EXHIBIT 10.22.1
THE COCA-COLA COMPANY
Coca-Cola Plaza
Atlanta, Georgia
ADDRESS REPLY TO
P.O. Drawer 1734
Atlanta, GA 30301
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404-676-2121
March 2, 2001
VIA HAND DELIVERY
Mr. Steven J. Heyer
Atlanta, GA
Dear Steve:
It is my pleasure to extend to you an offer of employment with The
Coca-Cola Company (the "Company") upon the terms set forth in the attached term
sheet. This offer will remain open for your acceptance until 6:00 p.m. (E.S.T.)
April 1, 2001, and anticipates your becoming an employee by April 18 , 2001.
Please signify your acceptance of such employment by signing as indicated below.
This letter agreement may be executed in counterparts.
/s/ DOUGLAS N. DAFT
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Douglas N. Daft
Chairman of the Board of Directors and
Chief Executive Officer
/s/ STEVEN J. HEYER
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Steven J. Heyer
Date: March 22, 2001
Terms of
Employment between
Steven J. Heyer ("Executive") and
The Coca-Cola Company ("Company")
March 2, 2001
1. POSITION AND DUTIES; PLACE OF PERFORMANCE: (a) During the Employment Period
(as defined below), the Executive shall serve as Executive Vice President
of the Company and President, Coca-Cola Company Ventures, subject to
election by the Board of Directors of the Company (the "Board"). The
Executive shall report to the Chairman of the Board and Chief Executive
Officer of the Company (the "Chief Executive Officer"). During the
Employment Period, the Executive shall have those powers and duties
consistent with his positions and assigned by the Chief Executive Officer,
including, but not limited to leading Company joint venture or acquisition,
innovation and incubation activities and acting as a Coca-Cola Company
member of Boards of Company joint ventures. Working with the CEO and other
executive officers, the Executive will also lead and direct the Company's
marketing, long range planning and strategy development process. During the
Employment Period, the Executive shall be a member of the Company's
Executive Committee. The Executive agrees to devote substantially all of
his working time to the performance of his duties for the Company, provided
that Executive shall be entitled to serve on corporate, charitable and
civic boards to the extent such activities do not materially interfere with
the performance of his duties hereunder. Effective no later than the first
regularly-scheduled Company Board of Directors meeting which occurs on or
after the date of the commencement of Executive's employment, Executive
will be elected, designated or appointed to the foregoing.
2. EMPLOYMENT PERIOD: The period during which the Executive is employed by the
Company hereunder (the "Employment Period") is anticipated to commence no
later than April 18, 2001 (such commencement of employment, the "Effective
Date") and shall end on the fifth anniversary thereof; provided however,
that commencing on the fourth anniversary of the Effective Date (each such
anniversary, a "Renewal Date"), the Employment Period shall automatically
be extended for one additional year unless, no later than the date which is
four months prior to such Renewal Date, the Company or the Executive shall
have given notice not to extend the Employment Period.
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3. ANNUAL SALARY: $850,000 for 2001, subject to increase (but not decrease)
thereafter.
4. ANNUAL INCENTIVE: So long as the Executive is employed by the Company, he
shall be eligible to receive annual cash incentive awards (the "Annual
Incentive") pursuant to and subject to the terms and conditions of the
Company's Annual Performance Incentive Plan or Executive Performance
Incentive Plan (or any successor or companion plan). The Executive's Annual
Incentive paid in respect of 2001 shall in no event be less than 80% of his
target Annual Incentive for such year. The Executive's Annual Incentive in
respect of 2001 and for each year after 2001 shall be determined on the
basis of Company and individual performance and shall in no event be
targeted at a percentage less than the target percentage set for other
senior executive officers nor shall the target and opportunity for future
awards be less than the initial target and opportunity. In the event of
termination of employment for any reason other than a termination for Cause
or a resignation other than for Good Reason during any subsequent bonus
year, a pro rata portion of the annual performance bonus shall be paid
after qualifying Company performance has been certified.
