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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-12
The Coca-Cola Company
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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(THE COCA-COLA COMPANY LOGO)
ATLANTA, GEORGIA
DOUGLAS N. DAFT
CHAIRMAN OF THE BOARD
AND
CHIEF EXECUTIVE OFFICER
March 2, 2001
Dear Share Owner:
We cordially invite you to our Annual Meeting of Share Owners. The meeting
will be held on Wednesday, April 18, 2001, at 9:00 a.m., local time, at The
Playhouse Theatre in Wilmington, Delaware.
At this year's meeting, you will vote on the election of three Directors,
ratification of Ernst & Young LLP's appointment as independent auditors, an
amendment to the 1989 Restricted Stock Award Plan of The Coca-Cola Company to
include performance criteria for certain awards, and three proposals of share
owners.
We also have attached a notice of meeting and a proxy statement that
contains more information about these items and the meeting, including:
- how to obtain an admission card, if you plan to attend the meeting,
and
- different methods you can use to vote, including telephone and
Internet.
If you plan to attend, please mark the appropriate box on your proxy card
to help us plan for the meeting.
Your vote is important to the Company. We encourage you to sign and return
your proxy card, or use telephone or Internet voting, before the meeting, so
that your shares will be represented and voted at the meeting even if you cannot
attend.
/s/ Douglas N. Daft
DOUGLAS N. DAFT
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(THE COCA-COLA COMPANY LOGO)
NOTICE OF ANNUAL MEETING OF SHARE OWNERS
TO THE OWNERS OF COMMON STOCK
OF THE COCA-COLA COMPANY
The Annual Meeting of Share Owners of The Coca-Cola Company (the "Company")
will be held at The Playhouse Theatre, Du Pont Building, 10th and Market
Streets, Wilmington, Delaware, on Wednesday, April 18, 2001, at 9:00 a.m., local
time. The purposes of the meeting are:
1. To elect three Directors to serve until the 2004 Annual Meeting of
Share Owners,
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company to serve for the 2001 fiscal year,
3. To approve an amendment to the 1989 Restricted Stock Award Plan of
The Coca-Cola Company to include performance criteria for certain awards
and to ratify certain awards,
4. To vote on three proposals submitted by share owners, and
5. To transact such other business as may properly come before the
meeting and at any adjournments or postponements of the meeting.
The Board of Directors set February 20, 2001, as the record date for the
meeting. This means that owners of Common Stock at the close of business on that
date are entitled to
- receive this notice of the meeting, and
- vote at the meeting and any adjournments or postponements of the
meeting.
We will make available a list of share owners as of the close of business
on February 20, 2001, for inspection during normal business hours from April 7
through April 17, 2001, at the Company's principal place of business, One
Coca-Cola Plaza, Atlanta, Georgia 30313. This list also will be available at the
meeting.
By Order of the Board of Directors
SUSAN E. SHAW
Secretary
Atlanta, Georgia
March 2, 2001
WE URGE EACH SHARE OWNER TO PROMPTLY SIGN AND RETURN THE ENCLOSED PROXY CARD OR
TO USE TELEPHONE OR INTERNET VOTING. SEE OUR QUESTION AND ANSWER SECTION FOR
INFORMATION ABOUT VOTING BY TELEPHONE OR INTERNET, HOW TO REVOKE A PROXY, AND
HOW TO VOTE SHARES IN PERSON.
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THE COCA-COLA COMPANY
ONE COCA-COLA PLAZA
ATLANTA, GEORGIA 30313
March 2, 2001
PROXY STATEMENT
FOR ANNUAL MEETING OF SHARE OWNERS
TO BE HELD APRIL 18, 2001
Our Board of Directors is furnishing you this proxy statement to solicit
proxies on its behalf to be voted at the 2001 Annual Meeting of Share Owners of
The Coca-Cola Company (the "Company"). The meeting will be held at The Playhouse
Theatre, Du Pont Building, 10th and Market Streets, Wilmington, Delaware, on
April 18, 2001, at 9:00 a.m., local time. The proxies also may be voted at any
adjournments or postponements of the meeting.
The mailing address of our principal executive offices is One Coca-Cola
Plaza, Atlanta, Georgia 30313. We are first sending the proxy materials to share
owners on March 2, 2001.
All properly executed written proxies, and all properly completed proxies
submitted by telephone or by the Internet, that are delivered pursuant to this
solicitation will be voted at the meeting in accordance with the directions
given in the proxy, unless the proxy is revoked before the meeting.
Only owners of record of shares of Common Stock at the close of business on
February 20, 2001, are entitled to vote at the meeting, or at adjournments or
postponements of the meeting. Each owner of record on the record date is
entitled to one vote for each share of Common Stock held. On February 20, 2001,
there were 2,487,036,532 shares of Common Stock issued and outstanding.
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QUESTIONS AND ANSWERS ABOUT
THE MEETING AND VOTING
1. WHAT IS A PROXY?
It is your legal designation of another person to vote the stock you own.
That other person is called a proxy. If you designate someone as your proxy in a
written document, that document also is called a proxy or a proxy card. As is
our usual practice, three of our outside Directors have been designated as
proxies for the 2001 Annual Meeting of Share Owners. These three Directors are
Ronald W. Allen, Cathleen P. Black and Sam Nunn.
2. WHAT IS A PROXY STATEMENT?
It is a document the SEC regulations require us to give you when we ask you
to sign a proxy card designating Ronald W. Allen, Cathleen P. Black and Sam Nunn
each as proxies to vote on your behalf.
3. WHAT IS THE DIFFERENCE BETWEEN A SHARE OWNER OF RECORD AND A SHARE OWNER WHO
HOLDS STOCK IN STREET NAME?
- If your shares are registered in your name, you are a share owner of
record.
- If your shares are in the name of your broker or bank, your shares are
held in street name.
4. HOW DO YOU GET AN ADMISSION CARD TO ATTEND THE MEETING?
If you are a share owner of record, your admission card is attached to your
proxy card. You will need to bring it with you to the meeting.
If you own shares in street name, you will need to ask your broker or bank
for an admission card in the form of a legal proxy. You will need to bring the
legal proxy with you to the meeting. If you do not receive the legal proxy in
time, bring your most recent brokerage statement with you to the meeting. We can
use that to verify your ownership of Common Stock and admit you to the meeting;
however, you will not be able to vote your shares at the meeting without a legal
proxy.
5. WHAT DIFFERENT METHODS CAN YOU USE TO VOTE?
(a) In Writing: All share owners can vote by written proxy card.
(b) By Telephone and Internet: All share owners of record also can vote
their proxies by touchtone telephone from the U.S. and Canada, using the
toll-free telephone number on the proxy card, or by the Internet, using the
procedures and instructions described on the proxy card and other enclosures.
Street name holders may vote by telephone or the Internet if their bank or
broker makes those methods available, in which case the bank or broker will
enclose the instructions with the proxy statement. The telephone and Internet
voting procedures, including the use of control numbers, are designed to
authenticate share owners' identities, to allow share owners to vote their
shares, and to confirm that their instructions have been properly recorded.
(c) In Person: All share owners may vote in person at the meeting (unless
they are street name holders without a legal proxy, as described in question 4).
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6. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?
The record date for the 2001 Annual Meeting of Share Owners is February 20,
2001. The record date is established by the Board of Directors as required by
Delaware law. Owners of Common Stock at the close of business on the record date
are entitled
(a) to receive notice of the meeting, and
(b) to vote at the meeting and any adjournments or postponements of the
meeting.
7. HOW CAN YOU REVOKE A PROXY?
A share owner can revoke a proxy by any one of the following three actions:
(a) giving written notice to the Secretary of the Company,
(b) delivering a later-dated proxy, or
(c) voting in person at the meeting.
8. ARE VOTES CONFIDENTIAL? WHO COUNTS THE VOTES?
We will continue our long-standing practice of holding the votes of all
share owners in confidence from Directors, officers and employees except: (a) as
necessary to meet applicable legal requirements and to assert or defend claims
for or against the Company, (b) in case of a contested proxy solicitation, (c)
if a share owner makes a written comment on the proxy card or otherwise
communicates his/her vote to management, or (d) to allow the independent
inspectors of election to certify the results of the vote. We will also
continue, as we have for many years, to retain an independent tabulator to
receive and tabulate the proxies and independent inspectors of election to
certify the results.
9. WHAT ARE YOUR VOTING CHOICES WHEN VOTING FOR DIRECTOR NOMINEES, AND WHAT VOTE
IS NEEDED TO ELECT DIRECTORS?
In voting on the election of three Director nominees to serve until the
2004 Annual Meeting of Share Owners, share owners may vote in one of the
following ways:
(a) in favor of all nominees,
(b) withhold votes as to all nominees, or
(c) withhold votes as to specific nominees.
Directors will be elected by a plurality.
The Board recommends a vote "FOR" each of the nominees.
10. WHAT ARE YOUR VOTING CHOICES WHEN VOTING ON THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AND WHAT VOTE IS NEEDED TO RATIFY THEIR
APPOINTMENT?
In voting on the ratification of the appointment of Ernst & Young LLP as
independent auditors, share owners may vote in one of the following ways:
(a) in favor of the ratification,
(b) against the ratification, or
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(c) abstain from voting on the ratification.
The proposal to ratify the appointment of Ernst & Young LLP will require
approval by a majority of the votes cast by the holders of the shares of Common
Stock voting in person or by proxy at the meeting. The Board recommends a vote
"FOR" this proposal.
11. WHAT ARE YOUR VOTING CHOICES WHEN VOTING ON THE AMENDMENT TO THE 1989
RESTRICTED STOCK AWARD PLAN OF THE COCA-COLA COMPANY?
In voting on the amendment to the 1989 Restricted Stock Award Plan of The
Coca-Cola Company, share owners may vote in one of the following ways:
(a) in favor of the amendment,
(b) against the amendment, or
(c) abstain from voting on the amendment.
The proposal to approve the amendment to the 1989 Restricted Stock Award
Plan of The Coca-Cola Company will require approval by a majority of the votes
cast by the holders of the shares of Common Stock voting in person or by proxy
at the meeting. The Board recommends a vote "FOR" this proposal.
12. WHAT ARE THE VOTING CHOICES WHEN VOTING ON EACH SHARE-OWNER PROPOSAL, AND
WHAT VOTE IS NEEDED TO APPROVE ANY OF THE SHARE-OWNER PROPOSALS?
A separate vote will be held on each of the three share-owner proposals. In
voting on each of the proposals, share owners may vote in one of the following
ways:
(a) in favor of the proposal,
(b) against the proposal, or
(c) abstain from voting on the proposal.
In order to be approved, each share-owner proposal would require approval
by a majority of the votes cast by the holders of the shares of Common Stock
voting in person or by proxy at the meeting. The Board recommends a vote
"AGAINST" each of the three share-owner proposals.
13. WHAT IF A SHARE OWNER DOES NOT SPECIFY A CHOICE FOR A MATTER WHEN RETURNING
A PROXY?
Share owners should specify their choice for each matter on the enclosed
form of proxy. If no instructions are given, proxies which are signed and
returned will be voted FOR the election of all Director nominees, FOR the
proposal to ratify the appointment of Ernst & Young LLP, FOR the amendment to
the 1989 Restricted Stock Award Plan of The Coca-Cola Company, and AGAINST each
share-owner proposal.
14. HOW ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
Abstentions and broker non-votes will not be included in vote totals and
will not affect the outcome of the vote.
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ELECTION OF DIRECTORS
(ITEM 1)
BOARD OF DIRECTORS
The share owners elect approximately one-third of the members of the Board
of Directors annually. The Directors are divided into three classes. Each class
serves for a period of three years, although occasionally a Director may be
elected for a shorter term in order to keep the number of Directors in each
class approximately equal. This has been the Company's practice since 1945.
The terms of Herbert A. Allen, James D. Robinson III and Peter V. Ueberroth
will expire at the 2001 Annual Meeting. Messrs. Allen, Robinson, and Ueberroth
each has been nominated to stand for reelection at the meeting to hold office
until our 2004 Annual Meeting and until his successor is elected and qualified.
We have no reason to believe that any of the nominees will be unable or
unwilling for good cause to serve if elected. However, if any nominee should
become unable or unwilling for good cause to serve for any reason, proxies may
be voted for another person nominated as a substitute by the Board of Directors,
or the Board of Directors may reduce the number of Directors.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF HERBERT A.
ALLEN, JAMES D. ROBINSON III AND PETER V. UEBERROTH AS DIRECTORS.
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NOMINEES FOR ELECTION TO TERM EXPIRING 2004
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(PHOTO) HERBERT A. ALLEN Director since 1982
Herbert A. Allen New York, New York Age 60
Mr. Allen is President and Chief Executive Officer of Allen & Company
Incorporated, a privately held investment banking firm, and has held these
positions for more than the past five years. He is a Director of Convera
Corporation.
Chairman of the Compensation Committee and a member of the Executive and
Finance Committees of the Board of Directors of the Company.
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(PHOTO) JAMES D. ROBINSON III Director since 1975
James D. Robinson III New York, New York Age 65
Mr. Robinson is co-founder, Chairman and Chief Executive Officer of RRE
Investors, LLC, a private information technology venture investment firm, and
a General Partner of RRE Ventures, L.P. He is also Chairman of Violy, Byorum &
Partners Holdings, LLC, a private firm specializing in financial advisory and
investment banking activities in Latin America. He previously served as
Chairman and Chief Executive Officer of American Express Company from 1977 to
1993. Mr. Robinson is a Director of Bristol-Myers Squibb Company, Cambridge
Technology Partners (Massachusetts), Inc., First Data Corporation,
ScreamingMedia, Inc. and Sunbeam Corporation.
Chairman of the Committee on Directors and a member of the Public Issues
Review Committee of the Board of Directors of the Company.
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(PHOTO) PETER V. UEBERROTH Director since 1986
Peter V. Ueberroth Newport Beach, California Age 63
Mr. Ueberroth is an investor and Chairman of the Contrarian Group, Inc., a
business management company, and has held these positions since 1989. He is
Chairman of Ambassadors International, Inc., a Director of Hilton Hotels
Corporation and serves as Co-Chairman of Pebble Beach Company.
Chairman of the Audit Committee and a member of the Compensation Committee
(including its Restricted Stock and Stock Option Subcommittees) of the Board
of Directors of the Company.
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(PHOTO) Herbert A.
Allen
(PHOTO) James D.
Robinson III
(PHOTO) Peter V.
Ueberroth
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INCUMBENT DIRECTORS -- TERM EXPIRING 2002
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(PHOTO) CATHLEEN P. BLACK Director since 1993
Cathleen P. Black New York, New York Age 56
Ms. Black is President, Hearst Magazines, a unit of The Hearst Corporation, a
major media and communications company, and has held these positions since
November 1995, and has been a Director of The Hearst Corporation since January
1996. Until that time she served as President and Chief Executive Officer of
Newspaper Association of America, a newspaper industry organization, since May
1991. She served as a Director of the Company from April 1990 to May 1991, and
was again elected as a Director in October 1993. Ms. Black is a Director of
International Business Machines Corporation and Women.com Networks, Inc.
Member of the Audit and Public Issues Review Committees of the Board of
Directors of the Company.
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(PHOTO) WARREN E. BUFFETT Director since 1989
Warren E. Buffett Omaha, Nebraska Age 70
Mr. Buffett is Chairman of the Board of Directors and Chief Executive Officer
of Berkshire Hathaway Inc., a diversified holding company, and has held these
positions for more than the past five years. He is also a Director of The
Gillette Company and The Washington Post Company.
Member of the Audit and Finance Committees of the Board of Directors of the
Company.
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(PHOTO) DOUGLAS N. DAFT Director since 1999
Douglas N. Daft Atlanta, Georgia Age 57
Mr. Daft is Chairman of the Board and Chief Executive Officer of the Company,
and has held these positions since February 17, 2000. He served as President
and Chief Operating Officer of the Company from December 5, 1999 until
February 17, 2000. He previously served as Senior Vice President of the
Company from 1991 until December 5, 1999 and as President of the Middle and
Far East Group. That position included management responsibility for the
Africa Group and the Schweppes Beverage Division from October 29, 1999 until
December 5, 1999. Mr. Daft has worked in the Company since 1969, and has held
various executive positions since 1984.
Chairman of the Executive Committee of the Board of Directors of the Company.
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(PHOTO) Cathleen P.
Black
(PHOTO) Warren E.
Buffett
(PHOTO) Douglas N. Daft
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(PHOTO) SUSAN B. KING Director since 1991
Susan B. King Durham, North Carolina Age 60
Ms. King is President of The Leadership Initiative, a support corporation of
Duke University, charged with the establishment of undergraduate college
leadership programs, and has held this position since September 1999. From
January 1995 until September 1999, she served as Leader in Residence, Hart
Leadership Program, Sanford Institute of Public Policy, Duke University, a
program for the development and advancement of leadership and management
skills in the public and private sectors. She was Senior Vice
President -- Corporate Affairs of Corning Incorporated from March 1992 through
April 1994, and served as President of Corning's Steuben Glass division from
1987 to March 1992. She is a Director of Guidant Corporation.
Member of the Compensation Committee (including its Restricted Stock and Stock
Option Subcommittees) and the Public Issues Review Committee of the Board of
Directors of the Company.
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INCUMBENT DIRECTORS -- TERM EXPIRING 2003
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(PHOTO) RONALD W. ALLEN Director since 1991
Ronald W. Allen Atlanta, Georgia Age 59
Mr. Allen is a consultant to and advisory Director of Delta Air Lines, Inc., a
major U.S. air transportation company, and has held these positions since July
1997. He retired as Delta's Chairman of the Board of Directors, President and
Chief Executive Officer in July 1997, and had been its Chairman of the Board
of Directors and Chief Executive Officer since 1987. He is a Director of Aaron
Rents, Inc.
