UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 29, 1997
Commission File Number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
DELAWARE 56-0950585
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification Number)
1900 REXFORD ROAD, CHARLOTTE, NORTH CAROLINA 28211
(Address of principal executive offices) (Zip Code)
(704) 551-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 4, 1997
----- -----------------------------
Common Stock, $1 Par Value 7,045,047
Class B Common Stock, $1 Par Value 1,319,800
<PAGE>
PART I - FINANCIAL INFORMATION
Item l. Financial Statements
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
June 29, Dec. 29, June 30,
1997 1996 1996
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 3,733 $ 2,941 $ 3,593
Accounts receivable, trade, less allowance for
doubtful accounts of $420, $410 and $432 52,097 50,918 17,988
Accounts receivable from The Coca-Cola Company 7,758 2,392 2,673
Due from Piedmont Coca-Cola Bottling Partnership 3,531 5,888 3,466
Accounts receivable, other 10,522 8,216 5,531
Inventories 37,265 30,787 36,795
Prepaid expenses and other current assets 9,732 9,453 8,249
-------- -------- --------
Total current assets 124,638 110,595 78,295
-------- -------- --------
Property, plant and equipment, less accumulated
depreciation of $170,982, $161,615 and $153,947 251,409 190,073 190,728
Investment in Piedmont Coca-Cola Bottling Partnership 64,399 64,462 64,757
Other assets 40,321 33,802 33,688
Identifiable intangible assets, less accumulated
amortization of $100,365, $95,403 and $90,469 235,890 238,115 243,049
Excess of cost over fair value of net assets of
businesses acquired, less accumulated
amortization of $27,415, $26,269 and $25,124 64,204 65,349 66,495
-------- -------- --------
Total $780,861 $702,396 $677,012
======== ======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
<TABLE>
<CAPTION>
June 29, Dec. 29, June 30,
1997 1996 1996
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Portion of long-term debt payable within one year $ 12,135 $ 105 $ 100
Accounts payable and accrued liabilities 55,302 56,939 54,495
Accounts payable to The Coca-Cola Company 6,795 3,249 3,174
Accrued compensation 3,801 5,275 3,768
Accrued interest payable 11,097 11,112 8,212
--------- --------- ---------
Total current liabilities 89,130 76,680 69,749
Deferred income taxes 109,667 108,403 104,189
Deferred credits 11,751 12,096 10,223
Other liabilities 47,135 43,495 32,825
Long-term debt 515,847 439,453 415,219
--------- --------- ---------
Total liabilities 773,530 680,127 632,205
--------- --------- ---------
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-
10,107,421, 10,107,359 and 10,090,859 shares 10,107 10,107 10,090
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares; Issued-
1,947,914, 1,947,976 and 1,964,476 shares 1,948 1,948 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares; Issued-None
Capital in excess of par value 107,257 111,439 116,086
Accumulated deficit (50,623) (59,868) (65,550)
Minimum pension liability adjustment (104) (104) (138)
--------- --------- ---------
68,585 63,522 62,453
Less-Treasury stock, at cost:
Common-3,062,374, 2,641,490 and 2,132,800 shares 60,845 40,844 17,237
Class B Common-628,114 shares 409 409 409
--------- --------- ---------
Total shareholders' equity 7,331 22,269 44,807
--------- --------- ---------
Total $ 780,861 $ 702,396 $ 677,012
========= ========= =========
</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>
Second Quarter First Half
1997 1996 1997 1996
----------- ----------- -------- ---------
<S> <C> <C> <C> <C>
Net sales (includes sales to Piedmont of
$15,485, $17,614, $26,076 and $29,689) $ 208,174 $ 213,579 $ 386,569 $ 385,575
Cost of sales, excluding depreciation shown
below (includes $11,407, $14,414, $20,010
and $24,998 related to sales to Piedmont) 114,393 119,626 213,843 217,894
--------- --------- --------- ---------
Gross margin 93,781 93,953 172,726 167,681
--------- --------- --------- ---------
Selling expenses 43,314 44,748 87,378 85,474
General and administrative expenses 14,792 14,135 28,780 26,843
Depreciation expense 8,288 7,055 16,421 14,062
