCHENRY JAMES D. ROBINSON III
Director Director
March 26, 2003 March 26, 2003
* *
- ----------------------------------- ------------------------------------
ROBERT L. NARDELLI PETER V. UEBERROTH
Director Director
March 26, 2003 March 26, 2003
* *
- ----------------------------------- ------------------------------------
SAM NUNN JAMES B. WILLIAMS
Director Director
March 26, 2003 March 26, 2003
* By: /s/ CAROL C. HAYES
----------------------------
CAROL C. HAYES
Attorney-in-fact
March 26, 2003
25
<PAGE>
CERTIFICATIONS
I, Douglas N. Daft, Chairman, Board of Directors, and Chief Executive Officer of
The Coca-Cola Company, certify that:
1. I have reviewed this annual report on Form 10-K of The Coca-Cola Company;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: March 26, 2003
/s/ Douglas N. Daft
------------------------------------
Douglas N. Daft
Chairman, Board of Directors, and
Chief Executive Officer
26
<PAGE>
I, Gary P. Fayard, Executive Vice President and Chief Financial Officer of The
Coca-Cola Company, certify that:
1. I have reviewed this annual report on Form 10-K of The Coca-Cola Company;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: March 26, 2003
/s/ Gary P. Fayard
----------------------------------
Gary P. Fayard
Executive Vice President and
Chief Financial Officer
27
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>4
<FILENAME>koksch.txt
<DESCRIPTION>SCHEDULES
<TEXT>
ANNUAL REPORT ON FORM 10-K
ITEM 14(d)
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 2002
THE COCA-COLA COMPANY AND SUBSIDIARIES
<PAGE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
Year ended December 31, 2002
(in millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------------------------------------------------------------------------
Additions
------------------------
(1) (2)
Balance at Charged to Charged Balance
Beginning of Costs and to Other Deductions at End
Description Period Expenses Accounts (Note 1) of Period
- ----------- ------------ ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY
APPLY
Allowance for losses on:
Trade accounts receivable $ 59 $ 19 $ 8 $ 31 $ 55
Miscellaneous investments and
other assets 230 27 - 54 203
Deferred tax assets 563 111 99 35 738
---- ---- ---- ---- ----
$852 $157 $107 $120 $996
==== ==== ==== ==== ====
</TABLE>
- -----------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
Trade Miscellaneous Deferred
Accounts Investments Tax
Receivable and Other Assets Assets Total
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts $ 23 $ 6 $ - $ 29
Write-off of impaired assets - 35 - 35
Other transactions 8 13 35 56
---- ---- ---- ----
$ 31 $ 54 $ 35 $120
==== ==== ==== ====
</TABLE>
F-1
<PAGE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
Year ended December 31, 2001
(in millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------------------------------------------------------------------------
Additions
------------------------
(1) (2)
Balance at Charged to Charged Balance
Beginning of Costs and to Other Deductions at End
Description Period Expenses Accounts (Note 1) of Period
- ----------- ------------ ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY
APPLY
Allowance for losses on:
Trade accounts receivable $ 62 $ 20 $ - $ 23 $ 59
Miscellaneous investments and
other assets 294 5 - 69 230
Deferred tax assets 641 218 - 296 563
---- ---- ---- ---- ----
$997 $243 $ - $388 $852
==== ==== ==== ==== ====
</TABLE>
- ------------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
Trade Miscellaneous Deferred
Accounts Investments Tax
Receivable and Other Assets Assets Total
---------- ---------------- -------- -------
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts $ 23 $ 13 $ - $ 36
Write-off of impaired assets - 36 - 36
Other transactions - 20 296 316
---- ---- ---- ----
$ 23 $ 69 $296 $388
==== ==== ==== ====
</TABLE>
F-2
<PAGE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
THE COCA-COLA COMPANY AND SUBSIDIARIES
Year ended December 31, 2000
(in millions)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------------------------------------------------------------------------------
Additions
------------------------
(1) (2)
Balance at Charged to Charged Balance
Beginning of Costs and to Other Deductions at End
Description Period Expenses Accounts (Note 1) of Period
- ----------- ------------ ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
RESERVES DEDUCTED IN THE
BALANCE SHEET FROM THE
ASSETS TO WHICH THEY
APPLY
Allowance for losses on:
Trade accounts receivable $ 26 $ 37 $ 4 $ 5 $ 62
Miscellaneous investments and
other assets 322 23 - 51 294
Deferred tax assets 443 353 - 155 641
---- ---- ---- ---- ----
$791 $413 $ 4 $211 $997
==== ==== ==== ==== ====
</TABLE>
- --------------
Note 1 - The amounts shown in Column D consist of the following:
<TABLE>
<CAPTION>
Trade Miscellaneous Deferred
Accounts Investments Tax
Receivable and Other Assets Assets Total
---------- ---------------- -------- -----
<S> <C> <C> <C> <C>
Charge off of uncollectible accounts $ 4 $ - $ - $ 4
Write-off of impaired assets - 51 - 51
Other transactions 1 - 155 156
---- ---- ---- ----
$ 5 $ 51 $155 $211
==== ==== ==== ====
</TABLE>
F-3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>5
<FILENAME>index.txt
<DESCRIPTION>EXHIBIT INDEX
<TEXT>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
2.1 Control and Profit and Loss Transfer Agreement, dated November 21,
2001, between Coca-Cola GmbH and Coca-Cola Erfrischungsgetraenke AG --
incorporated herein by reference to Exhibit 2 of the Company's Form
10-Q Quarterly Report for the quarter ended March 31, 2002. (With
regard to applicable cross references in this report, the Company's
Current, Quarterly and Annual Reports are filed with the Securities
and Exchange Commission under File No. 1-2217.)
3.1 Certificate of Incorporation of the Company, including Amendment of
Certificate of Incorporation, effective May 1, 1996 -- incorporated
herein by reference to Exhibit 3 of the Company's Form 10-Q Quarterly
Report for the quarter ended March 31, 1996.
3.2 By-Laws of the Company, as amended and restated through January 30,
2003.
4.1 The Company agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of any instrument defining the rights
of holders of long-term debt of the Company and all of its
consolidated subsidiaries and unconsolidated subsidiaries for which
financial statements are required to be filed with the Securities and
Exchange Commission.
10.1.1 The Key Executive Retirement Plan of the Company, as amended --
incorporated herein by reference to Exhibit 10.2 of the Company's Form
10-K Annual Report for the year ended December 31, 1995.*
10.1.2 Third Amendment to the Key Executive Retirement Plan of the Company,
dated as of July 9, 1998 -- incorporated herein by reference to
Exhibit 10.1.2 of the Company's Form 10-K Annual Report for the year
ended December 31, 1999.*
10.1.3 Fourth Amendment to the Key Executive Retirement Plan of the Company,
dated as of February 16, 1999 -- incorporated herein by reference to
Exhibit 10.1.3 of the Company's Form 10-K Annual Report for the year
ended December 31, 1999.*
10.1.4 Fifth Amendment to the Key Executive Retirement Plan of the Company,
dated as of January 25, 2000 -- incorporated herein by reference to
Exhibit 10.1.4 of the Company's Form 10-K Annual Report for the year
ended December 31, 1999.*
10.2 Supplemental Disability Plan of the Company, as amended and restated
effective January 1, 2003.*
10.3 The Performance Incentive Plan of the Company, as amended --
incorporated herein by reference to Exhibit 10.4 of the Company's Form
10-K Annual Report for the year ended December 31, 1995.*
10.4 1991 Stock Option Plan of the Company, as amended and restated through
April 20, 1999 -- incorporated herein by reference to Exhibit 10.2 of
the Company's Form 10-Q Quarterly Report for the quarter ended March
31, 1999.*
10.5 1999 Stock Option Plan of the Company, as amended and restated through
February 20, 2002 -- incorporated herein by reference to Exhibit 10.1
of the Company's Form 10-Q Quarterly Report for the quarter ended
March 31, 2002.*
i
<PAGE>
Exhibit No. Description
- ---------- -----------
10.6 2002 Stock Option Plan of the Company, adopted as of April 17, 2002 --
incorporated herein by reference to Exhibit 10.4 of the Company's Form
10-Q Quarterly Report for the quarter ended March 31, 2002.*
10.7 1983 Restricted Stock Award Plan of the Company, as amended through
February 17, 2000 -- incorporated herein by reference to Exhibit 10.7
of the Company's Form 10-K Annual Report for the year ended December
31, 1999.*
10.8 1989 Restricted Stock Award Plan of the Company, as amended and
restated through March 1, 2002 -- incorporated herein by reference to
Exhibit 10 of the Company's Form 10-Q Quarterly Report for the quarter
ended September 30, 2002.*
10.9.1 Compensation Deferral & Investment Program of the Company, as amended,
including Amendment Number Four dated November 28, 1995 --
incorporated herein by reference to Exhibit 10.13 of the Company's
Form 10-K Annual Report for the year ended December 31, 1995.*
10.9.2 Amendment Number 5 to the Compensation Deferral & Investment Program
of the Company, effective as of January 1, 1998 -- incorporated herein
by reference to Exhibit 10.8.2 of the Company's Form 10-K Annual
Report for the year ended December 31, 1997.*
10.10 Executive Medical Plan of The Coca-Cola Company, as amended and
restated effective January 1, 2001.*
10.11 Supplemental Benefit Plan of the Company, as amended and restated
effective January 1, 2002.*
10.12 Retirement Plan for the Board of Directors of the Company, as amended
-- incorporated herein by reference to Exhibit 10.22 of the Company's
Form 10-K Annual Report for the year ended December 31, 1991.*
10.13 Deferred Compensation Plan for Non-Employee Directors of the Company,
adopted as of October 16, 1997 -- incorporated herein by reference to
Exhibit 10.12 of the Company's Form 10-K Annual Report for the year
ended December 31, 1997.*
10.14 Long Term Performance Incentive Plan of the Company, as amended and
restated effective April 21, 1999 -- incorporated herein by reference
to Exhibit 10.4 of the Company's Form 10-Q Quarterly Report for the
quarter ended March 31, 1999.*
10.15 Executive Performance Incentive Plan of the Company, as amended and
restated effective April 21, 1999 -- incorporated herein by reference
to Exhibit 10.5 of the Company's Form 10-Q Quarterly Report for the
quarter ended March 31, 1999.*
10.16.1 Letter Agreement, dated December 6, 1999, between the Registrant and
M. Douglas Ivester -- incorporated herein by reference to Exhibit
10.17.1 of the Company's Form 10-K Annual Report for the year ended
December 31, 1999.*
10.16.2 Letter Agreement, dated December 15, 1999, between the Registrant and
M. Douglas Ivester -- incorporated herein by reference to Exhibit
10.17.2 of the Company's Form 10-K Annual Report for the year ended
December 31, 1999.*
ii
<PAGE>
Exhibit No. Description
- ---------- -----------
10.16.3 Letter Agreement, dated February 17, 2000, between the Registrant and
M. Douglas Ivester -- incorporated herein by reference to Exhibit
10.17.3 of the Company's Form 10-K Annual Report for the year ended
December 31, 1999.*
10.17 Group Long-Term Performance Incentive Plan of the Company, as amended
and restated effective February 17, 2000 -- incorporated herein by
reference to Exhibit 10.18 of the Company's Form 10-K Annual Report
for the year ended December 31, 1999.*
10.18 Executive Incentive Plan of the Company, adopted as of February 14,
2001 -- incorporated herein by reference to Exhibit 10.19 of the
Company's Form 10-K Annual Report for the year ended December 31,
2000.*
10.19 Form of United States Master Bottle Contract, as amended, between the
Company and Coca-Cola Enterprises Inc. ("Coca-Cola Enterprises") or
its subsidiaries -- incorporated herein by reference to Exhibit 10.24
of Coca-Cola Enterprises' Annual Report on Form 10-K for the fiscal
year ended December 30, 1988 (File No. 01-09300).
10.20.1 Employment Agreement, dated as of February 21, 2001, between the
Company and Deval L. Patrick -- incorporated herein by reference to
Exhibit 10.21.1 of the Company's Form 10-K Annual Report for the year
ended December 31, 2001.*
10.20.2 Letter, dated January 4, 2002, from the Company to Deval L. Patrick --
incorporated herein by reference to Exhibit 10.21.2 of the Company's
Form 10-K Annual Report for the year ended December 31, 2001.*
10.21.1 Employment Agreement, dated March 2, 2001, between the Company and
Steven J. Heyer -- incorporated herein by reference to Exhibit 10.22.1
of the Company's Form 10-K Annual Report for the year ended December
31, 2001.*
10.21.2 Letter, dated January 4, 2002, from the Company to Steven J. Heyer --
incorporated herein by reference to Exhibit 10.22.2 of the Company's
Form 10-K Annual Report for the year ended December 31, 2001.*
10.22 Letter Agreement, dated March 31, 2001, between the Company and Jack
L. Stahl -- incorporated herein by reference to Exhibit 10.4 of the
Company's Form 10-K Annual Report for the year ended March 31, 2001.*
10.23 Letter Agreement, dated June 12, 2001, between the Company and Joseph
R. Gladden, Jr. -- incorporated herein by reference to Exhibit 10.24
of the Company's Form 10-K Annual Report for the year ended December
31, 2001.*
10.24 Letter Agreement, dated August 22, 2001, between the Company and
Charles S. Frenette -- incorporated herein by reference to Exhibit
10.25 of the Company's Form 10-K Annual Report for the year ended
December 31, 2001.*
10.25 Letter Agreement, dated August 22, 2001, between The Coca-Cola Export
Corporation and Charles S. Frenette -- incorporated herein by
reference to Exhibit 10.26 of the Company's Form 10-K Annual Report
for the year ended December 31, 2001.*
10.26 Letter Agreement, dated September 17, 2001, between the Company and
Brian G. Dyson -- incorporated herein by reference to Exhibit 10.27 of
the Company's Form 10-K Annual Report for the year ended December 31,
2001.*
iii
<PAGE>
Exhibit No. Description
- ---------- -----------
10.27 Letter, dated October 17, 2001, from the Company to James E. Chestnut
-- incorporated herein by reference to Exhibit 10.28 of the Company's
Form 10-K Annual Report for the year ended December 31, 2001.*
10.28 Resolutions of the Compensation Committee of the Company's Board of
Directors, dated October 17, 2001, pertaining to A.R.C. (Sandy) Allan
-- incorporated herein by reference to Exhibit 10.29 of the Company's
Form 10-K Annual Report for the year ended December 31, 2001.*
10.29 Deferred Compensation Plan of the Company, adopted December 20, 2001
effective as of June 1, 2002 -- incorporated herein by reference to
Exhibit 10.30 of the Company's Form 10-K Annual Report for the year
ended December 31, 2001.*
10.30 Letter Agreement, dated October 24, 2002, between the Company and Carl
Ware.*
10.31 The Coca-Cola Export Corporation Employee Share Plan, effective as of
March 13, 2002.*
10.32 Employees' Savings and Share Ownership Plan of Coca-Cola Ltd.,
effective as of January 1, 1990.*
10.33 Share Purchase Plan - Denmark, effective as of 1991.*
12.1 Computation of Ratios of Earnings to Fixed Charges for the years ended
December 31, 2002, 2001, 2000, 1999 and 1998.
13.1 Portions of the Company's 2002 Annual Report to Share Owners expressly
incorporated by reference herein: Pages 45 through 106, 108 through
111, 114 and the inside back cover (definitions of "Dividend Payout
Ratio," "Economic Profit," "Net Capital," "Net Debt," "Return on
Capital," "Return on Common Equity," "Total Capital" and "Total Market
Value of Common Stock").
21.1 List of subsidiaries of the Company as of December 31, 2002.
23.1 Consent of Independent Auditors.
24.1 Powers of Attorney of Officers and Directors signing this report.
99.1 Cautionary Statement Relative to Forward-Looking Statements.
- --------------
* Management contracts and compensatory plans and arrangements required
to be filed as exhibits pursuant to Item 15(c) of this report.
iv
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>6
<FILENAME>x3-2.txt
<DESCRIPTION>BY-LAWS, AS AMENDED JANUARY 30, 2003
<TEXT>
EXHIBIT 3.2
BY-LAWS
OF
THE COCA-COLA COMPANY
AS AMENDED AND RESTATED THROUGH JANUARY 30, 2003
ARTICLE I
SHAREHOLDERS:
Section 1. Place, Date and Time of Holding Annual Meetings. Annual meetings
of shareholders shall be held at such place, date and time as shall be
designated from time to time by the Board of Directors. In the absence of a
resolution adopted by the Board of Directors establishing such place, date and
time, the annual meeting shall be held at 1209 Orange Street, Wilmington,
Delaware, on the third Wednesday in April of each year at 9:00 A.M. (local
time).
Section 2. Voting. Each outstanding share of common stock of the Company is
entitled to one vote on each matter submitted to a vote. Directors shall be
elected by plurality votes cast in the election for such directors. All other
action shall be authorized by a majority of the votes cast unless a greater vote
is required by the laws of Delaware. A shareholder may vote in person or by
proxy authorized by an instrument in writing or by a transmission permitted by
law filed in accordance with the procedures established for the meeting. Any
copy, facsimile telecommunication or other reliable reproduction of the writing
or transmission created pursuant to this section may be substituted or used in
lieu of the original writing or the transmission that could be used, provided
that such copy, facsimile telecommunication or other reproduction shall be a
complete reproduction of the entire original writing or transmission.
Section 3. Quorum. The holders of a majority of the issued and outstanding
shares of the common stock of the Company, present in person or represented by
proxy, shall constitute a quorum at all meetings of shareholders.
Section 4. Adjournment of Meetings. In the absence of a quorum or for any
other reason, the chairman of the meeting may adjourn the meeting from time to
time. If the adjournment is not for more than thirty days, the adjourned meeting
may be held without notice other than an announcement at the meeting. If the
adjournment is for more than thirty days, or if a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at such meeting. At any such adjourned
meeting at which a quorum is present, any business may be transacted which might
have been transacted at the meeting originally called.
Page 1 of 16
<PAGE>
Section 5. Special Meetings. Special meetings of the shareholders for any
purpose or purposes may be called by the Board of Directors, the Chairman of the
Board of Directors or the President. Special meetings shall be held at the
place, date and time fixed by the Secretary.
Section 6. Notice of Shareholders Meeting. Written notice, stating the
place, date, hour and purpose of the annual or special meeting shall be given by
the Secretary not less than ten nor more than sixty days before the date of the
meeting to each shareholder entitled to vote at such meeting.
Section 7. Organization. The Chairman of the Board of Directors shall
preside at all meetings of shareholders. In the absence of, or in case of a
vacancy in the office of, the Chairman of the Board of Directors, the President,
or in his absence or in the event that the Board of Directors has not selected a
President, any Senior Executive Vice President, Executive Vice President, Senior
Vice President or Vice President in order of seniority as specified in this
sentence, and, within each classification of office in order of seniority in
time in that office, shall preside. The Secretary of the Company shall act as
secretary at all meetings of the shareholders and in the Secretary's absence,
the chairman of the meeting may appoint a secretary.
The Board of Directors of the Company shall be entitled to make such rules
or regulations for the conduct of meetings of shareholders as it shall deem
necessary, appropriate or convenient. Subject to such rules and regulations of
the Board of Directors, if any, the chairman of the meeting shall have the right
and the authority to prescribe such rules, regulations and procedures and to do
all such acts as, in the judgment of such chairman, are necessary, appropriate
or convenient for the proper conduct of the meeting, including, without
limitation, establishing (i) an agenda or order of business for the meeting,
(ii) rules and procedures for maintaining order at the meeting and the safety of
those present, (iii) limitations on participation in such meetings to
shareholders of record of the Company and their duly authorized and constituted
proxies, and such other persons as the chairman of the meeting shall permit,
(iv) restrictions on entries to the meeting after the time affixed for the
commencement thereof, (v) limitations on the time allotted to the questions or
comments by participants and (vi) regulation of the opening and closing of the
polls for balloting and matters which are to be voted on by ballot. Unless and
to the extent determined by the Board of Directors or the chairman of the
meeting, meetings of shareholders shall not be required to be held in accordance
with rules of parliamentary procedure.
Section 8. Inspectors of Election. All votes by ballot at any meeting of
shareholders shall be conducted by such number of inspectors of election as are
appointed for that purpose by either the Board of Directors or by the chairman
of the meeting. The inspectors of election shall decide upon the qualifications
of voters, count the votes and declare the results.
Page 2 of 16
<PAGE>
Section 9. Record Date. The Board of Directors, in order to determine the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise any rights
in respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, shall fix in advance a record date which shall not be
more than sixty nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action and in such case only such
shareholders as shall be shareholders of record on the date so fixed, shall be
entitled to such notice of or to vote at such meeting or any adjournment
thereof, or entitled to express consent to such corporate action in writing
without a meeting, or be entitled to receive payment of any such dividend or
other distribution or allotment of any rights or be entitled to exercise any
such rights in respect of stock or to take any such other lawful action, as the
case may be, notwithstanding any transfer of any stock on the books of the
Company after any such record date fixed as aforesaid.
Section 10. Notice of Shareholder Proposals. At any annual or special
meeting of shareholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual or special meeting, business must be: (A) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (B) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (C) otherwise properly brought before
the meeting by a shareholder. In order for business to be properly brought
before an annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary of the Company and such
proposal must be a proper matter for shareholder action under the General
Corporation Law of the State of Delaware. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not later than the close of business on the one hundred twentieth
(120th) calendar day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event no annual meeting was held
in the previous year or the date of the annual meeting has been changed by more
than thirty (30) days notice by the shareholder to be timely must be so received
not later than the close of business on the later of one hundred twenty (120)
calendar days in advance of such annual meeting or ten (10) calendar days
following the date on which public announcement of the date of the meeting is
first made. A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Company's books, of the shareholder proposing
such business, (iii) the class and number of shares of the Company which are
beneficially owned by the shareholder, (iv) any material interest of the
shareholder in such business, and (v) any other information that is required to
be provided by the shareholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as
Page 3 of 16
<PAGE>
amended (the "1934 Act"), in his capacity as a proponent to a shareholder
proposal. Notwithstanding the foregoing, in order to include information with
respect to a shareholder proposal in the proxy statement and form of proxy for a
shareholders' meeting, shareholders must provide notice as required by the
regulations promulgated under the 1934 Act. Notwithstanding anything in these
By-Laws to the contrary, no business shall be conducted at any annual meeting
except in accordance with the procedures set forth in this Section 10. The
chairman of the meeting shall, if the facts warrant, determine and declare at
the meeting that business was not properly brought before the meeting and in
accordance with the provisions of this Section 10, and, if he should so
determine, he shall so declare at the meeting that any such business not
properly brought before the meeting shall not be transacted.
Section 11. Election of Directors. Only persons who are nominated in
accordance with the procedures set forth in this Section 11 shall be eligible
for election as directors. Nominations of persons for election to the Board of
Directors of the Company may be made (i) at an annual or special meeting of
shareholders by or at the direction of the Board of Directors or (ii) at an
annual meeting by any shareholder of the Company entitled to vote in the
election of directors at the meeting who complies with the notice procedures set
forth in this Section 11. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the Company in accordance with the provisions of
Section 10. Such shareholder's notice shall set forth (i) as to each person, if
any, whom the shareholder proposes to nominate for election or re-election as a
director: (A) the name, age, business address and residence address of such
person , (B) the principal occupation or employment of such person, (C) the
class and number of shares of the Company which are beneficially owned by such
person, (D) a description of all arrangements or understandings between the
shareholder and each nominee or any other person or persons (naming such person
or persons) pursuant to which the nominations are to be made by the shareholder,
and (E) any other information relating to such person that is required to be
disclosed in solicitations of proxies for elections of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the 1934 Act
(including, without limitation, such person's written consent to being named in
the proxy statement, if any, as a nominee and to serving as a director if
elected); and (ii) as to such shareholder giving notice, the information
required to be provided pursuant to Section 10. At the request of the Board of
Directors, any person nominated by a shareholder for election as a director
shall furnish to the Secret ary of the Company that information required to be
set forth in the shareholder's notice of nomination which pertains to the
nominee. No person shall be eligible for election as a director of the Company
unless nominated in accordance with the procedures set forth in this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and declare
at the meeting that nomination was not made in accordance with the procedures
prescribed by these By-Laws, and if he should so determine, he shall so declare
at the meeting, and the defective nomination shall be disregarded.
Page 4 of 16
<PAGE>
ARTICLE II
DIRECTORS:
Section 1. Number and Term and Classes of Directors. The whole Board of
Directors shall consist of not less than ten (10) nor more than twenty (20)
members, the exact number to be set from time to time by the Board of Directors.
No decrease in the number of directors shall shorten the term of any incumbent
director. In absence of the Board of Directors setting the number of directors,
the number shall be 20. The Board of Directors shall be divided into three
classes of as nearly equal size as practicable. The term of office of the
members of each class shall expire at the third annual meeting of shareholders
following the election of such members, and at each annual meeting of
shareholders, directors shall be chosen for a term of three years to succeed
those whose terms expire; provided, whenever classes are or, after the next
annual meeting of shareholders, will be uneven, the shareholders, for the sole
purpose of making the number of members in such class as equal as practicable,
may elect one or more members of such class for less than 3 years.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as the Board of Directors may determine from time to
time.
Section 3. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors, the Secretary or by a
majority of the directors by written request to the Secretary.
Section 4. Notice of Meetings. The Secretary shall give notice of all
meetings of the Board of Directors by mailing the notice at least three days
before each meeting or by telegraphing or telephoning the directors not later
than one day before the meeting. The notice shall state the time, date and place
of the meeting, which shall be determined by the Chairman of the Board of
Directors, or, in absence of the Chairman, by the Secretary of the Company,
unless otherwise determined by the Board of Directors.
Section 5. Quorum and Voting. A majority of the directors holding office
shall constitute a quorum for the transaction of business. Except as otherwise
specifically required by Delaware law or by the Certificate of Incorporation of
the Company or by these By-Laws, any action required to be taken shall be
authorized by a majority of the directors present at any meeting at which a
quorum is present.
Section 6. General Powers of Directors. The business and affairs of the
Company shall be managed under the direction of the Board of Directors.
Section 7. Chairman. At all meetings of the Board of Directors, the
Chairman of the Board of Directors shall preside and in the absence of, or in
the case of a vacancy in
Page 5 of 16
<PAGE>
the office of, the Chairman of the Board of Directors, a chairman selected
by the Chairman of the Board of Directors or, if he fails to do so, by the
directors, shall preside.
Section 8. Compensation of Directors. Directors and members of any
committee of the Board of Directors shall be entitled to such reasonable
compensation and fees for their services as shall be fixed from time to time by
resolution of the Board of Directors and shall also be entitled to reimbursement
for any reasonable expenses incurred in attending meetings of the Board of
Directors and any committee thereof, except that a Director who is an officer or
employee of the Company shall receive no compensation or fees for serving as a
Director or a committee member.
Section 9. Qualification of Directors. Each person who shall attain the age
of 74 shall not thereafter be eligible for nomination or renomination as a
member of the Board of Directors.
Any director who was elected or reelected because he or she was an officer
of the Company at the time of that election or the most recent reelection shall
resign as a member of the Board of Directors simultaneously when he or she
ceases to be an officer of the Company.
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS:
Section 1. Committees of the Board of Directors. The Board of Directors
shall designate an Audit Committee, a Compensation Committee and a Committee on
Directors and Corporate Governance, and whatever other committees the Board of
Directors deems advisable, each of which shall have and may exercise the powers
and authority of the Board of Directors to the extent provided in the charters
of each committee adopted by the Board of Directors in one or more resolutions.
The Chairman of the Board shall have the power and authority of a committee
of the Board of Directors for purposes of taking any action which the Chairman
of the Board is authorized to take under the provisions of this Article.
Section 2. Election of Committee Members. The members of each committee
shall be elected by the Board of Directors and shall serve until the first
meeting of the Board of Directors after the annual meeting of shareholders and
until their successors are elected and qualified or until the members' earlier
resignation or removal. The Board of Directors may designate the Chairman and
Vice Chairman of each committee. Vacancies may be filled by the Board of
Directors at any meeting.
Page 6 of 16
<PAGE>
The Chairman of the Board may designate one or more directors to serve as
an alternate member or members at any committee meeting to replace any absent or
disqualified member, such alternate or alternates to serve for that committee
meeting only, and the Chairman of the Board may designate a committee member as
acting chairman of that committee, in the absence of the elected committee
chairman, to serve for that committee meeting only.
Section 3. Procedure/Quorum/Notice. The Committee Chairman, Vice Chairman
or a majority of any committee may call a meeting of that committee. A quorum of
any committee shall consist of a majority of its members unless otherwise
provided by resolution of the Board of Directors. The majority vote of a quorum
shall be required for the transaction of business. The secretary of the
committee or the chairman of the committee shall give notice of all meetings of
the committee by mailing the notice to the members of the committee at least
three days before each meeting or by telegraphing or telephoning the members not
later than one day before the meeting. The notice shall state the time, date and
place of the meeting. Each committee shall fix its other rules of procedure.
ARTICLE IV
NOTICE AND WAIVER OF NOTICE:
Section 1. Notice. Any notice required to be given to shareholders or
directors under these By-Laws, the Certificate of Incorporation or by law may be
given by mailing the same, addressed to the person entitled thereto, at such
person's last known post office address and such notice shall be deemed to be
given at the time of such mailing.
Section 2. Waiver of Notice. Whenever any notice is required to be given
under these By-Laws, the Certificate of Incorporation or by law, a waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of any regular or special meeting of the shareholders, directors
or a committee of directors need be specified in any written waiver of notice.
ARTICLE V
OFFICERS:
Section 1. Officers of the Company. The officers of the Company shall be
selected by the Board of Directors and shall be a Chairman of the Board of
Directors, one or more Vice Presidents, a Secretary and a Treasurer. The Board
of Directors may elect a
Page 7 of 16
<PAGE>
Vice Chairman, President and a Controller and one or more of the following:
Senior Executive Vice President, Executive Vice President, Senior Vice
President, Assistant Vice President, Assistant Secretary, Associate Treasurer,
Assistant Treasurer, Associate Controller and Assistant Controller. Two or more
offices may be held by the same person.
The Company may have a General Counsel who shall be appointed by the Board
of Directors and shall have general supervision of all matters of a legal nature
concerning the Company, unless the Board of Directors has also appointed a
General Tax Counsel, in which event the General Tax Counsel shall have general
supervision of all tax matters of a legal nature concerning the Company.
The Company may have a Chief Financial Officer who shall be appointed by
the Board of Directors and shall have general supervision over the financial
affairs of the Company. The Company may also have a Chief of Internal Audits who
shall be appointed by the Board of Directors.
Section 2. Election of Officers. At the first meeting of the Board of
Directors after each annual meeting of shareholders, the Board of Directors
shall elect the officers. From time to time the Board of Directors may elect
other officers.
Section 3. Tenure of Office; Removal. Each officer shall hold office until
the first meeting of the Board of Directors after the annual meeting of
shareholders following the officer's election and until the officer's successor
is elected and qualified or until the officer's earlier resignation or removal.
Each officer shall be subject to removal at any time, with or without cause, by
the affirmative vote of a majority of the entire Board of Directors.
Section 4. Chairman of the Board of Directors. The Chairman of the Board of
Directors shall be the Chief Executive Officer of the Company and subject to the
overall direction and supervision of the Board of Directors and Committees
thereof shall be in general charge of the affairs of the Company; and shall
consult and advise with the Board of Directors and committees thereof on the
business and the affairs of the Company. The Chairman of the Board of Directors
shall have the power to make and execute contracts on behalf of the Company and
to delegate such power to others.
Section 5. President. The Board of Directors may select a President who
shall have such powers and perform such duties as may be assigned by the Board
of Directors or by the Chairman of the Board of Directors. In the absence or
disability of the President his or her duties shall be performed by such Vice
Presidents as the Chairman of the Board of Directors or the Board of Directors
may designate. The President shall also have the power to make and execute
contracts on the Company's behalf and to delegate such power to others.
Page 8 of 16
<PAGE>
Section 6. Vice Presidents. Each Senior Executive Vice President, Executive
Vice President, Senior Vice President and Vice President shall have such powers
and perform such duties as may be assigned to the Officer by the Board of
Directors or by the Chairman of the Board of Directors or the President.
Section 7. Secretary. The Secretary shall keep minutes of all meetings of
the shareholders and of the Board of Directors, and shall keep, or cause to be
kept, minutes of all meetings of Committees of the Board of Directors, except
where such responsibility is otherwise fixed by the Board of Directors. The
Secretary shall issue all notices for meetings of the shareholders and Board of
Directors and shall have charge of and keep the seal of the Company and shall
affix the seal attested by the Secretary's signature to such instruments as may
properly require same. The Secretary shall cause to be kept such books and
records as the Board of Directors, the Chairman of the Board of Directors or the
President may require; and shall cause to be prepared, recorded, transferred,
issued, sealed and cancelled certificates of stock as required by the
transactions of the Company and its shareholders. The Secretary shall attend to
such correspondence and such other duties as may be incident to the office of
the Secretary or assigned by the Board of Directors, the Chairman of the Board
of Directors, or the President.
In the absence of the Secretary, an Assistant Secretary is authorized to
assume the duties herein imposed upon the Secretary.
Section 8. Treasurer. The Treasurer shall perform all duties and acts
incident to the position of Treasurer, shall have custody of the Company funds
and securities, and shall deposit all money and other valuable effects in the
name and to the credit of the Company in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the Company
as may be authorized, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, whenever required, an account of all the
transactions of the Treasurer and of the financial condition of the Company. The
Treasurer shall vote all of the stock owned by the Company in any corporation
and may delegate this power to others. The Treasurer shall perform such other
duties as may be assigned to the Treasurer and shall report to the Chief
Financial Officer or, in the absence of the Chief Financial Officer, to the
Chairman of the Board of Directors.
In the absence of the Treasurer, an Assistant Treasurer is authorized to
assume the duties herein imposed upon the Treasurer.
Section 9. Controller. The Board of Directors may select a Controller who
shall keep or cause to be kept in the books of the Company provided for that
purpose a true account of all transactions and of the assets and liabilities of
the Company. The Controller shall prepare and submit to the Chief Financial
Officer or, in the absence of the Chief Financial Officer to the Chairman of the
Board of Directors, such financial statements and schedules as may be required
to keep the Chief Financial Officer and the
Page 9 of 16
<PAGE>
Chairman of the Board of Directors currently informed of the operations and
financial condition of the Company, and perform such other duties as may be
assigned by the Chief Financial Officer or the Chairman of the Board.
In the absence of the Controller, an Assistant Controller is authorized to
assume the duties herein imposed upon the Controller.