5. ANNUAL PERFORMANCE LTIP AND EQUITY BASED INCENTIVE COMPENSATION:
(a) LONG-TERM INCENTIVE. So long as the Executive is employed by the
Company, he shall be eligible to receive long-term cash incentive
awards (the "Long-Term Incentive") pursuant to and subject to the
terms and conditions of the Company's Long Term Performance Incentive
Plan (or any successor or companion plan). The target percentage for
the Executive's Long-Term Incentive for each performance period during
the Employment Period shall in no event be less than the target
percentage set for senior executive officers nor shall the target and
opportunity for future awards be less than the initial target and
opportunity. In the event of termination of employment for any reason
other than a termination for Cause or a resignation other than for
Good Reason, a pro rata portion of the each on-going LTIP award shall
be paid after qualifying Company performance has been certified.
(b) FUTURE EQUITY GRANTS. At such time(s) during each year of the
Employment Period that the Compensation Committee or a subcommittee
thereof approves annual stock option grants to senior executive
officers of the Company, and provided that the Executive is then still
employed by the Company, the Chief Executive Officer shall recommend
to the Compensation Committee a grant for the Executive of stock
options (and/or other equity) according to the terms of the applicable
plans, within an award value range (based upon a Black Scholes
valuation) of $9 to $12 million subject to discretion of the
Compensation Committee. It is the Company's expectation that as long
as the
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performance of the Company and the Executive are within a reasonable
range, that awards within this range will be made.
(c) All performance and equity based awards and other benefits provided to
Executive shall vest, remain exercisable and/or become payable upon a
change in control as provided in the applicable plans, the provisions
shall be no less favorable to Executive than those applicable to other
senior executive officers.
6. GROUP/EXECUTIVE BENEFITS: During the Employment Period, the Executive shall
be eligible to participate in such other employee benefit programs and
perquisite arrangements as are applicable generally to employees and/or
made available to senior executives of the Company (the "Benefit Plans"),
in accordance with the terms and conditions of such Benefit Plans and on a
basis no less favorable than the other senior executive officers, but with
all waiting periods waived to the maximum extent permitted by such Benefit
Plans. Executive will generally have access to a Company plane for business
travel and Executive and Family will have access to a Company plane on an
"as available" basis for other than business travel, assuming all planes
are not needed for business purposes, with obligation to reimburse for
personal use based upon first class airfare.
7. SUPPLEMENTAL PENSION:
(a) The Executive shall be eligible for pension benefits equal to the
amount that he would have earned under the Company's Employee
Retirement Plan and Supplemental Retirement Plan (and any successor or
companion plans), if the Executive's service had been determined as if
he had been in the employ of the Company for a number of years equal
to the sum of (i) his actual number of years of service with the
Company and (ii) ten (10) (the "Pension Credit"). Such Pension Credit
shall be reduced by the amounts actually paid under such plans in
accordance with their terms. The Company reserves the right to
purchase annuities or such other vehicles as it may determine to fund
the Pension Credit and/or to pay to the Executive, at the time of the
Executive's retirement, death or Disability, a lump sum payment equal
to the present value of the Pension Credit, determined using the
interest rate prescribed by the Pension Benefit Guaranty Corporation
for valuing immediate annuities for plans terminating in the month in
which the Executive's retirement, death or Disability occurs.
(b) The Pension Credit shall not be payable under this item 7 if, prior to
the fifth anniversary of the commencement of employment, Executive's
employment is terminated by the Company for Cause or by the Executive
without Good Reason.
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8. HIRING INDUCEMENT; MAKE WHOLE.
(a) RESTRICTED STOCK. Executive shall receive a restricted stock award for
50,000 shares cliff vesting on the fifth anniversary of the date of
grant, subject to release in full in the event of termination of
employment for any reason other than a termination for Cause or a
resignation other than for Good Reason.
