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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended January 1, 1995
Commission file number 0-9286
Coca-Cola Bottling Co. Consolidated
(Exact name of Registrant as specified in its charter)
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Delaware 56-0950585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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1900 Rexford Road,
Charlotte, North Carolina 28211
(Address of principal executive offices)
(Zip Code)
(704) 551-4400
Registrant's telephone number, including area code
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $l.00 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements,
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
State the aggregate market value of voting stock held by non-affiliates of the
Registrant.
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Market Value as of March 24, 1995
Common Stock, $l par value $207,413,000
Class B Common Stock, $l par value *
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* No market exists for the shares of Class B Common Stock, which is neither
registered under Section 12 of the Act nor subject to Section 15(d) of the Act.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
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Class Outstanding as of March 24, 1995
Common Stock, $1 Par Value 7,958,059
Class B Common Stock, $1 Par Value 1,336,362
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Documents Incorporated by Reference
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Proxy Statement to be filed pursuant to Section 14 of the Exchange Act with respect
to the 1995 Annual Meeting of Shareholders.......................................................... Part III, Items 10-13
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PART I
Item 1 -- Business
Introduction and Recent Developments
Coca-Cola Bottling Co. Consolidated ("the Company"), a Delaware
corporation, is engaged in the production, marketing and distribution of
carbonated and noncarbonated soft drinks, primarily products of The Coca-Cola
Company, Atlanta, Georgia ("The Coca-Cola Company"). The Company has been in the
soft drink manufacturing business since 1902.
Prior to 1984, the Company's business was concentrated in North Carolina.
In 1984, the Company undertook a major expansion program, primarily through
acquisitions. The following information summarizes major developments from 1984
through 1994.
On February 8, 1985, the Company acquired the bottling subsidiaries of
Wometco Coca-Cola Bottling Company which gave the Company franchise rights to
produce, market and distribute soft drink products principally in parts of
Tennessee, Virginia and Alabama.
In June 1987, the Company sold 1,355,033 shares of newly issued Common
Stock and 269,158 shares of Class B Common Stock to The Coca-Cola Company. Upon
completion of this transaction, The Coca-Cola Company owned a 20% equity
interest in the Company. On July 15, 1987, the Company sold its Canadian
subsidiary located in Vancouver, British Columbia. Net proceeds from the sale
were used to repay debt.
On January 27, 1989, the Company acquired all of the outstanding capital
stock of The Coca-Cola Bottling Company of West Virginia, Inc. from The
Coca-Cola Company in exchange for 1.1 million shares of the Company's Common
Stock and approximately $4 million in cash, as adjusted. Following this
transaction, The Coca-Cola Company owns an economic interest of approximately
30% and a voting interest of approximately 23% in the Company.
On December 20, 1991, the Company acquired all of the outstanding capital
stock of Sunbelt Coca-Cola Bottling Company, Inc. ("Sunbelt"). In connection
with the Sunbelt acquisition, total assets acquired were approximately $304
million. As a result of this transaction, the Company became the second largest
Coca-Cola bottler in the United States.
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont
Coca-Cola Bottling Partnership ("Piedmont") to distribute and market soft drink
products primarily in certain portions of North Carolina and South Carolina. The
Company and The Coca-Cola Company, through their respective subsidiaries, each
beneficially own a 50% interest in Piedmont. The Company provides a majority of
the soft drink products for Piedmont and receives a fee for managing the
operations of Piedmont pursuant to a Management Agreement. Subsidiaries of the
Company made an initial capital contribution to Piedmont of $70 million in the
aggregate. The capital contribution made by such subsidiaries was composed of
approximately $21.7 million in cash and of bottling operations and certain
assets used in connection with the Company's Wilson, North Carolina and
Greenville and Beaufort, South Carolina territories. The cash contributed to
Piedmont by the Company's subsidiaries was provided from the Company's available
credit facilities. The Company sold other territories to Piedmont for an
aggregate purchase price of approximately $118 million. Assets were sold or
contributed at their approximate carrying values. Proceeds from the sale of
territories to Piedmont, net of the Company's cash contribution, totaled
approximately $96 million and were used to reduce the Company's long-term debt.
The Company considers acquisition opportunities for additional territories
on an ongoing basis. To achieve its goals, further purchases and sales of
franchise rights and entities possessing such rights and other related
transactions designed to facilitate such purchases and sales may occur.
General
In its soft drink operations, the Company holds franchises under which it
produces and markets, in certain regions, carbonated soft drink products of The
Coca-Cola Company, including Coca-Cola, Coca-Cola classic, caffeine free
Coca-Cola classic, diet Coke, caffeine free diet Coke, Cherry Coke, diet Cherry
Coke, TAB, Sprite, diet Sprite, Mello Yello, diet Mello Yello, Mr. PiBB, Minute
Maid orange and diet Minute Maid orange sodas. The Company also distributes and
markets PowerAde, ready-to-drink Nestea and Fruitopia in certain of its markets.
The Company produces and markets Dr Pepper in most of its regions. Various other
products, including Welch's flavors, Seagrams' products, Barq's Root Beer and
Sundrop are produced and marketed in one or more of the Company's regions under
franchise agreements with the companies that manufacture the concentrate for
those beverages. In addition, the Company also produces soft drinks for other
bottlers of Coca-Cola.
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The Company's principal soft drink is Coca-Cola classic. During the last
three fiscal years, sales of products under the trademark Coca-Cola have
accounted for more than half of the Company's soft drink sales. In total, the
products of The Coca-Cola Company accounted for approximately 88% of the
Company's soft drink sales during fiscal 1994.
Franchises
The Company's franchises from The Coca-Cola Company entitle the Company to
produce and market The Coca-Cola Company's soft drinks in bottles, cans and five
gallon pressurized pre-mix containers. The Company is one of many companies
holding such franchises from The Coca-Cola Company. The Coca-Cola Company is the
sole owner of the secret formulas pursuant to which the primary components
(either concentrates or syrups) of its soft drinks are manufactured. The
concentrates, when mixed with water and sweetener, produce syrup which, when
mixed with carbonated water, produce the soft drinks known as "Coca-Cola,"
"Coca-Cola classic" or "Coke." Similar processes are used to produce the other
soft drinks marketed and distributed by the Company. With limited exceptions,
the Company purchases concentrates, syrups and natural sweeteners from The
Coca-Cola Company. No royalty or other compensation is paid under the franchise
agreements to The Coca-Cola Company for the Company's right to use in its
territories the trade names and trademarks "Coca-Cola," "Coca-Cola classic" and
"Coke" and associated patents, copyrights, designs and labels, all of which are
owned by The Coca-Cola Company.
Bottle Contracts. The Company is party to bottle contracts with The
Coca-Cola Company (the "Bottle Contracts") which provide that the Company will
purchase its entire requirement of concentrates and syrups for Coca-Cola,
Coca-Cola classic, caffeine free Coca-Cola classic, Cherry Coke, diet Coke,
caffeine free diet Coke and diet Cherry Coke (together, the "Coca-Cola Trademark
Beverages") from The Coca-Cola Company. The Company has the exclusive right to
distribute Coca-Cola Trademark Beverages for sale in its territories in
authorized containers of the nature currently used by the Company, which include
cans and returnable and non-returnable bottles. The Coca-Cola Company may
determine from time to time what containers of this type to authorize for use by
the Company.
The price The Coca-Cola Company may charge for syrup or concentrate under
the Bottle Contracts is set by The Coca-Cola Company from time to time. Except
as provided in the Supplementary Agreement described below, there are no
limitations on prices for concentrate or syrup. Consequently, the prices at
which the Company purchases concentrates and syrup under the Bottle Contracts
may vary materially from the prices it has paid during the periods covered by
the financial information included in this report.
Under the Bottle Contracts, the Company is obligated to maintain such
plant, equipment, staff and distribution facilities as are required for the
manufacture, packaging and distribution of the Coca-Cola Trademark Beverages in
authorized containers, and in sufficient quantities to satisfy fully the demand
for these beverages in its territories; to undertake adequate quality control
measures and maintain sanitation standards prescribed by The Coca-Cola Company;
to develop, to stimulate, and to satisfy fully the demand for Coca-Cola
Trademark Beverages and to use all approved means, and to spend such funds on
advertising and other forms of marketing, as may be reasonably required to meet
that objective; and to maintain such sound financial capacity as may be
reasonably necessary to assure performance by the Company and its affiliates of
their obligations to The Coca-Cola Company.
The Bottle Contracts require the Company to submit to The Coca-Cola Company
each year its plans for marketing, management and advertising with respect to
the Coca-Cola Trademark Beverages for the ensuing year. Such plans must
demonstrate that the Company has the financial capacity to perform its duties
and obligations to The Coca-Cola Company under the Bottle Contracts. The Company
must obtain The Coca-Cola Company's approval of those plans, which approval may
not be unreasonably withheld, and if the Company carries out its plan in all
material respects, it will have satisfied its contractual obligations. Failure
to carry out such plans in all material respects would constitute an event of
default that, if not cured within 120 days of notice of such failure, would give
The Coca-Cola Company the right to terminate the Bottle Contracts. If the
Company at any time fails to carry out a plan in all material respects with
respect to any geographic segment (as defined by The Coca-Cola Company) of its
territory, and if that failure is not cured within six months of notice of such
failure, The Coca-Cola Company may reduce the territory covered by the
applicable Bottle Contract by eliminating the portion of the territory with
respect to which the failure has occurred.
The Coca-Cola Company has no obligation under the Bottle Contracts to
participate with the Company in expenditures for advertising and marketing. As
it has in the past, The Coca-Cola Company may contribute to such expenditures
and undertake independent advertising and marketing activities, as well as
cooperative advertising and sales promotion programs
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which require mutual cooperation and financial support of the Company. The
future levels of marketing support and promotional funds provided by The
Coca-Cola Company may vary materially from the levels provided during the
periods covered by the financial information included in this report.
The Coca-Cola Company has the right to reformulate any of the Coca-Cola
Trademark Beverages and to discontinue any of the Coca-Cola Trademark Beverages,
subject to certain limitations, so long as all Coca-Cola Trademark Beverages are
not discontinued. The Coca-Cola Company may also introduce new beverages under
the trademarks "Coca-Cola" or "Coke" or any modification thereof, and in that
event the Company would be obligated to manufacture, package, distribute and
sell the new beverages with the same duties as exist under the Bottle Contracts
with respect to Coca-Cola Trademark Beverages.
If the Company acquires the right to manufacture and sell Coca-Cola
Trademark Beverages in any additional territory, such territory automatically
will be deemed to be included in the territories covered by the existing Bottle
Contracts, and any existing agreement with respect to the acquired territory
automatically shall be amended to conform to the terms of the existing Bottle
Contracts. In addition, if the Company acquires control, directly or indirectly,
of any bottler of Coca-Cola Trademark Beverages, or any party controlling a
bottler of Coca-Cola Trademark Beverages, the Company must cause the acquired
bottler to amend its franchises for the Coca-Cola Trademark Beverages to conform
to the terms of the Bottle Contracts.
The Bottle Contracts are perpetual, subject to termination by The Coca-Cola
Company in the event of default by the Company. Events of default by the Company
include (1) the Company's insolvency, bankruptcy, dissolution, receivership or
similar conditions; (2) the Company's disposition of any interest in the
securities of any bottling subsidiary; (3) termination of any agreement
regarding the manufacture, packaging, distribution or sale of Coca-Cola
Trademark Beverages between The Coca-Cola Company and any person that controls
the Company; (4) any material breach of any obligation occurring under the
Bottle Contracts (including, without limitation, failure to make timely payment
for any syrup or concentrate or of any other debt owing to The Coca-Cola
Company, failure to meet sanitary or quality control standards, failure to
comply strictly with manufacturing standards and instructions, failure to carry
out an approved plan as described above, and failure to cure a violation of the
terms regarding imitation products), that remains uncured for 120 days after
notice by The Coca-Cola Company; or (5) disposition of voting securities of any
subsidiary without the consent of The Coca-Cola Company. In addition, upon
termination of the Bottle Contracts for any reason, The Coca-Cola Company, at
its discretion, may also terminate any other agreements with the Company
regarding the manufacture, packaging, distribution, sale or promotion of soft
drinks, including the Allied Bottle Contracts described elsewhere herein.
The Company is prohibited from assigning, transferring or pledging its
Bottle Contracts, or any interest therein, whether voluntarily or by operation
of law, without the prior consent of The Coca-Cola Company. Moreover, the
Company may not enter into any contract or other arrangement to manage or
participate in the management of any other Coca-Cola bottler without the prior
consent of The Coca-Cola Company.
The Coca-Cola Company may automatically amend the Bottle Contracts if 80%
of the domestic bottlers who are parties to agreements with The Coca-Cola
Company containing substantially the same terms as the Bottle Contracts, which
bottlers purchased for their own account 80% of the syrup and equivalent gallons
of concentrate for Coca-Cola Trademark Beverages purchased for the account of
all such bottlers, agree that their bottle contracts shall be likewise amended.
Supplementary Agreement. The Company and The Coca-Cola Company are also
parties to a Supplementary Agreement (the "Supplementary Agreement") that
modifies some of the provisions of the Bottle Contracts. The Supplementary
Agreement provides that The Coca-Cola Company will exercise good faith and fair
dealing in its relationship with the Company under the Bottle Contracts; offer
marketing support and exercise its rights under the Bottle Contracts in a manner
consistent with its dealings with comparable bottlers; offer to the Company any
written amendment to the Bottle Contracts (except amendments dealing with
transfer of ownership) which it offers to any other bottler in the United
States; and, subject to certain limited exceptions, sell syrups and concentrates
to the Company at prices no greater than those charged to other bottlers which
are parties to contracts substantially similar to the Bottle Contracts.
The Supplementary Agreement permits transfers of the Company's capital
stock that would otherwise be limited by the Bottle Contracts.
Allied Bottle Contracts. Other contracts with The Coca-Cola Company (the
"Allied Bottle Contracts") grant similar exclusive rights to the Company with
respect to the distribution of Sprite, Mr. PiBB, Mello Yello, diet Mello Yello,
Fanta, TAB, diet Sprite, sugar free Mr. PiBB, Fresca, Minute Maid orange and
diet Minute Maid orange sodas (the "Allied Beverages") for sale in authorized
containers in its territories. These contracts contain provisions that are
similar to those of the Bottle Contracts with respect to pricing, authorized
containers, planning, quality control, trademark and transfer restrictions
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and related matters. Each Allied Bottle Contract has a term of 10 years and is
renewable by the Company for an additional 10 years at the end of each 10 year
period, but is subject to termination in the event of (1) the Company's
insolvency, bankruptcy, dissolution, receivership or similar condition; (2)
termination of the Company's Bottle Contract covering the same territory by
either party for any reason; and (3) any material breach of any obligation of
the Company under the Allied Bottle Contract that remains uncured for 120 days
after notice by The Coca-Cola Company.
Post-mix Rights. The Company also has the non-exclusive right to sell
Coca-Cola and other fountain syrups ("post-mix syrup") of The Coca-Cola Company.
Other Bottling Agreements. The bottling agreements from most other soft
drink franchisors are similar to those described above in that they are
renewable at the option of the Company and the franchisors at prices
unilaterally fixed by the franchisors. They also contain similar restrictions on
the use of trademarks, approved bottles, cans and labels and sale of imitations
or substitutes as well as termination for cause provisions. Sales of soft drinks
by the Company under these agreements represented approximately 12% of the
Company's sales for fiscal 1994.
The territories covered by the Allied Bottle Contracts and by bottling
agreements for products of franchisors other than The Coca-Cola Company in most
cases correspond with the territories covered by the Bottle Contracts. The
variations do not have a material effect on the business of the Company taken as
a whole.
Markets and Production and Distribution Facilities
As of March 15, 1995, the Company held franchises covering the majority of
central, northern and western North Carolina, and portions of Alabama,
Mississippi, Tennessee, Kentucky, Virginia, West Virginia, Ohio, Pennsylvania,
Georgia and Florida. The total population within the Company's Coca-Cola
franchise area is approximately 11.7 million.
As of March 15, 1995, the Company operated in six principal geographical
regions. Certain information regarding each of these markets follows:
1. North Carolina. This region includes the majority of central and western
North Carolina, including Raleigh, Greensboro, Winston-Salem, High Point,
Hickory, Asheville, Fayetteville and Charlotte and the surrounding areas. The
region has an estimated population of 5.0 million. Production/distribution
facilities are located in Charlotte and 15 other distribution facilities are
located in the region.
2. South Alabama. This region includes a portion of southwestern Alabama,
including the area surrounding Mobile, and a portion of southeastern
Mississippi. The region has an estimated population of 850,000. A
production/distribution facility is located in Mobile, and five other
distribution facilities are located in the region.
3. South Georgia. This region includes a small portion of eastern Alabama,
a portion of southwestern Georgia surrounding Columbus, Georgia, in which a
distribution facility is located, and a portion of the Florida Panhandle,
including Panama City and Quincy. Four other distribution facilities are located
in the region. This region has an estimated population of 950,000.
4. Middle Tennessee. This region includes a portion of central Tennessee,
including areas surrounding Nashville, and a small portion of southern Kentucky.
The region has an estimated population of 1.6 million. A production/distribution
facility is located in Nashville and seven other distribution facilities are
located in the region.
5. Western Virginia. This region includes most of southwestern Virginia,
including areas surrounding Roanoke, a portion of the southern Piedmont of
Virginia, a portion of northeastern Tennessee and a portion of southeastern West
Virginia. The region has an estimated population of 1.4 million. A
production/distribution facility is located in Roanoke and seven other
distribution facilities are located in the region.
6. West Virginia. This region includes most of the state of West Virginia,
a portion of eastern Kentucky, a portion of eastern Ohio and a portion of
southwestern Pennsylvania. The region has an estimated population of 1.9
million. There are 11 distribution facilities located in the region.
The Company owns 100% of the operations in each of the regions listed.
The Company sold the majority of its South Carolina franchise territory to
Piedmont in July 1993. Pursuant to a management agreement, the Company produces
a majority of the soft drink products for Piedmont.
On June 1, 1994, the Company executed a management agreement with South
Atlantic Canners, Inc. ("SAC"), a manufacturing cooperative located in
Bishopville, South Carolina. The Company is a member of the cooperative and
receives a fee
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for managing the day-to-day operations of SAC pursuant to this 10-year
management agreement. SAC has significantly expanded its operations by adding
two PET bottling lines. The new bottling lines will supply a portion of the
Company's volume requirements for PET product.
In addition to producing bottled and canned soft drinks for their own
franchise territories, each production facility also produces some products for
sale by other Coca-Cola bottlers. With the exception of the Company's production
of soft drink products for Piedmont, this contract production is currently not
material in the Company's production centers.
Raw Materials
In addition to concentrates obtained by the Company from The Coca-Cola
Company and other concentrate companies for use in its soft drink manufacturing,
the Company also purchases sweeteners, carbon dioxide, glass and plastic
bottles, cans, closures, pre-mix containers and other packaging materials as
well as equipment for the production, distribution and marketing of soft drinks.
Except for sweetener and plastic bottles, the Company purchases its raw
materials from multiple suppliers.
The Company purchases substantially all of its plastic bottles (20 ounce,
one liter, two liter and three liter sizes) from manufacturing plants which are
owned and operated by two cooperatives of southern Coca-Cola bottlers, including
the Company. The Company joined the southwest cooperative in February 1985
following its acquisition of the bottling subsidiaries of Wometco Coca-Cola
Bottling Company. The Company joined the southeast cooperative in 1984.
None of the materials or supplies used by the Company is in short supply,
although the supply of specific materials could be adversely affected by
strikes, weather conditions, governmental controls or national emergency
conditions.
Marketing
The Company's soft drink products are sold and distributed directly by its
employees to retail stores and other outlets, including food markets,
institutional accounts and vending machine outlets. During 1994, approximately
74% of the Company's total sales were made in the take-home channel through
supermarkets, convenience stores and other retail outlets. The remaining sales
were made in the cold drink channel, primarily through dispensing machines,
owned either by the Company, retail outlets or third party vending companies.
New product introductions, packaging changes and sales promotions have been
major competitive techniques in the soft drink industry in recent years and have
required and are expected to continue to require substantial expenditures. New
product introductions in recent years include: caffeine free Coca-Cola classic;
caffeine free diet Coke; Cherry Coke; diet Mello Yello; Minute Maid orange; diet
Minute Maid orange; ready-to-drink Nestea; Fruitopia; and PowerAde. New product
introductions have entailed increased operating costs for the Company resulting
from special marketing efforts, obsolescence of replaced items and occasionally
higher raw materials costs.
After several new package introductions in recent years, the Company now
sells its soft drink products in a variety of returnable and non-returnable
bottles, both glass and plastic, and in cans, in varying proportions from market
to market. There may be as many as eight or more different packages for
Coca-Cola classic, in addition to pre-mix containers and post-mix syrup
packages, within a single geographical area. Excluding post-mix syrup sales,
physical unit sales of soft drinks during fiscal year 1994 were approximately
51% cans, 46% non-returnable bottles, 2% pre-mix and 1% returnable bottles.
Advertising in various media, primarily television and radio, is relied
upon extensively in the marketing of the Company's soft drinks. The Coca-Cola
Company and Dr Pepper Company have joined the Company in making substantial
expenditures in cooperative advertising in the Company's marketing areas. The
Company also benefits from national advertising programs conducted by The
Coca-Cola Company and Dr Pepper Company. In addition, the Company expends
substantial funds on its own behalf for extensive local sales promotions of the
Company's soft drink products. These expenses are partially offset by marketing
funds which the concentrate companies provide to the Company in support of a
variety of marketing programs, such as price promotions, merchandising programs
and point-of-sale displays.
The substantial outlays which the Company makes for advertising are
generally regarded as necessary to maintain or increase sales volume, and any
curtailment of the funding provided by The Coca-Cola Company for advertising or
marketing programs which benefit the Company could have a materially adverse
effect on the business of the Company.
Seasonality
A larger than average percentage of the Company's total sales occurs during
peak periods, which are normally May, June, July and August. The Company has
adequate production capacity to meet sales demands during these peak periods.
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Competition
The soft drink industry is highly competitive. The Company's competitors
include several large soft drink manufacturers engaged in the distribution of
nationally advertised products, as well as similar companies which market
lesser-known soft drinks in limited geographical areas and manufacturers of
private brand soft drinks. In each region in which the Company operates, between
75% and 95% of carbonated soft drink sales in bottles, cans and pre-mix
containers are accounted for by the Company and its principal competition, which
in each region includes the local bottler of Pepsi-Cola and, in some regions,
also includes the local bottler of Royal Crown products. The Company's
carbonated soft drink products also compete with, among others, noncarbonated
soft drinks and citrus and noncitrus fruit drinks.
The principal methods of competition in the soft drink industry are
point-of-sale merchandising, new product introductions, packaging changes, price
promotions, quality of distribution and advertising.
Government Regulation
The production and marketing of beverages are subject to the rules and
regulations of the United States Food and Drug Administration ("FDA") and other
federal, state and local health agencies. The FDA also regulates the labeling of
containers.
No reformulation of the Company's products is presently required by any
rule or regulation, but there can be no assurance that future government
regulations will not require reformulation of the Company's products.
From time to time, legislation has been proposed in Congress and by certain
state and local governments which would prohibit the sale of soft drink products
in non-returnable bottles and cans or require a mandatory deposit as a means of
encouraging the return of such containers in an attempt to reduce solid waste
and litter. The Company is currently not impacted by this type of proposed
legislation.
Soft drink and similar-type taxes have been in place in North Carolina,
South Carolina, West Virginia and Tennessee for several years. To the Company's
knowledge, legislation has not been proposed or enacted to increase the tax in
any of these states.
Environmental Remediation
The Company does not currently have any material capital expenditure
commitments for environmental remediation for any of its properties.
Employees
As of March 15, 1995, the Company had a total of approximately 4,700
full-time employees, of whom approximately 400 were union members.
Item 2 -- Properties
The principal properties of the Company include its corporate headquarters,
its four production facilities and its 54 distribution centers, all of which are
owned by the Company except for its corporate headquarters, two
production/distribution facilities and nine distribution centers.
On November 30, 1992, the Company and the owner of the Company's Snyder
Production Center in Charlotte, North Carolina agreed to the early termination
of the Company's lease. Harrison Limited Partnership One purchased the property
contemporaneously with the termination of the lease, and the Company and
Harrison Limited Partnership One entered into an agreement under which the
Company leased the property for a 10-year term beginning on December 1, 1992.
JFH Management, Inc., a North Carolina corporation of which J. Frank Harrison,
Jr. is the sole shareholder, serves as sole general partner of the limited
partnership that purchased the production center property. The sole limited
partner of the limited partnership is a trust as to which J. Frank Harrison, III
and Reid M. Henson are co-trustees, share investment powers, and as to which
they share voting power for purposes of this partnership interest. The
beneficiaries of this trust are J. Frank Harrison, Jr. and his descendants. The
annual base rent the Company is obligated to pay under the lease agreement is
subject to adjustment for increases in the Consumer Price Index and for
increases or decreases in interest rates based on LIBOR.
On June 1, 1993, Beacon Investment Corporation, a North Carolina
corporation of which J. Frank Harrison, III is sole shareholder, purchased the
office building located on Rexford Road in Charlotte, North Carolina, in which
the Company leases its executive offices. Contemporaneously, the Company entered
into a 10-year lease commencing June 1, 1993 with Beacon Investment Corporation
for office space within the building. The annual base rent the Company is
obligated to pay
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under the lease agreement is subject to adjustment for increases in the Consumer
Price Index and for increases or decreases in interest rates based on LIBOR.
The Company also leases its 297,500 square-foot production/distribution
facility in Nashville, Tennessee. The lease requires monthly payments through
2002. The Company's other real estate leases are not material.
The Company owns and operates two soft drink production facilities apart
from the leased facilities described above. The current percentage utilization
of the Company's production centers as of March 15, 1995 is approximately as
indicated below:
Production Facilities
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Percentage
Location Utilization*
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Charlotte, North Carolina................................................................ 88%
Mobile, Alabama.......................................................................... 77%
Nashville, Tennessee..................................................................... 60%
Roanoke, Virginia........................................................................ 87%
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* Estimated 1995 production divided by capacity (based on 80 hours of operations
per week).
Because of the seasonality of the Company's soft drink business, the
Company uses considerably more of its capacity for production during peak
periods, normally May, June, July and August. The Company currently has
sufficient production capacity to meet its operational requirements.
Bottled and canned soft drinks are transported to distribution centers for
storage pending sale. The number of centers by market area as of March 15, 1995
is as follows:
Distribution Centers
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Number of
Region Centers
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North Carolina............................................................................ 16
South Alabama............................................................................. 6
South Georgia............................................................................. 5
Middle Tennessee.......................................................................... 8
Western Virginia.......................................................................... 8
West Virginia............................................................................. 11
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The Company's distribution facilities are all in good condition and are
adequate for the Company's operations as presently conducted.
The Company also operates approximately 2,500 vehicles in the sale and
distribution of its soft drink products, of which approximately 1,300 are
delivery trucks. In addition, the Company owns or leases approximately 107,000
soft drink dispensing and vending machines.
Item 3 -- Legal Proceedings
On March 4, 1993, a Complaint was filed against the Company, the
predecessor bottling company for the Laurel, Mississippi territory and other
unnamed parties in the matter of Mrs. Elsie Langley, Administratrix of the
Estate of Walter Langley v. Coca-Cola Bottling Co. Consolidated, et al., Cause
No. 93-3-30 in the Circuit Court of the Second Judicial District for Jones
County, Mississippi. This suit by the testatrix spouse of a deceased former
employee of the predecessor bottler alleges misrepresentation and fraud in
connection with the severance package offered to employees terminated by the
predecessor bottler in connection with the acquisition of the Laurel franchise
subsidiary of the Company. Plaintiff seeks damages in an amount up to $18
million in compensatory and punitive damages. The Company believes that the
Complaint is without merit and its ultimate disposition will not have a
material adverse effect on the financial condition or results of operations of
the Company.
7
<PAGE>
Item 4 -- Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended January 1, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered item in Part I of this Report in lieu of being
included in the Proxy Statement for the Annual Meeting of Shareholders to be
filed.
The following is a list of names and ages of all the executive officers of
the Registrant as of March 1, 1995, indicating all positions and offices with
the Registrant held by each such person. All officers have served in their
present capacities for the past five years except as otherwise stated.
J. FRANK HARRISON, JR., age 64, is Chairman of the Board of Directors of
the Company and has served the Company in that capacity since 1977. Mr.
Harrison, Jr. served as Chief Executive Officer of the Company from August 1980
until April 1983. He has previously served the Company as Vice Chairman of the
Board of Directors. He has been a Director of the Company since 1973. Mr.
Harrison, Jr. presently is a Director of Dixie Yarns, Inc. Mr. Harrison, Jr. is
Chairman of the Executive Committee and the Finance Committee and is a member of
the Compensation Committee.
J. FRANK HARRISON, III, age 40, is a Vice Chairman of the Board of
Directors and Chief Executive Officer of the Company. Mr. Harrison has served in
the capacity of Vice Chairman since his election in November 1987 and was
appointed as the Company's Chief Executive Officer in May 1994. He was first
employed by the Company in 1977, and has served as a Division Sales Manager and
as a Vice President of the Company. Mr. Harrison, III is a Director of Wachovia
Bank & Trust Co., N.A., Southern Region Board. He is Chairman of the
Compensation Committee and is a member of the Executive Committee, the Audit
Committee and the Finance Committee.
REID M. HENSON, age 55, has served as a Vice Chairman of the Board of
Directors of the Company since 1983. Prior to that time, Mr. Henson served as a
consultant for JTL Corporation, a management company, and later as President of
JTL Corporation. He has been a Director of the Company since 1979, is Chairman
of the Audit Committee and is a member of the Executive Committee, the
Retirement Benefits Committee and the Finance Committee.
JAMES L. MOORE, JR., age 52, is President and Chief Operating Officer of
the Company. Prior to his election as President in March 1987, he served as
President and Chief Executive Officer of Atlantic Soft Drink Co., a soft drink
bottling subsidiary of Grand Metropolitan USA. Mr. Moore has been a Director of
the Company since March 1987. He is a member of the Executive Committee and is
Chairman of the Retirement Benefits Committee.
DAVID V. SINGER, age 39, is Vice President and Chief Financial Officer. In
addition to his Finance duties, Mr. Singer has overall responsibility for the
Company's Purchasing/Materials Management function as well as the Distribution,
Fleet and Transport function. He served as Vice President, Chief Financial
Officer and Treasurer from October 1987 through May 1992; prior to that he was
Vice President and Treasurer. Prior to joining the Company in March 1986, Mr.
Singer was a Vice President of Corporate Banking for Mellon Bank, N.A.
M. CRAIG AKINS, age 44, is Vice President, Cold Drink Market, a position he
has held since October 1993. He was Vice President, Division Manager of the
Tennessee Division from 1989-1993. From 1987 through 1988, he was General
Manager of the Nashville, TN sales center. From 1985 through 1986, he was Trade
Development Director of the Tennessee Division. Prior to joining the Company in
1985, he was a Regional Trade Development Manager for Coca-Cola USA.
STEVEN D. CALDWELL, age 45, joined the Company in April 1987 as Vice
President, Business Systems and Services. Prior to joining the Company, he was
Director of MIS at Atlantic Soft Drink Co., a soft drink bottling subsidiary of
Grand Metropolitan USA for four years.
WILLIAM B. ELMORE, age 39, is Vice President, Regional Manager for the
Virginia/West Virginia/Alabama/Tennessee Division, a position he has held since
November 1991. He was Vice President, Division Manager of the West Virginia
Division from 1989-1991. He was Senior Director, Corporate Marketing from
1988-1989. Preceding that, he held various positions in sales and marketing in
the Charlotte Division from 1985-1988. Before joining the Company in 1985, he
was employed by Coca-Cola USA for seven years where he held several positions in
their field sales organization.
8
<PAGE>
NORMAN C. GEORGE, age 39, is Vice President, Regional Manager for the
Carolinas South Region, a position he has held since November 1991. He served as
Vice President, Division Manager of the Southern Division from 1988-1991. He
served as Vice President, Division Manager of the Alabama Division from
1986-1988. From 1982-1986, he served as Director of Sales and Operations in the
Northern Division. Prior to joining the Company in 1982, he was Sales Manager of
the Dallas-Fort Worth Dr Pepper Bottling Company in Irving, Texas.
BRENDA B. JACKSON, age 34, is Vice President and Treasurer, a position she
has held since January 1993. From February 1992 until her promotion, she served
as Assistant Treasurer. Mrs. Jackson joined the Company in March 1989 as
Director of Finance.
UMESH M. KASBEKAR, age 37, is Vice President, Planning and Administration,
a position he has held since December 1994. He was Vice President, Planning from
December 1988 until December 1994. He was first employed by the Company in 1983
and held various other positions with the Company from 1983 to 1988.
C. RAY MAYHALL, age 47, is Vice President, Regional Manager for the Georgia
Division and the Carolinas North Region, a position he has held since November
1991. He served as Vice President, Division Manager of the Northern Division
from 1989-1991. Before joining the Company in 1989, he was Vice President, Sales
and Marketing of Florida Coca-Cola Bottling Company, a position he had held
since 1987. Prior to 1987, he was Division Manager of the Central Florida
Division of Florida Coca-Cola Bottling Company for six years.
ROBERT D. PETTUS, JR., age 50, is Vice President, Human Resources, a
position he has held since September 1984. Prior to joining the Company, he was
Director, Employee Relations for the Texize Division of Morton-Thiokol for seven
years.
JAMES B. STUART, age 52, joined the Company in October 1990 as Vice
President, Marketing. Mr. Stuart had been Senior Vice President, Sales and
Marketing with JTL Corporation from 1980 until such company was acquired by The
Coca-Cola Company in 1986. From 1987 until joining the Company in 1990, Mr.
Stuart formed his own marketing company, serving a number of clients inside and
outside the soft drink industry. During this period, he worked almost
exclusively with the International Business Sector of The Coca-Cola Company.
STEVEN D. WESTPHAL, age 40, is Vice President and Controller of the
Company, a position he has held since November 1987. Prior to joining the
Company, he was Vice President-Finance for Joyce Beverages, an independent
bottler, beginning in January 1985. Prior to working for Joyce Beverages, he was
Director of Corporate Planning for Mid-Atlantic Coca-Cola Bottling Company, Inc.
from December 1981 to December 1984.
9
<PAGE>
PART II
Item 5 -- Market for Registrant's Common Equity and Related Stockholder Matters
The Company has two classes of common stock outstanding, Common Stock and
Class B Common Stock. The Common Stock is traded in the over-the-counter market
and is quoted on the NASDAQ National Market System under the symbol COKE. The
table below sets forth for the periods indicated the high and low reported sales
prices per share of Common Stock. There is no established public trading market
for the Class B Common Stock. Shares of Class B Common Stock are convertible on
a share-for-share basis into shares of Common Stock.
<TABLE>
<CAPTION>
Fiscal Year
1994
High Low
<S> <C> <C>
First quarter.............................................................................. $ 37 1/4 $ 27
Second quarter............................................................................. 30 1/4 24
Third quarter.............................................................................. 31 26 3/4
Fourth quarter............................................................................. 29 3/4 24
<CAPTION>
1993
High Low
<S> <C> <C>
First quarter.............................................................................. $ 20 1/4 $ 17
Second quarter............................................................................. 27 3/4 17 3/4
Third quarter.............................................................................. 35 1/2 26 1/4
Fourth quarter............................................................................. 41 1/2 33 1/4
</TABLE>
The quarterly dividends declared by the Company per share of Common Stock
and Class B Common Stock for the fiscal years ended January 1, 1995 and January
2, 1994 are presented below.
<TABLE>
<CAPTION>
Fiscal Year
1994 1993
Common Class B Common Class B
<S> <C> <C> <C> <C>
First quarter........................................................................ $ .25 $ .25 $ .22 $ .13
Second quarter....................................................................... .25 .25 .22 .13
Third quarter........................................................................ .25 .25 .22 .13
Fourth quarter....................................................................... .25 .25 .22 .13
Total cash dividends declared per share.............................................. $1.00 $ 1.00 $ .88 $ .52
Total cash dividends declared (in thousands)......................................... $7,958 $ 1,336 $6,970 $ 695
</TABLE>
Dividends on the Class B Common Stock are permitted to equal, but not
exceed, dividends on the Common Stock. At its December 8, 1993 meeting, the
Board of Directors stated its intention to increase and equalize dividends on
the Company's two classes of common stock, subject to the Company's overall
financial condition.
On February 8, 1994, the Board of Directors declared an increase in the
first quarter 1994 dividends. Shareholders of record as of February 24, 1994
received $.25 per share on both their Common Stock and Class B Common Stock
shares, payable on March 10, 1994. This dividend rate was maintained throughout
1994.
The amount and frequency of future dividends will be determined by the
Company's Board of Directors in light of the earnings and financial condition of
the Company at such time, and no assurance can be given that dividends will be
declared in the future.
Pursuant to the Company's Certificate of Incorporation, no cash dividend or
dividend of property or stock other than stock of the Company may be declared
and paid, per share, on the Class B Common Stock unless a dividend of an amount
greater than or equal to such cash or property or stock has been declared and
paid on the Common Stock. Reference should be made to Article Fourth of the
Company's Certificate of Incorporation for additional provisions relating to the
relative dividend rights of holders of Common Stock and Class B Common Stock.
The number of shareholders of record of the Common Stock and Class B Common
Stock, as of March 15, 1995, was 1,210 and 14, respectively.
Item 6 -- Selected Financial Data
The following table sets forth certain selected financial data concerning
the Company for the five years ended January 1, 1995. The data for the five
years ended January 1, 1995 is unaudited but is derived from audited statements
of the Company. This information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" set forth in Item 7 hereof and is qualified in its entirety by
reference to the more detailed financial statements and notes contained in Item
8 hereof. This information should also be read in conjunction with the
"Introduction and Recent Developments" section in Item 1 hereof which details
the Company's significant acquisitions and divestitures since 1984.
10
<PAGE>
COCA COLA BOTTLING CO. CONSOLIDATED
SELECTED FINANCIAL DATA*
In Thousands (Except Per Share Data)
<TABLE>
<CAPTION>
Fiscal Year
Summary of Operations 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net sales....................................................... $723,896 $686,960 $ 655,778 $464,733 $436,086
Cost of products sold........................................... 427,140 396,077 372,865 262,887 245,890
Selling expenses................................................ 149,992 144,411 151,382 107,266 95,934
General and administrative expenses............................. 54,559 51,125 47,154 37,995 35,008
Depreciation expense............................................ 24,188 23,284 22,217 18,785 18,814
Amortization of goodwill and intangibles........................ 12,309 14,784 18,326 10,884 10,700
Total costs and expenses........................................ 668,188 629,681 611,944 437,817 406,346
Income from operations.......................................... 55,708 57,279 43,834 26,916 29,740
Interest expense................................................ 31,385 30,994 36,862 21,556 24,087
Other income (expense), net..................................... 63 (2,270) (2,121) (2,404) (3,448)
Income before income taxes, extraordinary items and effect of
accounting changes............................................ 24,386 24,015 4,851 2,956 2,205
Federal and state income taxes.................................. 10,239 9,182 2,768 20 1,976
Income before extraordinary items and effect of
accounting changes............................................ 14,147 14,833 2,083 2,936 229
Extraordinary credit............................................ 1,975
Effect of accounting changes.................................... (2,211) (116,199)
Net income (loss)............................................... 11,936 14,833 (114,116) 2,936 2,204
Preferred stock dividends....................................... 4,195 728 448
Net income (loss) applicable to common shareholders............. $ 11,936 $ 14,833 $(118,311) $ 2,208 $ 1,756
Income (loss) per share:
Income (loss) before extraordinary items and effect of
accounting changes, less preferred stock dividends......... $ 1.52 $ 1.60 $ (.23) $ .24 $ (.02)
Extraordinary credit.......................................... .21
Effect of accounting changes.................................. (.24) (12.66)
Net income (loss) applicable to common shareholders........... $ 1.28 $ 1.60 $ (12.89) $ .24 $ .19
Cash dividends per share:
Common........................................................ $ 1.00 $ .88 $ .88 $ .88 $ .88
Class B Common................................................ $ 1.00 $ .52 $ .52 $ .52 $ .52
Year-End Financial Position
Total assets.................................................... $664,159 $648,449 $ 785,871 $785,196 $467,972
Long-term debt.................................................. 432,971 434,358 555,126 479,414 237,564
Redeemable preferred stock...................................... 7,280 7,280
Shareholders' equity............................................ 33,981 29,629 25,806 205,426 160,815
Other Information
Weighted average number of Common and Class B Common shares
outstanding................................................... 9,294 9,258 9,181 9,181 9,181
</TABLE>
* In December 1991, the Company acquired Sunbelt. See Note 2 to the consolidated
financial statements for information concerning the Company's investment in
Piedmont Coca-Cola Bottling Partnership. During 1992, the Company changed its
method of accounting for income taxes and for postretirement benefits other
than pensions, as described in Notes 9 and 12. In 1994, the Company adopted
the provisions of SFAS 112, as described in Note 12.
11
<PAGE>
Item 7 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations
Introduction
Coca-Cola Bottling Co. Consolidated ("the Company") is engaged in the
production, marketing and distribution of soft drinks, primarily products of The
Coca-Cola Company. Since 1984, the Company has expanded its franchise territory
throughout the Southeast, primarily through acquisitions.
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont
Coca-Cola Bottling Partnership ("Piedmont") to distribute and market soft drink
products of The Coca-Cola Company and other third party licensors, primarily in
certain portions of North Carolina and South Carolina. The Company provides a
majority of the soft drink products to Piedmont and receives a fee for managing
the business of Piedmont pursuant to a management agreement. The Company and The
Coca-Cola Company, through their respective subsidiaries, each beneficially own
a 50% interest in Piedmont. Subsidiaries of the Company made an initial capital
contribution to Piedmont of $70 million in the aggregate. The Company's capital
contribution was composed of approximately $21.7 million in cash and of bottling
operations and certain assets used in connection with the Company's Wilson,
North Carolina and Greenville and Beaufort, South Carolina territories. The cash
contributed to Piedmont by the Company's subsidiaries was provided from the
Company's available credit facilities. The Company sold other territories to
Piedmont for an aggregate purchase price of approximately $118 million. Assets
were sold or contributed at their approximate carrying values. Proceeds from the
sale of territories to Piedmont, net of the Company's cash contribution, totaled
approximately $96 million and were used to reduce the Company's long-term debt.
The Company is accounting for its investment in Piedmont using the equity method
of accounting.
On June 1, 1994, the Company executed a management agreement with South
Atlantic Canners, Inc. ("SAC"), a manufacturing cooperative located in
Bishopville, South Carolina. The Company is a member of the cooperative and
receives a fee for managing the day-to-day operations of SAC pursuant to this
10-year management agreement. SAC has significantly expanded its operations by
adding two PET bottling lines. These new bottling lines will supply a portion of
the Company's volume requirements for PET product. On July 22, 1994, the Company
guaranteed expansion financing for SAC of up to $15 million. As of January 1,
1995, the amount guaranteed was $11.0 million. On March 31, 1995, the Company
amended its guarantee to include a $5 million portion of SAC's working capital
facility.
Results of Operations
1994 Compared to 1993
The Company reported net income applicable to common shareholders of $11.9
million or $1.28 per share for fiscal 1994 compared to $14.8 million or $1.60
per share for fiscal 1993. A one-time, after-tax noncash charge of $2.2 million
or $.24 per share was recorded in the first quarter of 1994 upon the adoption of
Statement of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits" ("SFAS 112"). SFAS 112 requires the accrual, during the
years that employees render service, of the expected cost of providing
postemployment benefits if certain criteria are met. The Company does not expect
any significant impact on the results of future operations due to the adoption
of this accounting standard.
Pretax earnings in 1994 were slightly higher than pretax earnings in 1993
despite an increase in short-term interest rates that increased interest expense
by approximately 10% in the second half of 1994 versus the second half of 1993.
Due to the formation of Piedmont on July 2, 1993, results of operations for
1994 are not directly comparable to the results of operations for 1993. On a
comparable franchise territory basis, net franchise sales for 1994 increased
5.2%, reflecting a volume increase of 4.6% and slightly higher average net
selling prices. The higher net selling prices maintained the increases in net
selling prices realized in 1993 versus 1992. Sales to other bottlers increased
57% during 1994 as compared to 1993 primarily due to the sale of soft drink
products to Piedmont. Finished products are sold to Piedmont at cost.