Section 10. Chief of Internal Audits. The Board of Directors may select a
Chief of Internal Audits, who shall cause to be performed, and have general
supervision over, auditing activities of the financial transactions of the
Company, including the coordination of such auditing activities with the
independent accountants of the Company and who shall perform such other duties
as may be assigned to him from time to time. The Chief of Internal Audits shall
report to the Chief Financial Officer or, in the absence of the Chief Financial
Officer, to the Chairman of the Board of Directors. From time to time at the
request of the Audit Committee, the Chief of Internal Audits shall inform that
Committee of the auditing activities of the Company.
Section 11. Assistant Vice Presidents. The Company may have assistant vice
presidents who shall be appointed by a committee whose membership shall include
one or more executive officers of the Company (the "Committee"). Each such
assistant vice president shall have such powers and shall perform such duties as
may be assigned from time to time by the Committee, the Chairman of the Board of
Directors, the President or any Vice President, and which are not inconsistent
with the powers and duties granted and assigned by these By-Laws or the Board of
Directors. Assistant vice presidents appointed by the Committee shall be subject
to removal at any time, with or without cause, by the Committee. Annually the
Committee shall report to the Board of Directors who it has appointed to serve
as assistant vice presidents and their respective responsibilities.
ARTICLE VI
RESIGNATIONS: FILLING OF VACANCIES:
Section 1. Resignations. Any director, member of a committee, or officer
may resign at any time. Such resignation shall be made in writing and shall take
effect at the time specified therein, and, if no time be specified, at the time
of its receipt by the Chairman of the Board of Directors or the Secretary. The
acceptance of a resignation shall not be necessary to make it effective.
Section 2. Filling of Vacancies. If the office of any director becomes
vacant, the directors in office, although less than a quorum, or, if the number
of directors is increased, the directors in office, may elect any qualified
person to fill such vacancy. In the case of a vacancy in the office of a
director caused by an increase in the number of directors, the person so elected
shall hold office until the next annual meeting of shareholders, or until his
successor shall be elected and qualified. In the case of a
Page 10 of 16
<PAGE>
vacancy in the office of a director resulting otherwise than from an
increase in the number of directors, the person so elected to fill such vacancy
shall hold office for the unexpired term of the director whose office became
vacant. If the office of any officer becomes vacant, the Chairman of the Board
of Directors may appoint any qualified person to fill such vacancy temporarily
until the Board of Directors elects any qualified person for the unexpired
portion of the term. Such person shall hold office for the unexpired term and
until the officer's successor shall be duly elected and qualified or until the
officer's earlier resignation or removal.
ARTICLE VII
INDEMNIFICATION:
Section 1. Indemnification of Directors, and Officers, Employees and
Agents. The Company shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that he is or was a director, officer, employee, or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interest of the Company, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the Company,
and with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company, as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the Company
unless and only to the extent
Page 11 of 16
<PAGE>
that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 2. Expenses. To the extent that a director, officer, employee or
agent of the Company has been successful on the merits or otherwise, in whole or
in part, in defense of any action, suit or proceeding referred to in the first
two paragraphs of this Section 1 or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith. The entitlement
to expenses under this Section 2 shall include any expenses incurred by a
director, officer, employee or agent of the Company in connection with any
action, suit or proceeding brought by such director, officer, employee or agent
to enforce a right to indemnification or payment of expenses under this Article.
If successful in whole or in part in any such action, suit or proceeding, or in
any action, suit or proceeding brought by the Company to recover a payment of
expenses pursuant to the terms of an undertaking provided in accordance with
Section 4, the director, officer, employee or agent also shall be entitled
to be paid the expense of prosecuting or defending such action, suit or
proceeding.
Section 3. Procedure for Receiving Indemnification. To receive
indemnification under this By-Law, a director, officer, employee or agent of the
Company shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to him
and reasonably necessary to determine his entitlement to indemnification. Upon
receipt by the Company of a written request for indemnification, a
determination, if required by applicable law, with respect to a claimant's
request Any indemnification under the first two paragraphs of this Section
(unless ordered by a court) shall be made by the Company only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because the applicable
standard of conduct set forth in the first two paragraphs of this Section has
been met. Such determination shall be made: (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceedings, even though less than a quorum; or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum; or (3) if there are no such directors, or if such
directors so directs, by independent legal counsel in a written opinion; or
(4) by the shareholders. The determination of a claimant's entitlement to
indemnification shall be made within a reasonable time, and in any event within
no more than 60 days, after receipt by the Company of a written request for
indemnification together with the supporting documentation required by this
Section. The burden of establishing that a claimant is not entitled to be
indemnified under this Article or otherwise shall be on the Company.
Section 4. Payment of Expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may shall be paid by the Company in advance
of the final disposition of such action, suit or proceeding within 30 days after
receipt by the Company of a statement requesting payment of such expenses. Such
statement shall evidence the expenses incurred by the claimant and shall include
an undertaking by or on behalf of the claimant to repay such expenses unless it
shall ultimately be determined,
Page 12 of 16
<PAGE>
by final judicial decision from which there is no further right to appeal,
that he is not entitled to be indemnified by the Company as authorized by this
Article. The burden of establishing that a claimant is not entitled to
payment of expenses under this Article or otherwise shall be on the Company. Any
such payment shall not be deemed to be a loan or extension or arrangement of
credit by or on behalf of the Company.
Section 5. Provisions Non-Exclusive; Survival of Rights. The
indemnification and advancement payment of expenses provided by or granted
pursuant to this Section Article shall not be deemed exclusive of any other
rights to which those indemnified or those who receive advances payment of
expenses may be entitled under any By-Law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his an official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 6. Insurance. The Company shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of this Article.
Section 7. Authority to Enter into Indemnification Agreements. The Company
shall have the power to enter into contracts with any director, officer,
employee or agent of the Company in furtherance of the provisions of this
Article to provide for the payment of such amounts as may be appropriate, in the
discretion of the Board of Directors, to effect indemnification and payment of
expenses as provided in this Article.
Section 8. Effect of Amendment. Any amendment, repeal or modification of
this Article shall not adversely affect any right or protection existing at the
time of such amendment, repeal or modification in respect of any act or omission
occurring prior to such amendment, repeal or modification.
Page 13 of 16
<PAGE>
Section 9. No Duplication of Payments. The Company's obligation, if any, to
indemnify or pay expenses to any person under this Article shall be reduced to
the extent such person has otherwise received payment (under any insurance
policy, indemnity clause, bylaw, agreement, vote or otherwise).
ARTICLE VIII
CAPITAL STOCK:
Section 1. Form and Execution of Certificates. The certificates of shares
of the capital stock of the Company shall be in such form as shall be approved
by the Board of Directors. The certificates shall be signed by the Chairman of
the Board of Directors or the President, or a Vice President, and by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.
Each certificate of stock shall certify the number of shares owned by the
shareholder in the Company.
A facsimile of the seal of the Company may be used in connection with the
certificates of stock of the Company, and facsimile signatures of the officers
named in this Section may be used in connection with said certificates. In the
event any officer whose facsimile signature has been placed upon a certificate
shall cease to be such officer before the certificate is issued, the certificate
may be issued with the same effect as if such person was an officer at the date
of issue.
Section 2. Record Ownerships. All certificates shall be numbered
appropriately and the names of the owners, the number of shares and the date of
issue shall be entered in the books of the Company. The Company shall be
entitled to treat the holder of record of any share of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other person, whether
or not it shall have express or other notice thereof, except as required by the
laws of Delaware.
Section 3. Transfer of Shares. Upon surrender to the Company or to a
transfer agent of the Company of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the Company, if it is satisfied that all
provisions of law regarding transfers of shares have been duly complied with, to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Lost, Stolen or Destroyed Stock Certificates. Any person
claiming a stock certificate in lieu of one lost, stolen or destroyed shall give
the Company an affidavit as to such person's ownership of the certificate and of
the facts which go to prove that it was lost, stolen or destroyed. The person
shall also, if required by the Board of Directors, give the Company a bond,
sufficient to indemnify the Company against any claims that may be made against
it on account of the alleged loss, theft or destruction of
Page 14 of 16
<PAGE>
any such certificate or the issuance of such new certificate. Any Vice
President or the Secretary or any Assistant Secretary of the Company is
authorized to issue such duplicate certificates or to authorize any of the
transfer agents and registrars to issue and register such duplicate
certificates.
Section 5. Regulations. The Board of Directors from time to time may make
such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of shares.
Section 6. Transfer Agent and Registrar. The Board of Directors may appoint
such transfer agents and registrars of transfers as may be deemed necessary, and
may require all stock certificates to bear the signature of either or both.
ARTICLE IX
SEAL:
Section 1. Seal. The Board of Directors shall provide a suitable seal
containing the name of the Company, the year of its creation, and the words,
"CORPORATE SEAL, DELAWARE," or other appropriate words. The Secretary shall have
custody of the seal.
ARTICLE X
FISCAL YEAR:
Section 1. Fiscal Year. The fiscal year of the Company shall be the
calendar year.
ARTICLE XI
AMENDMENTS:
Section 1. Directors may Amend By-Laws. The Board of Directors shall have
the power to make, amend and repeal the By-Laws of the Company at any regular or
special meeting of the Board of Directors.
Section 2. By-Laws Subject to Amendment by Shareholders. All By-Laws shall
be subject to amendment, alteration, or repeal by the shareholders entitled to
vote at any annual meeting or at any special meeting.
ARTICLE XII
EMERGENCY BY-LAWS:
Section 1. Emergency By-Laws. This Article XII shall be operative during
any emergency resulting from an attack on the United States or on a locality in
which the Company conducts its business or customarily holds meetings of its
Board of Directors or
Page 15 of 16
<PAGE>
its stockholders, or during any nuclear or atomic disaster or during the
existence of any catastrophe or other similar emergency condition, as a result
of which a quorum of the Board of Directors or, if one has been constituted, the
Executive Committee thereof cannot be readily convened (an "emergency"),
notwithstanding any different or conflicting provision in the preceding Articles
of these By-Laws or in the Certificate of Incorporation of the Company. To the
extent not inconsistent with the provisions of this Article, the By-Laws
provided in the preceding Articles and the provisions of the Certificate of
Incorporation of the Company shall remain in effect during such emergency, and
upon termination of such emergency, the provisions of this Article XII shall
cease to be operative.
Section 2. Meetings. During any emergency, a meeting of the Board of
Directors, or any committee thereof, may be called by any officer or director of
the Company. Notice of the time and place of the meeting shall be given by any
available means of communication by the person calling the meeting to such of
the directors and/or Designated Officers, as defined in Section 3 hereof, as it
may be feasible to reach. Such notice shall be given at such time in advance of
the meeting as, in the judgment of the person calling the meeting, circumstances
permit.
Section 3. Quorum. At any meeting of the Board of Directors, or any
committee thereof, called in accordance with Section 2 of this Article XII, the
presence or participation of two directors, one director and a Designated
Officer or two Designated Officers shall constitute a quorum for the transaction
of business.
The Board of Directors or the committees thereof, as the case may be,
shall, from time to time but in any event prior to such time or times as an
emergency may have occurred, designate the officers of the Company in a numbered
list (the "Designated Officers") who shall be deemed, in the order in which they
appear on such list, directors of the Company for purposes of obtaining a quorum
during an emergency, if a quorum of directors cannot otherwise be obtained.
Section 4. By-Laws. At any meeting called in accordance with Section 2 of
this Article XII, the Board of Directors or the committees thereof, as the case
may be, may modify, amend or add to the provisions of this Article XII so as to
make any provision that may be practical or necessary for the circumstances of
the emergency.
Section 5. Liability. No officer, director or employee of the Company
acting in accordance with the provisions of this Article XII shall be liable
except for willful misconduct.
Section 6. Repeal or Change. The provisions of this Article XII shall be
subject to repeal or change by further action of the Board of Directors or by
action of the shareholders, but no such repeal or change shall modify the
provisions of Section 5 of this Article XII with regard to action taken prior to
the time of such repeal or change.
Page 16 of 16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>7
<FILENAME>x10-2.txt
<DESCRIPTION>SUPPLEMENTAL DISABILITY PLAN, AS AMENDED AND RESTATED, EFFECTIVE 1/1/2003
<TEXT>
EXHIBIT 10.2
THE COCA-COLA COMPANY
SUPPLEMENTAL DISABILITY PLAN
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2003
<PAGE>
THE COCA-COLA COMPANY
SUPPLEMENTAL DISABILITY PLAN
As Amended and Restated Effective January 1, 2003
PREFACE
The Coca-Cola Company established The Coca-Cola Company Supplemental Disability
Plan (the "Plan") effective January 1, 1984. The Plan is an unfunded
supplemental disability plan for eligible employees. The Plan is designed to
provide certain disability benefits primarily for a select group of executives
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided under the terms of The Coca-Cola Company Health and
Welfare Benefits Plan.
This Plan is amended and restated effective January 1, 2003, incorporating any
amendments effective as of that date. The benefit of any employee who becomes
disabled on or after January 1, 2003 shall be determined under the terms of this
amended and restated Plan. The benefit of any employee who becomes disabled
prior to January 1, 2003 shall be governed by the terms of the Plan, if any, in
effect at the time of the disability.
ARTICLE I
DEFINITIONS
The following definitions apply to the terms of this Plan.
"Committee" shall mean the Benefits Committee appointed by the Senior Vice
President, Human Resources, which shall act on behalf of the Company to
administer the Plan as provided in Article IV.
"Company" shall mean The Coca-Cola Company.
"Employee" shall mean any person who is currently employed by an Employer.
An individual shall be treated as employed by an Employer under this Plan for
any period only if (i) he or she is actually classified during such period by
the Employer on its payroll, personnel and benefits system as an employee, and
(ii) he or she is paid for services rendered during such period through the
payroll system, as distinguished from the accounts payable department of the
Employer. No other individual shall be treated as employed by an Employer under
this Plan for any period, regardless of his or her status during such period as
an employee under common law or under any statute.
"Employer" shall mean the Company and any Participating Subsidiary of the
Company.
"Insurer" shall mean the insurance company that issued the LTD Policy and
serves as the claims fiduciary for claims for benefits under the LTD Policy.
2
<PAGE>
"LTD Policy" shall mean the Long Term Disability Insurance Policy issued to
the Company providing Basic Long Term Disability Insurance benefits under The
Coca-Cola Company Health and Welfare Benefits Plan.
"Monthly Benefit" shall mean the gross monthly amount payable under the LTD
Policy by the Insurer to the Participant (i.e., the amount payable before any
reduction for other income benefits or other income earnings or for tax
withholdings), which is calculated at 60% of the Participant's "Basic Monthly
Earnings" (as that term is defined and determined under the LTD Policy), and
which is subject to any applicable maximum limits described in the LTD Policy.
"Participant" shall mean an Employee or former Employee of an Employer who
is eligible to receive benefits provided by the Plan.
"Participating Subsidiary" shall mean a subsidiary of the Company which the
Committee has designated as such and whose Employees are covered under the LTD
Policy.
"Plan" shall mean The Coca-Cola Company Supplemental Disability Plan, as
amended from time to time.
ARTICLE II
ELIGIBIILTY
2.1 Eligibility for Participation. Each Employee of the Employer who is eligible
for benefits under the LTD Policy is eligible to participate in the Plan. Upon
becoming a Participant, an Employee is deemed to have assented to the Plan and
to any amendments adopted hereafter.
2.2 Date of Participation. Each Employee who is eligible to become a Participant
under Section 2.1 shall become a Participant on the later of i) January 1, 2003
or ii) the date he meets the eligibility requirements.
2.3 Duration of Participation. An Employee who becomes a Participant shall
continue to be a Participant until the earlier of i) his termination of active
employment with the Employer ii) the date he is no longer covered under the LTD
Policy, or iii) the date he is no longer entitled to benefits under the LTD
Policy or this Plan.
ARTICLE III
BENEFITS
3.1 Disability Benefit. A Participant who becomes eligible for and receives a
disability benefit under the LTD Policy shall be eligible for a supplemental
disability benefit under this Plan. No benefit is payable under this Plan until
and unless the Insurer determines that a benefit is payable under the LTD
Policy.
3
<PAGE>
3.2 Amount of Benefit. A Participant who is eligible for a disability benefit
pursuant to Section 3.1 shall be entitled to a monthly supplemental disability
benefit under this Plan in an amount equal to the excess, if any, of (1) over
(2), where
(1) equals the Monthly Benefit payable under the LTD Policy,
notwithstanding any applicable maximum limits to the Monthly Benefit
described in the LTD Policy, and
(2) equals the Monthly Benefit payable under the LTD Policy.
Notwithstanding any other provision herein, in no event shall the monthly
supplemental benefit paid under this Plan plus the Monthly Benefit payable under
the LTD Policy exceed $25,000, and any supplemental benefit paid under this Plan
will be reduced accordingly.
3.3 Commencement and Duration. Monthly supplemental disability benefit payments
shall commence at the same time and be payable monthly thereafter for the same
period of time as the Monthly Benefits are paid under the LTD Policy.
ARTICLE IV
ADMINISTRATION
4.1 Committee.
(a) The Committee shall be responsible for the general administration of the
Plan. In the absence of the appointment of a Committee, the functions and
powers of the Committee shall reside with the Company.
(b) The Committee shall establish regulations for the day to day administration
of the Plan. The Committee and its designated agents shall have the
exclusive right and discretion to interpret the terms and conditions of the
Plan and to decide all matters arising with respect to the Plan's
administration and operation (including factual issues). Any
interpretations or decisions so made shall be conclusive and binding on all
persons. The Committee or its designee may pay the expenses of
administering the Plan or may reimburse the Company or other person
performing administrative services with respect to the Plan if the Company
or such other person directly pays such expenses at the request of the
Committee.
4.2 Authority to Appoint Advisors and Agents. The Committee may appoint and
employ such persons as it may require or deem advisable in carrying out the
provisions of the Plan. To the extent permitted by law, the members of the
Committee shall be fully protected by any action taken in reliance upon advice
given by such persons and in reliance on tables, valuations, certificates,
determinations, opinions and reports which are furnished by any accountant,
counsel, claims administrator or other expert who is employed or engaged by the
Committee.
4.3 Compensation and Expenses of Committee. The members of the Committee shall
receive no compensation for its duties hereunder, but the Committee shall be
reimbursed for all
4
<PAGE>
reasonable and necessary expenses incurred in the performance of its duties,
including counsel fees and expenses. Such expenses of the Committee, including
the compensation of administrators, actuaries, counsel, agents or others that
the Committee may employ, shall be paid out of the general assets of the
Company.
4.4 Records. The Committee shall keep or cause to be kept books and records with
respect to the operations and administration of this Plan.
4.5 Indemnification of Committee. The Company agrees to indemnify and to defend
to the fullest extent permitted by law any employee serving as a member of the
Committee or as its delegate against all liabilities, damages, costs and
expenses, including attorneys' fees and amounts paid in settlement of any claims
approved by the Company, occasioned by any act or failure to act in connection
with the Plan, unless such act or omission arises out of such employee's gross
negligence, willful neglect or willful misconduct.
4.6 Disputes.
(a) Claim. A person who believes that he or she is being denied a benefit to
which he or she is entitled under this Plan (hereinafter referred to as
"Claimant") must file a written request for such benefit with the
Committee, setting forth his or her claim within 60 days of the date the
benefit was denied. The request must be addressed to the Committee at the
Company's principal place of business.
(b) Claim Decision. Upon receipt of a claim, the Committee (or its delegate,
hereinafter collectively referred to as "Committee") shall deliver a reply
within 90 days. The Committee may, however, extend the reply period for an
additional 90 days for special circumstances. If the claim is denied, the
Committee shall inform the Claimant in writing.
(c) Limitation of Actions. No suit for benefits may be brought until the
Claimant has submitted and the Committee has made a final denial of the
claim. Any suit for benefits must be brought within one year after the date
the Committee has made a final denial of the claim. Notwithstanding any
other provision herein, any suit for benefits must be brought within two
years after the date the claim for benefits first arose.
ARTICLE V
MISCELLANEOUS
5.1 Unsecured General Creditor. Participants and their heirs, successors, and
assigns shall have no legal or equitable rights, claims, or interest in any
specific property or assets of the Employer. No assets of the Employer shall be
held in any way as collateral security for the fulfilling of the obligations of
the Employer under this Plan. Any and all of the Employer's assets shall be, and
remain, the general unpledged, unrestricted assets of the Employer. The
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Employer to pay money in the future, and the rights of
the Participants shall be no greater
5
<PAGE>
than those of unsecured general creditors. It is the intention of the Employer
that this Plan be unfunded. Nothing contained in this Plan, and no actions taken
pursuant to the provisions of this Plan shall create or be construed to create a
trust or any kind of fiduciary relationship between the Employer and any
Participant or any other person.
5.2 Restriction Against Assignment. The Employer shall pay all amounts payable
hereunder only to the person or persons designated by the Plan and not to any
other person or corporation. No part of a Participant's benefit shall be liable
for the debts, contracts, or engagements of any Participant or successors in
interest, nor shall a Participant's benefit be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever. If any Participant or successor in interest is adjudicated
bankrupt or purports to anticipate, alienate, sell, transfer, commute, assign,
pledge, encumber or charge any distribution or payment from the Plan,
voluntarily or involuntarily, the Committee, in its discretion, may cancel such
distribution or payment (or any part thereof) to or for the benefit of such
Participant or successor in interest in such manner as the Committee shall
direct.
5.3 Tax Withholding. There shall be deducted from each payment made under the
Plan or any other compensation payable to the Participant all taxes which are
required to be withheld by the Employer in respect to any payment under this
Plan. The Employer shall have the right to reduce any payment (or compensation)
by the amount of cash sufficient to provide the amount of said taxes.
5.4 Amendment, Modification, Suspension or Termination. The Committee may amend,
modify, suspend or terminate the Plan in whole or in part, at any time, except
that no amendment, modification, suspension or termination may retroactively
adversely affect any Participant's right to a benefit which has vested under the
Plan before such date.
5.5 Governing Law. This Plan shall be construed, governed and administered in
accordance with the laws of the State of Georgia, to the extent not preempted by
federal law, without regard to the conflicts of law principles thereof.
5.6 Receipt or Release. Any payment to a Participant in accordance with the
provisions of the Plan shall, to the extent thereof, be in full satisfaction of
all claims against the Committee and the Employer. The Committee may require
such Participant, as a condition precedent to such payment, to execute a receipt
and release to such effect.
5.7 Payments on Behalf of Persons Under Incapacity. In the event that any amount
becomes payable under the Plan to a person who, in the sole judgment of the
Committee, is considered by reason of physical or mental condition to be unable
to give a valid receipt therefore, the Committee may direct that such payment be
made to any person found by the Committee, in its sole judgment, to have assumed
the care of such person. Any payment made pursuant to such determination shall
constitute a full release and discharge of the Committee and the Employer.
6
<PAGE>
5.8 Limitation of Rights and Employment Relationship. Neither the establishment
of the Plan nor any modification thereof, nor the creating of any fund, nor the
payment of any benefits shall be construed as giving to any Participant or other
person any legal or equitable right against the Employer except as provided in
the Plan; and in no event shall the terms of employment of any Employee or
Participant be modified or in any way be affected by the provisions of the Plan.
5.9 Headings. Headings and subheadings in this Plan are inserted for convenience
of reference only and are not to be considered in the construction of the
provisions hereof.
The Coca-Cola Company Supplemental Benefit Plan is hereby amended and restated,
effective as of January 1, 2003.
By: /s/ Coretha M. Rushing
--------------------------------------
Senior Vice President, Human Resources
7
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>8
<FILENAME>x10-10.txt
<DESCRIPTION>EXECUTIVE MEDICAL PLAN, AS AMENDED AND RESTATED 1/1/2001
<TEXT>
EXHIBIT 10.10
EXECUTIVE MEDICAL PLAN OF
THE COCA-COLA COMPANY
(PLAN NO. 549)
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2001
The Coca-Cola Company (the "Plan Sponsor") adopted The Coca-Cola Company
Supplemental Medical Expense Plan on May 4, 1982 (the "Plan"). On August 1,
1989, the Plan Sponsor executed a Plan Instrument effective July 1, 1982. The
Plan was further amended effective January 1, 1989 by Amendment No. 1 dated
August 1, 1989.
The Plan Sponsor does hereby amend and restate the Plan in its entirety,
effective as of January 1, 2001. This amendment and restatement reflects the
renaming of the Plan as the "Executive Medical Plan of The Coca-Cola Company"
and the new Insurer for the Group Policy incorporated herein by reference.
1. Purpose
The purpose of the Plan is to provide eligible employees of the Plan
Sponsor and its participating affiliates with additional financial security in
the event of death or disability. An individual shall be treated as an employee
under this Plan for any period only if (i) he or she is actually classified
during such period by the Plan Sponsor or a participating affiliate on its
payroll, personnel and benefits system as an employee, and (ii) he or she is
paid for services rendered during such period through the payroll system as
distinguished from the accounts payable department of the Plan Sponsor or any
participating affiliate. No other individual shall be treated as an employee
under this Plan for any period regardless of his or her status during such
period as an employee under common law or under any statute.
The Plan Sponsor intends that the Plan constitute an "employee welfare
benefit plan" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and that the Plan be maintained in compliance with all
applicable provisions of ERISA and the Internal Revenue Code of 1986, as
amended.
2. Eligibility Requirements and Benefit Coverages Provided
Benefits provided under the Plan shall be provided through the purchase and
maintenance of one or more Group Insurance Policies (the "Group Policy") which
the officers of the Plan Sponsor are authorized to enter into with one or more
insurance companies (the "Insurer") with respect to the Plan. Plan requirements
respecting eligibility for participation and benefits shall be the requirements
as to employees to be insured as set forth in the Group Policy. The persons
entitled to benefits under the Plan shall be the employees insured as set forth
in the Group Policy and their beneficiaries designated in accordance with the
terms, provisions and conditions of the Group Policy. The benefits under the
Plan shall be provided by the Group Policy in accordance with the terms,
provisions and conditions of the Group Policy. The affiliates of the Plan
Sponsor whose employees may participate in the Plan shall be those affiliates
specified in the Group Policy.
<PAGE>
3. Plan Administrator
The Director of Employee Benefits of the Plan Sponsor shall be the Plan
Administrator of the Plan. The Plan Administrator may authorize any other person
to sign communications and to execute documents on his or her behalf and may
delegate such of his or her duties and responsibilities under the Plan as the
Plan Administrator considers to be in the best interest of the Plan. The Plan
Administrator may employ one or more persons to render advice with respect to
any of the Plan Administrator's responsibilities under the Plan.
4. Named Fiduciary and Administration of the Plan
(a) The Plan Administrator shall have the exclusive responsibility and
complete discretionary authority to control the operation and management of the
Plan, with all powers necessary to enable him or her to properly carry out such
responsibility, including, but not limited to, the power to construe the terms
of this Plan, to determine status, coverage and eligibility for benefits (except
to the extent delegated to the Insurer under Section 4(b) of the Plan), and to
resolve all interpretive, equitable and other questions that shall arise in the
operation and administration of the Plan. All actions and determinations made by
the Plan Administrator shall be final, conclusive and binding on all persons.
(b) Claims for benefits under the Plan are to be submitted to and payment
of claims will be made by the Insurer as provided in the Group Policy. A claim
which is denied by the Insurer shall be reviewed by the Insurer in accordance
with the procedure as provided in the Group Policy, and the decision of the
Insurer on any claim shall be final. The Insurer shall be the "named fiduciary"
under the Plan for the purpose of such review and all decisions thereon. The
Insurer's decision on any claim shall be final, conclusive and binding on all
persons. Except as provided in Section 4(c) of the Plan, the Insurer shall have
the exclusive responsibility and complete discretionary authority to make all
decisions with respect to claims, with all powers necessary to enable it to
properly carry out such responsibility, including, but not limited to, the power
to construe the terms of the Group Policy, to determine status, coverage and
eligibility of claims, and to resolve all interpretive and other questions that
shall arise while doing so. All such actions or determinations of the Insurer
shall be final, conclusive and binding on all persons.
(c) Notwithstanding Section 4(b), the Plan Administrator, and not the
Insurer, shall have the exclusive responsibility and complete discretionary
authority to determine whether an individual has been classified on the Plan
Sponsor's or a participating affiliate's payroll, personnel and benefits system
for any period as its employee for purposes of this Plan and shall be the "named
fiduciary" under the Plan for such purpose. All actions and determinations made
by the Plan Administrator in the scope of his or her authority under the Plan
shall be final, conclusive and binding on all persons.
5. Plan Year
The plan year for the Plan shall coincide with the policy year of the Group
Policy.
-2-
<PAGE>
- - 2 -
6. Financing the Plan
All Plan benefits shall be funded through the purchase of the Group Policy;
provided, however, that any payments made to or credits to the Plan Sponsor in
accordance with the experience rating provisions, if any, of the Group Policy
shall be the separate property of the Plan Sponsor. Eligible employees covered
under the Plan shall make such contributions to the cost of the Group Policy as
the Plan Administrator may require from time to time.
7. Plan Expenses
All reasonable and proper expenses incurred in administering the Plan shall
be paid by the Plan unless the Plan Sponsor, in its absolute discretion, elects
to pay any or all of such expenses.
8. Limitation of Rights
The Plan shall not give any employee, former employee or dependent any
right or claim except to the extent that such right is specifically fixed under
the terms of the Plan. Neither the establishment nor the continuance of the Plan
shall be construed as giving any employee a right to be continued in the employ
of the Plan Sponsor or any affiliate or as interfering with the right of the
Plan Sponsor or any affiliate to terminate the employment of any employee at any
time.
9. Failure of Enforcement as Waiver
The failure of the Plan Sponsor, the Plan Administrator, or the Insurer to
enforce at any time any of the provisions of the Plan, or to require at any time
performance of any of the provisions of the Plan, shall in no way be construed
to be a waiver of such provisions, nor in any way to effect the validity of the
Plan or any part thereof or the right of the Plan Sponsor, Plan Administrator,
or Insurer to thereafter enforce each and every such provision.
10. Amendment and Termination of the Plan
The Plan Administrator may terminate, suspend, amend or modify the Plan in
whole or part at any time for any reason (including, without limitation, to
reduce or eliminate coverage for one or more groups of individuals and to change
or increase at any time the amounts payable by covered persons under the Plan
including, without limitation, the amounts of contributions required for Plan
coverage), by written action, and any such termination, suspension, amendment or
modification may be made retroactively and, further, may be made without advance
notice to any person; provided, however, that no amendment to the benefit or
other provisions of the Group Policy may be made without the approval of the
Insurer.
11. Applicable Law
The Plan shall be construed, administered and governed in all respects
under and by the laws of the State of Georgia, except to the extent that Federal
law is controlling.
- 3 -
<PAGE>
IN WITNESS WHEREOF, the undersigned duly authorized Plan Administrator has
executed this amended and restated Plan on the 25 day of June, 2001.
THE COCA-COLA COMPANY
By: /s/ Barbara S. Gilbreath
----------------------------
Director of Employee Benefits
[2001_Restated_Exec_Med_Plan.doc]
-4-
<PAGE>
APPLICATION FOR GROUP INSURANCE
TO
UNITED HEALTHCARE INSURANCE COMPANY
Hartford, Connecticut
Employer - The Coca-Cola Company
Address - One Coca-Cola Plaza, Atlanta, Georgia 30313
The Employer applies for a Group Policy to cover its eligible Employees.
Employees of affiliated organizations under common control of the Employer may
be covered. The Employer will have to request in writing that they be covered.
The Employees of other affiliated organizations will have coverage started or
stopped when the Employer requests the Company in writing to do so. Coverage
will start or stop according to the rules of the policy.
The term "Employer" will mean the Employer named above. It will also mean any
affiliated organization the Employer has included under the policy.
The Employer will represent any affiliated organizations included under the
policy. The Employer will take any required actions for them.
The company identifies the policy as Policy Number GA-195732. The policy
includes any and all riders attached to it. The Employer has approved it and
accepts its terms.
The policy will take effect on January 1, 2001. Premium payments are required
each month.
Any earlier application for the policy is replaced by this application.
Dated at: Atlanta, Georgia THE COCA-COLA COMPANY
May 31, 2001
- ------------------- By: /s/ Coretha M. Rushing
--------------------------------
Official Title: Coretha Rushing
Senior Vice President,
Human Resources
Witness: /s/ Sharon Ray
--------------------
<PAGE>
United HealthCare Insurance Company
450 COLUMBUS BOULEVARD
HARTFORD, CONNECTICUT
A STOCK COMPANY
(Hereinafter called the Company)
Employer - The Coca-Cola Company
and any affiliated organizations included under this policy.
Policy Number - GA-195732
Effective Date - January 1, 2001
First Policy Anniversary - January 1, 2002
Subsequent Policy Anniversaries - each January 1
State or other Jurisdiction of Issue - Georgia
The Company agrees to insure the Employer's eligible Employees and their
eligible Dependents. The Company will do this while this policy stays in force.
The Company agrees to pay the benefits of this policy to the Employee. The
details of the benefits are shown in the Certificate(s) of Insurance and
Notice(s) of Amendment which form a part of the policy.
Premiums
The Employer has applied for this policy and understands that it must pay the
required premium to the Company to get the insurance and to keep it in force.
The Premium Due Date is the first day of each calendar month.
When This Policy Will Take Effect
This policy will take effect at the Employer's address on the Effective Date
above, its date of issue. All periods of time that apply to this policy are
deemed to begin and end at 12:01 A.M. at the Employer's address.
United HealthCare Insurance Company witnesses that this policy is executed on
its date of issue at Hartford, Connecticut.
/s/ P. A. Michaud
---------------------------------
Policy Registrar
Group Health Insurance: Non-Participating Term Insurance
Which can be Discontinued by the Company as Described in the Policy
P-CV1, P-Pl1, P-PP2, P-DP1.
<PAGE>
PLAN OF INSURANCE COVERAGE
1. All of the benefits and provisions in the Certificate(s) of Insurance and
Notice(s) of Amendment issued for the Employees shown in Paragraph 3 are
included in and made a part of this policy.
2. When a reference to "you" or "your" is made in any Certificate of Insurance
or Notice of Amendment, it will be a reference to an insured Employee.
3. The Certificate(s) of Insurance and Notice(s) of Amendment, each identified
by a Document Number, the description of the Employees, and the Effective
Date(s) of the Certificate(s) of Insurance and Notice(s) of Amendment are
shown below. The Effective Date is the date that the benefits and
provisions of the Certificate of Insurance or Notice of Amendment are to be
included in the policy.
Employees Document Number Effective Date
All Eligible Employees 03682423 January 1, 2001
<PAGE>
POLICY PROVISIONS
Premium Rates
The monthly premium for each insured Employee is as follows:
* $253.52 for Employee only coverage.
* $519.19 for Employee plus Spouse coverage.
* $732.15 for Employee plus Family coverage.
The Company's Right to Change the Rates
The Company can change the premium rates on:
* A Premium Due Date.
* The date of a change in Plan benefits or provisions.
* The effective date of any change in federal laws or state regulations which
affect the Company's obligations under this policy.
The Company also has the right to change the rates retroactive to the Effective
Date if an Employee makes a material misrepresentation that affects the
conditions under which the policy was issued.
