EXHIBIT 10.1
As amended 11/23/88
LONG TERM PERFORMANCE INCENTIVE PLAN
OF THE COCA-COLA COMPANY
SECTION 1. PURPOSE
The purpose of the Long Term Performance Incentive Plan
of The Coca-Cola Company (the "Plan") is to advance the
interests of The Coca-Cola Company (the "Company") by
providing a competitive level of incentive for eligible
senior executives which will encourage them to more closely
identify with shareholder interests and to achieve financial
results consistent with the Company's long range business
plans. It will also provide a vehicle to attract and retain
key executives who are responsible for moving the business
forward.
SECTION 2. ADMINISTRATION
The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors of the
Company (the "Board") from among its members and shall be
comprised of not less than three (3) members of the Board.
Unless and until its members are not qualified to serve
on the Committee pursuant to the provisions of the Plan,
the Compensation Committee of the Board shall function
as the Committee. Members of the Committee shall be
members of the Board who are not eligible to participate
under the Plan and who have not been eligible to participate
in the Plan for at least one year prior to the time at
which they become members of the Committee. The Committee
shall determine which of the eligible key employees of
the Company and its Affiliates (as hereinafter defined)
to whom, and the time or times at which, Long Term Incentive
Awards will be granted under the Plan, and the other
conditions of the grant of the Long Term Incentive Awards.
The provisions and conditions of the grants of Long Term
Incentive Awards need not be the same with respect to each
grantee or with respect to each Long Term Incentive Award.
The Committee shall, subject to the provisions of the
Plan, establish such rules and regulations as it deems
necessary or advisable for the proper administration of the
Plan, and shall make determinations and shall take such other
action in connection with or in relation to accomplishing the
objectives of the Plan as it deems necessary or advisable.
Each determination or other action made or taken pursuant to
the Plan, including interpretation of the Plan and the
specific conditions and provisions of the Long Term Incentive
Awards granted hereunder by the Committee shall be final and
conclusive for all purposes and upon all persons including,
but without limitation, the Company, its Affiliates, the
Committee, the Board, officers and the affected employees of
the Company and/or its Affiliates and their respective
successors in interest.
SECTION 3. ELIGIBILITY
Each key Senior Vice President in charge of a major
functional group as defined by the Chief Executive Officer of
the Company, higher-level officers of the Company and such
other key employees of the Company and its Affiliates as may
be approved by the Chief Executive Officer of the Company
from time to time shall be eligible to participate in the
Plan. Long Term Incentive Awards may be granted to such
officers and key employees of the Company and its Affiliates
as determined in the sole discretion of the Committee. The
term "Affiliates" shall mean any corporation or business
organization in which the Company owns, directly or
indirectly, twenty-five percent or more of the voting stock
or capital during the time to which the granting of the Long
Term Incentive Award applies.
SECTION 4. GRANTS OF-LONG TERM INCENTIVE AWARDS
(a) ANNUAL SELECTION BY THE COMMITTEE OF PARTICIPANTS.
Annually, the Chief Executive Officer, following a selection
by the Committee, shall advise key employees that they are
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participants in the Plan for a Performance Period. Each
Performance Period will be of three years duration and shall
commence on the January first of the applicable year. A new
three year Performance Period shall commence each year.
(b) CALCULATION OF PERFORMANCE INCENTIVE BASE. At the
time the Chairman advises a participant of his or her
participation, the participant's Performance Incentive Base
shall be calculated. The Performance Incentive Base shall be
the participant's salary grade midpoint at the time of
notification, times a percentage predicated upon the
participant's relative responsibility level within the
Company. The percentage will be progressively higher for
correspondingly higher levels of responsibility within the
Company. Once the Performance Incentive Base (i.e., the
employee's salary grade midpoint and the applicable
percentage) is determined at the commencement of each
Performance Period, that Performance Incentive Base will not
change for that Performance Period.
SECTION 5. PERFORMANCE CRITERION
The measures of performance are objective and shall be
based on two criteria measured annually over the three year
Performance Period. The criteria are (i) the Company's
average annual "Return on Shareholders' Equity" over the
Performance Period and (ii) the "Compounded Annual Growth in
Income From Continuing Operations" over the Performance
Period.
(a) RETURN ON SHAREHOLDERS' EQUITY. The average "Return
on Shareholders' Equity" shall mean the average of the three
percentages for each of the three years derived by dividing
the amount of Shareholders' Equity as reported on the Company's
Consolidated Balance Sheet (for example, $2,920,756,000 as of
December 31, 1983, and $2,778,654,000 as of December 31, 1982)
into the amount of Income from Continuing Operations (after
income taxes) as reported on the Company's Consolidated Statement
of Income for the twelve months then ended (for example,
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$558,000,000 for the twelve months ended December 31, 1983
and $503,000,000 for the twelve months ended December 31,
1982) as reported in the Annual Report to Shareholders.