When adjusted for comparable territories, gross margin increased 4.8%. As a
percentage of net franchise sales, gross margin decreased slightly due to higher
ingredient costs. Packaging costs began to increase at the end of the fourth
quarter of 1994 and are continuing to increase in 1995. The Company is focused
on achieving net selling price increases in 1995 to cover the increased cost of
raw materials.
Excluding the results of the territories sold or contributed to Piedmont
from 1993 results, selling expenses increased from approximately 24.3% of net
franchise sales in 1993 to approximately 26.3% of net franchise sales in 1994.
New sales development programs contributed to the increase in selling expenses
and resulted in improved market share. Higher employment costs were incurred due
to planned increases in certain sales and operations functions to improve
customer service and
12
<PAGE>
to reduce turnover. Increased expenses associated with the cold drink effort
resulted in a record number of placements of vending equipment. For the
comparable franchise territories, general and administrative expenses as a
percentage of net sales increased slightly due to higher employment costs.
Amortization of goodwill and intangibles decreased 16.7% for fiscal 1994,
reflecting the 1993 sale and contribution of franchise territories to Piedmont.
Depreciation expense increased 3.9% as a result of increased capital spending,
primarily for manufacturing improvements related to packaging changes and other
line efficiency projects.
Interest expense increased 1.3% due to increased short-term interest rates.
The Company's overall weighted average borrowing rate on its long-term debt
increased from an average of 5.9% during 1993 to an average of 6.6% during 1994.
The change in "other income (expense), net" for 1994 was due primarily to a
third quarter 1994 gain on the sale of one of the Company's aircraft and a first
quarter 1994 gain on the sale of an idle production facility. This facility was
acquired in the 1991 Sunbelt acquisition and was closed in April 1992. Gains of
approximately $1.4 million on sales of property, plant and equipment were
included in "other income (expense), net" in 1994. Losses of approximately $1.1
million on sales of property, plant and equipment were included in "other income
(expense), net" in 1993.
The effective tax rate for federal and state income taxes was approximately
42% in 1994 versus approximately 38% in 1993. The difference between the
effective rate and the statutory rate was due primarily to amortization of
nondeductible goodwill, state income taxes, nondeductible premiums on officers'
life insurance and other nondeductible expenses. The 1993 rate was lower due to
the utilization of certain tax benefits from prior years. The formation of
Piedmont allowed the utilization of these benefits.
1993 Compared to 1992
The Company reported net income applicable to common shareholders of $14.8
million or $1.60 per share for fiscal 1993. This compares with 1992's net loss
applicable to common shareholders of $2.1 million or $.23 per share before the
effect of accounting changes related to the adoption of SFAS 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions," and SFAS 109,
"Accounting for Income Taxes." For 1992, the reported net loss applicable to
common shareholders was $118.3 million or $12.89 per share. The 1992 results
included $116.2 million of noncash charges associated with the adoption of SFAS
109 and SFAS 106.
The record 1993 results were due to increased net selling prices, slightly
higher volume, lower packaging costs, lower financing costs, a lower effective
tax rate and the formation of Piedmont. The reduction of one work-week in fiscal
1993 and the formation of Piedmont on July 2, 1993 make reported results less
comparable.
Net sales increased by approximately 5% from 1992 to 1993. On a comparable
franchise territory and fiscal period basis, net franchise sales for 1993
increased by more than 4%, reflecting higher net selling prices and slightly
higher case volume. Sales to other bottlers increased by $58.8 million in 1993
primarily due to the sale of soft drink products to Piedmont.
Gross margin as reported increased by approximately 3%. When adjusted for
comparable franchise territory and fiscal days, franchise gross margin increased
by approximately 11% due to increased net selling prices and lower packaging
costs.
Selling expenses decreased by 4.6% and declined as a percentage of net
sales due primarily to reductions in operating costs resulting from the
elimination of expenses associated with territories sold to Piedmont. General
and administrative expenses increased by 8.4% as a result of increased
employment costs.
Depreciation expense increased by 4.8% during 1993. The sale and
contribution of certain fixed assets to Piedmont and normal retirements were
more than offset by additions to property, plant and equipment.
Amortization of goodwill and intangibles declined 19.3% primarily due to
the sale and contribution of franchise territories to Piedmont.
Financing costs declined in 1993 as compared to 1992 due to lower interest
rates and a reduction in long-term debt primarily resulting from the use of
proceeds from the sale of territories to Piedmont. During the fourth quarter of
1992, the Company redeemed all outstanding shares of preferred stock. Dividends
of $4.2 million were paid in 1992 on these preferred shares.
Reported income tax expense differs from the amount computed at the
statutory rate primarily due to amortization of certain nondeductible goodwill,
state income taxes and the effect of the change in statutory rates on the
deferred income tax
13
<PAGE>
liability as of the beginning of the year. As a result of the enactment of the
Omnibus Budget Reconciliation Act of 1993, the Company recorded an additional
income tax charge of approximately $2.1 million to reflect the change in the
maximum federal corporate tax rate from 34% to 35%. Due to the Company's
restructuring related to the formation of Piedmont and a significant increase in
profitability, the Company reduced a valuation allowance that had been recorded
due to restrictions on the use of certain net operating losses.
Financial Condition
Working capital increased by $6.4 million from a deficit of $24.9 million
on January 2, 1994 to a deficit of $18.5 million on January 1, 1995. The working
capital deficit is a result of the Company's sale of its trade accounts
receivable. The Company had sold trade accounts receivable of $35 million and
$33 million as of January 1, 1995 and January 2, 1994, respectively. Proceeds
from the sale of the Company's trade accounts receivable were used to reduce its
outstanding long-term debt.
The increase in working capital was primarily due to increases in
inventories and trade accounts receivable. The increase in inventories was
primarily due to the timing of purchases of certain packaging materials and an
increase in the number of stock keeping units. Trade accounts receivable
increased principally due to increases in net sales.
Additions to property, plant and equipment were $49.3 million in 1994.
During the year, the Company purchased, rather than leased, new vehicles. In
addition, certain improvements were made at the manufacturing facilities to
produce new packages. Expenditures for 1995 capital additions are expected to be
lower than 1994 expenditures.
Other liabilities increased by $7.0 million primarily due to deferred
revenue received from certain franchisors under multi-year marketing programs.
Liquidity and Capital Resources
On March 17, 1992, the Company entered into a revolving credit agreement
totaling $170 million that eliminated the term loan portion of the facility and
extended the revolving credit maturity date to March 1997. The agreement
contains several covenants that establish minimum ratio requirements related to
debt and cash flow. A commitment fee of 1/5% per year on the average daily
unused amount of the banks' commitment is payable quarterly. On January 1, 1995,
there were no amounts outstanding under this facility.
The Company borrows from time to time under informal lines of credit from
various banks. On January 1, 1995, the Company had $225 million available under
these lines, of which $93.4 million was outstanding. Loans under these lines are
made at the sole discretion of the banks at rates negotiated at the time of
borrowing.
A $100 million commercial paper program was established in January 1990 for
general corporate purposes. On January 1, 1995, there were no amounts
outstanding under this program.
It is the Company's intent to renew any borrowings under the revolving
credit facility and the lines of credit as they mature and, to the extent that
any borrowings under the revolving credit facility, the informal lines of credit
and commercial paper program do not exceed the amount available under the
Company's $170 million revolving credit facility, they are classified as
noncurrent liabilities.
On June 26, 1992, the Company entered into a three-year arrangement under
which it has the right to sell an undivided interest in a designated pool of
trade accounts receivable for up to a maximum of $40 million. On January 1,
1995, the Company had sold $35 million of its trade accounts receivable and used
the proceeds to reduce its outstanding bank long-term debt. It is the Company's
intent to seek renewal of this arrangement prior to its expiration.
On October 30, 1992, the Company entered into a three-year, $50 million
loan agreement. This agreement was amended November 30, 1992 to increase this
facility by $25 million to a total of $75 million. The proceeds from the loan
agreement were used primarily to redeem the Company's outstanding preferred
stock. On January 31, 1994, funds from informal lines of credit were used to
repay the $75 million loan agreement.
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became effective
and available for issuance. As of January 1, 1995, no securities had been issued
under this shelf registration. In any future offering under such registration,
net proceeds from sales of the securities would be used for general corporate
purposes, including repayment of debt, future acquisitions, capital expenditures
and/or working capital.
14
<PAGE>
As of January 1, 1995, the Company was in compliance with the covenants
contained in its various borrowing agreements.
The Company uses interest rate hedging products to cost effectively modify
risk from interest rate fluctuations in its underlying debt. The Company has
historically altered its fixed/floating rate mix based upon anticipated
operating cash flows of the Company relative to its debt level and the Company's
ability to absorb increases in interest rates. Sensitivity analyses are
performed to review the impact on the Company's financial position and coverages
of various interest rate movements. The Company does not use derivative
financial instruments for trading purposes.
The Company uses interest rate swaps to alter the interest rate
characteristics of its underlying debt and thereby realign the fixed/floating
rate mix of its debt. Where an interest rate swap has previously been used, the
Company's choices to alter the interest rate characteristics of its underlying
debt include modification of the underlying debt instrument, termination of the
existing swap or purchase of an offsetting swap. Each of these alternatives is
considered and the most cost effective option is selected. Offsetting swaps
rather than original swaps are sometimes used to help mitigate counterparty
credit risk. If an offsetting swap is entered into with the same counterparty, a
netting of payments occurs that reduces counterparty credit exposure as well as
administrative burden. The offsetting swaps along with original swaps and the
underlying debt are accounted for as a combined instrument. All of the Company's
outstanding interest rate swap agreements are LIBOR-based.
The Company enters into interest rate cap agreements to limit the exposure
to increasing interest rates with respect to its floating rate debt.
Occasionally, forward rate agreements are used to fix interest rate reset
periods on debt that is floating. There were no forward rate agreements
outstanding on January 1, 1995.
The Company has entered into a series of hedging transactions that resulted
in a weighted average interest rate of 7.0% for the debt portfolio as of January
1, 1995. After taking into account all of the interest rate hedging activities,
approximately 47% of the Company's debt portfolio of $433 million was subject to
changes in short-term interest rates as of January 1, 1995.
Leasing has continued to be used to lower the Company's overall cost for
certain capital equipment purchases. Total lease expense in 1994 was $20.9
million compared to $17.3 million in 1993. The Company plans to lease the
majority of its vending and fleet requirements in 1995.
At the end of 1994, the Company had no material commitments for the
purchase of capital assets other than those related to normal replacement of
equipment.
Management believes that the Company, through the generation of cash flow
from operations and the utilization of unused borrowing capacity, has sufficient
financial resources available to maintain its current operations and provide for
its current capital expenditure requirements. The Company considers the
acquisition of additional franchise territories on an ongoing basis.
15
<PAGE>
Item 8 -- Financial Statements and Supplementary Data
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash.................................................................................................. $ 1,812 $ 1,262
Accounts receivable, trade, less allowance for doubtful accounts of $400 and $425..................... 7,756 4,960
Accounts receivable from The Coca-Cola Company........................................................ 4,514 6,698
Due from Piedmont Coca-Cola Bottling Partnership...................................................... 1,383 2,454
Accounts receivable, other............................................................................ 7,232 10,758
Inventories........................................................................................... 31,871 27,533
Prepaid expenses and other current assets............................................................. 5,054 3,325
Total current assets................................................................................ 59,622 56,990
Property, plant and equipment, less accumulated depreciation of $141,419 and $134,546................. 185,633 163,015
Investment in Piedmont Coca-Cola Bottling Partnership................................................. 67,729 68,400
Other assets.......................................................................................... 23,394 20,109
Identifiable intangible assets, less accumulated amortization of $75,667 and $65,803.................. 257,851 267,715
Excess of cost over fair value of net assets of businesses acquired, less accumulated amortization of
$21,689 and $19,399................................................................................. 69,930 72,220
Total............................................................................................... $664,159 $648,449
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
16
<PAGE>
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
1995 1994
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Portion of long-term debt payable within one year..................................................... $ 300 $ 711
Accounts payable and accrued liabilities.............................................................. 59,413 67,026
Accounts payable to The Coca-Cola Company............................................................. 2,930 1,876
Accrued compensation.................................................................................. 4,246 2,206
Accrued interest payable.............................................................................. 11,275 10,108
Total current liabilities........................................................................... 78,164 81,927
Deferred income taxes................................................................................. 89,531 80,065
Other liabilities..................................................................................... 29,512 22,470
Long-term debt........................................................................................ 432,971 434,358
Total liabilities................................................................................... 630,178 618,820
Shareholders' Equity:
Convertible Preferred Stock, $100 par value: Authorized-50,000 shares; Issued-None
Nonconvertible Preferred Stock, $100 par value: Authorized-50,000 shares; Issued-None
Preferred Stock, $.01 par value: Authorized-20,000,000 shares; Issued-None
Common Stock, $1 par value: Authorized-30,000,000 shares; Issued-10,090,859 shares.................... 10,090 10,090
Class B Common Stock, $1 par value: Authorized-10,000,000 shares; Issued-1,964,476 shares............. 1,965 1,965
Class C Common Stock, $1 par value: Authorized-20,000,000 shares; Issued-None
Capital in excess of par value........................................................................ 130,028 139,322
Accumulated deficit................................................................................... (86,552) (98,488)
Minimum pension liability adjustment.................................................................. (3,904) (5,614)
51,627 47,275
Less-Treasury stock, at cost:
Common-2,132,800 shares............................................................................. 17,237 17,237
Class B Common-628,114 shares....................................................................... 409 409
Total shareholders' equity.......................................................................... 33,981 29,629
Total............................................................................................... $664,159 $648,449
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
17
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands (Except Per Share Data)
<TABLE>
<CAPTION>
Fiscal Year
1994 1993 1992
<S> <C> <C> <C>
Net sales (includes sales to Piedmont of $85,272 and $42,183 in 1994 and 1993)........... $723,896 $686,960 $ 655,778
Cost of products sold, excluding depreciation shown below (includes $75,879 and $38,944
related to sales to Piedmont in 1994 and 1993)......................................... 427,140 396,077 372,865
Gross margin............................................................................. 296,756 290,883 282,913
Selling expenses......................................................................... 149,992 144,411 151,382
General and administrative expenses...................................................... 54,559 51,125 47,154
Depreciation expense..................................................................... 24,188 23,284 22,217
Amortization of goodwill and intangibles................................................. 12,309 14,784 18,326
Income from operations................................................................... 55,708 57,279 43,834
Interest expense......................................................................... 31,385 30,994 36,862
Other income (expense), net.............................................................. 63 (2,270) (2,121)
Income before income taxes and effect of accounting changes.............................. 24,386 24,015 4,851
Federal and state income taxes:
Current................................................................................ 304 1,921 48
Deferred............................................................................... 9,935 7,261 2,720
Total federal and state income taxes..................................................... 10,239 9,182 2,768
Income before effect of accounting changes............................................... 14,147 14,833 2,083
Effect of accounting changes............................................................. (2,211) (116,199)
Net income (loss)........................................................................ 11,936 14,833 (114,116)
Preferred stock dividends................................................................ 4,195
Net income (loss) applicable to common shareholders...................................... $ 11,936 $ 14,833 $(118,311)
Income (loss) per share:
Income (loss) before effect of accounting changes, less preferred
stock dividends..................................................................... $ 1.52 $ 1.60 $ (.23)
Effect of accounting changes........................................................... (.24) (12.66)
Net income (loss) applicable to common shareholders.................................... $ 1.28 $ 1.60 $ (12.89)
Cash dividends per share:
Common Stock........................................................................... $ 1.00 $ .88 $ .88
Class B Common Stock................................................................... 1.00 .52 .52
Weighted average number of Common and Class B Common shares outstanding.................. 9,294 9,258 9,181
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
<TABLE>
<CAPTION>
Fiscal Year
1994 1993 1992
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income (loss)....................................................................... $ 11,936 $ 14,833 $(114,116)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Effect of accounting changes.......................................................... 2,211 116,199
Depreciation expense.................................................................. 24,188 23,284 22,217
Amortization of goodwill and intangibles.............................................. 12,309 14,784 18,326
Deferred income taxes................................................................. 9,935 7,261 2,720
(Gains) losses on sale of property, plant and equipment............................... (1,361) 1,148 574
Amortization of debt costs............................................................ 448 511 676
Undistributed loss of Piedmont Coca-Cola Bottling Partnership......................... 671 1,600
(Increase) decrease in current assets less current liabilities........................ (7,256) 813 4,784
Increase in other noncurrent assets................................................... (3,287) (4,414) (4,917)
Increase (decrease) in other noncurrent liabilities................................... 6,368 (25) (7,049)
Other................................................................................. 521 25 33
Total adjustments....................................................................... 44,747 44,987 153,563
Net cash provided by operating activities............................................... 56,683 59,820 39,447
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt............................................ 80,109
Payments on long-term debt.............................................................. (1,387) (120,768) (4,397)
Issuance of Common Stock................................................................ 2,269
Redemption of preferred stock and redeemable
preferred stock....................................................................... (60,991)
Cash dividends paid..................................................................... (9,294) (7,665) (11,793)
Other................................................................................... (1,654) (1,376) 4,695
Net cash provided by (used in) financing activities..................................... (12,335) (127,540) 7,623
Cash Flows from Investing Activities
Additions to property, plant and equipment.............................................. (49,292) (28,786) (32,887)
Proceeds from the sale of property, plant and equipment................................. 5,494 1,908 2,931
Acquisitions of companies, net of cash acquired......................................... (1,488) (16,699)
Net proceeds from sale and contribution of assets to Piedmont Coca-Cola Bottling
Partnership........................................................................... 95,934
Net cash provided by (used in) investing activities..................................... (43,798) 67,568 (46,655)
Net increase (decrease) in cash......................................................... 550 (152) 415
Cash at beginning of year............................................................... 1,262 1,414 999
Cash at end of year..................................................................... $ 1,812 $ 1,262 $ 1,414
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
19
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
In Thousands
<TABLE>
<CAPTION>
Class Minimum
B Capital in Pension
Preferred Common Common Excess of Accumulated Liability Treasury
Stock Stock Stock Par Value Deficit Adjustment Stock
<S> <C> <C> <C> <C> <C> <C> <C>
Balance on December 29, 1991.............. $ 50,000 $ 9,976 $1,966 $ 160,335 $ 795 $ 17,646
Net loss.................................. (114,116)
Cash dividends declared:
Common.................................. (7,598)
Preferred............................... (4,195)
Redemption of Preferred Stock............. (50,000)
Premium on Preferred Stock
redeemed................................ (3,711)
Conversion of Class B Common
Stock into Common Stock................. 1 (1 )
Balance on January 3, 1993................ 0 9,977 1,965 144,831 (113,321) 17,646
Net income................................ 14,833
Cash dividends declared:
Common.................................. (7,665)
Issuance of Common Stock.................. 113 2,156
Minimum pension liability
adjustment.............................. $ (5,614)
Balance on January 2, 1994................ 0 10,090 1,965 139,322 (98,488) (5,614) 17,646
Net income................................ 11,936
Cash dividends declared:
Common.................................. (9,294)
Minimum pension liability
adjustment.............................. 1,710
Balance on January 1, 1995................ $ 0 $10,090 $1,965 $ 130,028 $ (86,552) $ (3,904) $ 17,646
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
20
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Coca-Cola Bottling Co. Consolidated ("the Company") is engaged in the
production, marketing and distribution of soft drinks, primarily products of The
Coca-Cola Company.
The consolidated financial statements include the accounts of the Company
and its majority owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
The fiscal years presented are the 52-week periods ended January 1, 1995
and January 2, 1994 and the 53-week period ended January 3, 1993.
Certain prior year amounts have been reclassified to conform to current
year classifications.
The Company's more significant accounting policies are as follows:
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks and cash
equivalents, which are highly liquid debt instruments with maturities of less
than 90 days.
Inventories
Inventories are stated at the lower of cost, primarily determined on the
last-in, first-out basis, or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated using
the straight-line method over the estimated useful lives of the assets.
Additions and major replacements or betterments are added to the assets at cost.
Maintenance and repair costs and minor replacements are charged to expense when
incurred. When assets are replaced or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts, and the gains or losses,
if any, are reflected in income.
Investment in Piedmont Coca-Cola Bottling Partnership
The Company beneficially owns a 50% interest in Piedmont Coca-Cola Bottling
Partnership ("Piedmont"). The Company accounts for its interest in Piedmont
using the equity method of accounting.
With respect to Piedmont, sales of soft drink products at cost, management
fee revenue and the Company's share of Piedmont's results from operations are
included in "Net sales." See Note 2 for additional information.
Income Taxes
The Company provides deferred income taxes for the tax effects of temporary
differences between the financial reporting and income tax bases of the
Company's assets and liabilities.
Benefit Plans
The Company has a noncontributory pension plan covering substantially all
nonunion employees and one noncontributory pension plan covering certain union
employees. Costs of the plans are charged to current operations and consist of
several components of net periodic pension cost based on various actuarial
assumptions regarding future experience of the plans. In addition, certain other
union employees are covered by plans provided by their respective union
organizations. The Company expenses amounts as paid in accordance with union
agreements. The Company recognizes the cost of postretirement benefits, which
consist principally of medical benefits, during employees' periods of active
service.
21
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Intangible Assets and Excess of Cost Over Fair Value of Net Assets of Businesses
Acquired
Identifiable intangible assets resulting from the acquisition of Coca-Cola
bottling franchises are being amortized on a straight-line basis over periods
ranging from 17 to 40 years. The excess of cost over fair value of net assets of
businesses acquired is being amortized on a straight-line basis over 40 years.
The Company continually monitors conditions that may affect the carrying
value of its intangible assets. When conditions indicate potential impairment of
an intangible asset, the Company will undertake necessary market studies and
reevaluate projected future cash flows associated with the intangible asset.
When projected future cash flows, not discounted for the time value of money,
are less than the carrying value of the intangible asset, the impaired asset is
written down to its net realizable value.
Per Share Amounts
Per share amounts are calculated based on the weighted average number of
Common and Class B Common shares outstanding.
Postemployment Benefits
In November 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits" ("SFAS 112"). SFAS 112 requires the accrual, during the
years that employees render service, of the expected cost of providing
postemployment benefits if certain criteria are met. Postemployment benefits
encompass various types of employer-provided benefits including, but not limited
to, workers' compensation, disability-related benefits and severance benefits.
The Company adopted the provisions of SFAS 112 in the first quarter of
1994, effective January 3, 1994.
Derivative Financial Instruments
Premiums paid for interest rate cap agreements are amortized to interest
expense over the terms of the agreements. Unamortized premiums are included in
other liabilities. Amounts receivable under cap agreements are accrued as a
reduction of interest expense.
Unamortized deferred gains or losses on interest rate swap terminations are
amortized over the lives of the initial agreements as an adjustment to interest
expense. Amounts receivable or payable under interest rate swap agreements are
included in other assets or other liabilities.
Forward rate agreements are used to fix the interest rate reset periods on
a portion of debt that is floating. The differential to be paid or received
under these agreements is accrued as interest rates change and is recognized as
an adjustment to interest expense over the terms of the agreements. Amounts
receivable or payable under forward rate agreements are included in other assets
or other liabilities.
2. Investment in Piedmont Coca-Cola Bottling Partnership
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont
Coca-Cola Bottling Partnership ("Piedmont") to distribute and market soft drink
products primarily in certain portions of North Carolina and South Carolina. The
Company and The Coca-Cola Company, through their respective subsidiaries, each
beneficially own a 50% interest in Piedmont. The Company provides a majority of
the soft drink products for Piedmont and receives a fee for managing the
operations of Piedmont pursuant to a management agreement.
Subsidiaries of the Company made an initial capital contribution to
Piedmont of $70 million in the aggregate. The capital contribution made by such
subsidiaries was composed of approximately $21.7 million in cash and of bottling
operations and certain assets used in connection with the Company's Wilson,
North Carolina and Greenville and Beaufort, South Carolina territories. The cash
contributed to Piedmont by the Company's subsidiaries was provided from the
Company's available credit facilities. The Company sold other territories to
Piedmont for an aggregate purchase price of approximately $118 million. Assets
were sold or contributed at their approximate carrying values. Proceeds from the
sale of territories to
22
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Piedmont, net of the Company's cash contribution, totaled approximately $96
million and were used to reduce the Company's long-term debt.
Summarized financial information for Piedmont is as follows:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
In Thousands 1995 1994
<S> <C> <C>
Current assets..................................................................................... $ 18,907 $ 17,994
Noncurrent assets.................................................................................. 358,371 363,337
Total assets....................................................................................... $377,278 $381,331
Current liabilities................................................................................ $ 7,035 $ 9,867
Noncurrent liabilities............................................................................. 234,785 234,664
Total liabilities.................................................................................. 241,820 244,531
Partners' equity................................................................................... 135,458 136,800
Total liabilities and partners' equity............................................................. $377,278 $381,331
Company's equity investment........................................................................ $ 67,729 $ 68,400
</TABLE>
<TABLE>
<CAPTION>
For the
period
July 2, 1993
Fiscal through
Year January 2,
In Thousands 1994 1994
<S> <C> <C>
Net sales............................................................................................ $194,054 $ 91,259
Cost of products sold................................................................................ 109,563 52,535
Gross margin......................................................................................... 84,491 38,724
Income from operations............................................................................... 6,705 1,209
Net loss............................................................................................. $ (1,342) $ (3,200)
Company's equity in loss............................................................................. $ (671) $ (1,600)
</TABLE>
23
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
In Thousands Jan. 1, 1995 Jan. 2, 1994
<S> <C> <C>
Finished products.................................................................................. $ 17,621 $ 16,622
Manufacturing materials............................................................................ 12,638 9,498
Used bottles and cases............................................................................. 1,612 1,413
Total inventories.................................................................................. $ 31,871 $ 27,533
</TABLE>
The amounts included above for inventories valued by the LIFO method were
greater than replacement or current cost by approximately $2.1 million and $2.5
million on January 1, 1995 and January 2, 1994, respectively, as a result of
inventory premiums associated with certain acquisitions.
4. Property, Plant and Equipment
The principal categories and estimated useful lives of property, plant and
equipment were as follows:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2, Estimated
In Thousands 1995 1994 Useful Lives
<S> <C> <C> <C>
Land.................................................................... $ 9,898 $ 10,851
Buildings............................................................... 65,973 60,907 10-50 years
Machinery and equipment................................................. 76,296 65,945 5-20 years
Transportation equipment................................................ 42,439 33,246 4-10 years
Furniture and fixtures.................................................. 21,180 18,437 7-10 years
Vending equipment....................................................... 88,666 89,280 6-13 years
Leasehold and land improvements......................................... 18,049 12,619 5-20 years
Construction in progress................................................ 4,551 6,276
Total property, plant and equipment, at cost............................ 327,052 297,561
Less: Accumulated depreciation.......................................... 141,419 134,546
Property, plant and equipment, net...................................... $185,633 $163,015
</TABLE>
5. Identifiable Intangible Assets
The principal categories and estimated useful lives of identifiable
intangible assets, net of accumulated amortization, were as follows:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2, Estimated
In Thousands 1995 1994 Useful Lives
<S> <C> <C> <C>
Franchise rights........................................................... $223,679 $230,205 40 years
Customer lists............................................................. 28,129 30,858 17-23 years
Advertising savings........................................................ 5,278 5,792 17-23 years
Other...................................................................... 765 860 17-18 years
Total identifiable intangible assets....................................... $257,851 $267,715
</TABLE>
24
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed(F)
or
Interest Variable(V) Interest Jan. 1, Jan. 2,
In Thousands Maturity Rate Rate Paid 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Lines of Credit...................................... 1997 5.75%- V Varies $ 93,420 $ 18,335
6.63%
Term Loan Agreement..................................
75,000
Term Loan Agreement.................................. 2000 5.75% V Semi- 60,000 60,000
annually
Term Loan Agreement.................................. 2001 5.69% V Semi- 60,000 60,000
annually
Medium-Term Notes.................................... 1998 6.93% V Quarterly 10,000 10,000
Medium-Term Notes.................................... 1999 7.99% F Semi- 66,500 66,500
annually
Medium-Term Notes.................................... 2000 10.05% F Semi- 57,000 57,000
annually
Medium-Term Notes.................................... 2002 8.56% F Semi- 66,500 66,500
annually
Notes acquired in
Sunbelt acquisition................................ 2001 8.00% F Quarterly 5,327 5,442
Capital leases and other notes payable............... 1995- 6.85%- F Varies 14,524 16,292
2001 12.00%
433,271 435,069
Less: Portion of long-term debt payable within one
year............................................... 300 711
Long-term debt.......................................
$432,971 $434,358
</TABLE>
The principal maturities of long-term debt outstanding on January 1, 1995
were as follows:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
1996.............................................................................................................. $ 180
1997.............................................................................................................. 93,547
1998.............................................................................................................. 12,050
1999.............................................................................................................. 66,550
Thereafter........................................................................................................ 260,644
Total long-term debt.............................................................................................. $432,971
</TABLE>
On March 17, 1992, the Company entered into a revolving credit agreement
totaling $170 million which eliminated the term loan portion of the facility and
extended the revolving credit maturity date to March 1997. The agreement
contains several covenants which establish minimum ratio requirements related to
debt and cash flow. A commitment fee of 1/5% per year on the average daily
unused amount of the banks' commitment is payable quarterly. There were no
amounts outstanding under this facility as of January 1, 1995.
A $100 million commercial paper program was established in January 1990 for
general corporate purposes. On January 1, 1995, there were no amounts
outstanding under this program.
The Company borrows from time to time under informal lines of credit from
various banks. On January 1, 1995, the Company had $225 million of credit
available under these lines, of which $93.4 million was outstanding. Loans under
these lines are made at the sole discretion of the banks at rates negotiated at
the time of borrowing. It is the Company's intent to
25
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
renew such borrowings as they mature. To the extent that these borrowings, the
borrowings under the revolving credit facility described above, and outstanding
commercial paper do not exceed the amount available under the Company's $170
million revolving credit facility, they are classified as noncurrent
liabilities.
On February 12, 1990, a $200 million shelf registration for debt securities
filed with the Securities and Exchange Commission became effective and available
for the issuance of medium-term notes ("MTNs"). As of December 30, 1990, $67
million of eight- and ten-year MTNs had been issued. On February 19, 1992, the
Company issued $133 million of seven- and ten-year MTNs, the proceeds of which
were used to repay a portion of a bridge facility from Coca-Cola Financial
Corporation ("CCFC"). As of February 19, 1992, all $200 million of MTNs had been
issued for terms of seven, eight and ten years.
On June 28, 1990, the Company entered into an eight-year, $60 million loan
agreement. On October 28, 1993, the Company amended the agreement, extending the
term loan maturity date to October 28, 2001.
On February 20, 1992, the Company entered into a five-year, $60 million
loan agreement. The proceeds from the loan agreement were used to repay portions
of a bridge facility from CCFC and other senior debt. On October 28, 1993, the
Company amended the agreement, extending the term loan maturity date to October
28, 2000.
On June 26, 1992, the Company entered into a three-year arrangement under
which it has the right to sell an undivided interest in a designated pool of
trade accounts receivable for up to a maximum of $40 million. As of January 1,
1995, the Company had sold $35 million of its trade accounts receivable and used
the proceeds to reduce its outstanding long-term debt. It is the Company's
intent to seek renewal of this arrangement prior to its expiration. The discount
on sales of trade accounts receivable was $1.6 million in 1994, $1.4 million in
1993 and $1.6 million in 1992 and is included in "other income (expense), net."
On October 30, 1992, the Company entered into a three-year, $50 million
loan agreement, amended November 30, 1992 to increase this facility by $25
million for a total of $75 million. The proceeds from the loan agreement were
used primarily to redeem the Company's outstanding preferred stock. On January
31, 1994, funds from informal lines of credit were used to repay the $75 million
loan agreement.
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became effective
and available for issuance. As of January 1, 1995, no securities had been issued
under this shelf registration. In any future offering under such registration,
net proceeds from sales of the securities would be used for general corporate
purposes, including repayment of debt, future acquisitions, capital expenditures
and/or working capital.
As of January 1, 1995, the Company was in compliance with the covenants
covering all of its various borrowing agreements.
7. Derivative Financial Instruments
The Company uses interest rate hedging products to cost effectively modify
risk from interest rate fluctuations in its underlying debt. The Company has
historically altered its fixed/floating rate mix based upon anticipated
operating cash flows of the Company relative to its debt level and the Company's
ability to absorb increases in interest rates. These derivative financial
instruments are not used for trading purposes.
The Company uses interest rate swaps to alter the interest rate
characteristics of its underlying debt and thereby realign the fixed/floating
rate mix of its debt. Where an interest rate swap has been previously used, the
Company's choices to alter the interest rate characteristics of its underlying
debt include modification of the underlying debt instrument, termination of the
existing swap or purchase of an offsetting swap. Each of these alternatives is
considered and the most cost effective option is selected. Offsetting swaps
rather than an original swap are sometimes used to help mitigate counterparty
credit risk. If an offsetting swap is entered into with the same counterparty, a
netting of payments occurs which reduces counterparty credit exposure as well as
administrative burden. The offsetting swaps along with original swaps and the
underlying debt are accounted for as a combined instrument. All of the Company's
outstanding interest rate swap agreements are LIBOR-based.
26
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company enters into interest rate cap agreements to limit the exposure
to increasing interest rates with respect to its floating rate debt.
Occasionally, forward rate agreements are used to fix the next interest rate
reset period(s) on debt that is floating. There were no forward rate agreements
outstanding on January 1, 1995.
Derivative financial instruments are summarized as follows:
<TABLE>
<CAPTION>
Jan. 1, 1995 Jan. 2, 1994
Remaining Remaining
In Thousands Amount Term Amount Term
<S> <C> <C> <C> <C>
Interest rate swaps -- floating............................................. $221,600 6-9 years $221,600 7-10 years
Interest rate swaps -- fixed................................................ 215,000 1-9 years 368,000 1-10 years
Interest rate caps.......................................................... 110,000 .5 years 110,000 1.5 years
</TABLE>
Collateral and Credit Risk
In accordance with standard market practice, no collateral has been given
or received by the Company in connection with the derivative financial
instruments described above. The Company is exposed to credit loss in the event
of nonperformance by the other parties to the various derivative financial
transactions as disclosed above. The amount of such exposure is generally the
net unrealized gain or loss by the counterparty in such contracts. The Company
does not anticipate nonperformance by other parties. The Company has entered
into these derivative financial transactions with numerous counterparties during
the year. The financial instruments outstanding on January 1, 1995 as disclosed
above were with seven commercial or investment banks. It is the Company's belief
that these transactions do not represent any material concentration of credit
risk.
Interest Rate Swap Activity
The table below summarizes interest rate swap activity for the period
ending January 1, 1995:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
Total swaps, January 2, 1994..................................................................................... $ 589,600
New swaps........................................................................................................
Terminated swaps................................................................................................. (50,000)
Expired swaps.................................................................................................... (103,000)
Total swaps, January 1, 1995..................................................................................... $ 436,600
</TABLE>
Deferred gains on terminated interest rate swap contracts were $4.2 million
and $4.6 million on January 1, 1995 and January 2, 1994, respectively.
The Company has entered into a series of hedging transactions that resulted
in a weighted average interest rate of 7.0% for the debt portfolio as of January
1, 1995. The Company's overall weighted average borrowing rate on its long-term
debt increased from an average of 5.9% during 1993 to an average of 6.6% during
1994.
As of January 1, 1995, after taking into account all of the interest rate
hedging activities, approximately 47% of the total debt portfolio of $433
million was subject to changes in short-term interest rates.
A rate increase of 1% would increase annual interest expense by
approximately $2 million and net income applicable to common shareholders for
the year ended January 1, 1995 would have been reduced by approximately $1.2
million. Interest coverage as of January 1, 1995 would have been 2.8 times
(versus 2.9 times) if interest rates increased by 1%.
27
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following methods and assumptions were used by the Company in
estimating the fair values of its financial instruments:
Public Debt
The fair values of the Company's public debt are based on estimated market
prices.
Non-Public Variable Rate Long-Term Debt
The carrying amounts of the Company's variable rate borrowings approximate
their fair values.
Non-Public Fixed Rate Long-Term Debt
The fair values of the Company's fixed rate long-term borrowings are
estimated using discounted cash flow analyses based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.
Derivative Financial Instruments
Fair values for the Company's interest rate swaps are based on current
settlement values; fair values of the interest rate caps are negligible.
The carrying amounts and fair values of the Company's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
Jan. 1, 1995 Jan. 2, 1994
In Thousands Carrying Amount Fair Value Carrying Amount Fair Value
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt...................................................... $ 200,000 $ 201,119 $ 200,000 $ 225,223
Non-public variable rate long-term debt.......................... 213,420 213,420 213,335 213,335
Non-public fixed rate long-term debt............................. 19,851 19,030 21,659 23,367
Off-Balance-Sheet Instruments
Interest rate swaps.............................................. (11,123) (7,478)
</TABLE>
The fair values of the interest rate swaps represent the estimated amounts
the Company would have had to pay to terminate these agreements.
28
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Commitments and Guarantees
Operating lease payments are charged to expense as incurred. Such rental
expenses included in the consolidated statements of operations were $20.9
million, $17.3 million and $17.8 million for 1994, 1993 and 1992, respectively.
The following is a summary of future minimum lease payments for all
operating leases as of January 1, 1995:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
1995............................................................................................................... $19,175
1996............................................................................................................... 17,292
1997............................................................................................................... 14,542
1998............................................................................................................... 13,605
1999............................................................................................................... 9,720
Thereafter......................................................................................................... 21,341
Total minimum lease payments....................................................................................... $95,675
</TABLE>
The Company is a member of one cooperative from which it is obligated to
purchase a specified minimum number of plastic bottles on an annual basis
through December 1998. The annual purchase commitment under this agreement is
approximately $476,000. The Company is a member of another cooperative from
which it is obligated to purchase a specified number of cases of canned finished
product on an annual basis. The current annual purchase commitment under this
agreement is approximately $16 million.
The Company guarantees a portion of the debt for one cooperative from which
the Company purchases plastic bottles. The Company also guarantees a portion of
debt for South Atlantic Canners, Inc., a manufacturing cooperative that is being
managed by the Company. See Note 13 to the consolidated financial statements for
additional information concerning these financial guarantees. The total amounts
guaranteed on January 1, 1995 and January 2, 1994 were $31.0 million and $13.1
million, respectively.
9. Income Taxes
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109"), in 1992 with a charge of $109.1
million recorded as an "effect of accounting change." The provision for income
taxes has been calculated under the requirements of SFAS 109 for all periods
presented.
The provision for income taxes on income before effect of accounting
changes consisted of the following:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Current:
Federal..................................................................................... $ 304 $ 1,921
State....................................................................................... $ 48
304 1,921 48
Deferred:
Federal..................................................................................... 8,957 (27,748) 2,227
State....................................................................................... 1,213 (3,662) 493
Benefit of acquired loss carryforwards used to reduce franchise value....................... 35,599
Benefit (expense) of minimum pension liability adjustment................................... (359) 3,072
Other....................................................................................... 124
9,935 7,261 2,720
Income tax expense............................................................................ $10,239 $ 9,182 $2,768
</TABLE>
Income tax benefits of $1.7 million were recorded in 1994 in conjunction
with the adoption of SFAS 112. Income tax benefits of $4.5 million were recorded
in 1992 upon the adoption of SFAS 106.
29
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company made income tax payments for alternative minimum tax of
approximately $300,000 during 1994.
Deferred income taxes are recorded based upon differences between the
financial statement and tax bases of assets and liabilities and available tax
credit carryforwards. Temporary differences and carryforwards that comprised a
significant part of deferred income tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
In Thousands 1995 1994
<S> <C> <C>
Intangible assets..................................................................................... $107,886 $102,680
Depreciation.......................................................................................... 22,249 21,971
Investment in Piedmont................................................................................ 18,715 19,030
Other................................................................................................. 16,920 9,154
Gross deferred income tax liabilities................................................................. 165,770 152,835
Net operating loss carryforwards...................................................................... (56,497) (52,682)
Other................................................................................................. (18,278) (17,713)
Gross deferred income tax assets...................................................................... (74,775) (70,395)
Tax benefit of minimum pension liability adjustment................................................... (2,713) (3,072)
Deferred income tax liability......................................................................... $ 88,282 $ 79,368
</TABLE>
Net current deferred tax assets of $1.2 million and $.7 million were
included in prepaid expenses and other current assets on January 1, 1995 and
January 2, 1994, respectively.
Reported income tax expense is reconciled to the amount computed on the
basis of income before income taxes and effect of accounting changes at the
statutory rate as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Statutory expense.............................................................................. $ 8,535 $ 8,405 $1,649
Amortization of franchise and goodwill assets.................................................. 364 364 353
State income taxes, net of federal benefit..................................................... 1,244 1,185 373
Effect of change in statutory tax rates........................................................ 2,100
Adjustment of valuation allowance.............................................................. (3,216)
Other.......................................................................................... 96 344 393
Income tax expense............................................................................. $10,239 $ 9,182 $2,768
</TABLE>
The Company had $3.0 million of investment tax credits available to reduce
future income tax payments for federal income tax purposes on January 1, 1995.
These credits expire in varying amounts through 2001.
On January 1, 1995, the Company had $139 million and $174 million of
federal and state net operating losses, respectively, available to reduce future
income taxes. The net operating loss carryforwards expire in varying amounts
through 2007.
A valuation allowance of $29.9 million was recorded against certain income
tax assets on January 3, 1993, primarily due to restrictions on the use of
acquired net operating losses. The Company sold certain assets in connection
with the 1993 formation of Piedmont that allowed utilization of these restricted
net operating losses. The realization of the benefit from these net operating
loss carryforwards resulted in a reduction of recorded franchise values of $35.6
million. Due to the Company's profitability, no valuation allowance was
considered necessary on January 1, 1995.
The Omnibus Budget Reconciliation Act of 1993 increased the maximum federal
income tax rate from 34% to 35% effective January 1, 1993. This increase
resulted in additional income tax expense of $2.1 million for the year ended
January 2, 1994.
30
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Redeemable Preferred Stock
On April 20, 1990, the Company acquired all of the outstanding capital
stock of Coca-Cola Bottling Works of Jackson, Incorporated and Jackson Coca-Cola
Bottling Company, Inc. in Jackson, Tennessee. In connection with this
acquisition, the Company issued 20,800 shares of its Series A Nonconvertible
Preferred Stock, $100 par value. On November 30, 1992, the Company redeemed all
outstanding shares of this preferred stock. Preferred dividends of $728,000 were
paid in 1992 on these preferred shares.
11. Capital Transactions
On April 9, 1993, the Company acquired all of the outstanding stock of
Whirl-i-Bird, Inc. in exchange for 80,000 shares of the Company's Common Stock
valued at $1.6 million (based on the closing market price of $20 per share on
March 17, 1993). Whirl-i-Bird, Inc. had previously leased a helicopter to the
Company from time to time and was wholly owned by J. Frank Harrison, Jr., the
Chairman of the Board of Directors of the Company. On June 25, 1993, the Company
issued 33,464 shares of its Common Stock to The Coca-Cola Company at a price of
$20 per share. These shares were issued pursuant to a Stock Rights and
Restrictions Agreement dated January 27, 1989 that provided The Coca-Cola
Company a preemptive right to purchase a number of shares of the Company's
equity securities as necessary to allow it to maintain ownership of both 29.67%
of the outstanding shares of common stock of all classes and 22.59% of the total
votes of all outstanding shares of all classes. This preemptive right was
triggered by the issuance of shares pursuant to the Whirl-i-Bird transaction.
On December 20, 1991, the Company issued 25,000 shares of its Series B
Nonconvertible Preferred Stock to Coca-Cola Financial Corporation at a
subscription price of $50 million. These funds were used by the Company to repay
certain indebtedness of Sunbelt Coca-Cola Bottling Company, Inc. ("Sunbelt"). On
October 30, 1992, the Company redeemed the $50 million of Series B
Nonconvertible Preferred Stock with funds obtained from a $50 million three-year
bank term loan. Dividends of $3.5 million were paid in 1992 on these preferred
shares.
On January 27, 1989, J. Frank Harrison, III, J. Frank Harrison, Jr. and
Reid M. Henson, Co-Trustee, entered into a Voting Agreement with The Coca-Cola
Company respecting all shares of Common Stock and Class B Common Stock of the
Company which they hold or as to which, in the case of J. Frank Harrison, III
and J. Frank Harrison, Jr., they had the right to vote or, as to Reid M. Henson,
he had the right to vote as Co-Trustee of certain trusts (the "Voting
Agreement"). Pursuant to the Voting Agreement, J. Frank Harrison, III, J. Frank
Harrison, Jr. and Reid M. Henson, Co-Trustee, agreed to vote their shares of
Common Stock and Class B Common Stock for a nominee (and any successor or
replacement nominee) of The Coca-Cola Company for election to the Board of
Directors of the Company. An irrevocable proxy was granted to J. Frank Harrison,
III, for life and thereafter to J. Frank Harrison, Jr. by The Coca-Cola Company
with respect to all shares of Class B Common Stock and Common Stock held by it
during the term of the Voting Agreement (the "Irrevocable Proxy").