However, the Company may not increase the rates before either of the following
times, except for an increase due to a change in the number of Employees, a
change in Plan, a change in federal laws or state regulations or Employee
misrepresentation:
The first Policy Anniversary.
12 months after a previous increase in premium rates.
The Employer will be notified at least 60 days in advance of any increase in
premium rates.
Premiums: Where and How Payable
Premium is the money paid by the Employer to the Company for insurance coverage.
Premiums are paid at the Home Office or to an authorized agent of the Company.
Premiums are paid in advance each month on or before the Premium Due Date except
that premiums for each conversion policy or certificate issued during a calendar
quarter are paid to the Company quarterly in arrears.
The first premium is due on and must be paid by the Effective Date of the
policy.
Premium Computation and Adjustment
Premium Computation
Each monthly premium is calculated based on the number of enrollees, each
enrollee's coverage classification the Company shows in its records at the time
of the calculation and the premium rates then in effect.
<PAGE>
The Employer shall notify the Company in writing within 30 days of the effective
date of additions, terminations or other changes. The Employer shall notify the
Company in writing each month of any changes in the coverage classification of
any enrollee.
Premium Adjustment
The Company will make a retroactive adjustment of the premium for any additions,
terminations or changes in coverage classification not shown in the Company's
records at the time premium is calculated.
No retroactive credit will be made for:
* any change which occurs more than 60 days prior to the date the Employer
notifies the Company of the change
* any month in which an individual has received services or supplies under
the terms of the policy.
The Employer may notify the Company in writing to end the policy during a time
for which premium has been paid. The Company will make an adjustment of the
premium to the Employer for the time between the date the policy ends and the
end of the period for which premium has been paid.
Retrospective Rating
Insurance under this policy is subject to retrospective experience rating. This
means that the Company may at the end of any policy year retrospectively reduce,
but not increase, the premium for such policy year due to claims experience. The
claims experience of the class of business as a whole, of which the Employer is
a part, and to the extent allowed by law, the claims experience of each Employer
under this policy will be used to determine the premium rates. To the extent
allowed by law, the rates may also be based on some or all of the following
characteristics of the Employer: age, sex, family status, industry or
occupation, size of the Employer, location of the Employer, underwriting
classification, duration of coverage since underwriting, health status of
covered individuals, benefit plan design, and such other factors as the Company
may determine from time to time.
Grace Period
This section applies only to premiums due after the Effective Date of the
policy.
If premiums are not paid by a Premium Due Date, the policy will only stay in
force for 31 days. The Employer must pay premiums for the time the policy stays
in force. If written notice to end the policy is given by the Employer before
the end of the 31 days, an adjustment of the premium will be made.
Employee's Individual Certificate
The Company will issue Certificates of Insurance and any attachments to the
Employer for delivery to each covered Employee. The certificate and any
attachments will show all the benefits and provisions of the health insurance
plan.
Employer's Information Reports
The Company needs certain data. It is used to figure amounts of insurance and
premiums. The Employer must give the data when it is requested by the Company.
<PAGE>
Inspection of Records by the Company
The Company has the right to inspect records of the Employer that relate to the
insurance or the premiums. The Company will have this right at all reasonable
times.
Entire Contract
This policy is governed by the laws of the State or other Jurisdiction of Issue.
The entire contract is made up of the following:
* This policy, including all Certificates and any attachments.
* The Employer's application,
* The Employees' applications, if there are any.
Unless there is fraud, all statements made by the Employer or Employees will be
considered as statements of fact, not as guarantees.
A covered person's statement can not be used in defense to a claim under the
policy unless a copy of the statement has been given to the person.
Clerical Error
Clerical error shall not deprive any person of coverage under the policy or
create a right to benefits. Failure to report the termination of a person's
coverage shall not continue such coverage beyond the date it is scheduled to end
according to the terms of the policy. Upon discovery of a clerical error, any
necessary appropriate adjustment in premium shall be made. However, the Company
will not make an adjustment in premium or coverage for more than 60 days of
coverage prior to the date the Employer notifies the Company of such clerical
error.
Modifications
No one can change the policy, any of its conditions or the Premium Due Date
without the written consent of the Company.
The Company can change the policy (including the benefits and provisions in the
Certificates of Insurance) on a Policy Anniversary. The change must be effective
on a uniform basis on all policies which provide the same type of group health
product in the small and/or large group market. Employer agreement is not
needed.
The policy can also be changed if the Company and the Employer agree. Employee
agreement is not needed.
Any change has to agree with the laws of the State or other Jurisdiction of
Issue.
Any change has to be signed by an Officer of the Company and attached to this
policy before it is valid.
Benefits can not be reduced for an expense incurred before the date of the
change.
No Replacement for Workers' Compensation
This policy does not replace Workers' Compensation or affect any requirement for
Workers' Compensation
<PAGE>
coverage.
Discontinuance of Policy
The policy and all of the insurance ends on the earliest of the following:
* The date the premium is not paid when due. Unless the Employer gives
advance written notice to the Company to end the policy, the Grace Period
applies. During the Grace Period the policy stays in force for 31 days. The
Employer must pay premium for the time the policy stays in force. The Grace
Period applies even if the Employer replaces this policy with another plan
of insurance but has not given notice to the Company.
* The first Premium Due Date after the Employer gives the Company written
notice to end the policy. If the Employer does not give advance notice and
the policy ends because the premium is not paid, the Grace Period applies.
During the Grace Period the policy stays in force for 31 days. The Employer
must pay premium for the time the policy stays in force. The Grace Period
applies even if the Employer replaces this policy with another plan of
insurance but has not given notice to the Company.
* The date specified by the Company, in advance written notice to the
Employer, that the policy is discontinued for one of the following reasons:
* The Employer has performed an act or practice that is fraud or made an
intentional misrepresentation of material fact under the terms of the
policy. The Company has the right to rescind this policy back to the
effective date.
* The Employer has failed to comply with the Company's employer
contribution or group participation rules.
* The number of Employees changes such that a large employer becomes a
small employer. The small employer will be given the option to buy all
other group health coverage currently offered by the Company in the
small group market.
* The Company has stopped issuance of the type of group health coverage
provided by this policy in a state for the small and/or large group
market. The Company will give notice of the discontinuation to the
Employer and Employees at least 90 days prior to the date of the
discontinuation. The Employer will be given the option to buy all (or,
if the Employer is a large employer, any) other health coverage
currently offered by the Company.
* The Company has stopped issuance of all group health coverage in a
state for the small and/or large group market. The Company will give
notice of the discontinuation to the applicable state authority, the
Employer and Employees at least 180 days prior to the date of
discontinuation.
* There are no longer any Employees who reside or work in the network service
area.
* The terms small employer, small group market, large employer and large
group market will have the meaning given to them under applicable state or
federal law.
END OF POLICY
<PAGE>
UNITED HEALTHCARE INSURANCE COMPANY
CERTIFICATE OF COVERAGE
This Certificate of Coverage ("Certificate") sets forth your rights and
obligations under this coverage. It is important that you READ YOUR CERTIFICATE
CAREFULLY and familiarize yourself with its terms and conditions.
The Policy provides payment for certain medical expenses not otherwise covered
under The Health Benefit Plan of The Coca-Cola Company or under any other health
benefit plan in which you are enrolled. See the definition of Covered Health
Service in Section 1 and Section 8 "Covered Health Services".
United Healthcare Insurance Company ("Company") agrees with the Enrolling Group
to provide Coverage to you and your Dependents, subject to the terms,
conditions, exclusions and limitations of the Policy. The Policy is issued on
the basis of the Enrolling Group's application and payment of the required
Policy Charges. The Enrolling Group's application is made a part of the Policy.
The Company shall not be deemed or construed as an employer for any purpose with
respect to the administration or provision of benefits under the Enrolling
Group's benefit plan. The Company shall not be responsible for fulfilling any
duties or obligations of an employer with respect to the Enrolling Group's
benefit plan.
The Policy shall take effect on the date specified and will be continued in
force by the timely payment of the required Policy Charges when due, subject to
termination of the Policy as provided. All Coverage under the Policy shall begin
at 12:01 a.m. and end at 12:00 midnight at the Enrolling Group's address.
The Policy is delivered in the State of Georgia and is governed by ERISA.
IN4 2
<PAGE>
TABLE OF CONTENTS
Section 1 Definitions 3
Section 2 Eligibility and Effective Date of Coverage 6
Section 3 Termination of Coverage 6
Section 4 Reimbursement 7
Section 5 General Provisions 9
Section 6 Coordination of Benefits 10
Section 7 Continuation of Coverage 16
Section 8 Covered Health Services 19
Section 9 General Exclusions 20
TC
<PAGE>
SECTION 1
DEFINITIONS
This section defines the terms used throughout this Certificate and is not
intended to describe covered or uncovered services.
"Amendment" - any attached description of additional or alternative provisions
to the Policy. Amendments are effective only when signed by the Company.
Amendments are subject to all conditions, limitations and exclusions of the
Policy except for those which are specifically amended.
"Calendar Year Maximum" - the maximum amount of Covered Medical Expenses the
Plan Sponsor will pay during any calendar year period of January 1 through
December 31.
"Covered Health Services" - Copayments, coinsurance, and annual deductible
charges that are assessed to you in connection with services covered under The
Coca-Cola Company Health Benefit Plan.
"Coverage" or "Covered" - the entitlement by a Covered Person to reimbursement
for Health Services covered under the Policy, subject to the terms, conditions,
limitations and exclusions of the Policy. Health Services must be incurred (1)
when the Policy is in effect; and (2) prior to the date that any of the
individual termination conditions of Section 3.1 occur; and (3) only when the
recipient is a Covered Person and meets all eligibility requirements specified
in the Policy.
"Covered Person" - either the Subscriber or an Enrolled Dependent, but applies
only while Coverage of such person under the Policy is in effect. References to
"you" and "your" throughout this Certificate are references to a Covered Person.
"Dependent" -
* Your lawful spouse. Legally separated spouses are not considered eligible
family members. Common-law spouses are not considered eligible family members
unless they live in a state that recognizes common-law marriages.
* Same-sex domestic partners who:
* is an individual who is the same-sex as the associate;
* is at least 18 years old;
* is neither married to anyone else nor is the domestic partner of anyone
other than the associate;
* is the associate's sole same-sex domestic partner and intends to remain
so indefinitely;
DE4 4
<PAGE>
* lives with the associate in the same permanent residence;
* is jointly responsible, with the associate, for each other's welfare and
basic living expenses ("financial interdependence");
* is competent to enter a binding contract under the law; and
* is not related to the associate in a blood relationship that would bar
marriage under the law for opposite sex couples;
* Your unmarried dependent children under the age of 19 if the child is
dependent upon you for financial support and maintenance;
* Your unmarried children under the age of 24 who are registered students in
regular full-time attendance (at least 12 credit hours) at an accredited
secondary school, college, university, or vocational or trade school and
who primarily depend on you for financial support and maintenance; and
* Your disabled children who were covered under the plan and disabled at the
time their dependent coverage would otherwise have ended because of
reaching the maximum age, who are incapable of self-support due to a
physical or mental incapacity. Proof of total disability must be furnished
within 31 days after the date on which your child's coverage would normally
cease and from time to time thereafter as requested by the Company.
"Eligible Expenses" - Eligible Expenses are calculated by the Company based on
available data resources of competitive fees in that geographic area.
Eligible Expenses must not exceed the fees that the provider would charge any
similarly situated payor for the same services.
Eligible Expenses are determined solely in accordance with Our reimbursement
policy guidelines. We develop Our reimbursement policy guidelines, in Our
discretion, following evaluation and validation of all provider billings in
accordance with one or more of the following methodologies:
* as indicated in the most recent edition of the Current Procedural
Terminology (publication of the American Medical Association);
* as reported by generally recognized professionals or publications;
* as utilized for Medicare;
* as determined by medical staff and outside medical consultants;
* pursuant to other appropriate source or determination that We accept.
"Eligible Person" - (1) an employee of the Enrolling Group; or (2) other person
who meets the eligibility requirements specified in both the application and the
Policy.
"Enrolled Dependent" - a Dependent who is properly enrolled for Coverage
DE4
5
<PAGE>
under the policy.
"Enrolling Group" - the employer or other defined or otherwise legally
constituted group to whom the Policy is issued.
"Experimental, Investigational or Unproven Services" - medical, surgical,
diagnostic, psychiatric, substance abuse or other health care services,
technologies, supplies, treatments, procedures, drug therapies or devices that,
at the time the Company makes a determination regarding coverage in a particular
case, is determined to be:
A. not approved by the U.S. Food and Drug Administration ("FDA") to be
lawfully marketed for the proposed use and not identified in the American
Hospital Formulary Service or the United States Pharmacopoeia Dispensing
Information as appropriate for the proposed use; or
B. subject to review and approval by any institutional review board for the
proposed use; or
C. the subject of an ongoing clinical trial that meets the definition of a
Phase 1, 2 or 3 clinical trial set forth in the FDA regulations, regardless
of whether the trial is actually subject to FDA oversight; or
D. not demonstrated through prevailing peer-reviewed medical literature to be
safe and effective for treating or diagnosing the condition or illness for
which its use is proposed.
The Company, in its judgment, may deem an Experimental, Investigational or
Unproven Service a Covered Health Service for treating a life threatening
Sickness or condition if it is determined by the Company that the Experimental,
Investigational or Unproven Service at the time of the determination:
A. is safe with promising efficacy;
B. is provided in a clinically controlled research setting; and
C. uses a specific research protocol that meets standards equivalent to those
defined by the National Institutes of Health.
(For the purpose of this definition, the term "life threatening" is used to
describe Sicknesses or conditions that are more likely than not to cause death
within one year of the date of the request for treatment.)
"Full-time Student" - a dependent enrolled in at least 12 credit hours as an
accredited secondary school, college, university, or vocational or trade school
and whom primarily depend on you for financial support and maintenance.
"Health Services" - the health care services and supplies Covered under the
Policy, except to the extent that such health care services and supplies are
limited or excluded.
"Physician" - any Doctor of Medicine, "M.D.," or Doctor of Osteopathy, "D.O.,"
who is duly licensed and qualified by law. Note: Any duly licensed podiatrist,
DE4
<PAGE>
6
dentist, psychologist, chiropractor, optometrist or other provider who acts
within the scope of his or her license will be considered on the same basis as a
Physician. Designation of a provider as a Physician does not mean that Benefits
are available.
"Policy" - the group Policy, the application of the Enrolling Group. Amendments
and Riders which constitute the agreement regarding the benefits, exclusions and
other conditions between the Company and the Enrolling Group.
"Rider" - any attached description of Health Services Covered under the Policy.
Health Services provided by a Rider may be subject to payment of additional
Premiums. Riders are effective only when signed by the Company and are subject
to all conditions, limitations and exclusions of the Policy except for those
that are specifically amended.
"Subscriber" - an Eligible Person who is properly enrolled for Coverage under
the Policy. The Subscriber is the person who is not a Dependent on whose behalf
the Policy is issued to the Enrolling Group.
SECTION 2
EFFECTIVE DATE OF COVERAGE
Section 2.1 Effective Date of Coverage. Coverage for you and any of your
Dependents is effective on the date specified in the Policy. In no event is
there Coverage for Health Services rendered or delivered before the effective
date of Coverage.
Section 2.2 Coverage for a New Eligible Person. Coverage for you and any of your
Dependents shall take effect on the date specified in the Policy. Employees and
their eligible dependents must enroll for coverage within 31 days from when they
first became eligible.
Section 2.3 Coverage for a Newly Eligible Dependent. Coverage for a new
Dependent acquired by reason of birth, legal adoption, placement for adoption,
court or administrative order, or marriage shall take effect on the date of the
event. Coverage is effective only if the Company receives any required Premium
and is notified of the event within 31 days.
SECTION 3
TERMINATION OF COVERAGE
Section 3.1 Conditions for Termination of an Eligible Person's Coverage Under
the Policy. The Company may, at any time, discontinue this benefit plan and/or
all similar plans for the reasons specified in the Policy. When your
DE4
7
<PAGE>
Coverage terminates, you may have continuation privileges as described in
Section 7 or as provided under other applicable federal and/or state law.
Your Coverage, including coverage for Health Services rendered after the date of
termination for medical conditions arising prior to the date of termination,
shall automatically terminate on the earliest of the dates specified below.
A. The date the entire Policy is terminated, as specified in the Policy.
B. The date you cease to be eligible.
C. The date the Company receives written notice from the Enrolling Group the
Company to terminate Coverage or the date requested in such notice, if
later.
Section 3.2 Extended Coverage for Handicapped Dependent Children. Coverage for
your disabled children who were covered under the plan and disabled at the time
their dependent coverage would have otherwise ended because of reaching the
maximum age, who are incapable of self-support due to a physical or mental
incapacity. Proof of total disability must be furnished within 31 days after the
date on which your child's coverage would normally cease and from time to time
thereafter as requested by the claims administrator.
Section 3.3 Payment and Reimbursement Upon Termination. Termination of Coverage
shall not affect any request for reimbursement of Eligible Expenses for Health
Services rendered prior to the effective date of termination. Your request for
reimbursement must be furnished as required in Section 4.
SECTION 4
REIMBURSEMENT
Section 4.1 Reimbursement of Eligible Expenses. The Company shall reimburse you
for Eligible Expenses subject to the terms, conditions, exclusions and
limitations of the Policy and as described in 4.4
Section 4.2 Filing Claims for Reimbursement of Eligible Expenses. You are
responsible for submitting a claim to the Company's office, on a form provided
by or satisfactory to the Company. Claims should be submitted within 90 days
after date of service. Unless you are legally incapacitated, failure to provide
this information to the Company within 1 year of the date of service shall
cancel or reduce Coverage for the Health Service.
Subject to written authorization from you, all or a portion of any Eligible
Expenses due may be paid directly to the provided of the Health Services instead
of being paid to you.
Written proof of loss should be given to the Company within 90 days after the
date of the loss. If it was not reasonably possible to give written proof in the
time
TE(99)
8
<PAGE>
required, the Company will not reduce or deny the claim for this reason.
However, proof must be filed as soon as reasonably possible, but no later than
one year after the date of service.
It is not necessary to include a claim form with the proof of loss. If you would
like to use a claim form, contact the Company and a claim form will be sent to
you. If you do not receive the claim form within 15 days of your request, send
in the proof of loss with the following information:
A. Your name and address
B. Patient's name and age
C. Number stated on Your ID card
D. The name and address of the provider of the service(s)
E. A diagnosis from the Physician
F. Itemized bill which includes the CPT codes or description of
each charge
G. Date Injury or Sickness began
H. A statement indicating either that You are, or You are not,
enrolled for coverage under any other health insurance plan or
program. If You are enrolled for other coverage You must
include the name of the other carrier(s).
Section 4.3 Payment of Claims. Benefits are payable within 45 days after the
Company receives acceptable proof of loss. Benefits will be paid to you unless:
A. the provider notifies the Company that your signature is on file assigning
benefits directly to that provider; or
B. you make a written request at the time the claim is submitted.
Section 4.4 Limitation of Action for Reimbursement. You do not have the right to
bring any legal proceeding or action against the Company to recover
reimbursement until 90 days after you have properly submitted a request for
reimbursement, as described above. If you do not bring such legal proceeding or
action against the Company within 3 years of the expiration date, you forfeit
your rights to bring any action against the Company.
RE4
9
<PAGE>
SECTION 5
GENERAL PROVISIONS
Section 5.1 Entire Policy. The Policy, including the Certificate of Coverage as
Attachment A, the application, Amendments and Riders, constitutes the entire
Policy. All statements made by the Enrolling Group or by a Subscriber shall, in
the absence of fraud, be deemed representations and not warranties.
Section 5.2 Time Limit on Certain Defenses. No statement, except a fraudulent
statement, made by the Enrolling Group shall be used to void the Policy after it
has been in force for a period of two years.
Section 5.3 Amendments and Alterations. Amendments to the Policy are effective
upon 31 days written notice to the Enrolling Group. Riders are effective on the
date specified by the Company. No change will be made to the Policy unless it is
made by an Amendment or a Rider which is signed by an officer of the Company. No
agent has authority to change the Policy or to waive any of its provisions.
Section 5.4 Relationship Between Parties. The relationships between the Company
and providers and relationships between the company and Enrolling Groups, are
solely contractual relationships between independent contractors. Network
providers and Enrolling Groups are not agents or employees of the Company, nor
is the Company or any employee of the Company an agent or employee of providers
or Enrolling Groups.
The relationship between a provider and any Covered Person is that of provider
and patient. The provider is solely responsible for the services provided to any
Covered Person.
The relationship between the Enrolling Group and Covered Persons is that of
employer and employee, Dependent or other Coverage classification as defined in
the Policy. The Enrolling Group is solely responsible for enrollment and
Coverage classification changes (including termination of a Covered Person's
Coverage through the Company), for the timely payment of the Policy Charge to
the Company, and for notifying Covered Persons of the termination of the Policy.
Section 5.5 Records. You must furnish the Company with all information and
proofs which it may reasonably require regarding any matters pertaining to the
Policy.
By accepting Coverage under the Policy, you authorize and direct any person or
institution that has provided services to you, to furnish the Company any and
all information and records or copies of records relating to the services
provided to you. The Company has the right to request this information at any
reasonable time. This applies to all Covered Persons, including Enrolled
Dependents whether or not they have signed the Subscriber's enrollment form.
GP(99)
10
<PAGE>
The Company agrees that such information and records will be considered
confidential. The Company has the right to release any and all records
concerning health care services which are necessary to implement and administer
the terms of the Policy or for appropriate medical review or quality assessment.
The Company is permitted to charge you reasonable fees to cover costs for
completing requested medical abstracts or forms which you have requested.
In some cases, the Company will designate other persons or entities to request
records or information from or related to you and to release those records as
necessary. The Company's designees have the same rights to this information as
does the Company.
During and after the term of the Policy, the Company and its related entities
may use and transfer the information gathered under the Policy for research and
analytic purposes.
Section 5.6 ERISA. When the Policy is purchased by the Enrolling Group to
provide benefits under a welfare plan governed by the Employee Retirement Income
Security Act 29 U.S.C. [Section] 1001 et seq., the Company is not the plan
administrator or named fiduciary of the welfare plan, as those terms are used in
ERISA.
Section 5.7 Clerical Error. If a clerical error or other mistake occurs, that
error shall not deprive you of Coverage under the Policy. A clerical error also
does not create a right to benefits.
Section 5.8 Notice. When the Company provides written notice regarding
administration of the Policy to an authorized representative of the Enrolling
Group, that notice is deemed notice to all affected Subscribers and their
Enrolled Dependents. The Enrolling Group is responsible for giving notice to
Covered Persons.
Section 5.9 Workers' Compensation Not Affected. The Coverage provided under the
Policy does not substitute for and does not affect any requirements for coverage
by workers' compensation insurance.
Section 5.10 Conformity with Statutes. Any provision of the Policy which, on its
effective date, is in conflict with the requirements of state or federal
statutes or regulations (of the jurisdiction in which delivered) is hereby
amended to conform to the minimum requirements of such statutes and regulations.
SECTION 6
COORDINATION OF BENEFITS
Section 6.1 Coordination of Benefits Applicability. This coordination of
benefits (COB) provision applies when a person has health care coverage under
GP(99)
11
<PAGE>
more than one Coverage Plan. "Coverage Plan" is defined below.
The order of benefit determination rules below determine which Coverage Plan
will pay as the primary Coverage Plan. The primary Coverage Plan that pays first
pays without regard to the possibility that another Coverage Plan may cover some
expenses. A secondary Coverage Plan pays after the primary Coverage Plan and may
reduce the benefits it pays so that payments from all group Coverage Plans do
not exceed 100% of the total allowable expense.
Section 6.2 Definitions. For purposes of Section 6, terms are defined as
follows:
A. A "Coverage Plan" is any of the following that provides benefits or
services for medical or dental care or treatment. However, if separate
contracts are used to provide coordinated coverage for members of a group,
the separate contracts are considered parts of the same Coverage Plan and
there is no COB among those separate contracts.
1. "Plan" includes: group insurance, closed panel or other forms of group
or group-type coverage (whether insured or uninsured); medical care
components of group long-term care contracts, such as skilled nursing
care; medical benefits under group or individual automobile contracts;
and Medicare or other governmental benefits, as permitted by law.
2. "Plan" does not include: individual or family insurance; closed panel
or other individual coverage (except for group-type coverage); school
accident type coverage; benefits for non-medical components of group
long-term care policies; Medicare supplement policies, Medicaid
policies and coverage under other governmental plans, unless permitted
by law.
Each contract for coverage under (1) or (2) is a separate Coverage Plan. If
a Coverage Plan has two parts and COB rules apply only to one of the
two, each of the parts is treated as a separate Coverage Plan.
B. The order of benefit determination rules determine whether this Coverage
Plan is a "primary Coverage Plan" or "secondary Coverage Plan" when
compared to another Coverage Plan covering the person.
When this Coverage Plan is primary, its benefits are determined before
those of any other Coverage Plan and without considering any other coverage
Plan's benefits. When this Coverage Plan is secondary, its benefits are
determined after those of another Coverage Plan and may be reduced because
of the primary Coverage Plan's benefits.
C. "Allowable expense" means a health care service or expense, including
deductibles and copayments, that is covered at least in part by any of the
Coverage Plans covering the person. When a Coverage Plan provides benefits
in the form of services, (for example an HMO) the reasonable
CB(99)
12
<PAGE>
cash value of each service will be considered an allowable expense and a
benefit paid. An expense or service that is not covered by any of the
Coverage Plans is not an allowable expense. The following are examples of
expenses or services that are not allowable expenses:
1. If a covered person is confined in a private hospital room, the
difference between the cost of a semi-private room in the hospital and
the private room, (unless the patient's stay in a private hospital
room is medically necessary in terms of generally accepted medical
practice, or one of the Coverage Plans routinely provides coverage for
hospital private rooms) is not an allowable expense.
2. If a person is covered by 2 or more Coverage Plans that compute their
benefit payments on the basis of reasonable and customary fees, any
amount in excess of the highest of the reasonable and customary fees
for a specific benefit is not an allowable expense.
3. If a person is covered by 2 or more Coverage Plans that provide
benefits or services on the basis of negotiated fees, an amount in
excess of the highest of the negotiated fees is not an allowable
expense.
4. If a person is covered by one Coverage Plan that calculates its
benefits or services on the basis of reasonable and customary fees and
another Coverage Plan that provides its benefits or services on the
basis of negotiated fees, the primary Coverage Plan's payment
arrangements shall be the allowable expense for all Coverage Plans.
5. The amount a benefit is reduced by the primary Coverage Plan because a
covered person does not comply with the Coverage Plan provisions.
Examples of these provisions are second surgical opinions,
precertification of admissions, and preferred provider arrangements.
D. "Claim determination period" means a calendar year. However, it does not
include any part of a year during which a person has no coverage under this
Coverage Plan, or before the date this COB provision or a similar provision
takes effect.
E. "Closed panel Coverage Plan" is a Coverage Plan that provides health
benefits to covered persons primarily in the form of services through a
panel of providers that have contracted with or are employed by the
Coverage Plan, and that limits or excludes benefits for services provided
by other provider, except in cases of emergency or referral by a panel
member.
F. "Custodial parent" means a parent awarded custody by a court decree. In the
absence of a court decree, it is the parent with whom the child resides
CB(99)
13
<PAGE>
more than one half of the calendar year without regard to any
temporary visitation.
Section 6.3 Order of Benefit Determination Rules. When two or more Coverage
Plans pay benefits, the rules for determining the order of payment are as
follows:
A. The primary Coverage Plan pays or provides its benefits as if the secondary
Coverage Plan or Coverage Plans did not exist.
B. A Coverage Plan that does not contain a coordination of benefits provision
that is consistent with this provision is always primary. There is one
exception: coverage that is obtained by virtue of membership in a group
that is designed to supplement a part of a basic package of benefits may
provide that the supplementary coverage shall be excess to any other parts
of the Coverage Plan provided by the contract holder. Examples of these
types of situations are major medical coverages that are superimposed over
base Coverage Plan hospital and surgical benefits, and insurance type
coverages that are written in connection with a closed panel Coverage Plan
to provide out-of-network benefits.
C. A Coverage Plan may consider the benefits paid or provided by another
Coverage Plan in determining its benefits only when it is secondary to that
other Coverage Plan.
D. The first of the following rules that describes which Coverage Plan pays
its benefits before another Coverage Plan is the rule to use.
1. Non-Dependent or Dependent. The Coverage Plan that covers the person
other than as a dependent, for example as an employee, member,
subscriber or retiree is primary and the Coverage Plan that covers the
person as a dependent is secondary. However, if the person is a
Medicare beneficiary and, as a result of federal law, Medicare is
secondary to the Coverage Plan covering the person as a dependent; and
primary to the Coverage Plan covering the person as other than a
dependent (e.g. a retired employee); then the order of benefits
between the two Coverage Plans is reversed so that the Coverage Plan
covering the person as an employee, member, subscriber or retiree is
secondary and the other Coverage Plan is primary.
2. Child Covered Under More Than One Plan. The order of benefits when a
child is covered by more than one Coverage Plan is:
a. The primary Coverage Plan is the Coverage Plan of the parent
whose birthday is earlier in the year if:
1) the parents are married;
2) the parents are not separated (whether or not they
CB(99)
14
<PAGE>
ever have been married; or
3) a court decree awards joint custody without
specifying that one party has the responsibility to provide
health care coverage.
If both parents have the same birthday, the Coverage Plan
that covered either of the parents longer is primary.
b. If the specific terms of a court decree state that one of the
parents is responsible for the child's health care expenses or
health care coverage and the Coverage Plan of that parent has
actual knowledge of those terms, that Coverage Plan is primary.
This rule applies to claim determination periods or Coverage Plan
years commencing after the Coverage Plan is given notice of the
court decree.
c. If the parents are not married, or are separated (whether or not
they ever have been married) or are divorced, the order of
benefits is:
1) the Coverage Plan of the custodial parent;
2) the Coverage Plan of the spouse of the custodial parent;
3) the Coverage Plan of the noncustodial parent; and then
4) the Coverage Plan of the spouse of the noncustodial parent.
3. Continuation coverage. If a person whose coverage is provided under a
right of continuation provided by federal or state law also is covered
under another Coverage Plan, the Coverage Plan covering the person as
an employee, member, subscriber or retiree (or as that person's
dependent) is primary, and the continuation coverage is secondary. If
the other Coverage Plan does not have this rule, and if, as a result,
the Coverage Plans do not agree on the order of benefits, this rule is
ignored.
4. Longer or shorter length of coverage. The Coverage Plan that covered
the person as an employee, member, subscriber or retiree longer is
primary.
5. If the preceding rules do not determine the primary Coverage Plan, the
allowable expenses shall be shared equally between the Coverage Plans
meeting the definition of Coverage Plan under this provision. In
addition, this Coverage Plan will not pay more than it would have paid
had it been primary.
CB(99)
15
<PAGE>
Section 6.4 Effect on the Benefits of This Coverage Plan.
A. When this Coverage Plan is secondary, it may reduce its benefits so that
the total benefits paid or provided by all Coverage Plans during a claim
determination period are not more than 100 percent of total allowable
expenses. The difference between the benefit payments that this Coverage
Plan would have paid had it been the primary Coverage Plan, and the benefit
payments that it actually paid or provided shall be recorded as a benefit
reserve for the covered person and used by this Coverage Plan to pay any
allowable expenses, not otherwise paid during the claim determination
period. As each claim is submitted, this Coverage Plan will:
1. determine its obligation to pay or provide benefits under its
contract;
2. determine whether a benefit reserve has been recorded for the covered
person; and
3. determine whether there are any unpaid allowable expenses during that
claims determination period.
If there is a benefit reserve, the secondary Coverage Plan will use
the covered person's benefit reserve to pay up to 100% of total
allowable expenses incurred during the claim determination period. At
the end of the claims determination period, the benefit reserve
returns to zero. A new benefit reserve must be created for each new
claim determination period.
B. If a covered person is enrolled in two or more closed panel Coverage plans
and if, for any reason, including the provision of service by a non-panel
provider, benefits are not payable by one closed panel Coverage Plan, COB
shall not apply between that coverage Plan and other closed panel Coverage
Plans.
Section 6.5 Right to Receive and Release Needed Information. Certain facts about
health care coverage and services are needed to apply these COB rules and to
determine benefits payable under this Coverage Plan and other Coverage Plans.
The Company may get the facts it needs from or give them to other organizations
or persons for the purpose of applying these rules and determining benefits
payable under this Coverage Plan and other Coverage Plans covering the person
claiming benefits. The Company need not tell, or get the consent of, any person
to do this. The company need not tell, or get the consent of, any person to do
this. Each person claiming benefits under this Coverage Plan must give the
Company any facts it needs to apply those rules and determine benefits payable.
If you do not provide the Company the information it needs to apply these rules
and determine the benefits payable, your claim for benefits will be denied.
CB(99)
16
<PAGE>
Section 6.6 Payments Made. A payment made under another Coverage Plan may
include an amount that should have been paid under this Coverage Plan. If it
does, the Company may pay that amount to the organization that made the payment.
That amount will then be treated as though it were a benefit paid under this
Coverage Plan. The Company will not have to pay that amount again. The term
"payment made" includes providing benefits in the form of services, in which
case "payment made" means reasonable cash value of the benefits provided in the
form of services.
Section 6.7 Right of Recovery. If the amount of the payments made by the Company
is more than it should have paid under this COB provision, it may recover the
excess from one or more of the persons it had paid or for whom it has paid; or
any other person or organization that may be responsible for the benefits or
services provided for the covered person. The "amount of the payments made"
includes the reasonable cash value of any benefits provided in the form of
services.
SECTION 7
CONTINUATION OF COVERAGE
Section 7.1 Continuation Coverage. A Covered Person whose Coverage ends under
the Policy may be entitled to elect continuation Coverage in accordance with
federal law (under COBRA) and as outlined in Sections 9.2 through 9.4 below [or
in accordance with state law and as outlined in Sections 9.5 - 9.7 below].
Continuation Coverage under COBRA (Consolidated Omnibus Budget Reconciliation
Act) shall apply only to Enrolling Groups which are subject to the provisions of
COBRA. Covered Persons should contact the Enrolling Group's plan administrator
to determine if he or she is entitled to continue Coverage under COBRA. For the
purpose of continuation Coverage under COBRA, a newborn child of a Subscriber or
a child placed for adoption with the Subscriber during the period of
continuation coverage shall be considered on the same basis as a Subscriber.
Continuation Coverage for Covered Persons who selected continuation coverage
under a prior plan which was replaced by Coverage under the Policy shall
terminate as scheduled under the prior plan or in accordance with the
terminating events set forth in Section 9.4 below, whichever is earlier.
In no event shall the Company be obligated to provide continuation Coverage to a
Covered Person if the Enrolling Group or its designated plan administrator fails
to perform its responsibilities under federal law. These responsibilities
include but are not limited to notifying the Covered Person in a timely manner
of the right to elect continuation Coverage and notifying the Company in a
timely manner of the Covered Person's election of continuation Coverage.
