EXHIBIT 10.2
THE COCA-COLA COMPANY
2002 STOCK OPTION AND STOCK APPRECIATION RIGHT PLAN
Section 1. Purpose
The purpose of The Coca-Cola Company 2002 Stock Option and Stock
Appreciation Right Plan (the "Plan") is to advance the interest of The Coca-Cola
Company (the "Company") and its Related Companies (as defined in Section 2) by
encouraging and enabling the acquisition of a financial interest in the Company
by officers and other key employees of the Company or its Related Companies. In
addition, the Plan is intended to aid the Company and its Related Companies in
attracting and retaining key employees, to stimulate the efforts of such
employees and to strengthen their desire to remain in the employ of the Company
and its Related Companies. Also, the Plan is intended to help the Company and
its Related Companies, in certain instances, to attract and compensate
consultants to perform key services.
Section 2. Definitions
"Business Day" means a day on which the New York Stock Exchange is open for
securities trading.
"Change in Control" shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A under the Securities Exchange Act of 1934, as amended ("1934
Act"), as in effect on January 1, 2002, provided that such a change in
control shall be deemed to have occurred at such time as (i) any "person"
(as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the 1934
Act as in effect on January 1, 2002) directly or indirectly, of securities
representing 20% or more of the combined voting power for election of
directors of the then outstanding securities of the Company or any
successor of the Company; (ii) during any period of two (2) consecutive
years or less, individuals who at the beginning of such period constituted
the Board of Directors of the Company cease, for any reason, to constitute
at least a majority of the Board of Directors, unless the election or
nomination for election of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors
at the beginning of the period; (iii) the share owners of the Company
approve any merger or consolidation as a result of which the KO Common
Stock (as defined below) shall be changed, converted or exchanged (other
than a merger with a wholly owned subsidiary of the Company) or any
liquidation of the Company or any sale or other disposition of 50% or more
of the assets or earning power of the Company; or (iv) the share owners of
the Company approve any merger or consolidation to which the Company is a
party as a result of which the persons who were share owners of the Company
immediately prior to the effective date of the merger or consolidation
shall have beneficial ownership of less than 50% of the combined voting
power for election of directors of the surviving corporation following the
effective date of such merger or consolidation; provided, however, that no
Change in Control shall be deemed to have occurred if, prior to such times
as a Change in Control would otherwise be deemed to have occurred, the
Board of Directors determines otherwise.
"Board" means the Board of Directors of the Company.
"Committee" means a committee appointed by the Board of Directors in
accordance with the Company's By-Laws from among its members. Unless and
until its members are not qualified to serve on the Committee pursuant to
the provisions of the Plan, the Stock Option Subcommittee of the
Compensation Committee of the Board shall function as the Committee.
Eligibility requirements for members of the Committee shall comply with
Rule 16b-3 under the 1934 Act, or any successor rule or regulation.
"Disabled" or "Disability" means the optionee meets the definition of
"disabled" under the terms of the Company's Long Term Disability Income
Plan in effect on the date in question, whether or not the optionee is
covered by such plan.
"ISO" means an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.
"KO Common Stock" means the common stock of The Coca-Cola Company, par
value $.25 per share.
"Majority-Owned Related Company" means a Related Company in which the
Company owns, directly or indirectly, 50% or more of the voting stock or
capital on the date an Option or SAR is granted.
"NSO" means a stock option that does not constitute an ISO.
"Options" means ISOs and NSOs granted under this Plan.
"Related Company" or "Related Companies" means corporation(s) or other
business organization(s) in which the Company owns, directly or indirectly,
20% or more of the voting stock or capital at the relevant time.
"Retire" means to enter Retirement.
"Retirement" means an employee's termination of employment on a date which
is on or after the earliest date on which such employee would be eligible
for an immediately payable benefit pursuant to (i) for those employees
eligible for participation in the Company's Supplemental Retirement Plan,
the terms of that plan and (ii) for all other employees, the terms of the
Employee Retirement Plan (the "ERP"), whether or not the employee is
covered by the ERP. Notwithstanding the above, if an employee receiving
severance payment(s) would have been eligible for Retirement as defined
above had the employee continued his employment for a period equal to the
period of the proposed severance payment(s), the employee will be deemed
retired under this plan as of the date severance begins.