The Irrevocable Proxy covers voting on the election of directors and any
other matters on which holders of Common Stock or Class B Common Stock are
entitled to vote; however, the Irrevocable Proxy does not cover voting with
respect to any merger, consolidation, sale of all or substantially all of the
Company's assets, any other corporate reorganization or other similar corporate
transaction involving the Company in which Messrs. Harrison, III and Harrison,
Jr. would not exercise voting control over, or The Coca-Cola Company would not
have an equity interest in, the resulting entity.
The Coca-Cola Company agreed in the Voting Agreement to support the control
of the Company by the Harrison family, provided that Messrs. Harrison, III and
Harrison, Jr. or either of them are actively involved in the Company's
management.
Shareholders with Class B Common Stock are entitled to 20 votes per share
compared to one vote per share on the Common Stock. Dividends on the Class B
Common Stock are permitted to equal, but not exceed, dividends on the Common
Stock. On February 8, 1994, the Board of Directors increased the dividend for
the first quarter of 1994 to $.25 per share on both the Common and Class B
Common shares outstanding. This dividend rate was maintained throughout 1994.
On March 8, 1989, the Company granted J. Frank Harrison, Jr. an option for
the purchase of 100,000 shares of Common Stock exercisable at the closing market
price of the stock on the day of grant. The closing market price of the stock on
March 8, 1989 was $27.00 per share. The option is exercisable, in whole or in
part, at any time at the election of
31
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Mr. Harrison, Jr. over a period of 15 years from the date of grant. This option
has not been exercised with respect to any such shares.
On August 9, 1989, the Company granted J. Frank Harrison, III an option for
the purchase of 150,000 shares of Common Stock exercisable at the closing market
price of the stock on the day of grant. The closing market price of the stock on
August 9, 1989 was $29.75 per share. The option may be exercised, in whole or in
part, during a period of 15 years beginning on the date of grant. The option is
currently exercisable with respect to 120,000 shares and is exercisable with
respect to an additional 7,500 shares annually. This option has not been
exercised with respect to any such shares.
12. Benefit Plans
Pension plan expense related to the Company-sponsored pension plans for
1994, 1993 and 1992 was $2,607,000, $2,484,000 and $812,000, respectively,
including the pro rata share of past service costs, which are being amortized
over 30 years. In addition, certain employees are covered by pension plans
administered by unions. Expense associated with the union plans was $806,000,
$736,000 and $709,000 for 1994, 1993 and 1992, respectively.
Retirement benefits under the Company's principal pension plan are based on
the employee's length of service, average compensation over the five consecutive
years which gives the highest average compensation and the average of the Social
Security taxable wage base during the 35-year period before a participant
reaches Social Security retirement age. Contributions to the plan are based on
the projected unit credit actuarial funding method and are limited to the
amounts that are currently deductible for tax purposes.
The following table sets forth the status of the Company-sponsored plans:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
In Thousands 1995 1994
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of $40,779 and $40,310..................... $ 42,282 $ 43,507
Projected benefit obligation for service
rendered to date..................................................................................... $(47,355) $(48,456)
Plan assets at fair market value....................................................................... 41,107 40,423
Projected benefit obligation in excess of plan assets.................................................. (6,248) (8,033)
Unrecognized net loss.................................................................................. 12,158 12,695
Unrecognized prior service cost........................................................................ 12 42
Unrecognized net asset being amortized over 7 years.................................................... (280) (349)
Additional minimum pension liability................................................................... (6,816) (8,686)
Pension liability...................................................................................... $ (1,174) $ (4,331)
</TABLE>
Under the requirements of Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions," an additional minimum pension
liability for certain plans, representing the excess of accumulated benefits
over plan assets, was recognized as of January 2, 1994. The increase in
liabilities was charged directly to shareholders' equity. The minimum pension
liability adjustment, net of income taxes, was $5.6 million on January 2, 1994.
As of January 1, 1995, the minimum pension liability adjustment, net of income
taxes, was $3.9 million.
32
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net periodic pension cost for the Company-sponsored pension plans included
the following components:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Service cost-benefits earned.................................................................. $ 1,916 $ 1,693 $ 1,141
Interest cost on projected benefit obligation................................................. 3,556 3,310 2,658
Actual return on plan assets.................................................................. 1,169 (3,965) (836)
Net amortization and deferral................................................................. (4,034) 1,446 (2,151)
Net periodic pension cost..................................................................... $ 2,607 $ 2,484 $ 812
</TABLE>
The actuarial assumptions that were used for the Company's principal
pension plan calculations were as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Weighted average discount rate used in determining the actuarial present value of the projected benefit
obligation................................................................................................. 8.25 % 7.5%
Weighted average expected long-term rate of return on plan assets............................................ 9.0 % 9.0%
Weighted average rate of compensation increase............................................................... 4.75 % 4.0%
</TABLE>
The Company provides a 401(k) Savings Plan for substantially all of its
nonunion employees. Under provisions of the Savings Plan, an employee is vested
with respect to Company contributions upon the earlier of two consecutive years
of service while participating in the Savings Plan or after five years of
service with the Company. The total cost for this benefit in 1994, 1993 and 1992
was $1,307,000, $1,491,000 and $603,000, respectively.
During 1992, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other than Pensions" ("SFAS 106"). Under SFAS 106, the Company recognizes the
cost of postretirement benefits, which consist principally of medical benefits,
during employees' periods of active service. Prior to 1992, the Company
accounted for the cost of such benefits when the benefits were paid. The Company
does not pre-fund these benefits and has the right to modify or terminate
certain of these plans in the future. The accumulated postretirement benefit
obligation as of December 30, 1991, which represented the portion of the
expected cost of postretirement benefits attributable to employee service prior
to that date, of $7.1 million (net of income tax benefits of $4.5 million) was
charged to 1992 operations and appears in the consolidated statement of
operations within the caption "effect of accounting changes."
The components of postretirement benefit expense were as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Service cost -- benefits earned.................................................................. $ 304 $ 238 $ 231
Interest cost on projected benefit obligation.................................................... 989 1,223 1,348
Net postretirement benefit cost.................................................................. $1,293 $1,461 $1,579
</TABLE>
The accrued postretirement benefit obligation was comprised of the
following components:
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
In Thousands 1995 1994
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................................................. $ 9,163 $ 9,442
Fully eligible active plan participants............................................................... 1,738 1,633
Other active plan participants........................................................................ 3,251 2,783
14,152 13,858
Unrecognized transition asset........................................................................... 418 443
Unrecognized net loss................................................................................... (1,622) (1,942)
Accrued postretirement benefit obligation............................................................... $12,948 $12,359
</TABLE>
33
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Future postretirement benefit costs were estimated assuming the rate of
medical cost increases would decline over a four-year period from a 10% increase
beginning January 1, 1994 to 7% beginning January 1, 1997, and then decline to a
6.25% annual increase thereafter. A 1% increase in this annual trend rate would
have increased the accumulated postretirement benefit obligation on January 1,
1995 by approximately $1.6 million and postretirement benefit expense in 1994
would have increased by approximately $200,000. The weighted average discount
rate used to estimate the accumulated postretirement benefit obligation was
8.25% and 7.5% as of January 1, 1995 and January 2, 1994, respectively.
In November 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits" ("SFAS 112"). SFAS 112 requires the accrual, during the
years that employees render service, of the expected cost of providing
postemployment benefits if certain criteria are met. The Company adopted the
provisions of SFAS 112 in the first quarter of 1994, effective January 3, 1994,
and recorded a one-time, after-tax charge of $2.2 million.
13. Related Party Transactions
The Company's business consists primarily of the production, marketing and
distribution of soft drink products of The Coca-Cola Company, which is the sole
owner of the secret formulas under which the primary components (either
concentrates or syrups) of its soft drink products are manufactured.
Accordingly, the Company purchases a substantial majority of its requirements of
concentrates and syrups from The Coca-Cola Company in the ordinary course of its
business. The Company paid The Coca-Cola Company approximately $187 million,
$158 million and $140 million in 1994, 1993 and 1992, respectively, for
sweetener, syrup, concentrate and other miscellaneous purchases. Additionally,
the Company engages in a variety of marketing programs, local media advertising
and similar arrangements to promote the sale of products of The Coca-Cola
Company in territories operated by the Company. Total direct marketing support
provided to the Company by The Coca-Cola Company was approximately $32 million,
$28 million and $32 million in 1994, 1993 and 1992, respectively. In addition,
the Company paid approximately $15 million, $13 million and $14 million in 1994,
1993 and 1992, respectively, for local media and marketing program expense
pursuant to cooperative advertising and cooperative marketing arrangements with
The Coca-Cola Company.
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont. The
Company and The Coca-Cola Company, through their respective subsidiaries, each
beneficially own a 50% interest in Piedmont. The Company provides a majority of
the soft drink products for Piedmont and receives a fee for managing the
operations of Piedmont pursuant to a management agreement. The Company sold
product to Piedmont during 1994 and the six months ended January 2, 1994, at
cost, totaling $75.9 million and $38.9 million, respectively. The Company earned
$10.1 million and $4.8 million pursuant to its management agreement with
Piedmont for 1994 and 1993, respectively. Also, the Company subleased various
fleet and vending equipment to Piedmont at cost. These sublease rentals amounted
to approximately $693,000 and $380,000 in 1994 and 1993, respectively. In
addition, Piedmont subleased various fleet and vending equipment to the Company
at cost. These sublease rentals amounted to approximately $56,000 and $2,000 in
1994 and 1993, respectively.
On December 20, 1991, the Company acquired all of the outstanding capital
stock of Sunbelt for approximately $15.2 million. Approximately $4.4 million of
the purchase price was paid in cash to The Coca-Cola Company and one of its
affiliates (former shareholders of Sunbelt).
In connection with the acquisition of Sunbelt, the Company entered into an
agreement providing for a $230 million bridge facility with CCFC. On December
20, 1991, the Company borrowed $152.5 million under this agreement to repay
certain indebtedness of Sunbelt. The Company also issued $50 million of Series B
Nonconvertible Preferred Stock to CCFC. During the first quarter of 1992, the
Company refinanced the $230 million bridge facility from CCFC. Interest paid to
CCFC in 1992 under the bridge facility agreement amounted to $1.6 million. On
October 30, 1992, the Company redeemed the $50 million of Series B
Nonconvertible Preferred Stock held by CCFC with funds obtained from a $50
million three-year bank term loan. Dividends paid to CCFC in 1992 on these
preferred shares totaled $3.5 million.
On November 30, 1992, the Company and the owner of the Company's Snyder
Production Center in Charlotte, North Carolina agreed to the early termination
of the Company's lease. Harrison Limited Partnership One purchased the property
contemporaneously with the termination of the lease, and the Company and
Harrison Limited Partnership One entered into an
34
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
agreement pursuant to which the Company leased the property for a 10-year term
beginning on December 1, 1992. A North Carolina corporation owned entirely by J.
Frank Harrison, Jr. serves as sole general partner of the limited partnership.
The sole limited partner of this limited partnership is a trust as to which J.
Frank Harrison, III and Reid M. Henson are co-trustees. The annual base rent the
Company is obligated to pay for its lease of the Snyder Production Center is
approximately $1.9 million. The base rent is subject to adjustment for increases
in the Consumer Price Index and for increases or decreases in interest rates,
using LIBOR as the measurement device. Rent expense under this lease totaled
$2,007,000, $1,947,000 and $162,000 in 1994, 1993 and 1992, respectively.
On June 1, 1993, the Company entered into a 10-year lease agreement with
Beacon Investment Corporation related to the Company's headquarters office
building. Beacon Investment Corporation's sole shareholder is J. Frank Harrison,
III. The annual base rent the Company is obligated to pay under this lease is
approximately $1.2 million. The base rent is subject to adjustment for increases
in the Consumer Price Index and for increases or decreases in interest rates,
using LIBOR as the measurement device. Rent expense under this lease totaled
$1,560,000 and $738,000 in 1994 and 1993, respectively.
The Company is a shareholder in two entities from which it purchases
substantially all its requirements for plastic bottles. Net purchases from these
entities were approximately $44 million, $47 million and $46 million in 1994,
1993 and 1992, respectively. In connection with its participation in one of
these cooperatives, the Company has guaranteed a portion of the cooperative's
debt. On January 1, 1995, such guarantee amounted to approximately $20.0
million.
The Company has also guaranteed a portion of debt for South Atlantic
Canners, Inc., a manufacturing cooperative that is being managed by the Company.
On January 1, 1995, such guarantee was approximately $11.0 million.
See Note 11 to the consolidated financial statements for information
concerning the Whirl-i-Bird transaction.
14. Litigation
On March 4, 1993, a Complaint was filed against the Company, the
predecessor bottling company for the Laurel, Mississippi territory and other
unnamed parties by the testatrix spouse of a deceased former employee of the
predecessor bottler. This suit alleges misrepresentation and fraud in connection
with the severance package offered to employees terminated by the predecessor
bottler in connection with the acquisition of the Laurel franchise subsidiary of
the Company. Plaintiff seeks damages in an amount up to $18 million in
compensatory and punitive damages. The Company believes that the Complaint is
without merit and its ultimate disposition will not have a material adverse
effect on the financial condition or results of operations of the Company.
15. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash, net of
effects from acquisitions and divestitures and effects of accounting changes,
were as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Accounts receivable, trade, net............................................................... $(2,796) $(9,319) $ 7,762
Due from Piedmont............................................................................. 1,071 (2,454)
Accounts receivable, other.................................................................... 5,710 (3,524) (3,034)
Inventories................................................................................... (4,338) (2,939) 5,841
Prepaid expenses and other assets............................................................. (1,729) (845) 4,257
Portion of long-term debt payable within one year............................................. (411) (793) (3,699)
Accounts payable and accrued liabilities...................................................... (7,970) 21,872 (6,933)
Accrued compensation.......................................................................... 2,040 (251) (3,291)
Accrued interest payable...................................................................... 1,167 (934) 3,881
Decrease (increase)........................................................................... $(7,256) $ 813 $ 4,784
</TABLE>
35
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash payments for interest and income taxes were as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Thousands 1994 1993 1992
<S> <C> <C> <C>
Interest..................................................................................... $30,218 $31,417 $31,917
Income taxes (refunds)....................................................................... 56 2,900 (25)
</TABLE>
16. Quarterly Financial Data (Unaudited)
Set forth below are unaudited quarterly financial data for the fiscal years
ended January 1, 1995 and January 2, 1994.
<TABLE>
<CAPTION>
In Thousands (Except Per Share Data) Quarter
Year Ended January 1, 1995 1 2 3 4
<S> <C> <C> <C> <C>
Net sales.................................................................... $163,817 $200,692 $188,418 $170,969
Gross margin................................................................. 66,333 81,751 75,864 72,808
Income before effect of accounting change.................................... 1,510 6,700 4,899 1,038
Effect of accounting change.................................................. (2,211)
Net income (loss)............................................................ (701) 6,700 4,899 1,038
Per share:
Income before effect of accounting change.................................. .16 .72 .53 .11
Effect of accounting change................................................ (.24)
Net income (loss).......................................................... (.08) .72 .53 .11
Weighted average number of common shares outstanding......................... 9,294 9,294 9,294 9,294
</TABLE>
<TABLE>
<CAPTION>
In Thousands (Except Per Share Data) Quarter
Year Ended January 2, 1994 1 2 3 4
<S> <C> <C> <C> <C>
Net sales.................................................................... $154,267 $194,506 $182,149 $156,038
Gross margin................................................................. 69,842 85,635 73,391 62,015
Income before income taxes................................................... 2,568 10,647 8,507 2,293
Net income................................................................... 1,349 6,035 5,716 1,733
Per share:
Net income................................................................. .15 .65 .62 .18
Weighted average number of common shares outstanding......................... 9,181 9,261 9,294 9,294
</TABLE>
36
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF COCA-COLA BOTTLING CO. CONSOLIDATED
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) (1) and (2) of this filing present fairly, in all
material respects, the financial position of Coca-Cola Bottling Co. Consolidated
and its subsidiaries at January 1, 1995 and January 2, 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended January 1, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
During 1992 the Company changed its method of accounting for income taxes
and for postretirement benefits other than pensions, as described in Notes 9 and
12. During 1994, the Company changed its method of accounting for postemployment
benefits, as described in Note 12.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
February 24, 1995
37
<PAGE>
The financial statement schedules required by Regulation S-X are set forth
in response to Item 14 below.
The supplementary data required by Item 302 of Regulation S-K is set forth
in Note 16 to the financial statements.
Item 9 -- Changes in and disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
38
<PAGE>
PART III
Item 10 -- Directors and Executive Officers of the Company
For information with respect to the executive officers of the Company, see
"Executive Officers of the Registrant" at the end of Part I of this Report. For
information with respect to the Directors of the Company, see the "Election of
Directors" and "Certain Transactions" sections of the Proxy Statement for the
1995 Annual Meeting of Shareholders to be filed with the Securities and Exchange
Commission, which is incorporated herein by reference. For information with
respect to Section 16 reports for directors and executive officers of the
Company, see the "Election of Directors -- Beneficial Ownership of Management"
section of the Proxy Statement for the 1995 Annual Meeting of Shareholders.
Item 11 -- Executive Compensation
For information with respect to executive compensation, see the "Executive
Compensation" section of the Proxy Statement for the 1995 Annual Meeting of
Shareholders to be filed with the Securities and Exchange Commission, which is
incorporated herein by reference (other than the subsections entitled "Report of
the Compensation Committee on Annual Compensation of Executive Officers" and
"Common Stock Performance," which are specifically excluded from such
incorporation).
Item 12 -- Security Ownership of Certain Beneficial Owners and Management
For information with respect to security ownership of certain beneficial
owners and management, see the "Principal Shareholders" and "Election of
Directors -- Beneficial Ownership of Management" sections of the Proxy Statement
for the 1995 Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission, which is incorporated herein by reference.
Item 13 -- Certain Relationships and Related Transactions
For information with respect to certain relationships and related
transactions, see the "Certain Transactions" and "Compensation Committee
Interlocks and Insider Participation" sections of the Proxy Statement for the
1995 Annual Meeting of Shareholders to be filed with the Securities and Exchange
Commission, which are incorporated herein by reference.
PART IV
Item 14 -- Exhibits, Financial Statement Schedules and Reports on Form 8-K
A. List of Documents filed as part of this report.
1. Financial Statements
Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Shareholders' Equity
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The following financial statement schedules are filed as part
of this report following this Item 14. The Report of Independent
Accountants with respect to the financial statement schedules is
included in Item 8 above.
Schedule II -- Valuation and Qualifying Accounts and Reserves
All other financial statements and schedules not listed have
been omitted because the required information is included in the
consolidated financial statements or the notes thereto, or is not
applicable or required.
39
<PAGE>
3. Listing of Exhibits:
(i) Exhibits Incorporated by Reference:
<TABLE>
<S> <C>
(3.1) Bylaws of the Company, as amended.
(3.2) Restated Certificate of Incorporation of the Company.
(4.1) Specimen of Common Stock Certificate.
(4.2) Credit Agreement dated as of March 17, 1992 among the Company and NationsBank of North Carolina, as Agent, and other
banks named therein.
(4.3) Amendment No. 1 to Amended and Restated Revolving Credit and Reimbursement Agreement, dated as of March 27, 1992
between the Company and NationsBank of North Carolina.
(4.4) Specimen Fixed Rate Note under the Company's Medium-Term Note Program, pursuant to which it may issue, from time to
time, up to $200 million aggregate principal amount of its Medium-Term Notes, Series A.
(4.5) Specimen Floating Rate Note under the Company's Medium-Term Note Program, pursuant to which it may issue, from time
to time, up to $200 million aggregate principal amount of its Medium-Term Notes, Series A.
(4.6) Indenture dated as of October 15, 1989 between the Company and Manufacturers Hanover Trust Company of California, as
Trustee, in connection with the Company's $200 million shelf registration of its Medium-Term Notes, Series A, due
from nine months to 30 years from date of issue.
(4.7) Selling Agency Agreement, dated as of February 14, 1990, between the Company and Salomon Brothers and Goldman Sachs,
as Agents, in connection with the Company's $200 million Medium-Term Notes, Series A, due from nine months to 30
years from date of issue.
(4.8) Commercial Paper Agreement, dated as of December 13, 1989, between the Company and Goldman Sachs Money Markets,
Inc., as co-agent.
(4.9) Form of Debenture issued by the Company to two shareholders of Sunbelt Coca-Cola Bottling Company, Inc. dated as of
December 19, 1991.
(4.10) Commercial Paper Dealer Agreement, dated as of February 11, 1993, between the Company and Citicorp Securities
Markets, Inc., as co-agent.
(4.11) Form of Indenture, dated as of July 20, 1994, between the Company and NationsBank of Georgia, N.A., as Trustee.
(4.12) The Registrant, by signing this report, agrees to furnish the Securities and Exchange Commission, upon its request,
a copy of any instrument which defines the rights of holders of long-term debt of the Registrant and its
subsidiaries for which consolidated financial statements are required to be filed, and which authorizes a total
amount of securities not in excess of 10 percent of total assets of the Registrant and its subsidiaries on a
consolidated basis.
(10.1) Employment Agreement of James L. Moore, Jr. dated as of March 16, 1987.
(10.2) Stock Rights and Restrictions Agreement by and between Coca-Cola Bottling Co. Consolidated and The
Coca-Cola Company dated January 27, 1989.
(10.3) Description and examples of bottling franchise agreements between the Company and The Coca-Cola Company.
(10.4) Lease, dated as of December 11, 1974, by and between the Company and the Ragland Corporation, related to the
production/distribution facility in Nashville, Tennessee.
(10.5) Amendment to Lease Agreement designated as Exhibit 10.4.
(10.6) Second Amendment to Lease Agreement designated as Exhibit 10.4.
(10.7) Supplemental Savings Incentive Plan, dated as of April 1, 1990 between certain Eligible Employees of the Company and
the Company.
(10.8) Description and example of Deferred Compensation Agreement, dated as of October 1, 1987, between Eligible Employees
of the Company and the Company under the Officer's Split-Dollar Life Insurance Plan.
(10.9) Consolidated/Sunbelt Acquisition Agreement, dated as of December 19, 1991, by and among the Company and the
shareholders of Sunbelt Coca-Cola Bottling Company, Inc.
(10.10) Officer Retention Plan, dated as of January 1, 1991, between certain Eligible Officers of the Company and the
Company.
(10.11) Acquisition Agreement, by and among Sunbelt Coca-Cola Bottling Company, Inc., Sunbelt Carolina Acquisition Company,
Inc., certain of the common stockholders of Coca-Cola Bottling Co. Affiliated, Inc., and the stockholders of TRNH,
Inc., dated as of November 7, 1989.
(10.12) Amendment Number One to the Sunbelt/Affiliated Acquisition Agreement, dated as of December 29, 1989, between Sunbelt
Coca-Cola Bottling Company, Inc., Sunbelt Carolina Acquisition Company, Inc., certain of the common stockholders of
Coca-Cola Bottling Co. Affiliated, Inc. and the stockholders of TRNH, Inc.
(10.13) Amendment Number Two to the Sunbelt/Affiliated Acquisition Agreement, dated as of December 29, 1989, between Sunbelt
Coca-Cola Bottling Company, Inc., Sunbelt Carolina Acquisition Company, Inc., certain of the common stockholders of
Coca-Cola Bottling Co. Affiliated, Inc. and the stockholders of TRNH, Inc.
</TABLE>
40
<PAGE>
<TABLE>
<S> <C>
(10.14) Amendment Number Three to the Sunbelt/Affiliated Acquisition Agreement, dated as of December 29, 1989, between
Sunbelt Coca-Cola Bottling Company, Inc., Sunbelt Carolina Acquisition Company, Inc., certain of the common
stockholders of Coca-Cola Bottling Co. Affiliated, Inc. and the stockholders of TRNH, Inc.
(10.15) Lease Agreement, dated as of November 30, 1992, between the Company and Harrison Limited Partnership One, related to
the Snyder Production Center in Charlotte, North Carolina.
(10.16) Termination and Release Agreement dated as of March 27, 1992 by and among Sunbelt Coca-Cola Bottling Company,
Coca-Cola Bottling Co. Affiliated, Inc., the agent for holders of certain debentures of Sunbelt issued pursuant to a
certain Indenture dated as of January 11, 1990, as amended, and Wilmington Trust Company which acted as trustee
under the Indenture.
(10.17) Reorganization Plan and Agreement by and among Coca-Cola Bottling Co. Consolidated, Chopper Acquisitions, Inc.,
Whirl-i-Bird, Inc. and J. Frank Harrison, Jr.
(10.18) Partnership Agreement of Carolina Coca-Cola Bottling Partnership, dated as of July 2, 1993, by and among Carolina
Coca-Cola Bottling Investments, Inc., Coca-Cola Ventures, Inc., Coca-Cola Bottling Co. Affiliated, Inc.,
Fayetteville Coca-Cola Bottling Company and Palmetto Bottling Company.
(10.19) Asset Purchase Agreement, dated as of July 2, 1993, by and among Carolina Coca-Cola Bottling Partnership, Coca-Cola
Bottling Co. Affiliated, Inc. and Coca-Cola Bottling Co. Consolidated.
(10.20) Asset Purchase Agreement, dated as of July 2, 1993, by and among Carolina Coca-Cola Bottling Partnership,
Fayetteville Coca-Cola Bottling Company and Coca-Cola Bottling Co. Consolidated.
(10.21) Asset Purchase Agreement, dated as of July 2, 1993, by and among Carolina Coca-Cola Bottling Partnership, Palmetto
Bottling Company and Coca-Cola Bottling Co. Consolidated.
(10.22) Definition and Adjustment Agreement, dated July 2, 1993, by and among Carolina Coca-Cola Bottling Partnership,
Coca-Cola Ventures, Inc., Coca-Cola Bottling Co. Consolidated, CCBC of Wilmington, Inc., Carolina Coca-Cola Bottling
Investments, Inc., The Coca-Cola Company, Carolina Coca-Cola Holding Company, The Coastal Coca-Cola Bottling
Company, Eastern Carolina Coca-Cola Bottling Company, Inc., Coca-Cola Bottling Co. Affiliated, Inc., Fayetteville
Coca-Cola Bottling Company and Palmetto Bottling Company.
(10.23) Management Agreement, dated as of July 2, 1993, by and among Coca-Cola Bottling Co. Consolidated, Carolina Coca-Cola
Bottling Partnership, CCBC of Wilmington, Inc., Carolina Coca-Cola Bottling Investments, Inc., Coca-Cola Ventures,
Inc. and Palmetto Bottling Company.
(10.24) Post-Retirement Medical and Life Insurance Benefit Reimbursement Agreement, dated July 2, 1993, by and between
Carolina Coca-Cola Bottling Partnership and Coca-Cola Bottling Co. Consolidated.
(10.25) Aiken Asset Purchase Agreement, dated as of August 6, 1993 by and among Carolina Coca-Cola Bottling Partnership,
Palmetto Bottling Company and Coca-Cola Bottling Co. Consolidated.
(10.26) Aiken Definition and Adjustment Agreement, dated as of August 6, 1993, by and among Carolina Coca-Cola Bottling
Partnership, Coca-Cola Ventures, Inc., Coca-Cola Bottling Co. Consolidated, Carolina Coca-Cola Bottling Investments,
Inc., The Coca-Cola Company and Palmetto Bottling Company.
(10.27) Lease Agreement, dated as of June 1, 1993, between the Company and Beacon Investment Corporation, related to the
Company's corporate headquarters in Charlotte, North Carolina.
(10.28) Amended and Restated Guaranty Agreement, dated as of July 15, 1993 re: Southeastern Container, Inc.
(10.29) Agreement, dated as of December 23, 1993, between the Company and Western Container Corporation covering purchase of
PET bottles.
(10.30) Management Agreement, dated as of June 1, 1994, by and among Coca-Cola Bottling Co. Consolidated and South Atlantic
Canners, Inc.
(10.31) Guaranty Agreement, dated as of July 22, 1994, between Coca-Cola Bottling Co. Consolidated and Wachovia Bank of
North Carolina, N.A.
(10.32) Master Lease Agreement, beginning on May 31, 1988, with Schedules 1 through 3, between the Company and General
Electric Capital Corporation covering various vehicles.
(10.33) Lease Agreement, dated as of July 17, 1988, between the Company and GE Capital Fleet Services covering various
vehicles.
(10.34) Master Motor Vehicle Lease Agreement, dated as of December 15, 1988, with Schedule 4 between the Company and
Citicorp North America, Inc. covering various vehicles.
(10.35) Master Lease Agreement, beginning on April 12, 1989, with Schedule 1, between the Company and Citicorp North
America, Inc. covering various equipment.
(10.36) Schedules 2 through 6 of a Master Lease Agreement, beginning on April 12, 1989, between the Company and Citicorp
North America, Inc. covering various forklifts and vending machines.
(10.37) Schedule 7 of a Master Lease Agreement, beginning on April 12, 1989, between the Company and Citicorp North America,
Inc. covering various vending machines.
(10.38) Schedules 8 and 9 of a Master Lease Agreement, beginning on April 12, 1989, between the Company and Citicorp North
America, Inc. covering various vending machines.
(10.39) Schedule 14 of a Master Motor Vehicle Lease Agreement, beginning on November 14, 1988, between the Company and
Citicorp North America, Inc. covering various vehicles.
</TABLE>
41
<PAGE>
<TABLE>
<S> <C>
(10.40) Master Lease Agreement, dated as of January 7, 1992 between the Company and Signet Leasing and Financial
Corporation, and Schedules 1 through 4, covering various vehicles.
(10.41) Schedule No. 1, dated as of March 16, 1992, of a Master Lease Agreement between the Company and Citicorp North
America, Inc. covering various vending machines.
(10.42) Schedule No. 2, dated as of April 27, 1992, of a Master Lease Agreement between the Company and Citicorp North
America, Inc. covering various vending machines.
(10.43) Schedule No. 3, dated as of June 8, 1992, of a Master Lease Agreement between the Company and Citicorp North
America, Inc. covering various vending machines.
(10.44) Schedule No. 4, dated as of July 13, 1992, of a Master Lease Agreement between the Company and Citicorp North
America, Inc. covering various vending machines.
(10.45) Amended Schedules No. 1, 2 and 4 of a Master Lease Agreement, dated as of January 7, 1992 between the Company and
Signet Leasing and Financial Corporation, covering various vehicles.
(10.46) Schedules No. 1A, 5, 6, 7 and 8 of a Master Lease Agreement, dated as of January 7, 1992 between the Company and
Signet Leasing and Financial Corporation, covering various vehicles and forklifts.
(10.47) Master Equipment Lease, dated as of February 9, 1993, between the Company and Coca-Cola Financial Corporation
covering various vending machines.
(10.48) Motor Vehicle Lease Agreement No. 790855, dated as of December 31, 1992, between the Company and Citicorp Leasing,
Inc. covering various vehicles.
(10.49) Schedules 1 through 5 of the Motor Vehicle Lease Agreement No. 790855, beginning on December 31, 1992, between the
Company and Citicorp Leasing, Inc. covering various vehicles.
(10.50) Amended and Restated Leasing Schedules No. 1, 3, 5, 6, 8, 9, 11, 12 and 13 of a Master Motor Vehicle Lease
Agreement, dated as of November 14, 1988, between the Company and Citicorp North America, Inc. covering various
vehicles.
(10.51) Schedule 10 of a Master Lease Agreement, dated as of January 7, 1992 between the Company and Signet Leasing and
Financial Corporation covering various forklifts.
(10.52) Schedule No. 5, dated as of August 10, 1992, of a Master Lease Agreement between the Company and Citicorp Leasing,
Inc. covering various vending machines.
(10.53) Schedule No. 6, dated as of September 17, 1992, of a Master Lease Agreement between the Company and Citicorp
Leasing, Inc. covering various vending machines.
(10.54) Schedule No. 7, dated as of December 7, 1992, of a Master Lease Agreement between the Company and Citicorp Leasing,
Inc. covering various vending machines.
(10.55) Schedule No. 8, dated as of January 4, 1993, of a Master Lease Agreement between the Company and Citicorp Leasing,
Inc. covering various vending machines.
(10.56) Schedule No. 9, dated as of March 4, 1993, of a Master Lease Agreement between the Company and Citicorp Leasing,
Inc. covering various vending machines.
(10.57) Lease Funding No. 1, dated April 30, 1993, of a Master Equipment Lease between the Company and Coca-Cola Financial
Corporation covering various vending machines.
(10.58) Amended and Restated Schedule No. 7, dated April 27, 1993, of Motor Vehicle Lease Agreement No. 743918 between the
Company and Citicorp North America, Inc. covering various vehicles.
(10.59) Lease Funding No. 2, dated as of June 1, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.60) Lease Funding No. 3, dated as of July 12, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.61) Schedule No. 12 of a Master Lease Agreement, dated as of April 1, 1993, between the Company and Signet Leasing and
Financial Corporation covering various vehicles.
(10.62) Schedule No. 13 of a Master Lease Agreement, dated as of April 1, 1993, between the Company and Signet Leasing and
Financial Corporation covering various vehicles.
(10.63) Lease Funding No. 4, dated as of August 24, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.64) Lease Funding No. 5, dated as of September 30, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.65) Schedule No. 11 of a Master Lease Agreement, dated as of July 1, 1993, between the Company and Signet Leasing and
Financial Corporation covering various vehicles.
(10.66) Schedule No. 14 of a Master Lease Agreement, dated as of July 1, 1993, between the Company and Signet Leasing and
Financial Corporation covering various vehicles.
(10.67) Schedule No. 15 of a Master Lease Agreement, dated as of July 1, 1993, between the Company and Signet Leasing and
Financial Corporation covering various vehicles.
(10.68) Lease Funding No. 6, dated as of November 1, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.69) Lease Funding No. 7, dated as of November 17, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
</TABLE>
42
<PAGE>
<TABLE>
<S> <C>
(10.70) Lease Funding No. 8, dated as of December 30, 1993, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.71) Master Lease Agreement, dated as of February 18, 1992, between the Company and Citicorp Leasing, Inc. covering
various equipment.
(10.72) Lease Funding No. 94001, dated as of March 11, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.73) Lease Funding No. 94002, dated as of April 25, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.74) Lease Funding No. 94003, dated as of May 12, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.75) Lease Funding No. 94004, dated as of June 3, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.76) Lease Funding No. 94005, dated as of June 22, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.77) Lease Funding No. 94006, dated as of July 8, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.78) Lease Funding No. 94007, dated as of August 12, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.79) Lease Funding No. 94008, dated as of September 7, 1994, of a Master Equipment Lease between the Company and
Coca-Cola Financial Corporation covering various vending machines.
(10.80) Lease Funding No. 94009, dated as of October 10, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.81) Lease Funding No. 94010, dated as of October 26, 1994, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(ii) Other Exhibits:
(4.13) Amended and restated agreement, dated as of November 14, 1994, between the Company and Goldman Sachs Money Markets,
L.P.
(4.14) Issuing and Paying Agency Agreement, dated as of September 30, 1994, between the Company and BankAmerica National
Trust Company as issuing and paying agent.
(10.82) Description of the Company's 1995 Bonus Plan for officers.
(10.83) Selling Agency Agreement, dated as of March 3, 1995, between the Company, Salomon Brothers Inc and Citicorp
Securities, Inc.
(10.84) Amendment, dated as of May 18, 1994, to Employment Agreement designated as Exhibit 10.1.
(10.85) Agreement, dated as of March 1, 1994, between the Company and South Atlantic Canners, Inc.
(10.86) Stock Option Agreement, dated as of March 8, 1989, of J. Frank Harrison, Jr.
(10.87) Stock Option Agreement, dated as of August 9, 1989, of J. Frank Harrison, III.
(10.88) Lease Funding No. 94011, dated as of November 30, 1994, of a Master Equipment Lease between the Company and
Coca-Cola Financial Corporation covering various vending machines.
(10.89) Lease Funding No. 94012, dated as of December 19, 1994, of a Master Equipment Lease between the Company and
Coca-Cola Financial Corporation covering various vending machines.
(10.90) Lease Funding No. 94013, dated as of January 17, 1995, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.91) Lease Funding No. 95001, dated as of February 8, 1995, of a Master Equipment Lease between the Company and Coca-Cola
Financial Corporation covering various vending machines.
(10.92) Supplemental Indenture, dated as of March 3, 1995, between the Company and NationsBank of Georgia, National
Association, as Trustee.
(21.1) List of subsidiaries.
(23.1) Accountants Consent to Incorporation by Reference into Form S-3 (Registration No. 33-4325) and Form S-3
(Registration No. 33-54657).
(27.1) Financial data schedule for period ended January 1, 1995.
(99.1) Information, financial statements and exhibits required by Form 11-K with respect to the Coca-Cola Bottling Co.
Consolidated Savings Plan.*
</TABLE>
* To be supplied by amendment.
B. Reports on Form 8-K.
There were no Current Reports on Form 8-K filed by the Company during
the fourth quarter of 1994.
D. Audited Financial Statements of Piedmont Coca-Cola Bottling Partnership.
43
<PAGE>
Schedule II
COCA-COLA BOTTLING CO. CONSOLIDATED
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)
<TABLE>
<CAPTION>
Additions
Balance at Charged to
Beginning Costs and Balance at
Description of Year Expenses Other (1) Deductions End of Year
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts:
Fiscal year ended January 1, 1995...................... $ 425 $ 600 $ 625 $ 400
Fiscal year ended January 2, 1994...................... $ 400 $ 443 $ (20) $ 398 $ 425
Fiscal year ended January 3, 1993...................... $ 1,104 $ 118 $ 822 $ 400
Deferred tax assets valuation allowance:
Fiscal year ended January 2, 1994...................... $ 29,934 $ (26,718) $3,216 $ 0
Fiscal year ended January 3, 1993...................... $ 29,934 $29,934
</TABLE>
(1) Arising from business combinations and divestitures.
44
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PARTNERS OF PIEDMONT
COCA-COLA BOTTLING PARTNERSHIP
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of cash flows and of partners'
equity present fairly, in all material respects, the financial position of
Piedmont Coca-Cola Bottling Partnership and its subsidiary at January 1, 1995
and January 2, 1994, and the results of their operations and their cash flows
for the year ended January 1, 1995 and for the period July 2, 1993 through
January 2, 1994, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
February 24, 1995
45
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
In Thousands
<TABLE>
<CAPTION>
Jan. 1, Jan. 2,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash.................................................................................................. $ 424 $ 411
Accounts receivable, trade, less allowance for doubtful accounts of $104 and $200..................... 12,579 11,651
Accounts receivable from The Coca-Cola Company........................................................ 1,119 1,264
Accounts receivable, other............................................................................ 665 1,036
Inventories........................................................................................... 3,929 3,468
Prepaid expenses and other current assets............................................................. 191 164
Total current assets................................................................................ 18,907 17,994
Property, plant and equipment, less accumulated depreciation of $5,165 and $1,526..................... 31,510 26,442
Other assets.......................................................................................... 3,138 1,521
Identifiable intangible assets, less accumulated amortization of $11,367 and $3,742................... 293,145 300,415
Excess of cost over fair value of net assets of businesses acquired, less accumulated amortization of
$1,160 and $366..................................................................................... 30,578 34,959
Total............................................................................................... $377,278 $381,331
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities.............................................................. $ 4,424 $ 6,076
Accounts payable to The Coca-Cola Company............................................................. 112 665
Due to Coca-Cola Bottling Co. Consolidated............................................................ 1,383 2,454
Accrued interest payable.............................................................................. 1,116 672
Total current liabilities........................................................................... 7,035 9,867
Deferred income taxes................................................................................. 29,794 35,359
Other liabilities..................................................................................... 9,991 9,305
Long-term debt........................................................................................ 195,000 190,000
Total liabilities................................................................................... 241,820 244,531
Partners' equity:
Partner's investment-The Coca-Cola Company............................................................ 67,729 68,400
Partner's investment-Coca-Cola Bottling Co. Consolidated.............................................. 67,729 68,400
Total partners' equity.............................................................................. 135,458 136,800
Total............................................................................................... $377,278 $381,331
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
46
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands
<TABLE>
<CAPTION>
For the Period
Fiscal July 2, 1993
Year through
1994 January 2, 1994
<S> <C> <C>
Net sales........................................................................................ $194,054 $91,259
Cost of products sold (includes purchases from Coca-Cola Bottling Co. Consolidated of $75,879 and
$38,944)....................................................................................... 109,563 52,535
Gross margin..................................................................................... 84,491 38,724
Selling expenses................................................................................. 50,283 24,222
General and administrative expenses.............................................................. 15,152 7,629
Depreciation expense............................................................................. 3,932 1,556
Amortization of goodwill and intangibles......................................................... 8,419 4,108
Income from operations........................................................................... 6,705 1,209
Interest expense................................................................................. 9,866 4,276
Other income, net................................................................................ 14 127
Loss before income taxes......................................................................... (3,147) (2,940)
Income tax expense (benefit)..................................................................... (1,805) 260
Net loss......................................................................................... $ (1,342) $(3,200)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
47
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
In Thousands
<TABLE>
<CAPTION>
The Coca-Cola Coca-Cola Bottling
Company Co. Consolidated
<S> <C> <C>
Balance, July 2, 1993...................................................................... $ 0 $ 0
Investment of partners..................................................................... 70,000 70,000
Net loss................................................................................... (1,600) (1,600)
Balance, January 2, 1994................................................................... 68,400 68,400
Net loss................................................................................... (671) (671)
Balance, January 1, 1995................................................................... $67,729 $ 67,729
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
48
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
<TABLE>
<CAPTION>
For the Period
Fiscal July 2, 1993
Year through
1994 January 2, 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss........................................................................................... $(1,342) $ (3,200)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense............................................................................. 3,932 1,556
Amortization of goodwill and intangibles......................................................... 8,419 4,108
Deferred income taxes............................................................................ (1,545) (425)
Losses on sale of property, plant and equipment.................................................. 19
Amortization of debt costs....................................................................... 51 14
Increase in current assets less current liabilities.............................................. (4,165) (33)
Increase in other noncurrent assets.............................................................. (1,631) (1,363)
Increase (decrease) in other noncurrent liabilities.............................................. (881) 1,437
Other............................................................................................ (344) (69)
Total adjustments.................................................................................. 3,855 5,225
Net cash provided by operating activities.......................................................... 2,513 2,025
Cash Flows from Financing Activities:
Proceeds from the issuance of long-term debt....................................................... 5,000 190,000
Other.............................................................................................. 1,530 (12)
Net cash provided by financing activities.......................................................... 6,530 189,988
Cash Flows from Investing Activities:
Additions to property, plant and equipment......................................................... (9,371) (4,566)
Proceeds from the sale of property, plant and equipment............................................ 696 1,208
Cash investment of partners........................................................................ 91,746
Acquisition of bottling territories, net of cash................................................... (355) (279,990)
Net cash used in investing activities.............................................................. (9,030) (191,602)
Net increase in cash............................................................................... 13 411
Cash at beginning of period........................................................................ 411 0
Cash at end of period.............................................................................. $ 424 $ 411
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
49
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
Piedmont Coca-Cola Bottling Partnership ("Piedmont") is engaged in the
marketing and distribution of soft drinks, primarily products of The Coca-Cola
Company.
The consolidated financial statements include the accounts of Piedmont and
its wholly owned subsidiary. All significant intercompany accounts and
transactions have been eliminated.
The fiscal periods presented are the 52-week year ended January 1, 1995 and
the 26-week period from July 2, 1993 (date of inception) through January 2,
1994.
Piedmont's more significant accounting policies are as follows:
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks and cash
equivalents, which are highly liquid debt instruments with maturities of less
than 90 days.
Inventories
Inventories are stated at the lower of cost, primarily determined on the
first-in, first-out basis, or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated using
the straight-line method over the estimated useful lives of the assets.
Additions and major replacements or betterments are added to the assets at cost.
Maintenance and repair costs and minor replacements are charged to expense when
incurred. When assets are replaced or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts, and the gains or losses,
if any, are reflected in income.
Income Taxes
Piedmont provides deferred income taxes for the tax effects of temporary
differences between the financial reporting and income tax bases of the assets
and liabilities of CCBC of Wilmington, Inc., a corporation wholly owned by
Piedmont.