CB(99)
17
<PAGE>
It is the Subscriber's responsibility to notify the Enrolling Group within 60
days of the date an Enrolled Dependent loses eligibility due to divorce or due
to an Enrolled Dependent child losing eligibility (i.e. reaching the limiting
age or failing to meet the criteria of a Full-time Student.) If you fail to
notify the Enrolling Group of these events within the 60 day period, the
Enrolling Group and its designated plan administrator are not obligated to
provide continuation Coverage for that Enrolled Dependent.
The Company is not the Enrolling Group's designated Plan Administrator and does
not assume any responsibilities of a Plan Administrator pursuant to federal law.
A Covered Person whose Coverage would otherwise end under the Policy may be
entitled to elect continuation Coverage in accordance with federal law, as
outlined in Sections 9.2 through 9.4 below.
Section 7.2 Qualifying Events for Continuation Coverage Under Federal Law. If
the Covered Person's Coverage terminated due to one of the following qualifying
events, he or she is entitled to continue Coverage. The Covered Person may elect
the same Coverage that he or she had at the time of the qualifying event.
A. Termination of the Subscriber from employment with the Enrolling Group or
reduction of hours, for any reason other than gross misconduct; or
B. death of the Subscriber; or
C. divorce or legal separation of the Subscriber; or
D. loss of eligibility by an Enrolled Dependent who is a child; or
E. entitlement of the Subscriber to Medicare benefits; or
F. the Enrolling Group filing for bankruptcy, under Title XI, United States
Code, on or after July 1, 1986, but only for a retired Subscriber and his
or her Enrolled Dependents. This is also a qualifying event for any retired
Subscriber and his or her Enrolled Dependents if there is a substantial
elimination of coverage within one year before or after the date the
bankruptcy was filed.
Section 7.3 Notification Requirements and Election Period for Continuation
Coverage Under Federal Law. The Covered Person must notify the Enrolling Group's
designated plan administrator within 60 days of his or her divorce, legal
separation or loss of eligibility as an Enrolled Dependent. A Covered Person who
is continuing Coverage under Federal Law must notify the Enrolling Group's
designated plan administrator within 60 days of the birth or adoption of a
child.
Continuation must be elected by the later of 60 days after the Covered Person's
qualifying event occurs; or 60 days after the Covered Person receives notice of
CV4
18
<PAGE>
the continuation right from the Enrolling Group's designated plan administrator.
A Covered Person whose Coverage was terminated due to a qualifying event must
pay the initial Premium due to the Enrolling Group's designated plan
administrator on or before the 45th day after electing continuation.
Section 7.4 Terminating Events for Continuation Coverage Under Federal Law.
Continuation under the Policy will end on the earliest of the following dates:
A. Eighteen months from the date continuation began for a Covered Person whose
Coverage ended because employment was terminated or hours were reduced, in
accordance with qualifying event (A) described in Section 9.2. A Covered
Person who is disabled at the time of the qualifying event or within the
first 60 days of continuation Coverage may extend continuation Coverage to
a maximum of 29 months as described below.
A Covered Person who is disabled at the date of qualifying event (A) or
within the first 60 days of continuation Coverage for qualifying event (A)
must provide notice of such disability within 60 days after the
determination of the disability, and in no event later than the end of the
first 18 months, in order to extend Coverage beyond 18 months. If such
notice is provided, the Covered Person's Coverage may be extended up to a
maximum of 29 months from the date of qualifying event (A) or until the
first month that begins more than 30 days after the date of any final
determination that the qualified beneficiary is no longer disabled. Each
Covered Person must provide notice of any final determination that the
qualified beneficiary is no longer disabled within 30 days of such
determination.
B. Thirty-six months from the date continuation began for an Enrolled
Dependent whose Coverage ended because of the death of the Subscriber,
divorce or legal separation of the Subscriber, loss of eligibility by an
Enrolled Dependent who is a child or entitlement of the Subscriber to
Medicare benefits, in accordance with qualifying events (B), (C), (D) or
(E) described in Section 9.2.
C. The date Coverage terminates under the Policy for failure to make timely
payment of the Premium.
D. The date, after electing continuation Coverage, that coverage is first
obtained under any other group health plan. If such coverage contains a
limitation or exclusion with respect to any preexisting condition of the
Covered Person, continuation shall end on the date such limitation or
exclusion ends. The other group health coverage shall be primary for all
health services except those health services that are subject to the
preexisting condition limitation or exclusion.
CV4
19
<PAGE>
E. The date, after electing continuation Coverage, that the Covered Person
first becomes entitled to Medicare, except that this shall not apply in the
event the Covered Person's Coverage was terminated because the Enrolling
Group filed for bankruptcy, in accordance with qualifying event (F)
described in Section 9.2.
F. The date the entire Policy ends.
G. The date Coverage would otherwise terminate under the Policy.
If a Covered Person is entitled to 18 months of continuation and a second
qualifying event occurs during that time, the Covered Person's Coverage may be
extended up to a maximum of 36 months from the date Coverage ended because
employment was terminated or hours were reduced, in accordance with qualifying
event (A) described in Section 9.2. If a Covered Person is entitled to
continuation because the Enrolling Group filed for bankruptcy, in accordance
with qualifying event (F) described in Section 9.2 and the retired Subscriber
dies during the continuation period, the Enrolled Dependents shall be entitled
to continue Coverage for 36 months from the date of death. Terminating events
(B) through (G) described in this Section 9.4 shall apply during the extended
continuation period.
Continuation Coverage for Enrolled Dependents of a Subscriber whose continuation
Coverage terminates because the Subscriber becomes entitled to Medicare may be
extended for an additional period of time. Such Covered Persons should contact
the Enrolling Group's designated plan administrator for information regarding
the continuation period.
SECTION 8
COVERED HEALTH SERVICES
The Company will pay for 100% of the Covered Health Expenses incurred by a
Covered Person during the time he or she is enrolled under the Coverage. The
amount the Company will pay is subject to the Calendar Year Maximum.
The "Calendar Year Maximum" that the Company will pay for Covered Health
Services is $30,000 for each Covered Person.
The Company will pay for Covered Health Services for medical care that consist
of Copayments, coinsurance, and annual deductible charges that are assessed to
you in connection with services covered under The Coca-Cola Company Health
Benefit Plan.
CV4
20
<PAGE>
SECTION 9
GENERAL EXCLUSIONS
A. Expenses for services or supplies that do not meet the definition of a
Covered Health Service.
B. Personal comfort and convenience items or services such as television,
telephone, barber or beauty service, guest service and similar incidental
services and supplies.
C. Surrogate parenting. Health services and associated expenses for sex
transformation operations.
D. Health services for treatment of military service-related disabilities,
when the Covered Person is legally entitled to other coverage and
facilities are reasonably available to the Covered Person.
E. Devices used specifically as safety items or to affect performance
primarily in sports-related activities; all expenses related to physical
conditioning programs such as athletic training, body-building, exercise,
fitness, flexibility, and diversion or general motivation.
F. Services rendered by a provider with the same legal residence as a Covered
Person or who is a member of a Covered Person's family, including spouse,
brother, sister, parent or child.
G. Health services rendered after the date individual Coverage under the
Policy terminates, including health services for medical conditions arising
prior to the date individual Coverage under the Policy terminates.
H. Health services for which the Covered Person has no legal obligation to pay
or for which a charge would not ordinarily be made in the absence of
coverage under the Plan.
I. Health services for which other coverage is required by federal, state or
local law to be purchased or provided through other arrangements, including
but not limited to coverage required by workers' compensation, no-fault
automobile insurance, or similar legislation. If coverage under workers'
compensation or similar legislation is optional for You because You could
elect it, or could have it elected for You, Benefits will not be paid for
any Injury, Sickness or [Mental Illness] [mental illness] that would have
been covered under workers' compensation or similar legislation had that
coverage been elected.
APEC
21
<PAGE>
J. Health Services and associated expenses for Experimental, Investigational
or Unproven Services, treatments, devices and pharmacological regimens. The
fact that an Experimental, Investigational or Unproven Service, treatment,
device or pharmacological regimen is the only available treatment for a
particular condition will not result in Coverage if the procedure is
considered to be Experimental, Investigational or Unproven in the treatment
of that particular condition.
K. Charges for sickness or accidental injury incurred in connection with war
or any act of war. War means declared or undeclared war and includes
resistance to armed aggression.
L. Charges in connection with injury arising out of any work for wage or
profit whether or not with The Coca-Cola Company, any worker's compensation
law, occupational disease law or similar law, or maritime doctrine of
maintenance, wages and cure.
M. Benefit for any charges provided by any law or governmental plan under
which the patient is or could be covered. This does not apply to a State
plan under Medicaid or to any law or plan when, by law, its benefits are
excess to those of any private insurance program or other non-governmental
program.
N. Charges above the reasonable and customary fee.
O. Charges that are covered under the base plan, without regards to the rules
of Coordination of Benefits. The base plan means any plan offered by The
Coca-Cola Company under which the covered person is eligible for coverage.
P. Charges for transportation other than local ambulance service.
Q. Charges for the purchase of or alteration of a motor vehicle.
R. Charges for capital improvement of property such as the purchase,
installation or construction of any device, equipment or facility.
S. The cost of any insurance coverage.
APEC
22
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>9
<FILENAME>x10-11.txt
<DESCRIPTION>SUPPLEMENTAL BENEFIT PLAN, AS AMENDED AND RESTATED 1/1/2002
<TEXT>
EXHIBIT 10.11
THE COCA-COLA COMPANY
SUPPLEMENTAL BENEFIT PLAN
As Amended and Restated Effective January 1, 2002
PREFACE
The Coca-Cola Company established this Supplemental Benefit Plan (the "Plan")
effective January 1, 1984. The Plan is an unfunded supplemental retirement plan
for eligible employees and their beneficiaries as described herein. The Plan is
designed to provide certain retirement benefits primarily for a select group of
management or highly compensated employees which are not otherwise payable or
cannot otherwise be provided under the terms of the tax-qualified retirement
plans maintained by The Coca-Cola Company as a result of the limitations set
forth under certain applicable sections of the Internal Revenue Code or on
account of an employee's deferral of compensation under The Coca-Cola Company
Deferred Compensation Plan.
This plan is amended and restated effective January 1, 2002, incorporating any
amendments effective as of that date. The benefit of any employee who terminates
or retires on or after January 1, 2002 shall be determined under the terms of
this amended and restated Plan. The benefit of any employee who terminates or
retires prior to January 1, 2002 shall be governed by the terms of the Plan, if
any, in effect at the time of termination or retirement.
ARTICLE I
DEFINITIONS
The following definitions apply to the terms of this Plan. Where the context
requires, the definitions of all terms set forth in the Qualified Pension Plan
and the Qualified Defined Contribution Plan shall apply with equal force and
effect for purposes of interpretation and administration of this Plan, unless
said terms are otherwise specifically defined in this Plan.
"Account" shall mean the account or accounts established and maintained by
the Employer to reflect the interest of a Participant in the Plan resulting from
a Participant's Supplemental Thrift Benefit calculated in accordance with
Section 3.2.
"Beneficiary" shall mean, unless otherwise designated in a manner
acceptable to the Committee and approved by the Committee, the beneficiary
elected or deemed to have been elected under the Qualified Pension Plan for the
Supplemental Pension Benefit and the Qualified Defined Contribution Plan for the
Supplemental Thrift Benefit.
"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 Exchange Act as in effect on January 1, 2002, provided
that such a change in control shall be deemed to have occurred at such time as
(i) any "person" (as that term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act as in effect on January 1, 2002) directly or indirectly,
of securities representing
1
<PAGE>
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 the
Common Stock shall be changed, converted or exchanged (other than a merger with
a wholly owned subsidiary of the Company) or any liquidation of the Company or
any sale or other disposition of 50% or more of the assets or earning power of
the Company; or (iv) the share owners of the Company approve any merger or
consolidation to which the Company is a party as a result of which the persons
who were share owners of the Company immediately prior to the effective date of
the merger or consolidation shall have beneficial ownership of less than 50% of
the combined voting power for election of directors of the surviving corporation
following the effective date of such merger or consolidation; provided, however,
that no Change in Control shall be deemed to have occurred if, prior to such
times as a Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean common stock of The Coca-Cola Company.
"Committee" shall mean the Benefits Committee appointed by the Senior Vice
President, Human Resources, which shall act on behalf of the Company to
administer the Plan as provided in Article V.
"Company" shall mean The Coca-Cola Company.
"Deferred Compensation Plan" shall mean The Coca-Cola Company Deferred
Compensation Plan or any other similar nonqualified deferred compensation plan
maintained by the Employer established on or after the Effective Date which
provides for deferral of compensation.
"Earliest Retirement Date" shall mean "Earliest Retirement Date" as that
term is defined in the Employee Retirement Plan of The Coca-Cola Company.
"Effective Date" shall mean January 1, 2002, the effective date of this
amendment and restatement.
"Employee" shall mean any person who is currently employed by an Employer.
An individual shall be treated as employed by an Employer under this Plan for
any period only if (i) he or she is actually classified during such period by
the Employer on its payroll, personnel and benefits system as an employee, and
(ii) he or she is paid for services rendered during such period through the
payroll system, as distinguished from the accounts payable department of the
Employer. No other individual shall be treated as employed by an Employer under
this Plan for
2
<PAGE>
any period, regardless of his or her status during such period as an employee
under common law or under any statute.
"Employer" shall mean the Company and any Participating Subsidiary of the
Company approved by the Committee for participation in the Plan.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Market Price" shall mean the closing price per share of Common Stock as
reported on the New York Stock Exchange Composite Transactions listing.
"Participant" shall mean an Employee or former Employee of an Employer who
is eligible to receive benefits provided by the Plan.
"Participating Subsidiary" shall mean a subsidiary of the Company which the
Committee has designated as such and whose Employees are eligible to participate
in this Plan, as set forth in Appendix A.
"Plan" shall mean The Coca-Cola Company Supplemental Benefit Plan, as
amended from time to time.
"Plan Year" shall mean January 1 to December 31 each calendar year.
"Qualified Defined Contribution Plan" shall mean The Coca-Cola Company
Thrift & Investment Plan or any other tax-qualified defined contribution plan
maintained by the Employer, as amended from time to time.
"Qualified Pension Plan" shall mean the Employee Retirement Plan of The
Coca-Cola Company or any other tax-qualified defined benefit pension plan
maintained by the Employer, as amended from time to time.
"Retirement Benefit" shall be the benefit payable to a Participant under
Sections 5.1 - 5.3, as applicable of the Qualified Pension Plan.
"Supplemental Pension Benefit" shall mean the benefit described in Section
3.1 of this Plan.
"Supplemental Thrift Benefit" shall mean the benefit described in Section
3.2 of this Plan.
3
<PAGE>
ARTICLE II
ELIGIBIILTY
2.1 Eligibility for Participation.
All salaried Employees of the Employer (a) whose benefits under the Qualified
Pension Plan are limited by the limitations set forth in Code Sections
401(a)(17) and/or 415, (b) for whom contributions by the Employer to the
Qualified Defined Contribution Plan are limited by the limitations set forth in
Code Sections 401(a)(17) and/or 415, or (c) who defer compensation under the
Deferred Compensation Plan and, solely on account of such deferrals, the
Employee's benefit under the Qualified Pension Plan or Company matching
contributions to the Qualified Defined Contribution Plan are limited shall be
eligible to participate in the Plan. Upon becoming a Participant, an Employee is
deemed to have assented to the Plan and to any amendments hereafter adopted.
2.2 Date of Participation.
Each Employee who is eligible to become a Participant under Section 2.1 shall
become a Participant on the later of i) January 1, 1984 or ii) the first day of
the month coincident with or next following the date he meets the eligibility
requirements.
2.3 Duration of Participation.
An Employee who becomes a Participant shall continue to be a Participant until
his termination of employment with the Employer or the date he is no longer
entitled to benefits under this Plan.
ARTICLE III
BENEFITS
3.1 Supplemental Pension Benefit.
(a) Benefit.
(1) If a Participant has Years of Benefit Service as defined in the
Qualified Pension Plan of the Employer, he shall be entitled to a
Supplemental Pension Benefit equal to that portion of his Retirement
Benefit under the Qualified Pension Plan of the Employer which is not
payable under such Qualified Pension Plan as a result of the
limitations imposed by Code Sections 401(a)(17) and 415.
(2) If a Participant has Years of Benefit Service as defined in the
Qualified Pension Plan of the Employer and if a Participant has
deferred compensation under the Deferred Compensation Plan, he shall
be entitled to a Supplemental Pension Benefit equal to that portion of
his Retirement Benefit under the Qualified Pension Plan of the
Employer which is not payable under such Qualified Pension Plan solely
on account of the fact that deferred compensation is not considered
4
<PAGE>
Benefit Compensation (as defined in the Qualified Pension Plan of the
Employer) for purposes of the Qualified Pension Plan.
(3) In no event (except in the event that compensation is calculated under
Section 3.1(a)(5), below) shall the sum of i) the Supplemental Pension
Benefit and ii) the actual Retirement Benefit paid under the Qualified
Pension Plan exceed the amount of Retirement Benefit determined under
the Qualified Pension Plan had compensation not been deferred under
the Deferred Compensation Plan and without regard to limitations
imposed by the Code.
(4) For purposes of this Section 3.1, the Supplemental Pension Benefit of
a Participant shall be calculated based on the Participant's
compensation that is considered under the Qualified Pension Plan in
calculating his Retirement Benefit, without regard to the limitation
of Code Section 401(a)(17) and by taking into consideration
compensation that would have been considered benefit-eligible
compensation under the Qualified Pension Plan had the Participant not
elected to defer such amounts.
(5) If a Participant was on an Approved Leave of Absence, as defined under
the Qualified Pension Plan, for the purpose of working for another
entity within The Coca-Cola system, his Supplemental Pension Benefit
under this Plan shall be calculated based on compensation paid as
follows: compensation during the Approved Leave of Absence shall be
the greater of i) compensation as determined under the first sentence
of this paragraph 3.1(a)(4) or ii) compensation actually paid to the
Participant by the other entity within The Coca-Cola system during the
Approved Leave of Absence, subject to the same inclusions and
exclusions to benefit compensation under the Qualified Pension Plan,
but without regard to the limitation of Code Section 401(a)(17). The
Committee may require that the Participant provide satisfactory
evidence of such compensation.
(6) Any benefit payable pursuant to this Section 3.1 shall be offset by
the monthly benefit, if any, payable to a Participant under The
Coca-Cola Company Key Executive Retirement Plan. The Supplemental
Pension Benefit calculated under this Section 3.1 shall also be offset
by the value of benefits to which the Participant is entitled under
any other retirement plan (other than the Qualified Pension Plan or
the Qualified Defined Contribution Plan) to which the Company or an
affiliate of the Company contributed.
(b) Adjustments.
(1) To the extent that a Participant's Retirement Benefit under a
Qualified Pension Plan is recalculated as a result of an amendment to
such Qualified Pension Plan in order to increase the amount of his
Retirement Benefit, the Participant's Supplemental Pension Benefit
shall also be recalculated in order to properly reflect such increase
in determining payments of the Participant's Supplemental Pension
Benefit made on or after the effective date of such increase.
5
<PAGE>
(2) Any benefit payable pursuant to this Section 3.1 shall be adjusted in
accordance with new limitations, if any, established by the Internal
Revenue Service on payments that may be made from the Qualified
Pension Plan.
(c) Distribution of Supplemental Pension Benefit.
(1) The Supplemental Pension Benefit, as determined in accordance with
this Section 3.1, shall be payable in monthly increments as of the
first day of the month concurrently with and in the same manner as the
Participant's Retirement Benefit under the Qualified Pension Plan.
Notwithstanding the foregoing, if the Participant's Supplemental
Pension Benefit, as calculated in the form of a life annuity, is less
than $50 per month, then the present value of the Supplemental Pension
Benefit may be paid in a lump sum or the Supplemental Pension Benefit
may be paid in quarterly, semi-annual, or annual payments, as the
Committee may designate.
(2) Pre-Retirement Survivor's Benefit. If a Participant dies while
employed by the Employer and his Beneficiary is eligible for the
pre-retirement survivor's benefit under the Qualified Pension Plan,
his Beneficiary shall be entitled to receive a survivor's benefit from
this Plan calculated in the same manner and payable at the same time
as the pre-retirement survivor's benefit under the Qualified Pension
Plan.
(3) Post-Retirement Survivor's Benefit. If a Participant dies after
Supplemental Pension Benefit payments have begun, his Beneficiary
shall be entitled to receive a survivor's benefit from this Plan
calculated in the same manner and payable at the same time as the
post-retirement survivor's benefit under the Qualified Pension Plan.
(4) Termination of Employment. Except as provided in Article IV of this
Plan, if a Participant's employment with the Employer terminates for a
reason other than death before his Earliest Retirement Date, no
Supplemental Pension Benefit will be payable from this Plan.
3.2 Supplemental Thrift Benefit.
(a) Benefit.
(1) If a Participant elects to contribute to the Qualified Defined
Contribution Plan of the Employer, he may be entitled to a
Supplemental Thrift Benefit determined under this Section 3.2. An
Account shall be established for the Participant by the Employer, as
of his initial Plan Year of participation in this Plan. Each Plan
Year, such Account shall be credited with hypothetical contributions
equal to the amount that: i) the Employer is prohibited from
contributing as a matching contribution under the Qualified Defined
Contribution Plan on behalf of the
6
<PAGE>
Participant as a result of the limitations imposed by Code Sections
401(a)(17), 401(k), 401(m), 402(g) and 415 or ii) the Employer is
prohibited from contributing as a matching contribution under the
Qualified Defined Contribution Plan on behalf of the Participant
solely on account of the fact that deferred compensation is not
considered eligible pay for purposes of the Qualified Defined
Contribution Plan. If the Participant does not have a valid pre-tax or
after-tax deferral election on file under the Qualified Defined
Contribution Plan for a particular pay period, no amounts shall be
credited to the Participant's Account with respect to such pay period.
All amounts so credited to the Account of the Participant shall be
deemed to be invested in the Company Stock fund at the same time and
at the same share cost that such amounts would have been so invested
if they had been contributed by the Employer to the Qualified Defined
Contribution Plan. In addition, such Account shall be credited with
such additional hypothetical shares as could be purchased with the
dividends which would have been payable if the credited shares had
been outstanding.
(2) In no event shall the sum of total matching contributions under the
Qualified Defined Contribution Plan and hypothetical contributions
under this Plan exceed three percent of the Participant's eligible
compensation as defined for purposes of the Qualified Defined
Contribution Plan, but without regard to compensation deferred under
the Deferred Compensation Plan and the limits of Code Section
401(a)(17).
(b) Distribution of Supplemental Thrift Benefit.
(1) Distribution of the total value of an Account of a Participant shall
be received by the Participant when he is no longer an Employee in
accordance with this Section 3.2(b)(1) or shall be received by the
Beneficiary of a deceased Participant in accordance with Section
3.2(b)(2). A Participant may elect to receive such a distribution upon
his permanent and total disability as determined by the Committee
(according to such elections as may be prescribed by the Committee).
Distributions shall be made in the form of lump sum cash payments, or
in such other form as the Committee may approve. Distribution of a
Participant's Account shall be comprised of the cash value of the sum
of the hypothetical shares of Company Stock, if any, credited to the
Account in accordance with Section 3.2(a) plus the cash value of
hypothetical contributions and dividends which have accrued since the
most recent Valuation Date as defined in the Qualified Defined
Contribution Plan. The value of the hypothetical shares of Company
Stock shall be determined using the highest Market Price between the
fifteenth day of the month of termination of the Participant and the
first working day in the month following termination. Payment shall be
made to the Participant or Beneficiary as soon as administratively
feasible, but not later than one year, following the termination of
the Participant's employment. If any benefits payable to, or on behalf
of, a Participant are not claimed for a period of seven years from the
date of entitlement as determined by the Committee, the value of the
Account shall revert to the Company. In the event that a Participant
resumes
7
<PAGE>
his employment prior to the distribution of the value of his
Account, the distribution shall not be made, and no subsequent
distribution shall be made until the reemployed Participant again
ceases to be an Employee.
(2) Upon the death of a Participant, the total value of his Account as
calculated in Section 3.2(a)(1) above shall be paid to his designated
Beneficiary or Beneficiaries. If there is no surviving Beneficiary,
the value will be disposed of as designated by the will of a
Participant, or by the applicable intestate statute.
(3) The Committee in its sole discretion upon application made by the
Participant, a designated Beneficiary, or their legal representative,
may determine to extend or otherwise make payments in a manner
different from manner provided above in the event of a Participant's
death or total disability (as determined by the Social Security
Administration).
3.3 Change in Control.
In the event of a Change in Control, while this provision remains in effect, no
amendment will thereafter be made to this Section for a period of at least two
consecutive years following the date when the Change in Control occurs. The
enhancement of benefits described in this Section is conditional upon this
Section remaining in effect until a Change in Control occurs, and is not part of
any Participant's accrued benefit as defined in the Qualified Pension Plan. If
any Participant's employment terminates for any reason whatsoever during the two
consecutive year period which begins on the date when a Change in Control
occurs, the change of control provisions in the Qualified Pension Plan will
apply.
ARTICLE IV
VESTING AND FORFEITABILITY
4.1 Forfeitability of Supplemental Pension Benefit.
(a) Except as provided in subsection (c) of this Section 4.1, all rights to the
portion of the Supplemental Pension Benefit described in Section 3.1(a)(i)
above shall be extinguished and forfeited if a Participant terminates
employment with the Employer prior to his Earliest Retirement Date for any
reason other than death, unless otherwise expressly provided in writing by
the Compensation Committee of the Board of Directors.
(b) All rights to the portion of the Supplemental Pension Benefit described in
Section 3.1(a)(ii) above shall be extinguished and forfeited if a
Participant terminates employment with the Employer prior to becoming
vested in his Retirement Benefit under the Qualified Pension Plan. If a
Participant is fully vested in his Retirement Benefit under the Qualified
Pension Plan, he shall be fully vested in the portion of the Supplemental
Pension Benefit described in Section 3.1(a)(ii), but the portion of the
Supplemental Pension Benefit described in Section 3.1(a)(i) shall still be
subject to the conditions described in Section 4.1(a).
8
<PAGE>
(c) Participants on December 31, 1993.
Notwithstanding anything in this Plan to the contrary, each Employee who is
a Participant in the Plan as of December 31, 1993 shall be deemed vested in
the portion of his Supplemental Pension Benefit, if any, calculated as of
December 31, 1993 (based on his compensation and years of benefit service
as of such date and assuming that he is vested under the Qualified Pension
Plan of the Employer), and such benefit under the Plan shall not be subject
to forfeiture under Section 4.1(a). If the Participant terminates
employment with the Employer before his Earliest Retirement Date, such
vested benefit shall be payable in monthly increments on the first day of
the month concurrently and in the same manner as the Participant's
Retirement Benefit under the Qualified Pension Plan, or if no Retirement
Benefit is payable from the Qualified Pension Plan, then in monthly
increments commencing on the first day of the month following the
Participant's Earliest Retirement Date. Such monthly benefit shall be
reduced, using the same reduction factors as are in use under the Qualified
Pension Plan for a vested terminated participant, for each month by which
the Participant's first payment under this Plan precedes the first day of
the month on or after the Participant attains age 65. If the Participant's
Supplemental Pension Benefit is less than $50 per month, as calculated in
the form of a life annuity, the present value of the Supplemental Pension
Benefit may be paid in a lump sum or the Supplemental Pension Benefit may
be paid in quarterly, semi-annual, or annual payments, as the Committee may
designate.
4.2 Forfeitability of Supplemental Thrift Benefit.
The Supplemental Thrift Benefit shall become vested and nonforfeitable according
to the same terms as the Company matching contribution under the Qualified
Defined Contribution Plan. All rights to the Supplemental Thrift Benefit shall
be extinguished and forfeited to the extent the Participant's Company matching
contributions under the Qualified Deferred Compensation Plan are not vested at
the time the Participant terminates employment. If a Participant's Company
matching contributions under the Qualified Defined Contribution Plan are fully
vested, his Supplemental Thrift Benefit shall also be fully vested. If a
Participant's Company matching contributions under the Qualified Defined
Contribution Plan are non-vested or a percentage of such contributions are
vested, his Supplemental Thrift Benefit shall be considered vested in the same
proportion as the Company matching contributions are vested under the Qualified
Defined Contribution Plan.
4.3 Non-Competition.
Notwithstanding the foregoing, any benefits under this Plan which a Participant
is receiving shall cease, and all rights under the Plan shall be extinguished,
if a Participant terminates employment with the Employer and without the
Employer's consent is subsequently (i) employed by or in any manner provides
services for any business organization that is in direct competition with the
Employer, or (ii) personally engages in direct competition with the Employer. If
a court of competent jurisdiction finds that the restrictions provided for in
(i) and (ii) are unenforceable,
9
<PAGE>
then such benefits shall be forfeited if a Participant competes either as an
employee or directly in the widest geographical area and for the longest period
of time that are legally enforceable.
ARTICLE V
ADMINISTRATION
5.1 Committee.
(a) The Committee shall consist of not less than five members, who may or may
not be officers or employees of the Company or a Participating Subsidiary.
Each Committee member shall be appointed by and serve at the pleasure of
the Company's Vice President of Human Resources (VPHR).
(b) Removal, Resignation, Successor. The VPHR shall have the right to remove
any member of the Committee at any time. A member may resign at any time by
written resignation to the VPHR. If a vacancy in the Committee should
occur, a successor may be appointed by the VPHR.
(c) Organization. The VPHR will designate a Committee member as the chairman to
preside at each meeting. In the event of the chairman's absence at any
meeting, the members present will select one of their members to serve as
acting chairman. The Committee will appoint a secretary, who may or may not
be a Committee member, to keep minutes of meetings and to perform other
duties assigned by the Committee. The Committee may appoint such other
officers as it deems necessary, who may or may not be Committee members.
The members of the Committee will serve as such without compensation.
5.2 Committee Action.
Each action of the Committee will be taken by a majority vote of all members
then in office, provided that the Committee may establish procedures for taking
action by written votes (including e-mail voting) without a meeting. The
Committee may, by a properly executed resolution, authorize any member or
officer or any other person to sign communications and to execute documents on
its behalf, and may delegate other duties and responsibilities as it considers
in the best interest of the Plan.
5.3 Powers and Duties of the Committee.
The Committee shall have complete control of and sole discretion over the
administration of the Plan, with all powers necessary to enable it properly to
carry out its duties as set forth in the Plan, including but not limited to the
following powers and duties:
(a) To construe and interpret the terms and provisions of this Plan and to
determine all questions that shall arise thereunder;
10
<PAGE>
(b) To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;
(c) To maintain all records that may be necessary for the administration of the
Plan;
(d) To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;
(e) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan that are not inconsistent
with the terms hereof;
(f) To employ or retain other persons, including legal counsel, to render
advice with respect to any responsibility or authority being carried out by
the Committee and to assist in the administration of the Plan;
(g) To appoint a Plan administrator or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as
the Committee may from time to time prescribe; and
(h) To take all actions necessary for the administration of the Plan.
5.4 Construction and Interpretation.
The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, including questions of fact, which interpretations or
construction shall be final and binding on all parties, including but not
limited to the Company and any Participant or Beneficiary. The Committee shall
administer such terms and provisions in a uniform and nondiscriminatory manner
and in full accordance with any and all laws applicable to the Plan.
5.5 Information.
To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.
5.6 Compensation, Expenses and Indemnity.
(a) The Committee is authorized at the expense of the Company to employ such
legal counsel, actuaries, accountants and other advisers as it may deem
advisable to assist in the performance of its duties hereunder. Expenses
and fees in connection with the administration of the Plan shall be paid by
the Company.
(b) To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the
Board of Directors and any
11
<PAGE>
delegate of the Committee who is an employee of the Company against any and
all expenses, liabilities and claims, including legal fees to defend
against such liabilities and claims arising out of their discharge in good
faith of responsibilities under or incident to the Plan, other than
expenses and liabilities arising out of willful misconduct. This indemnity
shall not preclude such further indemnities as may be available under
insurance purchased by the Company or provided by the Company under any
bylaw, agreement or otherwise, as such indemnities are permitted under
state law.
5.7 Statements.
Under procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant's Supplemental Thrift Account on a
regular basis, not less frequently than annually.
5.8 Disputes.
(a) Claim. A person who believes that he or she is being denied a benefit to
which he or she is entitled under this Plan (hereinafter referred to as
"Claimant") must file a written request for such benefit with the
Committee, setting forth his or her claim within 90 days of the date such
Claimant believes he or she was entitled to benefits under the Plan. The
request must be addressed to the Committee at the Company's principal place
of business.
(b) Claim Decision. Upon receipt of a claim, the Committee (or its delegate,
hereinafter collectively referred to as "Committee") shall advise the
Claimant that a reply will be forthcoming within 90 days and shall, in
fact, deliver such reply within such period. The Committee may, however,
extend the reply period for an additional 90 days for special
circumstances. If the claim is denied in whole or in part, the Committee
shall inform the Claimant in writing, setting forth: (i) the specified
reason or reasons for such denial; (ii) the specific reference to pertinent
provisions of this Plan on which such denial is based; (iii) a description
of any additional material or information necessary for the Claimant to
perfect his or her claim and an explanation of why such material or such
information is necessary; (iv) appropriate information as to the steps to
be taken if the Claimant wishes to submit the claim for review; and (v) the
time limits for requesting a review under subsection (c).
(c) Request For Review. Within 60 days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that
the Committee review the determination of the Committee. Such request must
be addressed to the Committee, at the Company's then principal place of
business. The Claimant or his or her duly authorized representative may,
but need not, review the pertinent documents and submit issues and comments
in writing for consideration by the Committee. If the Claimant does not
request a review within such 60-day period, he or she shall be barred and
estopped from challenging the Committee's determination.
12
<PAGE>
(d) Review of Decision. Within 60 days after the Committee's receipt of a
request for review, after considering all materials presented by the
Claimant, the Committee will inform the Claimant in writing, the decision
setting forth the specific reasons for the decision containing specific
references to the pertinent provisions of this Plan on which the decision
is based. If special circumstances require that the 60 day time period be
extended, the Committee will so notify the Claimant and will render the
decision as soon as possible, but no later than 120 days after receipt of
the request for review.
(e) Limitation of Actions. Any suit for benefits must be brought within twelve
months after the date the Committee has made a final denial of the claim.
Notwithstanding any other provision herein, any suit for benefits must be
brought within two years after the date the claim for benefits first arose.
ARTICLE VI
MISCELLANEOUS
6.1 Unsecured General Creditor.
Participants and their Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Company. No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan. Any and all of the Company's assets shall be, and remain, the general
unpledged, unrestricted assets of the Company. The Company's obligation under
the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors. It
is the intention of the Company that this Plan be unfunded for purposes of the
Code and for purposes of Title 1 of ERISA. Nothing contained in this Plan, and
no actions taken pursuant to the provisions of this Plan shall create or be
construed to create a trust or any kind of fiduciary relationship between the
Employer and any Participant, his Beneficiary, or any other person.
