Coca Cola 2006 Annual Report Download - page 25

Company’s motion to dismiss on June 6, 2006. Following the hearing, the Court took the matter under
advisement and the parties are awaiting a ruling. The Company intends to vigorously defend its interests in this
matter.
During May, June and July 2005, three similar putative class action lawsuits (Pedraza v. The Coca-Cola
Company, et al., Shamrey, et al. v. The Coca-Cola Company, et al. and Jackson v. The Coca-Cola Company, et al.)
were filed in the United States District Court for the Northern District of Georgia by participants in the
Company’s Thrift & Investment Plan (the ‘‘Plan’’) alleging breach of fiduciary duties under the Employee
Retirement Income Security Act of 1974 by the Company, certain current and former executive officers, and the
Company’s Benefits Committee. The purported class in each of these cases consists of the Plan and persons who
were participants in or beneficiaries of the Plan between May 13, 1997 and April 18, 2005 and whose accounts
included investments in Company stock. The complaints allege that, among other things, the defendants failed
to exercise the required care, skill, prudence and diligence in managing the Plan and its assets; take steps to
eliminate or reduce the amount of Company stock in the Plan; adequately diversify the Plan’s investments in
Company stock, appoint qualified administrators and properly monitor their and the Plan’s performance; and
disclose accurate information about the Company. The plaintiffs, on behalf of the putative class, seek, among
other things, declaratory relief, damages for Plan losses and lost profits, imposition of constructive trust as a
remedy for unjust enrichment, injunctive relief, costs and attorneys’ fees, equitable restitution and other
appropriate equitable and monetary relief. By order of the Court, an amended complaint was filed in the
Jackson case on September 16, 2005. The amended complaint supplements the detailed allegations of the
original complaint and names specific individual defendants who served on the Benefits Committee. Identical
amended complaints were also filed in Pedraza and Shamrey. In each of the three cases, the plaintiff voluntarily
dismissed three individual defendants. The Company filed motions to dismiss all claims in each case.
On September 29, 2006, the Court dismissed all but one claim against the Benefits Committee and its
members. The Court ordered plaintiffs to replead the remaining claim against the Benefits Committee with
specificity within 20 days. On November 14, 2006, the Court entered a stipulation and order to dismiss the
remaining claim with prejudice thereby concluding this matter.
In February 2006, the International Brotherhood of Teamsters, a purported shareholder of CCE, filed a
derivative suit (International Brotherhood of Teamsters v. The Coca-Cola Company, et al.) in the Delaware Court
of Chancery for New Castle County naming the Company and current and former CCE board members,
including certain current and former Company officers who serve or served on CCE’s board, as defendants. The
plaintiff alleged that the Company breached fiduciary duties owed to CCE shareholders based upon alleged
control of CCE by the Company. The complaint also alleged that the Company had actual control over CCE and
that the Company abused its control by maximizing its own financial condition at the expense of CCE’s financial
condition. Subsequently, two lawsuits virtually identical to Teamsters were filed in the same court: Lang v. The
Coca-Cola Company, et al., filed March 30, 2006, and Gordon v. The Coca-Cola Company, et al., filed April 10,
2006. On April 6, 2006, the Company moved to dismiss Teamsters or, in the alternative, for a stay of discovery
(the ‘‘Dismissal Motion’’). On May 19, 2006, the Chancery Court entered an order consolidating Teamsters, Lang
and Gordon under the caption In re Coca-Cola Enterprises, Inc. Shareholders Litigation and requiring the
plaintiffs to file an amended consolidated complaint in the consolidated action as soon as practicable.
On September 29, 2006, plaintiffs filed their Consolidated Amended Shareholders’ Derivative Complaint
(the ‘‘Amended Complaint’’). The Amended Complaint omits certain former Company officers from the group
of individual defendants and defines the ‘‘relevant time period’’ for purposes of the claims as October 15, 2003,
through the date of the filing. The original complaint did not identify any specific dates. The Amended
Complaint also includes additional allegations about the conduct of the Company and certain of its executive
officers, including new allegations about the Company’s purported control over CCE and allegations of
improper conduct in connection with the establishment of a warehouse delivery system to supply Powerade to a
major customer. On December 7, 2006, the Company filed its motion to dismiss the amended complaint and
accompanying brief. The plaintiffs’ reply brief was filed on January 22, 2007.
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