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Call it the long goodbye. Though The Coca-Cola Co. announced DevalPatrick’s resignation in April, the general counsel doesn’t plan to leavethe company until the end of the year. That gives Coke plenty of time to work out Patrick’s severance package, whichwill undoubtedly be lucrative. Negotiations will be framed by Patrick’semployment agreement. The contract suggests that he’s likely to walk awaywith at least $22.9 million in stock options, and a $1.55 million paymentdue because he resigned just days before his third anniversary as a companyofficer. Patrick, 47, who also serves as Coke’s executive vice president andsecretary, signed a five-year employment agreement with the Atlanta-basedbeverage 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’s2003 bonus isn’t publicly available. The GC also received stock optionsvalued at $19.4 million in 2001 and $3.5 million in 2002. Patrick’s contract lays out various severance possibilities, depending on whyhe’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 leavingfor personal reasons, the GC’s contract states that Coke will pay hisaccrued benefits, including base salary and any reimbursable expenses due,plus any incentive payments or other benefits due at the time oftermination. The contract also states that granted stock options “shallbecome fully vested and exercisable.” The contract kicks in an additional lump sum of $1.55 million if Patrick’semployment ends before the third anniversary of his election as an officerof the company. Patrick was elected executive vice president on April 18,2001; his resignation was first announced in a memo by CEO Douglas Daft tosome Coke employees on April 12 of this year. That memo has not been publicly released, but was leaked to The AtlantaJournal-Constitution. According to the newspaper’s account, Daft said aninterim GC would take over, though Patrick would be available to the companythrough the end of the year. After considerable controversy, Daft reversedhimself days later and said Patrick would remain as GC till the end of 2004. Patrick’s departure comes after three tumultuous years in which Coke was hitwith several high-profile lawsuits and two federal investigations. If infact Coke was unhappy over these legal issues and forced him out — or ifPatrick can show he resigned for “good reason” such as breach ofcontract — then other provisions in his contract kick in and grant him moreseverance. These clauses cover the release of any restricted stocks thatnormally would vest at a future date, pension credit, insurance benefits,and the sum of two times his current base salary plus the average of hisannual bonus. Attorneys who have worked with the highly secretive Coke declined to commenton Patrick’s situation. But Peter Marathas, an employment lawyer who hasnegotiated high-level executive compensation agreements at other businesses,says companies will usually avoid a public fight over severance. “When arelationship doesn’t work anymore, you look to the employment agreement” asa starting point to negotiate a peaceful settlement, says Marathas, apartner at Miami’s Steel Hector & Davis. He adds that “anything over a yearof severance pay is unusual,” but sometimes the company will pay the salarydue for the length of the contract. Patrick, Coke’s highest-ranking African-American executive, was hired in 2001shortly after the company settled a racial discrimination class action suitfor $193 million. A former U.S. assistant attorney general and one-time civilrights chief at the U.S. Department of Justice, Patrick revamped Coke’sdiversity program. But after his arrival, Coke ran into other legal problems. A former financeemployee filed a whistleblower suit that was settled in October 2003.However, the case led to Coke’s admission of some accounting mistakes and toongoing investigations by the U.S. Attorney’s Office in Atlanta and theSecurities and Exchange Commission. The company is also fighting aconsolidated class action suit brought by investors in Atlanta federal courtthat alleges the beverage giant committed fraud by inflating sales in Japan. In its most recent annual report, Coke stated, “The company believes it hassubstantial legal and factual defenses to the plaintiffs’ claims.” The legal issues apparently have not affected Coke’s bottom line. At itsannual meeting in April, the company announced record first-quarter profitson earnings of $1.2 billion. But the meeting also highlighted another legalproblem that may have strained Patrick’s position in the company. Angryspeakers at the meeting accused Coke of violating the human rights ofworkers in Colombia. The International Labor Rights Fund sued Coke in Miami federal court in 2001on behalf of a murdered worker at a bottling plant in Colombia. The fundclaimed that Coke should have helped stop Colombian paramilitary groups fromviolently intimidating workers interested in unionizing at the plant. Cokecalled the allegations false and outrageous. The suit was dismissed, but an amended complaint was filed this spring. Lastfall, Patrick publicly promised to mount an independent investigation of thecharges. But at this spring’s annual meeting, Daft said such a step was notneeded.

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