6.2 Restriction Against Assignment.
The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation. No
part of a Participant's Account or benefit shall be liable for the debts,
contracts, or engagements of any Participant, his or her Beneficiary, or
successors in interest, nor shall a Participant's Account or benefit be subject
to execution by levy, attachment, or garnishment or by any other legal or
equitable proceeding, nor shall any such person have any right to alienate,
anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or
payments hereunder in any manner whatsoever. If any Participant, Beneficiary or
successor in interest is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, commute, assign, pledge, encumber or charge any
distribution or payment from the Plan, voluntarily or involuntarily, the
Committee, in its discretion, may cancel such distribution or payment (or any
part thereof) to or for the benefit of such Participant, Beneficiary or
successor in interest in such manner as the Committee shall direct.
13
<PAGE>
6.3 Tax Withholding.
There shall be deducted from each payment made under the Plan or any other
compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Company in respect to any payment under this
Plan. The Company shall have the right to reduce any payment (or compensation)
by the amount of cash sufficient to provide the amount of said taxes.
6.4 Amendment, Modification, Suspension or Termination.
(a) The Committee may amend, modify, suspend or terminate the Plan in whole or
in part, at any time, except that no amendment, modification, suspension or
termination may retroactively adversely affect any Participant's right to a
benefit which has vested under the Plan before such date.
(b) Notwithstanding anything to the contrary contained herein, with regard to
any Participant who is subject to Section 16 of the Securities Exchange Act
of 1934 or any Account of any such Participant, no amendment can be made to
any Plan provision concerning the Supplemental Thrift Benefit relating to
the amount and price of any Benefits hereunder the categories of
Participants, the timing of any awards or the formula determining Benefits
hereunder more than once every six months, except to comport with changes
in the Code, in ERISA, or the rules thereunder.
6.5 Governing Law.
This Plan shall be construed, governed and administered in accordance with the
laws of the State of Georgia, to the extent not preempted by federal law,
without regard to the conflicts of law principles thereof.
6.6 Receipt or Release.
Any payment to a Participant or the Participant's Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Committee and the Company. The Committee may require
such Participant or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect.
6.7 Payments on Behalf of Persons Under Incapacity.
In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.
14
<PAGE>
6.8 Limitation of Rights and Employment Relationship.
Neither the establishment of the Plan nor any modification thereof, nor the
creating of any fund or Account, nor the payment of any benefits shall be
construed as giving to any Participant, or Beneficiary or other person any legal
or equitable right against the Company except as provided in the Plan; and in no
event shall the terms of employment of any Employee or Participant be modified
or in any way be affected by the provisions of the Plan.
6.9 Headings.
Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.
The Coca-Cola Company Supplemental Benefit Plan is hereby amended and restated,
effective as of January 1, 2002.
By: /S/ CORETHA M. RUSHING
-------------------------------------
Senior Vice President, Human Resources
<PAGE>
APPENDIX A
PARTICIPATING SUBSIDIARIES
As of January 1, 2002
The Coca-Cola Export Corporation
Refreshment Products Services, Inc.
Soft Drink International, Inc.
Rocketcash LLC
16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>10
<FILENAME>x10-30.txt
<DESCRIPTION>LETTER AGREEMENT BETWEEN KO AND CARL WARE
<TEXT>
EXHIBIT 10.30
[LETTERHEAD OF THE COCA-C0LA COMPANY]
October 24, 2002
CONFIDENTIAL
Mr. Carl Ware
Atlanta, Georgia 30331
Re: Your Retirement from The Coca-Cola Company (the "Company")
Dear Carl:
This is to confirm the terms of your upcoming retirement from the Company,
effective as of February 1, 2003:
1. You will resign from your officership effective, January 31, 2003, and
retire from the Company effective, February 1, 2003.
2. Upon your retirement, the restrictions on the 176,000 restricted
shares granted to you pursuant to the 1983 Restricted Stock Plan will
be released, subject to applicable tax withholdings, and delivered to
you as soon as reasonably practicable thereafter, according to the
terms of the 1983 Plan. You will be provided a gross-up for federal
and state taxes pursuant to the terms of the 1983 Restricted Stock
Plan on these shares.
3. Upon your retirement and subject to the approval of the Compensation
Committee of the Company's Board of Directors, the Company will
release the restrictions on the 36,000 restricted shares granted to
you pursuant to the 1989 Restricted Stock Plan, and deliver such
shares to you, subject to applicable tax withholdings, as soon as
reasonably practicable thereafter.
4. You will forfeit the 125,000 performance-based restricted shares
granted to you pursuant to the 1989 Restricted Stock Plan, in
accordance with the terms of the grant.
5. As provided under the terms of the Plans, all stock options you have
held in the Company since February 1, 2002 will become fully vested
upon your retirement and will remain exercisable until the original
expiration date stated in each plan.
<PAGE>
Mr. Carl Ware
Page 2
6. You will be eligible for payment of an Annual Incentive bonus for
your performance in 2002, in accordance with the terms of the
Executive Performance Program, and Executive Incentive Plan and
payable when and as such bonuses are paid to other executives in the
Company.
7. You will be eligible for prorated performance periods in progress
under the Long Term Incentive Plan, in accordance with the terms of
the Plan and payable when and as such payments are made to other
executives in the Company.
8. Any payments made to you under the Executive Performance Program, the
Executive Incentive Plan or the Long Term Incentive Plan will be made
subject to applicable withholding taxes.
9. Upon the retirement and subject to the approval of the Compensation
Committee of the Company's Board of Directors in February 2003, the
Company will pay you a lump sum cash payment of $600,000, less
applicable taxes, in recognition of your special service to the
Company.
10. The Company will grant title and possession to you of the mobile
telephones and laptop computer currently assigned to you. The fair
market value of these items will be personal income to you.
11. You will become eligible to participate in all retiree medical,
dental, vision and prescription drug coverage plans as of February 1,
2003, and all other benefits and opportunities normally available to
retirees in good standing of the Company.
12. In the event of your death, all payments and benefits payable to you
will be made in accordance with the terms of the applicable plans or,
if no applicable plan, to your estate.
13. As we desire to continue to use your services as a senior advisor
after your retirement, the Company will enter into a three-year
consulting agreement with you, beginning March 1, 2003, at the annual
rate of $225,000. The terms of our agreement will be outlined and
agreed at a later date.
<PAGE>
Mr. Carl Ware
Page 3
No letter of this kind can begin to express our appreciation for the long
and loyal service you have rendered to and on behalf of the Company. Please
accept my personal thanks on behalf of all your many friends and colleagues at
The Coca-Cola Company.
Sincerely,
/s/ Douglas N. Daft
Accepted and agreed to this
7th day of November, 2002
/s/ Carl Ware
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>11
<FILENAME>x10-31.txt
<DESCRIPTION>TCCEC EMPLOYEE SHARE PLAN, EFFECTIVE 3/13/2002
<TEXT>
EXHIBIT 10.31
Dated 13th March 2002
THE COCA-COLA EXPORT CORPORATION
And
OTHERS
TRUST DEED AND RULES
of
THE COCA-COLA EXPORT CORPORATION
EMPLOYEE SHARE PLAN
<PAGE>
CONTENTS
THE TRUST DEED Page
1 Definitions and interpretation 1
2 Trusts of the Plan 2
3 Notices to Participants 3
4 Investment 3
5 Borrowing 4
6 Receipt of money or money's worth with
respect to Plan Shares 4
7 Application of the Plan to group companies 4
8 Retention of Shares subject to Holding Period 5
9 Voting rights and directions 5
10 Trustee's powers of delegation 6
11 Administration 6
12 Trustee's indemnities and charges 7
13 Appointment, removal and retirement of the Trustee 9
14 Residence of the trust 9
15 Amendments to the Plan 10
16 Termination of the Plan 10
17 Governing law 11
18 Construction of this Deed 11
SCHEDULE
RULES OF THE COCA-COLA EXPORT CORPORATION EMPLOYEE SHARE PLAN
PART ONE
Definitions and interpretation 12
PART TWO
Provisions affecting Plan Shares 18
1 Operation of the Plan/participation on the same terms 18
2 Participation Contract 18
3 Ineligibility due to participation in other share
plans 19
4 Ineligibility due to Material Interest in close
company 19
5 Contributions to the Trustee 19
6 Acquisition of Shares for the Plan 20
7 Rights attaching to Plan Shares 20
8 Rights issues 20
9 Capitalisation issues 21
10 Company Reconstruction 21
11 Events during Holding Period 22
12 Fractional entitlements 23
13 Transfer of Plan Shares 24
14 Stamp duty 24
15 Notices 24
<PAGE>
16 Disputes 24
17 Terms of employment 25
PART THREE
Free Shares 26
1 Invitation to participate 26
2 Maximum value of Free Shares Appropriated 26
3 Performance measures and targets 26
4 Basis of Appropriation 28
PART FOUR
Partnership Shares and Matching Shares 29
1 Invitations 29
2 Partnership Share Money 30
3 No Accumulation Period 30
4 Accumulation Period 31
5 Stopping and restarting deductions 32
6 Withdrawal of Partnership Shares 32
7 Number of Partnership Shares that can be acquired 33
8 Matching Shares 33
PART FIVE
Reinvestment of Cash Dividends 35
1 Permitted reinvestment 35
2 Limit on dividend reinvested 35
3 Acquisition of Dividend Shares 36
<PAGE>
THIS DEED is made the 13th day of March 2002
BETWEEN:
(1) THE COCA-COLA EXPORT CORPORATION whose registered office is at 1 Queen
Caroline Street, London W6 9HQ ("the Company");
(2) COCA-COLA HOLDINGS (UK) LIMITED and BEVERAGE SERVICES LIMITED both of
whose registered office is at 1 Queen Caroline Street, London W6 9HQ
(together the "Initial Participating Companies"); and
(3) CAPITA IRG TRUSTEES LIMITED whose registered office is at Bourne House,
34 Beckenham Road, Beckenham, Kent BR3 4TU United Kingdom (the
"Trustee").
WHEREAS:
(A) The Company wishes to establish an Employee Share Ownership Plan to be
known as the Coca-Cola Export Corporation Employee Share Plan, approved
in accordance with the provisions of Schedule 8 to the Finance Act 2000
and constituting an Employees' Share Scheme.
(B) The Plan was approved and established by the Company on 8 March 2002.
(C) The Company has agreed that the Initial Participating Companies shall be
Participating Companies in the Plan and the Initial Participating
Companies have agreed to be bound in all respects by this Deed and the
rules contained in the Schedule to this Deed (the "Rules").
(D) The Trustee has agreed to be the original trustee of the Plan.
NOW THIS DEED WITNESSES as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions: The words and expressions used in this Deed which have
capital letters have the meanings set out in Part One of the Rules.
1.2 Interpretation: The provisions of Part One of the Rules shall apply
equally to this Deed.
1
<PAGE>
2 TRUSTS OF THE PLAN
2.1 Payments by Participating Companies: The Participating Companies will pay
to the Trustee the amounts necessary to enable the Trustee to acquire, in
accordance with the Plan, Shares for and/or to be Appropriated to
Qualifying Employees, together with any other amounts required to cover
any liabilities incurred by the Trustee under the Plan in respect of the
Participating Companies' own employees.
2.2 Application of payments: Unless otherwise stated, the Trustee will apply
all monies received by it in accordance with the Plan and hold any Shares
acquired and all other trust property deriving from them on the trusts
declared in this Deed. In the case of any monies received for the
acquisition of Free Shares or Matching Shares, the Trustee will acquire
and Appropriate these Shares in accordance with the Plan. In the case of
any monies received for the acquisition of Partnership Shares or Dividend
Shares, the Trustee will acquire these Shares in accordance with the
Plan.
2.3 Retention or sale of surplus Shares: If it is not possible to Appropriate
all the Shares acquired for Appropriation as Free Shares or Matching
Shares without fractional entitlements arising or if, for any other
reason, the Trustee holds Shares which were acquired to be Appropriated,
but which are not Appropriated, the Trustee may either retain those
Shares or sell them and pay the net proceeds to the Participating
Companies.
2.4 Rights attaching to unappropriated Shares: If the Trustee becomes
entitled in respect of any Shares not held on behalf of a Participant to
any rights to be allotted, or to subscribe for, further securities (other
than an issue of capitalisation shares of the same class as specific
Shares which the Trustee is about to Appropriate, which capitalisation
shares shall be retained by the Trustee as Shares to be Appropriated
among the Qualifying Employees on the relevant Appropriation Day), the
Trustee may take up those rights or sell them for the best consideration
in money reasonably obtainable at the time or sell sufficient of them nil
paid to enable the Trustee to subscribe in full for the balance of any
unsold rights or allow those rights to lapse.
2.5 Trusts of unappropriated Shares: The Trustee shall hold any
unappropriated Shares or unutilised cash balances and any income arising
from them UPON TRUST to apply the same in or towards the future purchase
of Shares for the purposes of the Plan and/or their expenses of
administering the Plan. The Trustee shall notify the Participating
Companies from time to time of the amounts and/or number of Shares so
held by it and its/their application.
2.6 Use of Shares acquired under a qualifying transfer: Any Shares acquired
by the Trustee by a transfer from an employee share ownership trust which
is a qualifying transfer within section 69(3AA) of the Finance Act 1989
must not be awarded as Partnership Shares and must be
2
<PAGE>
included in priority to other available Shares in any award of Free
Free Shares or Matching Shares made after the date of the transfer.
2.7 General duty of the Trustee in relation to Participants' Plan Shares:
Subject to Clause 8, the Trustee shall not dispose of a Participant's
Plan Shares or deal with any rights, conferred in respect of any such
Shares, to be allotted Shares, securities or rights of any description
other than pursuant to a direction given by or on behalf of the
Participant.
3 NOTICES TO PARTICIPANTS
3.1 Notice of Appropriation of Free Shares or Matching Shares: As soon as
practicable after the Trustee has Appropriated Free Shares or Matching
Shares, the Trustee shall notify each Qualifying Employee of the number
and description of the Shares Appropriated to him, the Initial Market
Value of those Shares and the Holding Period applicable to them.
3.2 Notice of acquisition of Partnership Shares: As soon as practicable after
the Trustee has acquired any Partnership Shares on behalf of a Qualifying
Employee, the Trustee shall notify the Qualifying Employee of the number
and description of the Shares acquired, the amount of Partnership Share
Money applied in acquiring them and their Market Value on the Acquisition
Date.
3.3 Notice of acquisition of Dividend Shares: As soon as practicable after
the Trustee has acquired Dividend Shares on behalf of a Participant, the
Trustee shall notify the Participant of the number and description of the
Shares acquired, their Market Value on the Acquisition Date, the Holding
Period applicable to them and the amount (if any) of the cash dividend
carried forward under Rule 3.3 of Part Five of the Rules.
3.4 Notice of Participant's tax liability: Where a Participant becomes liable
to income tax under Schedule D Case V, Schedule E or Schedule F of the
Taxes Act due to his participation in the Plan, the Trustee shall inform
the Participant of any facts relevant to determining that liability.
3.5 Notice of any foreign tax deducted before dividend paid: Where any
foreign cash dividend is received in respect of Plan Shares held on
behalf of a Participant, the Trustee shall give the Participant notice of
the amount of any foreign tax deducted from the dividend before it was
paid.
4 INVESTMENT
4.1 Trustee's power of investment: The Trustee may invest any monies from
time to time held by it and not immediately required as if it were the
absolute beneficial owner of those monies.
4.2 No duty to invest: The Trustee shall be under no duty to invest property
held on trust under this Deed.
3
<PAGE>
5 BORROWING
The Trustee shall have power to borrow money both to acquire Shares for
the purposes of the Plan and to pay any other expenses properly incurred
by the Trustee in administering the Plan.
6 RECEIPT OF MONEY OR MONEY'S WORTH WITH RESPECT TO PLAN SHARES
6.1 Obligation to pay over: Subject to Clause 6.2, the Trustee shall, as soon
as practicable following its receipt of any money or money's worth in
respect of or by reference to any Plan Shares, arrange for that money or
money's worth to be paid to Participants in accordance with their
respective entitlements.
6.2 Exceptions from obligation: Clause 6.1 shall:
(a) not apply to money's worth consisting of New Shares;
(b) be subject to the operation of Part Five of the Rules (Reinvestmentof
Cash Dividends); and
(c) be subject to Clause 11.
7 APPLICATION OF THE PLAN TO GROUP COMPANIES
7.1 Extension of the Plan to Controlled Companies and/or Jointly Owned
Companies: The Plan may, with the consent of the Company, be extended to
any Controlled Company or Jointly Owned Company by the execution of a
deed of adherence whereby that company agrees to be bound by this Deed
and the Plan.
7.2 Disapplication of the Plan to Participating Companies: The Plan shall
cease to apply to any company at any time when:
(a) that company becomes no longer either a Controlled Company or a
Jointly Owned Company; or
(b) a notice is served by the Company upon the Trustee that the Plan
shall not apply to that company
provided that the rights of Participants employed by that company to Plan
Shares Appropriated o them or acquired on their behalf while that
company was a Participating Company shall not be affected and provided
that (in the situation referred to at (b) above) the requirement of
paragraph 10(2) of Schedule 8 continues to be satisfied.
4
<PAGE>
7.3 Information from Participating Companies: A Participating Company (or a
former Participating Company, if appropriate) shall provide the Trustee
with all information required from it for the operation of the Plan in
such form as the Trustee shall reasonably require.
8 RETENTION OF SHARES SUBJECT TO HOLDING PERIOD
8.1 No disposal: Subject to Clause 8.2, the Trustee shall not dispose of any
of a Participant's Free Shares, Matching Shares or Dividend Shares during
the Holding Period applicable to those Shares other than at the written
direction of the Participant (or his personal representatives) given
under the terms of the Participation Contract.
8.2 Permitted disposals during Holding Period: Clause 8.1 shall:
(a) not apply if at the time of the disposal the Participant has ceased
to be in Employment;
(b) be subject to a direction of the Participant given in accordance with
Rule 11.1 of Part Two of the Rules; and
(c) be subject to Clause 11.3.
9 VOTING RIGHTS AND DIRECTIONS
9.1 Exercise of voting rights: While Plan Shares are registered in the name
of the Trustee, the Trustee shall, in respect of any matter upon which,
at a general meeting of The Coca-Cola Company or at a meeting of the
holders of any class of shares of The Coca-Cola Company, it is entitled
to exercise any voting rights attaching to those Plan Shares, invite the
Participants on whose behalf those Plan Shares are held to direct it as
to such exercise. The Trustee shall not be entitled in respect of Plan
Shares held on behalf of Participants to vote on a show of hands unless
all directions received from Participants who have given directions in
respect of the particular resolution are identical. The Trustee shall not
in any circumstances be under an obligation to call for a poll. If there
is a poll, the Trustee shall vote only in accordance with the directions
of Participants who have given directions and shall not vote in respect
of Plan Shares where no directions have been received.
9.2 Voting rights attached to unappropriated Shares: The Trustee may not vote
in respect of Shares it holds which are not Plan Shares.
5
<PAGE>
10 TRUSTEE'S POWERS OF DELEGATION
10.1 Trustee's power to employ agents: The Trustee may, in the performance of
its duties under the Plan, employ and pay any appropriate person, appoint
any person as its agent to transact all or any business, and act on the
advice or opinion of any professional or business person, and shall not
be responsible for anything done or omitted or suffered in good faith in
reliance on such advice or opinion.
10.2 Delegation of the Trustee's powers: The Trustee may, to the extent
permitted by law, delegate any of its powers and duties under the Plan to
any person, but no delegation made under this Clause shall divest the
Trustee of its responsibilities under Schedule 8.
10.3 Nominee shareholder: The Trustee may allow any Shares to be registered in
the name of an appointed nominee, provided that such Shares are
registered in a designated account.
10.4 Revocation of delegation: The Trustee may at any time, and shall if
directed to by the Company, revoke any delegation or arrangement made
under this Clause and/or require any trust property held by another
person to be returned to the Trustee.
10.5 Execution of documents: The Trustee may execute and may authorise any of
its directors, officers or employees to execute on its behalf any
documents in such manner as may be appropriate.
11 ADMINISTRATION
11.1 Meetings and regulations: Subject to the terms of this Deed, the Trustee
may convene meetings and make such regulations as it considers
appropriate for the administration of the Plan.
11.2 Duty to keep accounts and records: The Trustee shall maintain the
accounts and records necessary for it to fulfil its own PAYE and other
obligations under the Plan and the PAYE obligations of any Employer
Company under the Plan.
11.3 Trustee's power to dispose of shares to meet its PAYE obligations: The
Trustee shall, where a PAYE obligation is imposed on it under Schedule 8
as a result of a Participant's Plan Shares ceasing to be subject to the
Plan (including due to the operation of this Clause), have the power to
meet that PAYE obligation by:
(a) disposing of any of the Participant's Plan Shares and retaining the
proceeds; or
(b) requiring the Participant to pay to it a sum equal to the amount
required to discharge the PAYE obligation.
6
<PAGE>
The Trustee may dispose of a Participant's Plan Shares under Clause
11.3(a) by itself acquiring some or all of those Shares for the purposes
of the Plan.
11.4 Trustee to pay Employer Company: If as a result of a Participant's Plan
Shares ceasing to be subject to the Plan a Participant is chargeable to
income tax under Part X of Schedule 8 and an obligation to make a PAYE
Deduction arises in respect of that charge the Trustee shall, subject to
Clauses 11.6 and 11.7, pay to the Employer Company a sum sufficient to
enable it to discharge that obligation.
11.5 Payment to Employer Company of Capital Receipts: If the Trustee receives
a sum of money which constitutes (or forms part of) a Capital Receipt in
respect of which a Participant is chargeable to income tax in accordance
with Part X of Schedule 8, the Trustee shall pay to the Employer Company
out of that sum of money an amount equal to that on which income tax is
payable.
11.6 Payment by Participant to Employer Company: Clause 11.4 shall not apply
if the relevant Participant is required to pay to his Employer Company a
sum that is sufficient to enable it to discharge the obligation.
11.7 No Employer Company: In any case under Clause 11.4 or Clause 11.5, as
appropriate, where:
(a) there is no Employer Company; or
(b) the Inland Revenue have directed under paragraph 95(7) or 96(3), as
appropriate, of Schedule 8 that it is impracticable for the Employer
Company concerned to make a PAYE Deduction,
Clause 11.4 or Clause 11.5, as appropriate, shall not apply and the
Trustee shall make a PAYE Deduction in respect of an amount equal to that
on which income tax is payable, as if the Participant were a former
employee of the Trustee.
12 TRUSTEE'S INDEMNITIES AND CHARGES
12.1 Trustee's indemnity: The Participating Companies agree to keep the
Trustee fully indemnified against any liability arising out of or in
connection with the Plan. However, the Trustee shall not be indemnified
or exonerated in respect of any fraud, negligence or wilful default on
its part or its agents' or any of their officers' or employees' parts.
The Trustee shall have the benefit of any indemnities conferred upon
trustees by law.
12.2 Accounting for benefits received by the Trustee: Neither the Trustee nor
any of its officers or employees shall be liable to account to
Participants for any benefit received under the Plan. Neither
7
<PAGE>
the Trustee nor any officer or employee of the Trustee shall be liable to
account to other Participants for any profit derived by him as a
Participant.
12.3 Trustee's remuneration: Any person acting as a trustee in the course of
any profession or business carried on by him may charge and be paid such
reasonable charges for so acting as shall from time to time be agreed
between him and the Company.
12.4 Permitted dealings of the Trustee: The Trustee (and any director or
officer of a body corporate or a trust corporation acting as a trustee)
shall not, on its own account:
(a) be precluded from acquiring, holding or dealing with any debentures,
debenture stock, shares or securities whatsoever of The Coca-Cola
Company, the Company, any Controlled Company or Jointly Owned Company
or any other company in the shares of which The Coca-Cola Company,
the Company, any Controlled Company or any Jointly Owned Company may
be interested;
(b) be precluded from entering into any contract or other transaction
with The Coca-Cola Company, the Company, any Controlled Company or
Jointly Owned Company or any other company, or from being interested
in any such contract or transaction; or
(c) be in any way liable to account to The Coca-Cola Company, the Company
or any Controlled Company or Jointly Owned Company or any Participant
for any amount obtained by it from such acquisition, holding,
dealing, contract or transaction, whether or not in connection with
its duties under this Deed.
12.5 Reliance on information provided: The Trustee shall be entitled, in the
absence of manifest error, to rely without further enquiry on:
(a) information supplied to it by any Participating Company for the
purposes of the Plan; and
(b) any direction, notice or document purporting to be given or executed
by or with the authority of any Participating Company or by any
Participant.
12.6 Exclusion of liability: The Trustee shall not be liable or responsible
for any loss, liability or increased liability of a Participant arising
out of the failure of the Participant to give a direction to the Trustee
or to give a direction within a particular time or, if the Participant
has directed the Trustee to use its discretion, arising out of the bona
fide exercise by the Trustee of that discretion.
12.7 Insurance: The Trustee may insure against any loss caused by it or by any
of its employees, officers, agents or delegates under the Plan. It may
also insure itself and any of these persons against liability for breach
of trust not involving wilful wrongdoing or fraud of the Trustee or the
8
<PAGE>
person concerned. Except in the case of a paid trustee, the insurance
premiums may be paid from the Plan assets.
13 APPOINTMENT, REMOVAL AND RETIREMENT OF THE TRUSTEE
13.1 Number of trustees: There shall at all times be in office at least two
trustees or a corporate trustee.
13.2 Appointment and removal of trustees: The Company may at any time by
notice in writing:
(a) appoint a new (or additional) trustee, including a corporate trustee
(to the exclusion of the trustee's statutory power of appointment);
and
(b) remove a trustee from office (but not so as to leave in office fewer
than two trustees or a corporate trustee), without assigning any
reason for its removal which (in the absence of a date specified in
the notice) shall take effect immediately.
13.3 Appointment and removal on cessation of the Company's existence: If the
Company ceases to exist then its powers of appointment and removal shall
be vested in the Trustee except that if the Company ceases to exist in
connection with a Company Reconstruction or takeover, then such powers
shall be vested in the successor company (or, if more than one, such
successor company as the Company shall nominate).
13.4 Retirement of the Trustee: The Trustee may retire as a trustee by giving
to the Company written notice which shall take effect at the end of three
months (or another period agreed with the Company) from the date of that
notice, provided that this will leave at least two trustees in office or
a corporate trustee. Where the retiring Trustee is a sole corporate
trustee, if the Company does not appoint a new trustee within three
months of the date of such retirement, then the Trustee may appoint a
successor trustee. The Trustee shall not be responsible for any costs
caused by its retirement but shall do all things necessary to give proper
effect to its retirement.
13.5 Transfer of trust property: Immediately on removal or retirement, the
Trustee shall transfer all trust property held by it to the continuing
and/or any successor trustee and deliver all documents in its possession
relating to the Plan as the Company may direct. If it does not do so, the
continuing trustee may do so on its behalf
13.6 Participant as trustee: A person shall not be disqualified from acting as
a trustee or an officer or employee of a trustee because he is or was an
officer or employee of The Coca-Cola Company, the Company or of a
Participating Company or is or was a Participant.
9
<PAGE>
14 RESIDENCE OF THE TRUST
For so long as the Plan is to be approved by the Inland Revenue
under Schedule 8, the Trust, and every trustee, shall be resident
for tax purposes in the United Kingdom.
15 AMENDMENTS TO THE PLAN
15.1 Company's power to amend: Subject to Clause 15.2, the Company may, with
the Trustee's consent, amend the Plan in any manner it thinks fit (with
any amendment being binding on the Trustee and all Participating
Companies and Participants) but so that no purported amendment shall be
effective if:
(a) it would cause the Plan to cease to be an Employees' Share Scheme;
(b) it would materially adversely affect the rights of a Participant in
respect of his Plan Shares unless it is made with his written
consent; or
(c) it would offend the rule against perpetuities.
15.2 Inland Revenue approval: If, and so long as, the Plan is approved by the
Inland Revenue under Schedule 8, no amendment to any key feature of the
Plan (for the purposes of paragraph 118(2)(b) of Schedule 8) shall have
effect unless such amendment has been approved by the Inland Revenue.
15.3 Notice to the Trustee: Written notice of any amendment made in accordance
with this Clause 15 shall be given to the Trustee.
16 TERMINATION OF THE PLAN
16.1 The Plan shall terminate:
(a) in accordance with a Plan Termination Notice issued by the Company to
the Trustee under paragraph 120 of Schedule 8; or
(b) if earlier, on the expiry of the Trust Period.
16.2 The Company shall immediately upon executing a Plan Termination Notice
provide a copy of the notice to the Trustee, the Inland Revenue and each
individual who has Plan Shares or who has entered into a Partnership
Share Agreement which was in force immediately before the notice was
issued.
10
<PAGE>
16.3 Upon the issue of a Plan Termination Notice or upon the expiry of the
Trust Period, paragraph 121 of Schedule 8 shall have effect.
16.4 Any Shares or other assets which remain undisposed of after the
requirements of paragraph 121 of Schedule 8 have been complied with shall
be held by the Trustee upon trust to pay or apply them to or for the
benefit of the Participating Companies as at the termination date in such
proportions, having regard to their respective contributions, as the
Trustee shall in its absolute discretion think fit.
17 GOVERNING LAW
This Deed shall be governed by and construed in accordance with the law
of England.
18 CONSTRUCTION OF THIS DEED
The Rules shall be treated as part of this Deed.
IN WITNESS whereof this Deed has been executed and delivered as a deed by the
parties on the date which first appears on page 1.
11
<PAGE>
SCHEDULE
RULES OF THE COCA-COLA EXPORT CORPORATION
EMPLOYEE SHARE PLAN
PART ONE
DEFINITIONS AND INTERPRETATION
The words and expressions used in the Plan which have capital letters have the
meanings set out below. Words and expressions not otherwise defined have the
same meanings as they have in the Taxes Act. In the Plan:
(a) the headings are for the sake of convenience and should be ignored when
construing it;
(b) references to any statutory provisions are to those provisions as amended,
extended or re-enacted from time to time and include any subordinate
legislation made under them; and
(c) unless the context requires otherwise, words in the singular include the
plural and vice versa and words imputing either gender include both
genders.