Benefit Plans
Piedmont leases all of its active employees from Coca-Cola Bottling Co.
Consolidated ("Consolidated"). Benefit plans of Consolidated cover these
employees. Piedmont assumed the postretirement benefit obligation on July 2,
1993 for certain retired employees of the bottling operations that were sold or
contributed by Consolidated and The Coca-Cola Company. Piedmont adopted the
provisions of Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions" upon its formation
on July 2, 1993.
Intangible Assets and Excess of Cost Over Fair Value of Net Assets of Businesses
Acquired
Identifiable intangible assets resulting from the acquisition of Coca-Cola
bottling franchises and the excess of cost over fair value of net assets of
businesses acquired are being amortized on a straight-line basis over 40 years.
Piedmont continually monitors conditions that may affect the carrying value
of its intangible assets. When conditions indicate potential impairment of an
intangible asset, Piedmont will undertake necessary market studies and
reevaluate projected future cash flows associated with the intangible asset.
When projected future cash flows, not discounted for the time value of money,
are less than the carrying value of the intangible asset, the impaired asset is
written down to its net realizable value.
50
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative Financial Instruments
Unamortized deferred gains or losses on interest rate swap terminations are
amortized over the terms of the initial agreements as an adjustment to interest
expense. Amounts receivable or payable under interest rate swap agreements are
included in other assets or other liabilities.
Forward rate agreements have been used to fix the interest rate reset
periods on a portion of debt that was floating. The differential to be paid or
received under these agreements is accrued as interest rates change and is
recognized as an adjustment to interest expense over the terms of the
agreements. Amounts receivable or payable under forward rate agreements are
included in other assets or other liabilities.
2. Formation of Piedmont Coca-Cola Bottling Partnership
On July 2, 1993, Consolidated and The Coca-Cola Company formed Piedmont to
distribute and market soft drink products primarily in certain portions of North
Carolina and South Carolina. Consolidated and The Coca-Cola Company, through
their respective subsidiaries, each beneficially own a 50% interest in Piedmont.
Consolidated provides a majority of the soft drink products for Piedmont and
receives a fee for managing the operations of Piedmont pursuant to a management
agreement.
Subsidiaries of Consolidated and The Coca-Cola Company each made an initial
capital contribution to Piedmont of $70 million in the aggregate. The capital
contribution made by Consolidated's subsidiaries was composed of approximately
$21.7 million in cash and of bottling operations and certain assets used in
connection with Consolidated's Wilson, North Carolina and Greenville and
Beaufort, South Carolina territories. Consolidated sold other territories to
Piedmont for an aggregate purchase price of approximately $118 million. The
Coca-Cola Company sold territories to Piedmont for an aggregate purchase price
of approximately $160.5 million. Assets acquired from and contributed by
Consolidated and The Coca-Cola Company totaled $385.0 million and related
liabilities aggregated $58.1 million. Assets were sold or contributed to
Piedmont at their approximate carrying values. The acquisition of bottling
territories was accounted for under the purchase method of accounting.
3. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
In Thousands Jan. 1, 1995 Jan. 2, 1994
<S> <C> <C>
Finished products................................................................................. $ 3,672 $ 3,271
Used bottles and cases............................................................................ 257 197
Total inventories................................................................................. $ 3,929 $ 3,468
</TABLE>
4. Property, Plant and Equipment
The principal categories and estimated useful lives of property, plant and
equipment were as follows:
<TABLE>
<CAPTION>
Estimated
In Thousands Jan. 1, 1995 Jan. 2, 1994 Useful Lives
<S> <C> <C> <C>
Land............................................................................... $ 2,423 $ 2,323
Buildings.......................................................................... 14,368 10,601 10-50 years
Machinery and equipment............................................................ 127 154 5-20 years
Transportation equipment........................................................... 6,155 5,571 4-10 years
Furniture and fixtures............................................................. 1,105 804 7-10 years
Vending equipment.................................................................. 11,237 7,889 6-13 years
Leasehold and land improvements.................................................... 1,098 490 5-20 years
Construction in progress........................................................... 162 136
Total property, plant and equipment, at cost....................................... 36,675 27,968
Less: Accumulated depreciation..................................................... 5,165 1,526
Property, plant and equipment, net................................................. $31,510 $26,442
</TABLE>
51
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed (F)
or
Interest Variable (V) Interest Jan. 1,
In Thousands Maturity Rate Rate Paid 1995
<S> <C> <C> <C> <C> <C>
Revolving Credit.......................................... 1999 6.23% V Varies $195,000
Less: Portion of long-term debt payable within
one year................................................ 0
Long-term debt............................................ $195,000
<CAPTION>
Jan. 2,
In Thousands 1994
<S> <C>
Revolving Credit.......................................... $190,000
Less: Portion of long-term debt payable within
one year................................................ 0
Long-term debt............................................ $190,000
</TABLE>
On August 31, 1994, Piedmont extended its revolving credit agreement
totaling $215 million to a new maturity date of August 31, 1999. A facility fee
of approximately 1/6% per year on the banks' total commitment is payable
annually. The agreement contains several covenants which establish minimum ratio
requirements related to debt and cash flow. As of January 1, 1995, Piedmont was
in compliance with the covenants covering its revolving credit agreement.
The $195 million in revolving credit loans as of January 1, 1995 is
outstanding under Piedmont's $215 million revolving credit facility. It is
Piedmont's intent to renew these borrowings as they mature. To the extent that
these borrowings do not exceed the amount available under the $215 million
revolving credit agreement, they are classified as noncurrent liabilities.
6. Derivative Financial Instruments
Piedmont uses interest rate hedging products to cost effectively modify
risk from interest rate fluctuations in its underlying debt. Piedmont has
historically altered its fixed/floating rate mix based upon anticipated
operating cash flows relative to its debt level and Piedmont's ability to absorb
increases in interest rates. These derivative financial instruments are not used
for trading purposes.
Piedmont uses interest rate swaps to alter the interest rate
characteristics of its underlying debt and thereby realign the fixed/floating
rate mix of its debt. Where an interest rate swap has been previously used,
Piedmont's choices to alter the interest rate characteristics of its underlying
debt include modification of the underlying debt instrument, termination of the
existing swap or purchase of an offsetting swap. Each of these alternatives is
considered and the most cost effective option is selected. Offsetting swaps
rather than an original swap are sometimes used to help mitigate counterparty
credit risk. If an offsetting swap is entered into with the same counterparty, a
netting of payments occurs which reduces counterparty credit exposure as well as
administrative burden. The offsetting swaps along with original swaps and the
underlying debt are accounted for as a combined instrument. All of Piedmont's
interest rate swap agreements are LIBOR-based.
Derivative financial instruments are summarized as follows:
<TABLE>
<CAPTION>
Jan. 1, 1995 Jan. 2, 1994
Remaining Remaining
In Thousands Amount Term Amount Term
<S> <C> <C> <C> <C>
Interest rate swaps-fixed..................................................... $95,000 1-2 years $125,000 3-5 years
Forward rate agreements....................................................... 25,000 1 year
</TABLE>
Collateral and Credit Risk
In accordance with standard market practice, no collateral has been given
or received by Piedmont in connection with the derivative financial instruments
described above. Piedmont does not anticipate nonperformance by the other
parties. Piedmont is exposed to credit loss in the event of nonperformance by
the other parties to the various derivative financial instruments as disclosed
above. The amount of such exposure is generally the net unrealized gain or loss
by counterparty in such contracts. The financial instruments outstanding on
January 1, 1995 as disclosed above were with two commercial banks.
52
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Interest Rate Swap Activity
The table below summarizes interest rate swap activity for the period
ending January 1, 1995.
<TABLE>
<CAPTION>
In Thousands
<S> <C>
Total swaps, January 2, 1994...................................................................................... $125,000
New swaps......................................................................................................... 45,000
Terminated swaps.................................................................................................. (75,000)
Expired swaps.....................................................................................................
Total swaps, January 1, 1995...................................................................................... $ 95,000
</TABLE>
Deferred gains on terminated interest rate swap contracts were $1.8 million
on January 1, 1995.
Piedmont entered into a series of hedging transactions that resulted in a
weighted average interest rate of 5.7% for its outstanding long-term debt as of
January 1, 1995. Piedmont's overall weighted average borrowing rate on its
long-term debt increased from an average of 4.9% during 1993 to an average of
5.3% during 1994.
As of January 1, 1995, after taking into account all of the interest rate
hedging activities, approximately 51% of the total debt portfolio was subject to
changes in short-term interest rates.
A rate increase of 1% would increase annual interest expense by
approximately $1 million for the year ended January 1, 1995. Interest coverage
as of January 1, 1995 would have been 1.8 times (versus 1.9 times) if interest
rates increased by 1%.
The following methods and assumptions were used in estimating the fair
values of Piedmont's financial instruments:
Non-Public Variable Rate Long-Term Debt
The carrying amounts of Piedmont's variable rate borrowings approximate
their fair values.
Derivative Financial Instruments
Fair values for Piedmont's interest rate swaps and forward rate agreements
are based on current settlement values.
The carrying amounts and fair values of Piedmont's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
Jan. 1, 1995 Jan. 2, 1994
Carrying Fair Carrying Fair
In Thousands Amount Value Amount Amount
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Non-public variable rate long-term debt.................................... $195,000 $195,000 $190,000 $190,000
Off-Balance-Sheet Instruments
Interest rate swaps........................................................ 4,959 151
Forward rate agreements.................................................... (21)
</TABLE>
The fair values of the interest rate swaps represent the estimated amounts
Piedmont would have received upon termination of these agreements. The fair
values of the forward rate agreements represent the estimated amount Piedmont
would have had to pay to terminate the agreements on the date indicated.
7. Commitments
On July 2, 1993, Piedmont entered into certain sublease agreements with
Consolidated for various fleet and vending equipment, at Consolidated's cost.
Rent expense incurred for the year ended January 1, 1995 and the six months
ended January 2, 1994 under these sublease agreements totaled $693,000 and
$380,000, respectively. Also, Consolidated subleased various fleet and vending
equipment from Piedmont during 1994 and 1993, at Piedmont's cost. These sublease
rentals amounted to approximately $56,000 and $2,000, respectively.
Operating lease payments are charged to expense as incurred. Total rental
expense included in the statements of operations for the year ended January 1,
1995 and the six months ended January 2, 1994 amounted to $3,365,000 and
$730,000, respectively.
53
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of future minimum lease payments for all
operating leases as of January 1, 1995:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
1995............................................................................................................... $ 3,068
1996............................................................................................................... 2,952
1997............................................................................................................... 2,782
1998............................................................................................................... 2,739
1999............................................................................................................... 2,477
Thereafter......................................................................................................... 6,527
Total minimum lease payments....................................................................................... $20,545
</TABLE>
8. Income Taxes
Piedmont owns all of the outstanding stock of CCBC of Wilmington, Inc.
("Wilmington"), a corporation under U.S. tax law. Partnerships are generally not
taxable entities under federal and state law; accordingly, Piedmont has not
provided for federal or state income taxes except for income taxes provided on
the results of operations of Wilmington.
All income tax expense recorded in the accompanying consolidated statements
of operations and the deferred income tax liability reflected in the
accompanying consolidated balance sheets relate to the operations of Wilmington.
The tax provision for Wilmington was calculated under the requirements of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."
The pretax loss for Wilmington for the year ended January 1, 1995 was
approximately $3.5 million. Wilmington had pretax income of approximately
$160,000 for the period July 2, 1993 (date of inception) through January 2,
1994.
Wilmington's provision for income tax expense (benefit) consisted of the
following:
<TABLE>
<CAPTION>
For the Period
July 2, 1993
through
In Thousands Fiscal Year 1994 January 2, 1994
<S> <C> <C>
Current:
Federal......................................................................... $ (175) $ 525
State........................................................................... (85) 160
(260) 685
Deferred:
Federal......................................................................... (1,215) (350)
State........................................................................... (330) (75)
(1,545) (425)
Income tax expense (benefit)...................................................... $ (1,805) $ 260
</TABLE>
Deferred income taxes are recorded based upon differences between the
financial statement and tax bases of assets and liabilities. Temporary
differences that comprise a significant part of deferred income tax assets and
liabilities were as follows:
<TABLE>
<CAPTION>
In Thousands Jan. 1, 1995 Jan. 2, 1994
<S> <C> <C>
Intangible assets.................................................................................. $ 30,052 $ 35,540
Other.............................................................................................. 2,375 1,548
Gross deferred income tax liabilities.............................................................. 32,427 37,088
Net operating loss carryforwards................................................................... (1,204)
Postretirement benefits payable.................................................................... (946) (1,662)
Other.............................................................................................. (26)
Gross deferred income tax assets................................................................... (2,176) (1,662)
Deferred income tax liability...................................................................... $ 30,251 $ 35,426
</TABLE>
54
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Wilmington recorded certain purchase accounting adjustments during 1994 to
reflect the final purchase price for assets and liabilities acquired. The
adjustments recorded were primarily to franchise and certain liability accounts.
As a result of these adjustments, the amount recorded for the deferred income
tax liability was reduced by $3.6 million with a corresponding reduction of
recorded goodwill. In addition, final Piedmont operating expense allocations
increased the current year tax benefit by $706,000.
Current deferred income taxes of $457,000 and $67,000 were included in
accounts payable and accrued liabilities on January 1, 1995 and January 2, 1994,
respectively.
Reported income tax expense (benefit) is reconciled to the amount computed
on the basis of Wilmington's income (loss) before income taxes at the statutory
rate as follows:
<TABLE>
<CAPTION>
For the Period
July 2, 1993
through
In Thousands Fiscal Year 1994 January 2, 1994
<S> <C> <C>
Statutory expense (benefit)....................................................... $ (1,219) $ 55
Amortization of goodwill.......................................................... 278 128
State income tax expense (benefit), net of federal benefit........................ (158) 7
Final allocation of operating expenses............................................ (706)
Other............................................................................. 70
Income tax expense (benefit)...................................................... $ (1,805) $ 260
</TABLE>
9. Benefit Plans
Pursuant to the management agreement with Consolidated, Piedmont leases its
active employees from Consolidated. These employees participate in
Consolidated's benefit plans. Piedmont reimburses Consolidated for the actual
costs of payroll and benefit expenses.
On July 2, 1993, Piedmont assumed the postretirement benefit obligation for
certain retired employees of the bottling operations that were sold or
contributed by Consolidated and The Coca-Cola Company. Postretirement benefit
expense, which consisted entirely of interest cost on the projected benefit
obligation, was $604,000 for the year ended January 1, 1995 and $340,000 for the
six month period ended January 2, 1994. The accumulated postretirement benefit
obligation for these former employees was approximately $7.2 million and $8.0
million as of January 1, 1995 and January 2, 1994, respectively.
Future postretirement benefit costs were estimated assuming the rate of
medical cost increases would decline over a four-year period from a 10% increase
beginning January 1, 1994 to 7% beginning January 1, 1997, and then decline to a
6.25% annual increase thereafter. A 1% increase in this annual trend rate would
have increased the accumulated postretirement benefit obligation on January 1,
1995 by approximately $800,000 and postretirement benefit expense in the year
ended January 1, 1995 would have increased by approximately $91,000. The
weighted average discount rates used to estimate the postretirement benefit
obligation were 8.25% and 7.5% as of January 1, 1995 and January 2, 1994,
respectively.
10. Related Party Transactions
On July 2, 1993, Consolidated and The Coca-Cola Company formed Piedmont.
Consolidated and The Coca-Cola Company, through their respective subsidiaries,
each beneficially own a 50% interest in Piedmont. Consolidated provides a
majority of the soft drink products for Piedmont and receives a fee for managing
the operations of Piedmont pursuant to a management agreement.
Subsidiaries of Consolidated and The Coca-Cola Company each made an initial
capital contribution to Piedmont of $70 million in the aggregate. The capital
contribution made by Consolidated's subsidiaries was composed of approximately
$21.7 million in cash and of bottling operations and certain assets used in
connection with the Wilson, North Carolina and Greenville and Beaufort, South
Carolina territories. Consolidated also sold other territories to Piedmont for
an aggregate purchase price of approximately $118 million. The Coca-Cola Company
sold territories to Piedmont for an aggregate purchase price of approximately
$160.5 million.
55
<PAGE>
PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In conjunction with its formation on July 2, 1993, Piedmont recorded notes
with Consolidated and The Coca-Cola Company for net amounts of approximately
$85.2 million and $93.1 million, respectively. In addition, Piedmont executed an
additional note payable for approximately $11.1 million to Consolidated on
August 6, 1993 in conjunction with its purchase of the Aiken, South Carolina
territory. The interest rate on these notes was approximately 3.6%. These notes
were repaid on August 31, 1993 when Piedmont secured its own bank financing.
Interest paid to Consolidated and The Coca-Cola Company on these notes was
approximately $528,000 and $547,000, respectively.
Piedmont's business consists primarily of the marketing and distribution of
soft drink products of The Coca-Cola Company, which is the sole owner of the
secret formulas under which the primary components (either concentrates or
syrups) of its soft drink products are manufactured. Piedmont engages in
arrangements to promote the sale of products of The Coca-Cola Company in its
territories. Total direct marketing support provided to Piedmont by The
Coca-Cola Company for the year ended January 1, 1995 and the six month period
ended January 2, 1994 was approximately $10.9 million and $3.6 million,
respectively. In addition, Piedmont paid approximately $5.0 million and $1.6
million for local media and marketing program expense pursuant to cooperative
advertising and cooperative marketing arrangements with The Coca-Cola Company
for the year ended January 1, 1995 and the six month period ended January 2,
1994, respectively. For the year ended January 1, 1995 and the six month period
ended January 2, 1994, Piedmont purchased approximately $8.4 million and $2.1
million, respectively, of finished soft drink products, principally post-mix
syrup, from The Coca-Cola Company.
Pursuant to the management agreement with Consolidated, Piedmont purchased,
at cost, $75.9 million and $38.9 million of soft drink products from
Consolidated during the year ended January 1, 1995 and the six month period
ended January 2, 1994, respectively. Piedmont recorded management fees to
Consolidated of $10.1 million and $4.8 million during the year ended January 1,
1995 and the six month period ended January 2, 1994, respectively. Piedmont
subleased various fleet and vending equipment from Consolidated during 1994 and
1993, at Consolidated's cost. These sublease rentals amounted to approximately
$693,000 and $380,000, respectively. Also, Consolidated subleased various fleet
and vending equipment from Piedmont during 1994 and 1993, at Piedmont's cost.
These sublease rentals amounted to approximately $56,000 and $2,000,
respectively.
Consolidated receives a fee for managing the operations of South Atlantic
Canners, Inc. ("SAC"), a manufacturing cooperative through which Piedmont
purchases soft drink products. During the year ended January 1, 1995 and the six
month period ended January 2, 1994, Piedmont's net purchases through SAC
amounted to $13.7 million and $7.9 million, respectively.
11. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash were as
follows:
<TABLE>
<CAPTION>
For the Period
July 2, 1993
through
In Thousands Fiscal Year 1994 January 2, 1994
<S> <C> <C>
Accounts receivable, trade, net................................................... $ (928) $ 4,037
Accounts receivable, other........................................................ 516 (1,472)
Inventories....................................................................... (461) 1,249
Prepaid expenses and other assets................................................. (460) 933
Accounts payable and accrued liabilities.......................................... (1,761) (7,234)
Due to Consolidated............................................................... (1,071) 2,454
Decrease (increase)............................................................... $ (4,165) $ (33)
</TABLE>
Cash payments for interest and income taxes were as follows:
<TABLE>
<CAPTION>
For the Period
July 2, 1993
through
In Thousands Fiscal Year 1994 January 2, 1994
<S> <C> <C>
Interest.......................................................................... $9,422 $ 3,591
Income taxes (refunds)............................................................ (217) 260
</TABLE>
56
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)
Date: March 31, 1995
By: /s/ JAMES L. MOORE, JR.
James L. Moore, Jr.
President and Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
By: /s/ J. FRANK HARRISON, JR. Chairman of the Board and Director March 31, 1995
J. Frank Harrison, Jr.
By: /s/ J. FRANK HARRISON, III Vice Chairman of the Board, Chief Executive March 31, 1995
J. Frank Harrison, III Officer and Director
By: /s/ JAMES L. MOORE, JR. President and Chief Operating Officer and March 31, 1995
James L. Moore, Jr. Director
By: /s/ REID M. HENSON Vice Chairman of the Board and Director March 31, 1995
Reid M. Henson
By: /s/ H. W. MCKAY BELK Director March 31, 1995
H. W. McKay Belk
By: /s/ JOHN M. BELK Director March 31, 1995
John M. Belk
By: /s/ H. REID JONES Director March 31, 1995
H. Reid Jones
By: /s/ DAVID L. KENNEDY, JR. Director March 31, 1995
David L. Kennedy, Jr.
By: /s/ JOHN W. MURREY, III Director March 31, 1995
John W. Murrey, III
By: /s/ HERBERT L. OAKES Director March 31, 1995
Herbert L. Oakes
</TABLE>
57
<PAGE>
<TABLE>
<S> <C> <C>
By: /s/ DAVID V. SINGER Vice President and Chief Financial Officer March 31, 1995
David V. Singer
By: /s/ STEVEN D. WESTPHAL Vice President and Chief Accounting Officer March 31, 1995
Steven D. Westphal
</TABLE>
58
<PAGE>
EXHIBIT INDEX
Page Number or
Exhibit Incorporation
Number Description by Reference to
3.1 Bylaws of the Company, as Exhibit 3.2 to the
amended. Company's Registra-
tion Statement (No.
33-54657) on Form
S-3.
3.2 Restated Certificate of Exhibit 3.1 to the
Incorporation of the Company. Company's Registra-
tion Statement (No.
33-54657) on Form
S-3.
4.1 Specimen of Common Stock Certificate. Exhibit 4.1 to the
Company's Registra-
tion Statement
(No. 2-97822) on
Form S-1.
4.2 Credit Agreement dated as of March 17, Exhibit 4.01 to the
1992 among the Company and NationsBank Company's Quarterly
of North Carolina, as Agent, and other Report on Form 10-Q
banks named therein. for the quarter
ended March 29, 1992
4.3 Amendment No. 1 to Amended and Restated Exhibit 4.02 to the
Revolving Credit and Reimbursement Company's Quarterly
Agreement, dated as of March 27, 1992 Report on Form 10-Q
between the Company and NationsBank of for the quarter ended
North Carolina. March 29, 1992.
4.4 Specimen Fixed Rate Note under the Exhibit 4.1 to the
Company's Medium-Term Note Program, Company's Current
pursuant to which it may issue, from Report on Form 8-K
time to time, up to $200 million dated February 14,
aggregate principal amount of its 1990.
Medium-Term Notes, Series A.
4.5 Specimen Floating Rate Note under the Exhibit 4.2 to the
Company's Medium-Term Note Program, Company's Current
pursuant to which it may issue, from Report on Form 8-K
time to time, up to $200 million dated February 14,
aggregate principal amount of its 1990.
Medium-Term Notes, Series A.
<PAGE>
4.6 Indenture dated as of October 15, 1989 Exhibit 4. to the
between the Company and Manufacturers Company's Registra-
Hanover Trust Company of California, as tion Statement (No.
Trustee, in connection with the Company's 33-31784) on Form
$200 million shelf registration of its S-3 as filed on
Medium-Term Notes, Series A, due from February 14, 1990.
nine months to 30 years from date of issue.
4.7 Selling Agency Agreement, dated as of Exhibit 1.2 to the
February 14, 1990, between the Company Company's Registra-
and Salomon Brothers and Goldman Sachs, tion Statement (No.
as Agents, in connection with the 33-31784) on Form
Company's $200 million Medium-Term Notes, S-3 as filed on
Series A, due from nine months to 30 February 14, 1990.
years from date of issue.
4.8 Commercial Paper Agreement, dated as of Exhibit 4.8 to the
December 13, 1989, between the Company Company's Annual
and Goldman Sachs Money Markets, Inc., Report on Form 10-K
as co-agent. for the fiscal year
ended December 31,
1989.
4.9 Form of Debenture issued by the Company Exhibit 4.04 to the
to two shareholders of Sunbelt Coca-Cola Company's Current
Bottling Company, Inc. dated as of Report on Form 8-K
December 19, 1991. dated December 19,
1991.
4.10 Commercial Paper Dealer Agreement, Exhibit 4.14 to the
dated as of February 11, 1993, between Company's Annual
the Company and Citicorp Securities Report on Form 10-K
Markets, Inc., as co-agent. for the fiscal year
ended January 3, 1993.
4.11 Form of Indenture, dated as of July 20, Exhibit 4.1 to the
1994, between the Company and Nations- Company's Registra-
Bank of Georgia, N.A., as Trustee. tion Statement (No.
33-54657) on Form S-3.
4.12 The Registrant, by signing this report,
agrees to furnish the Securities and
Exchange Commission, upon its request,
a copy of any instrument which defines
the rights of holders of long-term debt
of the Registrant and its subsidiaries
for which consolidated financial state-
ments are required to be filed, and which
authorizes a total amount of securities
not in excess of 10 percent of total
assets of the Registrant and its sub-
sidiaries on a consolidated basis.
<PAGE>
4.13 Amended and restated agreement, dated Exhibit included in
as of November 14, 1994, between the this filing.
Company and Goldman Sachs Money
Markets, L.P.
4.14 Issuing and Paying Agency Agreement, Exhibit included in
dated as of September 30, 1994, between this filing.
the Company and BankAmerica National
Trust Company as issuing and paying
agent.
10.1 Employment Agreement of James L. Moore, Exhibit 10.2 to the
Jr. dated as of March 16, 1987. Company's Annual
Report on Form 10-K
for the fiscal year
ended December 31,
1986.
10.2 Stock Rights and Restrictions Agreement Exhibit 28.01 to the
by and between Coca-Cola Bottling Co. Company's Current
Consolidated and The Coca-Cola Company Report on Form 8-K
dated January 27, 1989. dated January 27,
1989.
10.3 Description and examples of bottling Exhibit 10.20 to the
franchise agreements between the Company Company's Annual
and The Coca-Cola Company. Report on Form 10-K
for the fiscal year
ended December 31,
1988.
10.4 Lease, dated as of December 11, 1974, by Exhibit 19.6 to the
and between the Company and the Ragland Company's Annual
Corporation, related to the production/ Report on Form 10-K
distribution facility in Nashville, for the fiscal year
Tennessee. ended December 31,
1988.
10.5 Amendment to Lease Agreement designated Exhibit 19.7 to the
as Exhibit 10.4. Company's Annual
Report on Form 10-K
for the fiscal year
ended December 31,
1988.
10.6 Second Amendment to Lease Agreement Exhibit 19.8 to the
designated as Exhibit 10.4. Company's Annual
Report on Form 10-K
for the fiscal year
ended December 31,
1988.
<PAGE>
10.7 Supplemental Savings Incentive Plan, Exhibit 10.36 to the
dated as of April 1, 1990 between certain Company's Annual
Eligible Employees of the Company and Report on Form 10-K
the Company. for the fiscal year
ended December 30,
1990.
10.8 Description and example of Deferred Exhibit 19.1 to the
Compensation Agreement, dated as of Company's Annual
October 1, 1987, between Eligible Report on Form 10-K
Employees of the Company and the Company for the fiscal year
under the Officer's Split-Dollar Life ended December 30,
Insurance Plan. 1990.
10.9 Consolidated/Sunbelt Acquisition Exhibit 2.01 to the
Agreement, dated as of December 19, 1991, Company's Current
by and among the Company and the share- Report on Form 8-K
holders of Sunbelt Coca-Cola Bottling dated December 19,
Company, Inc. 1991.
10.10 Officer Retention Plan, dated as of Exhibit 10.47 to the
January 1, 1991, between certain Eligible Company's Annual
Officers of the Company and the Company. Report on Form 10-K
for the fiscal year
ended December 29,
1991.
10.11 Acquisition Agreement, by and among Exhibit 10.50 to the
Sunbelt Coca-Cola Bottling Company, Inc., Company's Annual
Sunbelt Carolina Acquisition Company, Report on Form 10-K
Inc., certain of the common stockholders for the fiscal year
of Coca-Cola Bottling Co. Affiliated, ended December 29,
Inc., and the stockholders of TRNH, Inc., 1991.
dated as of November 7, 1989.
10.12 Amendment Number One to the Sunbelt/ Exhibit 10.04 to the
Affiliated Acquisition Agreement, dated Company's Quarterly
as of December 29, 1989, between Sunbelt Report on Form 10-Q
Coca-Cola Bottling Company, Inc., Sunbelt for the quarter ended
Carolina Acquisition Company, Inc., March 29, 1992.
certain of the common stockholders of
Coca-Cola Bottling Co. Affiliated, Inc.
and the stockholders of TRNH, Inc.
10.13 Amendment Number Two to the Sunbelt/ Exhibit 10.05 to the
Affiliated Acquisition Agreement, dated Company's Quarterly
as of December 29, 1989, between Sunbelt Report on Form 10-Q
Coca-Cola Bottling Company, Inc., Sunbelt for the quarter ended
Carolina Acquisition Company, Inc., March 29, 1992.
certain of the common stockholders of
Coca-Cola Bottling Co. Affiliated, Inc.
and the stockholders of TRNH, Inc.
<PAGE>
10.14 Amendment Number Three to the Sunbelt/ Exhibit 10.06 to the
Affiliated Acquisition Agreement, dated Company's Quarterly
as of December 29, 1989, between Sunbelt Report on Form 10-Q
Coca-Cola Bottling Company, Inc., Sunbelt for the quarter ended
Carolina Acquisition Company, Inc., March 29, 1992.
certain of the common stockholders of
Coca-Cola Bottling Co. Affiliated, Inc.
and the stockholders of TRNH, Inc.
10.15 Lease Agreement, dated as of November 30, Exhibit 10.38 to the
1992, between the Company and Harrison Company's Annual
Limited Partnership One, related to the Report on Form 10-K
Snyder Production Center in Charlotte, for the fiscal year
North Carolina. ended January 3, 1993.
10.16 Termination and Release Agreement dated Exhibit 10.43 to the
as of March 27, 1992 by and among Sunbelt Company's Annual
Coca-Cola Bottling Company, Coca-Cola Report on Form 10-K
Bottling Co. Affiliated, Inc., the agent for the fiscal year
for holders of certain debentures of ended January 3, 1993.
Sunbelt issued pursuant to a certain
Indenture dated as of January 11, 1990,
as amended, and Wilmington Trust Company
which acted as trustee under the
Indenture.
10.17 Reorganization Plan and Agreement by and Exhibit 10.03 to the
among Coca-Cola Bottling Co. Company's Quarterly
Consolidated, Chopper Acquisitions, Report on Form 10-Q
Inc., Whirl-i-Bird, Inc. and J. Frank for the quarter ended
Harrison, Jr. April 4, 1993.
10.18 Partnership Agreement of Carolina Exhibit 2.01 to the
Coca-Cola Bottling Partnership, dated as Company's Current
of July 2, 1993, by and among Carolina Report on Form 8-K
Coca-Cola Bottling Investments, Inc., dated July 2, 1993.
Coca-Cola Ventures, Inc., Coca-Cola
Bottling Co. Affiliated, Inc.,
Fayetteville Coca-Cola Bottling
Company and Palmetto Bottling Company.
10.19 Asset Purchase Agreement, dated as of Exhibit 2.02 to the
July 2, 1993, by and among Carolina Company's Current
Coca-Cola Bottling Partnership, Report on Form 8-K
Coca-Cola Bottling Co. Affiliated, Inc. dated July 2, 1993.
and Coca-Cola Bottling Co. Consolidated.
10.20 Asset Purchase Agreement, dated as of Exhibit 2.03 to the
July 2, 1993, by and among Carolina Company's Current
Coca-Cola Bottling Partnership, Report on Form 8-K
Fayetteville Coca-Cola Bottling Company dated July 2, 1993.
and Coca-Cola Bottling Co. Consolidated.
<PAGE>
10.21 Asset Purchase Agreement, dated as of Exhibit 2.04 to the
July 2, 1993, by and among Carolina Company's Current
Coca-Cola Bottling Partnership, Palmetto Report on Form 8-K
Bottling Company and Coca-Cola Bottling dated July 2, 1993.
Co. Consolidated.
10.22 Definition and Adjustment Agreement, Exhibit 2.05 to the
dated July 2, 1993, by and among Carolina Company's Current
Coca-Cola Bottling Partnership, Coca-Cola Report on Form 8-K
Ventures, Inc., Coca-Cola Bottling Co. dated July 2, 1993.
Consolidated, CCBC of Wilmington, Inc.,
Carolina Coca-Cola Bottling Investments,
Inc., The Coca-Cola Company, Carolina
Coca-Cola Holding Company, The Coastal
Coca-Cola Bottling Company, Eastern
Carolina Coca-Cola Bottling Company,
Inc., Coca-Cola Bottling Co. Affiliated,
Inc., Fayetteville Coca-Cola Bottling
Company and Palmetto Bottling Company.
10.23 Management Agreement, dated as of July 2, Exhibit 10.01 to the
1993, by and among Coca-Cola Bottling Co. Company's Current
Consolidated, Carolina Coca-Cola Bottling Report on Form 8-K
Partnership, CCBC of Wilmington, Inc., dated July 2, 1993.
Carolina Coca-Cola Bottling Investments,
Inc., Coca-Cola Ventures, Inc. and
Palmetto Bottling Company.
10.24 Post-Retirement Medical and Life Exhibit 10.02 to the
Insurance Benefit Reimbursement Agree- Company's Current
ment, dated July 2, 1993, by and between Report on Form 8-K
Carolina Coca-Cola Bottling Partnership dated July 2, 1993.
and Coca-Cola Bottling Co. Consolidated.
10.25 Aiken Asset Purchase Agreement, dated as Exhibit 2.01 to the
of August 6, 1993 by and among Carolina Company's Quarterly
Coca-Cola Bottling Partnership, Palmetto Report on Form 10-Q
Bottling Company and Coca-Cola Bottling for the quarter ended
Co. Consolidated. July 4, 1993.
10.26 Aiken Definition and Adjustment Agree- Exhibit 2.02 to the
ment, dated as of August 6, 1993, by and Company's Quarterly
among Carolina Coca-Cola Bottling Report on Form 10-Q
Partnership, Coca-Cola Ventures, Inc., for the quarter ended
Coca-Cola Bottling Co. Consolidated, July 4, 1993.
Carolina Coca-Cola Bottling Investments,
Inc., The Coca-Cola Company and Palmetto
Bottling Company.
10.27 Lease Agreement, dated as of June 1, Exhibit 10.01 to the
1993, between the Company and Beacon Company's Quarterly
Investment Corporation, related to the Report on Form 10-Q
Company's corporate headquarters in for the quarter ended
Charlotte, North Carolina. July 4, 1993.
<PAGE>
10.28 Amended and Restated Guaranty Agreement, Exhibit 10.06 to the
dated as of July 15, 1993 re: Company's Quarterly
Southeastern Container, Inc. Report on Form 10-Q
for the quarter ended
July 4, 1993.
10.29 Agreement, dated as of December 23, Exhibit 10.1 to the
1993, between the Company and Western Company's Quarterly
Container Corporation covering purchase Report on Form 10-Q
of PET bottles. for the quarter ended
October 2, 1994.
10.30 Management Agreement, dated as of June 1, Exhibit 10.6 to the
1994, by and among Coca-Cola Bottling Company's Quarterly
Co. Consolidated and South Atlantic Report on Form 10-Q
Canners, Inc. for the quarter ended
July 3, 1994.
10.31 Guaranty Agreement, dated as of July 22, Exhibit 10.7 to the
1994, between Coca-Cola Bottling Co. Company's Quarterly
Consolidated and Wachovia Bank of North Report on Form 10-Q
Carolina, N.A. for the quarter ended
July 3, 1994.
10.32 Master Lease Agreement, beginning on Exhibit 19.3 to the
May 31, 1988, with Schedules 1 through Company's Quarterly
3, between the Company and General Report on Form 10-Q
Electric Capital Corporation covering for the quarter ended
various vehicles. March 31, 1990.
10.33 Lease Agreement, dated as of July 17, Exhibit 19.4 to the
1988, between the Company and GE Capital Company's Quarterly
Fleet Services covering various vehicles. Report on Form 10-Q
for the quarter ended
March 31, 1990.
10.34 Master Motor Vehicle Lease Agreement, Exhibit 19.5 to the
dated as of December 15, 1988, with Company's Quarterly
Schedule 4 between the Company and Report on Form 10-Q
Citicorp North America, Inc. covering for the quarter ended
various vehicles. March 31, 1990.
10.35 Master Lease Agreement, beginning on Exhibit 19.6 to the
April 12, 1989, with Schedule 1, between Company's Quarterly
the Company and Citicorp North America, Report on Form 10-Q
Inc. covering various equipment. for the quarter ended
March 31, 1990.
10.36 Schedules 2 through 6 of a Master Lease Exhibit 10.39 to the
Agreement, beginning on April 12, 1989, Company's Quarterly
between the Company and Citicorp North Report on Form 10-Q
America, Inc. covering various forklifts for the quarter ended
and vending machines. June 30, 1991.
<PAGE>
10.37 Schedule 7 of a Master Lease Agreement, Exhibit 10.41 to the
beginning on April 12, 1989, between the Company's Quarterly
Company and Citicorp North America, Inc. Report on Form 10-Q
covering various vending machines. for the quarter ended
September 29, 1991.
10.38 Schedules 8 and 9 of a Master Lease Exhibit 10.49 to the
Agreement, beginning on April 12, 1989, Company's Annual
between the Company and Citicorp North Report on Form 10-K
America, Inc. covering various vending for the fiscal year
machines. ended December 29,
1991.
10.39 Schedule 14 of a Master Motor Vehicle Exhibit 10.48 to the
Lease Agreement, beginning on Company's Annual
November 14, 1988, between the Company Report on Form 10-K
and Citicorp North America, Inc. covering for the fiscal year
various vehicles. ended December 29,
1991.
10.40 Master Lease Agreement, dated as of Exhibit 10.01 to the
January 7, 1992 between the Company and Company's Quarterly
Signet Leasing and Financial Corporation, Report on Form 10-Q
and Schedules 1 through 4, covering for the quarter ended
various vehicles. March 29, 1992.
10.41 Schedule No. 1, dated as of March 16, Exhibit 10.02 to the
1992, of a Master Lease Agreement between Company's Quarterly
the Company and Citicorp North America, Report on Form 10-Q
Inc. covering various vending machines. for the quarter ended
March 29, 1992.
10.42 Schedule No. 2, dated as of April 27, Exhibit 10.03 to the
1992, of a Master Lease Agreement between Company's Quarterly
the Company and Citicorp North America, Report on Form 10-Q
Inc. covering various vending machines. for the quarter ended
March 29, 1992.
10.43 Schedule No. 3, dated as of June 8, Exhibit 10.07 to the
1992, of a Master Lease Agreement Company's Quarterly
between the Company and Citicorp North Report on Form 10-Q
America, Inc. covering various vending for the quarter ended
machines. June 28, 1992.
10.44 Schedule No. 4, dated as of July 13, Exhibit 10.08 to the
1992, of a Master Lease Agreement between Company's Quarterly
the Company and Citicorp North America, Report on Form 10-Q
Inc. covering various vending machines. for the quarter ended
June 28, 1992.
<PAGE>
10.45 Amended Schedules No. 1, 2 and 4 of a Exhibit 10.09 to the
Master Lease Agreement, dated as of Company's Quarterly
January 7, 1992 between the Company and Report on Form 10-Q
Signet Leasing and Financial Corporation, for the quarter ended
covering various vehicles. September 27, 1992.
10.46 Schedules No. 1A, 5, 6, 7 and 8 of a Exhibit 10.10 to the
Master Lease Agreement, dated as of Company's Quarterly
January 7, 1992 between the Company and Report on Form 10-Q
Signet Leasing and Financial Corporation, for the quarter ended
covering various vehicles and forklifts. September 27, 1992.
10.47 Master Equipment Lease, dated as of Exhibit 10.37 to the
February 9, 1993, between the Company Company's Annual
and Coca-Cola Financial Corporation Report on Form 10-K
covering various vending machines. for the fiscal year
ended January 3, 1993.
10.48 Motor Vehicle Lease Agreement No. 790855, Exhibit 10.39 to the
dated as of December 31, 1992, between Company's Annual
the Company and Citicorp Leasing, Inc. Report on Form 10-K
covering various vehicles. for the fiscal year
ended January 3, 1993.
10.49 Schedules 1 through 5 of the Motor Exhibit 10.40 to the
Vehicle Lease Agreement No. 790855, Company's Annual
beginning on December 31, 1992, between Report on Form 10-K
the Company and Citicorp Leasing, Inc. for the fiscal year
covering various vehicles. ended January 3, 1993.
10.50 Amended and Restated Leasing Schedules Exhibit 10.41 to the
No. 1, 3, 5, 6, 8, 9, 11, 12 and 13 of a Company's Annual
Master Motor Vehicle Lease Agreement, Report on Form 10-K
dated as of November 14, 1988, between for the fiscal year
the Company and Citicorp North America, ended January 3, 1993.
Inc. covering various vehicles.
10.51 Schedule 10 of a Master Lease Agreement, Exhibit 10.45 to the
dated as of January 7, 1992 between the Company's Annual
Company and Signet Leasing and Financial Report on Form 10-K
Corporation covering various forklifts. for the fiscal year
ended January 3, 1993.
10.52 Schedule No. 5, dated as of August 10, Exhibit 10.46 to the
1992, of a Master Lease Agreement between Company's Annual
the Company and Citicorp Leasing, Inc. Report on Form 10-K
covering various vending machines. for the fiscal year
ended January 3, 1993.
10.53 Schedule No. 6, dated as of September 17, Exhibit 10.47 to the
1992, of a Master Lease Agreement between Company's Annual
the Company and Citicorp Leasing, Inc. Report on Form 10-K
covering various vending machines. for the fiscal year
ended January 3, 1993.
<PAGE>
10.54 Schedule No. 7, dated as of December 7, Exhibit 10.48 to the
1992, of a Master Lease Agreement Company's Annual
between the Company and Citicorp Leasing, Report on Form 10-K
Inc. covering various vending machines. for the fiscal year
ended January 3, 1993.
10.55 Schedule No. 8, dated as of January 4, Exhibit 10.49 to the
1993, of a Master Lease Agreement between Company's Annual
the Company and Citicorp Leasing, Inc. Report on Form 10-K
covering various vending machines. for the fiscal year
ended January 3, 1993.
10.56 Schedule No. 9, dated as of March 4, Exhibit 10.50 to the
1993, of a Master Lease Agreement between Company's Annual
the Company and Citicorp Leasing, Inc. Report on Form 10-K
covering various vending machines. for the fiscal year
ended January 3, 1993.
10.57 Lease Funding No. 1, dated April 30, Exhibit 10.01 to the
1993, of a Master Equipment Lease Company's Quarterly
between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. April 4, 1993.
10.58 Amended and Restated Schedule No. 7, Exhibit 10.02 to the
dated April 27, 1993, of Motor Vehicle Company's Quarterly
Lease Agreement No. 743918 between the Report on Form 10-Q
Company and Citicorp North America, Inc. for the quarter ended
covering various vehicles. April 4, 1993.
10.59 Lease Funding No. 2, dated as of June 1, Exhibit 10.02 to the
1993, of a Master Equipment Lease between Company's Quarterly
the Company and Coca-Cola Financial Report on Form 10-Q
Corporation covering various vending for the quarter ended
machines. July 4, 1993.
10.60 Lease Funding No. 3, dated as of July 12, Exhibit 10.03 to the
1993, of a Master Equipment Lease between Company's Quarterly
the Company and Coca-Cola Financial Report on Form 10-Q
Corporation covering various vending for the quarter ended
machines. July 4, 1993.
10.61 Schedule No. 12 of a Master Lease Agree- Exhibit 10.04 to the
ment, dated as of April 1, 1993, between Company's Quarterly
the Company and Signet Leasing and Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vehicles. July 4, 1993.
10.62 Schedule No. 13 of a Master Lease Agree- Exhibit 10.05 to the
ment, dated as of April 1, 1993, between Company's Quarterly
the Company and Signet Leasing and Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vehicles. July 4, 1993.
<PAGE>
10.63 Lease Funding No. 4, dated as of August Exhibit 10.01 to the
24, 1993, of a Master Equipment Lease Company's Quarterly
between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 3, 1993.
