SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
Coca-Cola Bottling Co. Consolidated
(Name of issuer or person filing statement)
Common Stock, $1.00 Par Value
(Title of class of securities)
191098 10 2
(CUSIP number of class of securities)
J. Frank Harrison, III
Vice Chairman of the Board of Directors and
Chief Executive Officer
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
(704) 551-4400
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of the person filing statement)
Copy to:
J. Norfleet Pruden, III
Kennedy Covington Lobdell & Hickman, L.L.P.
NationsBank Corporate Center
100 North Tryon Street, Suite 4200
Charlotte, North Carolina 28202-4006
(704) 331-7400
November 14, 1996
(Date tender offer first published, sent or given to security holders)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$23,750,000 $4,750
* Assumes the purchase of 500,000 Shares at the maximum tender offer
price per Share of $47.50.
[_] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
Amount previously paid: Not Applicable Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
<PAGE>
This Issuer Tender Offer Statement on Schedule 13E-4 (the "Statement")
relates to the tender offer by Coca-Cola Bottling Co. Consolidated, a Delaware
corporation (the "Company"), to purchase up to 500,000 shares of common stock,
$1.00 par value ("Common Stock" or the "Shares"), of the Company at prices, net
to the seller in cash, not greater than $47.50 nor less than $42.50 per Share,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated November 14, 1996 (the "Offer to Purchase") and the related Letter of
Transmittal (which are herein collectively referred to as the "Offer"). Copies
of such documents are filed as Exhibits (a)(1) and (a)(2), respectively, to this
Statement.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Coca-Cola Bottling Co. Consolidated, a
Delaware corporation. The address of its principal executive offices is 1900
Rexford Road, Charlotte, North Carolina 28211.
(b) The information set forth in "Introduction," "Section 1. Number of
Shares; Proration" and "Section 9. Information as to Capital Stock; Transactions
and Arrangements Concerning the Shares" in the Offer to Purchase is incorporated
herein by reference. The Offer is being made to all holders of Shares, including
officers, directors and affiliates of the Company.
(c) The information set forth in "Introduction," and "Section 7. Price
Range of Shares; Dividends" in the Offer to Purchase is incorporated herein by
reference.
(d) This Statement is being filed by the issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 10. Source and Amount of
Funds" in the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
ISSUER.
(a)-(j) The information set forth in "Introduction," "Section 8.
Background and Purpose of the Offer; Certain Effects of the Offer," "Section 9.
Information as to Capital Stock; Transactions and Arrangements Concerning the
Shares," "Section 10. Source and Amount of Funds" and "Section 12. Effects of
the Offer on the Market for Shares; Registration Under the Exchange Act" in the
Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 9. Information as to Capital
Stock; Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase is incorporated herein by reference.
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ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction," "Section 8. Background and
Purpose of the Offer; Certain Effects of the Offer" and "Section 9. Information
as to Capital Stock; Transactions and Arrangements Concerning the Shares" in the
Offer to Purchase is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and "Section 16. Fees and
Expenses" in the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Section 11. Certain Information
About the Company" in the Offer to Purchase is incorporated herein by reference.
The information set forth as (i) "Item 8. Financial Statements and Supplementary
Data" in Part II of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, filed as Exhibit (g)(1) hereto, and (ii) "Item 1.
Financial Statements" in Part I of the Company's Quarterly Report on Form 10-Q
for the quarterly period ended September 29, 1996, filed as Exhibit (g)(2)
hereto, is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION
(a) Not applicable.
(b) The information set forth in "Section 13. Certain Legal Matters;
Regulatory and Foreign Approvals" in the Offer to Purchase is incorporated
herein by reference.
(c) The information set forth in "Section 12. Effects of the Offer on
the Market for Shares; Registration Under the Exchange Act" in the Offer to
Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated November 14, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter dated November 14, 1996 from the Company to
brokers, dealers, commercial banks, trust companies and
other nominees.
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<PAGE>
(a)(5) Form of Letter dated November 14, 1996 to clients for use
by brokers, dealers, commercial banks, trust companies and
other nominees.
(a)(6) Form of Letter dated November 14, 1996 to shareholders from
the Vice Chairman of the Board of Directors and Chief
Executive Officer and the Vice President and Chief
Financial Officer of the Company.
(a)(7) Form of Press Release issued by the Company dated
November 14, 1996.
(a)(8) Form of Summary Advertisement dated November 14, 1996.
(a)(9) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(b) Amended and Restated Credit Agreement, dated as of December
21, 1995, among the Company, NationsBank, N.A., Bank of
America National Trust and Savings Association and the
other banks named therein (incorporated herein by reference
to Exhibit 4.14 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995).
(c)(i) Stock Rights and Restrictions Agreement, dated as of
January 27, 1989, by and between the Company and The
Coca-Cola Company (incorporated herein by reference to
Exhibit 28.01 to the Company's Current Report on Form 8-K
dated as of January 27, 1989).
(c)(ii) Shareholders' Agreement, dated as of December 17, 1988, by
and among The Coca-Cola Company, J. Frank Harrison, Jr.,
J. Frank Harrison, III and the other parties thereto.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) "Item 8. Financial Statements and Supplementary Data" in
Part II of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.
(g)(2) "Item 1. Financial Statements" in Part I of the Company's
Quarterly Report on Form 10-Q for the quarterly period
ended September 29, 1996.
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<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
COCA-COLA BOTTLING CO. CONSOLIDATED
By: /s/ David V. Singer
David V. Singer
Vice President and Chief Financial Officer
Dated: November 14, 1996
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INDEX TO EXHIBITS
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ITEM DESCRIPTION PAGE
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(a)(1) Form of Offer to Purchase dated November 14, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter dated November 14, 1996 from the
Company to brokers, dealers, commercial banks, trust
companies and other nominees.
(a)(5) Form of Letter dated November 14, 1996 to clients for use
by brokers, dealers, commercial banks, trust companies and
other nominees.
(a)(6) Form of Letter dated November 14, 1996 to shareholders from
the Vice Chairman of the Board of Directors and Chief
Executive Officer and the Vice President and Chief
Financial Officer of the Company.
(a)(7) Form of Press Release issued by the Company dated
November 14, 1996.
(a)(8) Form of Summary Advertisement dated November 14, 1996.
(a)(9) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(b) Amended and Restated Credit Agreement, dated as of December
21, 1995, among the Company, NationsBank, N.A., Bank of
America National Trust and Savings Association and the
other banks named therein (incorporated herein by reference
to Exhibit 4.14 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995).
(c)(i) Stock Rights and Restrictions Agreement, dated as of
January 27, 1989, by and between the Company and The
Coca-Cola Company (incorporated herein by reference to
Exhibit 28.01 to the Company's Current Report on Form 8-K
dated as of January 27, 1989).
(c)(ii) Shareholders' Agreement, dated as of December 17, 1988,
by and among The Coca-Cola Company, J. Frank Harrison, Jr.,
J. Frank Harrison, III and the other parties thereto.
(g)(1) "Item 8. Financial Statements and Supplementary Data" in
Part II of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.
(g)(2) "Item 1. Financial Statements" in Part I of the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 29, 1996.
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Exhibit (a)(1)
(Coca-Cola Bottling Co. Consolidated Logo appears here)
OFFER TO PURCHASE FOR CASH UP TO 500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $47.50 NOR LESS THAN $42.50 PER SHARE.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED.
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Company"), invites its stockholders to tender shares of its common stock, $1.00
par value ("Common Stock" or the "Shares"), to the Company at prices not greater
than $47.50 nor less than $42.50 per Share in cash, specified by tendering
stockholders, upon the terms and subject to the conditions set forth in this
Offer to Purchase and the related Letter of Transmittal (which together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $47.50 nor less than
$42.50 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 500,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $47.50 nor less than $42.50 per
Share) validly tendered and not withdrawn pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer including the proration terms hereof. The Company
reserves the right, in its sole discretion, to purchase more than 500,000 Shares
pursuant to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
This Offer is not being made for (nor will tenders be accepted of) shares
of the Company's Class B common stock, $1.00 par value ("Class B Common Stock").
Holders of Class B Common Stock who wish to participate in the Offer must
convert such Class B Common Stock into Shares in accordance with the terms and
provisions of the Company's Certificate of Incorporation and tender the Shares
issuable upon conversion in accordance with the terms and conditions of the
Offer prior to the expiration thereof.
On November 5, 1996, the Board of Directors of the Company declared a
dividend of $.25 per share on shares of Common Stock and Class B Common Stock
payable on December 6, 1996 to stockholders of record at the close of business
on November 22, 1996. Since the Expiration Date (as hereinafter defined) will
occur after November 22, 1996, holders of record on such date of Shares
purchased in the Offer will be entitled to receive such dividend regardless of
whether such Shares were tendered pursuant to the Offer prior to, on or after
November 22, 1996.
The Shares are listed and traded on the Nasdaq National Market under the
symbol "COKE." On November 13, 1996, the last full trading day on the Nasdaq
National Market prior to the announcement and commencement of the Offer, the
closing per Share sales price as reported on the Nasdaq National Market was
$42.25. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES. SEE SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED BY ITS PRINCIPAL STOCKHOLDERS (J.
FRANK HARRISON, JR., J. FRANK HARRISON, III AND CERTAIN TRUSTS FOR THE BENEFIT
OF MEMBERS OF THE HARRISON FAMILY (THE "HARRISON FAMILY INTERESTS") AND THE
COCA-COLA COMPANY) THAT THEY DO NOT INTEND TO TENDER SHARES PURSUANT TO THE
OFFER, ALTHOUGH, FOLLOWING COMPLETION OF THE OFFER, THE COMPANY INTENDS TO
NEGOTIATE WITH THE COCA-COLA COMPANY FOR THE PURCHASE OF CERTAIN SHARES HELD BY
THE COCA-COLA COMPANY. SEE SECTION 9. THE COMPANY HAS BEEN ADVISED THAT CERTAIN
OF ITS OTHER DIRECTORS AND EXECUTIVE OFFICERS MAY TENDER SHARES PURSUANT TO THE
OFFER. SEE SECTION 8.
The Date of this Offer to Purchase is November 14, 1996.
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it with any required signature guarantee and any
other required documents to First Union National Bank of North Carolina (the
"Depositary"), and either mail or deliver the stock certificates for such Shares
to the Depositary (with all such other documents) or follow the procedure for
book-entry delivery set forth in Section 3, or (ii) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such stockholder. A stockholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
that broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares. Stockholders who desire to tender
Shares and whose certificates for such Shares are not immediately available or
who cannot comply with the procedure for book-entry transfer on a timely basis
or whose other required documentation cannot be delivered to the Depositary by
the expiration of the Offer should tender such Shares by following the
procedures for guaranteed delivery set forth in Section 3. TO EFFECT A VALID
TENDER OF SHARES, STOCKHOLDERS MUST VALIDLY COMPLETE THE LETTER OF TRANSMITTAL,
INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and telephone
number set forth on the back cover of this Offer to Purchase.
2
<PAGE>
SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase.
<TABLE>
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Number of Shares to be Purchased...................... 500,000 Shares (or such lesser number of Shares as are
validly tendered). The Company reserves the right to
purchase a greater number of Shares. See Sections 1 and
15.
Purchase Price........................................ The Company will determine a single per Share net cash
price, not greater than $47.50 nor less than $42.50 per
Share, that it will pay for Shares validly tendered. All
Shares acquired in the Offer will be acquired at the
Purchase Price even if tendered at or below the Purchase
Price. Each stockholder desiring to tender Shares must
specify in the Letter of Transmittal the minimum price
(not greater than $47.50 nor less than $42.50 per Share)
at which such stockholder is willing to have Shares
purchased by the Company.
How to Tender Shares.................................. See Section 3. Call the Information Agent or consult your
broker for assistance.
Dividends............................................. See Section 7 for a discussion of payment of the next
regular quarterly dividend.
Brokerage Commissions................................. None.
Stock Transfer Tax.................................... None, if payment is made to the registered holder.
Expiration and Proration Dates........................ Friday, December 13, 1996, at 5:00 p.m., Eastern time,
unless extended by the Company.
Payment Date.......................................... As soon as practicable after the Expiration Date.
Position of the Company and its Directors............. Neither the Company nor its Board of Directors makes any
recommendation to any stockholder as to whether to tender
or refrain from tendering Shares.
Withdrawal Rights..................................... Tendered Shares may be withdrawn at any time until 5:00
p.m., Eastern time, on Friday, December 13, 1996, unless
the Offer is extended by the Company and, unless
previously purchased, after 12:00 Midnight, Eastern time,
on Monday, January 13, 1997. See Section 4.
Odd Lots.............................................. There will be no proration of Shares tendered by any
stockholder owning beneficially fewer than 100 Shares in
the aggregate (excluding Shares attributable to
individual accounts under the Company's Savings Plan, but
including Shares held in the Company's Dividend
Reinvestment and Stock Purchase Plans) as of the close of
business on November 13, 1996 and as of the Expiration
Date, who tenders all such Shares at or below the
Purchase Price prior to the Expiration Date and who
</TABLE>
3
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<TABLE>
<S> <C>
checks the "Odd Lots" box in the Letter of Transmittal.
Class B Common Stock.................................. This Offer is not being made for (nor will tenders be
accepted of) shares of the Company's Class B Common
Stock. Holders of Class B Common Stock who wish to
participate in the Offer must convert such Class B Common
Stock into Shares in accordance with the terms and
provisions of the Company's Certificate of Incorporation
and tender the Shares issuable upon conversion in
accordance with the terms and conditions of the Offer
prior to the expiration thereof.
Further Developments Regarding the Offer.............. Call the Information Agent or consult your broker.
</TABLE>
4
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THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH RECOMMENDATION
OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR MADE, AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
TABLE OF CONTENTS
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SECTION PAGE
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SUMMARY.................................................................................................. 3
INTRODUCTION............................................................................................. 6
THE OFFER................................................................................................ 8
1. Number of Shares; Proration..................................................................... 8
2. Tenders by Owners of Fewer than 100 Shares...................................................... 10
3. Procedure for Tendering Shares.................................................................. 10
4. Withdrawal Rights............................................................................... 14
5. Purchase of Shares and Payment of Purchase Price................................................ 15
6. Certain Conditions of the Offer................................................................. 16
7. Price Range of Shares; Dividends................................................................ 18
8. Background and Purpose of the Offer; Certain Effects of the Offer............................... 18
9. Information as to Capital Stock; Transactions and Arrangements Concerning the Shares............ 20
10. Source and Amount of Funds...................................................................... 21
11. Certain Information about the Company........................................................... 22
12. Effects of the Offer on the Market for Shares; Registration under the Exchange Act.............. 27
13. Certain Legal Matters; Regulatory and Foreign Approvals......................................... 27
14. Certain U.S. Federal Income Tax Consequences.................................................... 27
15. Extension of the Offer; Termination; Amendments................................................. 30
16. Fees and Expenses............................................................................... 31
17. Miscellaneous................................................................................... 31
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5
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TO THE HOLDERS OF SHARES OF COMMON STOCK OF COCA-COLA BOTTLING CO. CONSOLIDATED:
INTRODUCTION
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Company"), invites its stockholders to tender shares of its common stock, $1.00
par value ("Common Stock" or the "Shares"), to the Company at prices not greater
than $47.50 nor less than $42.50 per Share in cash, specified by tendering
stockholders, upon the terms and subject to the conditions set forth in this
Offer to Purchase and the related Letter of Transmittal (which together
constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $47.50 nor less than
$42.50 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to buy 500,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $47.50 nor less than $42.50 per
Share) validly tendered and not withdrawn pursuant to the Offer. The Company
will pay the Purchase Price for all Shares validly tendered prior to the
Expiration Date (as defined in Section 1) at prices at or below the Purchase
Price and not withdrawn, upon the terms and subject to the conditions of the
Offer including the proration terms described below. The Company reserves the
right, in its sole discretion, to purchase more than 500,000 Shares pursuant to
the Offer.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
If, before the Expiration Date, more than 500,000 Shares (or such greater
number of Shares as the Company may elect to purchase) are validly tendered at
or below the Purchase Price and not withdrawn, the Company will, upon the terms
and subject to the conditions of the Offer, purchase Shares first from all Odd
Lot Owners (as defined in Section 2) who validly tender all their Shares at or
below the Purchase Price and then on a PRO RATA basis from all other
stockholders who validly tender Shares at prices at or below the Purchase Price
(and do not withdraw them prior to the Expiration Date). The Company will return
at its own expense all Shares not purchased pursuant to the Offer, including
Shares tendered at prices greater than the Purchase Price and not withdrawn and
Shares not purchased because of proration. The Purchase Price will be paid net
to the tendering stockholders in cash for all Shares purchased. Tendering
stockholders will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer
taxes on the Company's purchase of Shares pursuant to the Offer. HOWEVER, ANY
TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO
THE DEPOSITARY (AS DEFINED BELOW) THE SUBSTITUTE FORM W-9 THAT IS INCLUDED WITH
THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. In addition, the Company will pay
all fees and expenses of Georgeson & Company Inc. (the "Information Agent") and
First Union National Bank of North Carolina (the "Depositary") in connection
with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY HAS BEEN ADVISED BY ITS PRINCIPAL STOCKHOLDERS
(THE HARRISON FAMILY INTERESTS AND THE COCA-COLA COMPANY) THAT THEY
6
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DO NOT INTEND TO TENDER SHARES PURSUANT TO THE OFFER, ALTHOUGH, FOLLOWING
COMPLETION OF THE OFFER, THE COMPANY INTENDS TO NEGOTIATE WITH THE COCA-COLA
COMPANY FOR THE PURCHASE OF CERTAIN SHARES HELD BY THE COCA-COLA COMPANY. SEE
SECTION 9. THE COMPANY HAS BEEN ADVISED THAT CERTAIN OF ITS OTHER DIRECTORS AND
EXECUTIVE OFFICERS MAY TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 8.
The Company's management and Board of Directors desire to enhance
stockholder value and provide a liquidity opportunity to stockholders and have
determined that Share repurchases funded by borrowings under the Company's
revolving credit facility would advance such objectives and be in the best
interests of the Company and its stockholders. The Company believes that the
purchase of Shares is consistent with its long-term goals and that, after the
Offer is completed, the Company will have sufficient cash flow and access to
other sources of capital in order to fund its working capital needs and provide
for its current capital expenditure requirements.
As of September 30, 1996, the Company's Savings Plan held 22,093 Shares.
The Savings Plan's Shares are the principal investment of the Savings Plan's
Company Stock Fund. The Savings Plan has been amended to eliminate the Company
Stock Fund, and, in order to dispose of the Shares held by the Company Stock
Fund, it is anticipated that the trustee of the Savings Plan will tender all of
the Savings Plan's Shares in the Offer. Participants in the Savings Plan should
not return the Letter of Transmittal with respect to Shares held by the Savings
Plan as it is currently anticipated that the trustee will tender all Shares held
by the Savings Plan. See Section 3.
Stockholders who are participants in the Company's Dividend Reinvestment
Plan ("the Dividend Reinvestment Plan") may instruct First Union National Bank
of North Carolina, the administrator of the Dividend Reinvestment Plan, to
tender part or all of the Shares credited to a participant's account in the
Dividend Reinvestment Plan by following the instructions set forth in Section 3.
Stockholders who are participants in the Company's Employee Stock Purchase
Plan (the "Stock Purchase Plan") may instruct First Union National Bank of North
Carolina, the administrator of the Stock Purchase Plan, to tender part or all of
the Shares credited to a participant's account in the Stock Purchase Plan by
following the instructions set forth in Section 3.
Frank Russell Trust Company holds 45,034 Shares on behalf of the Company's
Restated Retirement Plan for Employees (the "Retirement Plan") covering certain
employees of the Company and its subsidiaries. Frank Russell Trust Company may
tender such Shares on behalf of the Retirement Plan in the Offer.
As of November 8, 1996, there were 7,958,059 Shares outstanding, 250,000
Shares issuable upon exercise of outstanding stock options (the "Options") and
1,336,362 Shares of Class B Common Stock outstanding. The foregoing amounts
exclude all shares of Common Stock and Class B Common Stock held as treasury
stock. The 500,000 Shares that the Company is offering to purchase represent
approximately 6.3% of the outstanding Shares (approximately 6.1% assuming the
exercise of all outstanding Options) and 5.4% of the Shares that would be
outstanding if all of the outstanding shares of Class B Common Stock were
converted into Common Stock. The Shares are listed and traded on the Nasdaq
National Market under the symbol "COKE." On November 13, 1996 the last full
trading day on the Nasdaq National Market prior to the announcement and
commencement of the Offer, the closing per Share sales price was $42.25. THE
COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS ON THE MARKET PRICE OF
THE SHARES.
The Offer is not being made for (nor will tenders be accepted of) shares of
the Class B Common Stock. Each share of Class B Common Stock is convertible into
one Share. Holders of Class B Common Stock who wish to participate in the Offer
must first convert such Class B Common Stock into Shares in accordance with the
terms and provisions of the Company's Certificate of Incorporation and tender
the Shares issuable upon conversion in accordance with the terms and conditions
of the Offer
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prior to the expiration thereof. To the extent that shares of Class B Common
Stock are converted into Shares, but the resulting Shares are not purchased
pursuant to the Offer (whether because the Offer is terminated or withdrawn, or
by reason of proration or otherwise), holders of Class B Common Stock will have
lost all preferential rights as compared to holders of Shares. A conversion of
shares of Class B Common Stock into Shares cannot be revoked under any
circumstances, including a withdrawal of Shares tendered pursuant to the Offer
or the expiration or termination of the Offer without the purchase of any Shares
pursuant thereto. Neither the Company nor its Board of Directors makes any
recommendation to holders of shares of Class B Common Stock as to whether to
convert any or all such shares of Class B Common Stock and tender the Shares
issuable upon conversion.
THE OFFER
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) 500,000 Shares or such lesser number
of Shares as are validly tendered before the Expiration Date (and not withdrawn
in accordance with Section 4) at a net cash price (determined in the manner set
forth below) not greater than $47.50 nor less than $42.50 per Share. The term
"Expiration Date" means 5:00 P.M., Eastern time, on Friday, December 13, 1996,
unless and until the Company in its sole discretion shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. See Section 15 for a description of
the Company's right to extend the time during which the Offer is open and to
delay, terminate or amend the Offer. Subject to Section 2, if the Offer is
oversubscribed, Shares tendered at or below the Purchase Price before the
Expiration Date will be eligible for proration. The proration period also
expires on the Expiration Date.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will allow
it to buy 500,000 Shares (or such lesser number as are validly tendered at
prices not greater than $47.50 nor less than $42.50 per Share) validly tendered
and not withdrawn pursuant to the Offer. The Company reserves the right, in its
sole discretion, to purchase more than 500,000 Shares pursuant to the Offer. See
Section 15. In accordance with applicable regulations of the Securities and
Exchange Commission (the "Commission"), the Company may purchase pursuant to the
Offer an additional amount of Shares not to exceed 2% of the outstanding Shares
without amending or extending the Offer. If (i) the Company increases or
decreases the price to be paid for Shares, the Company increases the number of
shares being sought and such increase in the number of shares being sought
exceeds 2% of the outstanding Shares, or the Company decreases the number of
Shares being sought and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 15, the Offer will
be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 Midnight, Eastern time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder desiring to tender Shares must specify the price (not greater than
$47.50 nor less than $42.50 per Share) at which such stockholder is willing to
have the Company purchase Shares. As promptly as practicable following the
Expiration Date, the Company will, in its sole discretion, determine the
Purchase Price (not greater than $47.50 nor less than $42.50 per Share) that it
will pay for Shares validly tendered and not withdrawn
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pursuant to the Offer, taking into account the number of Shares so tendered and
the prices specified by tendering stockholders. The Company will pay the
Purchase Price, even if such Shares were tendered below the Purchase Price, for
all Shares validly tendered prior to the Expiration Date at prices at or below
the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer. All Shares not purchased pursuant to the Offer,
including Shares tendered at prices greater than the Purchase Price and Shares
not purchased because of proration, will be returned to the tendering
stockholders at the Company's expense as promptly as practicable following the
Expiration Date.