"Accumulation Period" in respect of Partnership Shares, the period during which
a Qualifying Employee's Partnership Share Money is accumulated before it is used
to acquire Partnership Shares or is repaid to that employee;
"Acquisition Date" in respect of Partnership Shares, the date determined under
Rule 3.1 or Rule 4.3 of Part Four of these Rules as appropriate and, in respect
of Dividend Shares, the date determined under Rule 3.1 of Part Five of these
Rules;
"Appropriation" the allocation to a Qualifying Employee of a beneficial interest
in Free Shares or Matching Shares (and references to "Appropriate" or
"Appropriated" shall be read accordingly);
"Appropriation Day" a day on which Free Shares or Matching Shares are
Appropriated to a Qualifying Employee;
"Appropriation Year" a Year of Assessment during which an Appropriation of
Shares is or is intended to be made;
"Associated Company" the meaning given in paragraph 126 (as extended by
paragraph 127) of Schedule 8;
12
<PAGE>
"Award Date" the date on which an Appropriation is made and/or Partnership
Shares or Dividend Shares are acquired on behalf of a Qualifying Employee;
"Capital Receipt" the meaning given in paragraph 79 of Schedule 8;
"the Company" the meaning given in the Deed;
"Company Reconstruction" has the meaning given to it in Rule 10 of Part Two of
these Rules;
"Connected Company" (a) the Company, (b) a company which Controls or is
Controlled by the Company or is Controlled by a company which also Controls the
Company, and (c) a company which is a Member of a Consortium owning the Company
or which is owned in part by the Company as a Member of a Consortium;
"Continuous Employment" continuous employment (within the meaning given in the
Employment Rights Act 1996) by an individual with one or more companies each of
which is a qualifying company, within the meaning of paragraph 14 of Schedule 8;
"Control" unless otherwise indicated, control within the meaning given in
section 840 of the Taxes Act (and references to "Controls" or "Controlled" shall
be read accordingly);
"Controlled Company" any company (being a body corporate) which is a Subsidiary
and is under the Control of the Company;
"Dealing Day" any day on which the New York Stock Exchange is open for business;
"the Deed" this trust deed as amended from time to time;
"Dividend Shares" Shares acquired by the Trustee on behalf of a Participant
under Part Five of these Rules;
"Eligible Employee" an individual who:
(a) is in Employment with a Participating Company, chargeable to tax in respect
of that Employment under Case I of Schedule E and has such Qualifying
Period (if any) as the Company may determine; or
(b) if paragraph (a) above does not apply, is in Employment with a
Participating Company and nominated to participate by the Company (or is a
member of a category of persons in such Employment which is nominated to
participate by the Company) subject to having such Qualifying Period (if
any)
13
<PAGE>
unless the individual is ineligible to participate in the Plan by virtue of Rule
3 or Rule 4 of Part Two of these Rules;
"Employee Share Ownership Plan" an employee share ownership plan approved under
Schedule 8 and established by a Connected Company;
"Employees' Share Scheme" the meaning given in section 743 of the Companies Act
1985;
"Employer Company" the company (if any) of which a Participant is an employee
when, as appropriate, either (a) his Plan Shares cease to be subject to the
Plan, or (b) the Trustee receives a sum of money which constitutes (or forms
part of) a Capital Receipt in respect of his Plan Shares and to which the PAYE
Regulations apply at that time;
"Employment" employment with a Participating Company or (unless otherwise
stated) with another Associated Company of the Company;
"Exchange Rate" for any day, the average of the buying and selling prices at
close UK Pounds for US Dollars spot rates for that day as published in the
Financial Times newspaper (or such other publication as is selected by the
Trustee for the purpose of the Plan);
"Free Shares" Shares Appropriated to a Qualifying Employee under Part Three of
these Rules;
"Holding Period" with respect to:
(a) an Appropriation of Free Shares or Matching Shares, the period specified by
the Company for that Appropriation during which those Shares will be held
by the Trustee, which must be not less than three years nor more than five
years from the Appropriation Day (or such other period(s) as may from time
to time be required or permitted under Schedule 8); and
(b) Dividend Shares, the period of three years from their Acquisition Date (or
such other period as may from time to time be required or permitted under
Schedule 8);
"Initial Market Value" in relation to any Appropriation of Shares, their Market
Value on the Appropriation Day. Where Shares are subject to restrictions or risk
of forfeiture (as that term is defined in paragraph 24(3) of Schedule 8) such
Market Value shall be determined as if there were no such restrictions or risk;
"Initial Participating Companies" the meaning given in the Deed;
14
<PAGE>
"Jointly Owned Company":
(a) any company of which 50 per cent. of its issued share capital is owned by
the Company and/or any Subsidiary and 50 per cent. of its issued share
capital is owned by another person; and
(b) any company under the Control of any such jointly owned company;
"Market Value" in relation to a Share, on any day, the average of the high and
low prices of a Share of the same class on the New York Stock Exchange at close
of business for the immediately preceding Dealing Day converted into UK Pounds
at the Exchange Rate for that preceding Dealing Day; provided that if all Plan
Shares comprised in an Appropriation or acquisition on behalf of Participants
are purchased on the market on their Award Date, "Market Value" shall mean the
average of the purchase prices of such Plan Shares expressed in UK Pounds;
"Matching Shares" Shares Appropriated under Part Four of these Rules;
"Material Interest" the meaning given in paragraphs 17 to 19 of Schedule 8;
"Member of a Consortium" the meaning given in paragraph 129(4) of Schedule 8;
"New Shares" the meaning given in Rule 10 of Part Two of these Rules;
"NICs" National Insurance contributions;
"Participant" any person on whose behalf the Trustee holds Plan Shares;
"Participating Companies":
(a) the Initial Participating Companies (while they remain bound by the Deed);
(b) any Controlled Company which, pursuant to Clause 7.1 of the Deed,
participates in the Plan; and
(c) any company which is a Jointly Owned Company and which, pursuant to Clause
7.1 of the Deed, participates in the Plan;
"Participation Contract" a contract complying with Rule 2 of Part Two of these
Rules;
"Partnership Shares" Shares acquired by the Trustee on behalf of a Qualifying
Employee under Part Four of these Rules;
"Partnership Share Agreement" a contract complying with Rule 2 of Part Two and
Rule 1 of Part Four of these Rules;
15
<PAGE>
"Partnership Share Money" money deducted from a Qualifying Employee's Salary
under a Partnership Share Agreement;
"PAYE Deduction" a deduction required by regulations made under section 203 of
the Taxes Act;
"PAYE Regulations" the meaning given in section 203L(3) of the Taxes Act;
"Performance Unit" any individual, team or divisional or corporate unit the
Company may determine with respect to an Appropriation to be made under Rule 1
of Part Three of these Rules;
"Permitted Cessation" ceasing to be in Employment because of:
(a) injury or disability;
(b) Redundancy;
(c) a transfer to which the Transfer of Undertakings (Protection of Employment)
Regulations 1981 apply;
(d) a change of Control or other circumstances in consequence of which the
company by which the Participant is employed ceases to be an Associated
Company of the Company;
(e) retirement on or after reaching the age of 50; or
(f) death;
"Plan" The Coca-Cola Export Corporation Employee Share Plan established by the
Deed and these Rules;
"Plan Shares" Free Shares, Partnership Shares, Matching Shares, Dividend Shares
and/or, where appropriate, New Shares, which are held by the Trustee on behalf
of the Participants to whom they have been Appropriated or on whose behalf they
have been acquired;
"Plan Termination Notice" a notice issued under paragraph 120 of Schedule 8;
"Profit Sharing Scheme" a profit sharing scheme approved under Schedule 9 to the
Taxes Act and established by a Connected Company;
"Qualifying Corporate Bond" the meaning given in section 117 of the Taxation of
Chargeable Gains Act 1992;
"Qualifying Employee" an Eligible Employee who has entered into a Participation
Contract or Partnership Share Agreement, as appropriate;
16
<PAGE>
"Qualifying Period" the period (if any) of Continuous Employment determined by
the Company with respect to any operation of the Plan, being, in the case of
Free Shares, a period starting not earlier than 18 months before the relevant
Appropriation Day, in the case of Partnership Shares or Matching Shares where
the Partnership Share Agreement provides for an Accumulation Period a period
starting no earlier than six months before the start of the Accumulation Period
and in the case of Partnership Shares or Matching Shares where the Partnership
Share Agreement does not provide for an Accumulation Period, a period starting
no earlier than 18 months before the date on which the relevant Partnership
Share Money is deducted;
"Redundancy" the meaning given in the Employment Rights Act 1996;
"Restricted Performance Measures" performance measures as defined in Rule 3.3 of
Part Three of these Rules;
"Salary" the meaning given in paragraph 48 of Schedule 8;
"Schedule 8" Schedule 8 to the Finance Act 2000;
"Share" a share in the capital of The Coca-Cola Company which satisfies the
conditions specified in Part VIII of Schedule 8;
"Subsidiary" any company which is a subsidiary (as defined by section 736 of the
Companies Act 1985) of the Company;
"the Taxes Act" the Income and Corporation Taxes Act 1988;
"The Coca-Cola Company" The Coca-Cola Company whose principal office is at [PO
Box 1734, Atlanta, Georgia 30301, United States of America], by whatever name
known from time to time;
"Trustee" the trustee referred to in the Deed or such other person or persons
resident in the United Kingdom who is or are the trustee or trustees from time
to time of the Plan;
"Trust Period" the period of 80 years beginning with the date of the Deed;
"Unrestricted Performance Measures" performance measures as defined in Rule 3.4
of Part Three of these Rules; and
"Year of Assessment" the meaning given in section 832 of the Taxes Act.
17
<PAGE>
PART TWO
PROVISIONS AFFECTING PLAN SHARES
1 OPERATION OF THE PLAN/PARTICIPATION ON THE SAME TERMS
1.1 Company's discretion: The Plan shall be operated at the discretion of the
Company.
1.2 Participation on the same terms: Subject to Rules 3.3 and 3.4 of Part Three
of these Rules, every Eligible Employee must be invited to participate in
the Plan in respect of any Appropriation of Shares or acquisition of Shares
on their behalf on the same terms, and those who participate must do so on
the same terms.
1.3 Permitted factors: The fact that participation at any operation of Part
Three of these Rules may be by reference to an Eligible Employee's
remuneration, length of service or hours worked shall not infringe Rule 1.2
unless, where more than one of these three factors is used, paragraph 9(4)
of Schedule 8 is not complied with.
2 PARTICIPATION CONTRACT
2.1 Holding Period: A Participation Contract (which shall include a Partnership
Share Agreement which provides for the Appropriation of Matching Shares)
shall specify the Holding Period applicable to the Free Shares (or Matching
Shares or Dividend Shares, if applicable) to which it relates and shall,
subject to its provisions, bind the Eligible Employee in contract with the
Company:
(a) to permit any Plan Shares which are subject to a Holding Period and
Appropriated to him or acquired on his behalf to remain in the hands
of the Trustee throughout the Holding Period applicable to them; and
(b) not to assign, charge or otherwise dispose of his beneficial interest
in any of those Plan Shares during their Holding Period.
2.2 Forfeiture: A Participation Contract shall, if the Company so decides,
state in respect of the Appropriation of Free Shares (or in the case of a
Partnership Share Agreement of Matching Shares) to which it relates the
extent (if any) to which those Shares will be forfeited if other than in
the event of Permitted Cessation:
(a) the Participant ceases to be in Employment;
18
<PAGE>
(b) the Participant withdraws the Shares from the Plan; or
(c) in the case of Matching Shares only, the Participant withdraws the
Partnership Shares in respect of which those Matching Shares were
Appropriated to him
before the expiry of the period (not exceeding three years) from the
Appropriation Day of the relevant Shares specified in the Participation
Contract. If any Shares are forfeited, a Participant shall cease to be
beneficially entitled to those Shares.
3 INELIGIBILITY DUE TO PARTICIPATION IN OTHER SHARE PLANS
3.1 Free Shares: An individual shall not be eligible to receive an
Appropriation of Free Shares in any Year of Assessment in which shares have
been (or are at the same time to be) appropriated to him under a Profit
Sharing Scheme or in which he has participated (or is at the same time to
participate) in another Employee Share Ownership Plan.
3.2 Partnership Shares or Matching Shares: An individual shall not be eligible
to participate in an invitation for Partnership Shares or Matching Shares
in any Year of Assessment in which he has participated (or is at the same
time to participate) in another Employee Share Ownership Plan.
3.3 Deemed participation: For the purposes of Rule 3.1 and Rule 3.2 an
individual shall be treated as having participated in an Employee Share
Ownership Plan if he would have received Free Shares under that plan but
for the failure to meet a performance target.
4 INELIGIBILITY DUE TO MATERIAL INTEREST IN CLOSE COMPANY
An individual shall not be eligible to participate in the Plan at any time
when he has (or has within the preceding 12 months had) a Material Interest
in The Coca-Cola Company (being a close company) or, if The Coca-Cola
Company is a close company, in any company which Controls The Coca-Cola
Company or is a Member of a Consortium which owns The Coca-Cola Company.
Paragraphs 15(2) and 20 to 22 of Schedule 8 shall apply to determine
whether an individual is regarded as having or having had a Material
Interest for the purposes of this Rule 4.
5 CONTRIBUTIONS TO THE TRUSTEE
Any contributions to be made to the Trustee to enable an acquisition of
Shares to be made by the Trustee for Appropriation on any Appropriation
Day shall be made within a sufficient time to allow for that Appropriation.
19
<PAGE>
6 ACQUISITION OF SHARES FOR THE PLAN
Acquisition of Shares: The Trustee, upon the direction of the Company,
shall acquire Shares to be Appropriated as Free Shares or Matching Shares
or to be acquired as Partnership Shares or Dividend Shares either by
acquiring authorised but unissued Shares or treasury Shares from The
Coca-Cola Company or by purchasing Shares on the market or otherwise.
7 RIGHTS ATTACHING TO PLAN SHARES
Rights attaching to Plan Shares: Where the Trustee Appropriates or acquires
Plan Shares a proportion of which rank for any dividend or other
distribution or other rights attaching to Shares by reference to a record
date preceding the relevant Appropriation Day or Acquisition Date and a
proportion of which do not, then the Shares to be allocated to each
Qualifying Employee shall, so far as practicable, be in the same
proportions of Shares with and without the rights.
8 RIGHTS ISSUES
8.1 Instructions to the Trustee: Whenever any rights to be allotted any shares
or securities (on payment) or rights of any description are granted in
respect of Plan Shares, each Participant shall be notified by the Trustee
of the rights relating to his Plan Shares. Each Participant may direct the
Trustee and the Trustee may then, in accordance with such directions, do
one or more of the following:
(a) subject to the provision by the Participant of any necessary funds,
take up or sell all or any of the rights or allow them to lapse;
and/or
(b) sell rights nil paid to the extent necessary to enable the Trustee to
subscribe in full for the balance of any unsold rights.
The Participant's directions may be of particular or general application
and may relate to Plan Shares acquired before and after the date of the
rights issue.
8.2 Period for giving directions: The Trustee shall act upon any such
directions received by it not less than five Dealing Days before the expiry
of the period allowed for the exercise of any such rights. If any
Participant has not by that time given directions to the Trustee with
regard to those rights and, if appropriate, provided any funds necessary
for the purpose, the Trustee shall allow the rights to lapse. Any Capital
Receipt received in consequence of the non-exercise or sale of any rights
shall be dealt with by the Trustee in accordance with Clause 11.5 of the
Deed.
20
<PAGE>
8.3 New Shares: Any shares, securities or rights taken up by the Trustee on
behalf of any Participant under Rule 8.1(b) shall, subject to Rule 13 and
provided that the right to so take up shares, securities or other rights
was conferred in respect of all the ordinary shares in The Coca-Cola
Company, form part of the Participant's Plan Shares and shall be deemed to
have been Appropriated to or acquired on behalf of the Participant in the
same way and at the same time as the Participant's Plan Shares in respect
of which they are allotted.
8.4 Trustee's indemnity: Nothing in this Rule shall require the Trustee to act
in any manner which would involve it in any liability unless indemnified to
its satisfaction by the Participant against such liability.
9 CAPITALISATION ISSUES
Where any Shares are allotted by way of capitalisation to the Trustee in
respect of any Participant's Plan Shares, those Shares shall form part of
that Participant's Plan Shares and be deemed to have been Appropriated to,
or acquired on behalf of, the Participant in the same way and at the same
time as the Participant's Plan Shares in respect of which they are
allotted.
10 COMPANY RECONSTRUCTION
10.1 Company Reconstruction: This Rule applies if there occurs in relation to
any of a Participant's Plan Shares (the "Original Shares") a transaction:
(a) which results in a new holding (the "New Holding") being equated with
the Original Shares for the purposes of capital gains tax; or
(b) which would have that result but for the fact that what would be the
new holding consists of or includes a Qualifying Corporate Bond.
Such a transaction is referred to in the Plan as a Company
Reconstruction.
10.2 Excluded Shares: If, as part of a Company Reconstruction, any:
(a) redeemable shares or securities issued as mentioned in section
209(2)(a) of the Taxes Act;
(b) share capital issued in circumstances such that section 210(l) of the
Taxes Act applies; or
(c) share capital to which section 249 of the Taxes Act applies,
is/are issued and a charge to income tax arises in respect of the issue,
those shares shall not form part of the New Holding for the purposes of
this Rule.
21
<PAGE>
10.3 New Shares: In this Rule "New Shares" means, subject to Rule 10.2, shares
comprised in the New Holding which were issued in respect of, or otherwise
represent, the Original Shares.
10.4 Effect on Original Shares: For the purposes of the Plan:
(a) a Company Reconstruction shall be treated as not involving a disposal
of the Original Shares;
(b) the date on which any New Shares are to be treated as having been
Appropriated to or acquired on behalf of a Participant shall be that
on which his Original Shares were so Appropriated or acquired;
(c) the conditions in Part VIII (types of share that may be used) of
Schedule 8 shall be treated as fulfilled with respect to any New
Shares if they were (or were treated as) fulfilled with respect to
the Original Shares; and
(d) the provisions of Part X (income tax) and Part XI (capital gains tax)
of Schedule 8 shall apply in relation to the New Shares as they would
have applied to the Original Shares.
10.5 References to Plan Shares: Following a Company Reconstruction, references
to a Participant's Plan Shares shall be construed, subject to the above
provisions, as being or, as the case may be, as including, references to
any New Shares.
11 EVENTS DURING HOLDING PERIOD
11.1 Takeover: A Participant may during the Holding Period of any of his Plan
Shares direct the Trustee to:
(a) accept an offer for those Plan Shares (the "Original Shares") if such
acceptance will result in a new holding being equated with the
Original Shares for the purposes of capital gains tax;
(b) accept an offer of a Qualifying Corporate Bond (whether alone or with
other assets or cash or both) for those Plan Shares if the offer
forms part of a general offer as mentioned in Rule 11.1(c) below;
(c) accept an offer of cash, with or without other assets, for those Plan
Shares if the offer forms part of a general offer which is made to
holders of shares of the same class as his shares in The Coca-Cola
Company and which is made in the first instance on a condition such
that if it is satisfied the person making the offer will have control
of The Coca-Cola Company, within the meaning of section 416 of the
Taxes Act; or
22
<PAGE>
(d) agree to a transaction affecting those Plan Shares or those of them
which are of a particular class, if the transaction would be entered
into pursuant to a compromise, arrangement or scheme applicable to or
affecting:
(i) all the ordinary share capital of The Coca-Cola Company or, as
the case may be, all the shares of the class in question; or
(ii) all the shares, or all the shares of the class in question, which
are held by a class of shareholders identified otherwise than by
reference to their employment or their participation in an
Employee Share Ownership Plan.
11.2 Compulsory acquisition: In the event of any Plan Shares being compulsorily
acquired under sections 428 to 430F of the Companies Act 1985, the
Participants concerned shall be entitled to receive notification of this
from the Trustee as soon as practicable after the acquisition, and the
provisions of Rules 13 and 14 shall apply with the necessary changes so far
as relevant.
12 FRACTIONAL ENTITLEMENTS
12.1 Proportionate allocation: Where the Trustee receives additional rights or
securities in respect of Plan Shares under a Company Reconstruction, a
takeover or compulsory acquisition described in Rule 11, a capitalisation
or rights issue or similar offer or invitation, the Trustee shall allocate
those rights or securities amongst the Participants concerned on a
proportionate basis. If that allocation gives rise to a fraction of a
security or of a transferable unit of a security (in this Rule "unit"), the
Trustee shall round the allocation down to the next whole unit and
aggregate the fractions not allocated. The Trustee shall use its best
endeavours to sell any rights or units which are not allocated and
distribute the net proceeds of sale (after deducting from them any expenses
of sale and any taxation which may be payable in respect of them)
proportionately among the Participants whose allocations were rounded down,
but so that any sum of less than 3 otherwise distributable to a particular
Participant may be retained by the Trustee and used for the purposes of
the Plan.
12.2 Allocation by reference to time of Appropriation or acquisition: In any
circumstances in which the Trustee receives New Shares which form part of a
Participant's Plan Shares, the Trustee shall allocate the New Shares to the
Participant by reference to the relative times of Appropriation or
acquisition of his Plan Shares to which they relate. If that allocation
gives rise to a fraction of a New Share, the Trustee shall round the
allocation up or down to the next whole unit as it, in its discretion,
thinks fit.
23
<PAGE>
13 TRANSFER OF PLAN SHARES
Subject to Clause 11.3 of the Deed, the Trustee shall, as soon as
practicable after it is required to do so under the Plan, transfer the
legal title to any Plan Shares it holds on behalf of that Participant into
the name of the relevant Participant (or his nominee).
14 STAMP DUTY
Any stamp duty or other expenses involved in any transfer of Shares by the
Trustee shall be payable:
(a) in the case of a transfer into the name of a Participant, by the
Trustee (and reimbursed by the relevant Participating Company); and
(b) in any other case, by the transferee.
15 NOTICES
15.1 Directions to the Trustee: Any direction given to the Trustee by or on
behalf of a Participant or any person in whom the beneficial interest in
his Plan Shares is for the time being vested under the Plan must be given
in writing and, unless given electronically, signed by the relevant person.
15.2 Notices: Any notice which the Trustee gives to any Eligible Employee,
Qualifying Employee or Participant shall be in writing (including by email)
and sufficiently given if delivered to him personally, by email or sent
first class through the post pre-paid, in either case addressed to the
Eligible Employee, Qualifying Employee or Participant at the address (or
email address) last known to the Trustee (including any address supplied by
the relevant Participating Company). If the notice is sent by post, it
shall be deemed to have been duly given on the day following the date of
posting and in the case of a notice sent by email, it shall be deemed to
have been duly given when sent provided the Trustee is not thereafter
notified that the email is undeliverable.
16 DISPUTES
The decision of the Company on any dispute or question affecting any
Eligible Employee, Qualifying Employee or Participant under the Plan shall
be final and conclusive.
24
<PAGE>
17 TERMS OF EMPLOYMENT
The rights and obligations of an individual under the terms and conditions
of his office or employment shall not be affected by his participation in
the Plan or any right he may have to participate in the Plan. An individual
who participates in the Plan waives all and any rights to compensation or
damages in consequence of the termination of his office or employment with
any company for any reason whatsoever - whether lawful or unlawful -
insofar as those rights arise, or may arise, from his ceasing to have
rights under or to be entitled to the Shares under the Plan as a result of
such termination or from the loss or diminution in value of such rights or
entitlements. If necessary, the individual's terms of employment shall be
varied accordingly.
25
<PAGE>
PART THREE
FREE SHARES
1 INVITATION TO PARTICIPATE
If the Company decides that an Appropriation of Free Shares shall be made,
it shall invite all Eligible Employees who are not at that time a party to
a Participation Contract, to participate by issuing to them a Participation
Contract. To consent to the Appropriation of Free Shares, an Eligible
Employee must return the Participation Contract duly completed by the date
specified in it. If the Company does not receive a Participation Contract
from an Eligible Employee by the specified date, that Eligible Employee
shall be deemed to have declined to participate in the Plan at that time.
The Company shall specify the Holding Period for the Free Shares to be
Appropriated on an Appropriation Date. The Holding Period for any Free
Shares already Appropriated under the Plan cannot be changed.
2 MAXIMUM VALUE OF FREE SHARES APPROPRIATED
The maximum aggregate Initial Market Value of the Free Shares Appropriated
to a Qualifying Employee in an Appropriation Year shall not exceed the
maximum amount permitted by paragraph 24 of Schedule 8 from time to time.
3 PERFORMANCE MEASURES AND TARGETS
3.1 Appropriation may be subject to performance measures: An Appropriation of
Free Shares may be made subject to performance measures and targets as
provided for under this Rule 3.
3.2 Requirements as to performance measures: If any Appropriation of Free
Shares under the Plan is to be made subject to performance measures they
must be:
(a) provided for all persons who are Qualifying Employees in respect of
that Appropriation;
(b) based on business results or other objective criteria;
(c) fair and objective measures of the performance of the Performance
Units to which they apply;
(d) set for Performance Units where no employee is a member of more than
one Performance Unit; and
(e) be either Restricted Performance Measures or Unrestricted Performance
Measures.
26
<PAGE>
3.3 Restricted Performance Measures: If the Company decides to Appropriate Free
Shares by reference to Restricted Performance Measures, at least 20 per
cent. of the Free Shares to be Appropriated must be Appropriated without
reference to performance measures and shall be Appropriated on the same
terms as required by Rule 1 of Part Two of these Rules. The remaining Free
Shares shall be Appropriated subject to performance measures but so that,
in respect of such Appropriation, the highest Appropriation made to a
Qualifying Employee by reference to performance measures shall be no more
than four times the highest Appropriation to a Qualifying Employee without
reference to performance measures. The Free Shares awarded by reference to
performance measures need not be Appropriated on the same terms as required
by Rule 1 of Part Two of these Rules.
3.4 Unrestricted Performance Measures: If the Company decides to Appropriate
Free Shares by reference to Unrestricted Performance Measures some or all
of the Free Shares shall be Appropriated by reference to performance
measures but so that:
(a) Appropriations of Free Shares to Qualifying Employees who are members
of the same Performance Unit shall be made on the same terms as
required by Rule 1 of Part Two of these Rules; and
(b) Free Shares Appropriated for each Performance Unit shall be treated
as separate Appropriations.
3.5 Company's obligation to notify: If an Appropriation of Free Shares under
the Plan is to be made subject to performance measures and targets the
Company must, as soon as reasonably practicable, notify each Eligible
Employee:
(a) of the performance measures and targets which will be used to
determine the number or value, as appropriate, of Free Shares
Appropriated to him; and
(b) in general terms of the performance measures which will be used to
determine the number or value, as appropriate, of Free Shares to be
Appropriated to each Qualifying Employee participating in that
Appropriation.
3.6 Confidential information: In fulfilling its obligations under Rule 3.5(b)
above, the Company shall not be obliged to disclose any information which
it reasonably considers would prejudice commercial confidentiality.
27
<PAGE>
4 BASIS OF APPROPRIATION
4.1 Free Shares - no performance measures: Free Shares to be Appropriated to
Qualifying Employees without performance measures shall be Appropriated on
a basis determined by the Company but so that such basis complies with Rule
1 of Part Two of these Rules.
4.2 Free Shares - performance measures: The Company shall determine in respect
of any Appropriation of Free Shares to be made subject to performance
measures (a) the Performance Units for that Appropriation, (b) the
performance measures and targets, and (c) whether the performance measures
are to be Restricted Performance Measures or Unrestricted Performance
Measures.
28
<PAGE>
PART FOUR
PARTNERSHIP SHARES AND MATCHING SHARES
1 INVITATIONS
1.1 Invitations to Eligible Employees: If the Company decides to give Eligible
Employees the opportunity to acquire Partnership Shares, each Eligible
Employee will be sent a Partnership Share Agreement under which:
(a) the Eligible Employee would authorise the relevant Participating
Company to deduct part of his Salary for the purchase of Partnership
Shares; and
(b) the Company would agree to arrange for Partnership Shares to be
acquired on behalf of the Eligible Employee in accordance with the
Plan.
To take the opportunity to acquire Partnership Shares, an Eligible Employee
must return the Partnership Share Agreement duly completed by the date
specified in it. If the Company does not receive a Partnership Share
Agreement from an Eligible Employee by the specified date, that Eligible
Employee shall be deemed to have declined to acquire Partnership Shares at
that time.
1.2 Maximum deductions from Salary: The Partnership Share Agreement must
stipulate the maximum amount of Partnership Share Money (or percentage of
Salary) that may be deducted from an Eligible Employee's Salary and the
intervals at which such deductions are to be made, but so that the maximum
amount does not exceed the amount permitted from time to time by paragraph
36 of Schedule 8 and does not, in any event, exceed 10 per cent. of the
Eligible Employee's Salary.
1.3 Percentage of Salary: For the purposes of Rule 1.2 above, "10 per cent. of
the Eligible Employee's Salary" shall mean:
(a) if the Partnership Share Agreement does not provide for an
Accumulation Period, 10 per cent. of the Salary payment from which
the deduction is made; and
(b) if the Partnership Share Agreement provides for an Accumulation
Period, 10 per cent. of the Salary payments over the Accumulation
Period.
1.4 Minimum deductions from Salary: The Partnership Share Agreement in respect
of any invitation may also stipulate that the minimum monthly amount
(irrespective of the interval for deductions) to be deducted from a
Qualifying Employee's Salary in pursuance of that Agreement must not be
less than a specified amount which must not be greater than [British
Pounds] 10.
29
<PAGE>
1.5 Prescribed notice: The Partnership Share Agreement must contain a notice in
a prescribed form in compliance with paragraph 38 of Schedule 8 (notice of
possible effect of deductions on benefit entitlement).
2 PARTNERSHIP SHARE MONEY
Any Partnership Share Money shall be paid to the Trustee as soon as
practicable following its deduction from a Qualifying Employee's Salary and
shall be held by the Trustee on his behalf pending its application in
accordance with Rule 3.1 or 4.3 of this Part Four, as appropriate, in an
account (interest bearing or otherwise) with:
(a) an institution authorised under the Banking Act 1987;
(b) a building society; or
(c) a relevant European institution.
The Company shall determine and inform the Trustee of whether the account
will be interest bearing.
If the Partnership Share Money held on behalf of a Qualifying Employee is
held in an interest bearing account, the Trustee shall account for the
interest to the Qualifying Employee.
3 NO ACCUMULATION PERIOD
3.1 Acquisition of Shares: Any Partnership Share Money deducted from a
Qualifying Employee's Salary under a Partnership Share Agreement with no
Accumulation Period will be applied by the Trustee in acquiring Partnership
Shares on a date (the "Acquisition Date") set by the Trustee which is
within 30 days after the deduction is made. The number of Shares acquired
on behalf of a Qualifying Employee shall be determined by reference to the
Market Value of the Shares on the Acquisition Date.
3.2 Surplus Partnership Share Money: Any surplus Partnership Share Money
remaining after the acquisition of Partnership Shares by the Trustee may,
with the agreement of the Qualifying Employee (which may be provided for in
the Partnership Share Agreement), be carried forward and added to the next
deduction of Salary. In any other case, it must be paid over to the
Qualifying Employee (subject to deduction of income tax under PAYE and
NICs, as appropriate) as soon as practicable.
30
<PAGE>
4 ACCUMULATION PERIOD
4.1 Accumulation Period: If the Company decides to offer an Accumulation Period
in respect of an invitation to acquire Partnership Shares, the Partnership
Share Agreement must specify:
(a) the length of the Accumulation Period (which cannot exceed 12 months
or, if different, any period specified from time to time in paragraph
41(1) of Schedule 8);
(b) when the Accumulation Period starts (which may not be later than the
date on which the first deduction of Salary is made under that
Agreement); and
(c) when the Accumulation Period ends and whether the Accumulation Period
will come to an end before then on the occurrence of specified
event(s).
4.2 Transaction resulting in a new holding: If, during an Accumulation Period,
a transaction occurs in relation to any Shares (the "original holding") to
be acquired under a Partnership Share Agreement which results in a new
holding of shares (the "new holding") being equated with the original
holding for the purposes of capital gains tax and the Qualifying Employee
so consents, the Partnership Share Agreement shall have effect after the
time of that transaction as if it were an agreement for the purchase of
shares comprised in the new holding.
4.3 Acquisition of Shares: Subject to Rule 4.5, the Partnership Share Money
deducted in respect of a Participant during an Accumulation Period must be
applied by the Trustee in acquiring Partnership Shares on behalf of that
Participant on a date (the "Acquisition Date") set by the Trustee which is
within 30 days after the end of that Accumulation Period. The number of
Shares acquired on behalf of a Qualifying Employee will be determined by
reference to the lower of:
(a) the Market Value of the Shares at the beginning of the Accumulation
Period; and
(b) the Market Value of the Shares on their Acquisition Date.
4.4 Surplus Partnership Share Money: Any surplus Partnership Share Money
remaining after the acquisition of Partnership Shares by the Trustee may,
with the agreement of the Qualifying Employee (which may be provided for in
the Partnership Share Agreement), be carried forward to the next
Accumulation Period. In any other case, it must be paid over to the
Qualifying Employee (subject to deduction of income tax under PAYE and
NICs, as appropriate) as soon as practicable.
4.5 Repayment of Partnership Share Money: In any case where Partnership Share
Money has been deducted in an Accumulation Period and the Qualifying
Employee ceases to be in Employment with a Participating Company during
that Accumulation Period the Partnership Share Money deducted in that
Accumulation Period must be paid over to the Qualifying Employee (subject
to
31
<PAGE>
deduction of income tax under PAYE and NICs as appropriate) as soon as
practicable. The Partnership Share Agreement may provide that when the
Accumulation Period comes to an end on the occurrence of an event specified
in the Agreement the Partnership Share Money deducted in that Accumulation
Period must be paid over to the Qualifying Employee (subject to deduction
of income tax under PAYE and NICs, as appropriate) as soon as practicable.
5 STOPPING AND RESTARTING DEDUCTIONS
5.1 Stopping deductions: A Qualifying Employee may at any time after entering
into a Partnership Share Agreement give notice in writing to the relevant
Participating Company to stop deductions from his Salary under that
Agreement.
5.2 Restarting deductions: A Qualifying Employee who has stopped deductions
from his Salary in pursuance of a Partnership Share Agreement may
subsequently give notice in writing to the relevant Participating Company
to restart deductions from his Salary under that Agreement. However:
(a) any deductions that have been missed may not be made up; and
(b) where the deductions are made during an Accumulation Period, the
Partnership Share Agreement may prevent a Qualifying Employee from
restarting deductions more than once in that Accumulation Period.
5.3 Termination of Partnership Share Agreement: A Qualifying Employee may
terminate his Partnership Share Agreement at any time by giving notice in
writing to the relevant Participating Company. Where a Qualifying Employee
terminates his Partnership Share Agreement, no further deductions shall be
made from his Salary and any Partnership Share Money held on his behalf
shall be paid over to him (subject to deduction of income tax under PAYE
and NICs, as appropriate) as soon as practicable.
5.4 Effect of notice under Rules 5.1, 5.2 and 5.3: Unless a later date is
specified in any notice given under Rule 5.1 or 5.3 above, the relevant
Participating Company must give effect to such a notice within 30 days of
receiving it. Unless a later date is specified in a notice given under Rule
5.2 above, the relevant Participating Company must restart deductions under
the Partnership Share Agreement no later than the date of the first
deduction due under the Partnership Share Agreement more than 30 days after
receipt of the notice.
6 WITHDRAWAL OF PARTNERSHIP SHARES
A Participant may withdraw his Partnership Shares from the Plan at any
time.
32
<PAGE>
7 NUMBER OF PARTNERSHIP SHARES THAT CAN BE ACQUIRED
7.1 Limit specified at time of invitation: The Company may specify at the time
of making an invitation under Rule 1 the maximum number of Partnership
Shares that can be acquired on behalf of Eligible Employees in respect of
that invitation. The Partnership Share Agreement shall contain an
undertaking by the Company to notify each Qualifying Employee of any
restriction on the number of Shares to be acquired:
(a) if there is no Accumulation Period, before the deduction of any
Partnership Share Money under the Partnership Share Agreement; or
(b) if there is an Accumulation Period, before the beginning of the
Accumulation Period under that Partnership Share Agreement.
7.2 Scaling down: If the Company receives applications for Partnership Shares
in excess of the maximum number of Partnership Shares specified in respect
of that invitation under Rule 7.1, then the following steps shall be taken
in sequence until the excess number is eliminated:
(a) the excess of the monthly deduction chosen by each Qualifying
Employee over the amount stipulated under Rule 1.4 shall be reduced
pro rata;
(b) all monthly deductions shall be reduced to the amount stipulated
under Rule 1.4; and
(c) Partnership Share Agreements shall be selected by lot, each based on
a monthly deduction of the amount stipulated under Rule 1.4.
7.3 Modification/withdrawal and notification: If Rule 7.2 applies, each
Partnership Share Agreement shall be deemed to have been modified or
withdrawn in accordance with Rule 7.2 and each Qualifying Employee shall be
notified accordingly.
8 MATCHING SHARES
8.1 Matching Shares - acquisition and forfeiture: If the Company decides, in
conjunction with an invitation to acquire Partnership Shares, to offer
Matching Shares, each Eligible Employee shall be sent a Partnership Share
Agreement. The Partnership Share Agreement will state the extent (if any)
to which the Matching Shares appropriated to a Participant in respect of
the associated Partnership Shares will be forfeited if, other than in the
event of Permitted Cessation, the Participant:
(a) ceases to be in Employment;
(b) withdraws the Matching Shares from the Plan; or
33
<PAGE>
(c) withdraws the associated Partnership Shares from the Plan,
in each case within such period after the relevant Shares were Appropriated
to him (not to exceed three years) as is stated in the Partnership Share
Agreement.
8.2 Terms of Matching Shares: Matching Shares shall:
(a) be Shares of the same class and carry the same rights as the
Partnership Shares to which they relate;
(b) be Appropriated on the same day as the Partnership Shares to which
they relate are acquired on behalf of the Qualifying Employee; and
(c) in respect of any Appropriation, be Appropriated to all Qualifying
Employees on exactly the same basis.
8.3 Ratio of Matching Shares to Partnership Shares: The Partnership Share
Agreement under which Matching Shares are offered must specify the ratio of
Matching Shares to Partnership Shares for the time being offered by the
Company and the circumstances and manner in which the ratio may be changed
by the Company. The ratio must not exceed 2:1 (or such other ratio
permitted by paragraph 51(2) of Schedule 8 from time to time) and must be
applied by reference to the number of Shares. The Qualifying Employee must
be informed by the Company if the ratio offered by the Company changes
before Partnership Shares are acquired on his behalf under the relevant
Partnership Share Agreement.
34
<PAGE>
PART FIVE
REINVESTMENT OF CASH DIVIDENDS
1 PERMITTED REINVESTMENT
1.1 Mandatory or voluntary reinvestment: At the time of operating Part Three or
Part Four of these Rules, the Company may decide that, subject to Rule 2
below, all cash dividends paid in respect of any Plan Shares Appropriated
or acquired on behalf of a Participant as a consequence of that operation
must either:
(a) be applied in acquiring Dividend Shares on behalf of the Participant;
or
(b) be applied in acquiring Dividend Shares on behalf only of
Participants who elect to reinvest those dividends.
If the Company decides to impose or allow such a facility under the Plan,
the provisions of this Part Five of these Rules shall apply.
