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A month late, lawyers representing four former Coca-Cola employees have secured judicial approval of an agreement containing new details of how the company would distribute a $192.5 million settlement. On Dec. 22, U.S. District Judge Richard W. Story formally certified the two-year-old race discrimination suit against Coke as a class action and approved the still-incomplete agreement, which the plaintiffs’ lawyers had submitted to the court earlier that day. Story also gave the Atlanta-based soft drink company until Jan. 16 to mail formal notices containing the terms of the agreement to an estimated 2,000 current and former African-American salaried employees at Coca-Cola, Coca-Cola Enterprises and Minute Maid in the United States who are eligible to participate, according to his court order. The judge also set a fairness hearing for May 29, 2001 to determine whether the settlement should get final approval and to allow settlement class members to raise any objections. No settlement checks will be distributed until after that May hearing. 11 DESIGNATED AS COUNSEL The agreement, which the plaintiffs’ attorneys were supposed to present to Story by Nov. 26, designates 11 lawyers as counsel for the settlement class and provides for payment of $20.7 million in legal fees and $1.5 million in expenses. Class counsel includes: Cyrus Mehri, Pamela Coukos and Gouri Bhat of Mehri’s Washington firm, Mehri, Malkin & Ross; Jeffrey O. Bramlett, H. Lamar Mixson, Joshua F. Thorpe and Steven J. Rosenwasser of Atlanta’s Bondurant, Mixson & Elmore; James E. Voyles of Deville, Milholin, Voyles & Wales in Marietta, Ga.; and Robert L. Wiggins Jr., Samuel Fisher and Byron R. Perkins of Gordon, Silberman, Wiggins & Childs in Birmingham, Ala. Mehri, Mixson and Bramlett have been designated as co-lead counsel. In November, Story formally approved an executive summary of the agreement that set $192.5 million as the settlement pricetag and designated how an estimated $113 million in cash would be divided among Coke’s African-American employees and their lawyers. The $79.5 million balance includes an estimated $43.5 million to make equity adjustments in pay and promotions at Coke over the next 10 years and $36 million to monitor the implementation of those changes — figures that a Coke spokesman acknowledges are “soft money” but that plaintiffs’ attorneys insist are “highly significant achievements that will create real change at Coca-Cola.” COMPENSATION DETAILS AIRED The preliminary agreement now on file with the court details for the first time how $58.7 million in compensatory damages will be distributed to eligible Coke and former Coke employees. Four former employees who are listed as lead plaintiffs in the suit will receive $300,000 each (a total of $1.2 million) as designated class representatives. Another 150 Coke and former Coke employees who gave sworn affidavits to the lawyers regarding allegations of racial discrimination at Coke each will receive a $3,000 bonus — a total of $450,000. Plaintiffs attorneys, to whom Coke has agreed to pay $20.7 million in legal fees, will also draw an additional $1,541,000 in legal expenses from the compensation fund, for a total of $22,241,000. According to a motion seeking Story’s preliminary approval of the agreement, the lawyers have invested about $1.2 million in expenses during the pendancy of the litigation. The $55,509,000 balance will be divided among Coke’s eligible employees. Each will receive $374 for every tenth of a year he or she has been employed by Coke, or $3,740 for each year of company service, according to the settlement agreement. STOCK OFFERING Each eligible employee may take as much as 100 percent of his or her payment in 10-year restricted shares of Coca-Cola stock. Although class members will be taxed on the fair market value of the stock shortly after the settlement is approved, they will be unable to sell any for 10 years, even to pay tax obligations incurred by the settlement, according to the preliminary agreement. How a separate back pay fund, for which an additional $24.1 million has been allotted, will be distributed has not been finalized. The January notice to class members will contain specifics on how settlement proceeds will be allocated, based on education, work experience, job position and any wage and promotional disparities that may exist between Coke’s African-American staff and their white counterparts. “The pay disparities under review will include base salary, bonuses and the value of stock option grants, if applicable,” the agreement says. A portion of the back pay fund will be distributed as stock options rather than in cash, the settlement agreement says. Eligible employees whose salary grade as of April 22, 1999, was Grade 10 or above will receive from 18 percent to 53 percent of their back pay award only in stock options, not in cash. The option price will vary depending on the individual’s position during the past three years. Employees with options will pay from $20.04 a share to $26.82 a share, but can only exercise the options at prices ranging from $48.875 to $65.875 a share. Coke stock on Friday opened at $60.94 a share. If employees are dissatisfied with the back pay allotment, they may — while remaining eligible for compensatory damages — hire their own attorneys and challenge Coke in court. But they must waive all claims to that back pay allotment should they lose. That money would be retained by Coca-Cola. CHALLENGERS FACE OBSTACLES Settlement class counsel are not obligated or expected to represent employees who challenge their back pay award, according to the agreement. Those who still choose to fight for more back pay remain part of the settlement class, but must agree to have their case heard by a U.S. magistrate judge, will face discovery restrictions and must forego any appeals. Employees who choose to participate in the settlement give Coke a broad waiver of all claims, many of which were not part of the litigation. That claims waiver includes claims arising from libel, slander, assault, battery or invasion of privacy. In addition, any eligible class member who accepted an enhanced severance package after Coke laid off more than 6,000 workers last winter, “has already waived his or her right to bring an individual legal action against Coca-Cola,” the agreement states. The agreement also discourages eligible employees from refusing to participate and filing their own suits instead. “The proposed settlement provides substantial guaranteed monetary awards without the burden and expense of hiring a lawyer,” the agreement states. “An individual suit could take three to five additional years to resolve, including appeals. Most individual employment discrimination suits are unsuccessful. In fact, according to the Coca-Cola Co., in the past 10 years, there has never been a successful individual race discrimination suit against the Coca-Cola Co.”

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