"SAR" means stock appreciation rights granted under this Plan. An SAR
entitles the Participant to receive, in KO Common Stock, value equal to the
excess of: a) the fair market value of a specified number of shares of KO
Common Stock at the time of exercise; over b) an exercise price established
by the Committee.
Section 3. Options and SARs
The Company may grant ISOs and NSOs to those persons meeting the
eligibility requirements in Section 6(a) and NSOs to those persons meeting the
eligibility requirements in Sections 6(b) and 6(c).
The Company may grant SARs to any persons meeting the eligibility
requirements in Sections 6(a), (b) and (c).
An individual who is granted an Option and/or an SAR shall be referred to
herein as an "optionee."
Section 4. Administration
The Plan shall be administered by the Committee. No person, other than
members of the Committee, shall have any discretion concerning decisions
regarding the Plan. The Committee shall determine the key employees of the
Company and its Related Companies (including officers, whether or not they are
directors) and consultants to whom, and the time or times at which, Options and
SARs will be granted; the number of shares to be subject to each Option and SAR;
the duration of each Option and SAR; the time or times within which the Option
or SAR may be exercised; the cancellation of the Option or SAR (with the consent
of the holder thereof); and the other conditions of the grant of the Option or
SAR, at grant or while outstanding, pursuant to the terms of the Plan. The
provisions and conditions of the Options or SARs need not be the same with
respect to each optionee or with respect to each Option or SAR.
The Committee may, subject to the provisions of the Plan, establish such
rules and regulations as it deems necessary, or advisable, for the proper
administration of the Plan, and may make determinations and may take such other
action in connection with or in relation to the Plan as it deems necessary or
advisable. Each determination or other action made or taken pursuant to the
Plan, including interpretation of the Plan and the specific conditions and
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provisions of the Options and SARs granted hereunder by the Committee, shall be
final and conclusive for all purposes and upon all persons including, but
without limitation, the Company, its Related Companies, the Committee, the
Board, officers and the affected employees and consultants to the Company and/or
its Related Companies, optionees and the respective successors in interest of
any of the foregoing.
Section 5. Stock
The KO Common Stock to be issued, transferred and/or sold under the Plan
shall be made available from authorized and unissued KO Common Stock or from the
Company's treasury shares. The total number of shares of KO Common Stock that
may be issued or transferred under the Plan pursuant to Options or SARs granted
thereunder may not exceed 120,000,000 shares (subject to adjustment as described
below); provided, however, that in no event shall the number of shares of KO
Common Stock that may be issued, transferred or sold under the Plan exceed 5% of
the number of shares of KO Common Stock outstanding on a given date. Such number
of shares shall be subject to adjustment in accordance with Section 5 and
Section 11. KO Common Stock subject to any unexercised portion of an Option or
SAR which expires or is canceled, surrendered or terminated for any reason may
again be subject to Options or SARs granted under the Plan.
SECTION 6. ELIGIBILITY
Options and/or SARs may be granted to:
(a) employees of the Company and its Majority-Owned Related Companies,
(b) particular employee(s) of a Related Company, who within the past
eighteen (18) months were employee(s) of the Company or a
Majority-Owned Related Company, and in rare instances to be determined
by the Committee at its sole discretion, employees of a Related Company
who have not been employees of the Company or a Majority-Owned Related
Company within the past eighteen (18) months, and
(c) consultants providing key services to the Company or its Related
Companies (provided that consultants are natural persons and are not
former employees of the Company or any Related Company, and that
consultants shall be eligible to receive only NSOs or SARs and shall
not be eligible to receive ISOs).
No person shall be granted the right to acquire, pursuant to Options or SARs
granted under the Plan, more than 5 % of the aggregate number of shares of KO
Common Stock originally authorized under the Plan, as adjusted pursuant to
Section 11.