(b) COMPOUNDED ANNUAL GROWTH IN INCOME FROM CONTINUING
OPERATIONS. The "Compounded Annual Growth in Income from
Continuing Operations" shall be the compounded average annual
percentage change in Income from Continuing Operations (after
income taxes) for the three years of the Performance Period.
SECTION 6. AWARD DETERMINATION
Awards will be determined after the close of each
Performance Period from an award matrix, which matrix shall
be adopted by the Committee at the inception of each
Performance Period.
SECTION 7. PAYMENT OF AWARDS
(a) AWARDS. Awards shall be paid in cash.
(b) THE VESTED CASH AWARD. One half of the Award will
be paid in cash to each participant within sixty days after
the date on which the independent accountants of the Company
issue their report on the financial statements of the Company
for the third year of each Performance Period (the "Vested
Cash Award"). The second half of the Award is referred to
herein as the "Contingent Award", and it shall be paid to
each participant in the manner described in (d) below.
(c) DEFERRAL OF VESTED CASH AWARDS. All Vested Cash
Awards shall be paid in cash at the time prescribed in
subparagraph (b) above, unless the Committee has received and
approved, in its sole discretion prior to the grant of such
Award, a request to defer payment. If such request to defer
is approved by the Committee, the participant may elect to
receive deferred payments of the Vested Cash Award from among
the following options. Such election shall be made at the
time the request to defer is made.
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(i) Full cash payment at a date not less than one
year from the date of the Vested Cash Award, nor more
than one year after the date of retirement,
(ii) Equal annual installments over a period not to
exceed fifteen years, commencing not less than one year
from the date of the Vested Cash Award, or
(iii) Upon retirement.
Any amounts deferred shall bear interest from the date a
Vested Cash Award is granted to the date of payment, such
interest to be calculated pursuant to rules promulgated by
the Committee. Notwithstanding any election to defer an
Award as provided above, in the event of a participant's
death, all amounts elected to be deferred shall be paid in
full to the executor or administrator of a participant's
estate within a reasonable time after notice to the Committee
of such participant's death.
(d) PAYMENT AND FORFEITURE OF CONTINGENT AWARD. The
Contingent Award, plus interest in accordance with the above
formula thereon from the date of such Contingent Award as
determined by the Committee, shall be paid in cash to each
participant within thirty days after the expiration of the
second year following the end of the final year of the
related Performance Period, provided that such Contingent
Award has not been forfeited as set forth in the following
sentence. The Contingent Cash Award shall be forfeited to
the Company if, within two years from the date the Contingent
Cash Award is granted, the participant voluntarily terminates
his or her employment with the Company (for reasons other
than death, retirement or disability as such disability may
be determined by the Committee) or the participant's
employment is terminated for cause by the Company.
(e) RETIREMENT DEATH OR DISABILITY DURING FORFEITURE
PERIOD. If, within two years after the end of a Performance
Period for which a participant receives a Contingent Cash
Award, the recipient retires, dies or becomes disabled, such
recipient shall be paid the full Contingent Cash Award.
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(f) DEFERRAL OF CONTINGENT CASH AWARD. The participant
may elect to defer receipt of the Contingent Cash Award at
the same time and in the same manner as provided with respect
to the Vested Cash Award in subparagraph (c) above.
(g) WITHHOLDING FOR TAXES. The Company shall have the
right to deduct from all Long Term Incentive Award payments
any taxes required to be withheld with respect to such
payments.
(h) PAYMENTS TO ESTATES. Long Term Incentive Awards
and earnings thereon, if any, to the extent that they are due
to a participant pursuant to the provisions hereof and which
remain unpaid at the time of the participant's death, shall
be paid in full to the executor or administrator of the
participant's estate.
SECTION 8. TERMINATION OF EMPLOYMENT DURING ANY
PERFORMANCE PERIOD
(a) TERMINATION FOR REASONS OTHER THAN RETIREMENT,
DEATH OR DISABILITY. If the participant's employment by the
Company or an Affiliate terminates for any reason (other than
retirement, death or disability) during any Performance
Period, that participant shall not be entitled to any Long
Term Incentive Award for that Performance Period.