If the number of Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date is less than or equal to 500,000
Shares (or such greater number of Shares as the Company may elect to purchase),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all shares so tendered.
PRIORITY. Upon the terms and subject to the conditions of the Offer, in
the event that prior to the Expiration Date more than 500,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) are validly tendered at or below the Purchase Price and not withdrawn,
the Company will purchase such validly tendered Shares in the following order of
priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any Odd Lot Owner (as defined in
Section 2) who:
(a) tenders all Shares (other than Shares attributable to
individual accounts under the Company's Savings Plan, but including
Shares held in the Company's Dividend Reinvestment and Employee Stock
Purchase Plans) beneficially owned by such Odd Lot Owner at or below the
Purchase Price (partial tenders will not qualify for this preference);
and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date on a PRO RATA basis (with adjustments to avoid
purchases of fractional Shares).
PRORATION. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Date. Proration for each stockholder tendering Shares
(other than Odd Lot Owners) shall be based on the ratio of the number of Shares
tendered by such stockholder at or below the Purchase Price to the total number
of Shares tendered by all stockholders (other than Odd Lot Owners) at or below
the Purchase Price. This ratio will be applied to stockholders tendering Shares
(other than Odd Lot Owners) to determine the number of Shares that will be
purchased from each such stockholder pursuant to the Offer. Although the Company
does not expect to be able to announce the final results of such proration until
approximately seven business days after the Expiration Date, it will announce
preliminary results of proration by press release as promptly as practicable
after the Expiration Date. Stockholders can obtain such preliminary information
from the Information Agent and may be able to obtain such information from their
brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and therefore may be relevant
to a stockholder's decision whether to tender Shares. The Letter of Transmittal
also affords each tendering stockholder the opportunity to designate the order
of priority in which Shares tendered are to be purchased in the event of
proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares as of November 12, 1996 and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the Company's stockholders list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
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2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price and not withdrawn on or prior to the Expiration Date by
or on behalf of stockholders who beneficially owned as of the close of business
on November 13, 1996, and continue to beneficially own as of the Expiration
Date, an aggregate of fewer than 100 Shares, excluding Shares attributable to
individual accounts under the Company's Savings Plan, but including Shares held
in the Dividend Reinvestment and Stock Purchase Plans ("Odd Lot Owners"). To
avoid proration, however, an Odd Lot Owner must validly tender at or below the
Purchase Price all such Shares (excluding Shares attributable to individual
accounts under the Company's Savings Plan, but including Shares held in the
Dividend Reinvestment and Stock Purchase Plans) that such Odd Lot Owner
beneficially owns; partial tenders will not qualify for this preference. This
preference is not available to partial tenders or to owners of 100 or more
Shares in the aggregate (excluding Shares attributable to individual accounts
under the Company's Savings Plan, but including Shares held in the Dividend
Reinvestment and Stock Purchase Plans), even if such owners have separate stock
certificates for fewer than 100 such Shares. Any Odd Lot Owner wishing to tender
all such Shares beneficially owned by such stockholder pursuant to this Offer
must complete the box captioned "Odd Lots" in the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery and must properly indicate in
the section entitled "Price (In Dollars) Per Share At Which Shares Are Being
Tendered" in the Letter of Transmittal the price at which such Shares are being
tendered, except that an Odd Lot Owner may check the box in the section entitled
"Odd Lots" indicating that the stockholder is tendering all of such
stockholder's Shares (excluding Shares attributable to individual accounts under
the Company's Savings Plan, but including Shares held in the Dividend
Reinvestment and Stock Purchase Plans) at the Purchase Price. See Section 3.
Stockholders owning an aggregate of fewer than 100 Shares whose Shares are
purchased pursuant to the Offer will avoid both the payment of brokerage
commissions and any applicable odd lot discounts payable on a sale of their
Shares in a transaction on the Nasdaq National Market.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any stockholder who tendered any Shares beneficially
owned at or below the Purchase Price and who, as a result of proration, would
then beneficially own an aggregate of fewer than 100 Shares (excluding Shares
attributable to individual accounts under the Company's Savings Plan, but
including Shares held in the Company's Dividend Reinvestment and Stock Purchase
Plans). If the Company exercises this right, it will increase the number of
Shares that it is offering to purchase in the Offer by the number of Shares
purchased through the exercise of such right.
3. PROCEDURE FOR TENDERING SHARES
PROPER TENDER OF SHARES. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) with any required
signature guarantees, and any other documents required by the Letter of
Transmittal, must be received prior to 5:00 P.M., Eastern time, on the
Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase; or
(ii) the tendering stockholder must comply with the guaranteed
delivery procedure set forth below.
AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH
STOCKHOLDER DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY
INDICATE IN THE SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES
ARE BEING TENDERED" IN THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF
$.125) AT WHICH SUCH STOCKHOLDER'S SHARES ARE BEING TENDERED, EXCEPT THAT AN
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ODD LOT OWNER MAY CHECK THE BOX IN THE SECTION OF THE LETTER OF TRANSMITTAL
ENTITLED "ODD LOTS" INDICATING THAT THE STOCKHOLDER IS TENDERING ALL OF SUCH
STOCKHOLDER'S SHARES (INCLUDING SHARES HELD IN THE DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLANS) AT THE PURCHASE PRICE. Stockholders desiring to tender
Shares at more than one price must complete separate Letters of Transmittal for
each price at which Shares are being tendered, except that the same Shares
cannot be tendered (unless properly withdrawn previously in accordance with the
terms of the Offer) at more than one price. IN ORDER TO VALIDLY TENDER SHARES,
ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH
LETTER OF TRANSMITTAL.
In addition, Odd Lot Owners who tender all Shares must complete the section
entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Owners as set forth in Section 2.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is signed
by the registered holder of the Shares (which term, for purposes of this
Section, includes any participant in The Depository Trust Company or
Philadelphia Depository Trust Company (the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the holder of the Shares)
tendered therewith and payment and delivery are to be made directly to such
registered holder, or (ii) if Shares are tendered for the account of a member
firm of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
(not a savings bank or savings and loan association) having an office, branch or
agency in the United States which is a participant in an approved Signature
Guarantee Medallion Program pursuant to Rule 17Ad-15 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (each such
entity being hereinafter referred to as an "Eligible Institution"). In all other
cases, all signatures on the Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a
certificate representing Shares is registered in the name of a person other than
the signer of a Letter of Transmittal, or if payment is to be made, or Shares
not purchased or tendered are to be issued, to a person other than the
registered holder, the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name of the
registered holder appears on the certificate, with the signature on the
certificate or stock power guaranteed by an Eligible Institution. In this
regard, see Section 5 for information with respect to applicable stock transfer
taxes. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities as described above), a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) and any other
documents required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such Shares into the Depositary's account in accordance with such
facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into the Depositary's account at one of the
Book-Entry Transfer Facilities, a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof), with any required signature
guarantees and other required documents must, in any case, be transmitted to and
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the guaranteed
delivery
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procedure set forth below must be followed. DELIVERY OF THE LETTER OF
TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied.
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier,
telegram or facsimile transmission), on or prior to the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer to
Purchase (indicating the price at which the Shares are being tendered),
including (where required) a signature guarantee by an Eligible Institution
in the form set forth in such Notice of Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) and any required signature
guarantees or other documents required by the Letter of Transmittal, are
received by the Depositary within three Nasdaq National Market trading days
after the date the Depositary receives such Notice of Guaranteed Delivery.
RETURN OF UNPURCHASED SHARES. If any tendered Shares are not purchased, or
if less than all Shares evidenced by a stockholder's certificates are tendered,
certificates for unpurchased Shares will be returned as promptly as practicable
after the expiration or termination of the Offer or, in the case of Shares
tendered by book-entry transfer at a Book-Entry Transfer Facility, such Shares
will be credited to the appropriate account maintained by the tendering
stockholder at the appropriate Book-Entry Transfer Facility, in each case
without expense to such stockholder.
BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent federal income tax
backup withholding equal to 31% of the gross payments made to stockholders for
shares purchased pursuant to the Offer, each stockholder who does not establish
an exemption from such withholding must provide the Depositary with such
stockholder's correct taxpayer identification number (social security number or
employer identification number), certify under penalties of perjury that such
number is correct, and provide certain other information by signing the
Substitute Form W-9 included as part of the Letter of Transmittal. Certain
stockholders (including, among others, all corporations and certain foreign
stockholders (in addition to foreign corporations)) are not subject to these
backup withholding and reporting requirements. In order for a foreign
stockholder to qualify as an exempt recipient, such a stockholder must submit an
IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury,
attesting to that stockholder's exempt status. Such forms can be obtained from
the Depositary. See Instructions 10 and 11 of the Letter of Transmittal.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH
STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING
MUST PROVIDE THE DEPOSITARY WITH THE STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of certain United States federal income tax consequences
to tendering stockholder, see Section 14.
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WITHHOLDING FOR FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or such stockholder's agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. For this purpose, a foreign stockholder is any
stockholder that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created or organized in or under the
laws of the United States, any State or any political subdivision thereof or
(iii) an estate or trust, the income of which is subject to United States
federal income taxation regardless of the source of such income. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
stockholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. In order to obtain an exemption from
withholding on the grounds that the gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business within the
United States, a foreign stockholder must deliver to the Depositary a properly
completed and executed IRS Form 4224. The Depositary will determine a
stockholder's status as a foreign stockholder and eligibility for a reduced rate
of, or exemption from, withholding by reference to any outstanding certificates
or statements concerning eligibility for a reduced rate of, or exemption from,
withholding (E.G., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete redemption", "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 14 or is otherwise able to establish that no tax or a reduced amount
of tax is due. Backup withholding generally will not apply to amounts subject to
the 30% or a treaty-reduced rate of withholding. FOREIGN STOCKHOLDERS ARE URGED
TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO
SUCH STOCKHOLDERS RELATED TO THE DISPOSITION OF SHARES PURSUANT TO THE OFFER AND
THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING
ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND
PROCEDURE. See Instructions 10 and 11 of the Letter of Transmittal.
SAVINGS PLAN. As of September 30, 1996, the Company's Savings Plan held
22,093 Shares that are credited to the individual accounts of certain Savings
Plan participants, beneficiaries of deceased participants and alternate payees
pursuant to qualified domestic relations orders (collectively, "Participants").
The Savings Plan's Shares are the principal investment of the Savings Plan's
Company Stock Fund. The Savings Plan has been amended to eliminate the Company
Stock Fund, and, in order to dispose of the Shares held by the Company Stock
Fund, it is anticipated that Investors Fiduciary Trust Company, the trustee of
the Savings Plan (the "Trustee"), will tender all of the Savings Plan's Shares
in the Offer. In the event that due to proration not all of the Savings Plan's
Shares are actually purchased in the Offer or the Offer is terminated for any
reason, the Company understands that the Trustee would then sell the Savings
Plan's Shares from time to time on the open market. PARTICIPANTS IN THE SAVINGS
PLAN SHOULD NOT COMPLETE OR RETURN THE LETTER OF TRANSMITTAL AS IT IS CURRENTLY
ANTICIPATED THAT THE TRUSTEE WILL TENDER ALL SHARES HELD BY THE SAVINGS PLAN.
DIVIDEND REINVESTMENT PLAN; STOCK PURCHASE PLAN. As of November 1, 1996,
the Dividend Reinvestment Plan held 24,620 Shares and the Stock Purchase Plan
held 24,586 Shares. Shares credited to participants' accounts under the Dividend
Reinvestment and Stock Purchase Plans will be tendered by First Union National
Bank of North Carolina, as administrator of both such plans (in either such
capacity, the "Administrator"), according to instructions provided to it from
participants in the Dividend Reinvestment and Stock Purchase Plans. Shares for
which the Administrator has not received timely instructions from participants
will not be tendered. The Administrator will make available to the participants
whose accounts are credited with Shares under the Dividend Reinvestment and
Stock Purchase Plans all documents furnished to stockholders generally in
connection with the Offer. BECAUSE THE
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DEPOSITARY FOR THE OFFER ALSO ACTS AS ADMINISTRATOR OF THE DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLANS, PARTICIPANTS IN EITHER SUCH PLAN MAY USE THE LETTER OF
TRANSMITTAL TO INSTRUCT THE ADMINISTRATOR REGARDING THE OFFER BY COMPLETING THE
BOX ENTITLED "DIVIDEND REINVESTMENT PLAN SHARES" OR "STOCK PURCHASE PLAN
SHARES," AS APPLICABLE. Each participant may direct that all, some or none of
the Shares credited to the participant's account under the Dividend Reinvestment
Plan or the Stock Purchase Plan be tendered and the price at which such
participant's Shares are to be tendered. Participants in the Dividend
Reinvestment and Stock Purchase Plans are urged to read the Letter of
Transmittal and related materials carefully.
TENDERING STOCKHOLDER'S REPRESENTATION AND WARRANTY; COMPANY'S ACCEPTANCE
CONSTITUTES AN AGREEMENT. It is a violation of Rule 14e-4 promulgated under the
Exchange Act for a person acting alone or in concert with others, directly or
indirectly, to tender Shares for such person's own account unless at the time of
tender and at the Expiration Date such person has a "net long position" equal to
or greater than the amount tendered in (i) the Shares and will deliver or cause
to be delivered such Shares for the purpose of tender to the Company within the
period specified in the Offer, or (ii) other securities immediately convertible
into, exercisable for or exchangeable into Shares ("Equivalent Securities") and,
upon the acceptance of such tender, will acquire such Shares by conversion,
exchange or exercise of such Equivalent Securities to the extent required by the
terms of the Offer and will deliver or cause to be delivered such Shares so
acquired for the purpose of tender to the Company within the period specified in
the Offer. Rule 14e-4 also provides a similar restriction applicable to the
tender or guarantee of a tender on behalf of another person. A tender of Shares
made pursuant to any method of delivery set forth herein will constitute the
tendering stockholder's representation and warranty to the Company that (i) such
stockholder has a "net long position" in Shares or Equivalent Securities being
tendered within the meaning of the Rule 14e-4, and (ii) such tender of Shares
complies with Rule 14e-4. The Company's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Company upon the terms and subject to the
conditions of the Offer.
DETERMINATIONS OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders it determines not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares or any particular stockholder. No tender of
Shares will be deemed to be properly made until all defects or irregularities
have been cured or waived. Neither the Company, the Depositary, the Information
Agent nor any other person is or will be obligated to give notice of any defects
or irregularities in tenders and none of them will incur any liability for
failure to give any such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless accepted for
payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 Midnight, Eastern time, on Monday, January 13, 1997.
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For a withdrawal to be effective, the Depositary must receive (at one of
its addresses set forth on the back cover of this Offer to Purchase) a notice of
withdrawal in written, telegraphic or facsimile transmission form on a timely
basis. Such notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares tendered, the number
of Shares to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares. If the certificates have been
delivered or otherwise identified to the Depositary, then, prior to the release
of such certificates, the tendering stockholder must also submit the serial
numbers shown on the particular certificates evidencing the Shares and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry transfer
set forth in Section 3, the notice of withdrawal must specify the name and the
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility. All questions as to the form and validity, including time of
receipt, of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
Neither the Company, the Depositary, the Information Agent nor any other person
is or will be obligated to give any notice of any defects or irregularities in
any notice of withdrawal, and none of them will incur any liability for failure
to give any such notice. Withdrawals may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not tendered for purposes of the
Offer. However, withdrawn Shares may be retendered before the Expiration Date by
again following any of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
Participants in the Dividend Reinvestment and Stock Purchase Plans should
notify the Depositary in accordance with the procedures for withdrawal set forth
in this Section 4 in the event they wish to deliver a notice of withdrawal, and
should specify in such notice of withdrawal that the Shares to be withdrawn
pursuant thereto are credited to such participant's account in the Dividend
Reinvestment Plan or the Stock Purchase Plan, as applicable.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders, and will accept for payment and pay for (and thereby purchase)
Shares validly tendered at or below the Purchase Price and not withdrawn as soon
as practicable after the Expiration Date. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased), subject
to proration, Shares that are validly tendered at or below the Purchase Price
and not withdrawn when, as and if it gives oral or written notice to the
Depositary of its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per Share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Date. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event or proration), but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other required documents.
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Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering stockholders. In the
event of proration, the Company will determine the proration factor and pay for
those tendered Shares accepted for payment as soon as practicable after the
Expiration Date. However, the Company does not expect to be able to announce the
final results of any such proration until approximately seven business days
after the Expiration Date. Under no circumstances will the Company pay interest
on the Purchase Price including, without limitation, by reason of any delay in
making payment. Certificates for all Shares not purchased, including all Shares
tendered at prices greater than the Purchase Price and Shares not purchased due
to proration, will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to the account maintained with one of the
Book-Entry Transfer Facilities by the participant who so delivered such Shares)
as promptly as practicable following the Expiration Date or termination of the
Offer without expense to the tendering stockholders. In addition, if certain
events occur, the Company may not be obligated to purchase Shares pursuant to
the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer; provided, however,
that if payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Shares are to be registered in the name
of, any person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person signing the Letter of
Transmittal, the amount of all stock transfer taxes, if any (whether imposed on
the registered holder or such other person), payable on account of the transfer
to such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of such taxes or exemption therefrom
is submitted. See Instruction 7 of the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO
THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING FEDERAL INCOME TAX
CONSEQUENCES FOR FOREIGN STOCKHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f)
promulgated under the Exchange Act, if at any time on or after November 13, 1996
and prior to the time of payment for any such Shares (whether any Shares have
theretofore been accepted for payment, purchased or paid for pursuant to the
Offer) any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) that, in the Company's judgment in
any such case and regardless of the circumstances giving rise thereto (including
any action or omission to act by the Company), makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payment:
(a) there shall have been threatened, instituted or pending before any
court, agency, authority or other tribunal any action, suit or proceeding
by any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which (i) challenges or seeks to make
illegal, or to delay or otherwise directly or indirectly to restrain,
prohibit or otherwise affect the making of the Offer, the acquisition of
Shares pursuant to the Offer or is otherwise related in any manner to, or
otherwise affects, the Offer; or (ii) could, in the sole judgment of the
Company, materially affect the business, condition (financial or other),
income,
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operations or prospects of the Company and its subsidiaries, taken as a
whole, or otherwise materially impair in any way the contemplated future
conduct of the business of the Company and its subsidiaries, taken as a
whole, or materially impair the Offer's contemplated benefits to the
Company; or
(b) there shall have been any action threatened, pending or taken, or
any approval withheld, or any statute, rule or regulation invoked,
proposed, sought, promulgated, enacted, entered, amended, enforced or
deemed to be applicable to the Offer or the Company or any of its
subsidiaries, by any government or governmental, regulatory or
administrative authority or agency or tribunal, domestic or foreign, which,
in the sole judgement of the Company, would or might directly or indirectly
result in any of the consequences referred to in clause (i) or (ii) of
paragraph (a) above; or
(c) there shall have occurred (i) the declaration of any banking
moratorium or any suspension of payment in respect of banks in the United
States (whether or not mandatory); (ii) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market; (iii) the
commencement of a war, armed hostilities or any other national or
international crisis directly or indirectly involving the United States;
(iv) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event which, in
the sole judgment of the Company, might materially affect, the extension of
credit by banks or other lending institutions in the United States; (v) any
significant decrease in the market price of the Shares or in the market
prices of equity securities generally in the United States or any change in
the general political, market, economic or financial conditions or in the
commercial paper markets in the United States or abroad that could have in
the sole judgment of the Company a material adverse effect on the business,
condition (financial or otherwise), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or on the trading in the
Shares or on the proposed financing for the Offer; (vi) in the case of any
of the foregoing existing at the time of the announcement of the Offer, a
material acceleration or worsening thereof; or (vii) any decline in either
the Dow Jones Industrial Average or the Standard & Poor's Composite 500
Stock Index by an amount in excess of 10% measured from the close of
business on November 13, 1996; or
(d) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which in the sole judgment of the
Company is or may be material to the Company; or
(e) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned that
(i) any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) shall have acquired or proposed to acquire beneficial
ownership of more than 5% of the outstanding Shares (other than as
disclosed in a Schedule 13D or 13G on file with the Commission on November
12, 1996), (ii) any such person or group that on or prior to November 12,
1996 had filed such a Schedule shall have acquired or proposed to acquire
beneficial ownership of additional Shares representing 2% or more of the
outstanding Shares, or (iii) any new group shall have been formed that
beneficially owns more than 5% of the outstanding Shares; or
(f) any person or group shall have filed a Notification and Report
Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
reflecting an intent to acquire the Company or any of its Shares.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived by
the Company in whole or in part. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right
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shall be deemed an ongoing right that may be asserted at any time and from time
to time. Any determination by the Company concerning the events described above
and any related judgment or decision by the Company regarding the inadvisability
of proceeding with the purchase of or payment for any Shares tendered will be
final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and principally traded on the Nasdaq National Market.
The high and low closing sales prices per Share on the Nasdaq National Market as
compiled from published financial sources and the quarterly cash dividends paid
per Share for the periods indicated are listed below:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
<S> <C> <C> <C>
FISCAL 1994
1st Quarter................................................................... $ 37 1/4 $ 27 $ .25
2nd Quarter................................................................... 30 1/4 24 .25
3rd Quarter................................................................... 31 26 3/4 .25
4th Quarter................................................................... 29 3/4 24 .25
FISCAL 1995
1st Quarter................................................................... $ 29 3/4 $ 26 $ .25
2nd Quarter................................................................... 32 3/4 29 1/4 .25
3rd Quarter................................................................... 35 7/8 31 .25
4th Quarter................................................................... 35 1/2 33 1/4 .25
FISCAL 1996
1st Quarter................................................................... $ 35 1/2 $ 31 1/2 $ .25
2nd Quarter................................................................... 35 1/4 32 1/4 .25
3rd Quarter................................................................... 39 1/2 32 3/4 .25
4th Quarter (through November 13, 1996)....................................... 42 1/2 38 .25*
</TABLE>
* Declared by the Board of Directors on November 5, 1996 and payable to
stockholders of record at the close of business on November 22, 1996.
On November 13, 1996, the last full trading day on the Nasdaq National
Market prior to the announcement and commencement of the Offer, the closing
price per Share on the Nasdaq National Market was $42.25. THE COMPANY URGES
STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
There is no established public trading market for shares of Class B Common
Stock. Shares of Class B Common Stock are convertible into Shares on a
one-for-one basis.
On November 5, 1996 the Board of Directors of the Company declared a
dividend of $.25 per share on shares of Common Stock and Class B Common Stock
payable on December 6, 1996 to the stockholders of record at the close of
business on November 22, 1996. Since the Expiration Date will occur after
November 22, 1996, holders of record on such date of Shares purchased in the
Offer will be entitled to receive such dividend regardless of whether such
Shares were tendered pursuant to the Offer prior to, on or after November 22,
1996.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
On May 15, 1996 the Board of Directors authorized the repurchase of up to
1,000,000 Shares from time to time at the discretion of the Executive Committee
of the Board of Directors on the open market, in privately negotiated
transactions or otherwise. Such authorization was based upon the determination
of the Board of Directors that Company repurchases of Shares would provide a
liquidity opportunity for those stockholders wishing to dispose of their Shares
and enhance stockholder value for the remaining stockholders, and that such
repurchases would be in the best interests of the Company and its stockholders.
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Due to the relatively thin public trading market for the Common Stock and
certain regulatory restrictions on Company repurchases at prices above
prevailing market prices, the Company has not repurchased any Shares under this
repurchase program. After considering the results of the repurchase program and
the Company's alternatives, the Board of Directors determined that an offer to
repurchase Shares directly from the Company's stockholders pursuant to this
Offer would be in the best interests of the Company and its stockholders, and
authorized the Offer. The Company believes that the purchase of Shares is
consistent with its long-term goals and that, after the Offer is completed, the
Company will have sufficient cash flow and access to other sources of capital in
order to fund its working capital needs and provide for its current capital
expenditure requirements.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $47.50 nor less than $42.50 per Share) at which they are willing to
sell their Shares and, if any such Shares are purchased pursuant to the Offer,
to sell those Shares for cash to the Company. Any Odd Lot Owners whose Shares
are purchased pursuant to the Offer will avoid both the payment of brokerage
commissions and any applicable odd lot discounts payable on sales of odd lots.
