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Call it the long goodbye. Though The Coca-Cola Co. announced General Counsel Deval Patrick’s resignation in April, the general counsel doesn’t plan to leave the company until the end of the year. That gives Coke plenty of time to work out Patrick’s severance package, which will undoubtedly be lucrative. Negotiations will be framed by Patrick’s employment agreement. The contract suggests that he’s likely to walk away with at least $22.9 million in stock options, and a $1.55 million payment due because he resigned just days before his third anniversary as a company officer. Patrick, 47, who also serves as Coke’s executive vice president and secretary, signed a five-year employment agreement with the Atlanta-based beverage giant in February 2001. The contract provides for a base salary of $475,000 a year, plus an unspecified annual bonus and long-term incentives. Coke gave Patrick a bonus of $1.25 million in 2002; information on Patrick’s 2003 bonus isn’t publicly available. The GC also received stock options valued at $19.4 million in 2001 and $3.5 million in 2002. Severance possibilities Patrick’s contract lays out various severance possibilities, depending on why he’s leaving. In an April statement, Coke spokeswoman Sonya Soutus said that “many factors, predominantly personal, played a role in Deval’s decision.” Neither Coke nor Patrick would comment for this article. But if he is leaving for personal reasons, the GC’s contract states that Coke will pay his accrued benefits, including base salary and any reimbursable expenses due, plus any incentive payments or other benefits due at the time of termination. The contract also states that granted stock options “shall become fully vested and exercisable.” The contract kicks in an additional lump sum of $1.55 million if Patrick’s employment ends before the third anniversary of his election as an officer of the company. Patrick was elected executive vice president on April 18, 2001; his resignation was first announced in a memo by CEO Douglas Daft to some Coke employees on April 12 of this year. That memo has not been publicly released, but was leaked to the Atlanta Journal-Constitution. According to the newspaper’s account, Daft said an interim GC would take over, though Patrick would be available to the company through the end of the year. After considerable controversy, Daft reversed himself days later and said Patrick would remain as GC until the end of 2004. Patrick’s departure comes after three tumultuous years in which Coke was hit with several high-profile lawsuits and two federal investigations. If in fact Coke was unhappy over these legal issues and forced him out-or if Patrick can show he resigned for “good reason” such as breach of contract-then other provisions in his contract kick in and grant him more severance. These clauses cover the release of any restricted stocks that normally would vest at a future date, pension credit, insurance benefits and the sum of two times his current base salary plus the average of his annual bonus. Attorneys who have worked with the highly secretive Coke declined to comment on Patrick’s situation. But Peter Marathas, an employment lawyer who has negotiated high-level executive compensation agreements at other businesses, said companies will usually avoid a public fight over severance. “When a relationship doesn’t work anymore, you look to the employment agreement” as a starting point to negotiate a peaceful settlement, said Marathas, a partner at Miami’s Steel Hector & Davis. He added that “anything over a year of severance pay is unusual,” but sometimes the company will pay the salary due for the length of the contract. Patrick, Coke’s highest-ranking black executive, was hired in 2001 shortly after the company settled a racial discrimination class action for $193 million. A former U.S. assistant attorney general and one-time civil rights chief at the U.S. Department of Justice, Patrick revamped Coke’s diversity program. But after his arrival, Coke ran into other legal problems. A former finance employee filed a whistleblower suit that was settled in October 2003. However, the case led to Coke’s admission of some accounting mistakes and to ongoing investigations by the U.S. attorney’s office in Atlanta and the Securities and Exchange Commission. The company is also fighting a consolidated class action brought by investors in Atlanta federal court that alleges Coke committed fraud by inflating sales in Japan. In its most recent annual report, Coke stated, “The company believes it has substantial legal and factual defenses to the plaintiffs’ claims.” The legal issues apparently have not affected Coke’s bottom line-the company reported first-quarter profits of $1.13 billion, a 35% increase from a year earlier. But the meeting also highlighted another legal problem that may have strained Patrick’s position: Angry speakers at the meeting accused Coke of violating the human rights of workers in Colombia. The International Labor Rights Fund sued Coke in Miami federal court in 2001 on behalf of a murdered worker at a bottling plant in Colombia. The fund claimed that Coke should have helped stop Colombian paramilitary groups from violently intimidating workers interested in unionizing at the plant. Coke called the allegations false and outrageous. The suit was dismissed, but an amended complaint was filed this spring.

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