Member of the Executive and Audit Committees and the Committee on Directors of
the Board of Directors of the Company.
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(PHOTO) DONALD F. MCHENRY Director since 1981
Donald F. McHenry Washington, D.C. Age 64
Mr. McHenry is Distinguished Professor in the Practice of Diplomacy and
International Affairs at the School of Foreign Service, Georgetown University,
and a principal owner and President of The IRC Group, LLC, a New York City and
Washington, D.C. consulting firm. He has held these positions for more than
the past five years. He is a Director of AT&T Corporation, FleetBoston
Financial Corporation, International Paper Company and GlaxoSmithKline plc.
Chairman of the Public Issues Review Committee and a member of the Executive
Committee and the Committee on Directors of the Board of Directors of the
Company.
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(PHOTO) Susan B. King
(PHOTO) Ronald W. Allen
(PHOTO) Donald F.
McHenry
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(PHOTO) SAM NUNN Director since 1997
Sam Nunn Atlanta, Georgia Age 62
Mr. Nunn is a partner in the law firm of King & Spalding, and has held this
position since January 1997. He served as a member of the United States Senate
from 1972 through 1996. He is a Director of Community Health Systems, Inc.,
Dell Computer Corporation, General Electric Company, Internet Security
Systems, Inc., National Service Industries, Inc., Scientific-Atlanta, Inc.,
Texaco Inc. and Total System Services, Inc.
Member of the Executive and Finance Committees of the Board of Directors of
the Company.
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(PHOTO) PAUL F. OREFFICE Director since 1985
Paul F. Oreffice Lake Tahoe, Nevada Age 73
Mr. Oreffice retired as Chairman of the Board of Directors and Chief Executive
Officer of The Dow Chemical Company in 1992, which position he had held for
more than five years.
Member of the Finance Committee and the Compensation Committee (including its
Restricted Stock and Stock Option Subcommittees) and the Committee on
Directors of the Board of Directors of the Company.
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(PHOTO) JAMES B. WILLIAMS Director since 1979
James B. Williams Atlanta, Georgia Age 67
Mr. Williams retired in March 1998 as Chairman of the Board of Directors and
Chief Executive Officer of SunTrust Banks, Inc., a bank holding company, which
positions he had held for more than five years. He continues to serve as a
Director and Chairman of the Executive Committee of SunTrust Banks, Inc. and
is also a Director of Genuine Parts Company, Georgia-Pacific Corporation,
Rollins, Inc. and RPC, Inc.
Chairman of the Finance Committee and a member of the Executive Committee of
the Board of Directors of the Company.
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(PHOTO) Sam Nunn
(PHOTO) Paul F.
Oreffice
(PHOTO) James B.
Williams
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OWNERSHIP OF EQUITY SECURITIES IN THE COMPANY
The following table sets forth information regarding beneficial ownership
of Common Stock by each Director, our five most highly compensated executive
officers, our former Chief Executive Officer, and our Directors and executive
officers as a group, all as of February 20, 2001, except where noted.
AGGREGATE NUMBER
OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED OUTSTANDING SHARES(19)
---- ------------------ ----------------------
Herbert A. Allen...................................... 9,317,435(1) *
Ronald W. Allen....................................... 15,827(2) *
Cathleen P. Black..................................... 20,188(3) *
Warren E. Buffett..................................... 200,009,021(4) 8.04%
Susan B. King......................................... 15,649(5) *
Donald F. McHenry..................................... 32,420(6) *
Sam Nunn.............................................. 6,583(7) *
Paul F. Oreffice...................................... 81,449(8) *
James D. Robinson III................................. 20,016(9) *
Peter V. Ueberroth.................................... 93,497(10) *
James B. Williams..................................... 105,668,012(11) 4.25%
Douglas N. Daft....................................... 2,523,187(12) *
Jack L. Stahl......................................... 1,525,317(13) *
James E. Chestnut..................................... 640,690(14) *
Charles S. Frenette................................... 865,164(15) *
Carl Ware............................................. 674,743(16) *
M. Douglas Ivester.................................... 4,294,083(17) *
All Directors and Executive Officers as a Group (20
Persons)............................................ 326,978,632(18) 12.94%
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* Less than 1% of issued and outstanding shares of Company Common Stock.
(1) Includes 2,347,920 shares owned by Allen & Company Incorporated
("ACI"). Also includes 21,000 shares owned by Allen Capital International L.P.,
12,634 shares owned by Allen Capital L.P. and 240,045 shares owned by Allen
Capital II, L.P., each of which is an affiliate of ACI's parent company, 258,938
shares which represent certain family members' interests in a partnership and
73,160 shares owned by his children; Mr. Allen exercises no investment
discretion or control over and has disclaimed beneficial ownership of such
shares. Does not include 200,000 shares held by ACI's pension plan nor 11,977
shares managed by Mr. Allen's son in a fiduciary capacity, over which he does
not have voting or investment power. Also includes 4,607 share units accrued
under the Deferred Compensation Plan for Non-Employee Directors.
(2) Includes 2,000 shares owned by Mr. Allen's wife and 200 shares owned by
her children; Mr. Allen has disclaimed beneficial ownership of such shares. Also
includes 3,627 share units accrued under the Deferred Compensation Plan for
Non-Employee Directors.
(3) Includes 10,000 shares jointly owned with Ms. Black's husband. Also
includes 9,988 share units accrued under the Deferred Compensation Plan for
Non-Employee Directors.
(4) Shares owned indirectly through subsidiaries of Berkshire Hathaway
Inc., the capital stock of which is owned 31.4% by Mr. Buffett and three trusts
of which he is trustee but in which he has no beneficial interest and 2.3% by
his wife. Also includes 9,021 share units accrued under the Deferred
Compensation Plan for Non-Employee Directors.
(5) Includes 3,649 share units accrued under Ms. King's account under the
Deferred Compensation Plan for Non-Employee Directors.
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(6) Includes 420 shares owned by Mr. McHenry's grandchildren. Also includes
5,893 share units accrued under the Deferred Compensation Plan for Non-Employee
Directors.
(7) Includes 5,583 share units accrued under Mr. Nunn's account under the
Deferred Compensation Plan for Non-Employee Directors.
(8) Includes 1,296 shares owned by Mr. Oreffice's wife and 6,000 shares
held by a trust of which his wife is sole trustee. Also includes 8,579 share
units accrued under the Deferred Compensation Plan for Non-Employee Directors.
(9) Does not include 4,552,880 shares owned by three trusts of which Mr.
Robinson is a beneficiary. Includes 8,016 share units accrued under the Deferred
Compensation Plan for Non-Employee Directors.
(10) Includes 22,000 shares owned by a trust of which Mr. Ueberroth is one
of two trustees and a beneficiary, 10,000 shares owned by his wife, 8,000 shares
held by a foundation of which he is one of six Directors and 12,000 shares held
by an investment trust for his children. Also includes 20,497 share units
accrued under the Deferred Compensation Plan for Non-Employee Directors.
(11) Includes 89,806,654 shares owned by four foundations of which Mr.
Williams is, in all cases, one of five trustees, and 15,786,700 shares owned by
a foundation of which he is one of three trustees. Also includes 24,658 share
units accrued under the Deferred Compensation Plan for Non-Employee Directors.
(12) Includes 5,927 shares credited to Mr. Daft's accounts under The
Coca-Cola Company Thrift & Investment Plan, 1,700,000 shares which are subject
to transfer restrictions and 43,660 shares held by a foundation of which his
wife is sole trustee. Also includes 389,250 shares which may be acquired upon
the exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 2001. Also includes 239 shares owned by his
son and 65,200 shares held by two trusts of which his wife is sole trustee; Mr.
Daft has disclaimed beneficial ownership of such shares.
(13) Includes 40,716 shares credited to Mr. Stahl's accounts under The
Coca-Cola Company Thrift & Investment Plan, 556,000 shares which are subject to
transfer restrictions, 47,990 shares owned by his wife and 2,919 shares owned by
his children. Does not include 3,200 shares owned by a trust of which he is a
beneficiary. Also includes 628,250 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 2001.
(14) Includes 3,923 shares credited to Mr. Chestnut's accounts under The
Coca-Cola Company Thrift & Investment Plan, 272,500 shares which are subject to
transfer restrictions, 4,960 shares owned by his wife and 2,997 shares owned by
his children. Also includes 328,175 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 2001.
(15) Includes 76,032 shares credited to Mr. Frenette's accounts under The
Coca-Cola Company Thrift & Investment Plan, 72,500 shares which are subject to
transfer restrictions, 17,800 shares owned by his wife and 1,000 shares owned by
his son. Also includes 297,375 shares which may be acquired upon the exercise of
options which are presently exercisable or which will become exercisable on or
before April 30, 2001.
(16) Includes 31,439 shares credited to Mr. Ware's accounts under The
Coca-Cola Company Thrift & Investment Plan, 337,000 shares which are subject to
transfer restrictions, 7,411 shares owned by his wife, 941 shares owned by his
son, 170 shares owned by his daughter-in-law and 1,879 shares owned by his
grandchildren. Also includes 291,550 shares which may be acquired upon the
exercise of options which are presently exercisable or which will become
exercisable on or before April 30, 2001.
11
15
(17) Includes one share owned by his wife. Also includes 2,650,000 shares
which could have been acquired upon the exercise of options which were
exercisable on or before April 30, 2000 which were all of Mr. Ivester's options.
Information is as of February 17, 2000, the date of Mr. Ivester's retirement,
except that he no longer holds shares in The Coca-Cola Company Thrift &
Investment Plan. For information on subsequent option exercises, see pages 20
and 21 of this proxy statement.
(18) Includes 3,422,000 shares which are subject to transfer restrictions
and 4,976,334 shares which may be acquired upon the exercise of options which
are presently exercisable or which will become exercisable on or before April
30, 2001. Includes the share units listed in the above footnotes.
(19) Share units accrued under the Deferred Compensation Plan for
Non-Employee Directors and shares which may be acquired upon the exercise of
options are not counted as outstanding shares in calculating these percentages.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Executive officers, Directors and certain persons who own more than ten
percent of the Common Stock are required by Section 16(a) of the Securities
Exchange Act of 1934 and related regulations
- to file reports of their ownership of Common Stock with the Securities
and Exchange Commission (the "SEC") and the New York Stock Exchange (the
"Exchange"), and
- to furnish us with copies of the reports.
We received written representations from each such person who did not file
an annual report with the SEC on Form 5 that no Form 5 was due. Based on our
review of the reports and representations, we believe that all required Section
16(a) reports were timely filed in 2000, except that Herbert A. Allen, a
Director of the Company, reported on Form 5 rather than a timely Form 4, the
purchase of 100,000 shares of Company Common Stock on February 1, 2000 by Allen
Capital, L.P., an affiliate of Allen Holding Inc., of which Mr. Allen is a
principal share owner. Mr. Allen exercises no investment discretion or control
over the portfolio of Allen Capital, L.P. and expressly disclaims beneficial
ownership of such shares.
PRINCIPAL SHARE OWNERS
Set forth in the table below is information as of December 31, 2000 about
persons we know to be the beneficial owners of more than five percent of the
issued and outstanding Common Stock:
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------- ------------------ ----------------
Berkshire Hathaway, Inc.(1)
1440 Kiewit Plaza 200,000,000 8.05%
Omaha, Nebraska 68131
SunTrust Banks, Inc.(2)
303 Peachtree Street 143,299,030 5.77%
Atlanta, Georgia 30308
- ------------
(1) Berkshire Hathaway Inc., a diversified holding company, has informed
the Company that certain of its subsidiaries hold an aggregate of 200,000,000
shares of Common Stock. The capital stock of Berkshire Hathaway Inc. is
beneficially owned 31.4% by Warren E. Buffet and three trusts of which he is a
trustee but in which he has no beneficial interest and 2.3% by his wife. All of
such
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shares of the Company are included in the share ownership of Mr. Buffet
disclosed in the table of beneficial ownership of securities above.
(2) SunTrust Banks, Inc. ("SunTrust"), a bank holding company, has informed
the Company that, as of December 31, 2000, certain subsidiaries of SunTrust held
either individually or in various fiduciary and agency capacities an aggregate
of 143,299,030 shares of Common Stock, of which 95,032,534 shares, or 3.8% of
the Common Stock, are held in various fiduciary and agency capacities as to
which SunTrust and certain of its subsidiaries may be deemed beneficial owners,
but as to which SunTrust and such subsidiaries disclaim any beneficial interest.
SunTrust Bank owns individually 25,373,952 shares of Common Stock, SunTrust Bank
Holding Company owns individually 12,212,544 shares of Common Stock and
Preferred Surety Corporation, a direct subsidiary of SunTrust Bank Holding
Company and an indirect subsidiary of SunTrust, owns individually 10,680,000
shares of Common Stock as to which SunTrust may be deemed a beneficial owner. Of
the shares held in fiduciary or agency capacities, such subsidiaries of SunTrust
have sole voting power with respect to 78,740,532 shares, shared voting power
with respect to 12,630,167 shares, sole investment power with respect to
53,260,073 shares and shared investment power with respect to 30,288,010 shares.
As to the shares described above, SunTrust has further informed the Company that
95,032,534 of such shares, or 3.8% of the Common Stock, are held in various
fiduciary and agency capacities by SunTrust Bank, which is a direct subsidiary
of SunTrust Bank Holding Company and an indirect subsidiary of SunTrust.
INFORMATION ABOUT COMMITTEES, MEETINGS AND COMPENSATION OF DIRECTORS
As called for by our By-Laws, the Board of Directors has established an
Executive Committee, a Finance Committee, an Audit Committee, a Compensation
Committee, a Committee on Directors and a Public Issues Review Committee. All
committees except the Executive Committee are composed entirely of outside
Directors. The Directors' committee memberships are indicated on pages 6 through
9 of this proxy statement.
The Executive Committee, between meetings of the Board of Directors, may
exercise the powers of the Board of Directors except, to the extent prohibited
by law, amending the By-Laws, or adopting or recommending to the share owners
any matter required by the Delaware General Corporation Law to be submitted to
share owners for approval. The Executive Committee met two times in 2000.
The Finance Committee reviews and recommends to the Board of Directors the
policies formulated by management with respect to our financial affairs and
accounting policies. The Finance Committee has oversight of the budget and all
of the financial operations of the Company. The Finance Committee met six times
in 2000.
The Audit Committee recommends to the Board of Directors the engagement of
the independent auditors and reviews with the independent auditors the scope and
results of the audits, the internal accounting controls and the professional
services furnished by the independent auditors. The Board of Directors has
adopted the Charter of the Audit Committee which is attached as Appendix I. All
four members of the Audit Committee are "independent" as this term is defined in
the New York Stock Exchange listing standards. The Audit Committee met three
times in 2000.
The Compensation Committee reviews and approves all salary arrangements and
other remuneration for officers. The Compensation Committee, or its
subcommittees, also are responsible for the administration of the Stock Option
Plans, the Long-Term Performance Incentive Plan, the Executive Performance
Incentive Plan, the Executive Incentive Plan and the Restricted Stock Award
Plans. In 2000, the Compensation Committee met seven times, the Stock Option
Subcommittee met six times and the Restricted Stock Subcommittee met five times.
13
17
The Committee on Directors recommends to the Board of Directors candidates
for election to the Board of Directors. It also reviews matters relating to
potential conflicts of interest and Directors' fees and retainers. The Committee
on Directors will consider recommendations for nominees for directorships
submitted by share owners. Share owners who wish the Committee on Directors to
consider their recommendations for nominees for the position of Director should
submit their recommendations in writing to the Committee on Directors in care of
the Secretary of the Company at our principal executive offices. The Committee
on Directors met four times in 2000.
The Public Issues Review Committee reviews our policy and practice relating
to significant public issues of concern to share owners, the Company, the
business community and the general public. The Public Issues Review Committee
met three times in 2000.
In 2000, the Board of Directors held seven meetings and Committees of the
Board of Directors held a total of 25 meetings. Overall attendance at such
meetings was 95%. Each Director attended more than 75% of the aggregate of all
meetings of the Board of Directors and the Committees on which he/she served
during 2000.
Officers who are also Directors do not receive any fee or remuneration for
services as members of the Board of Directors or of any Committee of the Board
of Directors. During 2000, outside Directors received an annual retainer fee of
$125,000, with $50,000 paid in cash and $75,000 accrued in share units to the
account of each Director under the Deferred Compensation Plan for Non-Employee
Directors (the "Deferred Compensation Plan"). During 2000, outside Directors
also received a $1,000 fee for each Board or Committee meeting attended and,
where applicable, a $3,000 committee chairman fee.
The Deferred Compensation Plan provides that outside Directors may elect to
defer receipt of all or part of their annual cash retainer fee until date(s) no
earlier than the year following the year in which they leave the Board. Under
this plan, retainer fees may be deferred in share units or cash. Cash deferrals
are credited with interest at the prime lending rate of SunTrust Bank. Share
units accrue phantom dividends and appreciate (or depreciate) as would an actual
share of Common Stock purchased on the deferral date. After a participant's
service as a Director terminates, cash deferrals will be paid in cash, and share
unit deferrals will be paid in shares of Common Stock.
In addition, the Company provides insurance benefits to members of the
Board of Directors who are not employees, including $30,000 term life insurance
for each Director, $100,000 group accidental death and dismemberment insurance
and $200,000 group travel accident insurance coverage while traveling on Company
business. The Company also provides health and dental coverage. Costs for all
such benefits for 2000 totaled $40,375.