(b) PERFORMANCE GRANT. Executive shall receive a five-year performance
restricted stock award for 125,000 shares vesting in accordance with
established performance criteria. In the event of termination of
employment for any reason other than a termination for Cause or a
resignation other than for Good Reason, a pro rata portion of the
performance restricted stock shall be released after qualifying
Company performance has been certified.
(c) SIGN-ON. Executive shall be entitled to receive $1,000,000, of which
$500,000 shall be paid in cash no later than 10 business days after
commencement of employment and the remainder shall be paid on the
first anniversary of commencing employment (the "Deferred Sign-On
Payment"). In the event of termination of employment for any reason
other than a termination for Cause or a resignation other than for
Good Reason prior to payment of the $1,000,000 in full, any unpaid
amount shall be paid within five (5) business days of such
termination.
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(d) STOCK OPTIONS. The Chief Executive Officer shall recommend to the
Stock Option Subcommittee of the Board at its first meeting coinciding
with or next following the Effective Date that the Company grant to
the Executive a stock option (the "Option"), pursuant to the Company's
1999 Stock Option Plan, to purchase a number of shares of the
Company's common stock, par value $0.25 per share ("Common Stock")
having a Black-Scholes value equal to 1) the Black-Scholes value of
the unvested options to acquire shares of the Executive's employer
(the "Current Employer") held by the Executive on the date hereof and
2) the value of lost LTIP participation at his former employer. The
Black-Scholes value of the Option shall be calculated as of the
Effective Date using the same methodology and assumptions utilized by
the Company in valuing annual grants to all employees in 2000. The
Black-Scholes value of the options to acquire shares of the current
employer held by the Executive on the date hereof shall be calculated
as of the Effective Date using the same methodology (including the
methodology used to determine assumptions) utilized by the Company in
valuing annual grants to employees in 2000. Any Black-Scholes
calculation made pursuant to this Agreement shall be delivered to the
Executive reasonably in advance of the date of grant of the Option.
The Option grant shall be reflected in an option agreement which shall
include the terms of the Company's standard form of option agreement
as in effect on the date of grant of the Option.
9. TERMINATION FOR CAUSE OR BY EXECUTIVE OTHER THAN FOR GOOD REASON. If the
Executive's employment hereunder is terminated by the Company for Cause or
by the Executive other than for Good Reason, then the Option shall become
fully vested and exercisable for a period of six months in accordance with
the applicable plans and individual agreements and; other option awards
that are vested upon the termination date will remain exercisable for a
period of six months, as provided by the plan and applicable agreements.
10. TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR DISABILITY OR BY THE
EXECUTIVE FOR GOOD REASON.: If the Executive's employment hereunder is
terminated by the Company other than for Cause or disability (as defined
under the Company's long-term disability plan) or by the Executive for Good
Reason, then:
(i) the Company shall pay the Executive an Annual Incentive payment
determined, prorated and paid in accordance with the terms of the
applicable plan(s);
(ii) the Company shall pay to the Executive, as soon as practicable
but no later than 30 days following the Date of Termination, a
lump sum amount equal to (A) any unpaid Deferred Sign-On Payment
plus (B)
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three times the sum of (1) the Executive's then-current Base
Salary and (2) the average of the Annual Incentives paid or
payable to the Executive for the three calendar years immediately
preceeding the year in which the Date of Termination occurs, or
such lesser period during which the Executive was employed by
the Company, offset by (C) any severance paid to the Executive
pursuant to any other severance pay plan or program of the
Company.