To the extent the purchase of Shares in the Offer results in a reduction in the
number of stockholders of record, the costs to the Company for services to
stockholders will be reduced. Stockholders who determine not to accept the Offer
will increase their proportionate interest in the Company's equity, and thus in
the Company's future earnings and net assets, subject to the Company's right to
issue additional Shares and other equity securities in the future.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS HAS
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. THE COMPANY HAS BEEN
ADVISED THAT THE HARRISON FAMILY INTERESTS, WHICH HAVE SOLE OR SHARED
DISPOSITIVE POWER WITH RESPECT TO AN AGGREGATE OF 793,506 SHARES OF COMMON STOCK
(WHICH AMOUNT EXCLUDES SHARES ISSUABLE UPON THE CONVERSION OF CLASS B COMMON
STOCK INTO SHARES AND UPON THE EXERCISE OF OPTIONS TO PURCHASE AN AGGREGATE OF
250,000 SHARES) AND 1,048,748 SHARES OF CLASS B COMMON STOCK, DO NOT INTEND TO
TENDER SHARES IN THE OFFER. THE COMPANY HAS ALSO BEEN ADVISED THAT THE COCA-COLA
COMPANY, WHICH HAS SOLE DISPOSITIVE POWER WITH RESPECT TO 2,488,497 SHARES OF
COMMON STOCK AND 269,158 SHARES OF CLASS B COMMON STOCK, DOES NOT INTEND TO
TENDER SHARES IN THE OFFER, ALTHOUGH, FOLLOWING COMPLETION OF THE OFFER, THE
COMPANY INTENDS TO NEGOTIATE WITH THE COCA-COLA COMPANY FOR THE PURCHASE OF UP
TO 210,937 SHARES HELD BY THE COCA-COLA COMPANY. SEE SECTION 9. THE COMPANY HAS
BEEN ADVISED THAT CERTAIN OF ITS OTHER DIRECTORS AND EXECUTIVE OFFICERS, WHO OWN
AN AGGREGATE OF APPROXIMATELY 16,500 SHARES OF COMMON STOCK, MAY TENDER SOME OR
ALL SUCH SHARES PURSUANT TO THE OFFER.
In connection with the Offer, the Company has determined not to proceed
with the open-market repurchase program authorized by the Board of Directors on
May 15, 1996. The Company may in the future, however, again authorize
repurchases of the Shares on the open market, in privately negotiated
transactions, through tender offers or otherwise. Any such purchases may be on
the same terms as, or on terms which are more or less favorable to stockholders
than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act
prohibits the Company and its affiliates from purchasing any Shares, other than
pursuant to the Offer, until at least ten business days after the expiration and
termination of the Offer. Any possible future purchases by the Company will
depend upon many factors, including the market price of the Shares, results of
the Offer, the Company's business and financial
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<PAGE>
position and general economic and market conditions. In addition, after the
expiration and termination of the Offer and the expiration of the period during
which further repurchases are restricted, the Company expects to pursue the
repurchase of some of the Shares held by The Coca-Cola Company as described
below under Item 9.
Shares the Company acquires pursuant to the Offer will be retained as
treasury stock by the Company (unless and until the Company determines to retire
such Shares) and will be available for the Company to issue without further
stockholder action (except as required by applicable law or, if retired, the
rules of any securities exchange on which Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, the raising
of additional capital for use in the Company's business and the satisfaction of
obligations under existing or future employee benefit plans. The Company has no
current plans for issuance of the Shares repurchased pursuant to the Offer.
Except as otherwise described herein, the Company has no plans or proposals
which relate to or would result in (a) the acquisition by any person of
additional securities of the Company or the disposition of securities of the
Company, (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries,
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries, (d) any change in the Board of Directors or management of the
Company, (e) any material change in the present dividend rate or policy, or
indebtedness or capitalization, of the Company, (f) any other material change in
the Company's corporate structure or business, (g) any change in the Company's
Certificate of Incorporation or bylaws, (h) a class of equity security of the
Company ceasing to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association, (i) a class of equity
security of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act, or (j) the suspension of the
Company's obligation to file reports pursuant to Section 15(d) of the Exchange
Act.
9. INFORMATION AS TO CAPITAL STOCK; TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES
As of November 8, 1996, there were 7,958,059 Shares of Common Stock
outstanding, 250,000 Shares issuable upon exercise of all outstanding options,
and 1,336,362 shares of Class B Common Stock outstanding. The Class B Common
Stock is entitled to 20 votes per share (as compared to one vote per Share of
Common Stock) and is convertible on a one-for-one basis into Common Stock. The
foregoing amounts exclude all shares of Common Stock and Class B Common Stock
held as treasury stock. The 500,000 Shares the Company is offering to purchase
pursuant to the Offer represent approximately 6.3% of the Shares outstanding
(approximately 6.1% assuming the exercise of all outstanding Options) and 5.4%
of the Shares that would be outstanding if all of the outstanding shares of
Class B Common Stock were converted into Shares.
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers, associates and subsidiaries,
neither the Company nor any of its associates or subsidiaries or persons
controlling the Company nor, to the best of the Company's knowledge, any of the
directors or executive officers of the Company or any of its subsidiaries, nor
any associates or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the 40 business days prior to the date hereof.
The Company and The Coca-Cola Company are parties to a Stock Rights and
Restrictions Agreement dated January 27, 1989 (the "Stock Rights and
Restrictions Agreement") that contains certain provisions pursuant to which The
Coca-Cola Company has agreed that if it (a) owns 30.67% or more of the
outstanding shares of common stock (I.E., shares of both Common Stock and Class
B Common Stock) or (b) holds 23.59% or more of the total votes of all
outstanding shares of all classes of capital stock of the Company, it will (x)
negotiate in good faith for a sale of the shares of common stock in excess of
29.67% to the Company and (y) in any event exchange that number of shares of
Class B
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<PAGE>
Common Stock for shares of Common Stock so that it will (i) own from 20.00% to
21.00% of the outstanding shares of Class B Common Stock and (ii) hold from
22.59% to 23.59% of the total votes of all outstanding shares of all classes of
capital stock of the Company. The Coca-Cola Company currently owns 2,488,497
shares of the Common Stock and 269,158 shares of Class B Common Stock (or 29.67%
of the total outstanding shares of both such classes of common stock) and holds
22.69% of the total votes of all outstanding shares of all classes of capital
stock of the Company.
The Company has been advised by The Coca-Cola Company that it does not plan
to tender any shares in the Offer. Assuming that the Company purchases 500,000
Shares pursuant to the Offer (and that none of such Shares are acquired upon the
conversion of shares of Class B Common Stock after November 13, 1996) and The
Coca-Cola Company does not tender any shares in the Offer, The Coca-Cola Company
will own 31.36% of the outstanding shares of common stock and will hold 23.03%
of the total votes of all outstanding shares of all classes of capital stock of
the Company. As a result, The Coca-Cola Company will be required to negotiate in
good faith with the Company with respect to the sale of up to 210,937 shares of
Common Stock to the Company. The Company would finance any such repurchase with
borrowings under its revolving credit facility. See Section 10.
The Stock Rights and Restrictions Agreement provides that The Coca-Cola
Company will not sell or otherwise dispose of shares of Class B Common Stock
without first converting them into shares of Common Stock. The Stock Rights and
Restrictions Agreement also provides the Company with a right of first refusal
with respect to any sale, assignment, transfer or other disposition by The
Coca-Cola Company of any Shares or Class B Common Stock.
J. Frank Harrison, Jr., J. Frank Harrison, III and certain trusts holding
shares of Class B Common Stock entered into a Shareholders' Agreement with The
Coca-Cola Company on December 17, 1988 pursuant to which Messrs. Harrison, Jr.
and Harrison, III and such trusts agreed not to dispose of their shares of
Common Stock or Class B Common Stock (other than to certain permitted
transferees) without first offering such shares to The Coca-Cola Company.
Messrs. Harrison, Jr. and Harrison, III and such trusts collectively have sole
or shared dispositive power with respect to an aggregate of 793,506 shares of
Common Stock (which amount excludes Shares issuable upon the conversion of Class
B Common Stock into Shares and upon the exercise of options to purchase an
aggregate of 250,000 Shares) and 1,048,748 shares of Class B Common Stock. The
Company has been advised that Messrs. Harrison, Jr. and Harrison, III and such
trusts do not plan to tender any shares in the Offer.
Except as described above, neither the Company nor any person controlling
the Company nor, to the Company's knowledge, any of its directors or executive
officers, is a party to any contract, arrangement, understanding or relationship
with any other person relating, directly or indirectly, to the Offer with
respect to any securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies, consents or authorizations).
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 500,000 Shares pursuant to the Offer at
a maximum Purchase Price of $47.50 per Share, the Company expects the maximum
aggregate cost, including all fees and expenses applicable to the Offer, to be
approximately $23.9 million. If the Company also purchases 210,937 Shares from
The Coca-Cola Company pursuant to the Stock Rights and Restrictions Agreement
(see Section 9), and the negotiated purchase price is the same as the maximum
Purchase Price in the Offer, it will pay approximately an additional $10.0
million for such Shares. The Company estimates that substantially all of the
funds necessary to pay such amounts will come from borrowings pursuant to the
Company's Amended and Restated Credit Agreement, dated as of December 21, 1995
(the "Credit Agreement"), with NationsBank, N.A., as administrative and
syndication agent, Bank of America National Trust and Savings Association, as
documentation agent, and the other participating banks
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<PAGE>
party thereto. The revolving credit facility matures in December 2000, is
unsecured and provides for both revolving and competitive bid loans in an
aggregate amount of up to $170 million. Revolving loans will, at the Company's
option, bear interest at (a) the greater of (i) the interest rate announced from
time to time by NationsBank, N.A. as its prime rate or (ii) the federal funds
effective rate plus 1/2% or (b) the sum of the maximum reserve-adjusted one,
two, three or six month LIBOR plus the applicable margin (currently 22.5 basis
points). At November 8, 1996, the NationsBank, N.A. prime rate was 8.25%, the
federal funds effective rate was 5.67%, and the one, two, three and six month
maximum reserve-adjusted LIBOR rates were 5.38%, 5.50%, 5.50% and 5.55%,
respectively. Competitive bid loans will have maturities ranging from seven to
180 days and will bear interest at the rate offered by the bank making such loan
in its competitive bid quote. There are currently no borrowings outstanding
under this revolving credit facility. The Credit Agreement contains
representations and warranties, affirmative and negative covenants (including
certain covenants which establish ratio requirements related to the Company's
debt, interest expense and cash flow), events of default and other terms
customary to similar financings. The Company expects to repay borrowings under
the Credit Agreement, depending on business and market conditions, through
internally generated funds, other borrowings or a combination of the foregoing.
11. CERTAIN INFORMATION ABOUT THE COMPANY
The Company is engaged in the production, marketing and distribution of
carbonated and noncarbonated beverages, primarily products of The Coca-Cola
Company. The Company has been in the soft drink manufacturing business since
1902.
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 classic, caffeine free Coca-Cola classic,
diet Coke, caffeine free diet Coke, Cherry Coke, TAB, Sprite, diet Sprite, Mello
Yello, Mr. PiBB, Barq's Root Beer, Fresca, Minute Maid orange and diet Minute
Maid orange sodas. The Company also distributes and markets POWERaDE,
ready-to-drink Nestea, Fruitopia and Minute Maid Juices To Go 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 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
Coca-Cola franchise bottlers.
The Company's principal soft drink is Coca-Cola classic. During fiscal
years 1993, 1994 and 1995, 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 90% of the
Company's soft drink sales during fiscal year 1995.
The Company has grown significantly since 1984. In 1984, net sales were
$130.2 million. In 1995, net sales were $761.9 million. The Company's franchise
territory was concentrated in North Carolina prior to 1984. A series of
acquisitions since 1984 have significantly expanded the Company's franchise
territory. The most significant acquisitions were as follows:
(Bullet) February 8, 1985 -- Acquisition of various subsidiaries of Wometco
Coca-Cola Bottling Company which included franchise territories in
parts of Alabama, Tennessee and Virginia. Other noncontiguous
territories acquired in this acquisition were subsequently sold.
(Bullet) January 27, 1989 -- Acquisition of all of the outstanding stock of
The Coca-Cola Company Bottling Company of West Virginia, Inc.
which included franchise territory covering most of the state of
West Virginia.
(Bullet) December 20, 1991 -- Acquisition of all of the outstanding capital
stock of Sunbelt Coca-Cola Bottling Company, Inc. which included
franchise territory covering parts of North Carolina and South
Carolina.
22
<PAGE>
(Bullet) July 2, 1993 -- Formation of Piedmont Coca-Cola Bottling
Partnership ("Piedmont"). Piedmont is a joint venture owned
equally by the Company and The Coca-Cola Company through their
respective subsidiaries. Piedmont distributes and markets soft
drink products, primarily in parts of North Carolina and South
Carolina. The Company sold and contributed certain franchise
territories to Piedmont upon formation. The Company currently
provides part of the finished product requirements for Piedmont
and receives a fee for managing the operations of Piedmont
pursuant to a management agreement.
These transactions, along with several smaller acquisitions of additional
franchise territory, have resulted in the Company becoming the second largest
Coca-Cola bottler in the United States.
The Company's principal executive offices are located at 1900 Rexford Road,
Charlotte, North Carolina 28211 and its telephone number is (704) 551-4400.
23
<PAGE>
SUMMARY HISTORICAL FINANCIAL INFORMATION. The following summary
consolidated historical financial information for the fiscal years ended January
1, 1995 and December 31, 1995 has been derived from the audited consolidated
financial statements of the Company contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, which is incorporated
herein by reference. This information should be read in conjunction with and is
qualified in its entirety by reference to such audited financial statements and
the related notes thereto. The summary historical financial information for the
nine month periods ended October 1, 1995 and September 29, 1996 has not been
audited, but in the opinion of management contains all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation. Such
information was derived from the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 29, 1996, which is incorporated herein by
reference, and should be read in conjunction with and is qualified in its
entirety by reference to such financial statements and the related notes
thereto. Copies of reports may be inspected or obtained from the Commission in
the manner specified in " -- Additional Information" below.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
JANUARY 1, DECEMBER 31, OCTOBER 1, SEPTEMBER 29,
1995 1995 1995 1996
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
Statement of Operations Data:
Net sales............................................ $ 723,896 $761,876 $ 582,412 $ 590,154
Income before extraordinary charge and effect of
accounting change................................. 14,147 15,536 14,650 16,970
Net income........................................... 11,936 10,520 14,650 16,970
Ratio of earnings to fixed charges (1)............... 1.54 1.51 1.65 1.75
Balance Sheet Data:
Working capital...................................... (14,344) (10,317) 453 9,552
Total assets......................................... 664,159 676,571 663,926 674,134
Total assets less excess of cost over fair value of
net assets of business acquired................... 594,229 608,932 595,714 608,212
Total indebtedness................................... 433,271 420,016 420,001 405,458
Shareholders' equity................................. 33,981 38,972 41,660 48,971
Per Share Data (2):
Income before extraordinary charge and effect of
accounting change................................. 1.52 1.67 1.58 1.83
Extraordinary charge................................. -- (.54) -- --
Effect of accounting change.......................... (.24) -- -- --
Net income per common share.......................... 1.28 1.13 1.58 1.83
Book value per share (3)............................. 3.66 4.19 4.48 5.27
Weighted average number of shares outstanding........ 9,294 9,294 9,294 9,294
</TABLE>
NOTES TO SUMMARY HISTORICAL FINANCIAL INFORMATION:
(1) The ratio of earnings to fixed charges has been computed using the amounts
for the Company, its consolidated subsidiaries and its proportionate share
of losses incurred by its fifty percent owned affiliate. Earnings available
for fixed charges represent earnings before income taxes, extraordinary
items and fixed charges. Fixed charges represent interest incurred plus that
portion of rental expense deemed to be the equivalent of interest.
(2) All per share data (other than book value per share) is calculated based on
the weighted average number of shares of Common Stock and Class B Common
Stock outstanding during the period. The potential dilutive effect from the
exercise of options is not material.
24
<PAGE>
(3) Book value per share is calculated as total shareholders' equity divided by
the total number of shares of Common Stock and Class B Common Stock
outstanding, net of treasury shares, at the end of the period.
SUMMARY PRO FORMA FINANCIAL INFORMATION. The following summary unaudited
consolidated pro forma financial information gives effect to the purchase of
500,000 Shares pursuant to the Offer and 210,937 Shares from The Coca-Cola
Company in accordance with the Stock Rights and Restrictions Agreement, based
upon certain assumptions described in the Notes to Summary Pro Forma Financial
Information, and gives effect to such purchases as if they had occurred, for
purposes of the statement of operations data, on the first day of the periods
presented and, for purposes of the balance sheet data, on the applicable balance
sheet date. See Sections 9 and 10. The summary pro forma financial information
should be read in conjunction with the historical financial information included
and incorporated herein by reference and does not purport to be indicative of
the results that would actually have been obtained had the purchase of 500,000
Shares pursuant to the Offer and 210,937 Shares from The Coca-Cola Company been
completed at the dates indicated or that may be obtained in the future.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
PRO FORMA (4) (UNAUDITED)
ASSUMED $42.50 ASSUMED $47.50
HISTORICAL PURCHASE PRICE PURCHASE PRICE
<S> <C> <C> <C>
(IN THOUSANDS, EXCEPT RATIOS
AND PER SHARE AMOUNTS)
Statement of Operations Data:
Net sales....................................................... $ 761,876 $761,876 $761,876
Income before extraordinary charge and effect of accounting
change....................................................... 15,536 14,362 14,224
Net income...................................................... 10,520 9,346 9,208
Ratio of earnings to fixed charges (1).......................... 1.51 1.45 1.44
Balance Sheet Data:
Working capital................................................. (10,317) (10,317) (10,317)
Total assets.................................................... 676,571 676,571 676,571
Total assets less excess of cost over fair value of net assets
of business acquired......................................... 608,932 608,932 608,932
Total indebtedness.............................................. 420,016 450,401 453,955
Shareholders' equity............................................ 38,972 8,587 5,033
Per Share Data (2):
Income before extraordinary charge and effect of accounting
change....................................................... 1.67 1.67 1.66
Extraordinary charge............................................ (.54) (.58) (.58)
Effect of accounting change..................................... -- -- --
Net income per common share..................................... 1.13 1.09 1.08
Book value per share (3)........................................ 4.19 1.01 .59
Weighted average number of shares outstanding..................... 9,294 8,583 8,583
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 29, 1996
PRO FORMA (4) (UNAUDITED)
ASSUMED $42.50 ASSUMED $47.50
HISTORICAL PURCHASE PRICE PURCHASE PRICE
<S> <C> <C> <C>
(IN THOUSANDS, EXCEPT RATIOS
AND PER SHARE AMOUNTS)
Statement of Operations Data:
Net sales....................................................... $ 590,154 $590,154 $590,154
Income before extraordinary charge and effect of accounting
change....................................................... 16,970 16,149 16,053
Net income...................................................... 16,970 16,149 16,053
Ratio of earnings to fixed charges (1).......................... 1.75 1.69 1.68
Balance Sheet Data:
Working capital................................................. 9,552 9,552 9,552
Total assets.................................................... 674,134 674,134 674,134
Total assets less excess of cost over fair value of net assets
of business acquired......................................... 608,212 608,212 608,212
Total indebtedness.............................................. 405,458 435,845 439,400
Shareholders' equity............................................ 48,971 18,584 15,029
Per Share Data (2):
Income before extraordinary charge and effect of accounting
change....................................................... 1.83 1.88 1.87
Extraordinary charge............................................ -- -- --
Effect of accounting change..................................... -- -- --
Net income per common share..................................... 1.83 1.88 1.87
Book value per share (3)........................................ 5.27 2.17 1.75
Weighted average number of shares outstanding..................... 9,294 8,583 8,583
</TABLE>
NOTES TO SUMMARY PRO FORMA FINANCIAL INFORMATION
(1) The ratio of earnings to fixed charges has been computed using the amounts
for the Company, its consolidated subsidiaries and its proportionate share
of losses incurred by its fifty percent owned affiliate. Earnings available
for fixed charges represent earnings before income taxes, extraordinary
items and fixed charges. Fixed charges represent interest incurred plus that
portion of rental expense deemed to be the equivalent of interest.
(2) All per share data (other than book value per share) is calculated based on
the weighted average number of shares of Common Stock and Class B Common
Stock outstanding during the period. The potential dilutive effect from the
issuance of options is not material.
(3) Book value per share is calculated as total shareholders' equity divided by
the total number of shares of Common Stock and Class B Common Stock
outstanding, net of treasury shares, at the end of the period.
(4) The pro forma information assumes (a) 500,000 Shares are purchased by the
Company pursuant to the Offer and 210,937 Shares are purchased by the
Company from The Coca-Cola Company in accordance with the Stock Rights and
Restrictions Agreement at $42.50 per Share and $47.50 per Share,
respectively, and (b) that such amounts were financed with the proceeds of
borrowings of $30.4 milliion and $34.0 million, respectively, under the
Company's revolving line of credit. Expenses directly related to the Offer
are assumed to be $170,000 and are included as part of the cost of the
Shares acquired. The assumed interest rate used for pro forma statement of
operations purposes is 6.28% for fiscal 1995 and 5.78% for the first nine
months of 1996. See Sections 9 and 10. The purchase price for Shares
purchased from The Coca-Cola Company pursuant to the Stock Rights and
Restrictions Agreement is to be negotiated in good faith and will not
necessarily be the same as the Purchase Price in the Offer.
ADDITIONAL INFORMATION. The Company is subject to the information
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission
26
<PAGE>
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the Commission. The Company has also filed
an Issuer Tender Offer Statement on Schedule 13E-4 with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington D.C. 20549, and (except for the Issuer Tender Offer
Statement) at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material may also be obtained by mail, upon
payment of the Commission's customary charges, from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549. The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission, including the Company.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce the
number of stockholders. Nonetheless, there will still be a sufficient number of
Shares outstanding and publicly traded following the Offer to ensure a continued
trading market in the Shares. Based on the published guidelines of the Nasdaq
National Market, the Company does not believe that its purchase of Shares
pursuant to the Offer will cause its remaining Shares to be delisted therefrom.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will continue
to be "margin securities" for purposes of the Federal Reserve Board's margin
regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The Company believes that its
purchase of Shares pursuant to the Offer will not result in the Shares becoming
eligible for deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY AND FOREIGN APPROVALS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares as contemplated by the Offer. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter. There can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that the failure to obtain any such approval or other action might not result
in adverse consequences to the Company's business. The Company's obligations
under the Offer to accept for payment and pay for Shares are subject to certain
conditions. See Section 6.
14. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary is
based upon the current provisions of the
27
<PAGE>
Internal Revenue Code of 1986, as amended to the date hereof (the "Code"),
applicable United States Treasury regulations promulgated thereunder, judicial
decisions, and administrative pronouncements, rulings and practice, changes to
any of which could materially affect the tax consequences described herein and
could be made on a retroactive basis. This summary does not apply to Shares
reflecting interests in the Savings Plan and may not apply to Shares acquired as
compensation (including Shares acquired upon the exercise of options or which
were or are subject to forfeiture restrictions). The summary also does not
address the state, local or foreign tax consequences of participating in the
Offer. This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular stockholders in light of their
personal circumstances, or to certain types of stockholders subject to special
treatment under the federal income tax laws (such as certain financial
institutions, broker-dealers in securities or commodities, insurance companies,
tax-exempt organizations or persons who hold Shares as a position in a
"straddle" or as a part of a "hedging" or "conversion" transaction for United
States federal income tax purposes). In particular, the discussion of the
consequences of an exchange of Shares for cash pursuant to the Offer applies
only to a United States Holder. For purposes of this summary, a "United States
Holder" is a holder of shares that is (i) a citizen or resident (within the
meaning of Section 7701(b)(1)(A) of the Code) of the United States, (ii) a
corporation, partnership or other business or investment entity created or
organized in or under the laws of the United States, any State or any political
subdivision thereof, or (iii) an estate or trust, the income of which is subject
to United States federal income taxation regardless of its source. This
discussion does not address the tax consequences to foreign stockholders who
will be subject to United States federal income tax on a net basis on the
proceeds of their exchange of Shares for cash pursuant to the Offer because such
income is effectively connected with the conduct of a trade or business within
the United States. Such stockholders are generally taxed in a manner similar to
United States Holders; however, certain special rules apply. Foreign
stockholders who are not subject to United States federal income tax on a net
basis should see Section 3 for a discussion of the applicable United States
withholding rules and the potential for obtaining a refund of all or a portion
of the tax withheld. The federal income tax consequences to a stockholder may
vary depending upon the stockholder's particular facts and circumstances. EACH
STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR AS TO THE
PARTICULAR CONSEQUENCES OF PARTICIPATION IN THE OFFER, INCLUDING WITHOUT
LIMITATION THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS,
AND ANY CHANGES IN APPLICABLE TAX LAWS.