In 2000, the Company entered into a one-year agreement with The IRC Group,
LLC ("IRC"), a company of which Donald F. McHenry, one of our Directors, is
President and a principal owner. Under the agreement, IRC provides consulting
services to the Company on international affairs and business activities and is
paid $185,000. We expect to use the services of IRC in 2001.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
James B. Williams, one of our Directors, retired as Chairman of the Board
and Chief Executive Officer of SunTrust in March 1998, and continues to serve as
a Director and Chairman of the Executive Committee of SunTrust. Subsidiary banks
of SunTrust engage in ordinary course of business banking transactions with the
Company and its subsidiaries, including the making of loans on customary terms,
for which we paid fees totaling approximately $287,000 in 2000. SunTrust Bank
(formerly SunTrust Bank, Atlanta), a subsidiary of SunTrust, has extended a $75
million fixed line of credit, a $200 million variable line of credit and a
letter of credit to the Company, for which we paid
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18
fees totaling approximately $114,000 in 2000. SunTrust Bank also holds equipment
leases under which we paid approximately $208,000 in 2000 for the lease of
trailers used to haul syrup. A SunTrust subsidiary leases office space in a
building owned by one of our subsidiaries and located at 711 Fifth Avenue, New
York, New York. Our subsidiary acquired that building in 1982 as an incidental
part of a much larger transaction. In 2000, our subsidiary was paid $332,500 and
it is expected that it will be paid a similar amount in 2001 under the terms of
the current lease. In the opinion of management, the terms of such banking and
credit arrangements and lease are fair and reasonable and as favorable to the
Company and its subsidiaries as those which could have been obtained from
unrelated third parties at the time of their execution.
Warren E. Buffett, one of our Directors, is Chairman of the Board of
Directors, Chief Executive Officer and the major share owner of Berkshire
Hathaway Inc. ("Berkshire Hathaway"). Berkshire Hathaway holds a significant
equity interest in American Express Company. In 2000, we paid fees for credit
card memberships, business travel and other services in the ordinary course of
business to subsidiaries of that company. International Dairy Queen ("IDQ") is a
wholly owned subsidiary of Berkshire Hathaway. In 2000, IDQ and its subsidiaries
made payments totaling approximately $1,030,000 to the Company and its
subsidiaries directly and through bottlers and other agents in respect of
fountain syrup and other products in the ordinary course of business. Also in
2000, IDQ and its subsidiaries received promotional and marketing incentives
(such as funding and loans for menu boards bearing the Company's logo) for
corporate and franchised stores totaling approximately $1,410,000 from the
Company and its subsidiaries in the ordinary course of business. This business
relationship was in place for many years prior to Berkshire Hathaway's
acquisition of IDQ and is on terms substantially similar to the Company's
relationships with other customers. Berkshire Hathaway also holds a significant
equity interest in Moody's Corporation and Jones Apparel Group, Inc. In 2000,
the Company paid fees totaling approximately $154,000 to Moody's Corporation for
rating our commercial paper programs and other services in the ordinary course
of business. In 2000, the Company paid approximately $535,000 to Jones Apparel
Group, Inc. for apparel used for promotional purposes.
Sam Nunn is a partner in the law firm King & Spalding. King & Spalding
provided legal services to the Company and its subsidiaries in 2000, and we
expect that they will provide services to the Company and its subsidiaries in
2001.
See "Information about Committees, Meetings and Compensation of Directors"
on pages 13 and 14 and "Compensation Committee Interlocks and Insider
Participation" on pages 31 and 32.
15
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EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid in
2000, 1999 and 1998 to both our current and former Chief Executive Officers and
our four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------- ---------------------------------------
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/SAR LTIP
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(4) COMPENSATION AWARDS(8/9) AWARDS(11) PAYOUTS(12)
- --------------------------- ---- ---------- ---------- ------------ ----------- ----------- -----------
Douglas N. Daft(1) 2000 $1,268,750 $3,000,000 $131,554(5) $87,281,250 650,000 $ 0
Chairman of the Board 1999 459,833 0 0 0 125,000 0
and Chief Executive 1998 415,250 275,000 0 2,700,000 0 351,900
Officer
Jack L. Stahl(2) 2000 734,792 1,275,000 0 8,728,125 500,000 0
President and Chief 1999 485,000 0 0 0 125,000 0
Operating Officer 1998 465,000 275,000 0 2,700,000 0 429,300
James E. Chestnut 2000 455,000 687,500 0 7,273,438 270,000 0
Executive Vice President 1999 400,000 0 0 543,125 117,500 0
1998 365,000 275,000 0 2,531,250 0 351,900
Charles S. Frenette 2000 466,115 668,750 77,787(6) 7,273,438(10) 270,000 0
Executive Vice President 1999 390,000 0 0 271,563 117,500 0
1998 282,500 225,000 0 2,531,250 0 277,200
Carl Ware 2000 439,167 668,750 0 7,273,438 270,000 0
Executive Vice President 1999 350,000 0 0 0 93,750 0
1998 335,000 200,000 0 0 50,000 277,200
M. Douglas Ivester(3) 2000 250,000 0 81,850(7) 0 0 0
Former Chairman of the 1999 1,354,167 0 0 0 250,000 0
Board and Chief 1998 1,250,000 1,500,000 0 16,875,000 0 702,000
Executive Officer
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION(13)
- --------------------------- ----------------
Douglas N. Daft(1) $ 67,171
Chairman of the Board 33,932
and Chief Executive 33,749
Officer
Jack L. Stahl(2) 70,946
President and Chief 63,566
Operating Officer 61,716
James E. Chestnut 26,445
Executive Vice President 25,529
28,125
Charles S. Frenette 54,764
Executive Vice President 52,502
48,995
Carl Ware 24,246
Executive Vice President 27,267
27,891
M. Douglas Ivester(3) 51,121
Former Chairman of the 17,819,697(14)
Board and Chief 142,799
Executive Officer
- ------------
(1) Mr. Daft was elected President and Chief Operating Officer of the
Company on December 5, 1999. Mr. Daft was elected a Director on December 15,
1999. He was elected Chairman of the Board and Chief Executive Officer on
February 17, 2000.
(2) Mr. Stahl was elected Executive Vice President on January 18, 2000.
Previously he was Senior Vice President. Also on February 17, 2000, he was
elected President and Chief Operating Officer.
(3) Mr. Ivester retired as Chairman of the Board and Chief Executive
Officer of the Company on February 17, 2000.
(4) The amounts in the Bonus column for 2000 represent payments from the
Executive Performance Incentive Plan and discretionary payments made to the
executive officers. No senior officer, including the named executive officers,
received an annual incentive award for 1999. The amounts in the Bonus column for
1998 for Messrs. Daft, Stahl, Chestnut, Ware and Ivester were discretionary
awards. Under the Executive Performance Incentive Plan approved by share owners
of the Company in 1994, cash awards are made to participants based upon the
individual's contributions to the improvement of operating results, growth,
profitability and efficient operation of the Company. Awards are paid to
participants annually during the year following the plan year after
certification of performance goals. In the event of a change in control,
participants earn the right to receive awards equal to the target percentage of
their annual salaries as if their performance goals had been met, prorated to
reflect the number of months a participant was employed in the plan year. No
awards
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were made to any executives under the Executive Performance Incentive Plan for
1998. The amount in the Bonus column for Mr. Frenette for 1998 was an award
under the Annual Incentive Performance Plan (the "Annual Plan"). The Annual Plan
does not cover any executive who is selected to participate in the Executive
Performance Incentive Plan.
(5) Mr. Daft's other annual compensation includes $121,762 for personal use
of Company aircraft. Mr. Daft is required by the Company to use Company aircraft
for all travel. Such travel for Mr. Daft and his spouse includes a gross-up for
taxes due.
(6) Mr. Frenette's other annual compensation includes $47,810 for
relocation expenses above those covered under normal relocation programs and
$21,250 representing a payment equivalent to dividend income under the terms of
the performance-based future grant of restricted stock to Mr. Frenette
(described in footnote 10 on page 18 of this proxy statement).
(7) Mr. Ivester's other annual compensation consisted of payments in 2000
for office and secretarial services as disclosed in the Company's most recent
proxy statement.
(8) 500,000 of the restricted shares awarded to Mr. Daft in 2000 and the
awards of restricted shares for Messrs. Daft, Stahl, Chestnut and Frenette
granted prior to 2000 were awards from the 1989 Restricted Stock Award Plan.
Restrictions on those awards lapse when the recipient retires (at or after age
62 on a date that is at least 5 years from the award date), becomes disabled or
dies, or upon a change in control.
1,000,000 of the restricted shares awarded to Mr. Daft and all of the
restricted shares for Messrs. Stahl, Chestnut and Ware granted from the 1989
Restricted Stock Award Plan in 2000 were performance-based restricted stock
awards as described under Item 3. To ensure tax deductibility of the awards, the
awards are contingent upon share-owner approval of Item 3.
(9) Under the 1983 Restricted Stock Award Plan, restrictions on awards
granted through July 1991 to executive officers lapse when the recipient
retires, becomes disabled or dies, or upon a change in control. Generally,
restrictions on awards granted to executive officers after July 1991 pursuant to
the 1983 Restricted Stock Award Plan, and awards granted pursuant to the 1989
Restricted Stock Award Plan, lapse when the recipient retires at or after age 62
on a date which is at least five years from the award date, becomes disabled or
dies, or upon a change in control.
The shares awarded under these plans have been adjusted, as necessary, to
reflect the 2-for-1 stock splits that occurred on May 1, 1996, May 1, 1992 and
May 1, 1990, and the 3-for-1 stock split that occurred on June 16, 1986. Under
these plans, Mr. Daft was originally awarded 1,595,000 shares, which, adjusted
for such stock splits, at the end of 2000 aggregated 1,700,000 of which
1,000,000 are performance-based shares (value at year end equaled $103,593,750);
Mr. Stahl was originally awarded 262,000 shares, which, adjusted for such stock
splits, at the end of 2000 aggregated 556,000 shares of which 150,000 are
performance-based shares (value at year end equaled $33,881,250); Mr. Chestnut
was originally awarded 243,500 shares, which, adjusted for such stock splits, at
the end of 2000 aggregated 272,500 shares of which 125,000 are performance-based
shares (value at year end equaled $16,605,469); Mr. Frenette was originally
awarded 62,500 shares, which, adjusted for such stock splits, at the end of 2000
aggregated 72,500 shares (value at year end equaled $4,417,969); and Mr. Ware
was originally awarded 156,000 shares, which, adjusted for such stock splits, at
the end of 2000 aggregated 337,000 shares of which 125,000 are performance-based
shares (value at year end equaled $20,535,938).
Dividends on all stock awards are paid at the same rate as paid to all
share owners. The 1983 Restricted Stock Award Plan provides for the Company to
make cash payments to recipients of awards made under these plans in amounts
equal to the recipients' income tax liability on these
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awards when the restrictions lapse. Receipt of these cash payments also causes
recipients to incur income tax liability, but no cash payments are made to the
recipients to offset this liability. No cash payments for reimbursement of any
income tax liability are provided under the 1989 Restricted Stock Award Plan.
(10) Mr. Frenette was provided with a promise to award a future grant of
restricted stock equivalent to 125,000 shares if performance criteria are met.
To ensure tax deductibility of the award, the award is subject to share-owner
approval of Item 3. To ensure tax-effective delivery of the award, the award was
not a direct grant of restricted shares. Instead, Mr. Frenette received a
promise to award such shares in January 2006 with subsequent release of the
award in March 2006, if performance related to earnings per share growth for the
period from January 1, 2001 to December 31, 2005 is met. Payments will be made
under the award to Mr. Frenette during the period equivalent to the dividend
income of an equivalent number of shares of the Company.
(11) Messrs. Daft, Stahl, Chestnut, Frenette and Ware received a stock
option award in February 2000 to ensure retention of Company leadership during a
critical time of the Company's transition. Messrs. Stahl, Chestnut, Frenette and
Ware also received option awards at the time of the Company's annual award of
such grants. The amounts of the separate awards are detailed on the Option/SAR
Grants in Last Fiscal Year chart on page 19 of this proxy statement.
(12) No awards were made to any participant under the Long-Term Performance
Incentive Plan for the three-year periods ending December 31, 2000 or December
31, 1999. The award under the Long-Term Performance Incentive Plan for the
three-year period ending December 31, 1998 represents the full award, although
one-half of the amount was subject to forfeiture if the recipient left the
Company prior to December 31, 2000, except by reason of retirement, death or
disability or unless pursuant to a change in control.
(13) For 2000, includes for Mr. Daft: $5,100 contributed by the Company to
The Coca-Cola Company Thrift & Investment Plan (the "Thrift Plan" described
below) and $62,071 accrued under The Coca-Cola Company Supplemental Benefit Plan
(the "Supplemental Plan" described below); for Mr. Stahl: $5,100 contributed by
the Company to the Thrift Plan, $36,399 accrued under the Supplemental Plan, and
$29,447 in above-market interest credited on amounts deferred under the
Company's 1986 Compensation Deferral and Investment Program (the "CDIP"
described below); for Mr. Chestnut: $4,500 contributed by the Company to the
Thrift Plan, and $21,945 accrued under the Supplemental Plan; for Mr. Frenette:
$5,100 contributed by the Company to the Thrift Plan, $20,217 accrued under the
Supplemental Plan and $29,447 in above-market interest credited on amounts
deferred under the CDIP; for Mr. Ware: $5,100 contributed by the Company to the
Thrift Plan and $19,146 accrued under the Supplemental Plan; and for Mr.
Ivester: $5,100 contributed by the Company to the Thrift Plan, $18,075 accrued
under the Supplemental Plan, and $27,946 in above-market interest credited on
amounts deferred under the CDIP.
The Thrift Plan is a tax-qualified defined contribution plan intended to
satisfy the requirements of Sections 401(a), 401(k) and 401(m) of the Internal
Revenue Code of 1986. The Company contributes an amount to the Company Stock
Fund of each participant's account maintained under the Thrift Plan equal to
100% of the participant's contributions but not more than (a) 3% of the
participant's earnings or (b) the amount allowable under the limits imposed
under Sections 401(a) and 415(c) of the Internal Revenue Code of 1986, whichever
is lower.
The Supplemental Plan provides a benefit to any eligible individual for
whom the 3% matching contribution would otherwise be in excess of the maximum
permitted under the Thrift Plan. The difference between the theoretical company
matching contribution under the Thrift Plan for each participant, without regard
to the legally imposed maximum, and the maximum contribution
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22
permitted under law is used to determine the number of theoretical shares of
Company Common Stock which would have been purchased for the participant's
account in the absence of the IRS's limitations on earnings and contributions
that can be considered for purposes of tax-qualified plans. The value of the
accumulated theoretical shares, including dividends, is paid in cash to the
individual at termination of employment. A participant will forfeit all rights
to future benefits under the Supplemental Plan if the participant engages in
competition with the Company following termination of employment.
The CDIP permitted salaried employees of the Company and certain of its
subsidiaries whose base annual salary was at least $50,000, to defer, on a
one-time basis, up to $50,000 of the compensation earned between May 1986 and
April 1987. Participants are credited with interest on their deferrals.
Effective January 1, 1998, the rate was set at 14% per annum. At enrollment,
each participant elected a method of distribution either (a) as a level annuity
payable from the date of retirement until attainment of age 80, or (b) split
between pre-retirement payments commencing no earlier than 1993 and a level
annuity payable from the date of retirement until attainment of age 80.
Participants are allowed to make a one-time election to defer the commencement
of monthly annuity payments until the earlier of age 65 or death. This election
is, generally, only effective if the participant terminates employment at least
one year after making the election and after reaching early retirement age under
the Company's pension plan. If a participant terminates employment prior to
early retirement age, the amounts credited, generally, will be paid out in a
lump sum in cash when the participant no longer is an employee of the Company or
of any participating subsidiary.
(14) In addition to the amounts listed in footnote 13, the amount in the
All Other Compensation column for Mr. Ivester for 1999 also includes accruals of
$17,687,141 made during 1999 regarding those portions of Mr. Ivester's
retirement arrangement which had not already been reported in prior proxy
statements. The arrangement was fully described in the Company's most recent
proxy statement.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/SARS GRANTED EXERCISE OR
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION
NAME (#)(1) IN FISCAL YEAR ($/SHARE) DATE
- ---- ------------ -------------- ----------- ----------
Douglas N. Daft 650,000 2.1% $54.34375 2/15/2015
Jack L. Stahl 200,000 0.6% 54.34375 2/15/2015
300,000 1.0% 57.84375 10/17/2015
James E. Chestnut 100,000 0.3% 54.34375 2/15/2015
170,000 0.5% 57.84375 10/17/2015
Charles S. Frenette 100,000 0.3% 54.34375 2/15/2015
170,000 0.5% 57.84375 10/17/2015
Carl Ware 100,000 0.3% 54.34375 2/15/2015
170,000 0.5% 57.84375 10/17/2015
M. Douglas Ivester 0 N/A N/A N/A
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM (15 YEARS)*
-----------------------------------------------------------
5% 10%
---------------------------- ----------------------------
PRICE
PRICE PER AGGREGATE PER AGGREGATE
NAME SHARE VALUE(2) SHARE VALUE(2)
- ---- --------- ---------------- --------- ----------------
Douglas N. Daft $113.035 $ 38,149,313 $227.1569 $ 112,328,531
Jack L. Stahl 113.035 11,738,250 227.1569 34,562,625
120.315 18,741,375 241.7869 55,182,938
James E. Chestnut 113.035 5,869,125 227.1569 17,281,313
120.315 10,620,113 241.7869 31,270,331
Charles S. Frenette 113.035 5,869,125 227.1569 17,281,313
120.315 10,620,113 241.7869 31,270,331
Carl Ware 113.035 5,869,125 227.1569 17,281,313
120.315 10,620,113 241.7869 31,270,331
M. Douglas Ivester N/A N/A N/A N/A
All Share Owners as a
Group (weighted
average option
price per share).... $116.044 $149,715,305,212 $ 233.203 $440,828,460,800
Named executives' portion of assumed value gained by all share owners is less
than .0008 of such gain.
- ------------
* The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates as set by the Securities and Exchange Commission and are
not intended to forecast future price appreciation of Company Common Stock. The
gains reflect a future value based upon growth at these prescribed rates. The
Company did not use an alternative formula for a grant date valuation, an
approach which would state gains at present, and therefore lower, value.