10.64 Lease Funding No. 5, dated as of Exhibit 10.02 to the
September 30, 1993, of a Master Equip- Company's Quarterly
ment Lease between the Company and Report on Form 10-Q
Coca-Cola Financial Corporation covering for the quarter ended
various vending machines. October 3, 1993.
10.65 Schedule No. 11 of a Master Lease Agree- Exhibit 10.03 to the
ment, dated as of July 1, 1993, between Company's Quarterly
the Company and Signet Leasing and Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vehicles. October 3, 1993.
10.66 Schedule No. 14 of a Master Lease Agree- Exhibit 10.04 to the
ment, dated as of July 1, 1993, between Company's Quarterly
the Company and Signet Leasing and Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vehicles. October 3, 1993.
10.67 Schedule No. 15 of a Master Lease Agree- Exhibit 10.05 to the
ment, dated as of July 1, 1993, between Company's Quarterly
the Company and Signet Leasing and Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vehicles. October 3, 1993.
10.68 Lease Funding No. 6, dated as of Exhibit 10.06 to the
November 1, 1993, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 3, 1993.
10.69 Lease Funding No. 7, dated as of Exhibit 10.66 to the
November 17, 1993, of a Master Equipment Company's Annual
Lease between the Company and Coca-Cola Report on Form 10-K
Financial Corporation covering various for the fiscal year
vending machines. ended January 2, 1994.
10.70 Lease Funding No. 8, dated as of Exhibit 10.67 to the
December 30, 1993, of a Master Equipment Company's Annual
Lease between the Company and Coca-Cola Report on Form 10-K
Financial Corporation covering various for the fiscal year
vending machines. ended January 2, 1994.
10.71 Master Lease Agreement, dated as of Exhibit 10.69 to the
February 18, 1992, between the Company Company's Annual
and Citicorp Leasing, Inc. covering Report on Form 10-K
various equipment. for the fiscal year
ended January 2, 1994.
<PAGE>
10.72 Lease Funding No. 94001, dated as of Exhibit 10.1 to the
March 11, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. April 3, 1994.
10.73 Lease Funding No. 94002, dated as of Exhibit 10.1 to the
April 25, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. July 3, 1994.
10.74 Lease Funding No. 94003, dated as of Exhibit 10.2 to the
May 12, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. July 3, 1994.
10.75 Lease Funding No. 94004, dated as of Exhibit 10.3 to the
June 3, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. July 3, 1994.
10.76 Lease Funding No. 94005, dated as of Exhibit 10.4 to the
June 22, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. July 3, 1994.
10.77 Lease Funding No. 94006, dated as of Exhibit 10.5 to the
July 8, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. July 3, 1994.
10.78 Lease Funding No. 94007, dated as of Exhibit 10.2 to the
August 12, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 2, 1994.
10.79 Lease Funding No. 94008, dated as of Exhibit 10.3 to the
September 7, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 2, 1994.
10.80 Lease Funding No. 94009, dated as of Exhibit 10.4 to the
October 10, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 2, 1994.
<PAGE>
10.81 Lease Funding No. 94010, dated as of Exhibit 10.5 to the
October 26, 1994, of a Master Equipment Company's Quarterly
Lease between the Company and Coca-Cola Report on Form 10-Q
Financial Corporation covering various for the quarter ended
vending machines. October 2, 1994.
10.82 Description of the Company's 1995 Bonus Exhibit included in
Plan for officers. this filing.
10.83 Selling Agency Agreement, dated as of Exhibit included in
March 3, 1995, between the Company, this filing.
Salomon Brothers Inc. and Citicorp
Securities, Inc.
10.84 Amendment, dated as of May 18, 1994, to Exhibit included in
Employment Agreement designated as this filing.
Exhibit 10.1.
10.85 Agreement, dated as of March 1, 1994, Exhibit included in
between the Company and South Atlantic this filing.
Canners, Inc.
10.86 Stock Option Agreement, dated as of Exhibit included in
March 8, 1989, of J. Frank Harrison, Jr. this filing.
10.87 Stock Option Agreement, dated as of Exhibit included in
August 9, 1989, of J. Frank Harrison, this filing.
III.
10.88 Lease Funding No. 94011, dated as of Exhibit included in
November 30, 1994, of a Master Equipment this filing.
Lease between the Company and Coca-Cola
Financial Corporation covering various
vending machines.
10.89 Lease Funding No. 94012, dated as of Exhibit included in
December 19, 1994, of a Master Equipment this filing.
Lease between the Company and Coca-Cola
Financial Corporation covering various
vending machines.
10.90 Lease Funding No. 94013, dated as of Exhibit included in
January 17, 1995, of a Master Equipment this filing.
Lease between the Company and Coca-Cola
Financial Corporation covering various
vending machines.
10.91 Lease Funding No. 95001, dated as of Exhibit included in
February 8, 1995, of a Master Equipment this filing.
Lease between the Company and Coca-Cola
Financial Corporation covering various
vending machines.
<PAGE>
10.92 Supplemental Indenture, dated as of Exhibit included in
March 3, 1995, between the Company and this filing.
NationsBank of Georgia, National
Association, as Trustee.
21.1 List of subsidiaries. Exhibit included in
this filing.
23.1 Accountants Consent to Incorporation by Exhibit included in
Reference into Form S-3 (Registration this filing.
No. 33-4325) and Form S-3 (Registration
No. 33-54657).
27.1 Financial data schedule for period ended Exhibit included in
January 1, 1995. this filing.
99.1 Information, financial statements and To be supplied by
exhibits required by Form 11-K with amendment.
respect to the Coca-Cola Bottling Co.
Consolidated Savings Plan.
<PAGE>
<PAGE>
EXHIBIT 4.13
<PAGE>
Goldman Sachs Money Markets L.P. 85 Broad Street New York, New York 10004
(a Delaware limited partnership)
Tel: 212-902-3585
Goldman
Sachs
November 14, 1994
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
Dear Sirs:
This letter will amend and restate the agreement dated December 13,
1989 between Coca-Cola Bottling Co. Consolidated (the "Company") and
Goldman Sachs Money Markets, L.P. and its successors ("GSMM LP") with
respect to the offer and sale by GSMM LP of short-term promissory notes
("Notes") proposed to be issued from time to time by the Company in
transactions not involving a public offering within the meaning of
Section 4(2) of the Securities Act of 1933 (the "Act") and Rule 506
thereunder. The Company understands that this letter does not constitute
a commitment or obligation, expressed or implied, on the part of GSMM LP
to purchase any Notes from the Company, or to offer or sell any Notes.
1. The Notes will be issuable in denominations of not less than
$250,000, will not be exchangeable for smaller denominations and will
have maturities not exceeding 270 days from the date of issue. The Notes
may be issued in physical bearer form or in book-entry form. Notes in
book-entry form will be represented by master notes registered in the
name of a nominee of the Depository Trust Company ("DTC") and recorded
in the book-entry system maintained by DTC. References to "Notes" in
this agreement shall refer both to physical and book-entry Notes to the
extent that the context of this agreement requires. The Notes may be
issued either at a discount or as interest bearing obligations with
interest payable at maturity in a stated amount. Notes will be issued
through BankAmerica National Trust Company in accordance with an issuing
and paying agency agreement between the Company and such bank, a copy of
which has been or will be furnished to GSMM LP. The Company will not
amend such agreement without first informing GSMM LP and will promptly
furnish to GSMM LP a copy of any amendment to such agreement.
2. The Company hereby confirms to GSMM LP that within the preceding
six months, except for publicly-offered unsecured medium-term promissory
notes sold under registration statements filed pursuant to the
Securities Act of 1933, offered through Salomon Brothers Inc. and
Citicorp Securities Markets, Inc., neither the Company nor any person
other than GSMM LP or Citicorp Securities Markets, Inc. ("CSMI") acting
on behalf of the Company has offered or sold any Notes, or any
substantially similar security of the Company, to, or solicited offers
to buy any thereof from, any person other than GSMM LP or CSMI. The
Company also agrees that, as long as the Notes are being offered for
sale by
<PAGE>
Coca-Cola Bottling Co. Consolidated
-2-
GSMM LP as contemplated hereby and until at least six months after the
offer of Notes hereunder has been terminated, neither the Company nor
any person other than GSMM LP or CSMI will offer the Notes or any
substantially similar security of the Company for sale to, or solicit
offers to buy any thereof from, any person other than GSMM LP or CSMI
except with the prior written consent of GSMM LP, which will not be
unreasonably withheld, it being understood that this agreement is made
with a view to bringing the offer and sale of the Notes within the
exemption provided by Section 4(2) of the Securities Act of 1933 and
Rule 506 thereunder. Further, both the Company and GSMM LP agree that
neither the Company nor any person acting on its behalf, nor GSMM LP,
will offer or sell, or solicit offers to buy, the Notes by any form of
general solicitation or general advertising, within the meaning of Rule
502(c) under the Act or otherwise. The Company also confirms that it has
entered into a dealer agreement with CSMI which contains provisions
relating to the qualification of prospective investors, maintaining a
list thereof and manner of offering the Notes which are substantially
identical to the corresponding provisions contained in this agreement.
The Company agrees that such provisions in its dealer agreement with
CSMI shall not be amended in any material respect without GSMM LP's
prior written consent, which will not be unreasonably withheld.
3. (a) GSMM LP proposes to maintain a list of prospective purchasers
of the Notes to whom GSMM LP may make offers and sales of Notes (the
"Investor List"). It is contemplated that GSMM LP will include on such
Investor List (i) investors who may purchase Notes for their own
accounts, (ii) investors who may purchase Notes as fiduciary or agent
for the accounts of others and (iii) investors for whose accounts Notes
may be purchased by others as fiduciary or agent.
(b) An investor will be included on the Investor List only if
reasonably believed by GSMM LP to be a (A) sophisticated institutional
investor that is an "Accredited Investor" as that term is defined in
Rule 5Ol(a) under the Act ("Accredited Investor"), or, if the potential
investor is a fiduciary or agent (other than a U.S. bank or savings and
loan association) who will be purchasing Notes for one or more accounts,
each such account will be an Accredited Investor, that either (i) has
such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of investing in Notes or
(ii) is represented by a fiduciary or agent with sole investment
discretion having such knowledge and experience, or (B) a "Qualified
Institutional Buyer," as that term is defined in Rule l44A under the
Act.
(c) GSMM LP will offer and sell Notes only to investors which
at the time are on the Investor List and are reasonably believed by GSMM
LP to meet the requirements set forth above for inclusion thereon.
(d) The Company represents and agrees that the proceeds of the
sale of the Notes are not currently contemplated to be used for the
purpose of buying, carrying or trading securities within the meaning of
Regulation T and the interpretations thereunder by the Board of
Governors of the Federal Reserve System. In the event that the Company
determines to use such proceeds for the purpose of buying, carrying or
trading securities including, but not limited to, buying, carrying or
trading securities in connection with an acquisition of equity
securities of another company, the Company shall give GSMM LP at least
five days prior written notice to that effect. The Company shall also
give GSMM LP prompt notice of the actual date that it commences to
purchase such securities with the proceeds of commercial paper.
Thereafter, in the event that GSMM LP purchases Notes as principal and
does not resell such Notes on the day of such purchase, GSMM LP will
sell such Notes only to persons on the
<PAGE>
Coca-Cola Bottling Co. Consolidated
-3-
Investor List it reasonably believes to be Qualified Institutional
Buyers or to Qualified Institutional Buyers on the Investor List it
reasonably believes are acting for other Qualified Institutional Buyers,
in each case pursuant to Rule 144A.
4. (a) GSMM LP will furnish to each purchaser of Notes (or to the
fiduciary or agent acting for such purchaser), at or before the time of
the sale of Notes to such purchaser, an Offering Memorandum in form and
substance satisfactory to the Company and GSMM LP. The Offering
Memorandum at any time may consist of an annual Offering Memorandum and
one or more supplemental Memoranda and will, among other things:
(i) Include summary financial and other information derived
from the Company's latest Annual Report on Form lO-K and
from any subsequent reports by it on Forms lO-Q or 8-K or
materials mailed by it to its public stockholders; and
incorporate by reference such Form lO-K report and any
such subsequent lO-Q or 8-K reports;
(ii) Include a statement to the effect that copies of reports
filed by the Company with the Securities and Exchange
Commission or mailed by it to its public stockholders, as
well as such additional information, if any, as an
investor in Notes may reasonably request, may be obtained
through GSMM LP;
(iii) Set forth on the first page of the annual Offering
Memorandum, with a reference thereto on the first page of
each supplemental Memorandum, statements substantially as
follows:
PRIVATE PLACEMENT:
THE NOTES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND INITIAL SALES
OF THE NOTES MAY BE MADE ONLY TO INSTITUTIONAL INVESTORS APPROVED
AS "ACCREDITED INVESTORS" AS DEFINED IN RULE 501(A) UNDER THE ACT.
SUBSEQUENT SALES OF THE NOTES MAY BE MADE ONLY TO INSTITUTIONAL
INVESTORS APPROVED AS "ACCREDITED INVESTORS", OR, PURSUANT TO RULE
l44A UNDER THE ACT, TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED
IN RULE l44A. BY ITS ACCEPTANCE OF A NOTE, A PURCHASER (A)
REPRESENTS THAT IT IS AN INSTITUTIONAL ACCREDITED INVESTOR, THAT
THE NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO,
OR FOR SALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF AND, IN
THE CASE OF RESALES PURSUANT TO RULE l44A, THAT IT IS A QUALIFIED
INSTITUTIONAL BUYER, THAT ANY PERSON FOR WHICH IT MAY BE
PURCHASING THE NOTE IS A QUALIFIED INSTITUTIONAL BUYER AND THAT
THE PURCHASER UNDERSTANDS THAT THE NOTE MAY BE SOLD TO IT PURSUANT
TO RULE l44A, AND (B) AGREES THAT ANY RESALE OR
<PAGE>
Coca-Cola Bottling Co. Consolidated
-4-
TRANSFER OF THE NOTE OR ANY INTEREST THEREIN WILL BE MADE ONLY IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT AND ONLY (l)
TO AN APPROVED DEALER, (2) THROUGH AN APPROVED DEALER TO AN
INSTITUTIONAL ACCREDITED INVESTOR OR A QUALIFIED INSTITUTIONAL
BUYER OR (3) DIRECTLY TO A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MADE PURSUANT TO RULE l44A.
Each purchaser of a Note will be deemed to have represented and
agreed as follows: (l) the purchaser understands that the Notes
are being issued only in transactions not involving any public
offering within the meaning of the Securities Act of 1933; (2)
the purchaser is a sophisticated institutional investor who (A)
is an "Accredited Investor" as that term is defined in Rule
501(a) under the Securities Act of 1933 (or is a fiduciary or
agent (other than a U.S. bank or savings and loan association)
which is purchasing the Note for the account of an Accredited
Investor) and (B) has such knowledge and experience (or is a
fiduciary or agent with sole investment discretion having such
knowledge and experience) in financial and business matters that
it (or such fiduciary or agent) is capable of evaluating the
merits and risks of investing in such Note; (3) such Note is
being purchased for the purchaser's own account (or for the
account of one or more other institutional investors for which
it is acting as duly authorized fiduciary or agent), for
investment and not with a view to public distribution; (4) if in
the future the purchaser (or any such other investor or any
other fiduciary or agent representing such investor) decides to
sell such Note prior to maturity, it will be sold only to GSMM
LP or through GSMM LP to an institutional investor which GSMM LP
advises is on an Investor List maintained by GSMM LP and only in
a transaction exempt from registration under such Act; (5) the
purchaser understands that, although GSMM LP may repurchase
Notes, GSMM LP is not obligated to do so, and accordingly the
purchaser (or any such other investor) should be prepared to
hold such Note until maturity; and (6) the purchaser understands
that such Note will bear a legend substantially as set forth in
capital letters above.
(b) The Company agrees to furnish promptly to GSMM LP three
copies of all reports filed with the Securities and Exchange Commission,
all documents filed with any stock exchange, all documents mailed to the
Company's public shareholders, all press releases (issued by its
corporate headquarters) and such other publicly distributed documents as
GSMM LP may reasonably request in order for GSMM LP to prepare from time
to time offering memoranda for distribution to purchasers of Notes and
in order for GSMM LP to evaluate at any time the ability of the Company
to pay the Notes as they mature. The Company also agrees to furnish to
GSMM LP such additional information concerning the Company as GSMM LP
may reasonably request.
(c) If at any time any event or other development occurs as a
result of which the Offering Memorandum (including any documents
incorporated by reference therein) includes an untrue statement of
material fact or omits to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading, the Company will
<PAGE>
Coca-Cola Bottling Co. Consolidated
-5-
promptly notify GSMM LP thereof, and GSMM LP will not thereafter use
such Offering Memorandum or offer or sell Notes until an appropriately
revised Offering Memorandum is available. Each sale of a Note by the
Company to GSMM LP shall constitute a representation by the Company that
the Offering Memorandum (including any documents incorporated by
reference therein) at such time does not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
5. The Company agrees that each Note, including each master note,
will bear a legend substantially as set forth in capital letters under
"Private Placement" in paragraph 4(a) (iii) above.
6. The Company will timely file such amendments to its notice on
Form D as may be required by Rule 503. The Company will furnish to GSMM
LP evidence of each such filing (including a copy thereof).
7. In the event that any Note offered or to be offered by GSMM LP
would be ineligible for resale under Rule 144A under the Act (because
such Note is of the same class (within the meaning of Rule 144A) as any
other securities of the Company which are at such time listed on a
national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended, or quoted in a U.S.
automated inter-dealer quotation system), the Company shall immediately
notify GSMM LP (by telephone, confirmed in writing) of such fact and
will promptly prepare and deliver to GSMM LP an amendment or supplement
to the Private Placement Memorandum describing the Notes which are
ineligible, the reason for such ineligibility and any other relevant
information relating thereto. At any time when the Company is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Company agrees to furnish at its expense, upon request, to holders
and prospective purchasers of Notes information satisfying the
requirement of subsection (d)(4)(i) of Rule 144A under the Act.
8. The Company agrees promptly from time to time to take such
action as GSMM LP may reasonably request to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as
GSMM LP may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the transactions contemplated
hereby, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction other than consent to
service of process under such state securities laws. The Company also
agrees to reimburse GSMM LP for any reasonable fees or costs incurred in
so qualifying the Notes.
9. This agreement will continue in effect until terminated as
provided in this paragraph. This agreement may be terminated by the
Company by giving written notice of its election to do so to GSMM LP; or
by GSMM LP by giving written notice of its election to do so to the
Company. This agreement shall terminate at the close of business on the
first business day following the receipt of such notice by the party to
whom such notice was given; provided, however, that the provisions of
paragraph 2, 4(c), 6, 7 and 8 will continue in effect subsequent to any
such termination.
10. This agreement and each Note shall be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>
Coca-Cola Bottling Co. Consolidated
-6-
If the foregoing is in accordance with your understanding
please confirm the same by signing and returning a copy hereof.
Yours very truly,
GOLDMAN SACHS MONEY MARKETS, L.P.
a Delaware limited partnership
By: GSMM Corp., as sole general partner
By George A. Myers
GSMM Corp. Officer
Confirmed as of the
above date:
COCA-COLA BOTTLING CO. CONSOLIDATED
By Brenda B. Jackson
Title: Brenda B. Jackson
Vice President & Treasurer
<PAGE>
EXHIBIT 4.14
<PAGE>
ISSUING AND PAYING AGENCY AGREEMENT
BankAmerica National Trust Company
One World Trade Center,
New York, New York 10048-1191
Attn: Corporate Trust Division
Re: Coca-Cola Bottling Co. Consolidated
Commercial Paper Program
Ladies and Gentlemen:
This letter sets forth the understanding between you and Coca-Cola
Bottling Co. Consolidated (the "Company"), whereby you have agreed to
act (a) as depositary for the safekeeping of certain notes of the
Company which may be issued and sold in the United States commercial
paper market (the "CP Notes"; such Commercial Paper Notes when issued in
book-entry form being hereinafter referred to as "Book-Entry CP Notes"
and when issued in the form of certificated promissory notes being
hereinafter referred to as the "Certificated CP Notes"), (b) as issuing
agent on behalf of the Company in connection with the issuance of the CP
Notes, (c) as paying agent to undertake certain obligations to make
payments in respect of the CP Notes, and (d) as depositary to receive
certain funds on behalf of the Company, as set forth herein. You have
executed or will promptly hereafter execute a Letter of Representations
(the "Letter of Representations", which term shall include the
Procedures referred to therein) with the Company and The Depository
Trust Company ("DTC") and a Certificate Agreement (the "Certificate
Agreement") with DTC which establish or will establish, among other
things, the procedures to be followed by you in connection with the
issuance and custody of Book-Entry CP Notes.
This letter (the "Agreement") will govern your rights, powers and
duties as such depositary, issuing agent and paying agent for the CP
Notes and no implied covenants and obligations shall be read into this
Agreement or any other agreement against you.
1. Appointment of Agent. The Company hereby appoints you and you
hereby agree to act, on the terms and conditions specified herein and in
the Letter of Representations and Certificate Agreement, as depositary,
issuing and paying agent for the CP Notes. The CP Notes will be sold
through such commercial paper dealers and/or placement agents as the
Company shall have notified you in writing from time to time
(collectively, the "Dealers"). The Dealers currently are Citicorp
Securities Markets, Inc. and Goldman Sachs Money Markets, L.P.
<PAGE>
2. Supply of CP Notes.
(a) The Company will from time to time furnish to your commercial
paper department (the "Commercial Paper Department") located at One
World Trade Center, New York, New York 10048-11912, an adequate supply
of CP Notes. Certificated CP Notes shall be in substantially the form
attached as Exhibit A to this Agreement, shall be serially numbered and
shall have been executed by manual or facsimile signature of an
Authorized Representative (as hereafter defined), but shall otherwise be
uncompleted. Book-Entry CP Notes shall be substantially in the forms
attached to the Letter of Representations and shall be represented by
one or more master notes ("Master Note" or "Master Notes") which shall
be executed by manual or facsimile signature by an Authorized
Representative in accordance with the Letter of Representations. Pending
receipt of instructions pursuant to this Agreement, you will hold the
Certificated CP Notes and Master Note(s) in safekeeping for the account
of the Company or DTC, as the case may be, in accordance with your
customary practice and the requirements of the Certificate Agreement.
(b) Each Certificated CP Note or Master Note delivered to you
shall be accompanied by a letter from the Company, as the case may be,
identifying the Certificated CP Note or Master Note(s) transmitted
therewith, and you shall acknowledge receipt of such Certificated CP
Note(s) or Master Note(s) on the copy of such letter or pursuant to some
other form of written receipt deemed appropriate by you at the time of
delivery to you of such Certificated CP Note(s) or Master Note(s).
Pending the issuance of Certificated CP Notes as provided in Section 4
hereof, all Certificated CP Notes and Master Note(s) delivered to you
shall be held by your Commercial Paper Department for the account of the
Company or DTC, as the case may be, for safekeeping in accordance with
your customary practice and the requirements of the Certificate
Agreement.
3. Authorized Representatives.
(a) With the delivery of this Agreement, the Company
is furnishing to you, and from time to time thereafter
may furnish to you, and shall furnish to you upon your
request, certificates ("Incumbency Certificates") of a
responsible officer of the Company certifying the
incumbency and specimen signatures of officers or agents
of the Company authorized to execute CP Notes on behalf
of the Company by manual or facsimile signature and/or
to take other action hereunder on behalf of the Company
(each an "Authorized Representative"); such certificate
shall also authorize you to deal with representatives of
Goldman Sachs Money Markets, L.P. and Citicorp
Securities Markets, Inc., (each a "Dealer
Representative"). Until you receive a subsequent
incumbency certificate of the Company, you are entitled
to rely on the last such certificate delivered to you
for purposes of determining the Authorized
Representatives. You shall not have any responsibility
to the Company to determine by whom or by what means a
facsimile signature may have been affixed on the CP
Notes, or to determine whether any facsimile or manual
signature resembles the specimen signature(s) filed with
you by a duly
<PAGE>
authorized officer of the Company. Any CP Note bearing the manual or
facsimile signature of a person who is an Authorized Representative on
the date such signature is affixed shall be binding on the Company after
the authentication thereof by you notwithstanding that such person shall
have died or shall have otherwise ceased to hold his office on the date
such CP Note is countersigned or delivered to you.
(b) Upon your receipt of this Agreement, and from time to time
thereafter as you choose, you shall deliver a certificate (a
"Certificate of Designation") certifying the incumbency and specimen
signatures of your designated signers ("Designated Officers") who are
authorized to receipt for and authenticate CP Notes, and deliver CP
Notes. Until the Company shall receive a subsequent Certificate of
Designation, or unless an Authorized Representative shall have received
written notice of the lack of authority of any individual, the Company
may rely on the last such Certificate of Designation delivered to it.
4. Completion, Authentication and Delivery of CP Notes.
(a) From time to time during the term of this Agreement and
subject to the terms and conditions hereof, and upon your timely receipt
of instructions promptly confirmed in written, telecopy or telex
instructions or notice transmitted directly to your computers or in such
manner as you then employ as your normal business practice
(collectively, "Instructions"), not later than 1:00 p.m., New York City
time, on a day on which you are open for business (a "Business Day"),
from an Authorized Representative or a Dealer Representative, on the
date of issuance of any Certificated CP Notes (in the case of
instructions from an Authorized Representative, a copy of such
instructions shall be sent to the Dealer Representative by said
Authorized Representative) you shall withdraw the respective
Certificated CP Notes from safekeeping and in accordance with the
Instructions so received, take the following actions with respect to
each such Certificated CP Note:
i. date each such Certificated CP Note the date of issuance
thereof (which shall be a Business Day) and insert the maturity
date thereof (provided that the Authorized Representative or
Dealer Representative shall ensure that such date is a Business
Day and that it shall not be more than 270 days from the date of
issue and that the aggregate principal amount of Commercial Paper
Notes outstanding shall not exceed $100,000,000) and the face
amount (provided that the Authorized Representative or the Dealer
Representative shall ensure that such face amount is not less than
$250,000) thereof in figures;
ii. authenticate (by countersigning) each such Certificated
CP Note in the appropriate space provided thereon; and
iii. deliver in the Borough of Manhattan south of Chambers
Street each such Certificated CP Note to the Dealer, or the
consignee, if any, designated by such Authorized Representative or
Dealer Representative for the account of the Dealer against
Payment in immediately available funds of the principal amount of
CP Notes.
-3-
<PAGE>
(b) In the case of Book-Entry CP Notes, from time to time during
the term of this Agreement and subject to the terms and conditions
hereof, and upon your timely receipt of written, telecopy or telex
instructions or notice transmitted directly to your computers or in such
a manner as you then employ as your normal business practices, not later
than 1:00 p.m., New York City time in the case of Book-Entry CP Notes,
on a Business Day, from an Authorized Representative or a Dealer
Representative, on the date of issuance of any Book-Entry CP Notes (in
the case of instructions from an Authorized Representative, a copy of
such instructions shall be sent to the Dealer Representative by said
Authorized Representative) you shall give issuance instructions for the
issuance of Book-Entry CP Notes to DTC in a manner set forth in, and
take other actions as are required by, the Letter of Representations and
the Certificate Agreement. Instructions for the issuance of Book-Entry
CP Notes shall include the following information with respect to each
Book-Entry CP Note:
i. the date of issuance of each such Book-Entry CP Note
(which shall be a Business Day);
ii. the maturity date of each such Book-Entry CP Note
(provided that the Authorized Representative or Dealer
Representative shall ensure that such date is a Business Day and
that it shall not be more than 270 days from the date of issue);
and
iii. the face amount (provided that the Authorized
Representative or the Dealer Representative shall ensure that such
face amount is not less than $250,000) in figures.
(c) You shall send a report (by telecopy or other means permitted
hereunder) to the Company on a monthly basis of your issuance of CP
Notes under this Section 4, including the maturity date and face amounts
of each CP Note issued.
(d) Instructions given must be received by you by 1:00 p.m. for
physical issuance and 1:00 p.m. for book-entry issuance, New York time,
if the CP Note(s) are to be delivered the same day. Telephone
instructions shall be confirmed in writing the same day.
(e) The Company understands that although you have been instructed
to deliver CP Notes against payment, delivery of CP Notes may, in
accordance with the custom prevailing in the commercial paper market, be
made before receipt of payment in immediately available funds.
Therefore, once you have delivered a CP Note to a Dealer or its agent as
provided herein, the Company shall bear the risk that a Dealer or its
agent fails to remit payment for the CP Note to you. You shall have no
liability to the Company for any failure or inability on the part of the
Dealer to make payment for CP Notes. Nothing in this Agreement shall
require you to purchase any CP Note or expend your own funds for the
purchase price of a CP Note or CP Notes.
(f) Except as may otherwise be provided in the Letter of
Representations, if at any time the Company instructs you to cease
issuing Certificated CP Notes and to issue only
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<PAGE>
Book-Entry CP Notes, you agree that all CP Notes will be issued as
Book-Entry CP Notes and that no Certificated CP Notes shall be exchanged
for Book-Entry CP Notes unless and until you have received written
instructions from an Authorized Representative (any such instructions
from a Dealer Representative shall not be sufficient for this purpose)
to the contrary.
(g) It is understood that you are not under any obligation to
assess or review the financial condition or credit worthiness of any
person to or for whose account you deliver a CP Note pursuant to
instructions from an Authorized Representative or Dealer Representative
or to advise the Company as to the results of any such appraisal or
investigation you may have conducted on your own or of any adverse
information concerning any such person that may in any way have come to
your attention.
(h) It is understood that DTC may request the delivery of
Certificated CP Notes in exchange for Book-Entry CP Notes upon the
termination of DTC's services pursuant to the DTC Letter of
Representations. Accordingly, upon such termination, you are authorized
to complete and deliver Certificated CP Notes in partial or complete
substitution for Book-Entry CP Notes of the same face amount and
maturity as requested by DTC. Upon the completion or delivery of any
such Certificated CP Note, you shall annotate your records regarding the
Master Note with respect to such Book-Entry CP Notes to reflect a
corresponding reduction in the face amount of the outstanding Book-Entry
CP Notes. Your authority to so complete and deliver such Certificated CP
Notes shall be irrevocable at all times from the time a Book-Entry CP
Note is purchased until the indebtedness evidenced thereby is paid in
full.
(i) If you shall receive Instructions (confirmed in writing in
accordance with this Agreement) from the Company not to issue or deliver
CP Notes, until revoked in writing or superseded by further written
instructions from the Company, you shall not issue or deliver CP Notes,
provided, however, that, notwithstanding contrary instructions from the
Company, you shall be required to deliver CP Notes in respect of
agreements for the sale of CP Notes concluded by an Authorized
Representative or Dealer Representative prior to receipt by the
Authorized Representative or Dealer Representative of notice of such
instructions from the Company, which the Authorized Representative or
Dealer Representative shall be required to confirm to you in writing
prior to your delivery of the CP Notes. For purposes of this Section
(i), you may rely on written notice given or delivered to you by an
Authorized Representative or Dealer Representative as to whether any
particular CP Notes are to be issued in respect of such agreements
concluded by such Authorized Representative or Dealer Representative,
and you shall have no obligation to make any other or further
investigation.
5. Proceeds of Sale of the CP Notes. Contemporaneously with the
execution and delivery of this Agreement, and for the purposes of this
Agreement, you will establish an account designated as the Coca-Cola
Bottling Co. Consolidated Note Account in the Company's name (the "Note
Account"). On each day on which a Dealer or its agent receives CP Notes
(whether through the facilities of DTC in the manner set forth in the
Letter of Representations or by delivery in accordance with the
provisions of this Agreement), all proceeds received by you in
connection with such sale shall be credited in immediately available
funds to the Note
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<PAGE>
Account. From time to time, upon written instructions received by you
from an Authorized Representative, you agree to transfer immediately
available funds from the Note Account to any bank or trust company in
the United States for the Company's account.
6. Payment of Matured CP Notes.
(a) By 1:00 p.m., New York Time, on the date that any CP Notes are
scheduled to mature, there shall have been transferred to you for
deposit in the Note Account immediately available funds at least equal
to the amount of CP Notes maturing on such date. When any matured CP
Note is presented to you for payment by the holder thereof (which may,
in the case of Book-Entry CP Notes held by you pursuant to the
Certificate Agreement, be DTC or a nominee of DTC), payment shall be
made from and charged to the Note Account to the extent funds are
available in said account.
(b) Each CP Note presented to you for payment at or prior to 3:00
p.m., New York City time, on any Business Day at or after the maturity
date of such CP Note shall be paid by you on the same day as such
presentation (or if presented after 3:00 p.m., New York City time on any
such Business Day, then on the next succeeding Business Day) to the
extent of funds available in the Note Account. Upon payment by you as
aforesaid, you shall mark Certificated CP Note(s) presented as paid,
destroy such Certificated CP Note(s) and deliver to the Company from
time to time a destruction certificate identifying all Certificated CP
Notes destroyed since the issuance of the prior destruction certificate.
After payment of any matured Book-Entry CP Note, you shall annotate your
records to reflect the face amount of Book-Entry CP Notes outstanding in
accordance with the Letter of Representations.
7. Representations and Warranties of the Company. The Company
hereby warrants and represents to you, and, each request to issue CP
Notes shall constitute the Company's continuing warranty and
representation, as follows:
(a) This Agreement is, and all CP Notes delivered to you pursuant
to this Agreement will be, duly authorized, executed and delivered by
the Company.
(b) The issuance and delivery of the CP Notes will not violate any
state or Federal law and the CP Notes do not require registration under
the Securities Act of 1933, as amended.
(c) This Agreement constitutes and the CP Notes, when completed,
countersigned, and delivered pursuant hereto, will constitute, the
Company's legal, valid and binding obligations enforceable against the
Company in accordance with their terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally and by
general principles of equity.
(d) The Company is a corporation duly organized and validly
existing under the laws of Delaware and no liquidation, dissolution,
bankruptcy, windup or similar proceedings have been instituted with
respect to the Company.
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<PAGE>
(e) The Company has, and at all relevant times has had, all
necessary power and authority to execute, deliver and perform this
Agreement and to issue the CP Notes.
(f) All actions on the part of the Company which are required for
the authorization of the issuance of the CP Notes and for the
authorization, execution, delivery and performance of this Agreement do
not require the approval or consent of any holder or trustee of any
indebtedness or obligations of the Company.
(g) The issuance of CP Notes by the Company (i) does not and will
not contravene any provision of any governmental law, regulation or rule
applicable to the Company, and (ii) does not and will not conflict with,
breach or contravene the provisions of any contract or other instrument
binding upon the Company.
8. Reliance on Instructions. Except as otherwise set forth herein,
you shall incur no liability to the Company in acting hereunder upon
telephonic or other instructions or notices contemplated hereby which
you reasonably believed in good faith to have been given by an
Authorized Representative or a Dealer Representative, as the case may
be. In the event a discrepancy exists with respect to such instructions,
the telephonic instructions as recorded by you will be deemed the
controlling and proper instructions, unless such instructions are
required by this Agreement to be in writing or have not been recorded by
you as contemplated by the next sentence. It is understood that all
telephonic instructions may be recorded by you and the Company hereby
consents to such recording.
9. Cancellation of CP Notes. You will in due course cancel
Certificated CP Note(s) presented for payment, destroy such Certificated
CP Note(s) and from time to time deliver a destruction certificate to
the Company. After payment of any matured Book-Entry CP Note, you shall
annotate your records to reflect the face amount of Book-Entry CP Notes
outstanding in accordance with the Letter of Representations. Promptly
upon the written request of the Company, you agree to cancel and return
to the Company all unissued Certificated CP Notes in your possession at
the time of such request.
10. Notices; Addresses.
(a) All communications by or on behalf of the Company or a Dealer,
by telephone or otherwise, relating to the completion, delivery or
payment of the CP Note(s) are to be directed to your Commercial Paper
Department.
(b) Notices and other communications hereunder shall (except to
the extent otherwise expressly provided) be in writing (which may be by
facsimile) and shall be addressed as follows, or to such other address
as the party receiving such notice shall have previously specified to
the party sending such notice:
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<PAGE>
if to the Company, at:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Treasury Department
Facsimile No.: (704) 551-4451
Telephone No.: (704) 551-4633
concerning daily issuance of
CP Notes and all other matters
if to you at:
Bank America National Trust Company
One World Trade Center
New York, New York 10048-1191
Attention: Corporate Trust
Division/Commercial Paper Department
Facsimile No.: (212) 390-3144
concerning daily issuance of
CP Notes and all other matters.
(c) In any case where it is provided in this Agreement that a copy
of any instruction, demand or other notice is to be delivered to a
Dealer, such copy shall be delivered to the Dealer at the address set
forth below by the same means as the original thereof shall have been
given, provided that the failure of such copy to be given to any Dealer
shall not invalidate or adversely affect the original thereof:
Dealer:
Citicorp Securities Markets, Inc.
399 Park Avenue - 7th Floor, Zone 3
New York, NY 10043
Attention: Don Donahue
Goldman Sachs Money Markets, L.P.
85 Broad Street
New York, NY 10004
Attention: Susan Dowling
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<PAGE>
Notices shall be deemed delivered when received at the address specified
above. For purposes of this Section 10, "when received" shall mean
actual receipt (i) of an electronic communication by a telex machine,
telecopier or issuance system specified in or pursuant to this
agreement; or (ii) of an oral communication by any person answering the
telephone in the office of the individual or department specified in or
pursuant to this Agreement; or (iii) of a written communication
hand-delivered at the office specified in or pursuant to this Agreement.
11. Liability. Neither you nor your officers, employees or agents
shall be liable for any act or omission hereunder, except in the case of
gross negligence or willful misconduct as described in Section 12
herein. Your duties and obligations and those of your officers and
employees shall be determined by the express provisions of this
Agreement, the Letter of Representations and the Certificate Agreement
(including the documents referred to therein), and you and your
officers, employees and agents shall be responsible for the performance
of only such duties and obligations as are specifically set forth herein
and therein, and no implied covenants shall be read into any such
document against you or your officers, employees or agents. Neither you
nor your officers, employees or agents shall be required to ascertain
whether any issuance or sale of CP Note(s) (or any amendment or
termination of this Agreement) has been duly authorized or is in
compliance with any other agreement, ordinance, resolution or other
undertaking or document to which the Company is a party or by which it
or its property may be bound (whether or not you are a party to such
other agreement).
12. Indemnity. The Company hereby agrees to indemnify and hold
you, your employees and any of your officers and agents harmless, from
and against, and you shall not be liable for, any and all losses,
liabilities (including liabilities for penalties), actions, suits,
judgments, demands, damages, costs and expenses of any nature
(including, without limitation, interest and reasonable attorneys' fees,
expenses, and the allocable costs of in-house legal services) arising
out of or resulting from the exercise of your rights and/or the
performance of your duties (or those of your agents and employees)
hereunder; provided, however, that the Company shall not be liable to
indemnify or pay you with respect to any loss, liability, action, suit,
judgment, demand, damage, cost or expense that results from or is
attributable to your gross negligence or willful misconduct or that of
your officers or employees. The foregoing indemnity includes, but is not
limited to, any action taken or omitted to be taken by you upon telex,
telephonic or other electronically transmitted instructions (authorized
herein) received by you from, or believed by you in good faith to have
been given by, the proper person or persons. The provisions of this
Section 12 shall survive (i) your resignation or removal hereunder and
(ii) the termination of this Agreement.
13. Termination.
(a) This Agreement may be terminated at any time by either you or
the Company by 15 days' prior written notice to the other, provided that
you agree to continue acting as issuing and paying agent hereunder until
such time as your successor has been selected and has entered into an
agreement with the Company to that effect. Such termination shall not
affect the
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<PAGE>
respective liabilities of the parties hereunder arising prior to such
termination.
(b) If no successor has been appointed within 30 days of such
notice, you shall have the right to petition a court of competent
jurisdiction for the appointment of a successor issuing and paying
agent. You shall be reimbursed for any and all expenses in connection
with any such petition and appointment.
(c) On the Business Day following the date of termination of this
Agreement, you shall destroy all Certificated CP Notes in your
possession (or at the request of the Company, transfer the Notes to the
Successor Issuing and Paying Agent), and shall transfer to the Company
all funds, if any, then on deposit in the Note Account. You shall
promptly notify the Company of all Certificated CP Notes so destroyed.
14. Amendments and Modifications. No amendment, modification or
waiver of any provision of this Agreement, nor any consent to any
departure by any party from any provision hereof binding upon such
party, shall be effective unless the same shall be in writing and signed
by all the parties hereto.
15. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their respective
successors, including successors by merger, and assigns; provided,
however, that no party hereto may assign any of its rights or
obligations hereunder, except with the prior written consent of all the
other parties hereto.
16. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK.
(b) Each party irrevocably and unconditionally submits to the
exclusive jurisdiction of the United States Federal courts located in
the Borough of Manhattan and the courts of the State of New York located
in the Borough of Manhattan.
17. Execution in Counterparts. This Agreement may be executed in
any number of counterparts; each counterpart, when so executed and
delivered, shall be deemed to be an original; and all of which
counterparts, taken together, shall constitute one and the same
agreement.
18. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
19. Compensation and Expenses. The Company shall pay you from time
to time following the execution of this Depositary Agreement reasonable
compensation for all services
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<PAGE>
rendered by you hereunder as agreed between you and the Company. The
Company shall reimburse you upon your request for all reasonable
expenses, disbursements and advances incurred or made by you in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of your
agents, counsel and allocated costs of in-house counsel) except any
expense or disbursement attributable to your gross negligence or willful
misconduct.
20. Miscellaneous.
(a) No provision of this Agreement shall require you to risk your
own funds or otherwise incur any financial liability in the performance
of any of your duties hereunder or in the exercise of any of your duties
hereunder or in the exercise of any of your rights and powers hereunder.
(b) You may consult with counsel, and any written opinion of such
counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you, in
the absence of bad faith, gross negligence or willful misconduct on your
part, in reliance on such advice or opinion.
(c) You make no representation as to, and shall have no
responsibility for, the correctness of any statement contained in, or
the validity or sufficiency of, this Agreement or any documents or
instruments referred to in this Agreement or as to or for the validity
or collectibility of any obligation contemplated by this Agreement. You
shall not be accountable for the use or application by any person of
disbursements properly made by you in conformity with the provisions of
this Agreement.
(d) You may rely and shall be protected in acting upon any
document or writing presented to you hereunder and reasonably believed
by you to be genuine and to have been signed and presented by an
authorized person or persons.
11
<PAGE>
If the foregoing is acceptable to you, please indicate your
agreement therewith by signing one or more counterparts of this
Agreement in the space provided below, and returning such signed
counterpart(s) to the Company, whereupon this letter when signed by you
and the Company, will become a binding agreement among us.
Coca-Cola Bottling Co.
Consolidated
By: Brenda B. Jackson
Its: Vice President & Treasurer
Agreed to and Accepted
this 30th day of September, 1994.
BANKAMERICA NATIONAL TRUST COMPANY
as Issuing and Paying Agent
By: Mary LaGumina
Its: Trust Officer
12
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
1995 ANNUAL BONUS PLAN
PURPOSE
The purpose of the bonus plan is to provide additional incentive
to officers and employees of the Company in key positions.
PLAN ADMINISTRATION
The plan will be administered by the Compensation Committee as
elected by the Board of Directors. The Committee is authorized
to establish new guidelines for administration of the plan,
delegate certain tasks to management, make determinations and
interpretations under the plan, and to make awards pursuant to
the plan. All determinations and interpretations of the
Committee will be binding upon the Company and each participant.
PLAN GUIDELINES
ELIGIBILITY: The Compensation Committee is authorized to grant
cash awards to any officer, including officers who are directors
and to other employees of the Company and its affiliates in key
positions.
PARTICIPATION: Management will recommend annually key positions
which should qualify for awards under the plan. The Compensation
Committee has full and final authority in its discretion to
select the key positions eligible for awards. Management will
inform individuals in selected key positions of their
participation in the plan.
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<PAGE>
QUALIFICATION AND AMOUNT OF AWARD:
1. Participants will qualify for awards under the plan based
(a) Corporate goals set for the fiscal year.
(b) Division/Manufacturing Center goals or individual goals
set for the fiscal year.
(c) The Compensation Committee may, in its sole discretion,
amend or eliminate any individual award.
2. The gross amount of the award will be specified as a
percentage of base salary of the participant and will be
determined on the following basis:
Goal Achievement* Amount of Award
(in Percent) (as a % of max.)
89.0 or less O
89.1 - 94 80
94.1 - 97 90
97.1 - 100 100
100.1 - 105 110
105.1 - 110 120
3. The total cash award to the participant will be computed as
follows:
Gross Cash Award = Base Salary X approved bonus % X the
indexed performance factor X overall goal achievement
factor.