Amortization of goodwill and intangibles 3,091 3,058 6,155 6,115
--------- --------- --------- ---------
Income from operations 24,296 24,957 33,992 35,187
Interest expense 9,385 7,466 18,509 15,159
Other income (expense), net (378) (1,628) (785) (2,610)
--------- --------- --------- ---------
Income before income taxes 14,533 15,863 14,698 17,418
Federal and state income taxes 5,392 6,318 5,453 6,936
--------- --------- --------- ---------
Net income $ 9,141 $ 9,545 $ 9,245 $ 10,482
========= ========= ========= =========
Net income per share $ 1.09 $ 1.03 $ 1.09 $ 1.13
Cash dividends per share:
Common Stock $ .25 $ .25 $ .50 $ .50
Class B Common Stock .25 .25 .50 .50
Weighted average number of Common and
Class B Common shares outstanding 8,365 9,294 8,450 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 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
December 31, 1995 $ 10,090 $ 1,965 $120,733 $(76,032) $ (138) $ 17,646
Net income 10,482
Cash dividends
paid: Common (4,647)
-------- -------- -------- -------- -------- -------
Balance on
June 30, 1996 $ 10,090 $ 1,965 $116,086 $(65,550) $ (138) $ 17,646
======== ======== ======== ======== ======== ========
Balance on
December 29, 1996 $ 10,107 $ 1,948 $111,439 $(59,868) $ (104) $ 41,253
Net income 9,245
Cash dividends
paid: Common (4,182)
Purchase of
Common Stock 20,001
-------- -------- -------- -------- -------- -------
Balance on
June 29, 1997 $ 10,107 $ 1,948 $107,257 $(50,623) $ (104) $ 61,254
======== ======== ======== ======== ======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
First Half
1997 1996
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 9,245 $ 10,482
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense 16,421 14,062
Amortization of goodwill and intangibles 6,155 6,115
Deferred income taxes 6,936
Losses on sale of property, plant and equipment 838 1,191
Amortization of debt costs 280 262
Undistributed losses of Piedmont Coca-Cola Bottling Partnership 63 867
Increase in current assets less current liabilities (12,679) (17,684)
Increase in other noncurrent assets (6,005) (682)
Increase in other noncurrent liabilities 4,858 3,467
Other 3,009 1
-------- --------
Total adjustments 12,940 14,535
-------- --------
Net cash provided by operating activities 22,185 25,017
-------- --------
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 76,619
Increase (decrease) in current portion of long-term debt 12,030 (20)
Payments on long-term debt (226) (4,677)
Purchase of Common Stock (20,001)
Cash dividends paid (4,182) (4,647)
Other (352) (333)
-------- --------
Net cash provided by (used in) financing activities 63,888 (9,677)
-------- --------
Cash Flows from Investing Activities
Additions to property, plant and equipment (81,578) (14,652)
Proceeds from the sale of property, plant and equipment 103 471
Acquisition of companies, net of cash acquired (3,806)
-------- --------
Net cash used in investing activities (85,281) (14,181)
-------- --------
Net increase in cash 792 1,159
Cash at beginning of period 2,941 2,434
-------- --------
Cash at end of period $ 3,733 $ 3,593
======== ========
</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 29, 1996 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:
Second Quarter First Half
In Thousands 1997 1996 1997 1996
---------- --------- -------- ------------
Net sales $63,037 $62,254 $115,868 $110,179
Gross margin 28,218 25,841 51,946 46,250
Income from operations 4,535 2,999 5,919 3,727
Net income (loss) 1,508 115 (126) (1,734)
3. Inventories
Inventories are summarized as follows:
June 29, Dec. 29, June 30,
In Thousands 1997 1996 1996
-------- ---------- ---------
Finished products $20,914 $18,888 $23,312
Manufacturing materials 10,394 9,894 10,596
Plastic pallets and other 5,957 2,005 2,887
--------- --------- ---------
Total inventories $37,265 $30,787 $36,795
======= ======= =======
The amounts included above for inventories valued by the LIFO method were
greater than replacement or current cost by approximately $2.1 million, $2.1
million and $1.0 million on June 29, 1997, December 29, 1996 and June 30, 1996,
respectively, as a result of inventory premiums associated with certain
acquisitions.