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23
It is important to note that options have value to recipients, including
the listed executives, only if the stock price advances beyond the grant date
price shown in the table during the effective option period.
(1) These awards were made pursuant to the 1999 Stock Option Plan. Under
this plan, the option price must be not less than 100% of the fair market value
of Company Common Stock on the date the option is granted. The fair market value
of a share of Company Common Stock is the average of the high and low market
prices at which a share of stock was sold on the date of grant. The grants
provide that stock options may not be exercised during the first twelve months
after the date of grant.
For options awarded on February 16, 2000, the options vest only at the end
of three years from the date of grant. Options awarded in October vest
one-fourth on the first, second, third and fourth anniversaries of the grant
date.
The plan allows shares of Company Common Stock to be used to satisfy any
resulting Federal, state and local tax liabilities, but does not provide for a
cash payment by the Company for income taxes payable as a result of the exercise
of a stock option award. The 1999 Stock Option Plan allows options to remain
exercisable for 15 years from the date of grant. The plan has provisions about
the impact of a change of control, death, disability, retirement and termination
of employment on the exercisability of options, with change of control, death,
disability and retirement, with certain exceptions, causing acceleration of
vesting.
(2) Not discounted to present value. Using a discount rate of 11%, which
approximates the Company's cost of capital, the present value of the assumed
potential realizable value of Mr. Daft's award is $7,973,372 at a 5% annual rate
of stock price appreciation and $23,477,151 at a 10% annual rate of stock price
appreciation; of Mr. Stahl's February 16, 2000 award is $2,453,345 at a 5%
annual rate of stock price appreciation and $7,223,739 at a 10% annual rate of
stock price appreciation and Mr. Stahl's October 18, 2000 award is $3,917,029 at
a 5% annual rate of stock price appreciation and $11,533,474 at a 10% annual
rate of stock price appreciation; of Messrs. Chestnut, Frenette and Ware's
February 16, 2000 award is $1,266,673 at a 5% annual rate of stock price
appreciation and $3,611,869 at a 10% annual rate of stock price appreciation and
of Messrs. Chestnut, Frenette and Ware's October 18, 2000 award is $2,219,650 at
a 5% annual rate of stock price appreciation and $6,535,635 at a 10% annual rate
of stock price appreciation.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES(1)
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS/SARS AT
UNEXERCISED FY-END ($) (BASED
OPTIONS/SARS AT ON $60.9375 PER
FY-END (#) SHARE)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED(2) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ----------------- --------------- -----------------
Douglas N. Daft 0 N/A 389,250/ $23,719,922/
743,750 45,322,266
Jack L. Stahl 0 N/A 628,250/ 38,283,984/
593,750 36,181,641
James E. Chestnut 0 N/A 328,175/ 19,998,164/
358,125 21,823,242
Charles S. Frenette 48,000 $ 1,723,773(3) 297,375/ 18,121,289/
358,125 21,823,242
Carl Ware 0 N/A 291,550/ 17,766,328/
354,200 21,584,063
M. Douglas Ivester 770,866 $28,631,022(4) 750,000/ 45,703,125/
0 0
- ------------
(1) The share numbers, and market and exercise prices have been adjusted,
as necessary, for the 2-for-1 stock splits that occurred on May 1, 1996, May 1,
1992 and May 1, 1990.
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(2) An individual, upon exercise of an option, does not receive cash equal
to the amount contained in the Value Realized column of this table. Instead, the
amounts contained in the Value Realized column reflect the increase in the price
of Company Common Stock from the option grant date to the option exercise date.
No cash is realized until the shares received upon exercise of an option are
sold.
(3) The exercise price of the stock option was $9.75781, which is equal to
the fair market value of a share of Company Common Stock on the grant date,
which was April 19, 1990.
(4) Mr. Ivester's exercises took place after his retirement. The exercise
prices of the stock options were $9.75781, which is equal to the fair market
value of a share of Company Common Stock on the grant date, which was April 19,
1990; $13.95313, which is equal to the fair market value of a share of Company
Common Stock on the grant date, which was April 17, 1991; $20.5625, which is
equal to the fair market value of a share of Company Common Stock on the grant
date, which was April 15, 1992; $19.9375, which is equal to the fair market
value of a share of Company Common Stock on the grant date, which was April 15,
1993; and $25.375, which is equal to the fair market value of a share of Company
Common Stock on the grant date, which was October 19, 1994.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR(1)
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS
SHARES, PERIOD UNTIL UNDER NON-STOCK PRICE-BASED PLANS(2)
UNITS OR MATURATION OR --------------------------------------
NAME OTHER RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM
- ---- ------------ ------------- ---------- ----------- -----------
Douglas N. Daft...................... $1,389,300 3 years $277,860 $1,389,300 $2,431,275
Jack L. Stahl........................ 834,000 3 years 166,800 834,000 1,459,500
James E. Chestnut.................... 531,000 3 years 106,200 531,000 929,250
Charles S. Frenette.................. 531,000 3 years 106,200 531,000 929,250
Carl Ware............................ 531,000 3 years 106,200 531,000 929,250
M. Douglas Ivester................... 0 N/A N/A N/A N/A
- ------------
(1) The Company has established a Long-Term Performance Incentive Plan
which has been approved by share owners. The Compensation Committee, which
administers the plan, awards incentive compensation to certain executive and
senior officers of the Company as well as designated other key executives of the
Company. The Committee determines a base for each participant. The base is
calculated on the participant's salary grade midpoint and level of
responsibility, for a three-year plan period, and the base cannot be increased
for that period. The Committee also sets a matrix which contains the target
levels for the performance measures selected. Actual awards are determined after
the end of the three-year period and range from 0% to 175% of the participant's
base. The plan is not based on the price of Company Common Stock. Subject to
continued employment of the participant, unless death, disability or retirement
occurs, one-half of each award earned is paid at the close of each three-year
performance period. Payment of the other half of each award, the "Contingent
Award," is deferred for two years and is subject to forfeiture if the
participant's employment with the Company terminates for any reason other than
death, disability, retirement or a change in control of the Company during such
two-year period. The participant is entitled to accrue interest on the
Contingent Award during such two-year period, calculated at rates not in excess
of prevailing market interest rates. Upon a change in control of the Company,
all awards or portions of awards earned up until such date become fully vested
and payable, and additional payments will be made in an amount equal to the
participant's liability for any taxes attributable to such payments.
(2) The threshold amount is equal to .20 times the targeted payout, and if
actual Company performance falls below certain parameters, no payouts are made.
The target amount is earned if special performance targets are achieved. The
maximum amount that can be earned is 1.75 times the targeted amount.
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PENSION PLAN TABLE
ASSUMED AVERAGE
ANNUAL COMPENSATION YEARS OF CREDITED SERVICE WITH THE COMPANY
FOR FIVE-YEAR PERIOD --------------------------------------------------------------
PRECEDING RETIREMENT 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------------- -------- -------- -------- -------- --------
$ 500,000 $ 175,000 $ 200,000 $ 225,000 $ 250,000 $ 275,000
1,000,000 350,000 400,000 450,000 500,000 550,000
1,500,000 525,000 600,000 675,000 750,000 825,000
2,000,000 700,000 800,000 900,000 1,000,000 1,100,000
2,500,000 875,000 1,000,000 1,125,000 1,250,000 1,375,000
3,000,000 1,050,000 1,200,000 1,350,000 1,500,000 1,650,000
3,500,000 1,225,000 1,400,000 1,575,000 1,750,000 1,925,000
4,000,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000
4,500,000 1,575,000 1,800,000 2,025,000 2,250,000 2,475,000
5,000,000 1,750,000 2,000,000 2,250,000 2,500,000 2,750,000
This table sets forth the annual retirement benefits payable under the
Employee Retirement Plan of The Coca-Cola Company (the "Retirement Plan"
described below), the retirement portion of the Supplemental Plan and The
Coca-Cola Company Key Executive Retirement Plan (the "Key Executive Plan"
described below) upon retirement at age 65 or later based on an employee's
assumed average annual compensation for the five-year period preceding
retirement and assuming actual retirement on January 1, 2001. The benefits
listed in the table are not subject to any reduction for Social Security or
other offset amounts.
Generally, compensation utilized for pension formula purposes includes
salary and annual bonus reported in the Summary Compensation Table. Awards under
the Long-Term Performance Incentive Plan are also included in the computation of
benefits under the Retirement Plan, the Key Executive Plan and the Supplemental
Plan. Company contributions received under the Thrift Plan and Supplemental Plan
are not included in the calculation of the named executive officer's
compensation for purposes of the pension benefit.
The Retirement Plan is a tax-qualified defined benefit plan and, subject to
certain maximum and minimum provisions, bases pension benefits on a percentage
of (a) the employee's final average compensation (the five highest consecutive
calendar years of compensation out of the employee's last eleven years of
credited service) or (b) $170,000 for 2000 (the limit set by the Internal
Revenue Code of 1986), whichever is lower, times the employee's years of
credited service. Age requirements for early retirement and benefit reductions
for early retirement are reduced for participants who terminate for any reason
within two years after a change in control. The term "compensation" includes
salary, overtime, commissions and performance incentive awards of the
participants.
The Supplemental Plan also provides a benefit to eligible persons whenever
100% of their pension benefits under the Retirement Plan are not permitted to be
funded or paid through that plan because of limits imposed by the Internal
Revenue Code of 1986. Those limitations in 2000 include a maximum annual benefit
at age 65 of $135,000. If a participant terminates employment before early
retirement age (for any reason other than death), the participant will forfeit
the portion of the Supplemental Plan pension benefit attributable to credited
service after December 31, 1993, unless the Compensation Committee of the Board
of Directors decides otherwise. In addition, a participant will forfeit all
rights to future pension benefits under the Supplemental Plan if the participant
competes against the Company following termination of employment. If a
participant is entitled to a pension benefit from the Retirement Plan because of
termination of employment for any reason
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within two years after a change in control, then the change in control
provisions in the Retirement Plan will apply to the calculation of the
participant's pension benefit under the Supplemental Plan. These vested benefits
are payable on termination of employment.
The Key Executive Plan provides certain executive and other key senior
officers of the Company annually, upon retirement, 20% of the average pay,
including awards pursuant to the Long-Term Performance Incentive Plan, for the
five highest consecutive years out of the employee's last eleven years of
credited service, increased 1% for each year of vested service with the Company
up to a maximum of 35 years (i.e., up to 55%). The amount any participant will
receive under the Key Executive Plan will be reduced, dollar for dollar, by
amounts payable under the Retirement Plan. Eligibility for early retirement
benefits under the Key Executive Plan starts when the participant has completed
ten years of service with the Company and is 55 years old, or when the
participant reaches age 60. Normal retirement benefits may commence when the
participant reaches age 65. These vested benefits are payable on termination of
employment. If a participant should die prior to retirement, his or her
surviving spouse will receive accrued benefits under the Key Executive Plan,
less any other survivor income benefits payable under the Retirement Plan. There
is also a benefit to a participant's surviving spouse if the participant dies
after retirement. A participant will forfeit all rights to future benefits under
the Key Executive Plan if the participant competes against the Company following
termination of employment. In the event of a change in control, all benefits
accrued to participants would immediately vest and, if a participant's
employment terminates within two years after a change in control, his or her
benefits would be paid in cash in a lump sum. In certain cases, such benefits
are calculated assuming continuation of employment to the first date on which
the employee would have satisfied the eligibility requirements with assumed
increases of 8% per annum in covered compensation. Also in such event, the
Company will pay the employee an additional amount equal to the liability, if
any, under Section 4999 of the Internal Revenue Code of 1986 attributable to
lump sum payments under the Key Executive Plan.
The respective years of credited service under the Employee Retirement Plan
as of February 17, 2000 for Mr. Ivester and December 31, 2000, for the other
persons named in the Summary Compensation Table are as follows: Mr. Daft, 24.3
years; Mr. Stahl, 21.5 years; Mr. Chestnut, 28.4 years; Mr. Frenette, 26.6
years; Mr. Ware, 27 years; and Mr. Ivester, 20.3 years.
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The Company has made previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that incorporate
future filings, including this proxy statement, in whole or in part. However,
the following Performance Graph and the Report of the Compensation Committee of
the Board of Directors of The Coca-Cola Company and its Subcommittees on
Executive Compensation shall not be incorporated by reference into any such
filings.
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
THE COCA-COLA COMPANY, S&P 500 INDEX AND FOOD, BEVERAGE AND TOBACCO GROUPS
TOTAL RETURN
STOCK PRICE PLUS REINVESTED DIVIDENDS
(PERFORMANCE GRAPH APPEARS HERE)
=============================================================================================================================
MEASUREMENT PERIOD THE COCA-COLA THE FOOD,
(FISCAL YEAR ENDING) COMPANY S&P 500 BEVERAGE, AND TOBACCO*
- -----------------------------------------------------------------------------------------------------------------------------
12/31/95 $100 $100 $ 100
12/31/96 $143 $123 $ 120
12/31/97 $183 $164 $ 159
12/31/98 $186 $211 $ 176
12/31/99 $163 $255 $ 128
12/31/00 $173 $232 $ 179
- -----------------------------------------------------------------------------------------------------------------------------
* Based on information for a self-constructed peer group of the Food,
Beverage and Tobacco Groups of companies as published in The Wall Street
Journal, which includes the following companies, but from which the Company has
been excluded:
Adolph Coors Company, American Italian Pasta Company, Anheuser-Busch
Companies, Inc., Archer-Daniels-Midland Company, Brown-Forman Corporation,
Campbell Soup Company, Coca-Cola Enterprises Inc., ConAgra Foods, Inc.,
Constellation Brands, Inc., Corn Products International, Inc., Dean Foods
Company, Dole Food Company, Inc., Dreyer's Grand Ice Cream, Inc., Flowers
Industries, Inc., General Mills, Inc., H.J. Heinz Company, Hershey Foods
Corporation, Hormel Foods Corporation, IBP, inc., International Multifoods
Corporation, Interstate Bakeries Corporation, Keebler Foods Company, Kellogg
Company, Krispy Kreme Doughnuts, Inc., Lancaster Colony Corporation, McCormick &
Company, Incorporated, Michael Foods, Inc., NBTY, Inc., PepsiCo, Inc., Philip
Morris Companies Inc., Ralcorp Holdings, Inc., Ralston Purina Company, RJ
Reynolds Tobacco Holdings, Inc., Sara Lee Corporation, Smithfield Foods, Inc.,
Suiza Foods Corporation, The Earthgrains Company, The Hain Celestial Group,
Inc., The Pepsi Bottling Group,
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28
Inc., The Quaker Oats Company, The Robert Mondavi Corporation, Triarc Companies,
Inc., Tyson Foods, Inc., Universal Corporation, UST Inc., Whitman Corporation
and Wm. Wrigley Jr. Company.
The Wall Street Journal periodically changes the companies reported as a
part of the Food, Beverage and Tobacco Groups of companies. At the time last
year's proxy statement was printed, the Groups excluded American Italian Pasta
Company, Constellation Brands, Inc., Corn Products International, Inc., Dean
Foods Company, Dreyer's Grand Ice Cream, Inc., Flowers Industries, Inc., IBP,
inc., International Multifoods Corporation, Interstate Bakeries Corporation,
Keebler Foods Company, Krispy Kreme Doughnuts, Inc., Lancaster Colony
Corporation, Michael Foods, Inc., NBTY, Inc., Ralcorp Holdings, Inc., Smithfield
Foods, Inc., Suiza Foods Corporation, The Earthgrains Company, The Hain
Celestial Group, Inc., The Pepsi Bottling Group, Inc., The Robert Mondavi
Corporation, Triarc Companies, Inc. and Universal Corporation. Those companies
are included in the Groups this year. Bestfoods and Nabisco Group Holdings
Corp., companies included in the Groups last year, are excluded from the Groups
this year. Additionally, ConAgra Inc. changed its name to ConAgra Foods, Inc.
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1995.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF THE COCA-COLA COMPANY
AND ITS SUBCOMMITTEES ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of The Coca-Cola
Company and related subcommittees (the "Committees") offer this report regarding
compensation policies for executive officers and the Chief Executive Officer of
the Company.
The overall goal of the Committees is to develop executive compensation
policies and practices that are consistent with and linked to the Company's
strategic business objectives. As the year 2000 represented a year of
significant change for the Company, the Committees undertook a comprehensive
review of the Company's total compensation philosophy to ensure that that
philosophy remained aligned with our strategic business objectives. To begin the
process, the Committees reaffirmed certain principles related to structuring the
compensation packages of executive officers. They are as follows:
Long-Term and At-Risk Focus. The majority of pay for executive
officers should be composed of long-term, at-risk pay to focus management
on the long-term interests of share owners. While base salary, annual
incentives and employee benefits should be at competitive levels, the
continued focus for top executives is the long-term growth of the Company.
Equity Orientation. Equity-based plans should comprise a major part
of the at-risk portion of total compensation to instill ownership thinking
and to link compensation to corporate performance and share-owner
interests. Consistent with this philosophy, the Company has established
ownership guidelines for executives with consequences for shortfalls.
Management Development. To support the Board of Directors in
fulfilling its responsibility of identifying future business leaders,
compensation opportunities should be structured to attract and retain those
individuals who can maximize the creation of share-owner value.
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Competitiveness. The Company emphasizes total compensation
opportunities while at the same time focusing attention on the competitive
posture of each component of compensation. The development of at-risk pay
policies is influenced by competitive practice. Competitiveness of base
salary and annual incentives is independent of stock performance. However,
overall competitiveness of total compensation will remain contingent on
long-term, stock-based compensation programs. In line with this principle,
current total compensation competitiveness is targeted in the top quartile
of the range of total compensation of a comparator group of companies
described in the text section of this proxy statement.