4. The Compensation Committee will review and approve all
awards. The Committee has full and final authority in its
discretion to determine the actual gross amount to be paid
to participants. The gross amount will be subject to all
local, state and federal minimum tax withholding
requirements.
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<PAGE>
5. Participant must be an employee of the Company on the date
of payment to qualify for an award. Any participant who
leaves the employ of the Company, voluntarily or
involuntarily, prior to the payment date, is ineligible for
any bonus. An employee who assumes a key position during
the fiscal year may be eligible for a pro-rated award at the
option of the Compensation Committee, provided the
participant has been employed a minimum of three (3) months
during the calendar year.
6. Awards under the bonus program will not be made if any
material aspects of the bottle contracts with The Coca-Cola
Company are violated.
PAYMENT DATE: Awards shall be paid upon notification from
the Company's independent auditors of the final results of
operations for the fiscal year. The Compensation Committee is
authorized to establish an earlier payment date based on
unaudited preliminary results.
SPECIAL AWARD PROVISION: Management may wish to recognize
outstanding performances by individuals who may or may not be in
eligible positions to receive an award. Management may recommend
awards for such individuals, and the Compensation Committee is
authorized to make such awards.
AMENDMENTS, MODIFICATIONS AND TERMINATION
The Compensation Committee is authorized to amend, modify or
terminate the plan retroactively at any time, in part or in
whole.
<PAGE>
EXHIBIT 10.83
<PAGE>
Coca-Cola Bottling Co. Consolidated
$400,000,000 Medium-Term Notes, Series B
Due More Than Nine Months
From Date of Issue
Selling Agency Agreement
March 3, 1995
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Citicorp Securities, Inc.
399 Park Avenue
New York, N.Y. 10043
Dear Sirs:
Coca-Cola Bottling Co. Consolidated, a Delaware corporation
(the "Company"), confirms its agreement with each of you with respect to
the issue and sale by the Company of up to $400,000,000 aggregate
principal amount of its Medium-Term Notes, Series B, Due More Than Nine
Months from Date of Issue (the "Notes"). The Notes will be issued under
an indenture dated as of July 20, 1994, as supplemented by a
supplemental indenture dated as of March 3, 1995 (as supplemented, the
"Indenture"), between the Company and NationsBank of Georgia, National
Association, as trustee (the "Trustee"). Unless otherwise specifically
provided for and set forth in a Pricing Supplement (as defined below),
the Notes will be issued in minimum denominations of $1,000 and in
denominations exceeding such amount by integral multiples of $1,000,
will be issued only in fully registered form and will have the interest
rates, maturities and, if applicable, other terms set forth in such
Pricing Supplement. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and the Medium- Term Notes
Administrative Procedures attached hereto as Exhibit A (the
"Procedures") (unless a Terms Agreement (as defined in Section 2(b))
modifies or otherwise supersedes such Procedures with respect to the
Notes issued pursuant to such Terms Agreement). The Procedures may be
amended only by written agreement of the Company and you after notice
to, and with the approval of, the Trustee. For the purposes of this
<PAGE>
2
Agreement, the term "Agent" shall refer to any of you acting solely in
the capacity as agent for the Company pursuant to Section 2(a) and not
as principal (collectively, the "Agents"), the term "Purchaser" shall
refer to one of you acting solely as principal pursuant to Section 2(b)
and not as agent, and the term "you" shall refer to you collectively
whether at any time any of you is acting in both such capacities or in
either such capacity. In acting under this Agreement, in whatever
capacity, each of you is acting individually and not jointly.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (d)
hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act"), and has filed with
the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (File Number: 33-54657),
including a basic prospectus, which has become effective, for the
registration under the Act of $400,000,000 aggregate initial
offering price of securities (the "Securities"), including the
Notes. Such registration statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(ix)
or (x) under the Act and complies in all other material respects
with said Rule. The Company has included in such registration
statement, or has filed or will file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act, a
supplement to the form of prospectus included in such registration
statement relating to the Notes and the plan of distribution
thereof (the "Prospectus Supplement"). In connection with the sale
of Notes, the Company proposes to file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act further
supplements to the Prospectus Supplement (each a "Pricing
Supplement") specifying the interest rates, maturity dates and, if
appropriate, other similar terms of the Notes sold pursuant hereto
or the offering thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, as of
the date of a Terms Agreement and at the date of delivery by the
Company of any Notes sold hereunder (a "Closing Date"), (i) the
Registration Statement, as amended as of any such time, the
Prospectus and the Indenture will comply in all mater-
<PAGE>
3
ial respects with the applicable requirements of the Act, the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the
Securities Exchange Act of 1934 (the "Exchange Act") and the
respective rules thereunder; (ii) the Registration Statement, as
amended as of any such time, did not or will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and (iii) the Prospectus will
not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement
of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in
or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by any of you
specifically for inclusion in the Registration Statement or the
Prospectus.
(c) As of the time any Notes are issued and sold hereunder,
the Indenture will constitute a legal, valid and binding instrument
enforceable against the Company in accordance with its terms and
such Notes will have been duly authorized, executed, authenticated
and, when paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture.
(d) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date"
shall mean the date on which the Execution Time occurs and each
date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective and each
date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall mean the
form of basic prospectus relating to the Securities contained in
the Registration Statement at the Effective Date. "Prospectus"
shall mean the Basic Prospectus as supplemented by one or more
Prospectus
<PAGE>
4
Supplements and Pricing Supplements. "Registration Statement"
shall mean the registration statement referred to in paragraph (a)
above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time. "Rule 415" and "Rule
424" refer to such rules under the Act. Any reference herein to
the Registration Statement, the Basic Prospectus, the Prospectus
Supplements or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, the Prospectus Supplements, the
Pricing Supplements or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus,
the Prospectus Supplements, the Pricing Supplements or the
Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus,
the Prospectus Supplements, the Pricing Supplements or the
Prospectus, as the case may be, deemed to be incorporated therein
by reference.
2. Appointment of Agents; Solicitation by the Agents of
Offers to Purchase; Sales of Notes to a Purchaser. (a) Subject to the
terms and conditions set forth herein, the Company hereby authorizes
each of the Agents to act as its agent to solicit offers for the
purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the Agents
agrees, as agent of the Company, to use its reasonable efforts to
solicit offers to purchase the Notes from the Company upon the terms and
conditions set forth in the Prospectus and in the Procedures. Each
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been
solicited by such Agent and accepted by the Company, but such Agent
shall not, except as otherwise provided in this Agreement, be obligated
to disclose the identity of any purchaser or have any liability to the
Company in the event any such purchase is not consummated for any
reason. Except as provided in Section 2(b), under no circumstances will
any Agent be obligated to purchase any Notes for its own account. It is
<PAGE> 5
understood and agreed, however, that any Agent may purchase Notes as
principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Upon receipt
of instructions from the Company, the Agents will forthwith suspend
solicitation of offers to purchase Notes from the Company until such
time as the Company has advised them that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, on the
Closing Date with respect to each sale of Notes by the Company as a
result of a solicitation made by such Agent, in an amount equal to that
percentage specified in Schedule I hereto of the aggregate principal
amount of the Notes sold by the Company. Such commission shall be
payable as specified in the Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by an
Agent as agent for the Company at such time and in such amounts as such
Agent deems advisable. The Company may from time to time offer Notes
for sale otherwise than through an Agent; provided, however, that so
long as this Agreement is in effect and has not been terminated in
accordance with Section 9 hereof, the Company shall not solicit or
accept offers to purchase Notes through any agent other than an Agent.
If the Company shall default in its obligations to deliver
Notes to a purchaser whose offer it has accepted, the Company shall
indemnify and hold each of you harmless against any loss, claim or
damage arising from or as a result of such default by the Company.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any of you determine that the Company shall
sell Notes directly to any of you as principal, each such sale of Notes
shall be made in accordance with the terms of this Agreement and a
supplemental agreement relating to such sale. Each such supplemental
agreement (which may be either an oral or written agreement) is herein
referred to as a "Terms Agreement". Each Terms Agreement shall describe
the Notes to be purchased by the Purchaser pursuant thereto and shall
specify the aggregate principal amount of such Notes, the price to be
paid to the Company for such Notes, the maturity date of such Notes, the
rate at which interest will be paid on such Notes, the dates
<PAGE> 6
on which interest will be paid on such Notes and the record date with
respect to each such payment of interest, the Closing Date for the
purchase of such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any requirements for the delivery of
opinions of counsel, certificates from the Company or its officers or a
letter from the Company's independent public accountants as described in
Section 6(b). Any such Terms Agreement may also specify the period of
time referred to in Section 4(m). Any written Terms Agreement may be in
the form attached hereto as Exhibit B. The Purchaser's commitment to
purchase Notes shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser
pursuant to a Terms Agreement shall be made not later than the Closing
Date agreed to in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by the
method and in the form set forth in the Procedures unless otherwise
agreed to between the Company and the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall
be purchased by such Purchaser at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to
an agency sale of a Note of identical maturity and (ii) may be resold by
such Purchaser at varying prices from time to time or, if set forth in
the applicable Terms Agreement and Pricing Supplement, at a fixed public
offering price. No additional commission shall be paid by the Company to
a Purchaser or to any other person in connection with any resale of
Notes. In connection with any resale of Notes purchased, a Purchaser
may use a selling or dealer group and may reallow to any broker or
dealer any portion of the discount or commission payable pursuant
hereto.
3. Offering and Sale of Notes. Each Agent and the Company
agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
<PAGE> 7
4. Agreements. The Company agrees with you that: (a) Prior
to the termination of the offering of the Notes (including by way of
resale by a Purchaser of Notes), the Company will not file any amendment
of the Registration Statement or supplement to the Prospectus (except
for (i) periodic or current reports filed under the Exchange Act, (ii) a
supplement relating to any offering of Notes providing solely for the
specification of or a change in the maturity dates, interest rates,
issuance prices or other similar terms of any Notes or (iii) a
supplement relating to an offering of Securities other than the Notes)
unless the Company has furnished each of you a copy for your review
prior to filing and given each of you a reasonable opportunity to
comment on any such proposed amendment or supplement. Subject to the
foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. The Company will
promptly advise each of you (i) when the Prospectus, and any supplement
thereto, shall have been filed with the Commission pursuant to Rule
424(b), (ii) when, prior to termination of any offering of Notes, any
amendment of the Registration Statement shall have been filed or become
effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or supplement to the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend the
<PAGE>
8
Registration Statement or to supplement the Prospectus to comply
with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend such
solicitation and cease using the Prospectus as then supplemented),
(ii) prepare and file with the Commission, subject to the first
sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect
such compliance and (iii) supply any supplemented Prospectus to
each of you in such quantities as you may reasonably request. If
such amendment or supplement, and any documents, certificates and
opinions furnished to each of you pursuant to paragraph (g) of this
Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to you,
you will, upon the filing of such amendment or supplement with the
Commission and upon the effectiveness of an amendment to the
Registration Statement, if such an amendment is required, resume
your obligation to solicit offers to purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating
to the Notes is required to be delivered under the Act, will file
promptly all documents required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
and will furnish to each of you copies of such documents. In
addition, on or prior to the date on which the Company makes any
announcement to the general public concerning earnings or
concerning any other event which is required to be described, or
which the Company proposes to describe, in a document filed
pursuant to the Exchange Act, the Company will furnish to each of
you the information contained or to be contained in such
announcement (subject, in the case of non-public information, to
your agreement to take all reasonable steps to preserve the
confidentiality of such information until it is publicly released).
The Company also will furnish to each of you copies of all material
press releases or announcements furnished to news or wire services
and any other material press releases and announcements. The
Company will immediately notify each of you of (i) any decrease in
the rating of the Notes or any other debt securities of the Company
by any "nationally recognized statistical rating organization"
(as defined for purposes of
<PAGE>
9
Rule 436(g) under the Act) or (ii) any notice given of any intended
or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the
possible change, as soon as the Company learns of any such decrease
or notice (subject, in the case of non-public information, to your
agreement to take all reasonable steps to preserve the
confidentiality of such information until it is publicly released).
(d) As soon as practicable, the Company will make generally
available to its security holders and to each of you an earnings
statement or statements of the Company and its subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(e) The Company will furnish to each of you and your counsel,
without charge, copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus
may be required by the Act, as many copies of the Prospectus and
any supplement thereto as you may reasonably request.
(f) The Company will arrange for the qualification of the
Notes for sale under the laws of such jurisdictions as any of you
may designate, will maintain such qualifications in effect so long
as required for the distribution of the Notes, and will arrange for
the determination of the legality of the Notes for purchase by
institutional investors; provided, however, that, in connection
therewith, the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it is not then
so qualified, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any
such jurisdiction where it is not then so subject.
(g) The Company shall furnish to each of you such
information, documents, certificates of officers of the Company and
opinions of counsel for the Company relating to the business,
operations and affairs of the Company, the Registration Statement,
the Prospectus, and any amendments thereof or supplements thereto,
the Indenture, the Notes, this Agreement, the Procedures and the
performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to
time and at any time prior
<PAGE>
10
to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes
is consummated, (i) pay all expenses incident to the performance of
its obligations under this Agreement and any Terms Agreement,
including the fees and disbursements of its accountants and
counsel, the cost of printing or other production and delivery of
the Registration Statement, the Prospectus, all amendments thereof
and supplements thereto, the Indenture, this Agreement, any Terms
Agreement and all other documents relating to the offering, the
cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements, including fees of counsel, incurred in
compliance with Section 4(f), the fees and disbursements of the
Trustee and the fees of any agency that rates the Notes, (ii)
reimburse each of you as requested for all out-of-pocket expenses
(including without limitation advertising expenses), if any,
incurred by you in connection with this Agreement and (iii) pay the
fees and expenses of your counsel incurred in connection with this
Agreement.
(i) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its representations
and warranties contained in this Agreement are true and correct at
the time of such acceptance, as though made at and as of such time,
and a covenant that such representations and warranties will be
true and correct at the time of delivery to the purchaser of the
Notes relating to such acceptance, as though made at and as of such
time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall
relate to the Registration Statement and Prospectus as amended or
supplemented at each such time). Each such acceptance by the
Company of an offer for the purchase of Notes shall be deemed to
constitute an additional representation, warranty and agreement by
the Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes, of any
other Notes to be issued on or prior to such settlement date
and of any other Securities to be issued and sold by the Company on
or prior to such settlement date, the aggregate amount of
Securities (including any Notes) which have been issued and sold by
the Company will not exceed the amount of Securities registered
pursuant to the Registration Statement. The Company will inform
you promptly upon your request of
<PAGE>
11
the aggregate amount of Securities registered under the
Registration Statement which remain unsold.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment
or supplement relating to any offering of Securities other than the
Notes or providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or
other similar terms of any Notes sold pursuant hereto), the Company
will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by any two of the principal
financial officer, the treasurer or the principal accounting
officer of the Company, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form
reasonably satisfactory to you, of the same tenor as the
certificate referred to in Section 5(d) but modified to relate to
the last day of the fiscal quarter for which financial statements
of the Company were last filed with the Commission and to the
Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or
the filing of such supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment
or supplement (i) relating to any offering of Securities other than
the Notes, (ii) providing solely for the specification of or a
change in the maturity dates, the interest rates, the issuance
prices or other similar terms of any Notes sold pursuant hereto or
(iii) setting forth or incorporating by reference financial
statements or other information as of and for a fiscal quarter,
unless, in the case of clause (iii) above, in the reasonable
judgment of any of you, such financial statements or other
information are of such a nature that an opinion of counsel should
be furnished), the Company shall furnish or cause to be furnished
promptly to each of you a written opinion of counsel of the Company
satisfactory to each of you, dated the date of the effectiveness
of such amendment or the date of the filing of such supplement, in
form satisfactory to each of you, of the same tenor as the opinion
referred to in Section 5(b) but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment
or the filing of such supplement or, in lieu of such opinion,
counsel last furnishing such an opinion to you may furnish each of
<PAGE>
12
you with a letter to the effect that you may rely on such last
opinion to the same extent as though it were dated the date of such
letter authorizing reliance (except that statements in such last
opinion will be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supple-
ment).
(l) Each time that the Registration Statement or the
Prospectus is amended or supplemented to include or incorporate
amended or supplemental financial information, the Company shall
cause its independent public accountants promptly to furnish each
of you a letter, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in
form satisfactory to each of you, of the same tenor as the letter
referred to in Section 5(e) with such changes as may be necessary
to reflect the amended and supplemental financial information
included or incorporated by reference in the Registration Statement
and the Prospectus, as amended or supplemented to the date of
such letter; provided, however, that, if the Registration Statement
or the Prospectus is amended or supplemented solely to include or
incorporate by reference financial information as of and for a
fiscal quarter, the Company's independent public accountants may
limit the scope of such letter, which shall be satisfactory in
form to each of you, to the unaudited financial statements, the
related "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and any other information of
an accounting, financial or statistical nature included in such
amendment or supplement, unless, in the reasonable judgment of any
of you, such letter should cover other information or changes in
specified financial statement line items.
(m) During the period, if any, specified (whether orally or
in writing) in any Terms Agreement, the Company shall not, without
the prior consent of the Purchaser thereunder, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly,
or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Notes being sold pursuant
to such Terms Agreement).
(n) The Company confirms as of the date hereof, and during
the term of this Agreement, and each acceptance by the Company of
an offer to purchase Notes will be deemed to be an affirmation,
that the Company
<PAGE>
13
is in compliance with all provisions of Section 1 of Laws of
Florida, Chapter 92-198, An Act Relating to Disclosure of Doing
Business with Cuba, and the Company further agrees that if it
commences engaging in business with the government of Cuba or with
any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the
Securities and Exchange Commission or with the Florida Department
of Banking and Finance (the "Department"), whichever date is later,
or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(o) The Company shall not be required to comply with the
provisions of subsections (b), (j) and (l) of this Section 4 during
any period (which may occur from time to time during the term of
this Agreement) for which the Company has instructed the Agents to
suspend the solicitation of offers to purchase Notes; provided
that, during any such period, any Purchaser does not then hold any
Notes purchased pursuant to a Terms Agreement. The Company shall
be required to comply with the provisions of subsections (b), (j)
and (l) of this Section 4 prior to instructing the Agents to resume
the solicitation of offers to purchase Notes or prior to entering
into a Terms Agreement.
5. Conditions to the Obligations of the Agents. The
obligations of each Agent to solicit offers to purchase the Notes shall
be subject to the accuracy of the representations and warranties on
the part of the Company contained herein as of the Execution Time, on
the Effective Date, when any supplement to the Prospectus is filed with
the Commission and as of each Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have
<PAGE>
14
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to each Agent the
opinion of Witt, Gaither & Whitaker, P.C., counsel for the Company,
dated the Execution Time, to the effect that:
(i) each of the Company, Coca-Cola Bottling Co.
Affiliated, Inc., Coca-Cola Bottling Company of Mobile, Inc.,
Coca-Cola Bottling Company of Nashville, Inc., Coca-Cola
Bottling Company of Roanoke, Inc., Columbus Coca-Cola Bottling
Company, Fayetteville Coca-Cola Bottling Company, Panama City
Coca-Cola Bottling Company, Tennessee Soft Drink Production
Company, The Coca-Cola Bottling Company of West Virginia,
Inc., Metrolina Bottling Company, COBC, Inc., ECBC, Inc.,
MOBC, Inc., NABC, Inc., PCBC, Inc., ROBC, Inc., WCBC, Inc.,
and WVBC, Inc. (individually a "Subsidiary" and collectively
the "Subsidiaries") is duly incorporated and validly exists
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own, lease and operate its
properties, and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business,
other than jurisdictions where the failure so to qualify would
not have a material adverse effect;
(ii) the Company's 50% owned general partnership,
Piedmont Coca-Cola Bottling Partnership ("Piedmont") is duly
organized and validly existing under the laws of the State of
Delaware, with full power and authority to own, lease and
operate its properties, and to conduct its business as
described in the Prospectus and each of its corporate partners
is duly registered and qualified and is in good standing as a
foreign corporation authorized to do business in each
jurisdiction which requires such qualification wherein
Piedmont owns or leases material properties or conducts
material business, other than jurisdictions where the failure
so to qualify would not have a material adverse effect.
<PAGE>
15
(iii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital
stock of the Subsidiaries and the 50% partnership interest in
Piedmont are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iv) the Company's authorized equity capitalization is as
set forth in the Prospectus; and the Notes conform to the
description thereof contained in the Prospectus (subject to
the insertion in the Notes of the maturity dates, the interest
rates and other similar terms thereof which will be described
in supplements to the Prospectus as contemplated by the fourth
sentence of Section 1(a) of this Agreement);
(v) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture
Act, and the Indenture constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights and remedies
generally from time to time in effect); and the Notes have
been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled
to the benefits of the Indenture;
(vi) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries or
Piedmont, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
<PAGE>
16
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated by reference in the
Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company, its
Subsidiaries and Piedmont fairly summarize such matters;
(vii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been or will
be made in the manner and within the time period required by
Rule 424(b); to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or threatened; and the Registration
Statement and the Prospectus (other than the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the
Trust Indenture Act and the respective rules thereunder; and
such counsel has no reason to believe that the Registration
Statement at the Effective Date or at the Execution
Time contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(viii) this Agreement has been duly authorized, executed
and delivered by the Company;
(ix) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein except
such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the sale of the Notes as contemplated by this
Agreement and such other
<PAGE>
17
approvals (specified in such opinion) as have been obtained;
(x) neither the execution and delivery of the Indenture,
the issue and sale of the Notes, nor the consummation of any
other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of, or constitute a default under any
law or the charter or by-laws of the Company or the terms of
any indenture or other agreement or instrument known to such
counsel and to which the Company or any of its Subsidiaries or
Piedmont is a party or bound or any judgment, order,
regulation or decree known to such counsel to be applicable to
the Company or any of its Subsidiaries or Piedmont of any
court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Company or any
of its Subsidiaries or Piedmont;
(xi) no holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement; and
(xii) the information contained in the Prospectus under
the caption "United States Tax Considerations" is a fair and
accurate summary of the principal Federal income tax
consequences associated with the ownership of the Notes.
In rendering such opinion, Witt, Gaither & Whitaker, P.C. may rely
(A) as to matters involving the application of laws of any
jurisdiction other than the State of Delaware and Tennessee or the
United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel for the
Agent and (B) as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (b)
include any supplements thereto at the date such opinion is
rendered.
(c) Each Agent shall have received from Cravath, Swaine &
Moore, counsel for the Agents, such opinion or opinions, dated the
date hereof, with respect to the issuance and sale of the Notes,
the Indenture, the Registration Statement, the Prospectus (together
with
<PAGE>
18
any supplement thereto) and other related matters as the
Agents may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a
certificate of the Company, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of
the Company, dated the Execution Time, to the effect that the
signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the date hereof with the same effect as if made
on the date hereof and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation of the
Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries or Piedmont,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(e) At the Execution Time, Price Waterhouse shall have
furnished to each Agent a letter or letters (which may refer to
letters previously delivered to the Agents), dated as of the
Execution Time, in form and substance satisfactory to the Agents,
confirming that they are independent accountants within the meaning
of
<PAGE>
19
the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and that they have
performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information in accordance with, and as described in, Statement of
Auditing Standards No. 71 for the latest unaudited financial
statements in or incorporated in the Registration Statement or the
Prospectus and stating in effect that:
(i) in their opinion the audited financial statements,
financial statement schedules and pro forma financial
statements of the Company and its subsidiaries and of Piedmont
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with
standards established by the American Institute of Certified
Public Accountants under Statement of Auditing Standards No.
71, of the unaudited interim financial information of the
Company and its subsidiaries, carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the executive,
finance, audit, pension and compensation committees of the
Company and the Subsidiaries and of the partnership
proceedings of Piedmont; and inquiries of certain officials of
the Company and Piedmont who have responsibility for financial
and accounting matters of the Company and its subsidiaries and
of Piedmont as to transactions and events subsequent to the
date of the most recent audited financial statements in or
<PAGE>
20
incorporated in the Prospectus, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the
Prospectus do not comply in form in all material respects
with applicable accounting requirements and with the pub-
lished rules and regulations of the Commission with
respect to financial statements included or incorporated
in quarterly reports on Form 10-Q under the Exchange Act;
or that said unaudited financial statements are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited financial statements included or incorporated
in the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to the
date of the most recent financial statements (other than
any capsule information), audited or unaudited, included
or incorporated in the Regis- tration Statement and the
Prospectus, there were any increases, at a specified date
not more than five business days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries and of Piedmont or capital stock of the
Company or decreases in the stockholders' equity of the
Company as compared with the amounts shown on the most
recent consolidated balance sheet included or
incorporated in the Registration Statement and the
Prospectus, or for the period from the date of the most
recent financial statements included or incorporated in
the Registration Statement and the Prospectus to such
specified date there were any decreases, as compared with
the corresponding period in the preceding year in net
sales, gross margin, income from operations, income
before income taxes and effect from accounting changes or
in total or per share amounts of net income applicable to
common stockholders of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the
<PAGE>
21
Company as to the significance thereof unless said
explanation is not deemed necessary by the Agents;
(3) the information included in the Registration
Statement and the Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402
(Executive Compensation) and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K; or
(4) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Prospectus do not agree with the
amounts set forth in the unaudited financial statements
for the same periods or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company, its subsidiaries and Piedmont) set forth in the
Registration Statement and the Prospectus and in Exhibit 12 to
the Registration Statement, including the information included
or incorporated in Items 1, 2, 6, 7 and 11 of the Company's
Annual report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated
in the Company's Quarterly Reports on Form 10-Q, incorporated
in the Registration Statement and the Prospectus, agrees with
the accounting records of the Company, its subsidiaries and
Piedmont, excluding any questions of legal interpretation; and
<PAGE>
22
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and
the acquired company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro
forma financial statements do not comply in form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in
this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to such Agents
and counsel for the Agents, this Agreement and all obligations of any
Agent hereunder may be canceled at any time by the Agents. Notice of
such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Agents, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, as of
the Execution Time.
6. Conditions to the Obligations of a Purchaser. The
obligations of a Purchaser to purchase any Notes will be subject to the
accuracy of the representations and warran-
<PAGE>
23
ties on the part of the Company herein as of the date of the related
Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and observed and
to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as
of the Closing Date, to the effect set forth in Section 5(d), (ii)
the opinion of Witt, Gaither & Whitaker, P.C., counsel for the
Company, dated as of the Closing Date, to the effect set forth in
Section 5(b), (iii) the opinion of Cravath, Swaine & Moore, counsel
for the Purchaser, dated as of the Closing Date, to the effect set
forth in Section 5(c), and (iv) the letter of Price Waterhouse,
independent accountants for the Company, dated as of the Closing
Date, to the effect set forth in Section 5(e) (except that
references to the Prospectus in any of such documents shall be to
the Prospectus as supplemented as of the date of such Terms
Agreement).
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates
and documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in
this Agreement and the applicable Terms Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement
or such Terms Agreement and required to be delivered to the Purchaser
pursuant to the terms hereof and thereof shall not be in all material
respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject thereto may
be canceled at, or at any time prior to, the respective Closing Date by
the Purchaser. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.
<PAGE>
24
7. Right of Person Who Agreed to Purchase to Refuse to
Purchase. (a) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the
Agents shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, any condition set forth in Section 5 or 6, as
applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the
Agents shall have the right to refuse to purchase such Note if,
subsequent to the agreement to purchase such Note, any change, condition
or development specified in any of Sections 9(b)(i) through (v) shall
have occurred (with the judgment of the Agent which presented the offer
to purchase such Note being substituted for any judgment of a Purchaser
required therein) the effect of which is, in the judgment of the Agent
which presented the offer to purchase such Note, so material and adverse
as to make it impractical or inadvisable to proceed with the sale and
delivery of such Note (it being understood that under no circumstance
shall any such Agent have any duty or obligation to the Company or to
any such person to exercise the judgment permitted to be exercised under
this Section 7(b) and Section 9(b)).
8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each of you, the directors, officers,
employees and agents of each of you and each person who controls each of
you within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to
which you, they or any of you or them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the
Prospectus or any preliminary Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company
<PAGE>
25
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by any of you specifically for
inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement and each person who controls the Company within
the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to you, but only with reference
to written information relating to such of you furnished to the Company
by such of you specifically for inclusion in the documents referred to
in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which you may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page, and under the heading "Plan of Distribution", of the
Prospectus Supplement constitute the only information furnished in
writing by any of you for inclusion in the documents referred to in the
foregoing indemnity, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not,
in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be
satisfactory to the
<PAGE>
26
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ one separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and each of
you agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses")
to which the Company and one or more of you may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company and by each of you from the offering of the Notes from
which such Losses arise; provided, however, that in no such case shall
any of you be responsible for any amount in excess of the commissions
received by such of you in connection with the sale of Notes from which
such Losses arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been received by
such of you if such commissions had been payable). If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Company and each of you shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and of each of you in connection with
the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Notes from which such Losses
arise, and benefits received by each of you shall be deemed to be equal
to the total commissions received by such
<PAGE>
27
of you in connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by such of you if
such commissions had been payable). Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates
to information provided by the Company or any of you. The Company and
each of you agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method
of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls any of you within the meaning of the Act or the Exchange Act
and each director, officer, employee and agent of any of you shall have
the same rights to contribution as you and each person who controls
the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. Termination. (a) This Agreement will continue in effect
until terminated as provided in this Section 9. This Agreement may be
terminated either by the Company as to any Agent or by any Agent insofar
as this Agreement relates to such Agent, by giving written notice of
such termination to such Agent or the Company, as the case may be. This
Agreement shall so terminate at the close of business on the first
business day following the receipt of such notice by the party to whom
such notice is given. In the event of such termination, no party shall
have any liability to the
<PAGE>
28
other party hereto, except as provided in the fourth paragraph of
Section 2(a), Section 4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company
prior to delivery of any payment for any Note to be purchased
thereunder, if prior to such time (i) there shall have occurred,
subsequent to the agreement to purchase such Note, any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries or of Piedmont, the
effect of which is, in the judgment of the Purchaser, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of such Note, (ii) there shall have been,
subsequent to the agreement to purchase such Note, any decrease in the
rating of any of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change,
(iii) trading in the Company's Common Stock or Class C Common Stock
shall have been suspended by the New York Stock Exchange or the National
Association of Securities Dealers Automated Quotation National Market
System or trading in securities generally on the New York Stock Exchange
or the National Association of Securities Dealers Automated Quotation
National Market System shall have been suspended or limited or minimum
prices shall have been established on such Exchange or market system,
(iv) a banking moratorium shall have been declared by either Federal or
New York State authorities or (v) there shall have occurred any outbreak
or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to proceed with the offering or
delivery of such Notes as contemplated by the Prospectus (exclusive of
any supplement thereto).
10. Survival of Certain Provisions. The respective
agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of each of you set forth
in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of you or
the Company or any of the directors, officers, employees, agents or
controlling persons referred to in Section 8 hereof, and
<PAGE>
29
will survive delivery of and payment for the Notes. The provisions of
Sections 4(h) and 8 hereof shall survive the termination or cancellation
of this Agreement. The provisions of this Agreement (including without
limitation Section 7 hereof) applicable to any purchase of a Note for
which an agreement to purchase exists prior to the termination hereof
shall survive any termination of this Agreement. If at the time of
termination of this Agreement any Purchaser shall own any Notes with the
intention of selling them, the provisions of Section 4 shall remain in
effect until such Notes are sold by the Purchaser.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to any of you, will be
mailed, delivered or telecopied and confirmed to such of you, at the
address specified in Schedule I hereto; or, if sent to the Company, will
be mailed, delivered or telecopied and confirmed to it at 1900 Rexford
Road, Charlotte, North Carolina 28211, attention of the Treasurer
(Telecopy No.: (704) 551-4451), with a copy sent to the Company's
counsel, Witt, Gaither & Whitaker, P.C., at 1100 American National Bank
Building, Chattanooga, Tennessee 37402, attention of Ralph M. Killebrew,
Jr., Esq. (Telecopy No.: (615) 266-4138).
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
directors, officers, employees, agents and controlling persons referred
to in Section 8 hereof and, to the extent provided in Section 7, any
person who has agreed to purchase Notes, and no other person will have
any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance
with your understanding of our agreement, please sign and return to us
the
<PAGE>
30
enclosed duplicate hereof, whereupon this letter and your acceptance
shall represent a binding agreement among the Company and you.
Very truly yours,
Coca-Cola Bottling Co. Consolidated
By: /s/ Brenda Jackson
Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
Salomon Brothers Inc
By:
/s/ Pamela Kendall
Vice President
Citicorp Securities, Inc.
By:
/s/ Donald J. Donahue
Vice President
Exhibit 10.84
First Amendment to Employment Agreement
This agreement shall be effective as of May 18, 1994, by and between
Coca-Cola Bottling Co. Consolidated, a Delaware Corporation (hereinafter
the "Company") and James L. Moore, Jr. (the "Employee")
Whereas, the Company and Employee desire to amend the Employment
Agreement between them dated as of March 16, 1987 (hereinafter the
"Employment Agreement") in the manner set forth herein.
Now, therefor, in consideration of the premises, the obligations of the
parties set forth herein, and other good and sufficient consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. The second and third sentences of Section 1, of the Employment
Agreement entitled "Employment" shall be deleted and the following shall
be substituted therefor.
"Employee shall serve as the Company's President and Chief
Operating Officer, and shall perform the duties generally and
customarily performed by a President and Chief Operating Officer and
such other duties as may be reasonably assigned to Employee by the Vice
Chairman and Chief Executive Officer. These duties shall include the
general supervision and control of the management of operations of the
Company."
2. Section 4, Subsection (c) of the Employment Agreement shall be
deleted in its entirety and the following shall be substituted
therefor.
"In the event the Employee is terminated without cause by the
Company, Employee shall receive his salary (i) specified in Section
2(a) for the period through May 18, 1999 or (ii) for a period of two
(2) years from the date of such termination at the specified annual rate
of $440,000, whichever is greater, and he shall be provided with health
insurance under the Company's plan then in effect for officers of the
Company generally, throughout such period."
3. The Employment Agreement shall continue in effect unchanged except
as herein specifically provided for.
This amendment has been executed and delivered to be effective the date
specified above.
Attest: Coca-Cola Bottling Co. Consolidated
John F. Henry
Secretary BY: J. Frank Harrison, III
Vice Chairman & CEO
Witness: Employee:
David V. Singer
James L. Moore, Jr.
President & COO
Exhibit 10.85
March 1, 1994
Board of Directors
South Atlantic Canners
601 Cousar Street
Bishopville, SC 29010
Dear Sirs:
This letter is intended to outline our mutual intent to
establish a long term relationship under which Coca-Cola Bottling Co.
Consolidated and or it's affiliates, ("CCBCC"), would maintain long term
membership in the South Atlantic Canners production co-operative
("SAC"). As inducement to enter into this long term arrangement, SAC
will hire CCBCC to manage SAC pursuant to a long term management
agreement (the "Contract"). During the term of the Contract, the SAC
Board of Directors (the "BOD") will use its best efforts to see that a
representative of CCBCC will be elected to serve on the BOD. This
letter is intended to summarize the general intent of the parties with
regard to this transaction, which will be more fully described in the
Contract and a membership agreement between SAC and CCBCC.
Upon execution of the Contract CCBCC will agree to long term
membership at SAC with a minimum annual commitment to purchase 4 million
cases of cans, and a commitment for 20oz PET and 2 Liter PET to be
determined ("CCBCC Membership"). Under the Contract, CCBCC will be paid
to manage the day to day operations of SAC under the direction of the
BOD. As part of the Contract, it will be CCBCC's responsibility to
oversee the acquisition and installation of two high speed production
lines, one generally suited for 2 liter PET bottles and one generally
suited for 20 ounce PET bottles, (the "Expansion"). CCBCC Membership
will not become effective if the BOD does not authorize the Expansion
and the required financing or if the Expansion cannot be undertaken for
unforeseen circumstances. Upon execution of this letter agreement,
CCBCC will begin to plan the Expansion and will have 60 days to
determine the ultimate feasibility of the Expansion and its projected
costs. If the Expansion is deemed to be feasible, can be accomplished
for not more than $15 million, the BOD approves the capital
expenditures, acceptable financing is obtained and the Contract is
<PAGE>
executed, CCBCC will immediately begin to undertake the Expansion and
CCBCC Membership will become effective.
Existing members will not be required to purchase PET bottle
products from SAC. It is anticipated that SAC will finance the
Expansion under a bank agreement which will require loan guarantees.
SAC members that choose to purchase PET bottle products will be required
to provide loan guarantees using an allocation method similar to that
used at Southeastern Container.
SAC will amend its Bylaws to authorize the BOD to enter into a
management contract of the type contemplated in this letter. No changes
in the by-laws of SAC are contemplated under this agreement. SAC
will remain a separate legal entity in its current form without change.
It is anticipated that the PET operation of SAC will be established as a
separate allocation unit within SAC, and allocations of net earnings
from the PET operation will be made to the members of SAC who
participate in this unit.
Management Agreement Outline:
Duration: Long term contract (10 years+)
Management Fee: CCBCC will receive $.15 for each physical case produced
at SAC. The fee will be increased annually by the increase in the CPI*.
The management fee will compensate CCBCC for all of the services it
normally provides to its production centers out of its Charlotte, NC
headquarters operation (a summary of these services is attached). All
costs incurred on behalf of SAC by CCBCC (with the exception of the
Charlotte based services) including the cost for all employees that are
located "on site" at SAC will be charged to SAC. "On site" employees
include all direct and indirect labor as well as all management and
administrative employees that are based in Bishopville.
Responsibilities of the BOD and CCBCC: As required by law, the business
and affairs of SAC will be exercised under the direction of the BOD. In
this regard, the BOD will set policies for the organization, approve the
annual budget, review and supervise the financial performance of the
company, review and approve long and short term business plans, approve
major financial undertakings, include major financial commitments, and
generally supervise the performance of the company in accordance with
the direction established by the BOD. It will be the BOD's
responsibility to assure that all costs will be allocated fairly to the
various products produced at SAC. Product pricing and rebates will be
at the discretion of the BOD and will be the same for all members
participating in all units including the new PET allocation unit.
*Not to exceed a total management fee of 25c per case for the first 10
years of the agreement, with increases thereafter as provided in the
final document.
<PAGE>
The day to day affairs of the company will be handled by CCBCC which
shall provide management services to SAC under the Contract. In this regard,
CCBCC will produce products which meet franchise company specifications
and will deliver all products within reasonable age standards as
approved by the BOD. CCBCC will prepare annual budgets for BOD review
and approval and will report monthly financial results in a format
acceptable to the BOD which generally communicate SAC's financial
position and financial performance versus budget. CCBCC will be
responsible for general accounting, billing, collections, accounts
payable, payroll, maintenance of fixed asset records, tax accounting and
return preparation, negotiation of and administration of all financings,
purchasing of raw materials, administration of benefit plans,
acquisition of insurance policies, monitoring compliance with all
relevant EPA and OSHA regulations, internal audit of policy compliance
and any other services generally provided by Charlotte HQ based
employees for CCBCC's manufacturing operations. As discussed above, the
performance of these duties will be the responsibility of CCBCC, however
the cost of these times will be borne by either CCBCC or SAC based on
the model that all functions that are currently being performed by Charlotte
HQ based personnel will be covered by the management fee and all "on
site" employees' costs and third party fees and other charges for
specific materials or service will be borne by SAC. An exhaustive list
of these services will be prepared and attached to the final agreement.
CCBCC will also perform such other management functions in the normal
course of business as may be determined from time to time by the BOD.
The members will provide reasonable estimates of annual volume
requirements by brand and package to CCBCC for planning purposes each
year for CCBCC to use in preparing annual budgets. The members will
also provide product orders to CCBCC in a manner and within time
parameters as reasonably requested by CCBCC.
CCBCC has a firm policy of working to maintain a union free work
environment. The BOD will authorize CCBCC as manager to use all
reasonable means to ensure that SAC maintains its union free status.
The BOD will authorize annually or as deemed necessary by the BOD an
independent audit of the financial results and financial position of
SAC. CCBCC will provide full access to its books and records to SAC
auditors. However, CCCBCC will not be required to provide sensitive
information, including but not limited to its raw material costs to SAC
members. These costs will be provided to independent auditors as needed
in the audit process but they will be bound by confidentiality with
regard to releasing this information. CCBCC will represent, and
auditors can confirm, that the amounts charged to SAC for materials and
services purchased on its behalf will be the actual
<PAGE>
costs incurred by CCBCC. With exception for potential differing
specifications, source of supply and freight cost, it is CCBCC's intent
that materials purchased on behalf of SAC will be identical in cost and
quality to those purchased for CCBCC directly.
The BOD will provide CCBCC the authority required to meet its
responsibilities as manager and will use reasonable business judgment
in considering annual operating and capital spending budget proposals
submitted by CCBCC as manager. The BOD will also use reasonable
business judgment in considering changes to these budgets based on
changes in the underlying cost assumptions or production volume
requirements. It will be the BOD's responsibility to assure that all
costs will be allocated fairly to the various products produced at SAC.
Product pricing and rebates will be at the discretion of the BOD and
will be the same for all members.
The Contract will provide for reasonable quality and service standards
which must be met by CCBCC (definitions to be included in the final
agreement). If CCBCC is in violation of these requirements or otherwise
fails to comply in all material respects with the policies and
directions of the BOD and, within 90 days following written notice from
the BOD, is unable to comply, the BOD will have the right to cancel the
Contract. In order for the BOD to cancel the Contract it must determine
in its reasonable business judgment that an alternative manager could
have meet the performance requirements during the time of CCBCC's
non-compliance and the BOD must require similar performance requirements
of the management it chooses to replace CCBCC. In the event the BOD
chooses to cancel the Contract, CCBCC will have the option to continue
its Membership. After termination, CCBCC will have the same rights to
cancel its purchase commitments as any other SAC member with regard to
product pricing, however, in the event CCBCC cancels its purchase
commitments, it may not withdraw from its guarantee of the debt used for
the Expansion, except in accordance with the terms of the guarantee. If
the Contract is terminated, CCBCC must provide such services in the
Contract requested by the BOD during a reasonable transition period
under the then existing terms of the Contract.*
Other: In the unlikely event after this transaction is consummated
there is a dispute between the parties that cannot be resolved in the
ordinary course of business, each party will designate a representative
to meet and negotiate in good faith for up to 5 business days. If these
negotiations are not successful in resolving the issue, the parties
agree to binding arbitration of the dispute to be scheduled as soon as
is practical under the circumstances.
* CCBCC will sign the same basic purchase agreement as other members.
CCBCC will have the same right to terminate its membership and
discontinue purchasing as other members; provided, however, that CCBCC
will not terminate its membership or discontinue purchasing at specified
levels while it serves as manager of SAC.
<PAGE>
CCBCC has reviewed the financial statements of SAC dated as of 8-31-93
and is operating under the assumption that SAC's financial position was
accurately reflected in these statements and that no material adverse
changes have occurred with respect to SAC's financial condition
subsequent to 8-31-93.
By signing below, the parties are committing to work in good faith and as
quickly as can be reasonably expected to negotiate mutually acceptable
documentation for the transaction as outlined in this letter. With
exception of this commitment to negotiate in good faith, the parties are
not contractually obligated to each other with respect to the matters
discussed herein until the final documentation contemplated by this
letter has been executed. The final agreements are subject to formal
approval by the Boards of Directors of CCBCC and SAC.
Agreed to on March 1, 1994 by:
David V. Singer A.T. Heath, III
Vice President and Chief Financial Officer Chairman of the Board
Coca-Cola Bottling Co. Consolidated South Atlantic Canners
EXHIBIT 10.86
STOCK OPTION AGREEMENT
THIS AGREEMENT is issued to be effective March 8, 1989, the date the
Board of Directors of Coca-Cola Bottling Co. Consolidated granted the
option described herein and evidenced hereby.
Coca-Cola Bottling Co. Consolidated (hereinafter the "Company") for due
consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agrees as follows:
1. Grant of Option. J. Frank Harrison, Jr. is hereby granted
effective March 8, 1989 an option for the purchase of 100,000 shares of
Common Stock, $1 par value, of the Company (the "Option Shares") subject to
the terms and conditions herein provided. The option may be exercised
in whole or in part at varying times until an aggregate of 100,000
Option Shares shall have been purchased.
2. Purchase Price and Payment Terms. The purchase price of the
Option Shares is $27.00 per share, representing the closing sales price
of the Company's Common Stock on March 8, 1989 as reported by NASD. The
price shall be paid in cash, or in the absolute discretion of the Company,
by promissory note providing for reasonable terms of payment and interest,
by property having a fair-market value equal to the purchase price, or in
shares of Common Stock of the Company valued for such purposes at
<PAGE>
the closing sales price of such shares as reported by
NASD on the day such shares are delivered to the Company.