SECTION 7. AWARDS OF OPTIONS AND SARS
Except as otherwise specifically provided in this Plan, Options and SARs
granted pursuant to the Plan shall be subject to the following terms and
conditions:
(a) Option Price and Exercise Price. The option price (for NSOs and
ISOs) and the exercise price (for SARs) shall be 100% of the fair market
value of the KO Common Stock on the date of grant. The fair market value of
a share of KO Common Stock shall be the average of the high and low market
prices at which a share of KO Common Stock shall have been sold on the date
of grant, or on the next preceding trading day if such date was not a
trading date, as reported on the New York Stock Exchange Composite
Transactions listing. If necessary to comply with foreign laws, the
Committee may, at its sole discretion, grant Options and SARs at an option
price or exercise price less than 100% of the fair market value of the KO
Common Stock on the date of grant.
(b) Payment of Option Price. The option price shall be paid in full at
the time of exercise, except as provided in the next sentence. If an
exercise is executed by the plan administrator using the cashless method,
the exercise price shall be paid in full no later than the close of
business on the third Business Day following the exercise.
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Payment may be in cash or, upon conditions established by the
Committee, by delivery of shares of KO Common Stock owned by the optionee
for at least six (6) months prior to the date of exercise.
The optionee, if a U.S. taxpayer, may elect to satisfy Federal, state
and local income tax liabilities due by reason of the exercise by the
withholding of shares of KO Common Stock.
If shares are delivered to pay the option price or if shares are
withheld for U.S. taxpayers to satisfy such tax liabilities, the value of
the shares delivered or withheld shall be computed on the basis of the
reported market price at which a share of KO Common Stock most recently
traded prior to the time the exercise order was processed. Such price will
be determined by reference to the New York Stock Exchange Composite
Transactions listing.
(c) Exercise May Be Delayed Until Withholding is Satisfied. The
Company may refuse to recognize the exercise of an Option or SAR if the
optionee has not made arrangements satisfactory to the Company to satisfy
the tax withholding which the Company determines is necessary to comply
with applicable requirements.
(d) Duration of Options and SARs. The duration of Options and SARs
shall be determined by the Committee, but in no event shall the duration of
an ISO exceed ten (10) years from the date of its grant or the duration of
an NSO or SAR exceed fifteen (15) years from the date of its grant.
(e) Vesting. Options and SARs shall contain such vesting terms as are
determined by the Committee, at its sole discretion, including, without
limitation, vesting upon the achievement of certain specified performance
targets. In the event that no vesting determination is made by the
Committee, Options and SARs shall vest as follows: (1) 25% on the first
anniversary of the date of the grant; (2) 25% on the second anniversary of
the date of the grant; (3) 25% on the third anniversary of the date of the
grant; and (4) 25% on the fourth anniversary of the date of the grant.
(f) Other Terms and Conditions. Options and SARs may contain such
other provisions, not inconsistent with the provisions of the Plan, as the
Committee shall determine appropriate from time to time; provided, however,
that, except in the event of a Change in Control, Retirement, Disability or
death of the optionee, no grant shall provide that an Option or SAR shall
be exercisable in whole or in part for a period of twelve (12) months from
the date on which the Option or SAR is granted. The grant of an Option or
SAR to any employee shall not affect in any way the right of the Company
and any Related Company to terminate the employment of such employee. The
grant of an Option or SAR to any consultant shall not affect in any way the
right of the Company and any Related Company to terminate the services of
such consultant.
(g) ISOs. The Committee, with respect to each grant of an Option to an
optionee, shall determine whether such Option shall be an ISO, and, upon
determining that an Option shall be an ISO, shall designate it as such in
the written instrument evidencing such Option. If the written instrument
evidencing an Option does not contain a designation that it is an ISO, it
shall not be an ISO.