These principles apply to compensation policies for all executive
officers. The Committees do not follow the principles in a mechanistic
fashion; rather, the Committees use experience and judgment in determining
the appropriate mix of compensation for each individual.
The sections that follow illustrate these principles.
COMPONENTS OF EXECUTIVE COMPENSATION
The primary components of executive compensation are:
- ANNUAL CASH COMPENSATION, including base salary and annual incentives.
- LONG-TERM INCENTIVE COMPENSATION, including cash long-term incentives,
stock options and restricted stock.
Executive officers receive compensation structured to meet varying business
objectives, and to cumulatively provide a level of total compensation in the top
quartile of the range of total compensation offered by a comparator group. The
companies selected for comparison of total compensation differ from those
included in the Performance Graph because the Company seeks talent from a
broader group of companies than the Food, Beverage and Tobacco Groups against
which performance is compared.
Total compensation comparators are selected by screening large public
companies for such performance characteristics as profit growth and return on
equity. Those companies exhibiting leadership in the performance measures over
sustained periods are selected as benchmarks for the Company's total
compensation standards.
The philosophy underlying each category is discussed herein.
ANNUAL CASH COMPENSATION
Base Salary. The purpose of base salary is to create a secure base of cash
compensation for executive officers that is competitive with the U.S. market for
global talent. Generally, total cash compensation (base salary plus cash
incentives) for executive officers will be targeted within the third quartile
versus the relevant talent market. The Committees exercise their discretion in
making salary decisions and rely to a large extent on the Chief Executive
Officer's evaluations of individual executive officer performance after
reviewing such performance with him. Salary increases for executive officers do
not follow a preset schedule or formula.
Base salary will provide an income level that is sufficient to minimize
day-to-day distractions of executives from their focus on long-term business
growth. However, base pay levels are not intended to be the vehicle for
significant long-term capital and wealth accumulation for executives.
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With individual variation, base pay for the executive officer group
generally falls within the targeted third quartile of the relevant talent
market.
Annual Incentives. The purpose of annual incentives is to provide cash
compensation that is at-risk on an annual basis and is contingent on the
achievement of annual business and operating objectives. Annual incentives
measure business performance, include performance for operating groups and
divisions where responsibilities are group and division responsibilities, and
are a primary program for measuring individual performance. Annual incentives
provide a payout scale with high up-side opportunity for high performance and
zero payout for low performance. Additionally, annual incentives provide income
levels that are sufficient to allow for modest capital and wealth accumulation
for executive officers in the presence of high levels of business performance.
The Company has maintained the Annual Performance Incentive Plan, and
adopted the Executive Performance Incentive Plan effective January 1, 1994.
Executive officers may be selected for participation in either, but not both, of
these plans. For those executive officers participating in the Executive
Performance Incentive Plan, the Compensation Committee has created a companion
incentive plan that allows a subjective evaluation of each executive officer's
individual performance. Each plan is described below.
Annual Performance Incentive Plan. Target annual incentives are
established for certain key executives, including executive officers not
expected to be subject to Section 162(m) of the Internal Revenue Code of
1986. The actual award is based on operating income and volume performance,
as well as personal performance, and may be greater or less than the target
annual incentive. Below a threshold level of performance, no awards may be
granted. Generally, income growth and volume increases are weighted higher
than personal performance, but the weightings may be adjusted to take into
account unusual circumstances.
Executive Performance Incentive Plan. The Committees may approve some
or all of the executive officers for participation in this plan each year,
and executive officers selected for participation are not eligible for
participation in the Annual Performance Incentive Plan. Target annual
incentives are established for each approved executive officer. The award
is based on earnings per share ("EPS") gain, unit case volume increases and
change in share of soft drink sales, and may be greater or less than the
target annual incentive set under this plan. Nearly 95% of the award is
determined from equal weightings on volume growth and earnings per share,
with the remaining amount determined by change in share of sales. Payments
from this plan are intended to qualify as tax-deductible performance-based
compensation under the terms of Section 162(m).
Executive Incentive Plan. This plan is a companion plan to the
Executive Performance Incentive Plan (the "EPIP") so that the executive
officers covered under that plan may also be measured for individual
performance and for achievement of goals such as those related to
diversity, quality and the environment which are not currently part of the
share-owner approved EPIP. A portion of the total target annual incentive
is payable under this plan and the determination of individual performance
against goals is made by the Committees for the Chairman and by the
Chairman for his direct reports. Payments from this plan are not intended
to qualify as tax-deductible performance-based compensation under the terms
of Section 162(m).
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LONG-TERM INCENTIVE COMPENSATION
Long-term incentives comprise the largest portion of the total compensation
package for executive officers. There are three forms of long-term incentives
utilized for executive officers, including stock options, restricted stock and
long-term incentive plans with cash awards. In any given year, an executive
officer may be offered participation in a single plan or in a combination of
plans. In the presence of high levels of business performance, long-term
incentives will provide income levels that are sufficient to allow for capital
and wealth accumulation for executive officers. As framed by the guiding
principles described earlier, the Company targets a level of total compensation
for executive officers in the top quartile of the comparator group range.
Because base salary and annual incentives are targeted within the third
quartile, the compensation focus for executive officers is clearly on long-term
incentives. The scope of long-term incentive opportunities targeted for each
executive officer is determined primarily by the variance between the desired
level of total compensation and the combined amount of base salary, employee
benefits and annual incentives. The actual long-term incentive amount is
determined by both individual and Company performance.
Factors which influence decisions regarding what form of long-term
incentives to grant to a particular executive officer include individual
performance, tenure with the Company, history of past grants, time in current
job and level of or significant changes in responsibility. These subjective
criteria are used for determining award type for all executive officers.
Each form of long-term incentive is discussed below.
Stock Options. The purpose of stock options is to provide equity
compensation whose value is entirely at-risk based on the increase in
Company stock price and the creation of share-owner value. Stock options
also allow executive officers to have equity ownership and to share in the
appreciation of the value of the stock in the Company. Stock options only
have value if the stock price appreciates in value from the date the
options are granted.
Stock option awards are based on business and individual performance
with high up-side award opportunity for high performance and no award
opportunity for low performance.
Approximately 8,700 employees received option awards in 2000. The
named executive officers received option awards for 1,960,000 shares in
2000.
Long-Term Performance Incentive Plan. The Long-Term Performance
Incentive Plan is a three-year performance plan. The plan includes the
following performance measures: unit case volume growth, growth in economic
profit, operating profit margin and share of sales. It also provides that
the Committee may, at the beginning of a performance period, designate two
or more of such measures to apply in calculating long-term incentive awards
for such period. The Compensation Committee believes that these factors are
key contributors, over time, to the creation of share-owner value. Below a
threshold level of performance, no awards can be earned. Restrictions are
attached on one-half of any award earned for two years after the end of the
performance period. The role of this plan is to maintain executive focus on
the drivers of the business at all times, regardless of periodic
distortions in the equity markets caused by external factors.
Long-term incentives only measure Company business performance and not
individual performance and link all executive actions to total Company
business results. Participation in the Long-Term Incentive Plan has been
expanded to include levels of key management who can directly impact
Company results, including the Division President level.
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Restricted Stock. The Restricted Stock Award Plan is designed to
focus executives, including executive officers, on the long-term
performance of the Company for the duration of their careers. Restricted
stock is used not as a guaranteed element of any executive's total
compensation, but as a special compensation tool for various reasons:
- to provide equity compensation whose value is at-risk and based on
the achievement of medium term goals (3 to 5 years) and the
enhancement of share-owner value over that time,
- to provide an effective retention mechanism for key executive talent
over the medium term, and
- to provide a mechanism for grants to executives that vest only upon
retirement to ensure their continuing commitment to long-term
business success.
Subject to share-owner approval, specific, measurable, performance
measures such as earnings per share will be used when restricted stock is
performance-related. Individual performance is not a measure used in
determining restricted stock performance vesting.
Executive officers, as a group, received or were promised 1,675,000
shares of restricted stock in 2000. All of the awards to executive
officers, with the exception of Mr. Daft who is discussed below, were made
with performance measurement targets.
ADDITIONAL INFORMATION
Stock Ownership Guidelines. In keeping with the principles set forth at
the beginning of this report, the Compensation Committee has established stock
ownership guidelines for officers and key employees of the Company. The
guidelines for stock ownership range from stock valued at two to eight times
base salary, depending on job level, and are particularly aggressive compared to
guidelines set by other companies. Only stock purchased by the individual is
considered for purposes of meeting the ownership guidelines. Stock granted as
matching contributions in the Thrift Plan or as restricted stock is not
considered in measuring compliance with the guidelines. Penalties in the form of
reduced future option grants may be applied to those who do not meet the
guidelines within five years of becoming covered by the guidelines.
Benefits. Benefits offered to executive officers serve a different purpose
than do the other elements of total compensation. In general, they are designed
to provide a safety net of protection against the financial catastrophes that
can result from illness, disability or death, and to provide a reasonable level
of retirement income based on years of service with the Company. Benefits
offered to executive officers are largely those that are offered to the general
employee population, with some variation, primarily to promote tax efficiency
and replacement of benefit opportunities lost due to regulatory limits.
Tax Compliance Policy. A feature of the Omnibus Budget Reconciliation Act
of 1993 limits deductibility of certain compensation for the Chief Executive
Officer and the additional four executive officers who are highest paid and
employed at year end to $1 million per year, effective for tax years beginning
on or after January 1, 1994. If certain conditions are met, including the
removal of positive discretion in the determination of individual rewards,
compensation may be excluded from consideration of the $1 million limit. The
policy of the Committees related to this Act is to establish and maintain a
compensation program that maximizes the creation of long-term share-owner value.
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In 1994, share owners approved the Executive Performance Incentive Plan and
a revised Long-Term Performance Incentive Plan, both of which meet the
conditions necessary for deductibility. Both plans were re-approved by share
owners in 1999 and the Company's Stock Option Plans meet the necessary
conditions, evidencing the intent of the Committees to comply with this Act. It
must be noted, however, that the Committees are obligated to the Board and the
share owners of the Company to recognize and reward performance, which increases
the value of the Company. Accordingly, the Committees will continue to exercise
discretion in those instances where the mechanistic approaches necessary under
tax law considerations would compromise the interests of share owners.
COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The year 2000 was a pivotal year for The Coca-Cola Company. Mr. Daft was in
his first year of leadership; it is the expectation of the Compensation
Committee and of the Board that he will demonstrate highly effective leadership
and vision in a uniquely complex marketplace and will consistently drive
business results through innovation and creative solutions.
The Compensation Committee met and made several pay decisions related to
the Chairman's compensation package both as a result of his being elected
Chairman and also as a result of a comprehensive review of executive
compensation. Those pay decisions are as follows:
ANNUAL CASH COMPENSATION
Base salary for Mr. Daft was increased to $1,200,000 upon his election as
Chairman in February. After a full review of competitive market data, an
adjustment in annual base salary to $1,500,000 was made effective August 1,
2000. Mr. Daft's base pay falls in the lower part of the fourth quartile for
comparable positions.
Annual incentive targets were developed for Mr. Daft based upon established
methodology and targets. After a review of competitive pay information, the
Committee concluded that annual incentive targets for executive positions,
including the Chairman's, had fallen below competitive levels. Therefore, the
Committee selectively increased the target awards for 2000. As a result, for the
year 2000, Mr. Daft's annual incentive award includes both a portion payable
according to established EPIP targets, $928,305, which is tax deductible, and a
portion that represents the higher target award, which for this year will not
qualify for tax deductibility under the provisions of Section 162(m). That
amount, $2,071,695, includes the 50% advance payment of incentives which was
made in August of 2000 to all incentive-eligible employees.
LONG-TERM INCENTIVE COMPENSATION
Long-Term Incentives. Mr. Daft did not earn an award for the performance
period ended December 31, 2000. Actual growth in unit case volume and economic
profit for the three-year period determined the level of payout, and performance
fell below the minimum of the range, therefore yielding no payout for the
performance period to any plan participants.
Stock Options. Mr. Daft received a retention stock option award of 650,000
shares with a three-year cliff vesting schedule in February 2000. This award was
made to Mr. Daft and appropriate other awards were made to other key employees
to ensure retention of Company leadership in this critical time of the Company's
transition. No additional stock option award was made to Mr. Daft at the
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annual grant time, although competitive information indicated that such an award
would be within appropriate market competitive levels.
Restricted Stock. Mr. Daft received a restricted stock award in 2000 of
500,000 shares. These grants of restricted shares are subject to forfeiture
until retirement (not to occur before age 62 and before five years have elapsed
from the date of the grant), death, disability or a change in control. This
restricted stock award was within the competitive ranges for long-term awards
for comparable positions.
Subject to share-owner approval, Mr. Daft also received an award of
1,000,000 performance-based restricted shares which are subject to specific EPS
performance targets over a five-year measurement period. For example, if average
annual EPS performance is 15% over the five-year measurement period beginning
January 1, 2001, 50% of the award will be released to Mr. Daft. For each percent
increase above 15% in realized average annual growth in EPS, a higher percent of
restricted shares are released. If EPS performance is at least 20% over the same
period, the entire award will be released to Mr. Daft in March 2006. If EPS
performance is less than 15% over the measurement period, no shares will be
released. The Restricted Stock Subcommittee made this award to incent Mr. Daft
to achieve share-owner objectives for significant Company growth. The award
allows Mr. Daft to achieve significant wealth only in the presence of
significant performance, and the targets set are very aggressive. If those
targets are met, share owners will also experience significant growth in the
value of their holdings.
The Committees believe that the pay decisions made for Mr. Daft in his
first year reflect market-competitive pay for comparable positions and set
significant goals for his achievement of share-owner value over time. Mr. Daft's
performance against established business objectives will determine future pay
levels and awards.
Subcommittees. Based on requirements of various tax and securities rules
and regulations, two subcommittees of the Compensation Committee (the Restricted
Stock Subcommittee and the Stock Option Subcommittee) met and took action in
2000.
Summary. The Committees believe the executive compensation policies and
programs described in this report serve the interests of the share owners and
the Company. Pay delivered to executives is intended to be linked to, and
commensurate with, Company performance and with share-owner expectations. The
Committees caution that the practice and the performance results of the
compensation philosophy described herein should be measured over a period
sufficiently long to determine whether strategy development and implementation
are in line with, and responsive to, share-owner expectations.
Herbert A. Allen, Chairman
Susan B. King
Paul F. Oreffice
Peter V. Ueberroth
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company is composed entirely of the four
outside Directors named as signatories to the Compensation Committee report
above, as was the case during fiscal 2000. Compensation Committee members do not
have any non-trivial professional, familial or financial relationship with the
Chief Executive Officer, other executive officers or the Company, other than his
or her directorship.
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Herbert A. Allen, who serves as Chairman of the Compensation Committee of
the Company's Board of Directors, is President and Chief Executive Officer of
Allen & Company Incorporated ("ACI") and a principal share owner of ACI's
parent. ACI has leased and subleased office space since 1977 in the building
located at 711 Fifth Avenue, New York, New York. A subsidiary of the Company
acquired that building in 1982 as an incidental part of a much larger
transaction. The current lease, as modified from time to time, was entered into
in 1985. In 2000, ACI paid approximately $2.5 million under the lease and it is
expected that ACI will pay a similar amount in 2001 under the terms of the
current lease. In the opinion of management, the terms of the lease, as
modified, are fair and reasonable and as favorable to the Company as those which
could have been obtained from unrelated third parties at the time of its
execution.
CERTAIN INVESTEE COMPANIES
The Company and its subsidiaries together currently hold approximately
40.41% of the issued and outstanding shares of Coca-Cola Enterprises Inc.
("Enterprises"), and approximately 45.49% of the issued and outstanding shares
of Coca-Cola Embonor S.A. ("Embonor"). We call Enterprises and Embonor the
"Investee Companies" in this proxy statement.
CERTAIN TRANSACTIONS AND RELATIONSHIPS WITH THE INVESTEE COMPANIES
James B. Williams, one of our Directors, retired as Chairman of the Board
and Chief Executive Officer of SunTrust in March 1998, and continues to serve as
a Director and Chairman of the Executive Committee of SunTrust. Subsidiary banks
of SunTrust engaged in ordinary course of business banking transactions in 2000,
and are expected to engage in similar transactions in 2001, with Enterprises and
its subsidiaries, including the making of loans on customary terms. Fees for
those transactions of approximately $1,190,000 were paid in 2000. Also in 2000,
Enterprises paid SunTrust approximately $331,000 for vehicle leases for the
transport of product, approximately $110,000 for letter of credit fees and
approximately $135,000 for interest and financing expenses.
Warren E. Buffett, one of our Directors, is Chairman of the Board of
Directors, Chief Executive Officer and a major share owner of Berkshire
Hathaway, which company holds a significant equity interest in American Express
Company. Enterprises paid fees to American Express Company for credit card
memberships, business travel and other services in the ordinary course of
business to subsidiaries of that company. In 2000, Embonor realized a gain of
$260,000 on an interest rate swap from a subsidiary of American Express Company.
Berkshire Hathaway also holds a significant equity interest in The Dun &
Bradstreet Corporation, to which Enterprises paid annual credit service fees of
approximately $147,000 in 2000.
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OWNERSHIP OF SECURITIES IN THE INVESTEE COMPANIES
The following table sets forth information regarding ownership of the stock
of the Investee Companies, if any, by each Director, our five most highly
compensated executive officers, our former Chief Executive Officer, and our
Directors and executive officers as a group, all as of February 16, 2001, except
where noted.