UNITED STATES HOLDERS WHO SELL SHARES PURSUANT TO THE OFFER. The sale of
Shares pursuant to the Offer by a United States Holder will be a taxable
transaction for United States federal income tax purposes and may also be a
taxable transaction under applicable state, local, foreign or other tax laws. As
a consequence of participating in the Offer, a United States Holder will,
depending on such holder's particular circumstances, be treated either as having
sold such holder's Shares or as having received a dividend distribution from the
Company, with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged for cash pursuant to the Offer will be treated as having sold such
holder's Shares, and thus will recognize gain or loss if the exchange (i) is
"not substantially equivalent to a dividend" with respect to the holder, (ii) is
"substantially disproportionate" with respect to such holder or (iii) results in
a "complete termination" of such holder's equity interest in the Company, each
as discussed below. In applying these tests, a United States Holder will be
treated as owning shares actually or constructively owned by certain related
individuals and entities.
If a United States Holder sells Shares to persons other than the Company at
or about the time such holder also sells Shares to the Company pursuant to the
Offer, and the various sales effected by the holder are part of an overall plan
to reduce or terminate such holder's proportionate interest in the Company, the
sales to persons other than the Company may, for United States federal income
tax purposes, be integrated with the holder's exchange of Shares pursuant to the
Offer and, if integrated, should be taken into account in determining whether
the holder satisfies any of the three tests described below.
28
<PAGE>
A United States Holder will satisfy the "not essentially equivalent to a
dividend" test if the reduction in such holder's proportionate interest in the
Company constitutes a "meaningful reduction" under such holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the percentage interest of a stockholder whose relative stock
interest in a publicly-held corporation is minimal (an interest of less than 1%
should satisfy this requirement) and who exercises no direct or indirect control
over corporate affairs should constitute such a "meaningful reduction."
An exchange of Shares for cash will be "substantially disproportionate"
with respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange, and the
stockholder owns actually or constructively less than 50% of the total combined
voting power of all classes of stock entitled to vote immediately after the sale
of Shares.
A United States Holder that exchanges all Shares actually or constructively
owned by such holder for cash pursuant to the Offer will be treated as having
completely terminated such holder's equity interest in the Company. Constructive
ownership of a stockholder who disposes of all shares of the Company's capital
stock actually owned by such stockholder may be waived under certain
circumstances described in Section 302(c) of the Code.
If a United States Holder is treated for federal income tax purposes as
having sold such holder's Shares under the tests described above, such holder
will recognize gain or loss equal to the difference between the amount of cash
received and such holder's tax basis in the Shares exchanged therefor. Any such
gain or loss will be capital gain or loss and will be long-term capital gain or
loss if the holding period of the purchased Shares exceeds one year as of the
date of the exchange. Stockholders should consult their own tax advisors
concerning the application of the above tests to determine the tax treatment of
participating in the Offer to their particular circumstances.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 of the Code as having sold such holder's Shares, the
entire amount of consideration received by such holder will be treated as a
dividend to the extent of the Company's current and accumulated earnings and
profits (which is approximately equal in the aggregate to the Company's net
income for fiscal 1996, less dividends previously paid during such fiscal year),
which the Company anticipates will be sufficient to cover the amount of any such
deemed dividend and will be included in the holder's taxable gross income as
ordinary income in its entirety, without reduction for the tax basis of the
Shares exchanged. No loss will be recognized. The United States Holder's tax
basis in the Shares exchanged generally will be added to such holder's tax basis
in such holder's remaining Shares. To the extent that consideration received in
exchange for Shares is treated as a dividend to a corporate United States
Holder, such holder will be (i) eligible for a dividends-received deduction
(subject to potential limitations, including those set forth in Section 246(c)
of the Code (relative to dividends received on common stock held for 45 days or
less) and Section 246A of the Code (relative to debt -- financial portfolio
stock)) and (ii) subject to the "extraordinary dividend" provisions of Section
1059 of the Code (pursuant to which such holder may be required to reduce its
tax basis in its remaining Shares and recognize gain to the extent that the
consideration received exceeds the basis in the Shares owned by such corporate
stockholder). To the extent, if any, that the consideration received by a United
States Holder pursuant to the Offer exceeds the Company's current and
accumulated earnings and profits, it will be treated first as a tax-free return
of such holder's tax basis in the Shares and thereafter as capital gain.
The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Company to accept fewer Shares than are tendered. Even
if all the Shares actually and constructively owned by a United States Holder
are tendered pursuant to the Offer, it is possible that not all of the Shares
will be purchased by the Company, which in turn may affect the United States
Holder's ability to satisfy one of the tests under
29
<PAGE>
Section 302 of the Code discussed above. Therefore, a United States Holder can
be given no assurance that a sufficient number of such United States Holder's
Shares will be exchanged pursuant to the Offer to ensure that such exchange will
be treated as a sale, rather than as a dividend, for United States federal
income tax purposes.
STOCKHOLDERS WHO DO NOT PARTICIPATE IN THE OFFER. Stockholders who do not
exchange or otherwise dispose of their Shares pursuant to, or in connection
with, the Offer will not recognize any taxable gain or loss or otherwise incur
any tax liability as a result of the consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign stockholders and backup
withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 hereof by giving oral or written notice of
such termination or postponement to the Depositary and making a public
announcement thereof. The Company's reservation of the right to delay payment
for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 6 shall have occurred or shall be
deemed by the Company to have occurred, to amend the Offer in any respect
(including, without limitation, by decreasing or increasing the consideration
offered in the Offer to holders of Shares or by decreasing or increasing the
number of Shares being sought in the Offer). Amendments to the Offer may be made
at any time and from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
Eastern time, on the next business day after the last previously scheduled or
announced Expiration Date. Any public announcement made pursuant to the Offer
will be disseminated promptly to stockholders in a manner reasonably designated
to inform stockholders of such change. Without limiting the manner in which the
Company may choose to make any public announcement, except as provided by
applicable law (including Rule 13e-4(e)(2) promulgated under the Exchange Act),
the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which, as
interpreted by the Commission, require that the minimum period during which an
offer must remain open following material changes in the terms of the offer or
information concerning the offer (other than a change in price or a change in
percentage of securities sought) will depend upon the facts and circumstances,
including the relative materiality of such terms or information. If (i) the
Company increases or
30
<PAGE>
decreases the price to be paid for Shares, the Company increases the number of
Shares being sought and such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares, or the Company decreases the number of
Shares being sought, and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of such increase or decrease is first
published, sent or given, the Offer will be extended until the expiration of
such period of ten business days.
16. FEES AND EXPENSES
The Company has retained Georgeson & Company Inc. as Information Agent and
First Union National Bank of North Carolina as Depositary in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services. The Company will also reimburse the
Information Agent and the Depositary for out-of-pocket expenses, including
reasonable attorneys' fees. The Information Agent may contact stockholders by
mail, telephone, telex, telegraph and personal interviews, and may request
brokers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners. Neither the Information Agent nor the Depositary
has been retained to make solicitations or recommendations in connection with
the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Company will, however, on request, reimburse such
persons for customary handling and mailing expenses incurred in forwarding
materials in respect of the Offer to the beneficial owners for which they act as
nominees. No such broker, dealer, commercial bank or trust company has been
authorized to act as the Company's agent for purposes of the Offer. The Company
will pay (or cause to be paid) any stock transfer taxes on its purchase of
Shares, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
17. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to the
Offer. The Schedule 13E-4, including the exhibits and any amendments thereto,
may be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 11 with respect to information concerning the
Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER THAN
THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
COCA-COLA BOTTLING CO. CONSOLIDATED
November 14, 1996
31
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for the Shares and any other required documents
should be sent or delivered by each stockholder or such stockholder's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at its
address set forth below:
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C>
BY MAIL OR BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION: BY HAND:
40 Broad Street (FOR ELIGIBLE INSTITUTIONS ONLY) 230 South Tryon Street
Suite 550 (212) 248-0425 11th Floor
New York, New York 10004 Charlotte, North Carolina
or
40 Broad Street
Suite 550
New York, New York
</TABLE>
CONFIRM RECEIPT OF NOTICE OF GUARANTEED DELIVERY BY TELEPHONE:
(800) 829-8432
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent, at the telephone number and
address below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer. To confirm delivery
of Shares, stockholders are directed to contact the Depositary.
THE INFORMATION AGENT FOR THE OFFER IS:
(Georgeson & Company Inc. Logo appears here)
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
November 14, 1996
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
COCA-COLA BOTTLING CO. CONSOLIDATED
PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 14, 1996
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C>
BY MAIL OR BY BY FACSIMILE TRANSMISSION: BY HAND:
OVERNIGHT COURIER: (FOR ELIGIBLE INSTITUTIONS ONLY) 230 South Tryon Street
40 Broad Street (212) 248-0425 11th Floor
Suite 550 Charlotte, North Carolina
New York, New York 10004 or
40 Broad Street
Suite 550
New York, New York
</TABLE>
CONFIRM RECEIPT OF NOTICE OF GUARANTEED
DELIVERY BY TELEPHONE:
(800) 829-8432
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S) TENDERED(2)
TOTAL SHARES
Indicate in this box the order (by certificate number) in which Shares are to be purchased in the event of proration.(3)
(Attach additional signed list if necessary.) See Instruction 16.
1st: 2nd: 3rd: 4th: 5th:
(1) Need not be completed by stockholders tendering Shares by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate delivered to
the Depositary are being tendered hereby. See Instruction 4.
(3) If you do not designate an order, then in the event less than all Shares tendered are purchased due to proration,
Shares will be selected for purchase by the Depositary. See Instruction 16.
</TABLE>
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE
INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT
BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO BOOK-ENTRY TRANSFER FACILITIES WILL NOT CONSTITUTE VALID DELIVERY
TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase (as defined
below). THIS LETTER OF TRANSMITTAL MAY BE USED FOR SHARES CREDITED TO ACCOUNTS
IN THE COMPANY'S DIVIDEND REINVESTMENT PLAN (THE "DIVIDEND REINVESTMENT PLAN")
(SEE BOX ENTITLED "DIVIDEND REINVESTMENT PLAN SHARES") AND EMPLOYEE STOCK
PURCHASE PLAN (THE "STOCK PURCHASE PLAN") (SEE BOX ENTITLED "STOCK PURCHASE PLAN
SHARES"). PARTICIPANTS IN THE COMPANY'S SAVINGS PLAN SHOULD NOT COMPLETE OR
RETURN THIS LETTER OF TRANSMITTAL AS IT IS CURRENTLY ANTICIPATED THAT THE
TRUSTEE WILL TENDER ALL SHARES HELD BY THE SAVINGS PLAN. SEE INSTRUCTIONS 14 AND
15.
Stockholders who cannot deliver their Share certificates and any other
required documents to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<TABLE>
<S><C>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
( ) CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF
THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Check Applicable Box: DTC ( ) PDTC ( )
Account No.
Transaction Code No.
( ) CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO
THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution that Guaranteed Delivery
</TABLE>
If delivery is by book-entry transfer:
<TABLE>
<S> <C>
Name of Tendering Institution
Account No. at DTC ( ) PDTC ( )
Transaction Code No.
</TABLE>
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Coca-Cola Bottling Co. Consolidated, a
Delaware corporation (the "Company"), the above-described shares of its common
stock, $1.00 par value ("Common Stock" or the "Shares"), at the price per Share
indicated in this Letter of Transmittal, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
November 14, 1996 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of
such Shares on the account books maintained by any of the Book-Entry
Transfer Facilities, together, in any such case, with all accompanying
evidences of transfer and authenticity, to or upon the order of the Company
upon receipt by the Depositary, as the undersigned's agent, of the Purchase
Price (as defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and
transfer on the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's representation and
3
<PAGE>
warranty to the Company that (i) the undersigned has a net long position in the
Shares or equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, and (ii) the
tender of such Shares complies with Rule 14e-4. The Company's acceptance for
payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will determine a single per
Share price (not greater than $47.50 nor less than $42.50 per Share), net to the
Seller in cash (the "Purchase Price"), that it will pay for Shares validly
tendered and not withdrawn pursuant to the Offer, taking into account the number
of Shares so tendered and the prices specified by tendering stockholders. The
undersigned understands that the Company will select the lowest Purchase Price
that will allow it to purchase 500,000 Shares (or such lesser number of Shares
as are validly tendered at prices not greater than $47.50 nor less than $42.50
per Share) validly tendered and not withdrawn pursuant to the Offer. The
undersigned understands that all Shares validly tendered at prices at or below
the Purchase Price and not withdrawn will be purchased at the Purchase Price,
net to the seller in cash, upon the terms and subject to the conditions of the
Offer, including its proration provisions, and that the Company will return all
other Shares, including Shares tendered at prices greater than the Purchase
Price and not withdrawn and Shares not purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may accept
for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the applicable Book-Entry Transfer Facility). Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the Purchase Price of any Shares purchased and/or any certificates for
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price of any Shares purchased and/or return any Shares not tendered or not
purchased in the name(s) of, and mail such check and/or any certificates to, the
person(s) so indicated. The undersigned recognizes that the Company has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if the Company does not
accept for payment any of the Shares so tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
<TABLE>
<S><C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE LETTER OF
TRANSMITTAL FOR EACH PRICE SPECIFIED MUST BE USED. (See Instruction 5)
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR IF NO
BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
( ) $42.500 ( ) $43.625 ( ) $44.750 ( ) $45.875 ( ) $47.000
( ) $42.625 ( ) $43.750 ( ) $44.875 ( ) $46.000 ( ) $47.125
( ) $42.750 ( ) $43.875 ( ) $45.000 ( ) $46.125 ( ) $47.250
( ) $42.875 ( ) $44.000 ( ) $45.125 ( ) $46.250 ( ) $47.375
( ) $43.000 ( ) $44.125 ( ) $45.250 ( ) $46.375 ( ) $47.500
( ) $43.125 ( ) $44.250 ( ) $45.375 ( ) $46.500
( ) $43.250 ( ) $44.375 ( ) $45.500 ( ) $46.625
( ) $43.375 ( ) $44.500 ( ) $45.625 ( ) $46.750
( ) $43.500 ( ) $44.625 ( ) $45.750 ( ) $46.875
</TABLE>
<TABLE>
<S><C>
ODD LOTS
(See Instruction 9)
This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who owns
beneficially, as of the close of business on November 13, 1996, and who continues to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under
the Savings Plan, but including Shares held in the Dividend Reinvestment and Stock Purchase Plans).
The undersigned either (check one box):
( ) owned beneficially, as of the close of business on November 13, 1996, and continues to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts
under the Savings Plan, but including Shares held in the Dividend Reinvestment and Stock Purchase Plans), all of
which are being tendered, or
( ) is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the beneficial
owner thereof, Shares with respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such beneficial owner owned beneficially, as of
the close of business on November 13, 1996, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares (excluding Shares attributable to individual accounts under the Savings Plan,
but including Shares held in the Dividend Reinvestment and Stock Purchase Plans) and is tendering all of such
Shares.
If you do not wish to specify a purchase price, check the following box, in which case you will be deemed to
have tendered at the Purchase Price determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share in the box entitled "Price (In Dollars) Per Share At Which
Shares are Being Tendered" in this Letter of Transmittal). ( )
</TABLE>
5
<PAGE>
<TABLE>
<S><C>
DIVIDEND REINVESTMENT PLAN SHARES
(SEE INSTRUCTION 14)
This section is to be completed ONLY if Shares held in the Dividend Reinvestment Plan are to be tendered.
( ) By checking this box, the undersigned represents that the undersigned is a participant in the Dividend
Reinvestment Plan and hereby instructs the Depositary to tender on behalf of the undersigned the following number
of Shares credited to the Dividend Reinvestment Plan account of the undersigned at the Purchase Price per Share
indicated in the box entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of
Transmittal:
Shares(1)
(1) The undersigned understands and agrees that all Shares held in the Dividend Reinvestment Plan account(s) of
the undersigned will be tendered if the above box is checked and the space above is left blank. If the box
captioned "Odd Lots" in this Letter of Transmittal is completed, all Shares held in the Odd Lot Owner's
account(s) will be tendered regardless of whether this section is otherwise completed.
</TABLE>
<TABLE>
<S><C>
STOCK PURCHASE PLAN SHARES
(SEE INSTRUCTION 14)
This section is to be completed ONLY if Shares held in the Stock Purchase Plan are to be tendered.
( ) By checking this box, the undersigned represents that the undersigned is a participant in the Stock Purchase Plan
and hereby instructs the Depositary to tender on behalf of the undersigned the following number of Shares
credited to the Stock Purchase Plan account of the undersigned at the Purchase Price per Share indicated in the
box entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal:
Shares(1)
(1) The undersigned understands and agrees that all Shares held in the Stock Purchase Plan account(s) of the
undersigned will be tendered if the above box is checked and the space above is left blank. If the box
captioned "Odd Lots" in this Letter of Transmittal is completed, all Shares held in the Odd Lot Owner's
account(s) will be tendered regardless of whether this section is otherwise completed.
</TABLE>
6
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if the check for the aggregate Purchase Price of
Shares purchased and/or certificates for Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned.
Issue ( ) check and/or ( ) certificate(s) to:
Name
(PLEASE PRINT)
Address
(INCLUDE ZIP CODE)
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6 AND 8)
To be completed ONLY if the check for the Purchase Price of Shares
purchased and/or certificates for Shares not tendered or not purchased are
to be mailed to someone other than the undersigned or to the undersigned at
an address other than that shown below the undersigned's signature(s).
Mail ( ) check and/or ( ) certificates to:
Name
(PLEASE PRINT)
Address
(INCLUDE ZIP CODE)
7
<PAGE>
<TABLE>
<S> <C>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL STOCKHOLDERS)
Signature(s) of Owner(s)
Dated
Name(s)
(PLEASE PRINT)
Capacity (full title)
Address
(INCLUDE ZIP CODE)
Area Code and Telephone No.
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share certificate(s) or on a security
position listing or by person(s) authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer
of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and
see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm
Authorized Signature
Name
(PLEASE PRINT)
Title
Address
(INCLUDE ZIP CODE)
Area Code and Telephone No.
Dated
</TABLE>
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
recognized member of an Eligible Institution (as defined in the Offer to
Purchase), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered herewith and such
holder(s) have not completed the box entitled "Special Payment Instructions" or
the box entitled "Special Delivery Instructions" on this Letter of Transmittal,
or (ii) such Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be used either if Share
certificates are to be forwarded herewith or if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities of all Shares delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal prior to the
Expiration Date. If certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery.
Stockholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date may tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the Expiration
Date, and (iii) the certificates for all physically delivered Shares in proper
form for transfer by delivery, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, in each case together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market trading days after the date the
Depositary receives such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
9
<PAGE>
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering stockholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In such
case, a new certificate for the remainder of the Shares represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the "Special Payment Instructions" or "Special
Delivery Instructions" boxes on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
validly tendered, the stockholder must check the box indicating the price per
Share at which such stockholder is tendering Shares under "Price (In Dollars)
Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal,
except that Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
may check the box above in the section entitled "Odd Lots" indicating that such
stockholder is tendering all Shares at the Purchase Price determined by the
Company. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR (OTHER
THAN AS DESCRIBED ABOVE FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE IS NO
VALID TENDER OF SHARES. A stockholder wishing to tender portions of such
stockholder's Share holdings at different prices must complete a separate Letter
of Transmittal for each price at which such stockholder wishes to tender each
such portion of such stockholder's Shares. The same Shares cannot be tendered
(unless previously validly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the Purchase Price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificate(s) evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures in any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
10
<PAGE>
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or its
order pursuant to the Offer. If, however, payment of the aggregate Purchase
Price is to be made to, or Shares not tendered or not purchased are to be
registered in the name of, any person other than the registered holder(s), or if
tendered Shares are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) payable on account of the transfer to such person will be deducted
from the Purchase Price unless satisfactory evidence of the payment of such
taxes, or exemption therefrom, is submitted. See Section 5 of the Offer to
Purchase. Except as provided in this Instruction 7, it will not be necessary to
affix transfer tax stamps to the certificates representing Shares tendered
hereby.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Purchase
Price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal, or if the check and/or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Stockholders tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
9. ODD LOTS. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date are to be purchased, the Shares purchased
first will consist of all Shares tendered by any stockholder who owned
beneficially, as of the close of business on November 13, 1996, and continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares (excluding Shares attributable to individual accounts under the Savings
Plan, but including Shares held in the Dividend Reinvestment and Stock Purchase
Plans) and who validly tendered all such Shares at or below the Purchase Price
(including by not designating a purchase price as described above). Partial
tenders of Shares will not qualify for this preference and this preference will
not be available unless the box captioned "Odd Lots" in this Letter of
Transmittal and the Notice of Guaranteed Delivery, if any, is completed.
10. SUBSTITUTE FORM W-9 AND FORM W-8. To prevent United States federal
income tax backup withholding of 31% of the gross proceeds payable to a
stockholder or other payee pursuant to the Offer, the
11
<PAGE>
stockholder or other payee must provide such person's taxpayer identification
number (employer identification number or social security number) to the
Depositary and certify that such number is correct. Therefore, each tendering
stockholder should complete and sign the Substitute Form W-9 included as part of
the Letter of Transmittal so as to provide the information and certification
necessary to avoid backup withholding, unless such stockholder otherwise
establishes to the satisfaction of the Depositary that it is not subject to
backup withholding. Certain stockholders (including, among others, all
corporations and certain foreign stockholders (in addition to foreign
corporations)) are not subject to these backup withholding and reporting
requirements. In order for a foreign stockholder to qualify as an exempt
recipient, that stockholder must submit an IRS Form W-8 or a Substitute Form
W-8, signed under penalties of perjury, attesting to that stockholder's exempt
status. Such statements may be obtained from the Depositary.
11. WITHHOLDING ON FOREIGN STOCKHOLDERS. Even if a foreign stockholder has
provided the required certification to avoid backup withholding, the Depositary
will withhold United States federal income taxes equal to 30% of the gross
payments payable to a foreign stockholder or such stockholder's agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or business
in the United States. For this purpose, a foreign stockholder is any stockholder
that is not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any State or any political subdivision thereof or (iii) an estate
or trust, the income of which is subject to United States federal income
taxation regardless of the source of such income. In order to obtain a reduced
rate of withholding pursuant to a tax treaty, a foreign stockholder must deliver
to the Depositary a properly completed IRS Form 1001. In order to obtain an
exemption from withholding on the grounds that the gross proceeds paid pursuant
to the Offer are effectively connected with the conduct of a trade or business
within the United States, a foreign stockholder must deliver to the Depositary a
properly completed IRS Form 4224. The Depositary will determine a stockholder's
status as a foreign stockholder and eligibility for a reduced rate of, or an
exemption from, withholding by reference to outstanding certificates or
statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" test described
in Section 14 of the Offer to Purchase or is otherwise able to establish that no
tax or a reduced amount of tax is due. Backup withholding generally will not
apply to amounts subject to the 30% or treaty-reduced rate of withholding.
Foreign stockholders are urged to consult their tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and refund procedures.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent at its telephone number
and address listed below. Requests for additional copies of the Offer to
Purchase, this Letter of Transmittal or other tender offer materials may be
directed to the Information Agent, and such copies will be furnished promptly at
the Company's expense. Stockholders may also wish to contact their local broker,
dealer, commercial bank or trust company for documents relating to, or
assistance concerning, the Offer.
13. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of
12
<PAGE>
Shares will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders it determines not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares or any particular stockholder. No tender of
Shares will be deemed to be validly made until all defects or irregularities
have been cured or waived. None of the Company, the Depositary, the Information
Agent or any other person is or will be obligated to give notice of any defects
or irregularities in tenders, and none of them will incur any liability for
failure to give any such notice.
14. DIVIDEND REINVESTMENT PLAN AND STOCK PURCHASE PLAN. If a tendering
stockholder desires to have tendered pursuant to the Offer Shares credited to
the stockholder's account(s) under either the Dividend Reinvestment Plan or the
Stock Purchase Plan, the applicable box(es) captioned "Dividend Reinvestment
Plan Shares" or "Stock Purchase Plan Shares" should be completed. A participant
in the Dividend Reinvestment Plan or Stock Purchase Plan may complete such
box(es) on only one Letter of Transmittal submitted by such participant. If a
participant submits more than one Letter of Transmittal and completes such
box(es) on more than one Letter of Transmittal, the participant will be deemed
to have elected to tender all shares credited to the stockholder's account(s)
under the Dividend Reinvestment Plan or Stock Purchase Plan at the lowest of the
prices specified in such Letters of Transmittal.
If a stockholder authorizes a tender of Shares held in the Dividend
Reinvestment Plan or Stock Purchase Plan, all such Shares credited to such
stockholder's account(s), including fractional Shares, will be tendered, unless
otherwise specified in the appropriate space in the box(es) entitled "Dividend
Reinvestment Plan Shares" or "Stock Purchase Plan Shares". In the event that the
box(es) captioned "Dividend Reinvestment Plan Shares" or "Stock Purchase Plan
Shares" is (are) not completed, no Shares held in the tendering stockholder's
account(s) will be tendered (unless the stockholder has otherwise completed the
box captioned "Odd Lots" in this Letter of Transmittal, in which case all Shares
held in the Odd Lot Owner's account(s) will be tendered regardless of whether
the boxes captioned "Dividend Reinvestment Plan Shares" or "Stock Purchase Plan
Shares" are completed).
15. SAVINGS PLAN. Participants in the Savings Plan may not use this Letter
of Transmittal to direct the tender of Shares attributable to their individual
account. Any such tender will be made by the Trustee of the Savings Plan. See
Section 3 of the Offer to Purchase.
16. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase may
have an effect on the United States federal income tax classification of any
gain or loss on the Shares purchased. See Sections 1 and 14 of the Offer to
Purchase.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) TOGETHER WITH
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH THEIR
LETTER OF TRANSMITTAL.
13
<PAGE>
<TABLE>
<C> <S> <C>
PAYER'S NAME: FIRST UNION NATIONAL BANK OF NORTH CAROLINA
PART 1: PLEASE PROVIDE YOUR TIN Social Security Number
SUBSTITUTE IN THE BOX AT RIGHT AND CERTIFY BY SIGNING or
FORM W-9 AND DATING BELOW Employer Identification Number:
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER (TIN) PART 2: For Payees exempt from backup withholding, see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 and
complete as instructed therein.
PART 3: Awaiting TIN ( )
CERTIFICATION -- Under the penalties of perjury, I certify that (i) the number
shown on this form is my correct Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate IRS
center or Social Security Administration office or (b) I intend to mail or deliver
an application in the near future) and (ii) I am not subject to backup withholding
because: (a) I am exempt from backup withholding; or (b) I have not been notified
by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends; or (c) the IRS has notified me that I am no
longer subject to backup withholding. Certification instructions -- You must cross
out Item (ii) above if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting interest or dividends on
your tax return.
SIGNATURE DATE
NAME (Please Print)
ADDRESS (Include Zip Code)
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
14
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
(Georgeson & Company Inc. Logo appears here)
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
15
<PAGE>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
<PAGE>
Exhibit (a)(3)
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
This form, or a form substantially equivalent to this form, must be
used to accept the Offer (as defined below) if certificates for the Shares of
Common Stock of Coca-Cola Bottling Co. Consolidated are not immediately
available, if the procedure for book-entry transfer cannot be completed on a
timely basis, or if time will not permit all other documents required by the
Letter of Transmittal to be delivered to the Depositary (as defined below) prior
to the Expiration Date (as defined in Section 1 of the Offer to Purchase defined
below). Such form may be delivered by hand or transmitted by mail or overnight
courier, or by facsimile transmission, to the Depositary. See Section 3 of the
Offer to Purchase. THE ELIGIBLE INSTITUTION COMPLETING THIS FORM MUST
COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF
TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN
HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE
INSTITUTION.
THE DEPOSITARY FOR THE OFFER IS:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<TABLE>
<S> <C> <C>
BY MAIL OR BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION: BY HAND:
40 Broad Street (FOR ELIGIBLE INSTITUTIONS ONLY) 230 South Tryon Street
Suite 550 (212) 248-0425 11th Floor
New York, New York 10004 Charlotte, North Carolina
or
40 Broad Street
Suite 550
New York, New York
</TABLE>
CONFIRM RECEIPT OF NOTICE OF GUARANTEED DELIVERY BY TELEPHONE:
(800) 829-8432
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Coca-Cola Bottling Co. Consolidated,
a Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 14, 1996 (the
"Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
shares of common stock, $1.00 par value (the "Shares"), of the Company listed
below, pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase.
Number of Shares:
Certificate Nos.: (if available)
If Shares will be tendered by book-entry
transfer:
Name of Tendering Institution:
Account No. at (check one)
( ) The Depository Trust Company
( ) Philadelphia Depository Trust Company
Name(s) (Please Print)
(Address)
Area Code and Telephone Number
Signature(s)
2
<PAGE>
<TABLE>
<S><C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE
SPECIFIED MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD
LOTS BOX AND INSTRUCTIONS BELOW), THERE IS NO VALID
TENDER OF SHARES.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
( ) $42.500 ( ) $43.625 ( ) $44.750 ( ) $45.875 ( ) $47.000
( ) $42.625 ( ) $43.750 ( ) $44.875 ( ) $46.000 ( ) $47.125
( ) $42.750 ( ) $43.875 ( ) $45.000 ( ) $46.125 ( ) $47.250
( ) $42.875 ( ) $44.000 ( ) $45.125 ( ) $46.250 ( ) $47.375
( ) $43.000 ( ) $44.125 ( ) $45.250 ( ) $46.375 ( ) $47.500
( ) $43.125 ( ) $44.250 ( ) $45.375 ( ) $46.500
( ) $43.250 ( ) $44.375 ( ) $45.500 ( ) $46.625
( ) $43.375 ( ) $44.500 ( ) $45.625 ( ) $46.750
( ) $43.500 ( ) $44.625 ( ) $45.750 ( ) $46.875
</TABLE>
<TABLE>
<S><C>
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on behalf of a person who owned
beneficially, as of the close of business on November 13, 1996, and who continues to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan (as defined in the Offer to Purchase), but including Shares held in the
Dividend Reinvestment and Stock Purchase Plans (each as defined in the Offer to Purchase)).
The undersigned either (check one box):
( ) owned beneficially, as of the close of business on November 13, 1996, and continues to own beneficially as
of the Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the Dividend Reinvestment and Stock Purchase
Plans), all of which are being tendered, or
( ) is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, for the
beneficial owner thereof, Shares with respect to which it is the record owner, and (ii) believes, based
upon representations made to it by each such beneficial owner, that such beneficial owner owned
beneficially, as of the close of business on November 13, 1996, and continues to own beneficially as of
the Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan, but including Shares held in the Dividend Reinvestment and Stock Purchase
Plans) and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in which case you will be
deemed to have tendered at the Purchase Price determined by the Company in accordance with the terms of the
Offer (persons checking this box need not indicate the price per Share in the box entitled "Price (In
Dollars) Per Share At Which Shares are Being Tendered" above). ( )
</TABLE>
3
<PAGE>
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States, hereby
guarantees (i) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares
complies with Rule 14e-4, and (iii) to deliver to the Depositary at one of its
addresses set forth above certificate(s) for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company or Philadelphia Depository Trust Company in each case together with a
properly completed and duly executed Letter(s) of Transmittal (or facsimile(s)
thereof), with any required signature guarantee(s) and any other required
documents, all within three Nasdaq National Market trading days after the date
hereof.
Name of Firm
Address
City, State, Zip Code
Dated:
Authorized Signature
Name
Title
Area Code and Telephone Number
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH
THE LETTER OF TRANSMITTAL.
4
<PAGE>
Exhibit (a)(4)
COCA-COLA BOTTLING CO. CONSOLIDATED
OFFER TO PURCHASE FOR CASH
UP TO 500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$47.50 NOR LESS THAN $42.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED.
November 14, 1996
To Brokers, Dealers, Commercial
Banks, Trust Companies and
other Nominees:
We are enclosing the material listed below relating to the offer of
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the "Company"), to
purchase up to 500,000 shares of its common stock, $1.00 par value (the
"Shares"), at prices not greater than $47.50 nor less than $42.50 per Share in
cash, specified by tendering stockholders, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 14, 1996 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
The Company will determine a single price (not greater than $47.50 nor less
than $42.50 per Share), net to the seller in cash, that it will pay for shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to purchase 500,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $47.50 nor less than $42.50 per
Share) validly tendered and not withdrawn pursuant to the Offer. The Company
will purchase all Shares validly tendered at prices at or below the Purchase
Price and not withdrawn, upon the terms and subject to the conditions of the
Offer, including the proration terms described in the Offer to Purchase. See
Section 1 of the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase Price
and Shares not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6 OF THE OFFER TO PURCHASE.
The Company asks you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients. For your information
and for forwarding to your clients, we are enclosing the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of
your clients.
3. A letter to stockholders of the Company from J. Frank Harrison, III,
Vice Chairman of the Board of Directors and Chief Executive Officer, and
David V. Singer, Vice President and Chief Financial Officer of the
Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (each as defined in the Offer to
Purchase).
5. A letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space for obtaining such clients' instructions with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal
income tax withholding.
7. A return envelope addressed to First Union National Bank of North
Carolina, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED.
<PAGE>
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The Company
has not retained the services of a dealer manager to assist with the Offer. The
Company will, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and customary handling and mailing expenses
incurred by them in forwarding materials relating to the Offer to their
customers. The Company will pay all stock transfer taxes applicable to its
purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter
of Transmittal.
As described in the Offer to Purchase, if more than 500,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date, as defined in Section 1 of the Offer to Purchase, the
Company will purchase Shares in the following order of priority: (i) all Shares
validly tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date by any stockholder who owned beneficially, as of the close of
business on November 13, 1996, and who continues to own beneficially as of the
Expiration Date, an aggregate of fewer than 100 Shares (excluding Shares
attributable to individual accounts under the Savings Plan (as defined in the
Offer to Purchase) but including Shares held in the Company's Dividend
Reinvestment and Stock Purchase Plans), and who validly tenders all of such
Shares (partial tenders will not qualify for this preference) and completes the
box captioned "Odd Lots" in the Letter of Transmittal and, if applicable, the
Notice of Guaranteed Delivery; and (ii) after purchase of all of the foregoing
Shares, all other Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date on a PRO RATA basis (with adjustments to
avoid purchases of fractional shares).
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. SEE SECTIONS 8 AND 9 OF THE OFFER TO PURCHASE FOR INFORMATION
AS TO THE CURRENT INTENTIONS OF THE COMPANY'S DIRECTORS, EXECUTIVE OFFICERS AND
PRINCIPAL STOCKHOLDERS REGARDING THE OFFER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to the Information Agent at the address and
telephone number set forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
Exhibit (a)(5)
COCA-COLA BOTTLING CO. CONSOLIDATED
OFFER TO PURCHASE FOR CASH
UP TO 500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$47.50 NOR LESS THAN $42.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON FRIDAY, DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November
14, 1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by Coca-Cola Bottling
Co. Consolidated, a Delaware corporation (the "Company"), to purchase up to
500,000 shares of its common stock, $1.00 par value (the "Shares"), at prices
not greater than $47.50 nor less than $42.50 per Share, net to the seller in
cash, specified by tendering stockholders, upon the terms and subject to the
conditions of the Offer. Also enclosed herewith is certain other material
related to the Offer, including a letter from J. Frank Harrison, III, Vice
Chairman of the Board of Directors and Chief Executive Officer, and David V.
Singer, Vice President and Chief Financial Officer of the Company, to
stockholders.
The Company will determine a single per Share price (not greater than
$47.50 nor less than $42.50 per Share) (the "Purchase Price") that it will pay
for the Shares validly tendered pursuant to the Offer and not withdrawn, taking
into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to purchase 500,000 Shares (or such lesser number of Shares as are
validly tendered at prices not greater than $47.50 nor less than $42.50 per
Share) validly tendered and not withdrawn pursuant to the Offer. The Company
will purchase all Shares validly tendered at prices at or below the Purchase
Price and not withdrawn, upon the terms and subject to the conditions of the
Offer, including the provisions thereof relating to proration. See Section 1 of
the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. You may tender Shares at a price (in multiples of $.125), which
cannot be greater than $47.50 nor less than $42.50 per Share, as indicated
in the attached Instruction Form, net to you in cash.
2. The Offer is extended for up to 500,000 Shares, constituting
approximately 6.3% of the total Shares outstanding as of November 12, 1996.
The Offer is not conditioned on any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set
forth in the Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at
5:00 P.M., Eastern time, on Friday, December 13, 1996, unless the Offer is
extended. Your instructions to us should be forwarded to us in ample time
to permit us to submit a tender on your behalf.
4. As described in the Offer to Purchase, if more than 500,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, the Company will purchase Shares in the following order of
priority:
<PAGE>
(i) all Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date by any stockholder who owned
beneficially, as of the close of business on November 13, 1996, and who
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares (excluding Shares attributable to individual
accounts under the Savings Plan (as defined in the Offer to Purchase),
but including Shares held in the Company's Dividend Reinvestment and
Stock Purchase Plans) and who validly tenders all of such Shares
(partial tenders will not qualify for this preference) and completes the
box captioned "Odd Lots" in the Letter of Transmittal and, if
applicable, the Notice of Guaranteed Delivery; and
(ii) after purchase of all the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date on a PRO RATA basis. See Section 1 of the Offer
to Purchase for a discussion of proration.
5. Tendering stockholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the purchase of Shares by the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each portion of your Shares. We must submit separate Letters
of Transmittal on your behalf for each price you will accept.
7. If you owned beneficially, as of the close of business on November
13, 1996, and continue to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares (excluding Shares attributable to
individual accounts under the Savings Plan, but including Shares held in
the Company's Dividend Reinvestment and Stock Purchase Plans), and you
instruct us to tender at or below the Purchase Price on your behalf all
such Shares prior to the Expiration Date and check the box captioned "Odd
Lots" in the Instruction Form, all such Shares will be accepted for
purchase before proration, if any, of the other tendered Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. SEE SECTIONS 8 AND 9 OF THE OFFER TO PURCHASE FOR INFORMATION
AS TO THE CURRENT INTENTIONS OF THE COMPANY'S DIRECTORS, EXECUTIVE OFFICERS AND
PRINCIPAL STOCKHOLDERS REGARDING THE OFFER.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us the
attached Instruction Form. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF BY THE EXPIRATION OF THE OFFER.
The Offer is being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction.
2
<PAGE>
INSTRUCTION FORM
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 500,000 SHARES OF COMMON STOCK
OF
COCA-COLA BOTTLING CO. CONSOLIDATED
AT A PURCHASE PRICE NOT GREATER THAN
$47.50 NOR LESS THAN $42.50 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 14, 1996, and the related Letter of
Transmittal (which together constitute the "Offer") in connection with the Offer
by Coca-Cola Bottling Co. Consolidated (the "Company") to purchase up to 500,000
shares of its common stock, $1.00 par value (the "Shares"), at prices not
greater than $47.50 nor less than $42.50 per Share, net to the undersigned in
cash, specified by the undersigned, upon the terms and subject to the terms and
conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are held
by you for the account of the undersigned, at the price per Share indicated
below, upon the terms and subject to the conditions of the Offer.
<TABLE>
<S><C>
SHARES TENDERED
( ) By checking this box, all Shares held by us for your account will be tendered. If fewer than all Shares
held by us for your account are to be tendered, please check the box and indicate below the aggregate
number of Shares to be tendered by us.
</TABLE>
Shares
<TABLE>
<S><C>
Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be
tendered.
</TABLE>
3
<PAGE>
<TABLE>
<S><C>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE INSTRUCTION FORM FOR EACH PRICE SPECIFIED MUST BE USED.
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
( ) $42.500 ( ) $43.625 ( ) $44.750 ( ) $45.875 ( ) $47.000
( ) $42.625 ( ) $43.750 ( ) $44.875 ( ) $46.000 ( ) $47.125
( ) $42.750 ( ) $43.875 ( ) $45.000 ( ) $46.125 ( ) $47.250
( ) $42.875 ( ) $44.000 ( ) $45.125 ( ) $46.250 ( ) $47.375
( ) $43.000 ( ) $44.125 ( ) $45.250 ( ) $46.375 ( ) $47.500
( ) $43.125 ( ) $44.250 ( ) $45.375 ( ) $46.500
( ) $43.250 ( ) $44.375 ( ) $45.500 ( ) $46.625
( ) $43.375 ( ) $44.500 ( ) $45.625 ( ) $46.750
( ) $43.500 ( ) $44.625 ( ) $45.750 ( ) $46.875
</TABLE>
<TABLE>
<S><C>
ODD LOTS
( ) By checking this box, the undersigned represents that the undersigned owned beneficially, as of the close of
business on November 13, 1996, and continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares (excluding Shares attributable to individual accounts under the Savings Plan, but
including Shares held in the Company's Dividend Reinvestment and Stock Purchase Plans) and is tendering all of
such Shares.
If you do not wish to specify a purchase price, check the following box, in which case you will be deemed to have
tendered at the Purchase Price determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share in the box entitled "Price (In Dollars) Per Share At Which
Shares Are Being Tendered" above). ( )
</TABLE>
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
<TABLE>
<S> <C>
SIGN HERE
Signature(s)
Dated: Name
Address
Social Security or Taxpayer ID No.
</TABLE>
4
<PAGE>
Exhibit (a)(6)
November 14, 1996
Dear Stockholder:
We are pleased to inform you that the Board of Directors of Coca-Cola
Bottling Co. Consolidated (the "Company") has approved an offer to purchase up
to 500,000 shares of its common stock, $1.00 par value ("Common Stock" or the
"Shares"), at a price not greater than $47.50 nor less than $42.50 per Share.
The Company is conducting the Offer through a procedure commonly referred to as
a "Dutch auction." This procedure allows you to select the price within the
specified price range at which you are willing to sell all or a portion of your
Shares to the Company. The Company will determine the lowest single per Share
purchase price within that range that will enable it to buy 500,000 Shares, or
such lesser number of Shares as have been properly tendered. If the Offer is
oversubscribed, Shares validly tendered at or below the purchase price will be
prorated. Any Shares tendered by you which the Company does not purchase will be
returned to you.
The Company's management and Board of Directors desire to enhance
stockholder value and provide a liquidity opportunity to stockholders. We have
determined that Share repurchases funded by borrowings under the Company's
revolving credit facility would advance such objectives and be in the best
interests of the Company and its stockholders.
In addition, the Offer provides stockholders with an opportunity to sell
some or all of their Shares without the payment of brokerage commissions or
fees. Stockholders who own fewer than 100 Shares should note that the Offer also
represents an opportunity for them to sell their Shares without having to pay
brokerage commissions or odd lot discounts.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your Shares, instructions on how to
tender Shares are provided in the enclosed materials. We encourage you to read
these materials carefully before making any decision with respect to the Offer.
Neither the Company nor its Board of Directors makes any recommendation to any
stockholder as to whether to tender or refrain from tendering Shares.
Stockholders who are participants in either the Company's Dividend
Reinvestment Plan or Employee Stock Purchase Plan may instruct the administrator
of such plans to tender all or part of the Shares credited to their individual
accounts by following the instructions set forth in the enclosed Offer to
Purchase and Letter of Transmittal.
Please note that the Offer is scheduled to expire at 5:00 P.M., Eastern
time, on Friday, December 13, 1996, unless extended by the Company. Questions
regarding the Offer should not be directed to the Company but should instead be
directed to Georgeson & Company Inc., the Information Agent, at (800) 223-2064.
Sincerely,
J. FRANK HARRISON, III
VICE CHAIRMAN OF THE BOARD OF
DIRECTORS
AND CHIEF EXECUTIVE OFFICER
DAVID V. SINGER
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
<PAGE>
Exhibit (a)(7)
COCA-COLA BOTTLING CO. ANNOUNCES DUTCH AUCTION SELF TENDER
PRESS RELEASE
Charlotte, NC, November 14, 1996 -- Coca-Cola Bottling Co. Consolidated
announced today that its Board of Directors has authorized a
"Dutch auction" self-tender offer to purchase for cash up to 500,000 shares of
its outstanding Common Stock. The offer will commence on Thursday,
November 14, 1996, and will expire, unless extended, at 5:00 P.M. on
Friday, December 13, 1996. Terms of the Dutch auction tender offer, which are
described more fully in the Offer to Purchase and Letter of Transmittal,
pursuant to which the offer is being made, include a purchase price not greater
than $47.50 nor less than $42.50 per share, net to the seller in cash.
In a Dutch auction, the Company sets a price range, and stockholders are given
an opportunity to specify prices within that range at which they are willing to
sell shares. After the expiration of the tender offer, the Company will
determine a single per share price that will enable it to purchase the stated
amount of shares, or such lesser number of shares as have been properly
tendered. If the tender offer is oversubscribed, shares validly tendered at or
below the purchase price will be subject to proration. The tender offer is not
conditioned on any minimum number of shares being tendered.
Participants in the tender offer, including stockholders who own fewer than 100
shares, will avoid the transaction costs normally associated with market sales.
Neither the Company nor its Board of Directors is making any recommendation to
stockholders as to whether to tender or refrain from tendering their shares. The
Offer to Purchase, Letter of Transmittal, and related documents will be mailed
to stockholders of record of its Common Stock and will also be made available
for distribution to beneficial owners of Common Stock.
On November 13, 1996, the day prior to the announcement and commencement of the
tender offer, the closing price of the Common Stock was $42.25 per share on
the Nasdaq National Market. As of November 13, 1996, the Company had 7,958,059
shares of Common Stock outstanding.
First Union National Bank of North Carolina is serving as the Depositary for the
tender offer, and Georgeson & Company Inc. is serving as the Information Agent.
Coca-Cola Bottling Co. Consolidated, headquartered in Charlotte, NC, is the
second-largest Coca-Cola bottler in the United States with annual revenues of
more than $760 million. The Company operates in 12 southeastern states and has
approximately 5,000 employees.
<PAGE>
Exhibit (a)(8)
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE AND THE
RELATED LETTER OF TRANSMITTAL THAT ARE BEING MAILED TO STOCKHOLDERS OF
COCA-COLA BOTTLING CO. CONSOLIDATED ON OR ABOUT NOVEMBER 14, 1996.
CAPITALIZED TERMS NOT DEFINED IN THIS ANNOUNCEMENT HAVE THE
RESPECTIVE MEANINGS ASCRIBED TO SUCH TERMS IN THE OFFER TO
PURCHASE. THE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY
ACCEPT TENDERS FROM, HOLDERS OF SHARES IN ANY JURISDICTION IN
WHICH THE OFFER OR ITS ACCEPTANCE WOULD VIOLATE THAT
JURISDICTION'S LAWS. THE COMPANY IS NOT AWARE OF ANY
JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE
TENDER OF SHARES WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH BY
(logo of Coca-Cola Bottling Co. Consolidated appears here)
UP TO 500,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN
$47.50 NOR LESS THAN $42.50 PER SHARE
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Company"), invites its stockholders to tender shares of its common stock, $1.00
par value ("Common Stock" or the "Shares"), to the Company at prices not greater
than $47.50 nor less than $42.50 per Share in cash, specified by tendering
stockholders, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 14, 1996 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together constitute the "Offer").