The aggregate fair market value (determined in each instance on the
date on which an ISO is granted) of the KO Common Stock with respect to
which ISOs are first exercisable by any optionee in any calendar year shall
not exceed $100,000 for such optionee (or such other time limit as may be
required by the Internal Revenue Code of 1986, as amended). If any
subsidiary or Majority-Owned Related Company of the Company shall adopt a
stock option plan under which options constituting ISOs may be granted, the
fair market value of the stock on which any such incentive stock options
are granted and the times at which such incentive stock options will first
become exercisable shall be taken into account in determining the maximum
amount of ISOs which may be granted to the optionee under this Plan in any
calendar year.
(h) Deferral of Gains. Gains associated with any exercise of Options
and SARs shall be eligible for deferral in accordance with the terms and
subject to the conditions of The Coca-Cola Company Deferred Compensation
Plan.
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SECTION 8. NONTRANSFERABILITY OF OPTIONS AND SARS
No Option or SAR granted pursuant to the Plan shall be transferable
otherwise than by will or by the laws of descent and distribution. During the
lifetime of an optionee, the Option or SAR shall be exercisable only by the
optionee personally or by the optionee's legal representative.
SECTION 9. EFFECT OF TERMINATION OF EMPLOYMENT, OTHER CHANGES OF EMPLOYMENT
OR EMPLOYEE STATUS, DEATH, RETIREMENT, OR A CHANGE IN CONTROL
(a) For Employees. For optionees who are employees of the Company or its
Related Companies on the date of grant, the following provisions shall apply:
Event Impact on Vesting Impact on Exercise Period
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Employment terminates upon All Options and SARs become Option/SAR expiration date provided
Disability. immediately vested. in grant continues to apply.
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Employment terminates upon Options and SARS held at least 12 Option/SAR expiration date provided
Retirement. full calendar months become in grant continues to apply.
immediately vested; Options and
SARs held less than 12 full calendar
months are forfeited.
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Employment terminates upon All Options and SARs become Right of executor, administrator
death. immediately vested. of estate (or other transferee
permitted by Section 8) to exercise
Options and SARs terminates on
earlier of (1) 12 months from the
date of death, or (2) the Option/SAR
expiration date provided in the
grant continues to apply.
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Employment terminates upon All Options and SARs become Option/SAR expiration date provided
Change in Control. immediately vested. in grant continues to apply.
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Termination of employment Unvested Options and SARs are Options/SARs expire upon the earlier
where optionee receives forfeited. of (1) the end of the severance
severance payment(s). period, but not less than 6 months
from the termination date, or
(2) the Option/SAR expiration date
provided in grant.
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Termination of employment Unvested Options are forfeited. Expires upon earlier of (1) 6 months
where optionee does not from termination date, or (2) Option/
receive severance payment(s). SAR expiration date provided in grant.
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US Military leave. Vesting continues during leave. Option/SAR expiration date provided
in grant continues to apply.
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Eleemosynary service. Committee's discretion. Committee's discretion.
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US FMLA leave of absence Vesting continues during leave. Option/SAR expiration date provided
in grant continues to apply.
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Event Impact on Vesting Impact on Exercise Period
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Optionee's employer is no Unvested Options and SARs are Expires upon earlier of (1) 6 months
longer a Related Company forfeited. from termination date or (2) Option/
(this constitutes a SAR expiration date provided in grant.
termination of employment
under the Plan, effective
the date the Company's
investment falls below
20%).
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Employment transferred to Vesting continues after transfer. The Option/SAR expiration date
Related Company provided in the grant continues to
apply.
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Death after employment has Not applicable. Right of executor, administrator of
terminated but before option estate (or other transferee permitted
has expired. Note: Termina- by Section 8) terminates on earlier
tion of employment may have of (1) 12 months from the date of
resulted in a change to the death, or (2) the Option/SAR expira-
original Option/SAR expira- tion date that applied at the date
tion date provided in the of death.
grant.
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In the case of other leaves of absence not specified above, optionees will
be deemed to have terminated employment (so that Options and SARs unvested will
expire and the option/SAR exercise period will end on the earlier of 6 months
from the date the leave began or the option expiration date provided in the
grant), unless the Committee identifies a valid business interest in doing
otherwise, in which case it may, specify what provisions it deems appropriate at
its sole discretion; provided that the Committee shall have no obligation to
consider any such matters.