AGGREGATE NUMBER PERCENT OF
OF SHARES OUTSTANDING
NAME COMPANY BENEFICIALLY OWNED SHARES(6)
- ---- ------- ------------------ -----------
Herbert A. Allen....................... Coca-Cola Enterprises 4,315,918(1) 1.03%
Donald F. McHenry...................... Coca-Cola Enterprises 1,020 *
Peter V. Ueberroth..................... Coca-Cola Enterprises 3,086(2) *
Jack L. Stahl.......................... Coca-Cola Enterprises 3,000 *
James E. Chestnut...................... Coca-Cola Enterprises 7,633(3) *
M. Douglas Ivester..................... Coca-Cola Enterprises 53,476(4) *
All Directors and Executive Officers as
a Group (20 Persons)................. Coca-Cola Enterprises 4,398,625(5) 1.04%
- ------------
* Less than 1% of issued and outstanding shares of common stock of the
indicated entity.
(1) Includes 3,683,400 shares owned by Allen & Company Incorporated
("ACI"). Also includes 17,500 shares held by Allen Capital, L.P., 332,500 shares
held by Allen Capital II, L.P. and 45,000 shares held by Allen Capital
International L.P., each of which is an affiliate of ACI's parent company, and
27,000 shares owned by his children; Mr. Allen exercises no investment
discretion or control over and has disclaimed beneficial ownership of such
shares. Does not include 105,000 shares held by ACI's pension plan nor 25,000
shares managed by Mr. Allen's son in a fiduciary capacity over which Mr. Allen
does not have voting or investment power.
(2) Shares are owned by a trust of which Mr. Ueberroth is one of two
trustees.
(3) Includes 4,983 phantom units issued under the Coca-Cola Enterprises
Inc. Deferred Compensation Plan for Non-Employee Director Compensation (the
"Enterprises Plan"). Also includes 1,650 shares which may be acquired upon the
exercise of options which are presently exercisable on or before April 30, 2001.
(4) Includes 630 shares jointly owned with Mr. Ivester's parents and 10,096
phantom units issued under the Enterprises Plan. Also includes 2,388 shares
owned by his wife and 255 shares jointly owned by his wife and his
mother-in-law; Mr. Ivester has disclaimed beneficial ownership of such shares.
Information is as of February 17, 2000, the date of Mr. Ivester's retirement,
except for phantom units.
(5) Includes 10,385 shares which may be acquired upon the exercise of
currently exercisable options and 19,836 phantom units issued under the
Enterprises Plan listed in the above footnotes.
(6) Phantom units issued under the Enterprises Plan and shares which may be
acquired upon the exercise of options are not counted as outstanding in
calculating these percentages.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Ernst & Young LLP to serve as independent auditors for the fiscal year
ending December 31, 2001, subject to ratification of the appointment by the
share owners. Ernst & Young LLP has served as the Company's independent auditors
for many years and is considered by management to be well qualified.
REPORT OF THE AUDIT COMMITTEE
For many years, the Company has had an Audit Committee composed entirely of
non-management directors. The members of the Audit Committee meet the
independence and experience requirements of the New York Stock Exchange. In
2000, the Committee met three times. Our Audit Committee has long followed the
substance of the procedures recommended in the report of the Blue Ribbon
Committee on Improving the Effectiveness of Corporate Audit Committees,
sponsored by the major securities markets, issued in February 1999, and our
Committee has long been advised by independent legal counsel, in its role of
overseeing financial reporting and internal control matters. Thus, when last
year the SEC and the Exchange adopted new audit committee requirements, no
significant changes in the practices of our Audit Committee were required. The
Committee has adopted, and in February 2001 our Board of Directors reapproved, a
charter outlining the practices it follows; a copy of the charter is attached as
Appendix I to this proxy statement.
During the year 2000, at each of its meetings, the Committee met with the
senior members of the Company's financial management team, our director of
internal audit, the Company's general counsel and our independent auditors. The
Committee's agenda is established by the Committee's chairman and the director
of internal audit. The Committee had private sessions, at each of its meetings,
with the Company's independent auditors and, separately, with the director of
internal audit, at which candid discussions of financial management, accounting
and internal control issues took place.
The Committee recommended to the Board of Directors the engagement of Ernst
& Young LLP as our independent auditors and reviewed with the Company's
financial managers, the independent auditors, and the director of internal
audit, overall audit scopes and plans, the results of internal and external
audit examinations, evaluations by the auditors of the Company's internal
controls and the quality of the Company's financial reporting.
Management has reviewed the audited financial statements in the Annual
Report with the Audit Committee including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements. In addressing the quality of management's accounting judgments,
members of the Audit Committee asked for management's representations that the
audited consolidated financial statements of the Company have been prepared in
conformity with generally accepted accounting principles, and have expressed to
both management and auditors their general preference for conservative policies
when a range of accounting options is available.
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In its meetings with representatives of the independent auditors, the
Committee asks them to address, and discusses their responses to several
questions that the Committee believes are particularly relevant to its
oversight. These questions include:
- Are there any significant accounting judgments made by management in
preparing the financial statements that would have been made differently
had the auditors themselves prepared and been responsible for the
financial statements?
- Based on the auditors' experience, and their knowledge of the Company, do
the Company's financial statements fairly present to investors, with
clarity and completeness, the Company's financial position and
performance for the reporting period in accordance with generally
accepted accounting principles, and SEC disclosure requirements?
- Based on the auditors' experience, and their knowledge of the Company,
has the Company implemented internal controls and internal audit
procedures that are appropriate for the Company?
The Committee believes that, by thus focusing its discussions with the
independent auditors, it can promote a meaningful dialogue that provides a basis
for its oversight judgments.
The Committee also discussed with the independent auditors other matters
required to be discussed by the auditors with the Committee under Statement on
Auditing Standards No. 61 (communication with audit committees). The Committee
received and discussed with the auditors their annual written report on their
independence from the Company and its management, which is made under
Independence Standards Board Standard No. 1 (independence discussions with audit
committees), and considered with the auditors whether the provision of financial
information systems design and implementation and other non-audit services
provided by them to the Company during 2000 was compatible with the auditors'
independence.
In performing all of these functions, the Audit Committee acts only in an
oversight capacity. The Committee does not complete its reviews prior to the
Company's public announcements of financial results and, necessarily, in its
oversight role, the Committee relies on the work and assurances of the Company's
management, which has the primary responsibility for financial statements and
reports, and of the independent auditors, who, in their report, express an
opinion on the conformity of the Company's annual financial statements to
generally accepted accounting principles.
In reliance on these reviews and discussions, and the report of the
independent auditors, the Audit Committee has recommended to the Board of
Directors, and the Board has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000, for filing with the Securities and Exchange Commission.
Peter V. Ueberroth, Chairman
Ronald W. Allen
Cathleen P. Black
Warren E. Buffett
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AUDIT FEES, FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES AND ALL
OTHER FEES. Fees for the last annual audit were approximately $5.5 million,
financial information systems design and implementation fees were approximately
$3.7 million and all other fees were approximately $20.5 million, including
audit related services of approximately $9.5 million and nonaudit services of
approximately $11 million. Audit related services generally include fees for
statutory audits, information systems audits, business acquisitions, and
accounting consultations. Financial information systems design and
implementation fees consist entirely of fees billed by the Ernst & Young LLP
consulting group prior to its sale on May 27, 2000 to Cap Gemini, a separate
French public company.
We have been advised by Ernst & Young LLP that neither the firm, nor any
member of the firm, has any financial interest, direct or indirect, in any
capacity in the Company or its subsidiaries.
One or more representatives of Ernst & Young LLP will be present at this
year's Annual Meeting of Share Owners. The representatives will have an
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
Ratification of the appointment of the independent auditors requires the
affirmative vote of a majority of the votes cast by the holders of the shares of
Common Stock voting in person or by proxy at the Annual Meeting of Share Owners.
If the share owners should not ratify the appointment of Ernst & Young LLP, the
Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS.
PROPOSAL TO APPROVE
THE AMENDMENT TO THE 1989 RESTRICTED
STOCK AWARD PLAN OF THE COCA-COLA COMPANY
AUTHORIZING THE GRANT OF PERFORMANCE-BASED AWARDS
AND THE ESTABLISHMENT OF PERFORMANCE CRITERIA THEREUNDER,
WHICH APPROVAL SHALL ALSO CONSTITUTE APPROVAL OF
ALL PERFORMANCE-BASED AWARDS GRANTED
DURING FISCAL YEAR 2000
(ITEM 3)
SUMMARY
We are asking for your approval of an Amendment to the 1989 Restricted
Stock Award Plan of The Coca-Cola Company (the "Plan"). The Amendment would
permit the Restricted Stock Subcommittee to make Awards conditioned on
performance criteria. The Plan, which was approved by share owners on April 19,
1989, currently has no performance measures. The Amendment would not cause any
additional costs to share owners, would give the Company the benefit of a tax
deduction and would provide the performance-based compensation element for use
in appropriate circumstances. The closing price of a share of Company stock on
the New York Stock Exchange on February 20, 2001 was $58.47.
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The Plan itself does not require that this Amendment be approved by share
owners. Share owners approved the Plan on April 19, 1989 without performance
requirements. However, the Restricted Stock Subcommittee and the Board of
Directors made the Amendment and the awards made under it contingent on
share-owner approval. Share-owner approval is required for the amount of the
Awards, if earned, to be deductible by the Company under Code Section 162(m).
That section limits deductibility of certain compensation in excess of $1
million per year paid by a publicly traded corporation to a Covered Employee.
Covered Employees are the Chief Executive Officer and the four other highest
compensated executive officers. Please note that whether or not the Amendment is
approved, the Restricted Stock Subcommittee may continue to make Awards that are
not performance-based.
The Plan has been amended from time to time and on October 18, 2000 the
Restricted Stock Subcommittee made performance-based Awards and established
performance criteria and targets for these Awards, subject to share-owner
approval of the Amendment. On February 15, 2001, the Board adopted the
Restricted Stock Subcommittee's recommendation to amend the Plan to establish
performance criteria with respect to future grants of performance-based Awards
under the Plan. Share-owner approval of the Amendment will also constitute
approval of all grants of performance-based Awards made under the Plan during
the 2000 calendar year that apply the performance criteria set out in the
Amendment. The performance criteria described below and all performance-based
Awards applying such criteria that were granted in fiscal year 2000 under the
Plan are contingent upon approval by the majority of votes cast by holders of
the shares of Company Common Stock voting in person or by proxy at the Annual
Meeting. These performance criteria are intended to align the interests of key
executives more closely with the interests of share owners.
TAX ISSUES
Code Section 162(m) limits the deductibility of compensation of Covered
Employees to $1 million per year unless the compensation qualifies as
"performance-based." Compensation in the form of restricted stock can be
excluded from this limit on deductibility if four conditions set forth by the
Internal Revenue Service are met. These conditions are: (i) the compensation is
payable on the attainment of one or more pre-established, objective performance
criteria; (ii) the performance criteria are established by a committee that is
comprised solely of two or more outside directors (such as the Restricted Stock
Subcommittee); (iii) the material terms of the compensation and performance
criteria are disclosed to and approved by share owners before payment; and (iv)
the committee that established the performance criteria certifies that the
performance criteria have been satisfied before payment.
SUMMARY OF PLAN AND PERFORMANCE CRITERIA
The following summary of the Plan is qualified in its entirety by the text
of the Plan and the Amendment. The Plan is administered by the Restricted Stock
Subcommittee of the Board of Directors. Eligibility requirements for the members
of the Restricted Stock Subcommittee shall comply with the provisions of Rule
16b-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation and currently meets the requirements for
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"outside directors" under Code Section 162(m). The Restricted Stock Subcommittee
has full and final authority, in its discretion, to determine the officers and
key employees who would be granted Awards of restricted stock under the Plan,
the number of shares subject to each such Award, the period during which each
Award shall be subject to forfeiture, and all other terms and conditions of each
Award, including whether the Award will be performance-based and the performance
criteria applicable to any such performance-based Award.
The material terms of the Plan, as amended, and the performance criteria
established thereunder for performance-based Awards are as follows:
Eligibility. The Restricted Stock Subcommittee is authorized to grant
Awards of restricted stock under the Plan to officers and other key employees
(as determined by the Restricted Stock Subcommittee) of the Company. Awards may
also be granted to officers and other key employees of a Related Company (as
defined in the Plan), but only if at the time of the grant the Company owns,
directly or indirectly, either, (i) at least 50% of the voting stock or capital
of the Related Company or (ii) an interest that causes the Related Company's
financial results to be consolidated with the Company's financial results for
financial reporting purposes. Although the class of employees that is generally
eligible for restricted stock Awards under the Plan is broader, it is expected
that the employees who will receive performance-based Awards tied to the
performance criteria shall be limited to executive officers, senior
vice-presidents and other key executives of the Company and subsidiaries
(approximately 50 persons), as determined by the Restricted Stock Subcommittee
in its sole discretion. No person is automatically eligible to participate in
the Plan in any plan year. The Restricted Stock Subcommittee may make occasional
Awards to key employees who are not included in the group of 50 persons in
particular circumstances.
Awards and Performance Criteria. All Awards under the Plan are in the form
of restricted stock or a promise to award restricted stock. Generally,
restrictions on Awards of restricted stock under the Plan lapse and shares are
released upon the earlier of a Change in Control (as defined in the Plan), or
the participant's death, disability or retirement after attaining age 62, but
only if such retirement occurs at least five years after the date of grant.
Under the Plan, however, the Restricted Stock Subcommittee has discretion to
grant Awards that are subject to such other conditions and different periods of
restriction as it determines appropriate from time to time. The Restricted Stock
Subcommittee exercised such discretion in fiscal year 2000, subject to
share-owner approval of this proposal, to make grants of performance-based
restricted stock Awards that are conditioned upon the attainment of the
performance criteria described below. The Amendment was subsequently adopted by
the Board on February 15, 2001, effective October 18, 2000, to specifically
authorize the grant of performance-based Awards and to establish performance
criteria for such Awards.
Under the terms of the Amendment, shares underlying the performance-based
Awards will generally be released on March 1 following the completion of the
"measurement period," based on the level of attainment during the measurement
period of certain performance targets established by the Restricted Stock
Subcommittee at or prior to the time of grant. If the performance targets are
not attained during the measurement period, all shares underlying the Award will
be forfeited. The measurement period will be determined by the Restricted Stock
Subcommittee at the time of grant and will be a period of years commencing on
January 1 of the first year of the measurement period
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and ending on December 31st of the last year of the measurement period. Grants
will be made no later than ninety days after commencement of the applicable
measurement period, or in the case of deferred grants, after the measurement
period, but prior to the release date.
The Restricted Stock Subcommittee has complete discretion to establish the
performance criteria that will be applicable to each grant and to determine the
percentage of shares that will be released upon various levels of attainment of
the performance criteria. To comply with Code Section 162(m), the establishment
of the performance criteria and the determination of the release formula must be
made at the time of grant, but in no event later than ninety days after the
commencement of the measurement period. The Restricted Stock Subcommittee may
select the performance criteria that will be applicable to an Award from the
following list:
(i) average annual growth in earnings per share;
(ii) increase in share-owner value;
(iii) earnings per share;
(iv) net income;
(v) return on assets;
(vi) return on share-owners' equity;
(vii) increase in cash flow;
(viii) operating profit or operating margins;
(ix) revenue growth of the Company;
(x) operating expenses; and
(xi) quality as determined by the Company's Quality Index.
Even if the performance criteria are met, the Restricted Stock Subcommittee
has discretion (which may be exercised at any time before shares are finally
released) to decrease, but not increase, the number of shares that will be
released upon the various levels of attainment of the performance criteria. No
shares shall be released until the Controller and the Restricted Stock
Subcommittee certify the level of attainment of the applicable performance
criteria.
For individuals resident outside the United States, the Restricted Stock
Subcommittee may award contractual promises to grant restricted stock at a
future date. Such Awards will be subject to one or more of the performance
criteria set forth in the Amendment, and no grant of restricted stock shall be
released unless the Controller and Restricted Stock Subcommittee certify that
the performance criteria have been achieved.
A copy of the Amendment is included as Appendix II.
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Limitation of Awards. As adopted in 1989, the Plan authorized the issuance
of up to 5,000,000 shares of Common Stock (or 40,000,000 shares as adjusted for
subsequent stock splits). As of December 31, 2000, a total of 27,579,980 shares
remain available for issuance under the Plan. This number reflects the
performance-based Awards made in 2000, except where the Award consisted of a
contractual promise. No more than 20% of shares available for issuance under the
Plan may be issued to any one participant. The aggregate number of shares
issuable under the Plan, and the aggregate amount issuable to any one
participant, are subject to adjustment in the event of any changes in the Common
Stock due to stock dividends, stock splits or recapitalization, merger,
consolidation, combination of shares or other similar action or event.