(iii)(A) the Option shall become fully vested and exercisable (and
shall remain exercisable in accordance with the applicable plans
and individual agreements), (B) any other options to acquire
Common Stock granted to the Executive shall become vested and
remain exercisable in accordance with the terms of the applicable
plans and individual agreements, (C) the 50,000 Restricted Stock
award shall be released from restriction and (D) other restricted
stock awards shall be considered in accordance with the terms of
the applicable plans and individual agreements;
(iv) the Company shall offer the Executive and his qualified
dependents continued coverage under the Company's insurance
plans, as required by the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"), at the Company's cost, so long as
the Executive or his dependents are eligible for COBRA coverage;
and
(v) the Executive shall be provided with the Pension Credit,
provided, that for purposes thereof the amounts described in
clause 10(ii) above shall be deemed paid under a severance policy
and thereby taken into account in determining Executive's final
average compensation.
11. MITIGATION: The Executive shall not be required to mitigate any amounts
payable hereunder by seeking other employment or otherwise, nor shall such
payments be reduced on account of any remuneration earned by the Executive
attributable to employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Company (other than any amounts owed by the Executive under Company benefit
plans and agreements and any expenses incurred by the Company on the
Executive's behalf and at the Executive's request) or otherwise.
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12. TERMINATION BY EXECUTIVE: Executive may, by at least 30 days prior written
notice, voluntarily terminate this agreement without liability at any time
without Good Reason.
13. FEES AND EXPENSES: The Company will pay all reasonable legal fees not to
exceed $25,000 and related expenses incurred by Executive in connection
with the negotiation and preparation of the employment agreement. In
addition, the Company shall indemnify and hold harmless the Executive from
any reasonable attorneys fees, Executive may incur or be liable for as a
result of his resignation from his former employer to commence employment
with the Company. The Company shall also pay all reasonable attorneys fees
and expenses incurred by Executive in connection with any dispute between
the Company and Executive regarding the validity or enforceability of, or
liability under this Agreement.
14. BINDING OF SUCCESSORS: The Company will cause any successor to all or
substantially all of its business and/or assets expressly to assume and
agree to perform Executive's employment agreement in the same manner and to
the same extent that the Company is required to perform hereunder.
15. CAUSE. The Company may terminate the Executive's employment for Cause. For
purposes hereof, "Cause" shall mean (i) the Executive's material breach of
this Agreement, (ii) the Executive's gross negligence in the performance or
non-performance of any of his material duties or responsibilities
hereunder, (iii) the Executive's dishonesty, fraud or willful misconduct
with respect to, or willful disparagement of, the business or affairs of
the Company, (iv) the Executive's conviction of a felony, (v) the
Executive's being absent from work for twenty (20) consecutive days for any
reason other than vacation, approved leave of absence (such approval not to
be unreasonably withheld) or disability or illness pursuant to Company
policy or law. No act or failure to act by the Executive shall be
considered Cause unless the Company has given detailed written notice
thereof to the Executive and, where remedial action is feasible, he has
failed to remedy the act or omission within twenty (20) business days after
receiving such notice.
16. GOOD REASON. The Executive may terminate his employment for "Good Reason".
For this purpose, "Good Reason" shall mean, without Executive's consent,
(a) the assignment to Executive of any duties inconsistent in any material
respect with Executive's position, authority, duties or responsibilities as
contemplated hereunder, or any other action by the Company which results in
a significant diminution in such position, authority, duties or
responsibilities, excluding any isolated and inadvertent action not taken
in bad faith and which is remedied by the Company within ten (10) days
after receipt of notice thereof given by Executive; (b) any failure by the
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Company to comply with any of the provisions of terms of Executive's
employment other than an isolated and inadvertent failure not committed
in bad faith and which is remedied by the Company within ten (10) days
after receipt of notice thereof given by Executive; (c) Executive being
required to relocate to a principal place of employment more than
twenty-five (25) miles from Executive's current principal place of
employment; or (d) delivery by the Company of a notice discontinuing the
automatic extension feature of the term of Executive's employment as set
forth in Section 2 hereof.