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS
EXPIRE AT 5:00 P.M., EASTERN TIME, ON FRIDAY,
DECEMBER 13, 1996, UNLESS THE OFFER IS EXTENDED.
The Offer is not conditioned on any minimum number of Shares being tendered.
The Offer is, however, subject to certain other conditions set forth in the
Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES SHOULD BE
TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES.
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $47.50 nor less than $42.50
per Share), net to the seller in cash (the "Purchase Price"), that it will pay
for Shares validly tendered and not withdrawn pursuant to the Offer, taking into
account the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will allow
it to buy 500,000 Shares (or such lesser number of Shares as are validly
tendered at prices not greater than $47.50 nor less than $42.50 per Share)
validly tendered and not withdrawn pursuant to the Offer. The Company will pay
the Purchase Price for all Shares validly tendered prior to the Expiration Date
(as defined below) at prices at or below the Purchase Price and not withdrawn,
upon the terms and subject to the conditions of the Offer, including the
proration terms described below. The term "Expiration Date" means 5:00 P.M.,
Eastern time, on Friday, December 13, 1996, unless and until the
Company in its sole discretion shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall refer
to the latest time and date at which the Offer, as so extended by the Company,
shall expire. The Company reserves the right, in its sole discretion, to
purchase more than 500,000 Shares pursuant to the Offer. For purposes of the
Offer, the Company will be deemed to have accepted for payment (and therefore
purchased), subject to proration, Shares that are validly tendered at or below
the Purchase Price and not withdrawn when, as and if it gives oral or written
notice to First Union National Bank of North Carolina (the "Depositary") of its
acceptance of such Shares for payment pursuant to the Offer. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made promptly (subject to possible delay in the event of proration), but only
after timely receipt by the Depositary of certificates for such Shares (or a
timely confirmation of a book-entry transfer of such shares into the
Depositary's account at one of the Book-Entry Transfer Facilities), a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) and any other required documents.
Upon the terms and subject to the conditions of the Offer, in the event that
prior to the Expiration Date more than 500,000 Shares (or such greater number of
Shares as the Company may elect to purchase pursuant to the
<PAGE>
Offer) are validly tendered at or below the Purchase Price and not withdrawn,
the Company will purchase such validly tendered shares in the following order of
priority: (i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any Odd Lot Owner who (a) tenders all
such Shares (other than Shares attributable to individual accounts under the
Company's Savings Plan but including Shares held in the Company's Dividend
Reinvestment and Employee Stock Purchase Plans) beneficially owned by such Odd
Lot Owner at or below the Purchase Price (partial tenders will not qualify for
this preference) and (b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery, and (ii)
after purchase of all of the foregoing Shares, all other Shares validly tendered
at or below the Purchase Price and not withdrawn prior to the Expiration Date on
a PRO RATA basis (with adjustments to avoid purchases of fractional shares).
The Company is making the Offer in order to provide a liquidity opportunity
for stockholders who wish to dispose of their Shares and enhance stockholder
value for the remaining stockholders. The Company believes that the purchase of
Shares is consistent with its long-term goals and that, after the Offer is
completed, the Company will have sufficient cash flow and access to other
sources of capital to fund its working capital needs and provide for its current
capital expenditure requirements.
On November 5, 1996, the Board of Directors of the Company declared a
dividend of $.25 per share on shares of Common Stock and Class B Common Stock
payable to stockholders of record at the close of business on November 22, 1996.
Since the Expiration Date will occur after November 22, 1996, holders of record
on such date of Shares purchased in the Offer will be entitled to receive such
dividend regardless of whether such Shares were tendered pursuant to the Offer
prior to, on or after November 22, 1996.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and payment for, any Shares
by giving oral or written notice of such extension to the Depositary and making
a public announcement thereof. The Company also expressly reserves the right, in
its sole discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of the
conditions specified in Section 6 of the Offer to Purchase by giving oral or
written notice of such termination or postponement to the Depositary and making
a public announcement thereof.
Shares tendered pursuant to the Offer may be withdrawn at any time before
the Expiration Date and, unless accepted for payment by the Company as provided
in the Offer to Purchase, may also be withdrawn after 12:00 Midnight, Eastern
time, on Monday, January 13, 1997. For a withdrawal to be effective, the
Depositary must receive (at one of its addresses set forth on the back cover of
the Offer to Purchase) a notice of withdrawal in written, telegraphic or
facsimile transmission form on a timely basis. Such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares tendered, the number of Shares to be withdrawn and the name of
the registered holder, if different from that of the person who tendered such
Shares. If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
stockholder must also submit the serial numbers shown on the particular
certificates evidencing the Shares and the signature on the notice of withdrawal
must be guaranteed by an Eligible Institution (except in the case of Shares
tendered by an Eligible Institution). If Shares have been tendered pursuant to
the procedure for book-entry transfer, the notice of withdrawal must specify the
name and the number of the account at the applicable Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE STOCKHOLDERS DECIDE WHETHER TO
ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHAT PRICE OR PRICES TO TENDER
THEIR SHARES. These materials are being mailed to record holders of Shares as of
November 12, 1996 and are being furnished to brokers, banks and similar persons
whose names, or the names of whose nominees, appear on the Company's stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing for transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated by reference herein. Additional copies of the Offer
to Purchase and the Letter of Transmittal may be obtained from the Information
Agent and will be furnished at the Company's expense. Questions and requests for
assistance may be directed to the Information Agent as set forth below:
THE INFORMATION AGENT FOR THE OFFER IS:
(GEORGESON & COMPANY INC. logo)
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect: (212) 440-9800
CALL TOLL-FREE: (800) 223-2064
November 14, 1996
<PAGE>
Exhibit (a)(9)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<S> <C>
GIVE THE
SOCIAL SECURITY
NUMBER OF --
FOR THIS TYPE OF ACCOUNT:
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the
minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent person(3)
minor, or incompetent person
7. a The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b So-called trust account that is not The actual owner(1)
a legal or valid trust under State
law
GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
FOR THIS TYPE OF ACCOUNT:
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension The legal entity (Do
trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
(Bullet) A corporation.
(Bullet) A financial institution.
(Bullet) An organization exempt from tax under section 501(a), or an individual
retirement plan.
(Bullet) The United States or any agency or instrumentality thereof.
(Bullet) A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
(Bullet) A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
(Bullet) An international organization or any agency, or instrumentality
thereof.
(Bullet) A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
(Bullet) A real estate investment trust.
(Bullet) A common trust fund operated by a bank under section 584(a).
(Bullet) An exempt charitable remainder trust, or a non-exempt trust described
in section 4947(a)(1).
(Bullet) An entity registered at all times under the Investment Company Act of
1940.
(Bullet) A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
(Bullet) Payments to nonresident aliens subject to withholding under section
1441.
(Bullet) Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
(Bullet) Payments of patronage dividends where the amount received is not paid
in money.
(Bullet) Payments made by certain foreign organizations.
(Bullet) Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
(Bullet) Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
(Bullet) Payments of tax-exempt interest (including exempt interest dividends
under section 852).
(Bullet) Payments described in section 6049(b)(5) to non-resident aliens.
(Bullet) Payments on tax-free covenant bonds under section 1451.
(Bullet) Payments made by certain foreign organizations.
(Bullet) Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers may be required to withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE>
Exhibit (c)(ii)
SHAREHOLDER'S AGREEMENT
THIS AGREEMENT, made and entered into this 17th day of
December, 1988 (the "Agreement"), by and among The Coca-Cola Company, a Delaware
corporation (the "Company") and J. Frank Harrison, J. Frank Harrison, III and
any other person related to or affiliated with J. Frank Harrison who has
executed this Agreement or otherwise agreed to be bound hereby (the latter
persons being hereinafter referred to individually as a "Harrison" or
"Shareholder" and collectively as the "Harrisons" or the Shareholders");
WHEREAS, the Company and the Harrisons are substantial
holders of the Common Stock and Class B Common Stock of Coca-Cola
Bottling Co. Consolidated ("Consolidated");
WHEREAS, the Harrisons have provided management and leadership
of Consolidated for many years and the Company desires to encourage them to
continue in their ownership of the Common Stock and the Class B Common Stock of
Consolidated and to continue to provide that leadership to Consolidated;
WHEREAS, the Company desires to receive and the Harrisons wish
to give assurances against the transfer of their controlling shares to an
unknown purchaser; and
WHEREAS, the Harrisons are willing to commit to restrictions
on their ability to transfer their Common Stock and Class B Common Stock of
Consolidated in exchange for the commitment of the Company to assure them that
if they continue to hold their stock for at least an additional five years that
they will have an assured value of their stock at that time in the form of an
obligation of the Company to purchase all of the Harrisons' Common Stock and
Class B Common Stock at the option of the Harrisons at that time;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the Harrisons and the Company hereby agree as
follows:
Section 1. Harrisons Continued Involvement. Subject to the
right and obligation of the Board of Directors of Consolidated to elect and
supervise management and subject to maintaining satisfactory employment and
other contractual arrangements, J. Frank Harrison and J. Frank Harrison, III
hereby express their commitment to remain actively involved and interested in
the management and operations of Consolidated during the term of this Agreement.
Section 2. Certain Terms. For purposes of this
Agreement, certain terms are defined as follows:
<PAGE>
(a) "Shares" shall mean any shares of the $1.00 par value per
share Common Stock of Consolidated and the $1.00 par value per share Class B
Common Stock of Consolidated or any other class of stock of Consolidated
hereafter authorized and issued, whether owned or hereafter acquired by the
Harrisons or any of them, in any manner whatsoever, all of which shall be duly
and timely legended in accordance with Section 9 herein.
(b) "Initial Shares" shall mean the Shares specified on
Schedule A hereto which are owned by the Harrisons on the date of this Agreement
and made subject hereto, namely 712,796 shares of Common Stock and 1,048,524
shares of Class B Common Stock.
(c) "Adjusted Initial Shares" shall mean the Initial Shares
and the Additional Shares, in each case as incremented, adjusted or converted
pursuant to any stock split, stock dividend, recapitalization, reorganization or
the like.
(d) "Additional Shares" shall mean the shares of
Consolidated's Common Stock or Class B Common Stock, if any, issued to either J.
Frank Harrison or J. Frank Harrison, III by Consolidated after the date hereof;
provided that the total number of Additional Shares shall in no event exceed ten
percent (10%) of the number of Initial Shares as of the date hereof (as such
number of shares may be appropriately adjusted in the manner contemplated in the
preceding paragraph (c)).
(e) "Offered Shares" shall mean any Shares offered
pursuant to Selection 4(a) hereof.
(f) "Put Shares" shall mean all of the Adjusted Initial Shares
owned by the Harrisons and their Permitted Transferees which the Harrisons have
elected to put to the Company pursuant to a Put Notice delivered to KO as
provided in Section 7 hereof.
(g) "Permitted Transferee" of any Shareholder shall mean such
Shareholder's spouse, lineal descendants, adopted children, any spouse of any
such lineal descendant or adopted child, any trust created and existing solely
for the benefit of any such person and any organization described in Section
501(c)(3) of the Internal Revenue Code, if such organization is exempt from tax
under Section 501(a) of such Code, any executor of such Shareholder's estate, or
any beneficiary of any trust which is a Shareholder; provided that no person or
organization shall be a Permitted Transferee unless he, she or it consents in
writing to a Permitted transferee unless he, she or it consents in writing to be
treated as a Harrison and be bound by all of their obligations thereunder.
(h) "Sell" and "Sale" shall mean the making of any
sale, exchange, gift, bequest, devise, assignment, transfer,
2
<PAGE>
pledge, hypothecation or other disposition or creation of a
security interest of any kind in any of the Shares.
(i) "Selling Shareholders" shall mean one of the
Harrisons or a Permitted Transferee who desires to sell Shares as
provided in Section 4 hereof.
Section 3. Restrictions on Transfer. During the term of this
Agreement, no Shareholder shall Sell any of the Shares to any person except a
Permitted Transferee without first offering to sell such Shares to the Company
in accordance with Section 4, except that this restriction shall not apply to a
pledge which complies with Section 5 hereof. Any Shares sold to a Permitted
Transferee shall remain subject to the restrictions provided in this Agreement
in the same manner and to the same extent as if such Permitted Transferee were a
Shareholder and a party to this Agreement, and such Permitted Transferee shall,
by the acceptance of such Shares, become bound hereby; provided, however, that
no Sale to a Permitted Transferee shall be consummated until a written consent
of the proposed Permitted Transferee to be so bound has been delivered to the
Company.
Section 4. First Offer to the Company
(a) If, at any time, the Harrisons, or any of them, or any
Permitted Transferee, shall have received a bona fide written offer to purchase
all or any part of the Shares owned by such person and desires to accept such
offer (the "Bona Fide Offer") on the terms and conditions specified therein,
then the person desiring to sell Shares (the "Selling Shareholder") shall give
written notice (the "Offer Notice") to the Company of the desire to sell such
Shares under the terms and conditions of the Bona Fide Offer and shall first
offer to sell such Shares (the "Offered Shares") to the Company on the same
terms and conditions. The Offer Notice shall fully describe all of the terms and
conditions of the proposed sale, including the name and address of the
purchaser, the number of shares to be sold, the consideration to be received in
exchange therefor and any other related terms and conditions and shall include a
true copy of the Bona Fide Offer. In the event that the Bona Fide Offer
contemplates any consideration other than cash, then the Selling Shareholder
shall state in the Offer Notice his good faith belief as to the fair market
value of the consideration. The Company shall have thirty (30) days after
delivery of the Offer Notice to accept such offer and to thereby agree to
purchase all, but not less than all, of the Offered Shares upon the terms and
conditions specified in the Offer Notice; provided, however, that if the
specified consideration is not cash and the Company does not agree with the
Selling Shareholder's good faith determination of the fair market value of the
consideration, then the Company may require that the fair market value of such
non-cash consideration (and the resultant purchase price for the Offered
3
<PAGE>
Shares) be determined by mutually agreed upon investment banking firm.
(b) In the event the Selling Shareholder's offer made pursuant
to Section 4(a) hereof is accepted by the Company, the purchase of the Offered
Shares shall be closed as soon as practicable after the acceptance of such
offer. At the closing, the Selling Shareholder shall deliver to the Company
share certificates representing all of the Offered Shares, duly endorsed in
blank for transfer, or with duly executed blank stock powers attached and with
signatures guaranteed by a national bank in either case, and shall further
deliver such other instruments as may be necessary or desirable in the
reasonable opinion of counsel for the Company to effect the transfer of the
Offered Shares to the Company. The Company shall pay the purchase price for such
shares in the manner and upon the terms provided in the Offer Notice or, at the
option of the Company, in cash.
(c) If the Company does not accept the offer of the Selling
Shareholder made pursuant to Section 4(a) hereof, the Selling Shareholder shall
be free to sell the Offered Shares; provided, however, that (i) the sale by the
Selling Shareholder pursuant to this Section 4(c) shall be made at the same
price and on other terms and conditions not materially differently from the
terms and conditions specified in the Offer Notice, and (ii) such sale shall be
consummated within thirty (30) days after the expiration date of the time in
which the Company could have accepted the Selling Shareholder's offer or, if
longer, within ten (10) days after receipt of any required regulatory approvals.
After the expiration of such fifteen or ten day period, any of the Offered
Shares not sold by the Selling Shareholder shall again become subject to all of
the provisions of this Agreement as though the offer under Section 4(a) hereof
had not been made.
Section 5. Bona Fide Pledges Permitted. Any Harrison or
Permitted Transferee desiring to effect a bona fide pledge of any of his Shares
to secure an obligation of such Shareholder shall have the right to effect such
pledge, but only if prior to effecting such pledge such Shareholder delivers to
the Company the written agreement of the pledgee (i) agreeing that such pledgee
shall not sell any of such Shares upon exercise of his rights as pledgee thereof
without complying with the provisions of Section 4 hereof in the same manner and
to the same extent as if such pledgee were a Shareholder and a party to this
Agreement, (ii) acknowledging that such Shares in such pledgee's hands are
subject to the options contained in Sections 4, 6 and 7 hereof and (iii) such
pledgee's agreement to comply with all other provisions hereof, together with
such further assurances with respect to the agreement of such pledgee as counsel
to the Company shall reasonably request.
4
<PAGE>
Section 6. Company Option Upon Unauthorized Transfer. In the
event any Shareholder, Permitted Transferee or pledgee Sells any of the Shares
owned by him or pledged to him otherwise than in strict accordance with the
terms of Section 3, 4, and 5 hereof, then, in addition to the right to any other
remedies hereunder, including an injunction against an unauthorized transfer,
the Company shall have the option to purchase such Shares from the transferee
(or any subsequent holder) to whom such Shares have been sold for an amount in
cash equal to eighty-five percent (85%) of the fair market value of the
consideration paid by such transferee for such Shares. The Company may exercise
the purchase option provided in this Section 6 by giving notice thereof to the
transferee of such Shares at any time within ninety (90) days after the Company
receives actual notice of such sale, and the purchase of such Shares from such
transferee shall be closed within fifteen (15) days after the delivery of such
notice. At such closing the Company shall pay the purchase price against
delivery of certificates representing the Shares so purchased, duly endorsed in
blank for transfer, or with duly executed blank stock powers attached, and with
signature guaranteed by a national bank in either case, and accompanied by such
further instruments as may be necessary or desirable in the opinion of counsel
for the Company to effect the transfer of such Shares. Acceptance by any
purchaser, assignee, transferee, donee, pledgee or other party of any of the
Shares held by any Shareholder, Permitted Transferee, pledgee or their
unauthorized transferee shall evidence conclusively the consent of such party to
all of the terms and provisions hereof.
Section 7. Harrisons Right to Cause the Purchase of
Their Shares by the Company.
(a) If at any time after the fifth anniversary of the date of
this Agreement and prior to the tenth anniversary thereof (the "Exercise
Period"), the Harrisons desire to cause the Company to purchase all or part of
the Adjusted Initial Shares then owned by them (including Shares held by any
Permitted Transferee or pledgee), they may give to the Company a notice in
writing (the "Put Notice") demanding that the Company purchase all of their
Adjusted Initial Shares (or the portion thereof specified in the Put Notice). If
the Harrisons elect to put less than all of their Adjusted Initial Shares
pursuant to any single Put Notice, the number of shares put to KO pursuant
thereto shall not be less than 100,000 Shares (as such number of shares may be
adjusted in the manner contemplated in Section 2(c) hereinabove). During the
Exercise Period, the Harrisons may continue to deliver Put Notices until KO has
acquired all of the Adjusted Initial Shares owned by them; provided that no more
than one (1) Put Notice may be delivered within any twelve month period.
(b) (i) Upon exercise of the right granted in paragraph (a)
above, the purchase price for all of the 1,761,320
5
<PAGE>
Initial Shares shall be Seventy-Five Million Dollars ($75,000,000) (the "Initial
Purchase Price") or $42.5817 per Share (assuming no stock split or other
occurrence requiring an adjustment as contemplated in Section 2(c) or
distribution requiring an adjustment under paragraph (iii) below).
(ii) If the Shares have been adjusted by virtue
of an event contemplated in Section 2(c), then the purchase price per share
shall be determined by dividing Seventy-Five Million Dollars by the number of
Initial Shares, as so adjusted.
(iii) The Initial Purchase Price, as otherwise
adjusted, shall be appropriately reduced if there has occurred any extraordinary
cash or property distribution other than normal quarterly dividends in light of
Consolidated's results of operations.
(iv) The total purchase price payment to the
Harrisons for their Initial Shares (as adjusted) and any Additional Shares
included in the Put Notice will be the purchase price per Share determined under
paragraphs (i), (ii), and (iii) above times the number of Put Shares.
(c) The closing of the purchase of the Put Shares pursuant to
this Section 7 shall take place as promptly as practicable at a time and place
specified by the Company.
(d) At the closing, the Harrisons shall deliver the
certificates evidencing the Put Shares free and clear of any lien or encumbrance
and such certificates shall be duly endorsed in blank or accompanied by duly
executed stock powers with signatures guaranteed by a national bank in either
case, and accompanied by such further instruments as may be necessary or
desirable in the reasonable opinion of counsel for the Company to effect the
transfer of such Put Shares. Acceptance by any purchaser, assignee, transferee,
donee, pledgee or other party of any of the Shares held by any Shareholder,
Permitted Transferee or pledgee shall evidence conclusively the consent of such
party to all the terms and provisions hereof.
(e) The consideration for the Put Shares shall be immediately
available funds paid by wire transfer to a bank account or accounts designated
by the Harrisons.
(f) Each of the Harrisons and their Permitted Transferees and
pledgees hereby irrevocably appoints J. Frank Harrison, III and if J. Frank
Harrison, III is unable for any reason to act then J. Frank Harrison, as his
true and lawful agent and attorney-in-fact for the purpose of determining and
with absolute discretion to determine if a Put Notice should be given under this
Section 7, for the giving of such notice and with respect to all other matters
related to the transfer of Put
6
<PAGE>
Shares pursuant to such notice and the receipt of consideration therefor; and
the Company may rely absolutely on any action taken by such attorney-in-fact in
connection herewith as being the action of each of the Harrisons and each
Permitted Transferee and pledgee.
Section 8. Merger or Sale of Assets. In the event that any
offer is made which, if consummated, would result in a change in control of
Consolidated, or the sale of all or substantially all of the assets of
Consolidated, and the Harrisons or the Permitted Transferees, as shareholders,
intend to vote their Shares in favor of such transaction, then the Harrisons
will immediately provide the Company with the Offer Notice described in Section
4 and thereby offer their Shares to the Company on the terms and conditions
contemplated in Section 4. In the event such transaction constitutes a sale of
assets of Consolidated, the price deemed offered for the Shares shall be the
product of (i) the percentage of the Harrisons' (or Permitted Transferees')
ownership of the total number of outstanding shares of Consolidated Common Stock
and Class B Common Stock, and (ii) the purchase price paid for such assets, net
of any anticipated tax liabilities and other out-of-pocket costs to be incurred
by Consolidated as a consequence of such transaction.
Section 9. Stock Legend. Simultaneously with the execution
hereof, each Shareholder shall present the certificates evidencing his Shares so
that the following legend may be placed thereon in conspicuous type:
"Any transfer (including a pledge) of the shares of stock
represented by this certificate is restricted by the terms of a
Shareholder's Agreement dated December 17, 1988 by and among The
Coca-Cola Company and J. Frank Harrison and certain of the other
shareholders of Coca-Cola Bottling Co. Consolidated, which includes
terms and options binding on Transferees and Pledgees, a copy of which
is on file at the offices of Consolidated."
Section 10. Amendment of Voting Agreement and Irrevocable
Proxy. The last sentence of paragraph 7(d) of the Voting Agreement dated May 7,
1987 among the Company and J. Frank Harrison and J. Frank Harrison, III is
hereby amended to provide that the Coca-Cola Bottling Co. Consolidated
Irrevocable Proxy of even date therewith will terminate at such time as (i) J.
Frank Harrison or executors or trustees under his will and/or J. Frank Harrison,
III do not collectively own all of the 712,796 shares of Class B Common Stock
currently owned by J. Frank Harrison, or (ii) the trusts which are parties
hereto collectively hold less than 50% of the shares of Class B Common Stock
held by them, in the aggregate, as of the date hereof.
7
<PAGE>
Section 11. Remedies.
(a) The parties recognize and acknowledge that it is
impossible to measure in money the damages which would result to a party hereto
by reason of a failure of any of the parties to perform any of the obligations
imposed upon them under this Agreement. Therefore, if any party hereto should
institute an action or proceeding to enforce the provisions hereof, any person
against whom such action or proceeding is brought hereby waives the claim or
defense that such party has an adequate remedy at law, and such person shall not
urge in any action or proceeding the claim or defense that such a remedy at law
exists.
(b) This Agreement constitutes a separate agreement
independently supported by good and adequate consideration, the receipt and
sufficiency of which are hereby acknowledged, and this Agreement shall be
interpreted, construed, and enforced separate and apart from other agreements
between or among the parties hereto. Any claim or cause of action of any party
hereto against any other party hereto arising under any other agreement between
or among the parties hereto or out of any state of facts shall not constitute a
defense to the enforcement of the covenants, options and agreements contained in
this Agreement.
