8-KLeadership ChangesOther EventsExhibits & Filings

COCA COLA CO 8-K Report, Executive Changes (Feb 21, 2008)

Filed February 21, 2008For Securities:KO

Summary

The Coca-Cola Company filed an 8-K report on February 20, 2008, detailing amendments and approvals related to its executive compensation plans. Key actions include the Compensation Committee's approval of performance criteria for the 2008 Annual Incentive Plan and the 2008-2010 long-term equity awards. These performance measures, such as net income, volume, profit before taxes, and economic profit growth, are designed to align executive pay with company performance and comply with IRS regulations (Section 162(m)). Furthermore, the filing announces significant amendments to existing equity compensation plans. The 1989 Restricted Stock Award Plan was modified to allow awards to be settled in shares post-separation for eligible retirees or disabled employees, offering more flexibility. The 1999 and 2002 Stock Option Plans were also amended to shorten the option term to 10 years, exclude certain consultants and minority-interest employees to comply with Section 409A of the Code, and clarify share usage for exercise price and tax payments. These changes reflect an ongoing effort to refine executive compensation structures and ensure regulatory compliance.

Key Highlights

  • 1Coca-Cola's Compensation Committee approved performance targets for the 2008 Annual Incentive Plan, to be paid in 2009, based on net income and volume (corporate) or profit before taxes and volume (operating units).
  • 2Economic profit growth was approved as the performance criterion for Performance Share Units under the 2008-2010 long-term equity compensation program.
  • 3The 1989 Restricted Stock Award Plan was amended to allow awards to be settled in shares after an employee separates from the Company, specifically for retirees or disabled employees meeting performance criteria.
  • 4Amendments to the 1999 and 2002 Stock Option Plans include reducing the maximum option term to 10 years.
  • 5Eligibility for participants in the 1999 and 2002 Stock Option Plans was updated to exclude consultants and employees of minority-owned entities to comply with Section 409A of the Internal Revenue Code.
  • 6Clarifications were made regarding the use of option shares for exercise prices and withholding taxes, noting these shares will reduce the total available for issuance.
  • 7Forms of various equity award agreements, including Restricted Stock Agreements and Stock Option Agreements for specific executives and general participants, were filed as exhibits.

Frequently Asked Questions

For the 2008 Annual Incentive Plan, performance measures include net income and volume for corporate roles, and profit before taxes and volume for operating unit roles. For long-term equity awards (2008-2010), economic profit growth is the primary performance criterion.

The amendment allows eligible retirees or disabled employees, who separate from the Company during a performance period, to receive their restricted stock awards after the Compensation Committee certifies performance results, provided performance criteria are met. This offers flexibility compared to previous settlements.

The amendments were made to comply with Section 409A of the Internal Revenue Code, which governs nonqualified deferred compensation. This ensures that the equity compensation plans remain compliant with tax regulations.

The maximum term for stock options granted in the future under the amended 1999 and 2002 Stock Option Plans has been reduced to 10 years.