ESTIMATE OF BENEFITS
The number of shares of restricted stock that will be awarded to the
Company's Chief Executive Officer and the other four most highly compensated
executive officers of the Company pursuant to the Plan, as amended, is within
the discretion of the Restricted Stock Subcommittee and therefore is not
currently determinable. The number of shares of restricted stock that were
awarded under the Plan (including both performance-based Awards and Awards that
were not subject to performance criteria and both restricted stock and
contingent contracts to grant restricted stock at a future date) to the
Company's Chief Executive Officer and the other four most highly compensated
executive officers of the Company and to other persons participating in the Plan
for fiscal year 2000 are as follows:
PERFORMANCE NON-PERFORMANCE
NAME AND POSITION SHARES SHARES
- ----------------- ----------- ---------------
Douglas N. Daft, Chairman of the Board and Chief Executive
Officer................................................... 1,000,000 500,000
Jack L. Stahl, President.................................... 150,000 0
James E. Chestnut, Executive Vice President................. 125,000 0
Charles S. Frenette, Executive Vice President............... 125,000 0
Carl Ware, Executive Vice President......................... 125,000 0
M. Douglas Ivester, former Chairman of the Board and Chief
Executive Officer......................................... 0 0
Executive Officers (including the persons named above)...... 1,675,000 500,000
Non-Executive Director Group................................ 0 0
Non-Executive Officer Employee Group........................ 1,000,000 0
FISCAL YEAR 2000 PERFORMANCE-BASED AWARDS
In the fourth quarter of 2000, the Restricted Stock Subcommittee granted
performance-based Awards under the Plan to certain executive officers, senior
vice-presidents and other key executives of the Company. These grants are
subject to the approval of the Amendment by the Company's share owners at the
2001 Annual Meeting and will be voided if such approval is not obtained. The
applicable performance criteria for these grants are based on annual average
growth in "earnings per share" during the measurement period, as established by
the Restricted Stock Subcommittee on
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October 18, 2000. No shares will be released unless the Controller and the
Restricted Stock Subcommittee certify that average annual growth in earnings per
share during the measurement period met the then applicable target. In the case
of Mr. Daft's award of 1,000,000 performance-based restricted shares, no shares
will be released unless annual average growth in earnings per share is at least
15% over the five-year measurement period beginning January 1, 2001, in which
case 50% of the award will be released to Mr. Daft. Additional shares will be
released for each additional one percent increase above 15% in average annual
growth in earnings per share. If such growth is 20% or more over the measurement
period, the entire award will be released. For this purpose, earnings per share
will be determined using the formula for diluted earnings per share defined in
FAS 128 (excluding nonrecurring items), which is: (a) the sum of income
available to common Stock Owners (excluding nonrecurring items) plus the effect
of assumed conversions, over (b) the sum of weighted-average shares plus
dilutive potential common shares. Because the performance criterion established
for the fiscal year 2000 performance-based Awards is consistent with the
performance criteria set out in the Amendment, approval of the Amendment by the
Company's share owners will also constitute approval of the performance
criterion for the fiscal year 2000 grants for purposes of Code Section 162(m).
FEDERAL INCOME TAX CONSEQUENCES
Under present United States income tax laws, participants will realize
ordinary income in the taxable year that the awarded shares are released from
restrictions (and are thus no longer subject to a substantial risk of
forfeiture) in an amount equal to the fair market value of the shares at the
time of release. A participant may, however, elect within 30 days of the Award
grant date to realize ordinary income in the taxable year of the grant in an
amount equal to the fair market value of the shares at the time of grant. The
Company will receive a deduction for the amount constituting ordinary income to
the participant in the year that the participant realizes such ordinary income
provided that the Plan satisfies the requirements of Code Section 162(m). It is
the Company's intention that the Plan be construed and administered in a manner
that maximizes the deductibility of compensation for the Company under Code
Section 162(m). For individuals resident outside the United States, the tax
consequences to the individual and to the Company (and/or its subsidiaries) are
determined by the applicable tax laws of the foreign jurisdiction.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE PROPOSAL TO APPROVE THE AMENDMENT TO THE 1989 RESTRICTED STOCK AWARD PLAN OF
THE COCA-COLA COMPANY AUTHORIZING THE GRANT OF PERFORMANCE-BASED AWARDS AND THE
ESTABLISHMENT OF PERFORMANCE CRITERIA THEREUNDER, WHICH APPROVAL SHALL ALSO
CONSTITUTE APPROVAL OF ALL PERFORMANCE-BASED AWARDS GRANTED DURING FISCAL YEAR
2000. PROXIES RECEIVED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHARE
OWNERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
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PROPOSALS OF SHAREOWNERS
ITEMS 4 THROUGH 6
The following three proposals were submitted by share owners. If the
share-owner proponent, or a representative who is qualified under state law, is
present and submits his or her proposal for a vote, then the proposal will be
voted upon at the Annual Meeting. In accordance with Federal securities
regulations, we include the share-owner proposals plus any supporting statement
exactly as submitted by the proponents. To make sure readers can easily
distinguish between material provided by the proponents and material provided by
the Company, we have put a box around material provided by the proponents. If
proposals are submitted by more than one share owner, we will only list the
primary filer's name, address and number of shares held. We will provide the
information regarding co-filers to share owners promptly if we receive an oral
or written request for the information.
SHARE-OWNER PROPOSAL ON GENETIC ENGINEERING (ITEM 4)
William C. Wardlaw III, c/o Harrington Investments, Inc., of 1001 Second
Street, Suite 325, Napa, California 94559, owner personally of 103,519 shares of
The Coca-Cola Company Common Stock, submitted, along with other co-filers, the
following proposal:
- --------------------------------------------------------------------------------
WHEREAS:
International markets for genetically engineered (GE) foods are threatened by
extensive resistance:
- - Europe's larger food retailers, including Tesco, Sainsbury Group, Carrefour,
and Rewe, have committed to removing GE ingredients from their store-brand
products, as have U.S. retailers Whole Foods Market, Wild Oats Markets, and
Genuardi's Family Markets;
- - In the UK, three fast-food giants -- McDonald's, Burger King, and Kentucky
Fried Chicken -- exclude GE soy and corn ingredients from their menus;
- - McCain Foods of Canada, the world's largest potato and frozen French fry
processor, announced it would no longer accept GE Bt potatoes for their
brand-name products (11/99);
- - Gerber Products announced it would not allow GE corn or soybeans in any of
their baby foods (7/99);
- - Pepsico's Frito Lay asked farmers that supply corn for their chips to provide
only non-GE corn (1/2000);
- - Philip Morris' Kraft Foods had to recall 2.5 million taco shells discovered to
contain genetically engineered corn not approved for human consumption
(9/2000);
- - Once in effect, the Biosafety Protocol, approved by representatives of more
than 130 countries (1/2000), will require that genetically engineered
organisms (GEOs) intended for food, feed and processing must be labeled "may
contain" GEOs, and countries can decide whether to import those commodities
based on a scientific risk assessment.
There is scientific concern that genetically engineered agricultural products
may be harmful to humans, animals, or the environment:
- - The USDA has acknowledged (7/13/1999) the need to develop a comprehensive
approach to evaluating long-term and secondary effects of GE products;
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
- - Some GE crops have been engineered to have higher levels of toxins, such as
Bacillus thuringiensis (Bt), to make them insect-resistant;
- - Research has shown that Bt crops are building up Bt toxins in the soil,
thereby disturbing soil ecology and impacting beneficial organisms and insects
(12/1999, 5/2000);
- - The National Academy of Sciences report, Genetically Modified Pest-Protected
Plants, recommends development of improved methods for identifying potential
allergens in genetically engineered pest-protected plants. The report found
the potential for gaps in regulatory coverage. (4/2000)
The long U.S. tradition of citizens' "right to know" is expressed in laws
requiring nutritional labeling of foods:
- - Nineteen polls in the U.S. show that 75-95% of people surveyed want GE food to
be labeled as such.
- - GE crops may incorporate genes from animal species. Individuals wishing to
avoid them for religious or ethical reasons cannot unless they are labeled;
- - The European Union requires labeling of GE foods, and labeling has been
proposed by governmental authorities in Japan, New Zealand, South Korea and
Australia.
RESOLVED: Shareholders request that the Board of Directors adopt a policy to
phase out genetically engineered crops, organisms, or products thereof from all
products sold or manufactured by the company as quickly as feasible, unless
long-term safety testing shows that they are not harmful to humans, animals, and
the environment; and provide the interim step of labeling and identifying
products that may contain these ingredients, and reporting to the shareholders
by August 2001.
- --------------------------------------------------------------------------------
STATEMENT AGAINST SHARE-OWNER PROPOSAL ON GENETIC ENGINEERING
We recognize the views of those who oppose genetic engineering in
agriculture, and respect their right to those views. We are continually
monitoring this field ourselves. However, with respect to this specific
proposal, we can assure our share owners that the new crop varieties at issue
here do not alter the safety or quality of our products in any way.
Our soft drinks and juice drinks do not contain the protein or DNA modified
through biotechnology that is at issue here. This is true because any DNA or
protein, genetically-modified or not, is removed from our sweeteners during the
refining process. Therefore, any attempt to stamp our products as containing
"biotech" or "nonbiotech" would be misleading.
The Coca-Cola Company has been a leading proponent of the purity, safety
and quality of food and beverage products for more than a century. That remains
our top priority today. We have a firm policy of using only ingredients that
have been thoroughly evaluated for safety and accepted for food use by all
appropriate regulatory authorities.
We will continue to support the efforts of national and international
food-safety and regulatory authorities to take whatever steps are necessary,
based on sound scientific principles, to assure that any new food technology is
safe for consumers and the environment. This proposal would require our Company
to depart from that time-honored policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THE PROPOSAL ON GENETIC ENGINEERING.
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SHARE-OWNER PROPOSAL ON RECYCLING (ITEM 5)
Walden Asset Management of 40 Court Street, 9th Floor, Boston,
Massachusetts 02108, owner of 6,500 shares of The Coca-Cola Company Common
Stock, submitted, along with other co-filers, the following proposal:
- -------------------------------------------------------------------------------
WHEREAS Our Company has repeatedly emphasized its commitment to environmental
leadership, and its brand value depends on excellence. CEO Douglas Daft has
stated "Our long-term success depends on quenching the thirst of consumers each
day in an environmentally sound and sustainable way."
Yet Coca-Cola has no comprehensive recycling strategy that includes publicly
stated, quantitative goals for boosting significantly the recycled content in
its U.S. beverage containers or for enhanced rates of beverage container
recovery in the U.S.
Nearly one-third of Coca-Cola's bottled products are bottled in plastic
(polyethylene terephthalate or PET) beverage containers, yet Coca-Cola's plastic
beverage containers in the U.S. contain a mere 2.5% recycled content. This is
not "an environmentally sound and sustainable" path. At the same time Coca-Cola
bottles in Australia, New Zealand, Switzerland and Sweden use at least 25%
recycled-content plastic and the company has the technological capability to
utilize a similar level of recycled content in the U.S.
Several competitors, including Gatorade and Veryfine use 25% recycled content in
their containers. Major consumer product companies such as Unilever and Procter
& Gamble containers also use at least 25% recycled content.
WHEREAS the majority of Coca-Cola's beverage containers in the U.S. are being
needlessly thrown in landfills, incinerated or littered and are therefore
diverted from the national supply of recycled plastic.
The U.S. recycling rate for plastic soft drink containers declined from 50% in
1994 to 35% in 1999, and Coca-Cola has actively lobbied against bottle container
deposit systems (i.e., bottle bill legislation) that are the only proven method
to increase recovery significantly, thereby increasing the supply of recycled
content for beverage containers.
Significant container recovery rates are possible, as evidenced by the
experience of U.S. states with bottle bills, and of countries like Germany and
Sweden, where companies have achieved beverage container recovery rates of more
than 80%. In the U.S., states with beverage container deposit systems recover
three times as many bottles as states without deposits.
Recycled PET content can be less costly than its virgin counterpart if a greater
supply of used containers is available from recycling. Yet our company is
currently selling some of its own collected PET containers that could provide
the raw materials to boost the recycled content level of Coke containers.
WHEREAS setting quantitative goals for boosting the recycled content in its
beverage containers and for higher rates of beverage container recovery will
begin to fulfill the company's stated commitment to "focus on minimizing our
impact on the environment and strive for continuous improvement."
BE IT RESOLVED THAT Shareowners of The Coca-Cola Company request that the board
of directors adopt a comprehensive recycling strategy. The strategy should aim
to achieve, by January 1, 2005, a system-wide average of 25% recycled content in
all plastic beverage containers, and a recovery rate of 80% for its beverage
containers bottled in the United States. The board shall prepare a report, by
October 1, 2001, on the company's efforts to achieve, and progress in achieving,
this strategy.
- -------------------------------------------------------------------------------
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STATEMENT AGAINST SHARE-OWNER PROPOSAL ON RECYCLING
The Coca-Cola Company is committed to demonstrating clear leadership and
innovation in sustaining the environment. We are proud that over the years our
efforts have helped to make soft drink containers the most recycled packaging in
the world. However, we do realize that the fate of discarded product packages in
the marketplace is one of our most visible environmental issues.
Our Company does have a comprehensive recycling strategy. It takes into
account the reality that the solid waste issue requires different solutions for
different localities. To this end, our new environmental management system
ensures that measurable, locally relevant goals, action plans and programs are
put into place that will significantly reduce the environmental impact of
packaging resulting from the operation of our enterprise.
And as part of our recycling strategy, in the U.S. our bottlers are in the
process of setting meaningful goals for increasing our use of recycled plastic.
It is important to note that we are already using 10% recycled content in one
out of every four plastic bottles. Beyond that, we will work towards increasing
the use of recycled material based on local market conditions and emerging
technologies.
We do plan to increase our use of recycled plastic, but the timeframe and
goals set forth in this share-owner proposal would displace significant levels
of material currently being used by other industries. Clearly, there is not an
environmental benefit if we create a situation where increased use of recycled
plastic by our system simply results in an increased use of virgin material by
others that currently use recycled plastic.
Another goal for our Company is to encourage more participation by our
consumers in recycling programs and to assist in developing new recycling
options to increase the amount of material recovered. We will shortly begin a
program to integrate environmental messages into our advertising campaigns and
marketing initiatives. And at colleges, stadiums and other venues that offer
opportunities for collecting beverage containers, local Coca-Cola bottlers have
begun working with our customers on collection and recycling programs.
We are committed to being part of the solution to beverage container
recycling and litter issues and will continue to take a strong leadership
position in this regard.
We believe this proposal, however well intentioned, is not in the best
interest of our business.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THE PROPOSAL ON RECYCLING.
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SHARE-OWNER PROPOSAL ON STOCK OPTIONS (ITEM 6)
International Brotherhood of Teamsters General Fund of 25 Louisiana Avenue,
N.W., Washington, D.C. 20001-2198, owner of 100 shares of The Coca-Cola Company
Common Stock, submitted the following proposal:
- -------------------------------------------------------------------------------
RESOLVED: That Coca-Cola Company stockholders urge the Board of Directors take
the necessary steps to adopt a policy that no executives may cash in on stock
options within one year of the announcement of a significant workforce (more
than 1% of total workforce) reduction.
SUPPORTING STATEMENT: Stock options were created to reward good performance.
This proposal would help to ensure that options reward real improvements in
performance, rather than short-term stock boosts, which are sometimes associated
with the announcement of major layoffs.
In 2000, Coca-Cola cut over 5,000 jobs - 20% of the workforce. Turnover at
Coca-Cola is at 12%, even with the elimination of 5,200 jobs. From 1996-1998 the
turnover rate was 6.7%.
While Wall Street may give a temporary boost to stock prices at layoff
announcements, there is growing concern that downsizings do not translate into
long-term benefits for shareholders. Author Timothy Carpenter likens such
layoffs to "converting your favorite horse to the commodity status of refined
glue. Yes, it can be more efficient and profitable, but who or what will replace
the horse?"
A recent 7-year study of 25 large corporations noted that a 10% reduction in
employment caused an average of only a 1.5% reduction in operating costs. After
three years, the average downsized company's stock was up only 4.7%, compared
with a typical increase of 34.4% for similar companies in the same field that
didn't reduce staff to the same extent.
As investors with a long-term horizon interested in building our investments
into the next century, we believe long-term growth at Coca-Cola is served by
linking options to long-term company growth, rather than stock market blips that
have more to do with the zeitgeist on Wall Street than with the real value of
the company.
For the above reasons we urge you to vote FOR this proposal.
- -------------------------------------------------------------------------------
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STATEMENT AGAINST SHARE-OWNER PROPOSAL ON STOCK OPTIONS
We believe this proposal is not in the best interest of our share owners,
is not contractually permissible, and would supercede previous share-owner
action.
The Company's stock option plans have been approved by share owners. Once
options are awarded, the stock option contracts are legally binding obligations
with the participating employees. It is not within management's purview, as this
proposal suggests, to alter terms of the contracts, once accepted.
The workforce reduction mentioned in the proposal resulted from efforts to
improve our business. It was the result of a careful review of our business
functions and a strategic decision to deploy our resources to better serve local
markets. Management has publicly stressed that this decision was a painful one,
and we do not want to go through it again. But there can be times when improving
the operation of the business results in reductions in staff; for our Company,
2000 was such a time.
The contractual obligation of our options program aside, we believe that an
options program that served to limit management in taking steps to improve
performance would be, on its face, counterproductive.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST
THE PROPOSAL ON STOCK OPTIONS.
EXPENSES OF SOLICITATION
We bear all expenses incurred in connection with the solicitation of
proxies. We have engaged Georgeson Shareholder Communications Inc. to assist
with the solicitation of proxies for an estimated fee of $25,000 plus expenses.
We will reimburse brokers, fiduciaries and custodians for their costs in
forwarding proxy materials to beneficial owners of Common Stock held in their
names.
Our Directors and officers and employees may also solicit proxies by mail,
telephone and personal contact. They will not receive any additional
compensation for these activities.
PROPOSALS OF SHARE OWNERS FOR 2002 ANNUAL MEETING
We must receive proposals of share owners intended to be presented at the
2002 Annual Meeting of Share Owners on or before November 2, 2001, in order for
the proposals to be eligible for inclusion in our proxy statement and proxy
relating to that meeting. These proposals should be sent to our Corporate
Secretary by fax to 404-676-8409 or by mail to the Office of the Secretary, P.O.
Box 1734, NAT 2616, Atlanta, Georgia 30301-1734 or by e-mail to sshaw@na.ko.com.
According to our By-Laws, a proposal for action to be presented by any
share owner at an annual or special meeting of share owners shall be out of
order and shall not be acted upon unless
- specifically described in our notice to all share owners of the meeting
and the matters to be acted upon thereat, or
- the proposal shall have been submitted in writing to the Chairman of the
Board of Directors in care of the Office of the Secretary at the above
fax number or mailing address or e-mail address and received at our
principal executive offices at least 60 days prior to the date of such
meeting, and such proposal is, under law, an appropriate subject for
share-owner action.
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OTHER INFORMATION
Management does not know of any items, other than those referred to in the
accompanying Notice of Annual Meeting of Share Owners, which may properly come
before the meeting or other matters incident to the conduct of the meeting.