1.2 Dividend Shares/Holding Period: Dividend Shares shall be shares of the same
class and carry the same rights as the Shares to which the cash dividend
relates and may not be subject to forfeiture.
During the Holding Period, the Participant shall be bound by the terms of
his Participation Contract with the Company to permit any Dividend Shares
acquired on his behalf to remain in the hands of the Trustee and (subject
to Clause 8 of the Deed) not to assign, charge or otherwise dispose of his
beneficial interest in such Dividend Shares.
2 LIMIT ON DIVIDEND REINVESTED
2.1 Maximum amount reinvested: The amount applied under the Plan and any other
Employee Share Ownership Plan in acquiring Dividend Shares for a
Participant shall not exceed [British Pounds] 1,500 in any Year of
Assessment (or such other amount as may be permitted from time to time
under paragraph 54(1) of Schedule 8).
2.2 Surplus cash dividend: If the amount of cash dividend received by the
Trustee in respect of a Participant's Plan Shares exceeds the limit
specified in Rule 2.1 above for that Participant in any Year of Assessment,
the excess of the cash dividend must be paid over to the Participant as
soon as practicable.
35
<PAGE>
3 ACQUISITION OF DIVIDEND SHARES
3.1 Time of acquisition: Subject to Rule 3.3, the Trustee must apply a cash
dividend paid in respect of Plan Shares that is to be reinvested in
acquiring Dividend Shares on a date (the "Acquisition Date") set by the
Trustee which is a date within 30 days after the date on which the cash
dividend is received by it. The Trustee must, in exercising its powers in
relation to the acquisition of Dividend Shares, treat Participants fairly
and equally and may, for these purposes, use any unappropriated Shares that
it holds.
3.2 Number of Dividend Shares acquired: The number of Dividend Shares acquired
on behalf of a Participant shall be determined in accordance with the
Market Value of those Shares on their Acquisition Date.
3.3 Carry forward of uninvested amounts: Any cash dividend available for
reinvestment that is not reinvested either because the amount of the
dividend is insufficient to acquire a Dividend Share or because there is an
amount remaining after acquiring one or more Dividend Shares on behalf of a
Participant may be retained by the Trustee and carried forward and added to
the amount of the next cash dividend to be reinvested for that Participant.
However, any such amount retained by the Trustee must be paid over to the
Participant as soon as practicable:
(a) if or to the extent that it is not reinvested within the period of
three years beginning with the date on which the dividend was paid;
(b) if the Participant ceases to be in Employment prior to its
reinvestment; or
(c) if a Plan Termination Notice is issued prior to its reinvestment.
For the purposes of this Rule an amount of cash dividend carried forward
from an earlier cash dividend shall be treated as reinvested before an
amount derived from a later cash dividend.
36
<PAGE>
THE COMMON SEAL OF )
THE COCA-COLA EXPORT CORPORATION )
was hereunto affixed in the presence of:)
/s/ Susan E. Shaw
-----------------------------
Secretary
/s/ Fiona K. Payne
-----------------------------
Authorized Signatory
THE COMMON SEAL OF )
COCA-COLA HOLDINGS (UK) LIMITED )
was hereunto affixed in the presence of:)
/s/ David Cullinan
-----------------------------
Director
/s/ Jennifer Owen
-----------------------------
Secretary
THE COMMON SEAL OF )
BEVERAGE SERVICES LIMITED )
was hereunto affixed in the presence of:)
/s/ David Cullinan
-----------------------------
Director
/s/ Jennifer Owen
-----------------------------
Secretary
THE COMMON SEAL OF )
CAPITA IRG TRUSTEES LIMITED )
was hereunto affixed in the presence of:)
/s/ David Kilmartin
-----------------------------
Authorised signatory
/s/ John Butler
-----------------------------
Authorised signatory
37
12
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>12
<FILENAME>x10-32.txt
<DESCRIPTION>EMPLOYEE'S SHARE SAVINGS AND SHARE OWNERSHIP PLAN OF CC LTD., EFFECTIVE 1/1/90
<TEXT>
EXHIBIT 10.32
Schedule "A"
Coca-Cola Ltd.
- ------------------------------ ------------------
SAVINGS PLAN EMPLOYEES
SAVINGS AND
SHARE
OWNERSHIP
Effective January 1, 1990 PLAN
<PAGE>
ARTICLE
1 Purpose 1
2 Definitions 2
3 Eligibility and Membership 7
4 Contributions 9
5 Investment of Funds 12
6 Allocation and Vesting of Funds 15
7 Valuation of the Trust Fund 18
8 Designation of Beneficiary 20
9 Benefits for Participants 21
<PAGE>
ARTICLE
(continued)
10 Method of Distribution of Benefits 24
11 Agreements 26
12 Amendments to the Plan 28
13 Termination of the Plan 29
14 General Provisions 30
15 Administration 33
16 Construction 35
<PAGE>
1 PURPOSE
1.01 The Plan is intended to qualify as an employees profit sharing plan
under the Income Tax Act (Canada) as amended from time to time.
1.
<PAGE>
2 DEFINITIONS
2.01 "Affiliate" shall mean The Coca-Cola Company, incorporated in the State
of Delaware, U.S.A., and Coca-Cola Beverages or any corporation not less
than 50% of whose voting stock (not including shares having voting power
only upon the happening of an event of default) is owned directly or
indirectly by The Coca-Cola Company or by Coca-Cola Beverages. Any such
corporation shall be an Affiliate only during such time as the foregoing
voting stock ownership requirements are met.
2.02 "Board of Directors" shall mean the Board of Directors of Coca-Cola Ltd.
Or any similar Board of any successor corporation.
2.03 "Company" shall mean Coca-Cola Ltd., its successors or assigns.
2.04 "Continuous Service" shall mean uninterrupted employment with a
Participating Employer and shall include periods of annual vacation,
absence on account of sickness or accident and other approved leave of
absence granted by a Participating Employer.
2.05 "Effective Date" shall mean January 1, 1990.
2.06 "Employee" shall mean a person who is resident in Canada and classified
as a permanent full-time employee by his
2.
<PAGE>
Participating Employer, excluding elected officers of The Coca-Cola
Company.
2.07 "Fund" shall mean the separate funds in which Participant contributions
to the Plan are invested in accordance with Article 5.
2.08 "Insurance Company" shall mean a company licensed or otherwise
authorized under the laws of Canada or a province to carry on an
annuities business in Canada.
2.09 "Market Value" shall mean, except where provided otherwise under the
Plan, the cost of a Share on a Valuation Date equivalent to the average
cost of all Shares purchased and paid for by the Trustee in the calendar
month in which such Valuation Date occurs. In the event no Shares are
purchased in the calendar month, the Market value shall be equivalent to
the average of high and low prices reported on the composite
transactions listing of the New York Stock Exchange on such Valuation
Date, or if the said Shares did not trade on such Valuation Date, the
last day prior to such Valuation Date such Shares traded on said
exchange.
2.10 "Participant" shall mean any person participating in the Plan as
provided in Article 3.
2.11 "Participant's Contribution Account" shall mean the account into which
shall be credited the contributions made by a Participant pursuant to
Section 4.01.
2.12 "Participant's Company Account" shall mean the account into which shall
be credited the contributions made by a
3.
<PAGE>
Participating Employer on behalf of the Participant pursuant to Section
4.04.
2.13 "Participating Employer" means the Company or a Subsidiary of the
Company, organized under the laws of Canada or a Province thereof, which
adopts the Plan with the approval of the Board.
2.14 "Plan" shall mean the Coca-Cola Ltd. Employees Savings and Share
Ownership Plan as described herein or as hereafter amended.
2.15 "Plan Year" shall mean the period beginning with the Effective Date and
ending December 31, 1990, and each 12-month period ending December 31st
thereafter.
2.16 "Retirement" shall mean early, normal or postponed retirement under any
retirement plan of a Participating Employer covering Employees, provided
such retirement results in the Participant's separation from the
employment of a Participating Employer. In any event, Retirement for
purposes of the Plan shall not occur later than the end of the calendar
year in which the Participant attains age 71.
2.17 "Retirement Savings Plan" shall mean the Coca-Cola Ltd. Employees'
Retirement Savings Plan.
2.18 "Salary" shall mean the total remuneration earned by a Participant and
received through the payroll of the Participating Employer but excluding
any payment made in lieu of any vacation with pay entitlement not taken
by the Participant prior to the date of his Termination of
4.
<PAGE>
Employment or Retirement, any contest prizes and any payment by the
Participating Employer to the Participant in respect of long term
disability insurance premiums paid by the Participant.
2.19 "Shares" shall mean the common shares of The Coca-Cola Company and
includes fractions thereof.
2.20 "Subsidiary" means any corporation not less than 50% of whose voting
stock (not including shares having voting power only upon the happening
of an event of default) is at the time owned, directly or indirectly, by
the Company. Any such corporation shall be a Subsidiary only during such
time as the foregoing voting stock ownership requirements are met.
2.21 "Termination of Employment" shall mean separation from the employment of
a Participating Employer.
2.22 "Trust Agreement" shall mean the agreement entered into between the
Company and the Trustee which governs the management and administration
of the assets of the Plan, as such agreement may be originally adopted,
or as it may be amended from time to time.
2.23 "Trust Fund" shall mean the cash and other properties arising from
contributions made by Participants and the Participating Employers in
accordance with the provisions of the Plan and held and administered by
the Trustee pursuant to the Trust Agreement to carry out the provisions
of the Plan.
5.
<PAGE>
2.24 "Trustee" shall mean a corporation licensed or otherwise authorized
under the laws of Canada or a province to carry on in Canada a business
as a trust company and by whom the assets of the Trust Fund are held as
provided for in Article 11.
2.25 "Valuation Date" shall mean the last business day of each month or such
other more frequent date as may be determined by the Trustee.
In the Plan, unless the context otherwise requires, words in the singular shall
be construed as including words in the plural and words in the plural as
including words in the singular and words importing the masculine gender shall
be construed as including the feminine and vice versa. The headings in the Plan
are for convenience of reference only and are not to be construed as part of the
Plan.
6.
<PAGE>
3 ELIGIBILITY AND MEMBERSHIP
3.01 Eligibility
(a) An Employee who is employed by a Participating Employer on December
31, 1989 shall be eligible to become a Participant on the Effective
Date.
(b) An Employee who is hired by a Participating Employer on and after
the Effective Date shall be eligible to become a Participant on the
first day of the month coincident with or next following the
completion of one year of Continuous Service.
(c) An Employee who transfers from an Affiliate or a Subsidiary which is
not a Participating Employer shall have his period of continuous
employment immediately prior to the date of transfer included for
the purpose of determining eligibility under this Section 3.01.
3.02 Participation
An eligible Employee shall become a Participant by filing with his
Participating Employer an application and enrollment form authorizing
the Participating Employer to make regular payroll deductions for such
contributions to the Plan and/or the Retirement Savings Plan as the
Employee may designate pursuant to Section 4.01 hereof and/or Section
3.01 of the Retirement Savings Plan and expressing the agreement of the
Employee to the terms and conditions of the Plan and/or the Retirement
Savings Plan. Participation shall become effective on the first day of
the month following the month in which such completed application and
7.
<PAGE>
enrollment form is received by the Participating Employer from an
eligible Employee. Notwithstanding the foregoing, any eligible Employee
who files the appropriate enrollment form with his Participating
Employer any time prior to the Effective Date shall become a Participant
on the Effective Date.
3.03 Re-Employment of Former Employees or Former Participants
Any person re-employed by a Participating Employer as an Employee, who
was previously a Participant or who was previously eligible to become a
Participant, shall become a Participant on the first day of the month
following the month in which his application and enrollment form is
received by the Participating Employer upon his subsequent
re-employment.
3.04 Inactive Participants
A Participant who remains in the employ of a Participating Employer but
who ceases to be an Employee as herein defined shall continue to remain
a Participant of the Plan but shall not be eligible to make
contributions hereto and no Company contributions shall be made on his
behalf while he is an inactive Participant.
3.05 Participation While Transferred to an Affiliate
A Participant who is transferred to an Affiliate for a temporary period
not exceeding three years shall remain a Participant of the Plan and
shall be eligible to continue to make contributions to the Plan during
such period of temporary transfer. The Company shall continue to make
contributions pursuant to Section 4.04 on behalf of the Participant
during such period.
8.
<PAGE>
4 CONTRIBUTIONS
4.01 Participant Contributions
(a) Basic Contributions
Each Participant may contribute to the Plan at the Participant's
option either 1%, 2%, 3% or 4% of his Salary less any amounts
contributed under Section 3.01 of the Retirement Savings Plan, as
designated by written notice. Such contributions, including any
amounts contributed under Section 3.01 of the Retirement Savings
Plan, up to a maximum of 4% of the Participant's Salary shall be
referred to as Basic Contributions.
(b) Supplemental Contributions
In addition, each Participant who is making the maximum Basic
Contributions in subsection (a) above may contribute to the Plan
each month supplemental contributions as elected by the Participant
in multiples of 1% of his Salary less any amounts contributed under
Section 3.02 of the Retirement Savings Plan.
4.02 Change in Participant Contributions
Subject to the provisions of Section 4.01, a Participant may change the
percentage of his contribution as of the first day of any month by
filing the applicable form with his Participating Employer's payroll
department no later than one month immediately prior to the effective
date of such change.
9.
<PAGE>
4.03 Suspension of Participant Contributions
(a) A Participant may suspend contributions as of the first day of any
month by filing the applicable form with his Participating
Employer's payroll department not later than one month prior to the
effective date of such suspension of contributions.
(b) A Participant who has suspended contributions may apply to his
Participating Employer's payroll department to have them resumed in
accordance with Section 4.01 on the first day of any month by filing
the applicable form with his Participating Employer's payroll
department not later than one month prior to the effective date of
resumption of contributions and that such resumption shall not occur
within 3 months of the date the contributions were suspended.
4.04 Participating Employer Contributions
(a) Each Participating Employer shall for each fiscal year contribute on
behalf of its Employees who are Participants in the Plan out of its
profits, either current or accumulated, or out of its profits and
the profits of a corporation with which it does not deal at arm's
length an amount equal to the aggregate of (i) 50% of each
Participant's Basic Contribution to the Plan pursuant to Section
4.01 and (ii) 50% of each Participant's Basic Contribution to the
Retirement Savings Plan.
(b) Notwithstanding the foregoing, in each fiscal year in which a
Participating Employer or a corporation with which it does not deal
at arm's length has established profits in accordance with generally
accepted accounting principles, each Participating Employer shall
make a contribution out of such profits to the Plan which shall not
be less than $100 per Participant.
10.
<PAGE>
4.05 Payment of Contributions
The amount of each Participant's monthly contributions under this Plan
shall be paid by his Participating Employer to the Trustee and shall be
deposited by the Trustee in the Participant's Contribution Account of
each Participant by the last day of the month following the month for
which such contributions are made. Participating Employer contributions
under the Plan in respect of such Participating Employer's fiscal year
shall be deposited with the Trustee within 120 days from the end of the
fiscal year of the Participating Employer.
4.06. Limitation on Contribution Changes and Suspensions
A Participant may not elect to change the percentage of his
contributions in accordance with Section 4.02 of this Plan or Section
3.05 of the Retirement Savings Plan nor suspend his contributions in
accordance with Section 4.03 of this Plan or Section 3.07 of the
Retirement Savings Plan more than twice in any one calendar year.
11.
<PAGE>
5 INVESTMENT OF FUNDS
5.01 Investment in Shares
Contributions made by Participating Employers to the Plan and
contributions made by Participants, which are directed by Participants
to be invested in Shares, shall be invested and reinvested by the
Trustee in Shares once every calendar month. The Trustee shall purchase
Shares on the open market in respect of Participants. For purposes of
the Plan, the cost of the Shares shall be the Market Value.
5.02 Participant Contributions
A Participant may direct the Trustee to invest all or part of his
Participant's Contribution Account either in accordance with Section
5.01 or in the following funds selected by the Company:
(a) a Pooled Equity Fund which shall be invested primarily in Canadian
stocks;
(b) a Guaranteed Fund which shall be a fund invested by the Trustee in
consultation with the Company which shall guarantee payment in full
of such amounts deposited therein plus interest at a fixed minimum
rate for a period.
5.03 Investment Directions
A Participant shall direct the proportion of his contributions under
Section 4.01 which shall be invested in accordance
12.
<PAGE>
with the foregoing Section 5.02 in increments of 1% as elected by the
Participant.
5.04 Notice of Direction
The Participant's investment direction shall be made in writing and
filed with his Participating Employer. Such direction shall be a
continuing direction, but may be changed effective as of the first day
of the month by submitting a revised investment direction in respect of
the Participant's future contributions at least one month prior to the
effective date thereof. Changes in the investment direction under
Section 5.04 of this Plan or Section 4.03 of the Retirement Savings Plan
may not be made more than twice in any one calendar year.
5.05 Investment Option Transfers
A Participant may elect twice every calendar year, by filing an Employee
Savings Plan Change Form with his Participating Employer at least 30
days prior to the effective Valuation Date, to transfer all or part of
his Participant's Contribution Account from Shares to one or both of the
Funds, from one or both of the Funds to Shares or from one Fund to the
other Fund. The transfer from the Funds to Shares or between Funds will
be determined on the basis of the value of the interest of the
Participant's Contribution Account in the exporting Fund or Funds, as
applicable, as determined by the Trustee at the Valuation Date on which
the transfer occurs. The transfer from Shares to one or both of the
Funds will be determined on the basis of the Market Value of the
interest of the Participant's Contribution Account in Shares on the
Valuation Date on which the transfer occurs. The amount of a
Participant's Contribution Account that may be transferred shall be
specified by a Participant in increments of 1% and shall be subject to a
13.
<PAGE>
minimum amount equal to 1% of his Participant's Contribution Account
balance determined as of the effective Valuation Date or such other
minimum amount as may, from time to time, be prescribed by the Company
for purposes of the Plan. Transfers between Shares and the Funds and
between Funds under Section 5.05 of this Plan or under Section 4.04 of
the Retirement Savings Plan may not be made more than twice in any one
calendar year.
14.
<PAGE>
6 ALLOCATION AND VESTING OF FUNDS
6.01 Establishment of Participant Accounts
The Trustee shall establish and maintain for each Participant:
(a) a Participant's Company Account showing the aggregate of all amounts
each of which is an amount contributed in respect of a Participant
by a Participating Employer to the Plan and any amounts allocated to
such Participant under this Article 6 plus income and capital gains
and losses thereon; and
(b) a Participant's Contribution Account showing the aggregate of all
amounts each of which is an amount contributed to the Plan by the
Participant and allocated gains to him, plus income and capital and
losses thereon.
6.02 Allocation and Vesting of Contributions
(a) The contributions of each Participant will be allocated by the end
of the month in which such contributions are received by the Trustee
to the Participant's Contribution Account. The Participant shall be
100% vested in such contributions immediately upon allocation of
such contributions to the Participant's Contribution Account.
(b) Participating Employer contributions on behalf of each Participant
will be allocated to the Participant's Company Account by the end of
the Plan Year in which such contributions are received by the
Trustee. Participating Employer contributions on behalf of each
Participant for a Plan Year shall be 100% vested in such
15.
<PAGE>
Participant immediately upon allocation of such contribution to the
Participant's Company Account.
6.03 Allocation of Income, Capital Gains and Losses
As of each Valuation Date the investment earnings attributable to each
investment option maintained pursuant to Section 5.02 including
interest, dividends, realized and unrealized capital gains (or losses),
shall be credited by the Trustee to the Participant's Contribution
Account and Participant's Company Account of each Participant whose said
accounts are invested in such investment option in the proportion that
the value of the Participant's Contribution and Company Accounts of each
Participant attributable to that investment option bears to the total
value of all Participant's Contribution and Company Accounts
attributable to that investment option as of the previous Valuation
Date.
6.04 Shares Held in Participant's Contribution and Company Accounts
In the event that all or a portion of a Participant's Contribution
Account and a Participant's Company Account established in respect of a
Participant is invested in Shares, the record of the respective
Participant's Contribution and Participant's Company Accounts shall
indicate the total number of Shares purchased and held on the
Participant's behalf. Any income received in respect of Shares held in
the Participant's Contribution Account and Participant's Company Account
shall be allocated by the Trustee to the respective accounts at the time
such income is received by the Trustee. All Shares purchased by the
Trustee pursuant to Section 5.01 shall be held by the Trustee in trust
on behalf of the applicable Participant, and the certificates in respect
thereof shall be registered in the name of the Trustee or its
16.
<PAGE>
nominee. All rights with respect to Shares held by the Trustee on behalf
of a Participant in his Participant's Contribution Account and in his
Participant's Company Account, including rights of conversion and
voting, shall be exercisable by the Participant. Any Shares held by the
Trustee as to which it receives no instructions from a Participant to
whose individual Participant's Contribution Account or Participant's
Company Account such Shares are credited shall be voted by the Trustee
in the same proportions as the voting of the Shares for which the
Trustee receives instructions from Participants.
17.
<PAGE>
7 VALUATION OF THE TRUST FUND
7.01 Valuation
The Trustee shall determine the value of the Trust Fund as of each
Valuation Date including the Valuation Date that coincides with the last
day of each Plan Year and shall advise the Company in writing of the
value so determined. The value of the Trust Fund at each such date shall
be an amount equal to the market value of all assets and income of the
Trust Fund, less any proper charges against the Trust Fund, all as of
such Valuation Date. The Trustee's determination of the value of the
Trust Fund shall be binding upon the Participating Employers,
Participants, their beneficiaries and all other persons involved.
Notwithstanding the above, the Company or its agent shall have the right
to review and audit the records of the Trustee pertaining to the
administration and operation of the Plan and Trust Fund, from time to
time, and the Trustee shall correct or recalculate any value which is
shown to have been calculated in error.
7.02 Expenses
Unless paid by the Company, in its sole discretion, all expenses of the
Plan shall be allocated to each Participant's Contribution Account and
Participant's Company Account pro rata in accordance with the respective
account balances, or in such other manner as determined by the Company
in consultation with the Trustee. Unless paid by the Company, any
expenses associated with the purchase or sale of Shares shall be
allocated to the applicable Participant's Company Accounts and
Participant's Contribution Accounts pro rata
18.
<PAGE>
in accordance with the number of Shares purchased or sold on behalf of
each Participant.
19.
<PAGE>
8 DESIGNATION OF BENEFICIARY
8.01 Subject to the laws of any province of Canada, a Participant may file
with his Participating Employer, on a form approved by it, a designation
of a beneficiary or beneficiaries to receive any payments to be paid
from the Plan on the death of the Participant, and the Participant may
from time to time change or revoke any such designation. The most recent
designation under the Plan so received shall be controlling, if valid
and effective under applicable laws unless subsequently revoked or
changed in accordance with applicable laws provided, however, that no
designation or change or revocation thereof shall be effective unless
received by the Participating Employer or any authorized agent thereof,
prior to the Participant's death, and in no event shall any designation
be effective as of a date prior to its receipt.
20.
<PAGE>
9 BENEFITS FOR PARTICIPANTS
9.01 Valuation Date
All benefits for Participants shall be computed as of the Valuation Date
immediately following or coincident with the termination of his
membership in the Plan.
9.02 Retirement or Termination of Employment
Subject to Section 10.02, any Participant who terminates service with a
Participating Employer due to Retirement or earlier Termination of
Employment will receive the value of his Participant's Company Account
and Participant's Contribution Account, including any univested cash
balance, determined as of the Valuation Date on which such Participant's
interest in the Plan is liquidated in accordance with applicable
valuation procedures then in effect for each investment option in which
the Participant's respective Participant's Company Account and
Participant's Contribution Account are invested less any expenses
associated with such distribution unless paid by the Company.
9.03 Death
Upon the death of a Participant at any time while in the employment of a
Participating Employer, there shall be paid to his designated
beneficiary or, if no designation of beneficiary is then in effect, to
the estate of the deceased Participant, the value of his Participant's
Company Account and Participant's Contribution Account, including any
uninvested cash balance, determined as of the Valuation
21.
<PAGE>
Date on which such Participant's interest in the Plan is liquidated in
accordance with applicable valuation procedures then in effect for each
investment option in which the Participant's respective Participant's
Company Account and Participant's Contribution Account are invested less
any expenses associated with such distribution unless paid by the
Company.
9.04 Disability
Any Participant whose service with a Participating Employer is
terminated due to disability or sickness as determined consistent with a
Participating Employer's policy will receive the value of his
Participant's Company Account and Participant's Contribution Account,
including any uninvested cash balance, determined as of the Valuation
Date on which such Participant's interest in the Plan is liquidated in
accordance with applicable valuation procedures then in effect for each
investment option in which the Participant's respective Participant's
Company Account and Participant's Contribution Account are invested less
any expenses associated with such distribution unless paid by the
Company.
9.05 Withdrawal from the Participant's Contribution Account
A Participant may, as of any Valuation Date, by giving notice to a
Participating Employer's payroll department not later than one month
prior to the effective date of the withdrawal, apply in writing to
liquidate all or a portion of his Participant's Contribution Account and
receive the value of all or a portion of his Participant's Contribution
Account, including any uninvested cash balance, in accordance with
applicable valuation procedures then in effect for each investment
option in which his Participant's Contribution Account is invested less
any expenses associated with such
22.
<PAGE>
distribution unless paid by the Company. Any such withdrawal shall be
subject to a minimum of $500 or the value of the Participant's
Contribution Account, if lesser, provided such Participant has not made
more than one withdrawal under this Section 9.05 or under Section 8.01
of the Retirement Savings Plan during the current calendar year.
9.06 Suspension Following Withdrawal
Following a withdrawal made under Section 9.05 of this Plan and/or under
Section 8.01 of the Retirement Savings Plan in respect of the
Participant's Basic Contributions, the Participant shall be deemed to
have made an effective election under Section 4.03 to suspend
contributions for a period of 3 months and shall be permitted to resume
such contributions upon proper notice as set out in subsection 4.03(b)
on the first day of any month following the appropriate period of
suspension.
23.
<PAGE>
10 METHOD OF DISTRIBUTION OF BENEFITS
10.01 Date of Payment
The benefits provided in Sections 9.02, 9.03, 9.04 and 9.05 shall be
paid to the Participant or, in the event of his death, to a beneficiary
designated by him or to his estate not later than 90 days after the
earliest of:
(a) the death of the Participant;
(b) the day on which the Participant ceases to be employed by a
Participating Employer;
(c) the end of the calendar year in which the Participant becomes 71
years of age;
(d) the termination or winding-up of the Plan; and
(e) the date on which the Participant elects to make a withdrawal under
Section 9.05.
10.02 Form of Distribution
Distribution of benefits under Article 9 shall be payable in cash in one
lump sum. All cash payments shall be made by cheque. If all or a portion
of his Participant's Company Account and Participant's Contribution
Account are invested in Shares, the Participant may elect to have the
Trustee distribute in specie to him the whole Shares held in those
accounts.
In such event,
24.
<PAGE>
(a) the Participant shall receive certificates in respect of those
Shares registered in his name or the name of his nominee; and
(b) the Participant shall receive, in lieu of any fractions of Shares
held in the Participant's respective accounts, the Market Value of
such fractional Shares determined in accordance with Article 9; and
(c) the cash value of his Participant's Contribution Account and
Participant's Company Account determined and otherwise payable under
Article 9, shall be reduced by the Market Value of the Shares as
determined under Article 9 and distributed in specie under this
Section 10.02.
25.
<PAGE>
11 AGREEMENTS
11.01 Agreement Between the Trustee and the Company
The Company shall enter into a Trust Agreement with the Trustee under
which the Trustee shall receive the contributions of the Participants
and the Participating Employers to be applied under the Trust Agreement
and held, invested, reinvested and distributed by the Trustee in
accordance with the terms of such Trust Agreement, this Plan, the Income
Tax Act (Canada), applicable provincial legislation and the requirements
of Revenue Canada, Taxation. The company may instruct the Trustee
pursuant to provisions in the Trust Agreement to enter into a contract
with an Insurance Company to invest part of the Trust Fund on such terms
as the Company deems appropriate, and the Company retains the right to
act on behalf of all persons having an interest in the Trust Fund to
require the Trustee to amend such contracts or to enter into further
such contracts.
11.02 Custody of Assets
The assets of the Trust Fund under the Trust Agreement shall be held in
the possession of the Trustee. Securities in the Trust Fund may be
registered in the name of the Trustee or its nominees or held in such
form that they may pass by delivery.
26.
11.03 Trustee to Invest Assets
Subject to and without limiting the generality of Article 5 and Section
11.01, the investment of the assets under the Trust Agreement shall be
made by the Trustee.
27.
<PAGE>
12 AMENDMENTS TO THE PLAN
12.01 Right to Amend
Subject to the provisions hereinafter set forth, the Company reserves
the right, at any time or from time to time, by action of its Board of
Directors to modify or amend in whole or in part any or all of the
provisions of the Plan, provided that no such modification or amendment
may be made which will:
(a) deprive any Participant of any benefit theretofore vested in him
under the Plan; or
(b) make it possible for any part of the Trust Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of the
Participants or their respective beneficiaries prior to the
satisfaction of all liabilities with respect to the Participants in
the Plan and their beneficiaries.
12.02 Retroactive Amendment
Notwithstanding the provisions of Section 12.01 or any other provisions
of the Plan, any modification or amendment of the Plan may be made,
retroactively if necessary, which the Company deems necessary or
appropriate to conform the Plan to or to satisfy the conditions of any
law, governmental regulation or ruling, and to permit the Plan and Trust
Agreement to meet the requirements of the income Tax Act (Canada),
applicable provincial legislation and the requirements of Revenue
Canada, Taxation.
28.
<PAGE>
13 TERMINATION OF THE PLAN
13.01 Right to Terminate the Plan
The Company reserves the right at any time by action of its Board of
Directors to terminate the Plan in whole or in part.
13.02 Procedure on Termination
In the event of discontinuance of the Plan whether in whole or in part,
all of the assets of the Trust Fund must and shall be applied for the
benefit of Participants and/or their beneficiaries, as specified under
the Plan, effected in accordance with the value of their respective
Participant's Company Accounts and Participant's Contribution Accounts
as determined through a special valuation of the Trust Fund as of that
date in such manner as the Trustee may determine.
29.
<PAGE>
14 GENERAL PROVISIONS
14.01 Rights of Participants
Neither the establishment of the Plan, nor any modification thereof, nor
the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant or former
Participant or Employee of a Participating Employer or any person
whomsoever, any legal or equitable right against a Participating
Employer, the Company or the Trustee, unless such right shall be
specifically provided for in the Trust Agreement or the Plan or
conferred by affirmative action of the Company in accordance with the
terms and provisions of the Plan. The rights of the Participants and
their beneficiaries under the Plan are rights only to share in the
assets of the Trust Fund in accordance with the provisions of the Plan
as from time to time in effect, and a Participating Employer or the
Company shall not have any liability under or arising out of the Plan,
to any Employee, Participant, beneficiary or other person.
14.02 Employment
Nothing herein contained shall be deemed to give any Employee the right
to be retained in the service of a Participating Employer or to
interfere with the rights of a Participating Employer to discharge such
Employee at any time, all of which rights shall remain as if the Plan
had not been established.
30.
<PAGE>
14.03 Qualification Plan
The establishment and continuation of this Plan is subject to such
qualification with the relevant tax authorities as is necessary to
establish that the Plan constitutes an employees profit sharing plan
within the meaning of the Income Tax Act (Canada) and in particular as
is necessary to establish that the Participating Employers are entitled
to deduct the amounts of their payments to the Plan as expenses before
taxes under the provisions of the Income Tax Act (Canada) or any other
applicable legislation, as is now in effect or as may be amended or
adopted.
14.04 Assignment
Except as otherwise required by law or as provided under the Plan, any
benefits payable under the terms of this Plan are for the Participant's
own use and benefit and are not capable of assignment or alienation and
do not confer upon any Participant, beneficiary, personal representative
or dependent, or any other person, any rights or interest in the
benefits, if any, capable of being assigned or otherwise alienated, nor
shall any such benefit be capable of surrender.
14.05 No Loans
No payment out of the Plan shall be made to a Participant or other
beneficiary by way of loan.
31.
<PAGE>
14.06 Payment of Benefits in the Case of Incapacity
If it shall be determined that any person entitled to benefits under the
Plan is legally, physically or mentally incapable of receiving and
receipting for such benefits, such payments or any part thereof may be
made by the Trustee to such other person, persons or institutions as a
Participating Employer believes are then maintaining or have custody of
such recipient. Such payment shall constitute a full and complete
discharge of the payment of the benefit under the Plan.
14.07 Written Explanation
There shall be prepared and made available to each Participant a written
explanation of the terms and conditions of the Plan and amendments
thereto applicable to him, together with an explanation of the rights
and duties of the Participant with reference to the benefits available
to him under the terms of the Plan. In the event of any conflict between
any statement made in such explanation and the provisions of the Plan or
Trust Agreement, the provisions of the Plan or Trust Agreement shall
govern.
32.
<PAGE>
15 ADMINISTRATION
15.01 Company to Administer
The Company will operate and administer the Plan and will determine all
questions arising under and in connection therewith, and may from time
to time prescribe, amend and rescind regulations for such operation and
administration but may employ an agent or agents for this purpose.
15.02 Annual Statement
The Company shall deliver or cause to be delivered to each Participant
at least annually a statement setting forth the value of the
Participant's Contribution Account and the Participant's Company Account
under the Plan. At the time of any payment to a Participant, beneficiary
or estate the Company shall deliver or cause to be delivered to the
person receiving such payment a statement setting forth in reasonable
detail the computation of the amount of the payment. Each such statement
shall be deemed correct unless the Participant, the beneficiary or
estate gives notice to the contrary to the Company within 6 months after
its delivery.
15.03 Delivery to Participants
Each notice, report, remittance, statement and other communication
directed to a Participant shall be in writing and may be delivered in
person or by first class mail, in which latter event it shall be deemed
to have been delivered and received by the Participant when so deposited
in the mail with postage prepaid addressed to the Participant at
33.
<PAGE>
The Participant's last address of record with his Participating
Employer.
15.04 Delivery to Participating Employers
All applications, notices, designations and other communications from
Participants shall be in writing and where applicable on prescribed
forms, and shall be mailed by first class mail or delivered to his
Participating Employer by the Participant and shall be deemed to have
been given when received by his Participating Employer.
34.
<PAGE>
16 CONSTRUCTION
16.01 The Plan shall be construed and interpreted in accordance with the laws
of the Province of Ontario and the laws of Canada applicable therein.
35.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>13
<FILENAME>x10-33.txt
<DESCRIPTION>SHARE PURCHASE PLAN - DENMARK, EFFECTIVE AS OF 1991
<TEXT>
EXHIBIT 10.33
SHARE PURCHASE PLAN - DENMARK
The Share Purchase Plan - Denmark is not set forth in any formal document. The
following is a written description of the plan.
Overview of the Plan.