17. EXECUTIVE COVENANTS. (a) During the Employment Period, and for a period of
one year thereafter, the Executive shall not, either directly or
indirectly, for himself or on behalf of or in conjunction with any other
person, company, partnership, corporation, business, group or other entity
(each, a "Person"):
(i) engage, as an officer, director, owner, partner, member, joint
venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor or sales representative,
in any business engaged in the manufacture, sale or distribution of
non-alcoholic beverages; or
(ii) solicit or attempt to solicit, recruit or attempt to recruit, any
employee, agent or contract worker of the Company with whom the
Executive had contact during the course of his employment with the
Company.
(b) For the purposes of this Section, references to "the Company" shall
mean the Company and its direct and indirect subsidiaries and/or any
Company joint ventures or incubators.
(c) The covenants in this Section are severable and separate, and the
unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provision of this Section 1
relating to the time period or geographic areas of the restrictive
covenants shall be declared by a court of competent jurisdiction to
exceed the maximum time period or geographic area, as applicable, that
such court deems reasonable and enforceable, then this Agreement shall
automatically be considered to have been amended and revised to
reflect such determination.
(d) All of the covenants in this Section shall be construed as an
agreement independent of any other provisions in this Agreement, and
the existence of any claim or cause of action the Executive may have
against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the
Company of such covenants.
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(e) The Executive has carefully read and considered the provisions of this
Section and, having done so, agrees that the restrictive covenants in
this Section impose a fair and reasonable restraint on the Executive
and are reasonably required to protect the interests of the Company
and its officers, directors, employees, and stockholders. The
Executive covenants that he will not challenge the enforceability of
this Section nor will he raise any equitable defense to its
enforcement.
18. TRADE SECRETS AND CONFIDENTIAL INFORMATION
(a) For purposes of this Section, "Confidential Information" means any
data or information, other than Trade Secrets, that is valuable to the
Company and not generally known to the public or to competitors of the
Company. "Trade Secret" means information including, but not limited
to, any technical or nontechnical data, formula, pattern, compilation
program, device, method, technique, drawing, process, financial data,
financial plan, product plan, list of actual or potential customers or
suppliers or other information similar to any of the foregoing, which
(i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper
means by, other persons who can derive economic value from its
disclosure or use and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(b) The Executive acknowledges he is employed by the Company in a
confidential relationship wherein he, in the course of his employment
with the Company, has received or will receive and has had or will
have access to Confidential Information and Trade Secrets of the
Company, including but not limited to confidential and secret business
and marketing plans, strategies and studies, detailed client/customer
lists and information relating to the operations and business
requirements of those clients/customers and accordingly, he is willing
to enter into the covenants contained in Sections 17 and 18 of this
Agreement in order to provide the Company with what he considers to be
reasonable protection for its interest.
(c) The Executive hereby agrees that during the Employment Period and
thereafter, he will hold in confidence all Confidential Information of
the Company and its direct or indirect subsidiaries that came into his
knowledge during his employment by the Company and shall not disclose,
publish or make use of such Confidential Information without the prior
written consent of the Company.
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(d) The Executive shall hold in confidence all Trade Secrets of the
Company and its direct or indirect subsidiaries that came into his
knowledge during his employment by the Company and shall not disclose,
publish or make use of at any time after the date hereof such Trade
Secrets without the prior written consent of the Company for as long
as the information remains a Trade Secret.
(e) Notwithstanding the foregoing, the provisions of this Section will not
apply to (i) information required to be disclosed by the Executive in
the ordinary course of his duties hereunder or (ii) Confidential
Information that otherwise becomes generally known in the industry or
to the public through no act of the Executive or any person or entity
acting by or on the Executive's behalf, or which is required to be
disclosed by court order or applicable law.
(f) The parties agree that the restrictions stated in this Section 18 are
in addition to and not in lieu of protections afforded to trade
secrets and confidential information under applicable state law.
Nothing in this Agreement is intended to or shall be interpreted as
diminishing or otherwise limiting the Company's right under applicable
state law to protect its trade secrets and confidential information.