(b) DEATH, DISABILITY OR RETIREMENT DURING PERFORMANCE
PERIOD. If a participant retires, dies or becomes disabled
during any Performance Period, the amount of the Long Term
Incentive Award shall be calculated as provided in Sections
4, 5 and 6 as if the Performance Period ended on the last day
of the year in which the participant retired, died or became
disabled. Such Long Term Incentive Award will then be paid
all in cash within sixty days after the date on which the
independent public accountants of the Company issue their
report on the financial statements of the Company for the
last year of the Performance Period. The amount of the Long
Term Incentive Award will be prorated by a fraction, the
numerator of which shall be the number of whole calendar
months in the period commencing with the first month of the
Performance Period and ending with the whole calendar month
immediately preceding the date of retirement, death or
disability, and the denominator of which will be thirty-six.
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SECTION 9. AMENDMENTS, MODIFICATION AND TERMINATION OF
THE PLAN
The Board or the Committee may terminate the Plan, in
whole or in part, may suspend the Plan, in whole or in part
from time to time, and may amend the Plan from time to time,
including the adoption of amendments deemed necessary or
desirable to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or in any Long Term
Incentive Award granted thereunder. No amendment,
termination or modification of the Plan shall in any manner
affect Long Term Incentive Awards theretofore granted without
the consent of the employee unless the Committee has made a
determination that an amendment or modification is in the
best interest of all persons to whom Long Term Incentive
Awards have theretofore been granted.
SECTION 10. GOVERNING LAW
The Plan and all determinations made and actions taken
pursuant thereto shall be governed by the laws of the State
of Georgia and construed in accordance therewith.
SECTION 11. CHANGE IN CONTROL
If there is a Change in Control while the Plan remains
in effect, then
(a) each participant's Award accrued through the date
of such Change in Control for each Performance
Period then in effect automatically shall become
nonforfeitable on such date,
(b) the Committee immediately after the date of such
Change in Control shall determine each participant's
Award accrued through the end of the calendar month
which immediately precedes the date of such Change
in Control, and such determination shall be made
based on a formula established by the Committee which
computes such Award using (1) actual performance data
for each full Plan Year in each Performance Period
for which such data is available and (2) projected
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data for each other Plan Year, which projection
shall be based on a comparison (for the Plan Year
which includes the Change in Control) of the actual
performance versus budgeted performance for
compounded annual growth in income from continuing
operations for the full calendar months (in such
Plan Year) which immediately precede the Change in
Control and the actual performance versus budget
performance for the average return on shareholder
equity for such period multiplied by (3) a
fraction, the numerator of which shall be the
number of full calendar months in each such
Performance Period before the date of the Change in
Control and the denominator of which shall be 36,
(c) each participant's accrued Award (as determined
under Section 11(b) and his then unpaid Vested Cash
Award and Contingent Awards under Section 7
(computed with interest at the weighted prime rate
at Trust Company Bank, Atlanta, Georgia accrued on
such awards under Section 7 through the date of
such Change in Control) shall be paid to him in a
lump sum in cash promptly after the date of such
Change in Control in lieu of any other additional
payments under the Plan for the related Performance
Periods, and
(d) any federal golden parachute payment excise tax
paid or payable under Section 4999 of the Internal
Revenue Code of 1986, as amended, or any successor
to such section, by a participant for his taxable
year for which he reports the payment made under
Section 11(c) on his federal income tax return
shall be deemed attributable to such payment under
Section 11(c), and the Company promptly on written
demand from the participant (or, if he is dead,
from his estate) shall pay to him (or, if he is
dead, to his estate) an amount equal to such excise
tax.
A "Change in Control" for purposes of this Section 11 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
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14A promulgated under the Securities Exchange Act of 1934
(the "Exchange Act") as in effect on November 15, 1988,
provided that such a change in control shall be deemed to
have occurred at such time as (i) any "person" (as that term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities
representing 20% or more of the combined voting power for
election of directors of the then outstanding securities of
the Company or any successor of the Company; (ii) during any
period of two consecutive years or less, individuals who at
the beginning of such period constituted the Board of
Directors of the Company cease, for any reason, to constitute
at least a majority of the Board of Directors, unless the
election or nomination for election of each new director was
approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
the period; (iii) the shareholders of the Company approve any
merger or consolidation as a result of which its stock shall
be changed, converted or exchanged (other than a merger with
a wholly-owned subsidiary of the Company) or any liquidation
of the Company or any sale or other disposition of 50% or
more of the assets of earning power of the Company; or (iv)
the shareholders of the Company approve any merger or
consolidation to which the Company is a party as a result of
which the persons who were shareholders of the Company
immediately prior to the effective date of the merger or
consolidation shall have beneficial ownership of less than
50% of the combined voting power for election of directors of
the surviving corporation following the effective date of
such merger or consolidation; provided, however, that no
Change in Control shall be deemed to have occurred if, prior
to such time as a Change in Control would otherwise be deemed
to have occurred, the Board of Directors determines
otherwise.
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