- --------------------
The plan enables employees to buy shares in The Coca-Cola Company, through
regular saving. For every share the employee buy (maximum 3% of base salary),
Coca-Cola Nordic Services (CCNS)/Coca-Cola Denmark (CCDK) will match.
Furthermore, according to Danish Tax Law, the received shares are free of income
tax and social security. The shares may not be withdrawn for 5 years.
Details of the Plan
- -------------------
The employee is eligible to participate in the plan if the employee is a
permanent employee and has completed 6 months of continuous service with The
Coca-Cola Company. The employee cannot participate if he/she is no longer
employed by CCNS/CCDK even if such employee is receiving severance payments.
The employee can decide to save 1%, 2% or 3% (maximum) of gross base salary.
This amount is deducted monthly from the net pay (after tax), and is shown as a
separate deduction on the payslip. CCNS/CCDK matches the employee contribution.
CCNS/CCDK holds the total sum of money and each quarter instructs Danske Invest
(Danske Bank) to buy on the New York Stock Exchange the maximum number of whole
shares possible using the money which CCNS/CCDK holds. Any balance remaining
(which is insufficient to buy a whole share that quarter) is rolled forward and
added in the next quarter to buy further shares.
CCNS/CCDK instructs Danske Bank to open a depository account (for the shares)
for each employee and an account (for any remaining balance) for each employee.
The employee receives dividends on all shares.
Danske Bank's fees for buying the shares are paid by CCNS/CCDK. The employee
pays the fees as and when the employee sells the shares.
Taxation
- --------
The plan is approved by the Tax Authorities and therefore the contribution from
the CCNS/CCDK is free of tax. The employee needs to hold the shares for 5 years,
and then the shares can either be sold or transferred to another account. Danske
Bank automatically notifies the employee when the shares are released.
Termination
- -----------
The participation in the plan ends when the employee ends his or her employment
with CCNS/CCDK. The shares in the depository account are owned by the employee.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>14
<FILENAME>x12-1.txt
<DESCRIPTION>COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TEXT>
EXHIBIT 12.1
The Coca-Cola Company and Subsidiaries
Computation of Ratios of Earnings to Fixed Charges
(IN MILLIONS EXCEPT RATIOS)
<TABLE>
Year Ended December 31,
------------------------------------------------
2002 2001 2000 1999 1998
------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations
before income taxes and changes
in accounting principles $ 5,499 $ 5,670 $ 3,399 $ 3,819 $ 5,198
Fixed charges 236 327 489 386 320
Less: Capitalized interest, net (1) (8) (11) (18) (17)
Equity income, net of dividends (256) (54) 380 292 31
------------------------------------------------
Adjusted earnings $ 5,478 $ 5,935 $ 4,257 $ 4,479 $ 5,532
================================================
Fixed charges:
Gross interest incurred $ 200 $ 297 $ 458 $ 355 $ 294
Interest portion of rent expense 36 30 31 31 26
------------------------------------------------
Total fixed charges $ 236 $ 327 $ 489 $ 386 $ 320
================================================
Ratios of earnings to fixed charges 23.2 18.1 8.7 11.6 17.3
================================================
<FN>
The Company is contingently liable for guarantees of indebtedness owed by third
parties in the amount of $494 million. Fixed charges for these contingent
liabilities have not been included in the computation of the above ratios as the
amounts are immaterial and, in the opinion of Management, it is not probable
that the Company will be required to satisfy the guarantees.
</FN>
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>15
<FILENAME>x13-1.txt
<DESCRIPTION>PORTIONS OF 2002 ANNUAL REPORT TO SHARE OWNERS
<TEXT>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
OUR BUSINESS
The Coca-Cola Company is the largest manufacturer, distributor and marketer of
nonalcoholic beverage concentrates and syrups in the world. When used in this
report, the terms "Company," "we," "us" or "our" mean The Coca-Cola Company and
its divisions and subsidiaries. Our Company manufactures beverage concentrates
and syrups as well as some finished beverages, which we sell to bottling and
canning operations, distributors, fountain wholesalers and some fountain
retailers. We are also the largest producer of ready-to-drink juices and juice
drinks in the world. In addition, we have ownership interests in numerous
bottling and canning operations.
Our Company exists to benefit and refresh everyone who is touched by our
business. We believe our success ultimately depends on our ability to build and
nurture relationships with constituents essential to our business: consumers,
customers, bottlers, business partners, government agencies, communities,
employees and share owners. In order to serve and create value for these
constituents, our Company executes a business strategy to drive profitable
volume growth focused on the following strategic priorities:
(1) accelerate carbonated soft-drink growth, led by Coca-Cola;
(2) selectively broaden our family of beverage brands to drive profitable
growth;
(3) grow system profitability and capability together with our bottling
partners;
(4) serve customers with creativity and consistency to generate growth across
all channels;
(5) direct investments to highest-potential areas across markets;
(6) drive efficiency and cost effectiveness everywhere.
Significant Growth Opportunities
- --------------------------------
The following table illustrates how we view various markets for our
Company's products and reflects information as of and for the year ended
December 31, 2002, as applicable:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Developing Markets Developed Markets Leading-Edge Markets
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sample countries (1) China, India, Russia, Korea, Brazil, Japan, Great Britain, Mexico, Spain,
Indonesia, Nigeria Italy, Turkey South Africa U.S., Australia
Annual per capita consumption
of our Company's products Less than 50 servings 50-149 servings 150-249 servings 250+ servings
Population 4.3 billion 800 million 600 million 500 million
Percentage of the world's
population 69% 13% 10% 8%
Percentage of Company's unit
case volume 11% 17% 25% 47%
(1) Includes selected countries within each of the identified markets and
is not intended to include all countries within the given markets.
</TABLE>
Leading-edge markets generated 47 percent of the Company's unit case volume
in 2002. Annual per capita consumption of our Company's beverages in these
leading-edge markets is 250 or more servings. However, even in our highest per
capita consumption market, Mexico, less than one-third of the population drinks
brand Coca-Cola on a daily basis. Emerging markets, where annual per capita
consumption is less than 50 servings, contributed only 11 percent of the
Company's unit case volume in 2002. More than 4 billion people live in these
emerging markets.
In emerging and developing markets, our focus is on availability of
affordable products for consumers and building brand preference. In developed
and leading-edge markets, our approach to consumers is more sophisticated. Along
with ensuring our products are affordable and building brand preference, we
must activate points of purchase so that consumers have greater connections with
our brands.
2002 ANNUAL REPORT - 45
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
In all markets, we need a consistent approach to always:
- - provide quality products and superior customer service;
- - strive to manage our brand/price/package/channel strategy to meet consumer
needs in a way that maximizes value for our system and leverages the unique
and unparalleled strengths of our bottlers and our system infrastructure.
We believe significant growth potential exists for our family of brands.
Profitable Growth
- -----------------
To add value to our Company, our growth must be profitable. Carbonated soft
drinks have attractive historical margins, and we expect these attractive
margins to continue in the future. As a result, we intend to accelerate
carbonated soft-drink growth, led by Coca-Cola. Additionally, our Company is
continuing to profitably broaden our family of brands. In particular, we are
expanding and growing our noncarbonated offerings to provide more alternatives
to consumers. We plan to introduce and/or expand both carbonated soft drinks and
noncarbonated beverages as profitable introduction and/or expansion is warranted
in identified markets. Increasing consumption of our entire family of beverages
on more occasions is a key success factor in all markets.
System Economics
- ----------------
For our Company to be successful, the bottler system must be successful. Bottler
returns have been improving, and equity income from our bottlers is also
steadily improving. The following are examples of joint initiatives to drive
profitability:
- - We established a process for top management level meetings with our
bottling partners.
- - We established a bottler Information Technology Advisory Board whose
mission is to prioritize, recommend and enable execution of the highest
impact system-wide information technology initiatives.
- - In North America, we supported our bottlers as they formed Coca-Cola
Bottlers' Sales & Services Company to generate significant system-wide
savings in procurement, route to market optimization and account
management.
Corporate Governance
- --------------------
Corporate governance received significant attention in 2002. While strategic
priorities and execution are critical to our business, we have always been and
will continue to be committed to the highest standards of corporate governance.
The following two examples demonstrate our commitment.
First, in July 2002, our Company announced that we would expense the cost
of all forms of stock-based compensation, including stock options granted by the
Company. We concluded that stock options are a form of employee compensation
expense, and it would therefore be appropriate to reflect these costs in our
financial results. Voluntarily changing to this preferable method of accounting
for employee stock options and other forms of stock-based compensation ensures
that our earnings more clearly reflect economic reality when all compensation
costs are recorded in the financial statements. Refer to the heading
"Application of Critical Accounting Policies-Stock-Based Compensation" and to
Notes 1 and 13. (Throughout this report, references to "Notes" refer to the
Notes to Consolidated Financial Statements included as part of this report.)
Second, in December 2002, our Company changed our policy of providing
future earnings guidance. Our Company will no longer provide quarterly or annual
earnings per share guidance. We will continue to provide investors with
perspective on our value drivers, our strategic initiatives and those factors
critical to understanding our business and operating environment. Our Company,
with the support of the Board of Directors, concluded that establishing
short-term guidance can impede a more meaningful investor focus on the strategic
initiatives that companies are taking to build businesses and succeed over the
long run.
Our Company's Board of Directors is composed of qualified directors
providing appropriate oversight. Various committees of our Board of Directors
review and approve Company transactions, as appropriate. Our Audit Committee
members are all independent directors. Furthermore, we defined new guiding
principles for how our suppliers conduct business and reaffirmed a code of
ethics for our own employees and directors.
46 - THE COCA-COLA COMPANY
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
INVESTMENTS
With a business system that operates locally in more than 200 countries and
generates superior cash flows, we consider our Company to be uniquely positioned
to capitalize on profitable investment opportunities. Our criteria for
investment are simple: New investments should directly enhance our existing
operations and generally be expected to provide cash returns that exceed our
long-term, after-tax, weighted-average cost of capital (calculated on a book
basis), currently estimated at between 8 and 10 percent.
Because the beverage business has consistently generated high returns, we
consider it to be a particularly attractive investment for us. Our expenditures
in developed and leading-edge markets focus primarily on marketing our Company's
brands. In emerging and developing markets, our objective is to increase the
penetration of our products. In these markets, we allocate most of our
investments to enhancing our brands and infrastructure such as production
facilities, distribution networks, sales equipment and technology. We make these
investments by forming strategic business alliances with local bottlers and by
matching local expertise with our experience, resources and strategy.
We pursue our strategic investment priorities in a way that capitalizes on
the combination of our most fundamental and enduring attributes-our brands, our
people and our bottling partners. The more than 6 billion people in the world
represent current and potential consumers of our Company's products. As we
increase and meet consumer demand for our family of brands, we produce growth
throughout the Coca-Cola system.
Our Brands
- ----------
Our offerings in the nonalcoholic beverages business include some of the world's
most valuable brands -- more than 300 in all. These include carbonated soft
drinks and noncarbonated beverages such as juices and juice drinks, sports
drinks, water products, teas and coffees. Ultimately, consumer demand determines
the Company's optimal brand offerings. To meet our long-term growth objectives,
we make significant expenditures to support our brands. This process involves
investments to support existing brands, to develop new global or local brands,
and to acquire global or local brands when appropriate.
In 2002, our Company introduced a variety of new brands and products
including Vanilla Coke and diet Vanilla Coke. Our existing brands such as diet
Coke with lemon, Fanta, Qoo and POWERade were introduced into new markets. Our
Company acquired brands during 2002 such as Risco water in Mexico, Dorna water
and Valser water in Europe, and Rio Beverages in New Zealand. Along with Danone
Waters of North America, Inc., we established a joint venture, of which our
Company owns 51 percent, with the rights to the Dannon, Sparkletts and Alhambra
brands in the United States. Our Company acquired long-term global license
rights for Seagram's nonalcoholic carbonated soft drinks and certain assets
related to the Seagram's mixer business. We entered into a master license
agreement for the Evian water brand in the United States and Canada. Also during
2002, our Company continued our collaboration with The Walt Disney Company to
market noncarbonated children's beverages.
We make significant investments in marketing to support our brands.
Marketing investments enhance consumer awareness and increase consumer
preference for our brands. This produces long-term growth in profitable volume,
per capita consumption and our share of worldwide nonalcoholic beverage sales.
Our People
- ----------
Our people -- the 56,000 employees of our Company who work with our bottling
partners and other key constituents -- are essential to our success. To meet our
long-term growth objectives, we recruit and actively cultivate a diverse
workforce and establish a culture that fosters learning, innovation and value
creation on a daily basis. This means maintaining and refining a corporate
culture that encourages our people to develop to their fullest potential, which
enhances enjoyment and satisfaction in the Company's work environment. Our
Company values the uniqueness of all employees and the contributions they make.
We put the responsibility and accountability for ensuring local relevance and
maximizing business performance in the hands of those closest to the market.
Additionally, we have made innovation an explicit priority for all our
associates. Our associates work together with bottling partners to understand
markets and what consumers want. Then we meet that need by delivering products
through our unparalleled system.
The increase in the number of employees from 38,000 as of December 31, 2001
to 56,000 as of December 31, 2002 is primarily due to 2002 acquisitions. For a
description of these acquisitions, refer to Note 18.
2002 ANNUAL REPORT - 47
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
Our Bottling Partners
- ---------------------
The financial health and success of our bottling partners are critical
components of the Company's ability to deliver leading brands. Our people work
with our bottling partners to continuously look for ways to improve system
economics. Our Company has business relationships with three types of bottlers:
(1) independently owned bottlers, in which we have no ownership interest;
(2) bottlers in which we have invested and have a noncontrolling ownership
interest;
(3) bottlers in which we have invested and have a controlling ownership
interest.
During 2002, independently owned bottling operations produced and
distributed approximately 23 percent of our worldwide unit case volume. Bottlers
in which we own a noncontrolling ownership interest produced and distributed
approximately 59 percent of our worldwide unit case volume in 2002. Controlled
bottling operations accounted for 8 percent of 2002 volume. Fountain operations
and The Minute Maid Company produced and distributed approximately 10 percent of
2002 volume.
The independently owned bottling operations and the bottlers in which we
have a noncontrolling interest generally have significant funding from majority
owners and other financing sources that are otherwise unrelated to our Company.
Bottlers in which we have a noncontrolling ownership interest are accounted
for under the cost or equity method, as appropriate. Equity income or loss,
included in our consolidated net income, represents our share of the net
earnings or losses of our equity method investees. In 2002, our Company's share
of income from equity method investments totaled $384 million.
In July 2001, our Company and San Miguel Corporation (San Miguel) acquired
Coca-Cola Bottlers Philippines, Inc. (CCBPI) from Coca-Cola Amatil Limited
(Coca-Cola Amatil). Upon completion of this transaction, our Company owned 35
percent of the common shares and 100 percent of the Preferred B shares, and San
Miguel owned 65 percent of the common shares of CCBPI. Additionally, as a result
of this transaction, our Company's interest in Coca-Cola Amatil was reduced from
approximately 38 percent to approximately 35 percent.
During 2000, the Company entered into a joint venture in China with China
National Oils and Foodstuffs Imports/Exports Corporation (COFCO), completion of
which occurred in 2001. COFCO contributed to the joint venture its minority
equity interests in 11 Chinese bottlers. Our Company contributed its equity
interests in two Chinese bottlers plus cash in exchange for a 35 percent equity
interest in the venture.
On December 31, 1999, we owned approximately 51 percent of Coca-Cola
Beverages plc (Coca-Cola Beverages). In July 2000, a merger of Coca-Cola
Beverages and Hellenic Bottling Company S.A. was completed to create Coca-Cola
Hellenic Bottling Company S.A. (CCHBC). This merger resulted in a decrease of
our Company's equity ownership interest from approximately 51 percent of
Coca-Cola Beverages to approximately 24 percent of the combined entity, CCHBC.
This change in ownership resulted in the Company recognizing a $118 million
tax-free, noncash gain in the third quarter of 2000.
The following table presents the difference between calculated fair values,
based on quoted closing prices of publicly traded shares, and our Company's
carrying values for significant publicly traded equity method investees (in
millions):
- --------------------------------------------------------------------------------
Fair Carrying
DECEMBER 31, 2002 Value Value Difference (1)
- --------------------------------------------------------------------------------
Coca-Cola Enterprises Inc. $ 3,670 $ 972 $ 2,698
Coca-Cola FEMSA, S.A. de C.V. 785 347 438
Coca-Cola Hellenic
Bottling Company S.A. 745 872 (127)
Coca-Cola Amatil Limited 711 492 219
Panamerican Beverages, Inc. 636 441 195
Grupo Continental, S.A. 264 164 100
Coca-Cola Bottling
Company Consolidated 160 63 97
Coca-Cola Embonor S.A. 63 100 (37)
Coca-Cola West Japan
Company Ltd. 59 107 (48)
Embotelladoras Polar S.A. 20 37 (17)
- --------------------------------------------------------------------------------
$ 7,113 $ 3,595 $ 3,518
================================================================================
(1) In instances where carrying value exceeds fair value, the decline in
value is considered to be temporary.
- --------------------------------------------------------------------------------
Historically, in certain situations, we have viewed it to be advantageous
for our Company to acquire a controlling interest in a bottling operation, often
on a temporary basis. Owning such a controlling interest has allowed us to
48 - THE COCA-COLA COMPANY
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
compensate for limited local resources and has enabled us to help focus the
bottler's sales and marketing programs, assist in developing its business and
information systems and establish appropriate long-term capital structures.
Effective February 2002, our Company acquired control of Coca-Cola
Erfrischungsgetraenke AG (CCEAG), the largest bottler in Germany. This
transaction was accounted for as a business combination, and the results of
CCEAG's operations have been included in the Company's financial statements
since February 2002. Prior to February 2002, CCEAG was accounted for by our
Company under the equity method of accounting. As of December 31, 2002, our
Company had an approximate 41 percent ownership interest in the outstanding
shares of CCEAG. In accordance with the terms of a Control and Profit and Loss
Transfer Agreement (CPL) with CCEAG, our Company obtained control of CCEAG for a
period of up to five years. In return for the control of CCEAG, the Company
guaranteed annual payments, in lieu of dividends by CCEAG, to all other CCEAG
share owners. Additionally, all other CCEAG share owners entered into either a
put or put/call option agreement with the Company, exercisable at the end of the
term of the CPL at agreed prices. Our Company entered into either put or
put/call agreements for shares representing an approximate 59 percent interest
in CCEAG.
In January 2002, our Company and CCBPI finalized the purchase of RFM
Corp.'s (RFM) approximate 83 percent interest in Cosmos Bottling Corporation
(CBC), a publicly traded Philippine beverage company. The original sale and
purchase agreement with RFM was entered into in November 2001. As of the date of
this sale and purchase agreement, the Company began supplying concentrate for
this operation. In March 2002, a tender offer was completed with our Company and
CCBPI acquiring all shares of the remaining minority share owners except for
shares representing a 1 percent interest in CBC. As of December 31, 2002, our
Company's direct ownership interest in CBC was approximately 61 percent, and our
indirect ownership interest in CBC was approximately 13 percent. This
transaction was accounted for as a business combination, and the results of
CBC's operations have been included in the Company's financial statements since
January 2002. CBC is an established carbonated soft-drink business in the
Philippines. Our Company's goal is to leverage our partnership with San Miguel
in the Philippines, as well as leverage our sales, marketing and system
resources, to expand CBC volume and profit over time. The Company and CCBPI have
agreed to restructure the operations of CBC, and this restructuring will result
in the Company owning all acquired trademarks and CCBPI owning all acquired
bottling assets. Upon expected completion of the restructuring in 2003, our
Company does not expect a significant gain or loss.
In February 2001, our Company reached agreement with Carlsberg A/S
(Carlsberg) for the dissolution of Coca-Cola Nordic Beverages A/S (CCNB), a
joint venture in which our Company had a 49 percent ownership interest. At that
time, CCNB had bottling operations in Sweden, Norway, Denmark, Finland and
Iceland. Under this agreement with Carlsberg, our Company acquired CCNB's Sweden
and Norway bottling operations in June 2001, increasing our Company's ownership
in those bottlers to 100 percent. Carlsberg acquired CCNB's Denmark and Finland
bottling operations, increasing Carlsberg's ownership in those bottlers to 100
percent. Pursuant to the agreement, CCNB sold its Iceland bottling operations to
a third-party group of investors in May 2001.
During the first half of 2001, in separate transactions, our Company
purchased two bottlers in Brazil: Refrescos Guararapes Ltda. and Sucovalle Sucos
e Concentrados do Vale S.A. In separate transactions during the first half of
2000, our Company purchased two other bottlers in Brazil: Companhia Mineira de
Refrescos, S.A. and Refrigerantes Minas Gerais Ltda. In October 2000, the
Company purchased a 58 percent interest in Paraguay Refrescos S.A. (Paresa), a
bottler in Paraguay. In December 2000, the Company made a tender offer for the
remaining 42 percent of the shares in Paresa. In January 2001, following the
completion of the tender offer, we owned approximately 95 percent of Paresa.
In line with our long-term bottling strategy, we consider alternatives for
reducing our ownership interests in bottlers in which we have controlling
ownership interests. One alternative is to combine our bottling interests with
the bottling interests of others to form strategic business alliances. Another
alternative is to sell our interest in a bottling operation to one of our equity
investee bottlers. In both of these situations, we continue to participate in
the bottler's results of operations through our share of the equity investee's
earnings or losses.
In the first quarter of 2002, our Company sold our Baltics bottling
operations to CCHBC. The proceeds from the sale
2002 ANNUAL REPORT - 49
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
of the Baltics bottlers were approximately equal to the carrying value of the
investment.
In November 2001, our Company sold nearly all of its ownership interests in
various Russian bottling operations to CCHBC for approximately $170 million in
cash and notes receivable, of which $146 million in notes receivable remained
outstanding as of December 31, 2001. This amount was fully collected in 2002.
These interests consisted of the Company's 40 percent ownership interest in a
joint venture with CCHBC that operated bottling territories in Siberia and parts
of western Russia, together with our Company's nearly 100 percent interests in
bottling operations with territories covering the remainder of Russia.
Refer to Notes 2 and 18 for further discussion of the above bottler
transactions.
FINANCIAL STRATEGIES
The following strategies are intended to optimize our cost of capital,
increasing our ability to maximize share-owner value.
Debt Financing
- --------------
Our Company maintains debt levels we consider prudent based on our cash flow,
interest coverage and percentage of debt to capital. We use debt financing to
lower our overall cost of capital, which increases our return on share-owners'
equity.
As of December 31, 2002, our long-term debt was rated "A+" by Standard &
Poor's and "Aa3" by Moody's, and our commercial paper program was rated "A-1"
and "P-1" by Standard & Poor's and Moody's, respectively. In assessing our
credit strength, both Standard & Poor's and Moody's consider our capital
structure and financial policies as well as aggregated balance sheet and other
financial information for the Company and certain bottlers including Coca-Cola
Enterprises Inc. (Coca-Cola Enterprises) and CCHBC. While the Company has no
legal obligation for the debt of these bottlers, the rating agencies believe the
strategic importance of the bottlers to the Company's business model provides
the Company with an incentive to keep these bottlers viable. If our credit
ratings were reduced by the rating agencies, our interest expense could
increase. Additionally, if certain bottlers' credit ratings were to decline, the
Company's share of equity income could be reduced as a result of the potential
increase in interest expense for these bottlers.
The interest coverage ratio is a key item monitored by rating agencies.
Generally, this ratio is computed as income before taxes (excluding unusual
items) plus interest expense, divided by the sum of interest expense and
capitalized interest. In accordance with this definition, our Company's interest
coverage ratio on a stand-alone basis was 29x, 20x and 12x, respectively, for
the years ended December 31, 2002, 2001 and 2000. If the unusual items were
included in the calculation, the interest coverage ratio would have been 28x,
20x and 8x, respectively, for the years ended December 31, 2002, 2001 and 2000.
The interest coverage ratio is monitored by our Company for trends and is
one measurement generally used by rating agencies in assessing debt ratings for
companies. However, as described above, the rating agencies aggregate financial
data for certain bottlers with our Company when assessing our debt rating. As
such, the key measure is the aggregate interest coverage ratio of the Company
and these bottlers. Both Standard & Poor's and Moody's employ different
aggregation methodologies and have different thresholds for the aggregate
interest coverage ratio. These thresholds are not necessarily permanent nor are
they fully disclosed to our Company.
Our global presence and strong capital position give us easy access to key
financial markets around the world, enabling us to raise funds with a low
effective cost. This posture, coupled with active management of our percentage
mix of short-term and long-term debt, results in a lower overall cost of
borrowing. Our debt management policies, in conjunction with our share
repurchase programs and investment activity, can result in current liabilities
exceeding current assets.
In managing our use of debt, we also monitor the following financial
measurements and ratios:
- --------------------------------------------------------------------------------
DECEMBER 31, 2002 2001 2000
- --------------------------------------------------------------------------------
Net debt (in billions) $ 3.2 $ 3.3 $3.9
Net debt-to-net capital 21% 23% 29%
Ratio of earnings to
fixed charges 23.2x 18.1x 8.7x
================================================================================
- --------------------------------------------------------------------------------
Our Company monitors the financial measurements and ratios discussed above
in conjunction with our percentage mix of fixed-rate and variable-rate debt and
other business and financial risks. The above financial measurements and
50 - THE COCA-COLA COMPANY
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
ratios trended positively in 2002 and 2001, reflecting improved business results
and effective capital management strategies. Additionally, the 2000 ratio of
earnings to fixed charges was negatively impacted by items discussed under the
heading "Other Operating Charges."
Share Repurchases
- ------------------
In October 1996, our Board of Directors authorized a plan to
repurchase up to 206 million shares of our Company's common stock through 2006.
In 2002 and 2001, we repurchased approximately 14 million shares at an average
price of $48.42 and 5 million shares at an average price of $48.53,
respectively, under the 1996 plan.
In 2000, we did not repurchase any shares under the 1996 plan. This was due
to our utilization of cash for an organizational realignment (the Realignment),
as discussed under the heading "Other Operating Charges," and the impact on cash
from the reduction in concentrate inventory levels by certain bottlers, as
discussed under the headings "Net Operating Revenues and Gross Profit" and
"Operating Income and Operating Margin."
Since the inception of our initial share repurchase program in 1984 through
our current program as of December 31, 2002, we have purchased more than 1
billion shares of our Company's common stock. This represents 32 percent of the
shares outstanding as of January 1, 1984 at an average price per share of
$13.13.
Our Company expects to make share repurchases of approximately $1.5 billion
in 2003. As cash flows are expected to increase in subsequent years, our
subsequent share repurchases are also expected to increase.
Dividend Policy
- ---------------
At its February 2003 meeting, our Board of Directors again increased our
quarterly dividend, raising it to $.22 per share, equivalent to a full-year
dividend of $.88 per share in 2003. This is our 41st consecutive annual
increase. Our annual common stock dividend was $.80 per share, $.72 per share
and $.68 per share in 2002, 2001 and 2000, respectively.
In 2002, our dividend payout ratio was approximately 65 percent of our net
income. To free up additional cash for reinvestment in our high-return beverage
business, our Board of Directors intends to gradually reduce our dividend payout
ratio over time.
FINANCIAL RISK MANAGEMENT
Our Company uses derivative financial instruments primarily to reduce our
exposure to adverse fluctuations in interest rates and foreign exchange rates
and, to a lesser extent, adverse fluctuations in commodity prices and other
market risks. We do not enter into derivative financial instruments for trading
purposes. As a matter of policy, all our derivative positions are used to reduce
risk by hedging an underlying economic exposure. Because of the high correlation
between the hedging instrument and the underlying exposure, fluctuations in the
value of the instruments are generally offset by reciprocal changes in the value
of the underlying exposure. Virtually all of our derivatives are
straightforward, over-the-counter instruments with liquid markets.
Foreign Currency
- ----------------
We manage most of our foreign currency exposures on a consolidated basis, which
allows us to net certain exposures and take advantage of any natural offsets.
With approximately 77 percent of 2002 Operating Income, excluding Corporate,
generated outside the United States, weakness in one particular currency is
often offset by strengths in others over time. We use derivative financial
instruments to further reduce our net exposure to currency fluctuations.
Our Company enters into forward exchange contracts and collars and
purchases currency options (principally euro and Japanese yen) to hedge certain
portions of forecasted cash flows denominated in foreign currencies.
Additionally, the Company enters into forward exchange contracts to offset the
earnings impact relating to exchange rate fluctuations on certain monetary
assets and liabilities. The Company also enters into forward exchange contracts
as hedges of net investments in international operations.
2002 ANNUAL REPORT - 51
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
Interest Rates
- --------------
Our Company monitors our percentage mix of fixed-rate and variable-rate debt, as
well as our percentage mix of term debt versus nonterm debt. This monitoring
includes a review of business and other financial risks as noted above. We also
enter into interest rate swap agreements to manage these risks.
Value at Risk
- -------------
Our Company monitors our exposure to financial market risks using several
objective measurement systems, including value-at-risk models. Our value-at-risk
calculations use a historical simulation model to estimate potential future
losses in the fair value of our derivatives and other financial instruments that
could occur as a result of adverse movements in foreign currency and interest
rates. We have not considered the potential impact of favorable movements in
foreign currency and interest rates on our calculations. We examined historical
weekly returns over the previous 10 years to calculate our value at risk. The
average value at risk represents the simple average of quarterly amounts over
the past year. As a result of our foreign currency value-at-risk calculations,
we estimate with 95 percent confidence that the fair values of our foreign
currency derivatives and other financial instruments, over a one-week period,
would decline by less than $34 million, $43 million and $37 million,
respectively, using 2002, 2001 or 2000 average fair values and by less than $31
million and $37 million, respectively, using December 31, 2002 and 2001 fair
values. According to our interest rate value-at-risk calculations, we estimate
with 95 percent confidence that any increase in our net interest expense due to
an adverse move in our 2002 average or in our December 31, 2002 interest rates
over a one-week period would not have a material impact on our financial
statements. Our December 31, 2001 and 2000 estimates also were not material to
our financial statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS
VOLUME
We measure our sales volume in two ways: (1) gallons and (2) unit cases of
finished products. "Gallons" represent our primary business and measure the
volume of concentrates, syrups, beverage bases, finished beverages and powders
(in all cases, expressed in equivalent gallons of syrup) for all beverage
products which are reportable as unit case volume. Most of our revenues are
based on this measure of primarily wholesale activity, which consists mainly of
our sales to bottlers and customers.
We also measure volume in unit cases. "Unit case" means a unit of
measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce
servings). "Unit case volume" means the number of unit cases (or unit case
equivalents) of Company trademark or licensed beverage products directly or
indirectly sold by the Coca-Cola system to customers. Volume primarily consists
of beverage products bearing Company trademarks. Also included in volume are
certain products licensed to our Company or owned by our bottling partners, for
which our Company provides marketing support and derives profit from the sales.
Such products licensed to our Company or owned by our bottling partners account
for a minimal portion of total unit case volume. Although most of our Company's
revenue is not based directly on unit case volume, we believe unit case volume
is one of the measures of the underlying strength of the Coca-Cola system
because it measures trends at the consumer level.
Our worldwide unit case volume increased 5 percent in 2002, on top of a 4
percent increase in 2001. The increase reflects acquisitions (refer to Note 18)
and consistent performance across certain key operations despite difficult
global economic conditions. The Coca-Cola system sold 18.7 billion unit cases in
2002.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Management has discussed with our Audit Committee the development, selection and
disclosure of our critical accounting policies and estimates and the application
of these policies and estimates.
52 - THE COCA-COLA COMPANY
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS
The Coca-Cola Company and Subsidiaries
Consolidation and Basis of Presentation
- ---------------------------------------
Our financial statements include the accounts of The Coca-Cola Company and all
subsidiaries. We consolidate all entities that our Company controls, and we do
not have any unconsolidated "special purpose" entities. Under current accounting
guidance, our Company is not permitted to consolidate companies we do not
control. For investments in companies in which we have the ability to exercise
significant influence over operating and financial policies, such entities are
accounted for by the equity method. Our judgments regarding the level of
influence of each equity method investment include considering key factors such
as our ownership interest, representation on the board of directors,
participation in policy making decisions and material intercompany transactions.
Consolidated net income includes our Company's share of the net earnings of
these companies. The difference between consolidation and the equity method
impacts certain financial ratios because of the presentation of the detailed
line items reported in the financial statements. However, our consolidated net
income for the period and our share-owners' equity at the end of the period are
the same whether the investment in the company is accounted for under the equity
method or the company is consolidated. We record our investments in other
companies that we do not control and for which we do not have the ability to
exercise significant influence under the cost method. In accordance with the
cost method, the assets are recorded at cost or fair value, as appropriate. Our
Company eliminates from our financial results all significant intercompany
transactions, including transactions with equity method investees.
The table below presents Equity Income (Loss) and Income Before Income
Taxes and Cumulative Effect of Accounting Change, of which Equity Income (Loss)
is a component. The purpose of the table is to present the relative significance
of Equity Income (Loss) to Income Before Income Taxes and Cumulative Effect of
Accounting Change.
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2002 2001 2000
- --------------------------------------------------------------------------------
(In millions)
Equity income (loss) $ 384 $ 152 $ (289)
Income before income taxes
and cumulative effect
of accounting change $5,499 $ 5,670 $ 3,399
- --------------------------------------------------------------------------------
The table below presents our Equity Method Investments, Cost Method
Investments, Principally Bottling Companies and Total Assets. The purpose of the
table is to present the relative significance of our equity and cost method
investments to Total Assets.
- --------------------------------------------------------------------------------
DECEMBER 31, 2002 2001
- --------------------------------------------------------------------------------
(In millions)
Equity method investments $ 4,737 $ 5,128
Cost method investments,
principally bottling companies $ 254 $ 294
Total assets $ 24,501 $ 22,417
- --------------------------------------------------------------------------------
Our CCEAG business combination represents a good example related to
consolidation and management's consideration regarding control. We concluded
that CCEAG should be consolidated with our Company based on the following.
Prior to February 2002, our Company accounted for CCEAG under the equity
method of accounting. Our Company has an approximate 41 percent ownership
interest in the outstanding shares of CCEAG. In accordance with the terms of the
CPL, our Company obtained control of CCEAG for a period of up to five years. In
return for control of CCEAG, the Company guaranteed annual payments, in lieu of
dividends by CCEAG, to all other CCEAG share owners. Additionally, all other
CCEAG share owners entered into either a put or put/call option agreement with
the Company, exercisable at the end of the term of the CPL at agreed prices. Our
Company entered into either put or put/call agreements for shares representing
an approximate 59 percent interest in CCEAG. The spread in the strike prices of
the put and call options is only approximately 3 percent.
Since the terms of the CPL transfer control and all of the economic risks
and rewards of CCEAG to the Company immediately, we determined consolidation was
appropriate. Refer to Note 18.
2002 ANNUAL REPORT - 53
<PAGE>
FINANCIAL REVIEW INCORPORATING MANAGEMENT'S DISCUSSION AND ANALYSIS