Section 12. Assignment by Company. The Company shall have the
right at any time and from time to time to assign to any subsidiary of the
Company any or all rights, options or other benefits to which it is entitled
hereunder, but it shall remain responsible for the performance of its obligation
hereunder.
Section 13. Term of Agreement. The term of this agreement
shall be ten (10) years, unless sooner terminated upon the purchase by the
Company of all of the Shares owned by the Harrisons, their Permitted Transferees
and pledgees.
Section 14. Notice and Miscellaneous.
(a) Any notice, offer, acceptance of any offer, or other
communication provided for or required by this Agreement shall be in writing and
shall be deemed to have been given when delivered by hand, or when deposited in
the United States Mail, registered mail, return receipt requested, postage
prepaid, properly addressed to the person to whom such notice or other
communication is intended to be given, at the following address:
if to J. Frank Harrison or
J. Frank Harrison, III
J. Frank Harrison
c/o Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
8
<PAGE>
J. Frank Harrison, III
c/o Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, North Carolina 28211
with a copy to:
John W. Murrey, III, Esq.
Witt, Gaither & Whitaker
1100 American National Bank Bldg.
Chattanooga, Tennessee 37402-2608
if to The Coca-Cola Company
The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: Chief Financial Officer
with a copy to:
The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: General Counsel
or at such other address for a party as shall have been specified by
like notice.
(b) The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
(c) No change or modification of this Agreement shall be valid
or binding upon the parties hereto unless such change or modification shall be
in writing and signed by all of the parties hereto.
(d) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, transferees, successors and assigns.
(e) For the convenience of the parties hereto, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument.
(f) This Agreement shall be interpreted, construed,
and enforced in accordance with the laws of the State of
Delaware. Titles of the sections herein have been inserted as a
9
<PAGE>
matter of convenience of reference only and shall not affect the meaning or
construction of any of the terms or provisions hereof.
(g) This Agreement is intended by the parties hereto to be the
final expression of their agreement and is the complete and exclusive statement
of the terms hereof notwithstanding any representations or statements to the
contrary heretofore made.
IN WITNESS WHEREOF, the parties hereto have executed and sealed this
Agreement, effective as of the date first above written.
THE COCA-COLA COMPANY
By: /s/ David L. Kennedy
(SEAL)
ATTEST:
/s/ Carol C. Huger
Shareholders:
Witness as to
each Shareholder:
/s/ Dottie Heard /s/ J. Frank Harrison (SEAL)
J. Frank Harrison
/s/ Sheila C. Beasley /s/ J. Frank Harrison III(SEAL)
J. Frank Harrison, III
/s/ Sheila C. Beasley /s/ J. Frank Harrison III(SEAL)
J. Frank Harrison, III
/s/ Dottie Heard /s/ Reid M. Henson (SEAL)
Reid M. Henson, Trustees U/A
Anne L. Carter dated 12/29/66
f/b/o J. Frank Harrison, III
/s/ Sheila C. Beasley /s/ J. Frank Harrison III(SEAL)
J. Frank Harrison, III
10
<PAGE>
/s/ Dottie Heard /s/ Reid M. Henson (SEAL)
Reid M. Henson, Trustees U/A
Anne L. Carter dated 12/29/66
f/b/o Deborah Harrison
/s/ Sheila C. Beasley /s/ J. Frank Harrison III(SEAL)
J. Frank Harrison, III
/s/ Dottie Heard /s/ Reid M. Henson (SEAL)
Reid M. Henson, Trustees U/A
Anne L. Carter dated 2/2/67
f/b/o J. Frank Harrison
/s/ Sheila C. Beasley /s/ J. Frank Harrison III(SEAL)
J. Frank Harrison, III
/s/ Dottie Heard /s/ Reid M. Henson (SEAL)
Reid M. Henson, Trustees U/A
J. Frank Harrison f/b/o Harrison
Family dated 10/13/88
11
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
==========================================================================================================================
Numbers of Numbers of Shares
Shares of Common of Class B Common
Shareholder Stock Owned Stock Owned
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Frank Harrison 712,796 712,796
- --------------------------------------------------------------------------------------------------------------------------
J. Frank Harrison, III (none included in Initial Shares)
- --------------------------------------------------------------------------------------------------------------------------
J. Frank Harrison, III 33,314
and Reid M. Henson,
Trustees U/A Anne L.
Carter dated 12/29/66
f/b/o J. Frank Harrison,
III
- --------------------------------------------------------------------------------------------------------------------------
J. Frank Harrison, III 33,314
and Reid M. Henson,
Trustees U/A Anne L.
Carter dated 12/29/66
f/b/o Deborah Harrison
- --------------------------------------------------------------------------------------------------------------------------
J. Frank Harrison, III 235,786
and Reid M. Henson,
Trustees U/A Anne L.
Carter dated 2/2/67
f/b/o J. Frank Harrison
- --------------------------------------------------------------------------------------------------------------------------
J. Frank Harrison, III 33,314
and Reid M. Henson,
Trustees U/A J. Frank
Harrison f/b/o Harrison
Family dated 10/13/88
==========================================================================================================================
</TABLE>
12
<PAGE>
Exhibit (g)(1)
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS (EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
1995 1995
<S> <C> <C>
ASSETS
Current assets:
Cash............................................................................................ $ 2,434 $ 1,812
Accounts receivable, trade, less allowance for
doubtful accounts of $406 and $400............................................................ 12,098 7,756
Accounts receivable from The Coca-Cola Company.................................................. 6,725 4,514
Due from Piedmont Coca-Cola Bottling Partnership................................................ 4,584 1,383
Accounts receivable, other...................................................................... 9,492 7,232
Inventories..................................................................................... 27,989 31,871
Prepaid expenses and other current assets....................................................... 6,935 5,054
Total current assets 70,257 59,622
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $153,602 and $141,419........... 191,800 185,633
INVESTMENT IN PIEDMONT COCA-COLA BOTTLING PARTNERSHIP........................................... 65,624 67,729
OTHER ASSETS.................................................................................... 33,268 23,394
IDENTIFIABLE INTANGIBLE ASSETS, less accumulated amortization of $85,535 and $75,667............ 247,983 257,851
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF BUSINESSES ACQUIRED, less accumulated
amortization of $23,980 and $21,689........................................................... 67,639 69,930
Total......................................................................................... $676,571 $664,159
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
16
<PAGE>
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
1995 1995
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Portion of long-term debt payable within one year............................................... $ 120 $ 300
Accounts payable and accrued liabilities........................................................ 65,510 55,215
Accounts payable to The Coca-Cola Company....................................................... 3,636 2,930
Accrued compensation............................................................................ 5,049 4,246
Accrued interest payable........................................................................ 6,259 11,275
Total current liabilities..................................................................... 80,574 73,966
DEFERRED INCOME TAXES........................................................................... 97,252 89,531
OTHER LIABILITIES............................................................................... 39,877 33,710
LONG-TERM DEBT.................................................................................. 419,896 432,971
Total liabilities............................................................................. 637,599 630,178
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.................................................................. 120,733 130,028
Accumulated deficit............................................................................. (76,032) (86,552)
Minimum pension liability adjustment (138) (3,904)
56,618 51,627
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.................................................................... 38,972 33,981
Total......................................................................................... $676,571 $664,159
</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
1995 1994 1993
<S> <C> <C> <C>
NET SALES (includes sales to Piedmont of $71,123, $85,272 and $42,183)................... $761,876 $723,896 $686,960
Cost of products sold, excluding depreciation shown below (includes $62,526, $75,879 and
$38,944 related to sales to Piedmont).................................................. 447,636 427,140 396,077
GROSS MARGIN............................................................................. 314,240 296,756 290,883
Selling expenses......................................................................... 158,831 149,992 144,411
General and administrative expenses...................................................... 54,720 54,559 51,125
Depreciation expense..................................................................... 26,746 24,188 23,284
Amortization of goodwill and intangibles................................................. 12,230 12,309 14,784
INCOME FROM OPERATIONS................................................................... 61,713 55,708 57,279
Interest expense......................................................................... 33,091 31,385 30,994
Other income (expense), net.............................................................. (3,401) 63 (2,270)
Income before income taxes, extraordinary charge and effect of accounting change......... 25,221 24,386 24,015
Federal and state income taxes:
Current................................................................................ 751 304 1,921
Deferred............................................................................... 8,934 9,935 7,261
Total federal and state income taxes..................................................... 9,685 10,239 9,182
Income before extraordinary charge and effect of accounting change....................... 15,536 14,147 14,833
Extraordinary charge, net of tax benefit of $3,127....................................... (5,016)
Effect of accounting change.............................................................. (2,211)
NET INCOME............................................................................... $ 10,520 $ 11,936 $ 14,833
Income per share:
Income before extraordinary charge and effect of accounting change..................... $ 1.67 $ 1.52 $ 1.60
Extraordinary charge................................................................... (.54)
Effect of accounting change............................................................ (.24)
NET INCOME............................................................................. $ 1.13 $ 1.28 $ 1.60
Cash dividends per share:
Common Stock........................................................................... $ 1.00 $ 1.00 $ .88
Class B Common Stock................................................................... 1.00 1.00 .52
Weighted average number of Common and Class B Common shares outstanding.................. 9,294 9,294 9,258
</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
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................................... $ 10,520 $ 11,936 $ 14,833
Adjustments to reconcile net income to net cash provided by operating activities:
Extraordinary charge................................................................ 5,016
Effect of accounting change......................................................... 2,211
Depreciation expense................................................................ 26,746 24,188 23,284
Amortization of goodwill and intangibles............................................ 12,230 12,309 14,784
Deferred income taxes............................................................... 8,934 9,935 7,261
(Gains) losses on sale of property, plant and equipment............................. 1,182 (1,361) 1,148
Amortization of debt costs.......................................................... 467 448 511
Undistributed loss of Piedmont Coca-Cola Bottling Partnership....................... 2,105 671 1,600
Increase in current assets less current liabilities................................. (3,174) (8,667) (403)
Increase in other noncurrent assets................................................. (9,588) (3,287) (4,414)
Increase in other noncurrent liabilities............................................ 10,891 7,779 1,191
Other............................................................................... 237 521 25
Total adjustments........................................................................ 55,046 44,747 44,987
Net cash provided by operating activities................................................ 65,566 56,683 59,820
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt............................................. 73,840
Payments on long-term debt............................................................... (1,387) (120,768)
Issuance of Common Stock................................................................. 2,269
Redemption of Medium-Term Notes.......................................................... (95,948)
Cash dividends paid...................................................................... (9,295) (9,294) (7,665)
Other.................................................................................... 791 (1,654) (1,376)
Net cash used in financing activities.................................................... (30,612) (12,335) (127,540)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment............................................... (37,284) (49,292) (28,786)
Proceeds from the sale of property, plant and equipment.................................. 2,952 5,494 1,908
Acquisitions of companies, net of cash acquired.......................................... (1,488)
Net proceeds from sale and contribution of assets to Piedmont Coca-Cola Bottling
Partnership............................................................................ 95,934
Net cash provided by (used in) investing activities...................................... (34,332) (43,798) 67,568
NET INCREASE (DECREASE) IN CASH.......................................................... 622 550 (152)
CASH AT BEGINNING OF YEAR................................................................ 1,812 1,262 1,414
CASH AT END OF YEAR...................................................................... $ 2,434 $ 1,812 $ 1,262
</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
COMMON COMMON EXCESS OF ACCUMULATED LIABILITY TREASURY
STOCK STOCK PAR VALUE DEFICIT ADJUSTMENT STOCK
<S> <C> <C> <C> <C> <C> <C>
Balance on January 3, 1993............................ $ 9,977 $1,965 $ 144,831 $(113,321) $ 17,646
Net income............................................ 14,833
Cash dividends paid................................... (7,665)
Issuance of Common Stock.............................. 113 2,156
Minimum pension liability adjustment.................. $ (5,614)
Balance on January 2, 1994............................ 10,090 1,965 139,322 (98,488) (5,614) 17,646
Net income............................................ 11,936
Cash dividends paid................................... (9,294)
Minimum pension liability adjustment.................. 1,710
Balance on January 1, 1995............................ 10,090 1,965 130,028 (86,552) (3,904) 17,646
Net income............................................ 10,520
Cash dividends paid................................... (9,295)
Minimum pension liability adjustment.................. 3,766
BALANCE ON DECEMBER 31, 1995.......................... $10,090 $1,965 $ 120,733 $ (76,032) $ (138) $ 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 carbonated and noncarbonated
beverages, primarily products of The Coca-Cola Company. The Company operates in
portions of 11 states, principally in the southeastern region of the United
States.
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 December 31, 1995,
January 1, 1995 and January 2, 1994.
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 ("LIFO"), 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.
Amounts recorded for benefit plans reflect estimates related to future
interest rates, investment returns, employee turnover, wage increases and health
care costs. The Company reviews all assumptions and estimates on an ongoing
basis.
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 portion of
the soft drink products for Piedmont at cost 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>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Current assets........................................................................................ $ 22,136 $ 18,907
Noncurrent assets..................................................................................... 351,450 358,371
Total assets.......................................................................................... $373,586 $377,278
Current liabilities................................................................................... $ 13,775 $ 7,035
Noncurrent liabilities................................................................................ 228,563 234,785
Total liabilities..................................................................................... 242,338 241,820
Partners' equity...................................................................................... 131,248 135,458
Total liabilities and partners' equity $373,586 $377,278
Company's equity investment........................................................................... $ 65,624 $ 67,729
</TABLE>
<TABLE>
<CAPTION>
FISCAL FISCAL FOR THE PERIOD
YEAR YEAR JULY 2, 1993 THROUGH
IN THOUSANDS 1995 1994 JANUARY 2, 1994
<S> <C> <C> <C>
Net sales........................................................................ $212,665 $194,054 $ 91,259
Cost of products sold............................................................ 126,197 109,563 52,535
Gross margin..................................................................... 86,468 84,491 38,724
Income from operations........................................................... 5,618 6,705 1,209
Net loss......................................................................... $ (4,210) $ (1,342) $ (3,200)
Company's equity in loss......................................................... $ (2,105) $ (671) $ (1,600)
</TABLE>
3. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Finished products....................................................................................... $17,809 $17,621
Manufacturing materials................................................................................. 8,809 12,638
Used bottles and cases.................................................................................. 1,371 1,612
Total inventories....................................................................................... $27,989 $31,871
</TABLE>
The amounts included above for inventories valued by the LIFO method were
greater than replacement or current cost by approximately $1.2 million and $2.1
million on December 31, 1995 and January 1, 1995, respectively, as a result of
inventory premiums associated with certain acquisitions.
23
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. PROPERTY, PLANT AND EQUIPMENT
The principal categories and estimated useful lives of property, plant and
equipment were as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1, ESTIMATED
IN THOUSANDS 1995 1995 USEFUL LIVES
<S> <C> <C> <C>
Land.................................................................... $ 9,500 $ 9,898
Buildings............................................................... 71,359 65,973 10-50 years
Machinery and equipment................................................. 80,909 76,296 5-20 years
Transportation equipment................................................ 48,267 42,439 4-10 years
Furniture and fixtures.................................................. 23,027 21,180 7-10 years
Vending equipment....................................................... 88,903 88,666 6-13 years
Leasehold and land improvements......................................... 20,048 18,049 5-20 years
Construction in progress................................................ 3,389 4,551
Total property, plant and equipment, at cost............................ 345,402 327,052
Less: Accumulated depreciation.......................................... 153,602 141,419
Property, plant and equipment, net...................................... $191,800 $185,633
</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>
DEC. 31, JAN. 1, ESTIMATED
IN THOUSANDS 1995 1995 USEFUL LIVES
<S> <C> <C> <C>
Franchise rights........................................................ $217,149 $223,679 40 years
Customer lists.......................................................... 25,400 28,129 17-23 years
Advertising savings..................................................... 4,764 5,278 17-23 years
Other................................................................... 670 765 17-18 years
Total identifiable intangible assets.................................... $247,983 $257,851
</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 DEC. 31, JAN. 1,
IN THOUSANDS MATURITY RATE RATE PAID 1995 1995
<S> <C> <C> <C> <C> <C> <C>
Lines of Credit................................ 2000 6.00%- V Varies $ 22,590 $ 93,420
6.04%
Term Loan Agreement............................ 2002 6.44%- V Varies 85,000 60,000
6.46%
Term Loan Agreement............................ 2003 6.44%- V Varies 85,000 60,000
6.46%
Medium-Term Notes.............................. 1998 6.37% V Quarterly 10,000 10,000
Medium-Term Notes.............................. 1998 10.05% F Semi- 2,000 2,000
annually
Medium-Term Notes.............................. 1999 7.99% F Semi- 28,585 66,500
annually
Medium-Term Notes.............................. 2000 10.00% F Semi- 25,500 55,000
annually
Medium-Term Notes.............................. 2002 8.56% F Semi- 47,000 66,500
annually
Debentures..................................... 2007 6.85% F Semi- 100,000
annually
Notes acquired in Sunbelt acquisition.......... 2001 8.00% F Quarterly 217 5,327
Other notes payable............................ 1996- 6.85%- F Varies 14,124 14,524
2001 12.00%
420,016 433,271
Less: Portion of long-term debt payable within one year............................................... 120 300
Long-term debt........................................................................................ $419,896 $432,971
</TABLE>
The principal maturities of long-term debt outstanding on December 31, 1995
were as follows:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
1997.............................................................................................................. $ 125
1998.............................................................................................................. 12,050
1999.............................................................................................................. 28,635
2000.............................................................................................................. 50,762
Thereafter........................................................................................................ 328,324
Total long-term debt.............................................................................................. $419,896
</TABLE>
On December 21, 1995, the Company amended and restated the revolving credit
agreement totaling $170 million and extended the revolving credit maturity date
to December 2000. The agreement contains several covenants which establish ratio
requirements related to debt, interest expense and cash flow. A facility fee of
1/8% per year on the banks' commitment is payable quarterly. There were no
amounts outstanding under this facility as of December 31, 1995.
A $100 million commercial paper program was established in January 1990 for
general corporate purposes. On December 31, 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 December 31, 1995, the Company had $246 million of credit
available under these lines, of which $22.6 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 November 20, 1995, the Company entered into a $170 million loan
agreement with $85 million maturing in November 2002 and $85 million maturing in
November 2003. This loan was used to repay two $60 million loans previously
entered into by the Company and other bank debt.
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 December 31,
1995 and 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. This
arrangement was amended in June 1995 to extend the arrangement to June 1998 on
terms substantially similar to those previously in place. The discount on sales
of trade accounts receivable was $2.2 million, $1.6 million, $1.4 million in
1995, 1994 and 1993, respectively, and is included in "other income (expense),
net."
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became effective
and the securities thereunder became available for issuance. On November 1,
1995, the Company issued $100 million of 6.85% debentures due 2007 pursuant to
such registration. The net proceeds from this issuance were used principally for
refinancing existing indebtedness with the remainder used to repay other bank
debt. As of December 31, 1995, $37.9 million of Medium-Term Notes due 1999 with
a coupon rate of 7.99%, $29.5 million of Medium-Term Notes due 2000 with a
coupon rate of 10.00% and $19.5 million of Medium-Term Notes due 2002 with a
coupon rate of 8.56% had been repurchased. An after tax extraordinary charge of
$5.0 million related to the premium paid on these repurchases was recorded in
the fourth quarter of 1995.
As of December 31, 1995, the Company was in compliance with the covenants
covering all of its various borrowing agreements.
The Company has a weighted average interest rate of 7.2% for the debt
portfolio as of December 31, 1995 compared to 7.0% at January 1, 1995. The
Company's overall weighted average borrowing rate on its long-term debt
increased from an average of 6.6% during 1994 to an average of 7.3% during 1995.
As of December 31, 1995, after taking into account all of the interest rate
hedging activities, approximately $203 million or 48% 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 $2.0 million and net income for the year ended December 31, 1995
would have been reduced by approximately $1.2 million. Interest coverage as of
December 31, 1995 would have been 2.0 times (versus 2.1 times) if interest rates
increased by 1%.
7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses interest rate hedging products to 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. During 1995, and in conjunction with the Company's
early retirement of a portion of its Medium-Term Notes, all but two of the
derivative financial instruments held by the Company were extinguished.
All deferred gains and losses on interest rate hedging transactions
associated with the retired Medium-Term Notes have been recognized in 1995. The
notional amount of the extinguished interest rate swaps exceeds the amount of
debt retired due to the Company's practice of offsetting swaps. Offsetting swaps
rather than an original swap were used to help mitigate counterparty credit risk
as well as reduce administrative burden. The offsetting swaps along with
original swaps and the underlying debt were accounted for as a combined
instrument. The Company does not use derivative financial instruments for
trading or other speculative purposes nor does it use leveraged financial
instruments. All of the Company's outstanding interest rate swap agreements are
LIBOR-based. The Company's two remaining interest rate swaps are with the same
financial institution and effectively offset each other. Accordingly, risk of
counterparty nonperformance is considered minimal.
26
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative financial instruments are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 January 1, 1995
Remaining Remaining
IN THOUSANDS Amount Term Amount Term
<S> <C> <C> <C> <C>
Interest rate swaps -- floating............................................ $60,000 8 years $221,600 6-9 years
Interest rate swaps -- fixed............................................... 60,000 8 years 215,000 1-9 years
Interest rate caps......................................................... -0- -- 110,000 .5 years
</TABLE>
INTEREST RATE SWAP ACTIVITY
The table below summarizes interest rate swap activity for the period
ending December 31, 1995:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
Total swaps, January 1, 1995..................................................................................... $ 436,600
New swaps........................................................................................................ 25,000
Terminated swaps................................................................................................. (341,600)
Expired swaps.................................................................................................... -0-
Total swaps, December 31, 1995................................................................................... $ 120,000
</TABLE>
8. FAIR VALUES OF FINANCIAL INSTRUMENTS
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.
The carrying amounts and fair values of the Company's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
December 31, 1995 January 1, 1995
IN THOUSANDS Carrying Amount Fair Value Carrying Amount Fair Value
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt...................................................... $ 213,085 $ 228,103 $ 200,000 $ 201,119
Non-public variable rate long-term debt.......................... 192,590 192,590 213,420 213,420
Non-public fixed rate long-term debt............................. 14,341 16,189 19,851 19,030
Off-Balance-Sheet Instruments
Interest rate swaps.............................................. (4,725) (11,123)
</TABLE>
The fair values of the interest rate swaps represent the estimated amounts
the Company would have had to pay to terminate these agreements.
27
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. COMMITMENTS AND GUARANTEES
Operating lease payments are charged to expense as incurred. Such rental
expenses included in the consolidated statements of operations were $23.3
million, $20.9 million and $17.3 million for 1995, 1994 and 1993, respectively.
The following is a summary of future minimum lease payments for all
operating leases as of December 31, 1995:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
1996.............................................................................................................. $ 23,255
1997.............................................................................................................. 20,759
1998.............................................................................................................. 18,940
1999.............................................................................................................. 14,588
2000.............................................................................................................. 11,445
Thereafter........................................................................................................ 29,651
Total minimum lease payments...................................................................................... $118,638
</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 $.5 million. The Company is a member of another cooperative from
which it is obligated to purchase a specified number of cases of finished
product on an annual basis. The current annual purchase commitment under this
agreement is approximately $40 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 December 31, 1995 and January 1, 1995 were $35.2 million and $31.0
million, respectively.
The Company has entered into purchase agreements for aluminum cans on an
annual basis through 2000. The annual purchase commitment under these agreements
is approximately $39 million.
10. INCOME TAXES
The provision for income taxes on income before extraordinary charge and
the effect of an accounting change consisted of the following:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Current:
Federal................................................................................... $ 751 $ 304 $ 1,921
State.....................................................................................
751 304 1,921
Deferred:
Federal................................................................................... 9,382 8,957 (27,748)
State..................................................................................... 2,130 1,213 (3,662)
Benefit of acquired loss carryforwards used to reduce franchise value..................... 35,599
Benefit (expense) of minimum pension liability adjustment................................. (2,578) (359) 3,072
Other..................................................................................... 124
8,934 9,935 7,261
Income tax expense.......................................................................... $ 9,685 $10,239 $ 9,182
</TABLE>
Income tax benefits of $1.7 million were recorded in 1994 in conjunction
with the adoption of SFAS 112. Income tax benefits of $3.1 million were recorded
in 1995 related to the extraordinary charge associated with the early retirement
of long-term debt at a premium.