As to any other item or proposal that may properly come before the meeting,
including voting on a proposal omitted from this proxy statement pursuant to the
rules of the Securities and Exchange Commission, it is intended that proxies
will be voted in accordance with the discretion of the proxy holders.
The form of proxy and this proxy statement have been approved by the Board
of Directors and are being mailed and delivered to share owners by its
authority.
SUSAN E. SHAW
Secretary
Atlanta, Georgia
March 2, 2001
------------------------
THE 2000 ANNUAL REPORT TO SHARE OWNERS INCLUDES OUR FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000. WE HAVE MAILED THE 2000 ANNUAL
REPORT TO ALL SHARE OWNERS. THE 2000 ANNUAL REPORT DOES NOT FORM ANY PART OF THE
MATERIAL FOR THE SOLICITATION OF PROXIES.
------------------------
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APPENDIX I
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the Audit Committee (the
"Committee") and furthers its description in the Company's By-laws. The charter
will be reviewed and reassessed by the Committee and will be approved by the
Board of Directors (the "Board"), at least annually. The Committee shall be
appointed by the Board and shall comprise at least three directors, each of whom
are independent of management and the Company. Members of the Committee will be
considered independent if, in the determination of the Board they meet the New
York Stock Exchange definition of "independence." All committee members will be
financially literate, or will become financially literate within a reasonable
period of time after appointment to the committee, and at least one member will
have accounting or related financial management expertise as determined by the
Board.
The Committee will meet as often as may be deemed necessary or appropriate
in its judgment, generally at least three times each year, and at such times and
places and in such manner as the Committee shall determine. The Committee shall
report to the Board with respect to its meetings. The Board will designate a
Chairperson for the Committee. The majority of the members of the Committee
shall constitute a quorum.
STATEMENT OF POLICY
The Committee will provide assistance to the Board in fulfilling its
oversight responsibility to the share owners and others relating to the
Company's financial statements and the financial reporting process, the systems
of internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the Board,
including the Company's Code of Business Conduct. In so doing, it is the
responsibility of the Committee to maintain free and open communication between
the Committee, independent auditors, the internal auditors and management of the
Company. In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities, and personnel of the Company and the power to retain
outside counsel or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of its
activities to the Board. Management is responsible for preparing the Company's
financial statements, and the independent auditors are responsible for auditing
those financial statements. The Committee in carrying out its responsibilities
believes its policies and procedures should remain flexible, in order to best
react to changing conditions and circumstances. The Committee should take the
appropriate actions to set the overall corporate "tone" for quality financial
reporting, sound business risk practices, and ethical behavior.
The following shall be the principal recurring processes of the Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate.
- The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Committee, as representatives of the
Company's share owners. The Committee and the Board
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53
shall have the ultimate authority and responsibility to evaluate and,
where appropriate, replace the independent auditors. The Committee shall
discuss the auditors' independence from management and the Company and
the matters included in the written disclosures required by the
Independence Standards Board. Annually, the Committee will review and
recommend to the Board the selection of the Company's independent
auditors, subject to share owner approval.
- The Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and the compensation. Also, the
Committee will discuss with management, the internal auditors, and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's system to monitor and manage
business risk, and legal and ethical compliance programs, including the
Code of Business Conduct. Further, the Committee will meet separately
with the internal auditors and the independent auditors, with and without
management present, to discuss the results of their examinations and will
provide sufficient opportunity for the internal auditors and the
independent auditors to meet privately with the members of the Committee
to discuss any matters the internal auditors or the independent auditors
wish to discuss in the absence of management.
- The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee will discuss
the results of the quarterly review and any other matters required to be
communicated to the Committee by the independent auditors under generally
accepted auditing standards. The Chairman of the Committee may represent
the entire Committee for the purposes of this review.
- The Committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K, (or the annual report to share owners if distributed prior to
the filing of the Form 10-K) including their judgment about the quality,
not just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. The Committee will review with management and the
independent auditors significant changes in the accounting policies of
the Company and accounting and financial reporting proposals that may
have a significant impact on the Company's financial reports. Also, the
Committee will discuss the results of the annual audit and any other
matters required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards. Based on these
reviews, the Committee will make a recommendation to the Board as to
whether the audited financial statements should be included in the
Company's Annual Report on Form 10-K.
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APPENDIX II
AMENDMENT TO THE 1989 RESTRICTED STOCK AWARD PLAN OF THE COCA-COLA COMPANY
AUTHORIZING THE GRANT OF PERFORMANCE-BASED AWARDS
The 1989 Restricted Stock Award Plan of The Coca-Cola Company be, and it hereby
is, amended effective October 18, 2000 by adding the following new paragraph (d)
to Section 5:
(d) Performance-Based Awards.
1. The Restricted Stock Subcommittee of the Board which shall be
comprised of two or more outside directors meeting the requirements of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code")(the "Subcommittee") may select from time to time, in its
discretion, executive officers, senior vice-presidents and other key
executives of the Company to receive awards of restricted stock under the
Plan, in such amounts as the Subcommittee may, in its discretion, determine
(subject to any limitations provided in the Plan), the release of which
will be conditioned upon the attainment of certain performance targets
("Performance-Based Awards"). With respect to individuals residing in
countries other than in the United States, the Subcommittee may authorize
alternatives that deliver substantially the same value, including, but not
limited to, promises of future restricted stock awards provided that the
grant and subsequent release is contingent upon attainment of certain
performance targets under this section.
2. At the time of each grant, the Subcommittee shall determine the
performance targets and the Measurement Period (as defined below) that will
be applied with respect to such grant. Grants of Performance-Based Awards
may be made, and the performance targets applicable to such
Performance-Based Awards may be defined and determined, by the Subcommittee
no later than ninety days after the commencement of the Measurement Period.
The performance criteria applicable to Performance-Based Awards will be one
or more of the following criteria:
(i) average annual growth in earnings per share;
(ii) increase in share-owner value;
(iii) earnings per share;
(iv) net income;
(v) return on assets;
(vi) return on share-owners' equity;
(vii) increase in cash flow;
(viii) operating profit or operating margins;
(ix) revenue growth of the Company;
(x) operating expenses; and
(xi) quality as determined by the Company's Quality Index.
The Measurement Period will be a period of years, determined by the
Subcommittee in its discretion, commencing on January 1 of the first year
of the Measurement Period and ending on December 31 of the last year of the
Measurement Period. The Measurement Period will be subject to adjustment as
the Subcommittee may provide in the terms of each award.
3. Except as otherwise provided in the terms of the award, shares
awarded in the form of Performance-Based Awards shall be eligible for
release (the "Release Date") on March 1 next following the completion of
the Measurement Period.
4. Shares awarded in the form of Performance-Based Awards will be
released only if the Controller of the Company and the Subcommittee certify
that the performance targets have been achieved during the Measurement
Period.
5. Performance-Based Awards granted pursuant to this Section 5(d) are
intended to qualify as performance-based compensation under Section 162(m)
of the Code and shall be administered and construed accordingly.
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[RECYCLING LOGO]
Printed on recycled paper
56
PROXY
[THE COCA-COLA COMPANY LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COCA-COLA COMPANY
The undersigned, having received the Notice of Annual Meeting and Proxy
Statement, hereby (i) appoints Ronald W. Allen, Cathleen P. Black and Sam Nunn,
and each of them, proxies with full power of substitution, for and in the name
of the undersigned, to vote all shares of Common Stock of The Coca-Cola Company
owned of record by the undersigned, and (ii) directs (a) Merrill Lynch Trust
Company, FSB, Trustee under The Coca-Cola Company Thrift & Investment Plan,
and/or (b) Banco Santander De Puerto Rico, Inc., Trustee under the Caribbean
Refrescos, Inc. Thrift Plan, to vote in person or by proxy all shares of Common
Stock of The Coca-Cola Company allocated to any accounts of the undersigned
under such Plans, and which the undersigned is entitled to vote, in each case,
on all matters which may come before the 2001 Annual Meeting of Share Owners to
be held at The Playhouse Theatre, Du Pont Building, 10th and Market Streets,
Wilmington, Delaware, on April 18, 2001, at 9:00 a.m., local time, and any
adjournments or postponements thereof, unless otherwise specified herein. THE
PROXIES, IN THEIR DISCRETION, ARE FURTHER AUTHORIZED TO VOTE (X) FOR THE
ELECTION OF A PERSON TO THE BOARD OF DIRECTORS IF ANY NOMINEE NAMED HEREIN
BECOMES UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, (Y) ON OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE 2001 ANNUAL MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
Election of Directors:
Nominees (terms expiring in 2004)
01. Herbert A. Allen 02. James D. Robinson III 03. Peter V. Ueberroth
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
ANNUAL MEETING OF SHARE OWNERS OF
[THE COCA-COLA COMPANY LOGO]
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER OR NOT
YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE
URGE YOU TO COMPLETE AND MAIL THE PROXY CARD ON THE REVERSE OR TO USE OUR
TELEPHONE OR INTERNET VOTING SYSTEM.
FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS, SEE REVERSE
- --------------------------------------------------------------------------------
COMMENTS
- --------------------------------------------------------------------------------
(ADMISSION TICKET ON REVERSE)
(BRING THE ADMISSION TICKET WITH YOU IF ATTENDING THE MEETING)
DIRECTIONS TO THE PLAYHOUSE THEATRE:
From Baltimore, the Delaware Memorial Bridge or downstate Delaware:
Take I-95 North to Wilmington Exit 7 marked "Route 52, Delaware
Avenue." From right lane take Exit 7 onto Adams Street. At third traffic light
on Adams Street, turn right onto 11th Street. At Delaware Avenue intersection
stay left, continuing on 11th Street. At the fourth traffic light (Market
Street), turn right. The Playhouse Theatre is on the right in the Du Pont
Building.
From Commodore Barry Bridge (New Jersey), or Philadelphia on I-95, or I-476 (The
Blue Route), or Route 202 (if traveling Route 202, follow Route 202 to
intersection with I-95 South):
Follow I-95 South to Exit 7A marked "Route 52, South Delaware Avenue"
(11th Street). Follow exit road (11th Street) to intersection with Delaware
Avenue marked "52 South, Business District." At Delaware Avenue intersection
stay left, continuing on 11th Street. At the fourth traffic light (Market
Street), turn right. The Playhouse Theatre is on the right in the Du Pont
Building.
57
[X] PLEASE MARK YOUR 0282
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ALL OF THE BOARD OF
DIRECTORS' NOMINEES AND "FOR" PROPOSALS 2 AND 3, AND "AGAINST" PROPOSALS 4, 5,
AND 6.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, and 3.
- --------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of the [ ] [ ] [ ]
Directors appointment of Ernst &
(See reverse) Young LLP as
Independent Auditors
For, except vote withheld from the following nominee(s):
3. Proposal to amend the [ ] [ ] [ ]
1989 Restricted Stock
- -------------------------------------------------------- Award Plan of The
Coca-Cola Company
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 4, 5, AND 6.
FOR AGAINST ABSTAIN
4. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Genetic Engineering
5. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Recycling
6. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Stock Options
- --------------------------------------------------------------------------------
SPECIAL ACTION [ ] Mark here if [ ]
- -------------- you plan to
Mark here to discontinue Annual Report attend the
mailing for this account (for multiple Annual
account holders only) Meeting
- --------------------------------------------------------------------------------
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
------------------------------
------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE*
Dear Share Owner:
The Coca-Cola Company encourages you to take advantage of convenient ways by
which you can vote your shares. You can vote your shares electronically through
the Internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically, you must use the control number which is the
series of numbers printed in the box above, just below the perforation. This
control number must be used to access the system.
1. To vote over the Internet:
- Log on to the Internet and go to the web site http://www.eproxyvote.com/ko
2. To vote over the telephone:
- On a touch-tone telephone, call 1-877-PRX-VOTE (1-877-779-8683)
24 hours a day, 7 days a week
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
(BRING THIS TICKET WITH YOU IF ATTENDING THE MEETING)
ADMISSION TICKET
ANNUAL MEETING OF SHARE OWNERS
OF THE COCA-COLA COMPANY
WEDNESDAY, APRIL 18, 2001
9:00 A.M., LOCAL TIME
THE PLAYHOUSE THEATRE
DU PONT BUILDING
10TH AND MARKET STREETS
WILMINGTON, DELAWARE
58
PROXY
[THE COCA-COLA COMPANY LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COCA-COLA COMPANY
The undersigned, having received the Notice of Annual Meeting and Proxy
Statement, hereby (i) appoints Ronald W. Allen, Cathleen P. Black and Sam Nunn,
and each of them, proxies with full power of substitution, for and in the name
of the undersigned, to vote all shares of Common Stock of The Coca-Cola Company
owned of record by the undersigned, and (ii) directs Putnam Fiduciary Trust
Company, Trustee under the Coca-Cola Enterprises Inc. Matched Employee Savings
and Investment Plan, The Lansing Matched Employee Savings and Investment Plan,
The Coca-Cola Bottling Company of New York, Inc. Savings Plan for Southern New
England, Central States Coca-Cola Bottling Company 401(k) Plan for St. Louis
Bargaining Employees to vote in person or by proxy all shares of Common Stock of
The Coca-Cola Company allocated to any accounts of the undersigned under such
Plans, and which the undersigned is entitled to vote, in each case, on all
matters which may come before the 2001 Annual Meeting of Share Owners to be held
at The Playhouse Theatre, Du Pont Building, 10th and Market Streets, Wilmington,
Delaware, on April 18, 2001, at 9:00 a.m., local time, and any adjournments or
postponements thereof, unless otherwise specified herein. THE PROXIES, IN THEIR
DISCRETION, ARE FURTHER AUTHORIZED TO VOTE (X) FOR THE ELECTION OF A PERSON TO
THE BOARD OF DIRECTORS IF ANY NOMINEE NAMED HEREIN BECOMES UNABLE TO SERVE OR
FOR GOOD CAUSE WILL NOT SERVE, (Y) ON OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE 2001 ANNUAL MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
Election of Directors:
Nominees (terms expiring in 2004)
01. Herbert A. Allen 02. James D. Robinson III 03. Peter V. Ueberroth
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
ANNUAL MEETING OF SHARE OWNERS OF
[THE COCA-COLA COMPANY LOGO]
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER OR NOT
YOU ATTEND THE MEETING IN PERSON. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE
URGE YOU TO COMPLETE AND MAIL THE PROXY CARD ON THE REVERSE OR TO USE OUR
TELEPHONE OR INTERNET VOTING SYSTEM.
FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS, SEE REVERSE
- --------------------------------------------------------------------------------
COMMENTS
- --------------------------------------------------------------------------------
(ADMISSION TICKET ON REVERSE)
(BRING THE ADMISSION TICKET WITH YOU IF ATTENDING THE MEETING)
DIRECTIONS TO THE PLAYHOUSE THEATRE:
From Baltimore, the Delaware Memorial Bridge or downstate Delaware:
Take I-95 North to Wilmington Exit 7 marked "Route 52, Delaware
Avenue." From right lane take Exit 7 onto Adams Street. At third traffic light
on Adams Street, turn right onto 11th Street. At Delaware Avenue intersection
stay left, continuing on 11th Street. At the fourth traffic light (Market
Street), turn right. The Playhouse Theatre is on the right in the Du Pont
Building.
From Commodore Barry Bridge (New Jersey), or Philadelphia on I-95, or I-476 (The
Blue Route), or Route 202 (if traveling Route 202, follow Route 202 to
intersection with I-95 South):
Follow I-95 South to Exit 7A marked "Route 52, South Delaware Avenue"
(11th Street). Follow exit road (11th Street) to intersection with Delaware
Avenue marked "52 South, Business District." At Delaware Avenue intersection
stay left, continuing on 11th Street. At the fourth traffic light (Market
Street), turn right. The Playhouse Theatre is on the right in the Du Pont
Building.
59
[X] PLEASE MARK YOUR 9907
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ALL OF THE BOARD OF
DIRECTORS' NOMINEES AND "FOR" PROPOSALS 2 AND 3, AND "AGAINST" PROPOSALS 4, 5,
AND 6.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3.
- --------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of the [ ] [ ] [ ]
Directors appointment of Ernst &
(See reverse) Young LLP as
Independent Auditors
For, except vote withheld from the following nominee(s):
3. Proposal to amend the [ ] [ ] [ ]
1989 Restricted Stock
- -------------------------------------------------------- Award Plan of The
Coca-Cola Company
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 4, 5, AND 6.
FOR AGAINST ABSTAIN
4. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Genetic Engineering
5. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Recycling
6. Approval of Share-Owner [ ] [ ] [ ]
Proposal on Stock Options
- --------------------------------------------------------------------------------
SPECIAL ACTION Mark here if
- -------------- you plan to
Mark here to discontinue Annual Report [ ] attend the [ ]
mailing for this account (for multiple Annual
account holders only) Meeting
- --------------------------------------------------------------------------------
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
------------------------------
------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
Dear Share Owner:
The Coca-Cola Company encourages you to take advantage of convenient ways by
which you can vote your shares. You can vote your shares electronically through
the Internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically, you must use the control number which
is the series of numbers printed in the box above, just below the perforation.
This control number must be used to access the system.
1. To vote over the Internet:
- Log on to the Internet and go to the web site http://www.eproxyvote.com/ko
2. To vote over the telephone:
- On a touch-tone telephone, call 1-877-PRX-VOTE (1-877-779-8683)
24 hours a day, 7 days a week
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
(BRING THIS TICKET WITH YOU IF ATTENDING THE MEETING)
ADMISSION TICKET
ANNUAL MEETING OF SHARE OWNERS
OF THE COCA-COLA COMPANY
WEDNESDAY, APRIL 18, 2001
9:00 A.M., LOCAL TIME
THE PLAYHOUSE THEATRE
DU PONT BUILDING
10TH AND MARKET STREETS
WILMINGTON, DELAWARE