3. Term. This option may be exercised in whole or in part from
time to time during the 15-year period commencing on March 8, 1989 and
ending on March 7, 2004, but only with respect to the following amounts:
50,000 Immediately
60,000 Shares after 12/31/89
70,000 Shares after 12/31/90
80,000 Shares after 12/31/91
90,000 Shares after 12/31/92
100,000 Shares after 12/31/93
4. Conditions of Exercise. If Harrison should die, become
disabled, or if his employment with the Company should be terminated by
the Company without cause, then this option shall not be affected but
shall continue unaltered. However, if Harrison should voluntarily
resign as an officer of the Company, other than as a result of his
disability, and/or should voluntarily cease serving as a director of
the Company, other than as the result of his disability, or should be
terminated by the Company by reason of his embezzlement, proven dishonesty,
proven fraud, conviction of a felonious or other charge involving moral
turpitude, alcoholism, drug addiction or other similar incapacitating problem
including behavior clearly outside acceptable means of business conduct,
improper
<PAGE>
2
communication of confidential information obtained in the course of employment
with the Company, or conspiracy against the Company (termination for cause),
then this option shall continue to be exercisable with respect to the number
of shares then available in accordance with the schedule set forth in
Section 3 hereinabove, but it shall not thereafter become exercisable
with respect to any additional shares.
5. Adjustment of Number of Shares. The number of Option Shares for
which this option may be exercised and the purchase price per share
thereof shall be adjusted by increase or decrease, proportionately as a
result of any stock dividend, split up, subdivision, reverse split or
combination of the Company's shares of Common Stock, whether by
reclassification, recapitalization or otherwise, so as to increase or
decrease the number of shares issued and outstanding.
6. Merger, Consolidation, Etc. In the event of a proposed merger,
consolidation, or sale of substantially all of the assets of the
Company, the option shall become exercisable with respect to the entire
100,000 shares. However, any unexercised portion of the option granted
herein shall be deemed cancelled unless, following receipt of written
notice from the Company of the proposed merger, consolidation, or sale,
Harrison exercises the option or any part thereof and pays for said
shares in full within 30 days after receipt of the written notice to him
of such
<PAGE>
3
proposed action.
If the merger, consolidation, or sale of assets
is later abandoned and Harrison has not exercised this option in full,
this option shall be deemed reinstated on the original terms set forth
herein, as if never cancelled.
7. Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, the option shall become exercisable with
respect to the entire 100,000 shares. However, any unexercised portion
of the option granted herein shall be deemed cancelled unless, following
receipt of written notice from the Company of the proposed dissolution
or liquidation, Harrison exercises the option or any part thereof and
pays for said shares in full within 30 days after receipt of the written
notice to him of such proposed action.
If the dissolution or liquidation is later abandoned, this
option shall be deemed reinstated, as to any unexercised portion, on the
original terms set forth herein, as if never cancelled.
8. Transferability. Except with the prior written consent of the
Company, this option may not be transferred during Harrison's lifetime
except to his issue and/or any trust or other entity for the sole
benefit of Harrison and/or his issue. Upon Harrison's death, this
option shall survive and may become a part of his estate and may be
<PAGE>
4
transferred to his executors, administrators, heirs or legatees, either
under his will or by operation of law.
9. Manner of Exercise. This option may be exercised by written
notice of such election given by the holder thereof to the President or
Secretary of the Company, specifying the date of the election, which
must be on or after the date of delivery of the notice, and the number
of shares with respect to which the option is being exercised, together
with either a cashier's or certified check in payment of the purchase
price or a wire transfer of such funds to an account designated by the
Company, if payment is to be made in cash, or the executed promissory
note, bill of sale, stock certificates, or other instrument of transfer,
if payment is to be made otherwise, The shares shall be issued as of
the date of the election specified in the notice or the date of receipt
by the Company of the payment for such shares, whichever is later, and
the owner of such shares shall be entitled to all privileges of a
shareholder from and after such date. Certificates may be issued
thereafter evidencing ownership of such shares but shall be dated the
date of their issue.
10. Governing Law. This agreement shall be governed by the laws of
the State of Delaware.
11. Legal Limitations. This option may not be exercised if the
issuance of the shares of Common Stock to which it relates would
constitute a violation of any applicable
<PAGE>
5
federal or state securities or other law or valid regulation. Furthermore, the
holder of this option, as a condition to the exercise of this option, shall
represent to the Company that the shares of Common Stock of the Company that
are being acquired pursuant hereto are being acquired for investment and not
with a view to distribution or resale, unless counsel for the Company is then
of the opinion that such a representation is not required under the
Securities Act of 1933 or any other applicable law, regulation or rule
of any governmental agency.
Executed to be effective March 8, 1989.
COCA-COLA BOTTLING CO. CONSOLIDATED
By: (signature of James L. Moore, Jr. appears here)
-----------------------------------------------
James L. Moore, Jr., President
and Chief Executive Officer
EXHIBIT 10.87
STOCK OPTION AGREEMENT
THIS AGREEMENT is issued to be effective August 9, 1989, the date the
Board of Directors of Coca-Cola Bottling Co. Consolidated granted
the option described herein and evidenced hereby.
Coca-Cola Bottling Co. Consolidated (hereinafter the "Company") for due
consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agrees as follows:
1. Grant of Option. J. Frank Harrison, III is hereby granted
effective August 9, 1989 an option for the purchase of 150,000
shares of Common Stock, $1 par value, of the Company (the "Option
Shares") subject to the terms and conditions herein provided. The
option may be exercised in whole or in part at varying times until an
aggregate of 150,000 Option Shares shall have been purchased.
2. Purchase Price and Payment Terms. The purchase price of the
Option Shares is $29.75 per share, representing the closing sales
price of the Company's Common Stock on August 9, 1989 as reported
by NASD. The price shall be paid in cash, or in the absolute
discretion of the Company, by promissory note providing for reasonable
terms of payment and interest, by property having a fair-market
value equal to the purchase
<PAGE>
price, or in shares of Common Stock of the Company valued for such purposes
at the closing sales price of such shares as reported by NASD or by reference
to the closing market price of such shares as reported on any other exchange,
automated quotation system or other such organization which is the
predominant trading market for such shares on the day such shares are
delivered to the Company.
3. Term. This option may be exercised in whole or in part from time to
time during the 15-year period commencing on August 9, 1989 and
ending on August 9, 2004, but only with respect to the following
amounts:
75,000 Immediately 120,000 Shares after 12/31/94
82,500 Shares after 12/31/89 127,500 Shares after 12/31/95
90,000 Shares after 12/31/90 135,000 Shares after 12/31/96
97,500 Shares after 12/31/91 142,500 Shares after 12/31/97
105,000 Shares after 12/31/92 150,000 Shares after 12/31/98
112,500 Shares after 12/31/93
4. Conditions of Exercise. If Harrison should die, become
disabled, or if his employment with the Company should be
terminated by the Company without cause, then this option shall not
be affected but shall continue unaltered. However, if Harrison should
voluntarily resign as an officer of the Company, other than as a
result of his disability, and/or
<PAGE>
2
should voluntarily cease serving
as a director of the Company, other than as the result of his
disability, or should be terminated by the Company by reason of his
embezzlement, proven dishonesty, proven fraud, conviction of a
felonious or other charge involving moral turpitude, alcoholism,
drug addiction or other similar incapacitating problem including
behavior clearly outside acceptable means of business conduct, or
conspiracy against the Company (termination for cause), then
this option shall continue to be exercisable with respect to the
number of shares then available in accordance with the schedule set
forth in Section 3 hereinabove, but it shall not thereafter become
exercisable with respect to any additional shares.
5. Adjustment of Number of Shares. The number of Option Shares for
which this option may be exercised and the purchase price per share
thereof shall be adjusted by increase or decrease, proportionately
as a result of any stock dividend, split up, subdivision, reverse
split or combination of the Company's shares of Common Stock, whether by
reclassification, recapitalization or otherwise, so as to increase
or decrease the number of shares issued and outstanding.
6. Merger, Consolidation, Etc. In the event of a proposed merger,
consolidation, or sale of substantially all of the assets of the
Company, the option shall become exercisable with respect to the
entire 150,000 shares. However, any unexercised portion of the option
granted herein shall be deemed cancelled
<PAGE>
3
unless, following receipt of written notice from the Company of the proposed
merger, consolidation, or sale, Harrison exercises the option or any part
thereof and pays for said shares in full within 30 days after receipt of
the written notice to him of such proposed action.
If the merger, consolidation, or sale of assets is later abandoned
and Harrison has not exercised this option in full, this option shall be
deemed reinstated on the original terms set forth herein, as if never
cancelled.
7. Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, the option shall become exercisable
with respect to the entire 150,000 shares. However, any
unexercised portion of the option granted herein shall be deemed
cancelled unless, following receipt of written notice from the
Company of the proposed dissolution or liquidation, Harrison
exercises the option or any part thereof and pays for said shares in
full within 30 days after receipt of the written notice to him of
such proposed action.
If the dissolution or liquidation is later abandoned, this option
shall be deemed reinstated, as to any unexercised portion, on the
original terms set forth herein, as if never cancelled.
8. Transferability. Except with the prior written consent of
<PAGE>
4
the Company, this option may not be transferred during Harrison's
lifetime except to his issue, spouse and/or any trust or other
entity for the sole benefit of Harrison, his issue and/or spouse. Upon
Harrison's death, this option shall survive and may become a part
of his estate and may be transferred to his executors,
administrators, heirs or legatees, either under his will or by
operation of law. In the event of any transfer pursuant to the terms of
this Section 8, the terms and conditions of exercise, including,
but not limited to those set forth in Section 4 hereof, shall
continue to apply to said option.
9. Manner of Exercise. This option may be exercised by written
notice of such election given by the holder thereof to the
President or Secretary of the Company, specifying the date of the
election, which must be on or after the date of delivery of the notice,
and the number of shares with respect to which the option is being
exercised, together with either a cashier's or certified check in
payment of the purchase price or a wire transfer of such funds to an
account designated by the Company, if payment is to be made in cash,
or the executed promissory note, bill of sale, stock certificates,
or other instrument of transfer, if payment is to be made
otherwise. The shares shall be issued as of the date of the election
specified in the notice or the date of receipt by the Company of
the payment for such shares, whichever is later, and the owner of
such shares shall be entitled to all privileges of a shareholder from and
<PAGE>
5
after such date. Certificates may be issued thereafter
evidencing ownership of such shares but shall be dated the date of
their issue.
10. Governing Law. This agreement shall be governed by the laws of
the State of Delaware.
11. Legal Limitations. Anything herein to the contrary
notwithstanding, this option may not be exercised until its
issuance has been approved by a vote of the shareholders of the
Company or otherwise if the issuance of the shares of Common Stock to
which it relates would constitute a violation of any applicable
federal or state securities or other law or valid regulation.
Furthermore, the holder of this option, as a condition to the
exercise of this option, shall represent to the Company that the shares
of Common Stock of the Company that are being acquired pursuant hereto
are being acquired for investment and not with a view to distribution or
resale, unless counsel for the Company is then of the opinion that such
a representation is not required under the Securities Act of 1933 or any
other applicable law, regulation or rule of any governmental agency.
<PAGE>
6
Executed this 24th day of October, 1989.
COCA-COLA BOTTLING CO. CONSOLIDATED
By:_(signature of James L. Moore, Jr. appears here)
------------------------------------------------
James L. Moore, Jr.
President and Chief Executive Officer
<PAGE>
7
EXHIBIT 10.88
TREASURY BOND 8.07%
RENTAL FACTOR 3.29447%
LEASE FUNDING NO: 94011
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
and
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 30th day of November,
1994 ("lease Commencement Date"); and will continue for a term of one
hundred eight (108) months ending on the 30th day of November,
2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an
aggregate rental charge of $1,483,471.08, payable in arrears in
thirty-six (36) quarterly installments of $41,207.53 each,
beginning on February 30, 1995 and continuing on the same day of each
calendar quarter thereafter during the Initial Term, with the final
such installment being due and payable on November 30, 2003.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on
all payments made by Lessor for Equipment from the date of Lessor's
payment, if paid prior to the Lease Commencement Date, until the Lease
Commencement Date. Interim Rent shall be calculated from the date of such
payment on the basis of a rate which shall be the lesser of (i) a daily
rate of .00037 per dollar so paid by Lessor, (which rate is based
on the rate implied by the Basic Rent amount set forth above), or
(ii) a per annum rate applied to the amount so paid by Lessor equal
to the "Prime Rate" as published in The Wall Street Journal on the last
business day prior to the date of such payment by Lessor. Interim
Rent shall be payable in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent, Lessee
shall pay Lessor all Supplemental Rent provided for in the Master
Lease including, without limitation, all applicable sales and use
taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on
Exhibit "A" attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The
supporting equipment invoices, installation notifications and
equipment serial numbers are summarized on Exhibit "A" attached
hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference
to Exhibit "B" attached hereto by multiplying the original cost of
such item of Equipment as stated on Exhibit "A" hereto by the
percentage of the cost of such item set forth opposite the applicable
month number on Exhibit "B" hereto. For this purpose the applicable
month number means the number of months or partial months elapsed
since the Lease Commencement Date. If only a portion of an item of
Equipment is affected by any event causing calculation of "Stipulated
Loss Value" as specified in the Master Lease, and the cost of such
portion of the Equipment cannot be readily determined from the
original cost of such item set forth on Exhibit A, then the Stipulated
Loss Value for such portion of the Equipment shall be as reasonably
calculated by Lessor, with written notice of such amount being sent
to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to
the terms of the Master Lease, and this Lease Supplement shall be
deemed to be a part of, and shall be governed by the terms and
conditions of the Master Lease. For purposes of this Lease
Supplement, capitalized terms which are used herein but which are not
otherwise defined herein shall have the meanings ascribed to such
terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly
executed and delivered by its duly authorized officers, this 30th day of
November, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
By:_(sig. of Brenda B. Jackson appears here)
-------------------------------------------
Title: Vice President & Treasurer
---------------------------
(CORPORATE SEAL)
Attest: (sig. of Patricia A. Gill)
--------------------------
Title: Assistant Secretary
-----------------------------
Accepted in Atlanta, Georgia, this 29th day of Dec. 1994.
----- -------
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: (sig. of Kathy L. Meyers appears here)
-------------------------------------
Title: Op. Mgr.
-----------------------------------
<PAGE>
CERTIFICATE OF ACCEPTANCE
This certificate of Acceptance is executed and delivered under and
pursuant to the terms of that certain Master Equipment Lease dated
February 9, 1993 (the "Lease") between Coca-Cola Financial
Corporation ("Lessor") and Coca-Cola Bottling Co. Consolidated
("Lessee"). This Certificate of Acceptance shall be deemed to be a part
of, and shall be governed by, the terms and conditions of the Lease
and words and phrases defined in the Lease shall have the same
meanings in this Certificate of Acceptance.
The undersigned, the Lessee under the Lease, acknowledges and agrees
that the Equipment described on the manufacturers' invoices
summarized on the attached Exhibit "A" has been delivered to Lessee
and installed and has been accepted by the Lessee under and
pursuant to and subject to all terms and conditions of the Lease, and
that such Equipment is in good order and condition and is of the
manufacture, design and capacity selected by Lessee and is suitable
for Lessee's purposes. Lessee understands that Lessor is relying on the
foregoing certification in its purchase of such Equipment and, to
induce Lessor to purchase such Equipment, Lessee agrees that it
will settle all claims, defenses, set-offs and counterclaims it may
have with the manufacturer directly with the manufacturer and will not
assert any thereof against Lessor, that its obligation to Lessor is
absolute, and that Lessor is neither the manufacturer, distributor
nor seller of such Equipment.
This Certificate of Acceptance does not and shall not limit, abrogate or
detract from any rights or claims against any manufacturer or
vendor of the Equipment including, but not limited to, any
warranties or representations written or oral, statutory, express or
implied.
IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to
be executed and delivered by its duly authorized officers, the 30th
day of November, 1994.
(CORPORATE SEAL) LESSEE: COCA-COLA BOTTLING CO.
CONSOLIDATED
By: Brenda B. Jackon
-----------------------------
Title: Vice Presient & Treasurer
-------------------------
Attest: (sig. of Patricia A. Gill)
--------------------------
Title: Assistant Secretary
---------------------------
<page >
EXHIBIT 10.89
TREASURY BOND 7.97%
Rental Factor 3.30273%
Lease Funding No: 94012
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 19th day of December,
1994 ("Lease commencement Date"); and will continue for a term
of one hundred eight (108) months ending on 19th day of
December, 2003.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay
an aggregate rental charge of $612,561.96, payable in arrears in
thirty-six (36) quarterly installments of $17,015.61 each, beginning on
March 19, 1995 and continuing on the same day of each calendar quarter
thereafter during the Initial Term, with the final such installment
being due and payable on December 19, 2003.
(b) INTERIM RENT: Lessee
shall pay Lessor Interim Rent on all payments made by Lessor for
Equipment from the date of Lessor's payment, if paid prior to the Lease
Commencement Date, until the Lease Commencement Date. Interim Rent
shall be calculated from the date of such payment on the basis of a rate
which shall be the lesser of (i) a daily rate of .00037 per dollar so
paid by Lessor, (which rate is based on the rate implied by the Basic
Rent amount set forth above), or (ii) a per annum rate applied to the
amount so paid by Lessor equal to the "Prime Rate" as published in The
Wall Street Journal on the last business day prior to the date of such
payment by Lessor. Interim Rent shall be payable in full on the Lease
Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and
Interim Rent, Lessee shall pay Lessor all Supplemental Rent
provided for in the Master Lease including, without limitation, all
applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on
Exhibit "A" attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The
supporting equipment invoices, installation notifications and equipment
serial numbers are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to
Exhibit "B" attached hereto by multiplying the original cost of such
item of Equipment as stated on Exhibit "A" hereto by the percentage of
the cost of such item set forth opposite the applicable month number on
Exhibit "B" hereto. For this purpose the applicable month number means
the number of months or partial months elapsed since the Lease Commencement
Date. If only a portion of an item of Equipment is affected by any
event causing calculation of "Stipulated Loss Value" as specified in the
Master Lease, and the cost of such portion of the Equipment cannot be
readily determined from the original cost of such item set forth on
Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written
notice of such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and
pursuant to the terms of the Master Lease, and this Lease Supplement
shall be deemed to be a part of, and shall be governed by the terms and
conditions of the Master Lease. For purposes of this Lease Supplement,
capitalized terms which are used herein but which are not otherwise
defined herein shall have the meanings ascribed to such terms in the
Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to
be duly executed and delivered by its duly authorized officers, this
19th day of December, 1994.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: Brenda B. Jackson
________________________
Brenda B. Jackson
Attest: (sig. of Patricia A Gill) Title: Vice President & Treasurer
--------------------------
Patricia A. Gill
Title: Assistant Secretary
Accepted in Atlanta, Georgia, this 28 day of January, 1995.
-- ---------
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: (Sig. of Nuala M. King appears here)
-------------------------------------
Title: President
------------------------
<PAGE>
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is executed and delivered under
and pursuant to the terms of that certain Master Equipment Lease dated
February 9, 1993 (the "Lease") between Coca-Cola Financial Corporation
("Lessor") and Coca-Cola Bottling Co. Consolidated ("Lessee"). This
Certificate of Acceptance shall be deemed to be a part of, and shall be
governed by, the terms and conditions of the Lease and words and phrases
defined in the Lease shall have the same meanings in this Certificate of
Acceptance.
The undersigned, the Lessee under the Lease, acknowledges and
agrees that the Equipment described on the manufacturers' invoices
summarized on the attached Exhibit "A", has been delivered to Lessee and
installed and has been accepted by the Lessee under and pursuant to and
subject to all terms and conditions of the Lease, and that such
Equipment is in good order and condition and is of the manufacture,
design and capacity selected by Lessee and is suitable for Lessee's
purposes. Lessee understands that Lessor is relying on the foregoing
certification in its purchase of such Equipment and, to induce Lessor to
purchase such Equipment, Lessee agrees that it will settle all claims,
defenses, set-offs and counterclaims it may have with the manufacturer
directly with the manufacturer and will not assert any thereof against
Lessor, that its obligation to Lessor is absolute, and that Lessor is
neither the manufacturer, distributor nor seller of such Equipment.
This Certificate of Acceptance does not and shall not limit,
abrogate or detract from any rights or claims against any manufacturer
or vendor of the Equipment including, but not limited to, any warranties
or representations written or oral, statutory, express or implied.
IN WITNESS WHEREOF, Lessee has caused this Certificate of
Acceptance to be executed and delivered by its duly authorized
officers, the 19th day of December, 1994.
(CORPORATE SEAL) LESSEE: COCA-COLA BOTTLING CO.
CONSOLIDATED
Attest: (sig. of Patricia A. Gill) By: (sig. of Brenda B. Jackson)
------------------------- ---------------------------
Patricia A. Gill Brenda B. Jackson
Title: Assistant Secretary Title: Vice President & Treasurer
EXHIBIT 10.90
TREASURY BOND 7.73%
Rental Factor 3.35684%
Lease Funding No: 94013
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATE: February 9, 1993
1. Term
The "Initial Term" shall commence on the 17th day of January,
1995 ("Lease Commencement Date"); and will continue for a term of one
hundred eight (108) months ending on 17th day of January, 2004.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay
an aggregate rental charge of $1,115,255.16, payable in arrears in
thirty-six (36) quarterly installments of $30,979.31 each, beginning on
April 17, 1995 and continuing on the same day of each calendar quarter
thereafter during the Initial Term, with the final such installment
being due and payable on January 17, 2004.
(b) INTERIM RENT: Lessee
shall pay Lessor Interim Rent on all payments made by Lessor for
Equipment from the date of Lessor's payment, if paid prior to the Lease
Commencement Date, until the Lease Commencement Date. Interim Rent
shall be calculated from the date of such payment on the basis of a rate
which shall be the lesser of (i) a daily rate of .00037 per dollar so
paid by Lessor, (which rate is based on the rate implied by the Basic
Rent amount set forth above), or (ii) a per annum rate applied to the
amount so paid by Lessor equal to the "Prime Rate" as published in The
Wall Street Journal on the last business day prior to the date of such
payment by Lessor. Interim Rent shall be payable in full on the Lease
Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and
Interim Rent, Lessee shall pay Lessor all Supplemental Rent provided for in
the Master Lease including, without limitation, all applicable sales and
use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on
Exhibit "A" attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The
supporting equipment invoices, installation notifications and equipment
serial numbers are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to
Exhibit "B" attached hereto by multiplying the original cost of such
item of Equipment as stated on Exhibit "A" hereto by the percentage of
the cost of such item set forth opposite the applicable month number on
Exhibit "B" hereto. For this purpose the applicable month number means
the number of months or partial months elapsed since the Lease Commencement
Date. If only a portion of an item of Equipment is affected by any
event causing calculation of "Stipulated Loss Value" as specified in the
Master Lease, and the cost of such portion of the Equipment cannot be
readily determined from the original cost of such item set forth on
Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written
notice of such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and
pursuant to the terms of the Master Lease, and this Lease Supplement
shall be deemed to be a part of, and shall be governed by the terms and
conditions of the Master Lease. For purposes of this Lease Supplement,
capitalized terms which are used herein but which are not otherwise
defined herein shall have the meanings ascribed to such terms in the
Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to
be duly executed and delivered by its duly authorized officers, this
17th day of January, 1995.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
David V. Singer
(CORPORATE SEAL) By: ________________________
Attest: (sig. of Patricia A Gill) Title: Vice President & CFO
------------------------
Title: Assistant Secretary
Accepted in Atlanta, Georgia, this 27 day of January, 1995.
-- -------
LESSOR:
COCA-COLA FINANCIAL CORPORATION
By: (sig. of Nuala M. King)
------------------------
Title: President
-------------------
<PAGE>
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is executed and delivered under
and pursuant to the terms of that certain Master Equipment Lease dated
February 9, 1993 (the "Lease") between Coca-Cola Financial Corporation
("Lessor") and Coca-Cola Bottling Co. Consolidated ("Lessee"). This
Certificate of Acceptance shall be deemed to be a part of, and shall be
governed by, the terms and conditions of the Lease and words and phrases
defined in the Lease shall have the same meanings in this Certificate of
Acceptance.
The undersigned, the Lessee under the Lease, acknowledges and
agrees that the Equipment described on the manufacturers' invoices
summarized on the attached Exhibit "A", has been delivered to Lessee and
installed and has been accepted by the Lessee under and pursuant to and
subject to all terms and conditions of the Lease, and that such
Equipment is in good order and condition and is of the manufacture,
design and capacity selected by Lessee and is suitable for Lessee's
purposes. Lessee understands that Lessor is relying on the foregoing
certification in its purchase of such Equipment and, to induce Lessor to
purchase such Equipment, Lessee agrees that it will settle all claims,
defenses, set-offs and counterclaims it may have with the manufacturer
directly with the manufacturer and will not assert any thereof against
Lessor, that its obligation to Lessor is absolute, and that Lessor is
neither the manufacturer, distributor nor seller of such Equipment.
This Certificate of Acceptance does not and shall not limit,
abrogate or detract from any rights or claims against any manufacturer
or vendor of the Equipment including, but not limited to, any warranties
or representations written or oral, statutory, express or implied.
IN WITNESS WHEREOF, Lessee has caused this Certificate of
Acceptance to be executed and delivered by its duly authorized officers,
the 17th day of January, 1995.
(CORPORATE SEAL) LESSEE: COCA-COLA BOTTLING CO.
CONSOLIDATED
Attest: (sig. of Patricia A. Gill) By: David V. Singer
-------------------------- ----------------------------
Patricia A. Gill
Title: Assistant Secretary Title: Vice President & CFO
EXHIBIT 10.91
TREASURY BOND 7.53%
RENTAL FACTOR 3.31973%
LEASE FUNDING NO: 95001
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE ( the"Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO CONSOLIDATED ("Lessee")
DATED: FEBRUARY, 9 1993
1. TERM
The "Initial Term" shall commence on the 8th day of February,1995
("Lease Commencement Date") and will continue for a term of one hundred
eight (108) months ending on 8th day of February,2004.
2. RENT
(a) BASIC RENT : As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $1,669,118.76 payable in arrears in thirty-six (36)
quarterly installments of $ 46,364.41 each beginning on May 8, 1995 and
continuing on the same day of each calendar quarter thereafter during
the Initial Term with the final such installment being due and payable
on February 8th 2004.
(b) INTERIM RENT : Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid
prior to the Lease Commencement Date until the Lease Commencement Date.
Interim Rent shall be calculated from the date of such payment on the
basis of a rate which shall be the lesser of (i) a daily rate of .00037
per dollar so paid by Lessor, (which rate is based on the rate implied
by the Basic Rent amount set forth above), or (ii) a per annum rate
applied to the amount so paid by Lessor equal to the "Prime Rate" as
published in The Wall Street Journal on the last business day prior to
the date of such payment by Lessor. Interim Rent shall be payable in
full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent,
Lessee shall pay Lessor all Supplemental Rent provided for in the Master
Lease including, without limitation, all applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit
"A" attached hereto.
4. Equipment Leased
The equipment leased is described on each equipment invoice and installation
notification subject to this Lease Supplement. The supporting equipment
invoices, installation notifications and equipment serial numbers are
summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to
Exhibit "B" attached hereto by multiplying the original cost of such
item of Equipment as stated on Exhibit "A" hereto by the percentage of
the cost of such item set forth opposite the applicable month number on
Exhibit "B" hereto. For this purpose the applicable month number means
the number of months or partial months elapsed since the Lease
Commencement Date. If only a portion of an item of Equipment is affected
by any event causing calculation of "Stipulated Loss Value" as specified
in the Master Lease, and the cost of such portion of the Equipment
cannot be readily determined from the original cost of such item set
forth on Exhibit A, then the Stipulated Loss Value for such
portion of the Equipment shall be as reasonably calculated by Lessor
with written notice of such amount being sent to Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to
the terms of the Master Lease and this Lease Supplement shall be deemed
to be a part of and shall be governed by the terms and conditions of
the Master Lease. For purposes of this Lease Supplement, capitalized
terms which are used herein but which are not otherwise defined herein
shall have the meanings ascribed to such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to
be duly executed and delivered by its duly authorized officers, this 8th
day of February, 1995.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: (sig. of Steven D. Westphal)
-----------------------------
Steven D. Westphal
Title: Vice President & Controller
Attest: (sig. of Patricia A. Gill)
Title: Assistant Secretary
Accepted in Atlanta, Georgia, this ____ day of _____________,1995.
LESSOR:
COCA-COLA FINANCIAL CORPORATION
A. Balfour
By: ________________________
Title: Operations Manager
----------------------
<PAGE>
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is executed and delivered under and
pursuant to the terms of that certain Master Equipment Lease dated
February 9, 1993 ("the Lease") between Coca-Cola Financial Corporation
("Lessor") and Coca-Cola Bottling Co. Consolidated ("Lessee"). This
Certificate of Acceptance shall be deemed to be a part of, and shall be
governed by, the terms and conditions of the Lease and words and
phrases defined in the Lease shall have the same meanings in this
Certificate of Acceptance.
The undersigned, the Lessee under the Lease, acknowledges and agrees
that the Equipment described on the manufacturers' invoices summarized
on the attached Exhibit "A", has been delivered to Lessee and installed
and has been accepted by the Lessee under and pursuant to and subject to
all terms and conditions of the Lease, and that such Equipment is in
good order and condition and is of the manufacture, design and capacity
selected by Lessee and is suitable for Lessee's purposes. Lessee
understands that Lessor is relying on the foregoing certification in its
purchases of such Equipment and ,to induce Lessor to purchase such
Equipment, Lessee agrees that it will settle all claims, defenses,
set-offs and counterclaims it may have with the manufacturer directly
with the manufacturer and will not assert any thereof against Lessor,
that its obligation to Lessor is absolute, and that Lessor is neither
the manufacturer, distributor nor seller of such Equipment.
This Certificate of Acceptance does not and shall not limit, abrogate or
detract from any rights or claims against any manufacturer or vendor of
the Equipment including, but not limited to any warranties or
representations written or oral, statutory, express or implied.
IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to
be executed and delivered by its duly authorized officers, the 8th day
of February, 1995.
(CORPORATE SEAL) LESSEE COCA-COLA BOTTLING CO.
CONSOLIDATED
Attest: (sig. of Patricia A Gill) By: (sig. Steven D. Westphal)
Title : Assistant Secretary Title: Vice President & Controller
<PAGE>
<PAGE>
_______________________________
______________________________________________________________
Coca-Cola Bottling Co. Consolidated
TO
NationsBank of Georgia, National Association,
Trustee
____________________
Supplemental Indenture
Dated as of March 3, 1995
____________________
______________________________________________________________
_______________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions:
Act . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . 2
Attributable Debt . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . 3
Capital Stock . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request and Company Order . . . . . . . . . . 3
Consolidated Net Tangible Assets . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . 4
corporation . . . . . . . . . . . . . . . . . . . . . 4
Debt . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . 4
Funded Debt . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . 5
Mortgage . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . 5
NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
i
<PAGE>
PAGE
Outstanding . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . 6
Preferred Stock . . . . . . . . . . . . . . . . . . . 6
Principal Property . . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . 7
Repayment Date . . . . . . . . . . . . . . . . . . . . 7
Repayment Price . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . 7
Restricted Subsidiary . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security Registrar . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . 8
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . 9
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . 9
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . 10
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . 11
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . 11
SECTION 108. Effect of Headings and Table of Contents . . . . . . . 11
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . 12
ii
<PAGE>
PAGE
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . 12
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . 12
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . 12
SECTION 202. Forms of Securities . . . . . . . . . . . . . . . . . 13
SECTION 203. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . 13
SECTION 204. Securities in Global Form . . . . . . . . . . . . . . 13
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . 14
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . 16
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . 16
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . 18
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . 19
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . 21
SECTION 307. Payment of Interest; Interest Rights
Reserved . . . . . . . . . . . . . . . . . . 22
iii
<PAGE>
PAGE
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . 23
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . 23
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . 24
SECTION 311. Medium-Term Securities . . . . . . . . . . . . . . . . 24
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Securities
of any Series . . . . . . . . . . . . . . . . 25
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . 26
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . 26
SECTION 502. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . 28
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . 29
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . 30
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . 30
SECTION 506. Application of Money Collected . . . . . . . . . . . . 31
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . 31
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . . . 32
iv
<PAGE>
PAGE
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . 32
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . 32
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . 33
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . 33
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . 33
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . 34
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . 34
SECTION 516. Record Date for Action By Holders . . . . . . . . . . 34
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . 34
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . 36
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . 36
SECTION 604. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . 37
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . 37
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . 38
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . 38
SECTION 608. Persons Ineligible for Appointment as
Trustee . . . . . . . . . . . . . . . . . . . 38
v
<PAGE>
PAGE
SECTION 609. Disqualification; Conflicting Interests . . . . . . . 38
(a) Elimination of Conflicting Interest
or Resignation . . . . . . . . . . . . . . . . 38
(b) Notice of Failure to Eliminate
Conflicting Interest or Resign . . . . . . . . 39
(c) "Conflicting Interest" Defined . . . . . . . . . 39
(d) Definitions of Certain Terms Used in
This Section . . . . . . . . . . . . . . . . . 42
(e) Calculation of Percentages of
Securities . . . . . . . . . . . . . . . . . . 43
SECTION 610. Corporate Trustee Required; Eligibility . . . . . . . 45
SECTION 611. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . 45
SECTION 612. Acceptance of Appointment by Successor . . . . . . . . 47
SECTION 613. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . 48
SECTION 614. Preferential Collection of Claims Against
Company . . . . . . . . 48
(a) Segregation and Apportionment of Certain
Collections by Trustee, Certain
Exceptions . . . . . . . . . . . . . . . . . . 48
(b) Certain Creditor Relationships Excluded
from Segregation and Apportionment . . . . . . 50
(c) Definitions of Certain Terms Used in
This Section . . . . . . . . . . . . . . . . . 51
SECTION 615. Appointment of Authenticating Agent . . . . . . . . . 52
vi
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
PAGE
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . 53
SECTION 702. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . 54
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . 55
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . 56
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, OR TRANSFER
SECTION 801. Company May Consolidate, Etc., Only
on Certain Terms . . . . . . . . . . . . . . 57
SECTION 802. Successor Corporation Substituted . . . . . . . . . . 58
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . 58
SECTION 902. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . 59
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . 60
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . 61
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . 61
vii
<PAGE>
PAGE
SECTION 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . 61
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest . . . . . 61
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . 61
SECTION 1003. Money for Securities Payments to Be Held in
Trust . . . . . . . . . . . 62
SECTION 1004. Corporate Existence . . . . . . . . . . . . . . . . . 63
SECTION 1005. Statement By Officers as to Default . . . . . . . . . 63
SECTION 1006. Restrictions on Debt . . . . . . . . . . . . . . . . 64
SECTION 1007. Restrictions on Sales and Leasebacks . . . . . . . . 65
SECTION 1008. Waiver of Certain Covenants . . . . . . . . . . . . . 67
SECTION 1009. Calculation of Original Issue Discount; and Certain
Information Concerning Tax Reporting . . . . . . . 67
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . 67
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . 68
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed . . . . . . . . . . . . . . . . . . 68
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . 68
viii
<PAGE>
PAGE
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . 69
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . 69
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . 70
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . 70
SECTION 1202. Satisfaction of Sinking-Fund Payments with
Securities . . . . . . . . . . . . . . . . . 70
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . 71
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Applicability of Article; Company's
Option to Effect Defeasance . . . . . . . . 71
SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . . . 71
SECTION 1303. Covenant Defeasance . . . . . . . . . . . . . . . . . 72
SECTION 1304. Conditions to Defeasance . . . . . . . . . . . . . . 72
SECTION 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Miscellaneous . . . . . . . . . . . . . . . 74
ARTICLE FOURTEEN
REPAYMENT OF SECURITIES AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article . . . . . . . . . . . . . . 75
ix
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PAGE
SECTION 1402. Notice of Repayment Date . . . . . . . . . . . . . . 75
SECTION 1403. Deposit of Repayment Price . . . . . . . . . . . . . 75
SECTION 1404. Securities Payable on Repayment Date . . . . . . . . 76
SECTION 1405. Securities Repaid in Part . . . . . . . . . . . . . . 76
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS.
SECTION 1501. Immunity of Incorporators, Stockholders,
Officers and Directors . . . . . . . . . . . 76
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . 78
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
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SUPPLEMENTAL INDENTURE, dated as of March 3, 1995, between Coca-Cola
Bottling Co. Consolidated, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal office at 1900 Rexford Road, Charlotte, North Carolina 28211, and
NationsBank of Georgia, National Association, a National Banking Association
organized under the laws of the United States, as Trustee (herein called the
"Trustee"), having its principal office at 600 Peachtree Street, Atlanta,
Georgia 30308.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Supplemental Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided. This Supplemental Indenture amends and supplements, and restates
(as amended and supplemented) the provisions of that certain Indenture between
the Company and the Trustee dated July 20, 1994 (the "Original Indenture").
All things necessary to make this Supplemental Indenture a valid agreement of
the Company, in accordance with its terms and with the terms of the Original
Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
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(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means, as to any particular lease under which any
person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining primary term thereof, discounted from
the respective due date thereof to such date at a rate per annum equal to the
weighted average interest rate, or yield to maturity in the case of an
Original Issue Discount Security, borne by all the Outstanding Securities.
The weighted average interest rate borne by the Securities shall be calculated
by dividing the aggregate of the annual interest payments required on the
Securities, based on the amount Outstanding at the latest date any Securities
were issued hereunder, by the aggregate principal amount of the Securities
Outstanding at such date. In the case of an Original Issue Discount Security,
the amount Outstanding shall be deemed to be the entire principal amount
thereof and the annual interest payments shall be deemed to be the product
obtained by multiplying such entire principal amount by the rate of interest
payable on overdue principal. The net amount of rent required to be paid
under any such lease for any such period shall be the amount of the rent
payable by the lessee with respect to such period, after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease which
is terminable by the lessee upon the payment of a penalty, such net amount
shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon
which it may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Securities.
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"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which any banking institutions in that Place of Payment are authorized or
obligated by law to close.
"Capital Stock", as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless
of whether such capital stock shall be limited to a fixed sum or percentage
with respect to the rights of the holders thereof to participate in dividends
and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of such corporation.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the
Board or a Vice Chairman, the President or a Vice President (any reference to
a Vice President of the Company herein shall be deemed to include any Vice
President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President"), and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Company
and its consolidated subsidiaries and computed in accordance with generally
accepted accounting principles. For purposes of this definition, any
leasehold interest of the Company or any Restricted Subsidiary shall be deemed
to be a tangible asset if the rental obligations thereunder are included in
Funded Debt.
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"Corporate Trust Office" means the principle office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 600 Peachtree
Street, Suite 900, Atlanta, Georgia 30308, Attention: Corporate Trust
Administration.
"corporation" includes corporations, associations, companies and
business trusts.
"Debt" has the meaning specified in Section 1006.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who
is then a Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such series
shall mean the Depositary with respect to the Securities of that series.
"Event of Default" has the meaning specified in Section 501.
"Funded Debt" means (i) all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the amount thereof
is to be determined or having a maturity of less than 12 months but by its
terms being renewable or extendible beyond 12 months from such date at the
option of the borrower, and (ii) rental obligations payable more than 12
months from such date under leases which are capitalized in accordance with
generally accepted accounting principles (such rental obligations to be
included as Funded Debt at the amount so capitalized and to be included for
the purposes of the definition of Consolidated Net Tangible Assets both as an
asset and as Funded Debt at the amount so capitalized).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this Instrument as originally executed or as it may
from time to time be supplemented or amended by one or more Indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of any particular series of Securities established
as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
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"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption, occurrence of any
Repayment Date or otherwise.
"Mortgage" has the meaning specified in Section 1006.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except
as otherwise provided in this Indenture) be counsel for, or an employee of,
the Company and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities of any series,
means, as of the date of determination, all Securities of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, (i) the principal amount of an Original Issue
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Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof pursuant to Section 502, and (ii)
Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that Series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock ranking prior to the shares of any other class of Capital
Stock of said corporation as to the payment of dividends or the distribution
of assets on any voluntary or involuntary liquidation.
"Principal Property" means any building, structure or other facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, used primarily for the bottling, canning or packaging of soft drinks
or soft drink products or warehousing and distributing of such products, owned
or leased by the Company or any Subsidiary of the Company, the gross book
value (without deduction of any depreciation reserves) of which on the date as
of which the determination is being made exceeds 3% of Consolidated Net
Tangible Assets, other than any such building, structure or other facility or
portion thereof which, in the opinion of the Board of Directors, is not of
material importance to the total business conducted by the Company and its
Subsidiaries as an entirety.
6
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"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Repayment Date", when used with respect to any Security of any series
to be repaid, means the date, if any, fixed for such repayment pursuant to
Section 301 of this Indenture.
"Repayment Price", when used with respect to any Security of any series
to be repaid, means the price, if any, at which such Security is to be repaid
pursuant to Section 301 of this Indenture.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means a Subsidiary of the Company which (i) owns
a Principal Property as of the date hereof, or (ii) acquires a Principal
Property after the date hereof from the Company or a Restricted Subsidiary
other than for cash equal to such property's fair market value as determined
by the Board of Directors, or (iii) acquires a Principal Property after the
date hereof by purchase with funds substantially all of which are provided by
the Company or a Restricted Subsidiary or with the proceeds of indebtedness
for money borrowed, which indebtedness is guaranteed in whole or in part by
the Company or a Restricted Subsidiary, or (iv) is a party to any contract
with respect to the bottling, canning, packaging or distribution of soft
drinks or soft drink products, other than any such contract which in the
opinion of the Board of Directors is not of material importance to the total
business conducted by the Company and its Subsidiaries as an entirety.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
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"Stated Maturity", when used with respect to any Security or any
Installment of principal thereof or Interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
and in force at the date as of which this instrument was executed, except as
provided in Section 905.
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances for the election of the board of directors,
managers or trustees of such corporation (irrespective of whether or not at
the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than certificates provided
pursuant to paragraph (4) of Section 704 of this Indenture) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been complied with, and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reason able care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
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for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company
in reliance thereon, whether or not notation of such action is made upon such
Security.
(e) Without limiting the generality of the foregoing, unless otherwise
specified pursuant to Section 301 or pursuant to one or more indentures
supplemental hereto, a Holder, including a Depositary that is the Holder of a
global Security, may make, give or take, by a proxy or proxies duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be made, given or taken
by Holders, and a Depositary that is the Holder of a global Security may
provide its proxy or proxies to the beneficial owners of interests in any such
global Security through such Depositary's standing instructions and customary
practices.
(f) The Trustee shall fix a record date for the purpose of determining
the Persons who are beneficial owners of interests in any global Security held
by a Depositary entitled under the procedures of such Depositary to make, give
or take, by a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders. If such a record date
is fixed, the Holders on such record date or their duly appointed proxy or
proxies, and only such Persons, shall be entitled to make, give or take such
request, demand, authorization, direction, notice, consent, waiver or other
action, whether or not such Holders remain Holders after such record date. No
such request, demand, authorization, direction, notice, consent, waiver or
other action shall be valid or effective if made, given or taken more than 90
days after such record date.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at
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its Corporate Trust Office,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing to the Company by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it and marked "Attention:
Treasurer" at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at such Holder's address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Security
Registrar and Paying Agent, any Authenticating Agent and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date or Stated Maturity of any Security shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this Indenture
or of the Securities) payment of interest or principal (and premium, if any)
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date, Repayment
Date or at the Stated Maturity, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Repayment
Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed
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thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may
be produced in any other manner, subject, with respect to the Securities of
any series, to the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 202. Forms of Securities.
Each Security shall be in one of the forms approved from time to time by
or pursuant to a Board Resolution, or established in one or more indentures
supplemental hereto. Prior to the delivery of a Security to the Trustee for
authentication in any form approved by or pursuant to a Board Resolution, the
Company shall deliver to the Trustee the Board Resolution by or pursuant to
which such form of Security has been approved, which Board Resolution shall
have attached thereto a true and correct copy of the form of Security which
has been approved thereby or, if a Board Resolution authorizes a specific
officer or officers to approve a form of Security, a certificate of such
officer or officers approving the form of Security attached thereto. Any form
of Security approved by or pursuant to a Board Resolution must be acceptable
as to form to the Trustee, such acceptance to be evidenced by the Trustee's
authentication of Securities in that form or a certificate signed by a
Responsible Officer of the Trustee and delivered to the Company.