28
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company made income tax payments for alternative minimum tax of
approximately $1.1 million and $.3 million during 1995 and 1994, respectively.
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>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Intangible assets..................................................................................... $106,752 $107,886
Depreciation.......................................................................................... 23,166 22,249
Investment in Piedmont................................................................................ 19,417 18,715
Other................................................................................................. 10,309 16,920
Gross deferred income tax liabilities................................................................. 159,644 165,770
Net operating loss carryforwards...................................................................... (39,736) (56,497)
Other................................................................................................. (25,817) (18,278)
Gross deferred income tax assets...................................................................... (65,553) (74,775)
Tax benefit of minimum pension liability adjustment................................................... (48) (2,713)
Deferred income tax liability......................................................................... $ 94,043 $ 88,282
</TABLE>
Net current deferred tax assets of $3.2 million and $1.2 million were
included in prepaid expenses and other current assets on December 31, 1995 and
January 1, 1995, respectively.
Reported income tax expense is reconciled to the amount computed on the
basis of income before income taxes, extraordinary charge and effect of
accounting change at the statutory rate as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Statutory expense.............................................................................. $8,827 $ 8,535 $ 8,405
Amortization of franchise and goodwill assets.................................................. 364 364 364
State income taxes, net of federal benefit..................................................... 758 1,244 1,185
Effect of change in statutory tax rates........................................................ 2,100
Adjustment of valuation allowance.............................................................. (3,216)
Other.......................................................................................... (264) 96 344
Income tax expense............................................................................. $9,685 $10,239 $ 9,182
</TABLE>
The Company had $3.5 million of investment tax credits available to reduce
future income tax payments for federal income tax purposes on December 31, 1995.
These credits expire in varying amounts through 2001.
On December 31, 1995, the Company had $97 million and $132 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.
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.
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
29
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 and
1995.
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 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 127,500 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 two Company-sponsored pension plans for
1995, 1994 and 1993 was $2.7 million, $2.6 million and $2.5 million,
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.
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 two Company-sponsored
plans:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of $48,990 and $40,779..................... $ 50,236 $ 42,282
Projected benefit obligation for service rendered to date.............................................. (56,427) (47,355)
Plan assets at fair market value....................................................................... 51,988 41,107
Projected benefit obligation in excess of plan assets.................................................. (4,439) (6,248)
Unrecognized net loss.................................................................................. 11,752 12,158
Unrecognized prior service cost........................................................................ (1,207) 12
Unrecognized net asset being amortized over 7 years.................................................... (210) (280)
Additional minimum pension liability................................................................... (225) (6,816)
Pension asset (liability).............................................................................. $ 5,671 $ (1,174)
</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,
30
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
was recognized as of January 2, 1994. The increase in liabilities was charged
directly to shareholders' equity. As of December 31, 1995 and January 1, 1995,
the minimum pension liability adjustment, net of income taxes, was $138,000 and
$3.9 million, respectively.
Net periodic pension cost for the Company-sponsored pension plans included
the following:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Service cost-benefits earned.................................................................. $ 1,901 $ 1,916 $ 1,693
Interest cost on projected benefit obligation................................................. 4,015 3,556 3,310
Actual return on plan assets.................................................................. (6,993) 1,169 (3,965)
Net amortization and deferral................................................................. 3,732 (4,034) 1,446
Net periodic pension cost..................................................................... $ 2,655 $ 2,607 $ 2,484
</TABLE>
The actuarial assumptions that were used for the Company's principal
pension plan calculations were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Weighted average discount rate used in determining the actuarial present value of the projected benefit
obligation............................................................................................... 7.75% 8.25%
Weighted average expected long-term rate of return on plan assets.......................................... 9.0% 9.0%
Weighted average rate of compensation increase............................................................. 4.50% 4.75%
</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 1995, 1994 and 1993
was $1.6 million, $1.3 million and $1.5 million, respectively.
The Company recognizes the cost of postretirement benefits, which consist
principally of medical benefits, during employees' periods of active service.
The Company does not pre-fund these benefits and has the right to modify or
terminate certain of these plans in the future.
The components of postretirement benefit expense were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Service cost -- benefits earned.................................................................. $ 338 $ 304 $ 238
Interest cost on projected benefit obligation.................................................... 1,275 989 1,223
Net amortization................................................................................. 11
Net postretirement benefit cost.................................................................. $1,624 $1,293 $1,461
</TABLE>
The accrued postretirement benefit obligation was comprised of the
following:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................................................. $10,025 $ 9,163
Fully eligible active plan participants............................................................... 2,231 1,738
Other active plan participants........................................................................ 4,124 3,251
16,380 14,152
Unrecognized transition asset........................................................................... 394 418
Unrecognized net loss................................................................................... (2,443) (1,622)
Accrued postretirement benefit obligation............................................................... $14,331 $12,948
</TABLE>
31
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted average health care cost trend rate used in measuring the
postretirement benefit expense was 9% in 1995 gradually declining to 5.25% in
1999 and remaining at that level thereafter. A 1% increase in this annual trend
rate would have increased the accumulated postretirement benefit obligation on
December 31, 1995 by approximately $1.7 million and postretirement benefit
expense in 1995 would have increased by approximately $227,000. The weighted
average discount rates used to estimate the accumulated postretirement benefit
obligation were 7.75% and 8.25% as of December 31, 1995 and January 1, 1995,
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. The annual
incremental cost of adoption of SFAS No. 112 is not material on an ongoing
basis.
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
for concentrates and syrups from The Coca-Cola Company in the ordinary course of
its business. The Company paid The Coca-Cola Company approximately $186 million,
$187 million and $158 million in 1995, 1994 and 1993, 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 $36 million,
$32 million and $28 million in 1995, 1994 and 1993, respectively. In addition,
the Company paid approximately $18 million, $15 million and $13 million in 1995,
1994 and 1993, 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 portion of
the soft drink products for Piedmont at cost and receives a fee for managing the
operations of Piedmont pursuant to a management agreement. The Company sold
product to Piedmont during 1995, 1994 and the six months ended January 2, 1994,
at cost, totaling $62.5 million, $75.9 million and $38.9 million, respectively.
The Company received $10.7 million, $10.1 million and $4.8 million for
management services pursuant to its management agreement with Piedmont for 1995,
1994 and 1993, respectively. Also, the Company subleased various fleet and
vending equipment to Piedmont at cost. These sublease rentals amounted to
approximately $784,000, $693,000 and $380,000 in 1995, 1994 and 1993,
respectively. In addition, Piedmont subleased various fleet and vending
equipment to the Company at cost. These sublease rentals amounted to
approximately $186,000, $56,000 and $2,000 in 1995, 1994 and 1993, respectively.
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 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 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 $2,593,000, $2,007,000 and $1,947,000 in 1995, 1994 and 1993,
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
subject to adjustment for increases in the Consumer Price
32
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Index and for increases or decreases in interest rates, using LIBOR as the
measurement device. Rent expense under this lease totaled $1,804,000, $1,560,000
and $738,000 in 1995, 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 $52 million, $44 million and $47 million in 1995,
1994 and 1993, respectively. In connection with its participation in one of
these cooperatives, the Company has guaranteed a portion of the cooperative's
debt. On December 31, 1995, such guarantee amounted to approximately $20
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 December 31, 1995, such guarantee was approximately $15.2 million.
The Company leases vending equipment from Coca-Cola Financial Corporation
("CCFC"), a subsidiary of The Coca-Cola Company. Future lease payments to CCFC
as of December 31, 1995 totaled $49.6 million. During 1995, the Company made
lease payments to CCFC totaling $4.4 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. RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Approximately 90% of the Company's sales are products of The Coca-Cola
Company, which is the sole supplier of the concentrate required to manufacture
these products. Additionally, the Company purchases virtually all of its
requirements for sweetener from The Coca-Cola Company.
The Company currently obtains all of its aluminum cans from two domestic
suppliers. The Company currently obtains all of its PET bottles from two
domestic cooperatives. The inability of either of these aluminum can or PET
bottle suppliers to meet the Company's requirement for containers could result
in short-term shortages until alternative sources of supply could be located.
Less than 10% of the Company's labor force is currently covered by
collective bargaining agreements. There are no material collective bargaining
contracts expiring during 1996.
33
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Changes in current assets and current liabilities affecting cash, net of
effects from acquisitions and divestitures and the effect of an accounting
change, were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Accounts receivable, trade, net............................................................... $(4,342) $(2,796) $(9,319)
Due from Piedmont............................................................................. (3,201) 1,071 (2,454)
Accounts receivable, other.................................................................... (4,471) 5,710 (3,524)
Inventories................................................................................... 3,882 (4,338) (2,939)
Prepaid expenses and other assets............................................................. (1,881) (1,729) (845)
Portion of long-term debt payable within one year............................................. (180) (411) (793)
Accounts payable and accrued liabilities...................................................... 11,232 (9,381) 20,656
Accrued compensation.......................................................................... 803 2,040 (251)
Accrued interest payable...................................................................... (5,016) 1,167 (934)
Increase in current assets less current liabilities........................................... $(3,174) $(8,667) $ (403)
</TABLE>
Cash payments for interest and income taxes were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Interest..................................................................................... $36,749 $30,218 $31,417
Income taxes................................................................................. 1,475 56 2,900
</TABLE>
17. QUARTERLY FINANCIAL DATA (UNAUDITED)
Set forth below are unaudited quarterly financial data for the fiscal years
ended December 31, 1995 and January 1, 1995.
<TABLE>
<CAPTION>
IN THOUSANDS (EXCEPT PER SHARE DATA) QUARTER
YEAR ENDED DECEMBER 31, 1995 1 2 3 4
<S> <C> <C> <C> <C>
Net sales.................................................................... $170,977 $207,876 $203,559 $179,464
Gross margin................................................................. 72,074 87,134 82,727 72,305
Income before extraordinary charge........................................... 1,957 8,054 4,639 886
Extraordinary charge......................................................... (5,016)
Net income (loss)............................................................ 1,957 8,054 4,639 (4,130)
Per share:
Income before extraordinary charge......................................... .21 .87 .50 .09
Extraordinary charge....................................................... (.54)
Net income (loss).......................................................... .21 .87 .50 (.45)
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 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>
34
<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 December 31, 1995 and January 1, 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 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 1994, the Company changed its method of accounting for
postemployment benefits, as described in Note 12.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
February 23, 1996
<PAGE>
Exhibit (g)(2)
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
Sept. 29, Dec. 31, Oct. 1,
1996 1995 1995
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 2,709 $ 2,434 $ 2,723
Accounts receivable, trade, less allowance for
doubtful accounts of $413, $406 and $401 27,800 12,098 11,180
Accounts receivable from The Coca-Cola Company 1,535 6,725 6,337
Due from Piedmont Coca-Cola Bottling Partnership 4,584 1,457
Accounts receivable, other 5,372 9,492 4,577
Inventories 32,780 27,989 33,447
Prepaid expenses and other current assets 7,732 6,935 5,538
---------- ---------- ---------
Total current assets 77,928 70,257 65,259
---------- ---------- ---------
Property, plant and equipment, less accumulated
depreciation of $158,301, $153,602 and $152,271 189,706 191,800 189,118
Investment in Piedmont Coca-Cola Bottling Partnership 65,697 65,624 66,629
Other assets 34,299 33,268 24,258
Identifiable intangible assets, less accumulated
amortization of $92,936, $85,535 and $83,068 240,582 247,983 250,450
Excess of cost over fair value of net assets of
businesses acquired, less accumulated
amortization of $25,697, $23,980 and $23,407 65,922 67,639 68,212
---------- ---------- ---------
Total $674,134 $676,571 $663,926
========== ========== =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
Sept. 29, Dec. 31, Oct. 1,
1996 1995 1995
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Portion of long-term debt payable within one year $ 105 $ 120 $ 174
Accounts payable and accrued liabilities 52,031 65,510 52,812
Accounts payable to The Coca-Cola Company 3,748 3,636 3,470
Due to Piedmont Coca-Cola Bottling Partnership 1,207
Accrued compensation 4,472 5,049 3,464
Accrued interest payable 6,813 6,259 4,886
-------- -------- --------
Total current liabilities 68,376 80,574 64,806
Deferred income taxes 107,492 97,252 99,269
Other liabilities 43,942 39,877 38,364
Long-term debt 405,353 419,896 419,827
-------- -------- --------
Total liabilities 625,163 637,599 622,266
-------- -------- --------
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 10,090
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares;
Issued-1,964,476 shares 1,965 1,965 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares; Issued-None
Capital in excess of par value 113,762 120,733 123,057
Accumulated deficit (59,062) (76,032) (71,902)
Minimum pension liability adjustment (138) (138) (3,904)
-------- --------- --------
66,617 56,618 59,306
Less-Treasury stock, at cost:
Common-2,132,800 shares 17,237 17,237 17,237
Class B Common-628,114 shares 409 409 409
-------- --------- --------
Total shareholders' equity 48,971 38,972 41,660
-------- --------- --------
Total $674,134 $676,571 $663,926
======== ========= ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
<TABLE>
<CAPTION>
Third Quarter Nine Months
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales (includes sales to Piedmont of $18,134, $19,355
$47,823 and $55,664) $ 204,579 $ 203,559 $ 590,154 $ 582,412
Cost of products sold, excluding depreciation shown
below (includes $14,114, $16,715, $39,112 and
$48,599 related to sales to Piedmont) 114,641 120,832 332,535 340,477
--------- --------- --------- --------
Gross margin 89,938 82,727 257,619 241,935
--------- --------- --------- --------
Selling expenses 47,277 41,831 132,751 119,918
General and administrative expenses 13,879 13,868 40,722 40,839
Depreciation expense 7,137 6,786 21,199 19,756
Amortization of goodwill and intangibles 3,060 3,058 9,175 9,173
--------- --------- --------- ---------
Income from operations 18,585 17,184 53,772 52,249
Interest expense 7,543 8,312 22,702 25,205
Other income (expense), net (1,252) (1,099) (3,862) (2,656)
--------- --------- --------- ---------
Income before income taxes 9,790 7,773 27,208 24,388
Federal and state income taxes 3,302 3,134 10,238 9,738
--------- --------- --------- ---------
Net income $ 6,488 $ 4,639 $ 16,970 $ 14,650
========= ========= ========= =========
Net income per share $ .70 $ .50 $ 1.83 $ 1.58
Cash dividends per share:
Common Stock $ .25 $ .25 $ .75 $ .75
Class B Common Stock .25 .25 .75 .75
Weighted average number of Common and
Class B Common shares outstanding 9,294 9,294 9,294 9,294
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
Capital Minimum
Class B in Pension
Common Common Excess of Accumulated Liability Treasury
Stock Stock Par Value Deficit Adjustment Stock
<S> <C> <C> <C> <C> <C> <C>
Balance on
January 1, 1995 $10,090 $ 1,965 $130,028 $ (86,552) $ (3,904) $ 17,646
Net income 14,650
Cash dividends
paid:
Common (6,971)
Balance on
October 1, 1995 $10,090 $ 1,965 $123,057 $ (71,902) $ (3,904) $ 17,646
======= ======= ======== ========= ======== ========
Balance on
December 31, 1995 $10,090 $ 1,965 $120,733 $ (76,032) $ (138) $ 17,646
Net income 16,970
Cash dividends
paid:
Common (6,971)
Balance on
September 29, 1996 $10,090 $ 1,965 $113,762 $ (59,062) $ (138) $ 17,646
======= ======= ======== ========= ======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
Nine Months
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 16,970 $ 14,650
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense 21,199 19,756
Amortization of goodwill and intangibles 9,175 9,173
Deferred income taxes 10,238 9,738
Losses on sale of property, plant and equipment 1,737 1,037
Amortization of debt costs 396 344
Undistributed (earnings) losses of Piedmont Coca-Cola (73) 1,100
Bottling Partnership
Increase in current assets less current liabilities (19,593) (13,886)
Increase in other noncurrent assets (1,401) (1,076)
Increase in other noncurrent liabilities 4,708 2,746
Other 3 132
-------- --------
Total adjustments 26,389 29,064
-------- --------
Net cash provided by operating activities 43,359 43,714
-------- --------
Cash Flows from Financing Activities
Payments on long-term debt (14,543) (13,144)
Cash dividends paid (6,971) (6,971)
Other (726) 1,721
-------- --------
Net cash used in financing activities (22,240) (18,394)
-------- --------
Cash Flows from Investing Activities
Additions to property, plant and equipment (21,402) (26,304)
Proceeds from the sale of property, plant and equipment 558 1,895
-------- --------
Net cash used in investing activities (20,844) (24,409)
-------- --------
Net increase in cash 275 911
Cash at beginning of period 2,434 1,812
-------- --------
Cash at end of period $ 2,709 $ 2,723
======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
1. Accounting Policies
The consolidated financial statements include the accounts of Coca-Cola Bottling
Co. Consolidated and its majority owned subsidiaries (the "Company"). All
significant intercompany accounts and transactions have been eliminated.
The information contained in the financial statements is unaudited. The
statements reflect all adjustments which, in the opinion of management, are
necessary for a fair statement of the results for the interim periods presented.
All such adjustments are of a normal, recurring nature.
The accounting policies followed in the presentation of interim financial
results are the same as those followed on an annual basis. These policies are
presented in Note 1 to the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 filed
with the Securities and Exchange Commission.
Certain prior year amounts have been reclassified to conform to current year
classifications.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
2. Summarized Income Statement Data of 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 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 portion of the soft drink
products to Piedmont at cost and receives a fee for managing the business of
Piedmont pursuant to a management agreement. Summarized income statement data
for Piedmont is as follows:
<TABLE>
<CAPTION>
Third Quarter Nine Months
In Thousands 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $60,659 $59,396 $170,838 $163,856
Gross margin 26,273 23,627 72,523 66,337
Income from operations 2,958 1,777 6,685 5,312
Net income (loss) 1,880 (758) 146 (2,200)
</TABLE>
3. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
Sept. 29, Dec. 31, Oct. 1,
In Thousands 1996 1995 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Finished products $19,883 $17,809 $20,429
Manufacturing materials 10,364 8,809 11,585
Plastic pallets and other 2,533 1,371 1,433
--------- --------- ---------
Total inventories $32,780 $27,989 $33,447
======= ======= =======
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
4. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed(F) or
Interest Variable Interest Sept. 29, Dec. 31, Oct. 1,
In Thousands Maturity Rate (V) Rate Paid 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lines of Credit 2000 5.37% V Varies $ 9,620 $ 22,590 $ 85,601
Term Loan Agreement 2002- 6.39% V Varies 170,000 170,000 120,000
2003
Medium-Term Notes 1998 6.13% V Quarterly 10,000 10,000 10,000
Medium-Term Notes 1998 10.05% F Semi- 2,000 2,000 2,000
annually
Medium-Term Notes 1999 7.99% F Semi- 28,585 28,585 66,500
annually
Medium-Term Notes 2000 10.00% F Semi- 25,500 25,500 55,000
annually
Medium-Term Notes 2002 8.56% F Semi- 47,000 47,000 66,500
annually
Debentures 2007 6.85% F Semi- 100,000 100,000
annually
Notes acquired in
Sunbelt acquisition 2001 8.00% F Quarterly 177 217 217
Capital leases and 2000 - 6.85% - F Varies 12,576 14,124 14,183
other notes payable 2001 10.00%
-------- -------- --------
405,458 420,016 420,001
Less: Portion of long-
term debt payable
within one year 105 120 174
- ---------------------------------------------------------------------------------------------------------------------------------
Long-term debt $405,353 $419,896 $419,827
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
4. Long-Term Debt (cont.)
As of September 29, 1996, the Company was in compliance with all of the
covenants of its various borrowing agreements.
It is the Company's intent to renew its lines of credit, commercial paper
borrowings and borrowings under the revolving credit facility as they
mature. To the extent that these borrowings do not exceed the amount
available under the Company's $170 million revolving credit facility, they
are classified as noncurrent liabilities.
A $100 million commercial paper program was established in January 1990 with
funds to be used for general corporate purposes. There were no balances
outstanding under this program on September 29, 1996, December 31, 1995 or
October 1, 1995.
In June 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 up to a maximum of $40 million. This arrangement has
been amended to extend it to June 1998 on terms substantially similar to
those previously in place. The Company had sold trade receivables of $20
million as of September 29, 1996 and $35 million as of December 31, 1995 and
October 1, 1995.
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became
effective and the securities thereunder became available for issuance. On
November 1, 1995, the Company issued $100 million of 6.85% debentures due
2007 pursuant to such registration. The net proceeds from this issuance were
used principally for refinancing a portion of existing public indebtedness
with the remainder used to repay other bank debt.
On November 20, 1995, the Company entered into a $170 million loan agreement
with $85 million maturing in November 2002 and $85 million maturing in
November 2003. This loan was used to repay two $60 million loans previously
entered into by the Company and other bank debt.
The Company has guaranteed a portion of the debt for two cooperatives in
which the Company is a member. The amounts guaranteed were $32.5 million,
$35.2 million and $34 million as of September 29, 1996, December 31, 1995
and October 1, 1995, respectively.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Derivative Financial Instruments
The Company uses derivative financial instruments to modify risk from
interest rate fluctuations in its underlying debt. The Company has
historically altered its fixed/floating interest 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 had weighted average interest rates for the debt portfolio of
approximately 7.1%, 7.2% and 7.3% as of September 29, 1996, December 31,
1995 and October 1, 1995, respectively. The Company's overall weighted
average interest rate on its long-term debt decreased from an average of
7.4% during the first nine months of 1995 to an average of 7.0% during the
first nine months of 1996. After taking into account the effect of all of
the interest rate swap activities, approximately 47%, 48% and 53% of the
total debt portfolio was subject to changes in short-term interest rates as
of September 29, 1996, December 31, 1995 and October 1, 1995, respectively.
A rate increase of 1% on the floating rate component of the Company's debt
would have increased interest expense for the first nine months of 1996 by
approximately $1.4 million and net income for the first nine months ended
September 29, 1996 would have been reduced by approximately $.9 million.
The Company currently has two interest rate swap agreements. There were no
new derivative financial instruments, nor activity with current financial
instruments, during the third quarter or first nine months of 1996.
Derivative financial instruments were as follows:
<TABLE>
<CAPTION>
Sept. 29, 1996 December 31, 1995 Oct. 1, 1995
------------------------------------------------------------------------------------
Remaining Remaining Remaining
In Thousands Amount Term Amount Term Amount Term
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps-floating $ 60,000 7 years $ 60,000 8 years $ 60,000 8 years
Interest rate swaps-fixed 60,000 7 years 60,000 8 years 60,000 8 years
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Derivative Financial Instruments (cont.)
The carrying amounts and fair values of the Company's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
September 29, 1996 December 31, 1995
----------------------------- -----------------------------
Carrying Fair Carrying Fair
In Thousands Amount Value Amount Value
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt $213,085 $214,721 $213,085 $228,103
Non-public variable rate long-term
debt 179,620 179,620 192,590 192,590
Non-public fixed rate long-term debt 12,753 13,448 14,341 16,189
Off-Balance-Sheet Instruments
Interest rate swaps (4,872) (4,725)
</TABLE>
The fair values of the interest rate swaps represent the estimated amounts
the Company would have had to pay to terminate these agreements.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
6. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash were as
follows:
<TABLE>
<CAPTION>
Nine Months
In Thousands 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accounts receivable, trade, net $ (15,702) $ (3,424)
Due from Piedmont Coca-Cola Bottling Partnership 4,584 (74)
Accounts receivable, other 9,310 832
Inventories (4,791) (1,576)
Prepaid expenses and other current assets (797) (484)
Portion of long-term debt payable within one year (15) (126)
Accounts payable and accrued liabilities (13,366) (1,863)
Due to Piedmont Coca-Cola Bottling Partnership 1,207
Accrued compensation (577) (782)
Accrued interest payable 554 (6,389)
---------- -----------
Increase in current assets less current liabilities $(19,593) $ (13,886)
========= ==========
</TABLE>
<PAGE>