19. INVENTIONS. The Executive agrees to promptly report and disclose to the
Company all developments, discoveries, methods, processes, designs,
inventions, ideas, or improvements (hereinafter collectively called "Work
Product"), conceived, made, implemented, or reduced to practice by the
Executive, whether alone or acting with others, during the Executive's
employment with the Company, that is developed (a) on the Company's time,
or (b) while utilizing, directly or indirectly, the Company's equipment,
supplies, facilities, or trade secret information. the Executive
acknowledges and agrees that all Work Product is the sole and exclusive
property of the Company. The Executive agrees to assign, and hereby
automatically assigns, without further consideration, to the Company any
and all rights, title, and interest in and to all Work Product; provided
however, that this Section shall not apply to any Work Product for which no
equipment, supplies, facilities, or trade secret information of the Company
was used and which was developed entirely on the Executive's own time,
unless the Work Product (a) relates directly to the Company's business or
its actual or demonstrably anticipated research or development, or (b)
results from any work performed by the Executive for the Company. The
Company, its successors and assigns, shall have the right to obtain and
hold in its or their own name copyright registrations, trademark
registrations, patents and any other protection available to the work
Product. The Executive agrees to perform, upon the reasonable request of
the Company, during or after employment, such further acts as may be
necessary or desirable to transfer, perfect, and defend the Company's
ownership of the Work Product.
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20. RETURN OF COMPANY PROPERTY. All records, designs, patents, business plans,
financial statements, manuals, memoranda, customer lists, customer
database, rolodex and other property delivered to or compiled by the
Executive by or on behalf of the Company (including the respective
subsidiaries thereof) or its representatives, vendors or customers which
pertain to the business of the Company (including the respective
subsidiaries thereof) shall be and remain the property of the Company, and
be subject at all times to its discretion and control. Upon the request of
the Company and, in any event, upon the termination of the Executive's
employment with the Company, the Executive shall deliver all such materials
to the Company. Likewise, all correspondence, reports, records, charts,
advertising materials and other similar data pertaining to the business,
activities or future plans of the Company which are collected by the
Executive shall be delivered promptly to the Company without request by it
upon termination of the Executive's employment.
21. EQUITABLE REMEDY. Because of the difficulty of measuring economic losses to
the Company as a result of a breach of the covenants set forth in Sections
17, 18, 19 and 20, and because of the immediate and irreparable damage that
would be caused to the Company for which monetary damages would not be a
sufficient remedy, it is hereby agreed that in addition to all other
remedies that may be available to the Company at law or equity, the Company
shall be entitled to specific performance and any injunctive or other
equitable relief as a remedy for my breach or threatened breach of the
Executive's covenants.
22. NOTICE. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return
receipt re-quested, postage prepaid, addressed as follows:
If to the Executive:
Mr. Steven J. Heyer
Atlanta, Georgia
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If to the Company:
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, GA 30313
Attention: Chief Executive Officer
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall be effective only upon receipt.
23. MISCELLANEOUS. No provisions of this Agreement may be modified unless such
modification is agreed to in writing signed by the Executive and an
authorized officer of the Company. Any waiver or discharge must be in
writing and signed by the Executive or such an authorized officer of the
Company, as the case may be. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Delaware without regard to its
conflicts of law principles.
24. WITHHOLDING. Any payments provided for in this Agreement shall be paid net
of any applicable withholding of taxes required under federal, state or
local law.
25. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
26. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
27. ENTIRE AGREEMENT. This Agreement (together with any option and restricted
stock agreements which may evidence the awards contemplated hereby) set
forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations or warranties,
whether oral or written, by the parties hereto in respect of the subject
matter contained herein; and any prior agreement of the parties hereto in
respect of the subject matter contained herein is hereby terminated and
canceled.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
March ___, 2001 to be effective as of the Effective Date.
THE COCA-COLA COMPANY
By: /s/ DOUGLAS N. DAFT
Name:-------------------
Title:------------------
/s/ STEVEN J. HEYER
- ------------------------
Executive
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