SECTION 203. Form of Trustee's Certificate of Authentication.
The form of the Trustee's Certificate of Authentication for any Security
issued pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
NationsBank of Georgia,
National Association, as Trustee
By: ____________________________
Authorized Signatory
SECTION 204. Securities in Global Form.
If any Security of a series is issuable in global form, such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed
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thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time
to time be reduced to reflect exchanges. Any endorsement of a Security in
global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee and
in such manner as shall be specified in such Security. Any instructions by
the Company with respect to a Security in global form, after its initial
issuance, shall be in writing but need not comply with Section 102.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. All Securities of
each series issued under this Indenture shall in all respects be equally and
ratably entitled to the benefits hereof with respect to such series without
preference, priority or distinction on account of the actual time of the
authentication and delivery or Maturity of the Securities of such series.
There shall be established in or pursuant to a Board Resolution and, subject
to Section 303, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the date or dates (or manner of determining the same) on
which the principal of the Securities of the series is payable (which,
if so provided in such Board Resolution, may be determined by the
Company from time to time and set forth in the Securities of the series
issued from time to time);
(4) the rate or rates (or the manner of calculation thereof) at
which the Securities of the series shall bear interest, if any, the date
or dates from which such interest shall accrue (which, if so provided by
the Board Resolution, may be determined by the Company from time to time
and set forth in the Securities of the series issued from time
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to time),
the Interest Payment Dates on which such interest shall be payable and
the Regular Record Date for the interest payable on any Interest Payment
Date;
(5) if other than the Corporate Trust Office of the Trustee, the
place or places where the principal of (and premium, if any) and
interest, if any, on Securities of the series shall be payable;
(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or
repurchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period
or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or
repurchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) whether the Securities of the series shall be issued in whole
or in part in the form of a global Security or Securities and, in such
case, the Depositary for such global Security or Securities;
(10) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of Maturity thereof pursuant to Section
502;
(11) the application, if any, of either or both of Section 1302
and Section 1303 hereof to the Securities of the series; and
(12) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
the Board Resolution referred to above and (subject to Section 303) set forth
in the Officers' Certificate referred to above or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board or one of its Vice Chairmen, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If any Security shall be represented by a global Security, then,
for purposes of this Section and Section 304, the notation of the record
owner's interest therein upon original issuance of such Security shall be
deemed to be delivery in connection with the original issuance of each
beneficial owner's interest in such global Security. If all the Securities of
any one series are not to be originally issued at one time and if a Board
Resolution relating to such Securities shall so permit, such Company Order may
set forth procedures acceptable to the Trustee for the issuance and
authentication of such Securities.
If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture;
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(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equity
principles;
(d) that all laws and requirements in respect of the execution and
delivery by the Company of the Securities have been complied with; and
(e) such other matters as the Trustee may reasonably request.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to
the time of authentication of each Security of such series if such documents
are delivered at or prior to the time of authentication upon original issuance
of the first Security of such series to be issued.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Security to
the Trustee for cancellation as provided in Section 309 together with a
written statement (which need not comply with Section 102 and need not be
accompanied by an opinion of Counsel) stating that such Security has never
been issued and sold by the Company, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in the form of one or more global
Securities, then the Company shall execute and the Trustee shall, in
accordance with this Section and the Company Order with respect to such
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series, authenticate and deliver one or more global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series issued and not yet
canceled, (ii) shall be registered in the name of the Depositary for such
global Security or Securities or the nominee of such Depositary, (iii) shall
be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless this certificate is presented by an authorized
representative of the Depositary to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is registered in
the name of the nominee of the Depositary or in such other name as is
requested by an authorized representative of the Depositary (and any payment
is made to the nominee of the Depositary or to such other entity as is
requested by an authorized representative of the Depositary), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, the nominee of the
Depositary, has an interest herein."
Each Depositary designated pursuant to Section 301 for a global Security
must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and any other applicable statute or regulation.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series of like Stated Maturity and with like terms and
provisions upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series and of like Stated Maturity and with
like terms and provisions. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series of like Stated Maturity and
with like terms and provisions.
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SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at one of its offices or agencies
maintained pursuant to Section 1002 a register (the register maintained in
such office and in any other office or agency of the Company in a Place of
Payment being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The person responsible for the maintenance of the
Security Register is referred to herein as the "Security Registrar". The
Trustee is hereby appointed the initial Security Registrar.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Sections 304, 906 or 1107 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (ii) to
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register the transfer of or exchange any Security so selected for redemption
in whole or in part, except the unredeemed portion of any Security being
redeemed in part.
Notwithstanding any other provision of this Section 305, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor depositary.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities
of such series shall no longer be eligible under Section 303, the Company
shall appoint a successor Depositary with respect to the Securities of such
series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 301(9) shall no longer be effective with respect to the Securities of
such series, and the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver, Securities of such series in
definitive registered form without coupons, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the global
Security or Securities representing such series, in exchange for such global
Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more global
Securities shall no longer be represented by a global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver, Securities of such series in
definitive registered form without coupons, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the global
Security or Securities representing such series, in exchange for such global
Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Securities, a Person owning a beneficial interest in a global
Security for Securities of a series may instruct the Depositary for such
series of Securities to surrender such global Security in exchange in whole or
in part for Securities of such series in definitive registered form on such
terms as are acceptable to the Company and such Depositary. Thereupon, the
Company shall execute, and the Trustee shall authenticate and deliver, without
service charge:
(i) to the Person specified by such Depositary a new Security or
Securities of the same series, of any authorized denomination as requested by
such Person, in an aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the global Security; and
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(ii) to such Depositary a new global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
global Security and the aggregate principal amount of Securities authenticated
and delivered pursuant to Clause (i) above.
Upon the exchange of a global Security for Securities in definitive
registered form without coupons, in authorized denominations, such global
Security shall be canceled by the Trustee. Securities in definitive
registered form without coupons issued in exchange for a global Security
pursuant to this Section 305 shall be registered in such names and in such
authorized denominations as the Depositary for such global Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to or as
directed by the Persons in whose names such Securities are so registered.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Reserved.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not
less than 11 days prior to such Special Record Date. The Trustee may,
in its discretion, in the name and at the expense of the Company, cause
a similar notice to be published at least once in an authorized
newspaper in each Place of Payment, but such publication shall not be a
condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered
at the
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close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest, if any, on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee, except that if a global
Security is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the Depositary for such global Security, without
service charge, a new global Security or Securities in a denomination equal to
and in exchange for the unredeemed portion of the principal of the global
Security so surrendered. No Securities shall be authenticated in lieu of
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or in exchange for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be destroyed by the Trustee, and the Trustee shall deliver a
certificate of such destruction to the Company.
Notwithstanding any other provision of this Indenture to the contrary,
in the case of a series, all the Securities of which are not deemed to have
been originally issued at one time, a Security of such series shall not be
deemed to have been Outstanding at any time hereunder if and to the extent
that, subsequent to the authentication and delivery thereof, such Security is
delivered to the Trustee for such Security for cancellation by the Company or
any agent thereof upon the failure of the original purchaser thereof to make
payment therefor against delivery thereof, and any Security so delivered to
such Trustee shall be promptly canceled by it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest, if any, on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. Medium-Term Securities.
Notwithstanding any contrary provision herein, if all Securities of a
series are not to be originally issued at one time, it shall not be necessary
for the Company to deliver to the Trustee an Officers' Certificate, Board
Resolution, supplemental indenture, Opinion of Counsel or Company Order
otherwise required pursuant to Sections 102, 202, 301 and 303 at or prior to
the time of authentication of each Security of such series if such documents
are delivered to the Trustee or its agent at or prior to the authentication
upon original issuance of the first Security of such series to be issued;
provided that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute
a representation and warranty by the Company that as of the date of such
request, the statements made in the Officers' Certificate or other
certificates delivered pursuant to Sections 102 [and 202] shall be true and
correct as if made on such date.
A Company Order, Officers' Certificate or Board Resolution or
supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph may provide that Securities
which are the subject thereof will be authenticated and delivered by the
Trustee or its agent on original issue from time to time in the aggregate
principal amount established for such series pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by Company
Order upon the telephonic, electronic or written order of persons designated
in such Company Order, Officers' Certificate, supplemental indenture or Board
Resolution (any such telephonic or electronic instructions to be promptly
confirmed in writing by such persons) and that such persons are authorized to
determine, consistent with such Company Order, Officers' Certificate,
supplemental indenture or Board Resolution, such terms and conditions of said
Securities as are specified in such Company Order, Officers' Certificate,
supplemental indenture or Board Resolution.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Securities of any Series.
(a) The Company shall be deemed to have satisfied and discharged the
entire indebtedness on all the Securities of any particular series and, so
long as no Event of Default shall be continuing, the Trustee for the
Securities of such series, upon Company Request and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when:
(1) either
(A) all Securities of such series theretofore authenticated
and delivered (other than (i) Securities of such series which have
been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Securities of such series
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation;
or
(B) all Outstanding Securities of such series not described
in subclause (A) above and not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on all such Outstanding
Securities, for principal (and premium, if any) and interest, if
any, to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to Securities of
such series; and
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(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of the entire indebtedness on all
Securities of such series have been complied with.
(b) Upon the satisfaction of the conditions set forth in this Section
401 with respect to all the Securities of any series, the terms and conditions
of such series, including the terms and conditions with respect thereto set
forth in this Indenture, shall no longer be binding upon, or applicable to,
the Company, and the Holders or the Securities of such series shall look for
payment only to the funds deposited with the Trustee pursuant to Section
401(a)(1)(B); provided, however, that in no event shall the Company be
discharged from any obligations under Sections 305, 306 (except that
Securities of such series issued upon registration of transfer or exchange or
in lieu of mutilated, destroyed, lost or stolen Securities shall not be
obligations of the Company), 607, 611, 701 or 1002; and provided, further,
that in the event a petition for relief under Title 11 of the United States
Code or a successor statute is filed and not discharged with respect to the
Company within 91 days after the deposit pursuant to Section 401(a)(1)(B), the
entire indebtedness on all Securities of such series shall not be discharged,
and in such event the Trustee shall return such deposited funds as it is then
holding to the Company upon Company Request.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal (and premium,
if any) and interest, if any, for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds
except to the extent otherwise required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
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(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of a series of
Securities other than that series), and continuance of such default or
breach for a period of 60 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) a default under or the acceleration of the maturity date of
any bond, debenture, note or other evidence of indebtedness of the
Company or any Restricted Subsidiary (other then the Securities of that
series) or a default under any indenture or other instrument under which
any such evidence of indebtedness has been issued or by which it is
governed and the expiration of the applicable period of grace, if any,
specified in such evidence of indebtedness, indenture or other
instrument, if the aggregate amount of indebtedness with respect to
which such default or acceleration has occurred exceeds $1.0 million;
provided, however, that, if such default or acceleration under such
evidence of indebtedness, indenture or other instrument shall be cured
by the Company, or be waived by the holders of such indebtedness, in
each case as may be permitted by such evidence of indebtedness,
indenture or other instrument, then the Event of Default hereunder by
reason of such default shall be deemed likewise to have been thereupon
cured or waived;
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
a p p roving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
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(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities
of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by Holders), and upon any such declaration such principal amount (or
specified amount), plus any interest accrued on such Securities to the date of
declaration, shall become immediately due and payable.
Upon payment (i) of (A) such principal amount and (B) such interest and
(ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest on such Securities shall terminate.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
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(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holder of such Security, the whole amount then due and payable on such
Security for principal (and premium, if any) and interest, if any, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at
the rate or rates prescribed therefor in such Security, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Security and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Security, wherever
situated.
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If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any), and interest, if any, owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production
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thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal (or
premium, if any) or interest, if any, upon presentation of the Securities and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest, if any, on the
Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, if any, respectively; and
THIRD: The balance, to the Person or Persons lawfully entitled
thereto, or as a court of competent jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series, it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to
seek to obtain priority or preference over any other of such Holders or
to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or, in the case of repayment at the option of the Holder, on the
Repayment Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, expose the Trustee to personal liability or be
unduly prejudicial to Holders not joining therein, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
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SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of (or premium, if any) or interest, if any, on
any Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date or,
in the case of repayment at the option of the Holder, on or after the
Repayment Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 516. Record Date for Action by Holders.
The Company may set a record date for purposes of determining the
identity of Holders of Securities entitled to vote or consent to any action by
vote or consent authorized or permitted by Section 512 or 513 hereof. Such
record date shall be the later of 30 days prior to the first solicitation of
such consent or the date of the most recent list of Holders furnished to the
Trustee pursuant to Section 701 hereof prior to such solicitation.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series, determined as provided in Section
512, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
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SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee
of directors or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders of
Securities of such series; and provided, further, that in the case of any
default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to Securities of such
series.
The Trustee shall not be deemed to have knowledge of any default or
Event of Default except (i) an Event of Default described in Section 501(1),
(2) or (3) so long as the Trustee is Paying Agent for the Securities or (ii)
any default or Event of Default of which the Trustee shall have received
written notification or a Responsible Officer charged with the administration
of this Indenture shall have obtained actual knowledge, and such notification
shall not be deemed to include receipt of information obtained in any report
or other documents furnished under Section 704(1) or (2) of this Indenture,
which reports and documents the Trustee shall have no duty to examine.
SECTION 603. Certain Rights of Trustee.
Subject to the provision of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order or
as otherwise expressly provided herein and any resolution of the Board
of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any
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action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee and its officers, directors,
employees and agents (the Trustee and its officers, directors, employees
and agents referred to in this Section collectively as the "Indemnified
Parties" and individually as an "Indemnified Party") for, and to hold
each Indemnified Party harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration by the Trustee of
the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. As
security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee, as such, except
funds held in trust for the payment of principal of (and premium, if
any) or interest on Securities.
SECTION 608. Persons Ineligible for Appointment as Trustee.
Neither the Company nor any other Person directly or indirectly
controlling, controlled by or under common control with the Company shall
serve as Trustee.
SECTION 609. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, with respect to the Securities of any
series, then within 90 days after ascertaining that it has such
conflicting interest, and if the default (as defined in
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Subsection (b)
of this Section) to which such conflicting interest relates has not been
cured or duly waived or otherwise eliminated before the end of such 90-
day period, it shall either eliminate such conflicting interest or,
except as otherwise provided in this Section 609, resign with respect to
the Securities of that series in the manner and with the effect
hereinafter specified in this Article, and the Company shall take prompt
steps to have a successor appointed in the manner provided in this
Article Six.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the
Securities of any series, the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit by mail to all Holders of
Securities of that series, as their names and addresses appear in the
Security Register, notice of such failure in the manner and to the
extent provided in Subsection (a) of Section 703 hereof.
(c) For the purposes of this Section, the Trustee shall be deemed
to have a conflicting interest with respect to the Securities of any
series if such Securities are in default (as defined in Subsection (b)
of this Section, but exclusive of any period of grace or requirement of
notice) and:
(1) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any series other than
that series or is trustee under another indenture under which any
other securities, or certificates of interest or participation in
any other securities, of the Company are outstanding, unless such
other indenture is a collateral trust indenture under which the
only collateral consists of Securities issued under this
Indenture, provided that there shall be excluded from the
operation of this paragraph this Indenture with respect to the
Securities of any series other than that series or any indenture
or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
outstanding, if
(i) this Indenture and such other indenture or
indentures (and all series of Securities issuable
thereunder) are wholly unsecured and rank equally and such
other indenture or indentures (and such series) are
hereafter qualified under the Trust Indenture Act, unless
the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust
Indenture Act that differences exist between the provisions
of this Indenture with respect to Securities of that series
and one or more other series or the provisions of such other
indenture or indentures which are so likely to involve a
material conflict of interest as to make it necessary in the
public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to the Securities of that series and
such other series or under such other indenture or
indentures, or
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(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to the Securities of that series and
such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as
to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to the
Securities of that series and such other series or under
such other indenture or indentures;
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or
indirect common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than
the Trustee itself) for the Company who is currently engaged in
the business of underwriting, except that: (i) one individual may
be a director or an executive officer, or both, of the Trustee and
a director or an executive officer, or both, of the Company but
may not be at the same time an executive officer of both the
Trustee and the Company; (ii) if and so long as the number of
directors of the Trustee in office is more than nine, one
additional individual may be a director or an executive officer,
or both, of the Trustee and a director of the Company; and (iii)
the Trustee may be designated by the Company or by an underwriter
for the Company to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depository, or in any other similar capacity, or, subject to the
provisions of paragraph (1) of this Subsection, to act as trustee,
whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director,
partner or executive officer thereof, or 20% or more of such
voting securities is beneficially owned, collectively, by any two
or more of such persons; or 10% or more of the voting securities
of the Trustee is beneficially owned either by an underwriter for
the Company or by any director, partner or executive officer
thereof, or is beneficially owned, collectively, by any two or
more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), (i) 5% or more of the
voting securities, or 10% or more of any other class of security,
of the Company not including the Securities issued under this
Indenture
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and securities issued under an other indenture under
which the Trustee is also trustee, or (ii) 10% or more of any
class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 5% or more of the voting
securities of any person who, to the knowledge of the Trustee,
owns 10% or more of the voting securities of, or controls directly
or indirectly or is under direct or indirect common control with,
the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 10% or more of any class
of security of any person who, to the knowledge of the Trustee,
owns 50% or more of the voting securities of the Company;
(9) the Trustee owns, on the date of default upon the
Securities of any series issued under this Indenture (as such term
is defined hereinafter in this Section but exclusive of any period
of grace or requirement of notice) or any anniversary of such
default while such default upon the Securities of a series issued
under this Indenture remains outstanding, in the capacity of
executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or
of any class of security, of any person, the beneficial ownership
of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) of this
Subsection. As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which includes them, the
provisions of the preceding sentence shall not apply, for a period
of two years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed 25% of such
voting securities or 25% of any such class of security. Promptly
after the dates of any such default upon the Securities of any
series issued under this Indenture and annually in each succeeding
year that such Securities remain in default, the Trustee shall
make a check of its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Company fails
to make payment in full of the principal of (or premium, if any)
or interest on any of the Securities when and as the same becomes
d u e and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its holdings
of such securities in any of the above-mentioned capacities as of
the date of the expiration of such 30-day period, and after such
date, notwithstanding the foregoing provisions of this paragraph,
all such securities so held by the Trustee, with sole or joint
control over such securities vested in it, shall, but only so long
as such failure shall continue, be considered as though
beneficially owned by the Trustee for the purposes of paragraphs
(6), (7) and (8) of this Subsection; or
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(10) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Subsection (b) of Section 614 of this
Indenture, the Trustee shall be or shall become a creditor of the
Company.
The specification of percentages in paragraphs (5) to (9), inclusive, of
this Subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and (iii) the Trustee shall
not be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not
in default as defined in clause (ii) above, or (8) any security which it holds
as collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or as
custodian, escrow agent or depository, or in any similar representative
capacity.
Except in the case of a default in the payment of the principal of or
interest on any Security issued under this Indenture, or in the payment of any
sinking or purchase fund installment, the Trustee shall not be required to
resign as provided by this Subsection if the Trustee shall have sustained the
burden of proving, on application to the Commission and after opportunity for
hearing thereon, that:
(i) the default under this Indenture may be cured or waived
during a reasonable period and under the procedures described in such
application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Securities. The
filing of such an application shall automatically stay the performance
of the duty to resign until the Commission orders otherwise.
Any resignation of the Trustee shall become effective only upon the
appointment of a successor Trustee and such successor's acceptance of such an
appointment.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the
Company, means every person who, within one year prior to the time
as of which the determination is made, has purchased from the
Company with a view to, or has
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offered or sold for the Company in
connection with, the distribution of any security of the Company
outstanding at such time, or has participated or has had a direct
or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from
an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation
or any individual performing similar functions with respect to any
organization, whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political
subdivision thereof. As used in this paragraph, the term "trust"
shall include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued
under or pursuant to any trust, agreement or arrangement whereby a
trustee or trustees or agent or agents for the owner or holder of
such security are presently entitled to vote in the direction or
management of the affairs of a person.
(5) The term "Company" means any obligor upon the
Securities.
(6) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary
and the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization
whether incorporated or unincorporated, but shall not include the
chairman of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the
following provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting securities
of such person as entitles the holder or holders thereof to cast
such specified percentage of the aggregate votes which the holders
of all the outstanding voting Securities of such person are
entitled to cast in the direction or management of the affairs of
such person.
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(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities
of the class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of
indebtedness, the number of shares if relating to capital shares
and the number of units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not
be deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities
is not in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as
to principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer shall
be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or
holders thereof substantially the same rights and privileges;
provided, however, that, in the case of secured evidences of
indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such
series different classes; and provided, further, that, in the case
of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed
sufficient to constitute them securities of different classes,
whether or not they are issued under a single indenture.
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SECTION 610. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, authorized under
such laws to exercise corporate trust powers, shall be subject to supervision
or examination by Federal, State or District of Columbia authority and shall
(i) have a combined capital and surplus of at least $50,000,000 or (ii) be a
wholly owned subsidiary of a bank, trust company or bank holding company
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal, State or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 611. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 609(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 610 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
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(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, winding up or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to any or all series of Securities, or (ii) subject to
Section 514, unless the Trustee's duty to resign is stayed as provided in this
Section 611, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
with respect to any or all series of Securities and the appointment of a
successor Trustee or Trustees with respect to such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 612. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 612, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 612, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Officer.
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SECTION 612. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder subject,
nevertheless, to its lien, if any, provided for in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent
provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of each successor Trustee relates; but,
on request of the Company or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 613. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 614. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within three months prior to a default, as defined in Subsection
(c) of this Section, or subsequent to such a default, then unless and until
such default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon the
date of such default; and
(2) all property received by the Trustee in respect of any claims
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third Person, and (iii)
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distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable
State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to believe
that a default, as defined in Subsection (c) of this Section, would
occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Holders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other
than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant
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to the
Federal Bankruptcy Code or applicable State law, whether such distribution is
made in cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole
or in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and
the Holders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to liquidate
or to appraise the value of any securities or other property held in such
special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three
months' period, it shall be subject to the provision of this Subsection if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such three months'
period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
In any case commenced under the Bankruptcy Act of July 1, 1898 or any
amendment thereto enacted prior to November 6, 1978, all references to periods
of three months shall be deemed to be references to periods of four months.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances
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surrounding the making thereof is given to the Holders at
the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture,transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction,as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper, as defined in Subsection
(c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full
of the principal of or interest on any of the Securities or upon the
other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section, and
(iii) under which a default exists at the time of the apportionment of
the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously
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with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Code" means the Bankruptcy Code
of 1978, as amended, or successor provisions thereto.
SECTION 615. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$15,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case
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at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under
the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If all of the Securities of a series are not to be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee may appoint in accordance with this Section an
Authenticating Agent having an office in a Place of Payment designated by the
Company with respect to such series of Securities.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
NationsBank of Georgia,
National Association, as Trustee
By ______________________
as Authenticating Agent
By _______________________
Authorized Officer
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
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(a) semi-annually, not more than 15 days after each Regular Record
Date of each series of Securities having such a Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of a date not more than 15 days prior to
the time such list is furnished, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished; excluding from any such list
names and addresses received by the Trustee in its capacity as Security
Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Trustee, and furnish to the Trustee reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 702(a) a copy of the
form of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable
expenses of mailing, unless within five days after such tender the Trustee
shall mail to such applicants and file with the Commission, together with a
copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
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objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1995, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, a brief report dated as of such May
15 with respect to any of the following events which may have occurred within
the previous 12 months (but if no such event has occurred within such period,
no report need be transmitted):
(1) any change to its eligibility under Section 610 and its
qualifications under Section 609;
(2) the creation of or any material change to a relationship
specified in paragraph 1 through 10 of Subsection (c) of Section 609
hereof;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities Outstanding on the date of such report;
(4) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3),
(4) or (6);
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(5) any change to the property and funds, if any, physically in
the possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of a
default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names
and addresses appear in the Security Register, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee
(as such) since the date of the last report transmitted pursuant to Subsection
(a) of this Section (or if no such report has yet been so transmitted, since
the date of execution of this instrument) for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Securities, on
property or funds held or collected by it as Trustee and which it has not
previously reported pursuant to this Subsection, except that the Trustee shall
not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
the Securities Outstanding at such time, such report to be transmitted within
90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934 in respect of a security listed and
registered on a
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national securities exchange as may be prescribed from
time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1)
and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission; and
(4) furnish to the Trustee, not less often than annually, a brief
certificate from the Company's principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under the Indenture. For purposes of this paragraph, such compliance
shall be determined without regard to any period of grace or requirement
of notice provided under this Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey or transfer all or substantially all of its properties
and assets as an entirety to any Person unless:
(1) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company substantially as an
entirety shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the performance
and observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
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(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing;
and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Anything in this Article Eight to the contrary notwithstanding, no such
consolidation, merger, conveyance or transfer shall be entered into or made by
the Company with or to another corporation which has outstanding any
obligations secured by a Mortgage if, as a result of such consolidation,
merger, conveyance or transfer, any Principal Property of the Company or any
Restricted Subsidiary would be subjected to the lien of such Mortgage and such
Mortgage is not expressly excluded from the restrictions or permitted by the
provisions of Section 1006 unless simultaneously therewith or prior thereto
effective provision shall be made for the securing of all the Securities
(together with, if the Company shall so determine, any other Debt of the
Company now existing or hereafter created which is not subordinated to the
Securities), equally and ratably with (or, at the option of the Company, prior
to) the obligations secured by such Mortgage by a lien upon such Principal
Property.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into
any other corporation or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter the
predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
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(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon
the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as
to principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided such other provisions
shall not adversely affect the interests of the Holders of Securities of
any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board
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Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change any Place of Payment
where, or the coin or currency in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Section 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in
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relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental Indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental Indenture. If the Company shall
so determine, new Securities of any series to modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest, if any, on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company hereby appoints Midwest Clearing
Corp., 40
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Broad Street, 2nd Floor, New York, New York, 10004, as its initial
office or agency for each said purposes. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest, if any, on any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium,
if any) or interest, if any, so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest, if any, on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest, if any, on Securities of that series
in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
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(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest, if any, on the
Securities of that series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest, if any, on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or
interest, if any, has become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries as a whole.
SECTION 1005. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or
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not to the best knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions of Sections 1001 to 1004 inclusive, and
Sections 1006 and 1007, and if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.
SECTION 1006. Restrictions on Debt.
The Company will not itself, and will not permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any loans, whether or not
evidenced by negotiable instruments or securities, or any notes, bonds,
debentures or other similar evidences of indebtedness for money borrowed
(loans and notes, bonds, debentures or other similar evidences of indebtedness
for money borrowed being hereinafter in this Article called "Debt"), secured
by pledge of, or mortgage or other lien on, any Principal Property of the
Company or any Restricted Subsidiary, or any shares of stock or Debt of any
Restricted Subsidiary (pledges, mortgages and other liens being hereinafter in
this Article called "Mortgage" or "Mortgages"), without effectively providing
that the Securities (together with, if the Company shall so determine, any
other Debt of the Company or such Restricted Subsidiary then existing or
thereafter created which is not subordinate to the Securities) shall be
secured equally and ratably with (or prior to) such secured Debt, so long as
such secured Debt shall be so secured, and will not permit any Restricted
Subsidiary to incur, issue, assume or guaranty any unsecured Debt (except for
guaranties of Unsecured Debt of the Company or a Restricted Subsidiary of the
Company) or to issue any Preferred Stock in each instance unless the aggregate
amount of (A) all such Debt, (B) the aggregate preferential amount to which
such Preferred Stock would be entitled on any involuntary distribution of
assets and (C) Attributable Debt of the Company and its Restricted
Subsidiaries in respect of sale and leaseback transactions (as defined in
Section 1007) would not exceed 10% of Consolidated Net Tangible Assets;
provided, however, that this Section 1006 shall not apply to, and there shall
be excluded from Debt in any computation under this Section 1006:
(1) Debt secured by Mortgages on property of, or on any shares of
stock or Debt of, any corporation, and unsecured Debt of any
corporation, existing at the time such corporation becomes a Restricted
Subsidiary;
(2) Debt secured by Mortgages in favor of the Company or any
Restricted Subsidiary and unsecured Debt payable to the Company or any
Restricted Subsidiary;
(3) Debt secured by Mortgages in favor of the United States of
America, or any agency, department or other instrumentality thereof, to
secure progress, advance or other payments pursuant to any contract or
provision of any statute;
(4) (a) Debt secured by Mortgages on property, shares of Capital
Stock or Debt existing at the time of acquisition thereof (including
acquisition through merger or consolidation) or to secure the payment of
all or any part of the purchase price or construction cost thereof or to
secure any Debt incurred prior to, at the time of, or within
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120 days
after, the acquisition of such property or shares or Debt or the
completion of any such construction for the purpose of financing all or
any part of the purchase price or construction cost thereof, and (b)
unsecured Debt incurred to finance the acquisition of any property,
shares of Capital Stock or Debt (other than shares of Capital Stock or
Debt of the Company) or to finance construction on property incurred
prior to, at the time of, or within 120 days after the later of the
acquisition of such property or the completion of construction thereon;
(5) Debt secured by Mortgages securing obligations issued by a
state, territory or possession of the United States, or any political
subdivision of any of the foregoing or the District of Columbia, to
finance the acquisition of or construction on property, and on which the
interest is not, in the opinion of tax counsel of recognized standing or
in accordance with a ruling issued by the Internal Revenue Service,
includible in gross income of the holder by reason of Section 103(a)(1)
of the Internal Revenue Code (or any successor to such provision) as in
effect at the time of the issuance of such obligations; and
(6) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Debt referred to in the foregoing clauses (1) to (5), inclusive;
provided, that (i) such extension, renewal or replacement, in the case
of Debt secured by a Mortgage, shall be limited to all or a part of the
same property, shares of stock or Debt that secured the Mortgage
extended, renewed or replaced (plus improvements on such property), and
(ii) the Debt secured by such Mortgage at such time is not increased;
and provided, further, that this Section 1006 shall not apply to any
issuance of Preferred Stock by a Restricted Subsidiary to the Company or
another Restricted Subsidiary, provided that such Preferred Stock shall
not thereafter be transferable to any Person other than the Company or a
Restricted Subsidiary.
SECTION 1007. Restrictions on Sales and Leasebacks.
The Company will not itself, and will not permit any Restricted
Subsidiary to, enter into any transaction after the date hereof with any bank,
insurance company, lender or other investor, or to which any such bank,
insurance company, lender or investor is a party, provided for the leasing by
the Company or a Restricted Subsidiary of any Principal Property which has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such bank, insurance company, lender or investor, or to any
person to whom funds have been or are to be advanced by such bank, insurance
company, lender or investor on the security of such Principal Property (herein
referred to as a "sale and leaseback transaction") unless, after giving effect
thereto, the aggregate amount of all Attributable Debt with respect to such
transactions plus all Debt to which Section 1006 is applicable would not
exceed 10% of Consolidated Net Tangible Assets. This covenant shall not apply
to, and there shall be excluded from Attributable Debt in any computation
under this Section 1007, Attributable Debt with respect to any sale and
leaseback transaction if:
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(1) the lease in such sale and leaseback transaction is for a
period, including renewal rights, of not in excess of three years, or
(2) the Company or a Restricted Subsidiary, within 180 days after
the sale or transfer shall have been made by the Company or by a
Restricted Subsidiary, applies an amount not less than the greater of
the net proceeds of the sale of the Principal Property leased pursuant
to such arrangement or the fair market value of the Principal Property
so leased at the time of entering into such arrangement (as determined
in any manner approved by the Board of Directors) to (a) the retirement
of Funded Debt of the Company ranking on a parity with or senior to the
Securities or the retirement of Funded Debt of a Restricted Subsidiary;
provided, however, that the amount to be applied to the retirement of
such Funded Debt of the Company or a Restricted Subsidiary shall be
reduced by (x) the principal amount of any Securities (or other notes or
debentures constituting such Funded Debt) delivered within such 180-day
period to the Trustee or other applicable trustee for retirement and
cancellation and (y) the principal amount of such Funded Debt, other
than items referred to in the preceding clause (x), voluntarily retired
by the Company or a Restricted Subsidiary within 180 days after such
sale; and provided, further, that, notwithstanding the foregoing, no
retirement referred to in this clause (a) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision, or (b) the purchase of other property
which will constitute a Principal Property having a fair market value,
in the opinion of the Board of Directors of the Company, at least equal
to the fair market value of the Principal Property leased in such sale
and leaseback transaction less the amount of any Funded Debt retired
pursuant to clause (a) of this subsection, or
(3) such sale and leaseback transaction is entered into prior to,
at the time of, or within 180 days after the later of the acquisition of
the Principal Property or the completion of construction thereon, or
(4) the lease in such sale and leaseback transaction secures or
relates to obligations issued by a state territory or possession of the
United States, or any political subdivision of any of the foregoing, or
the District of Columbia, to finance the acquisition of or construction
on property, and on which the interest is not, in the opinion of tax
counsel of recognized standing or in accordance with a ruling issued by
the Internal Revenue Service, includible in gross income of the holder
by reason of Section 103(a)(1) of the Internal Revenue Code (or any
successor to such provision) as in effect at the time of the issuance of
such obligations or
(5) such sale and leaseback transaction is entered into between
the Company and a Restricted Subsidiary or between Restricted
Subsidiaries.
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SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1006 and 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
SECTION 1009. Calculation of Original Issue Discount; and Certain Information
Concerning Tax Reporting
The Company will deliver to the Trustee, within 40 days of the date of
original issuance of any series of Securities with Original Issue Discount, an
Officers' Certificate, setting forth (i) the amount of the Original Issue
Discount on the Securities, expressed as a U.S. dollar amount per $1,000 of
principal amount at Stated Maturity, (ii) the yield to maturity for the
Securities, and (iii) a table of the amount of the Original Issue Discount on
the Securities, expressed as a U.S. dollar amount per $1,000 of principal
amount at Stated Maturity, accrued for each day from the date of original
issuance of the Securities to their Stated Maturity.
On or before December 15 of each year during which any Securities are
Outstanding, the Company shall furnish to the Trustee such information as may
be reasonably requested by the Trustee in order that the Trustee may prepare
the information which it is required to report for such year on Internal
Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the Internal
Revenue Code of 1986, as amended. Such information shall include the amount
of Original Issue Discount includible in income for each $1,000 of principal
amount at Stated Maturity of Outstanding Securities during such year.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
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SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection By Trustee of Securities to Be Redeemed.
With the exception of Securities delivered by the Company to the Trustee
in satisfaction of obligations of the Company to make mandatory sinking fund
payments, if less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof)
of the principal amount of Securities of such series of a denomination larger
than the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
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(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on
and after said date;
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price; and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered, except
that if a global Security is so surrendered, the Company shall execute, and
the Trustee shall authenticate and deliver to the Depositary for such global
Security, without service charge, a new global Security or Securities in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the global Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by
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the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, and will also deliver to the Trustee any Securities
to be so credited which have not theretofore been so delivered. Not less than
30 days before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 1103 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
provided in Section 1104. Such notice having been duly given, the redemption
of such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to Effect
Defeasance.
If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of a series under Section 1302 or (b) covenant
defeasance of the Securities of a series under Section 1303, then the
provisions of such Section or Sections, as the case may be, together with the
other provisions of this Article Thirteen, shall be applicable to the
Securities of such series, and the Company may at its option by Board
Resolution, at any time, with respect to the Securities of such series, elect
to have either Section 1302 (if applicable) or Section 1303 (if applicable) be
applied to the Outstanding Securities of such series upon compliance with the
conditions set forth below in this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the
Outstanding Securities of such series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the
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Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Outstanding Securities of such series
to receive, solely from the trust fund described in Section 1304 and as more
fully set forth in such Section, payments in respect of the principal of (and
premium, if any) and interest on such Securities when such payments are due,
(b) the Company's obligations with respect to such Securities under Sections
304, 305, 306, 1002 and 1003, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (d) this Article Thirteen. Subject to
compliance with this Article Thirteen, the Company may exercise its option
under this Section 1302 notwithstanding the prior exercise of its option under
Section 1303 with respect to the Securities of such series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections
501(5), 1006 and 1007 with respect to the Outstanding Securities of such
series on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"). For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities of such
series, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section,
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance.
The following shall be the conditions to application of either Section
1302 or Section 1303 to the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (a) money in an amount, or (b) U.S.
Government Obligations which through the scheduled payment of principal
and interest, if any, in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (c) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any, on) and each installment of principal
of (and premium, if any) and interest, if any, on the Outstanding
Securities of such series on the Stated Maturity of such principal or
installment of principal or interest and (ii) any mandatory sinking fund
payments or
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analogous payments applicable to the Outstanding Securities
of such series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities. For
this purpose, "U.S. Government Obligations" means securities that are
(x) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any
such U.S. Government obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian
for the account of the holder of such depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit or, insofar as Subsections 501(6) and (7) are
concerned, at any time during the period ending on the 91st day after
the date of such deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to the Company in
respect of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities of such series to have a conflicting interest
as defined in Section 608 and for purposes of the Trust Indenture Act
with respect to any securities of the Company.
(4) Such defeasance or covenant defeasance shall not cause any
Securities of such series then listed on any registered national
securities exchange under the Securities Exchange Act of 1934, as
amended, to be delisted or deregistered.
(5) In the case of an election under Section 1302, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
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(6) In the case of an election under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which
may be imposed on the Company in connection therewith pursuant to
Section 301.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to be Held in
Trust; Miscellaneous.
Subject to the provisions of the last paragraph of Section 1003, all
money and U. S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively, for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304, in
respect of the Outstanding Securities of such series shall be held in trust
and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities, of all sums due and
to become due thereon in respect of principal (and premium, if any) and
interest, if any, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U. S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U. S. Government obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would be
required to be deposited to effect an equivalent defeasance or covenant
defeasance.
74
<PAGE>
ARTICLE FOURTEEN
REPAYMENT OF SECURITIES AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable before their Stated
Maturity at the option of the Holders shall be repaid in accordance with their
terms and (except as otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
SECTION 1402. Notice of Repayment Date.
Notice of any Repayment Date with respect to Securities of any series
shall, unless otherwise specified by the terms of the Securities of any
series, be given by the Company not less than 45 nor more than 60 days prior
to such Repayment Date to each Holder of Securities of such series in
accordance with Section 106.
The notice as to Repayment Date shall state:
(1) the Repayment Date;
(2) the Repayment Price;
(3) the place or places where such Securities are to be
surrendered for payment of the Repayment Price and the date
by which Securities must be so surrendered in order to be
repaid;
(4) a description of the procedure which a Holder must follow to
exercise a repayment right; and
(5) that exercise of the option to elect repayment is
irrevocable.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repayment right.
SECTION 1403. Deposit of Repayment Price.
Prior to the Repayment Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Repayment Price of and (unless the Repayment Date shall
be an Interest Payment Date) accrued interest, if any, on all of the
Securities of such series which are to be repaid on that date.
75
<PAGE>
SECTION 1404. Securities Payable on Repayment Date.
The form of option to elect repayment having been delivered as specified
in the form of Security for such series, the Securities of such series so to
be repaid shall, on the Repayment Date, become due and payable at the
Repayment Price applicable thereto, and from and after such date (unless the
Company shall default in the payment of the Repayment Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for repayment in accordance with said notice, such Security
shall be paid by the Company at the Repayment Price together with accrued
interest to the Repayment Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to such Repayment Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Security shall not be paid upon surrender thereof for repayment,
the principal (and premium, if any) shall, until paid, bear interest from the
Repayment Date at the rate prescribed therefor in such Security.
SECTION 1405. Securities Repaid in Part.
Any Security which by its terms may be repaid in part at the option of
the Holder and which is to be repaid only in part shall be surrendered at any
office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unrepaid portion of the principal of the Security
so surrendered.
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS.
SECTION 1501. Immunity of Incorporators, Stockholders, Officers and
Directors.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that
this Indenture and the obligations issued hereunder are solely corporate
obligations, and that no personal liability whatever shall attach
76
<PAGE>
to, or is or
shall be incurred by, the incorporators, stockholders, officers or directors,
as such, of the Company or any successor corporation, or any of them, because
of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or implied therefrom are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of such Securities.
* * * * * * *
77
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
COCA-COLA BOTTLING CO.
CONSOLIDATED
By: s/ Brenda B. Jackson
Brenda B. Jackson
ATTEST: Vice President and Treasurer
s/ Patricia A. Gill
Patricia A. Gill, Assistant Secretary
[Corporate Seal]
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION, AS TRUSTEE
By: s/ Sandra C. Carreker
ATTEST: Vice President
s/ Elizabeth T. Talley
[Corporate Seal]
EXHIBIT 21.1
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
STATE/DATE PERCENT
INVESTMENT IN INCORPORATION OWNED BY OWNERSHIP
<S> <C> <C> <C>
Columbus Coca-Cola Delaware Consolidated 100%
Bottling Company 7/10/84
Coca-Cola Bottling Co. Delaware Consolidated 100%
of Nashville, Inc. 2/5/85
Coca-Cola Bottling Co. Delaware Consolidated 100%
of Roanoke, Inc. 2/5/85
Coca-Cola Bottling Co. Alabama Consolidated 100%
of Mobile, Inc. 7/29/85
Panama City Coca-Cola Florida Columbus CCBC, Inc. 100%
Bottling Company 10/5/31
Case Advertising, Inc. Delaware Consolidated 100%
2/19/88
C C Beverage Packing, Delaware Consolidated 100%
Inc. 3/15/88
Tennessee Soft Drink Tennessee CCBC of Nashville,Inc 100%
Production Company 12/22/88
The Coca-Cola Bottling West Virginia Consolidated 100%
Company of West 12/28/92
Virginia,Inc.
Jackson Acquisitions, Delaware Consolidated 100%
Inc. 1/24/90
CCBCC, Inc. Delaware Consolidated 100%
12/20/93
Sunbelt Coca-Cola Bottling Delaware Consolidated 100%
Company, Inc. 7/24/80
Coca-Cola Bottling Co. Delaware Sunbelt 100%
Affiliated, Inc. 4/18/35
Metrolina Bottling Delaware Consolidated 100%
Company 5/21/93
COBC, Inc. Delaware Columbus Coca-Cola 100%
11/23/93 Bottling Company
ECBC,Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. Affiliated, Inc.
MOBC,Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. of Mobile, Inc.
NABC, Inc. Delaware Coca-Cola Bottling Co. 100%
11/23/93 of Nashville, Inc.
PCBC, Inc. Delaware Panama City Coca-Cola 100%
11/23/93 Bottling Company
ROBC, Inc. Delaware Coca-Cola Bottling Co. 100%
11/23/93 of Roanoke, Inc.
WCBC,Inc. Delaware Coca-Cola Bottling Co. 100%
11/23/93 Affiliated, Inc.
WVBC, Inc. Delaware The Coca-Cola Bottling 100%
11/23/93 Company of West
Virginia,Inc.
Coca-Cola Ventures, Delaware Coca-Cola Bottling Co. 100%
Inc. 6/17/93 Affiliated,Inc.
Whirl-i-Bird, Inc. Tennessee Consolidated 100%
11/3/86
</TABLE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No.33-4325)
and Registration Statement on Form S-3 (No.33-54657) of our report dated
February 24,1995 appearing in this filing of Coca-Cola Bottling Co.
Consolidated's annual report on Form 10-K for the fiscal year ended
January 1, 1995. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
Price Waterhouse LLP
Charlotte, North Carolina
March 31, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the year ended January 1, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-01-1995
<PERIOD-END> JAN-01-1995
<CASH> 1,812
<SECURITIES> 0
<RECEIVABLES> 8,156
<ALLOWANCES> 400
<INVENTORY> 31,871
<CURRENT-ASSETS> 59,622
<PP&E> 327,052
<DEPRECIATION> 141,419
<TOTAL-ASSETS> 664,159
<CURRENT-LIABILITIES> 78,164
<BONDS> 432,971
<COMMON> 12,055
0
0
<OTHER-SE> 21,926
<TOTAL-LIABILITY-AND-EQUITY> 664,159
<SALES> 723,896
<TOTAL-REVENUES> 723,896
<CGS> 427,140
<TOTAL-COSTS> 427,140
<OTHER-EXPENSES> 241,048
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,385
<INCOME-PRETAX> 24,386
<INCOME-TAX> 10,239
<INCOME-CONTINUING> 14,147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (2,211)
<NET-INCOME> 11,936
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 0
</TABLE>