(b) For Consultants. For optionees who are consultants, the provisions
relating to changes of work assignment, death, disability, Change in Control, or
any other provision of an Option or SAR shall be determined by the Committee at
the date of the grant.
(c) Committee Retains Discretion To Establish Different Terms Than Those
Provided in Sections 9(a) or 9(b). Notwithstanding the foregoing provisions, the
Committee may, at its sole discretion, establish different terms and conditions
pertaining to the effect of an optionee's termination on the expiration or
exercisability of Options and SARs at the time of grant or (with the consent of
the affected optionee) on the expiration or exercisability of outstanding
Options and SARs. However, no Option or SAR can have a term of more than fifteen
years.
SECTION 10. NO RIGHTS AS A SHARE OWNER
An optionee or a transferee of an optionee pursuant to Section 8 shall have
no right as a share owner with respect to any KO Common Stock covered by an
Option or SAR or receivable upon the exercise of an Option or SAR, until the
optionee or transferee shall have become the holder of record of such KO Common
Stock. No adjustments shall be made for dividends in cash or other property or
other distributions or rights in respect to such KO Common Stock covered by any
Option or SAR for which the record date is prior to the date on which the
optionee or transferee shall have in fact become the holder.
SECTION 11. ADJUSTMENT IN THE NUMBER OF SHARES AND IN OPTION AND EXERCISE
PRICE
In the event there is any change in the shares of KO Common Stock through
the declaration of stock dividends, or stock splits, or through recapitalization
or merger or consolidation or combination of shares or spin-offs or otherwise,
the Committee or the Board shall make such adjustment, if any, as it may deem
appropriate in the number of shares of KO Common Stock available for Options and
SARs as well as the number of shares of KO Common Stock subject to any
outstanding Option or SAR and the option price or exercise price thereof. Any
such adjustment
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may provide for the elimination of any fractional shares, which might otherwise
become subject to any Option or SAR, without payment therefor.
SECTION 12. AMENDMENTS, MODIFICATIONS AND TERMINATION OF THE PLAN
The Board or the Committee may terminate the Plan at any time. From time to
time, the Board or the Committee may suspend the Plan, in whole or in part. From
time to time, the Board or the Committee may amend the Plan, in whole or in
part, including the adoption of amendments deemed necessary or desirable to
qualify the Options or SARs under the laws of various countries (including tax
laws) and under rules and regulations promulgated by the Securities and Exchange
Commission with respect to optionees who are subject to the provisions of
Section 16 of the 1934 Act, or to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or in any Option or SAR granted
thereunder, or for any other purpose or to any effect permitted by applicable
laws and regulations, without the approval of the share owners of the Company.
However, in no event may additional shares of KO Common Stock be allocated to
the Plan or any outstanding option or SAR be repriced or replaced without
share-owner approval. Without limiting the foregoing, the Board or the Committee
may make amendments applicable or inapplicable only to participants who are
subject to Section 16 of the 1934 Act.
No amendment or termination or modification of the Plan shall in any manner
affect any Option or SAR theretofore granted without the consent of the
optionee, except that the Committee may amend or modify the Plan in a manner
that does affect Options and SARs theretofore granted upon a finding by the
Committee that such amendment or modification is in the best interest of holders
of outstanding Options and SARs affected thereby. Grants of ISOs may be made
under this Plan until April 17, 2012 or such earlier date as this Plan is
terminated, and grants of NSOs and SARs may be made until all of the 120,000,000
shares of KO Common Stock authorized for issuance hereunder (adjusted as
provided in Sections 5 and 11) have been issued or until this Plan is
terminated, whichever first occurs. The Plan shall terminate when there are no
longer Options or SARs outstanding under the Plan, unless earlier terminated by
the Board or by the Committee.
SECTION 13. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant thereto
shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
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