<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 June 29, Dec. 29, June 30,
In Thousands Maturity Rate (V) Rate Paid 1997 1996 1996
---------- -------- ----------- -------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lines of Credit 2001 5.70% - V Varies $132,350 $ 19,720 $ 19,370
5.78%
Revolving Credit 24,000
Term Loan Agreement 2004 - 6.20% V Varies 170,000 170,000 170,000
2005
Medium-Term Notes 1998 6.38% 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 28,585
annually
Medium-Term Notes 2000 10.00% F Semi- 25,500 25,500 25,500
annually
Medium-Term Notes 2002 8.56% F Semi- 47,000 47,000 47,000
annually
Debentures 2007 6.85% F Semi- 100,000 100,000 100,000
annually
Other notes payable 2000 - 6.85% - F Varies 12,547 12,753 12,864
2001 10.00% -------- ------- -------
527,982 439,558 415,319
Less: Portion of long-
term debt payable
within one year 12,135 105 100
------ -------- --------
Long-term debt $515,847 $439,453 $415,219
-------- -------- --------
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
4. Long-Term Debt (cont.)
It is the Company's intent to renew its lines of credit 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.
The Company previously had an arrangement under which it had the right to
sell an undivided interest in a designated pool of trade accounts receivable
up to a maximum of $40 million. This arrangement was suspended in the fourth
quarter of 1996. The Company had no trade accounts receivable outstanding as
of June 29, 1997 and December 29, 1996 under this arrangement.
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 term loan
agreement. This loan was used to repay two $60 million loans previously
entered into by the Company and other bank debt. On July 22, 1997, the
maturities under this agreement were extended such that $85 million matures
in 2004 and $85 million matures in 2005.
The Company has guaranteed a portion of the debt for two cooperatives in
which the Company is a member. The amounts guaranteed were $31.5 million,
$32.2 million and $32.5 million as of June 29, 1997, December 29, 1996 and
June 30, 1996, respectively.
During July 1997, the Company issued $100 million of 7.20% debentures due
2009 pursuant to the $400 million shelf registration filed in October 1994.
The proceeds from the issuance of the debentures were used to pay down
borrowings under the Company's lines of credit. The lines of credit had been
used primarily to fund the repurchase of shares of Common Stock and the
purchase of assets previously leased. The Company entered into floating rate
interest swap agreements on the $100 million of debentures issued.
<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 6.8%, 7.2% and 7.0% as of June 29, 1997, December 29, 1996 and
June 30, 1996, respectively. The Company's overall weighted average interest
rate on its long-term debt decreased from an average of 7.0% during the
first half of 1996 to an average of 6.9% during the first half of 1997.
After taking into account the effect of all of the interest rate swap
activities, approximately 59%, 51% and 48% of the total debt portfolio was
subject to changes in short-term interest rates as of June 29, 1997,
December 29, 1996 and June 30, 1996, respectively.
A rate increase of 1% on the floating rate component of the Company's debt
would have increased interest expense for the first half of 1997 by
approximately $1.6 million and net income for the first six months ended
June 29, 1997 would have been reduced by approximately $1.0 million.
Derivative financial instruments were as follows:
<TABLE>
<CAPTION>
June 29, 1997 December 29, 1996 June 30, 1996
-------------------------------------------------------------------------------
Remaining Remaining Remaining
In Thousands Amount Term Amount Term Amount Term
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps-floating $ 60,000 6.25 years $ 60,000 6.75 years $60,000 7.25 years
Interest rate swaps-fixed 60,000 6.25 years 60,000 6.75 years 60,000 7.25 years
</TABLE>
During July 1997, the Company entered into new interest rate swap agreements
related to $100 million of long-term debt.
<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>
June 29, 1997 June 30, 1996
----------------------------- ------------------------
Carrying Fair Carrying Fair
In Thousands Amount Value Amount Value
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt $213,085 $216,850 $213,085 $214,697
Non-public variable rate long-term
debt 302,350 302,350 189,370 189,370
Non-public fixed rate long-term debt 12,547 13,334 12,864 14,386
Off-Balance-Sheet Instruments
Interest rate swaps (3,730) (4,327)
</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:
First Half
In Thousands 1997 1996
------------ --------
Accounts receivable, trade, net $ (1,074) $ (5,890)
Accounts receivable from The Coca-Cola Company (5,366) 4,052
Due from Piedmont Coca-Cola Bottling Partnership 2,357 1,118
Accounts receivable, other (2,020) 3,961
Inventories (6,438) (8,806)
Prepaid expenses and other current assets (274) (1,314)
Accounts payable and accrued liabilities (1,913) (10,055)
Accounts payable to The Coca-Cola Company 3,546 (461)
Accrued compensation (1,482) (1,281)
Accrued interest payable (15) 992
-------- --------
Increase in current assets less current liabilities $(12,679) $(17,684)
======== ========
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Result
of Operations
Introduction:
The following discussion presents management's analysis of the results of
operations for the second quarter and first six months of 1997 compared to the
second quarter and first six months of 1996 and changes in financial condition
from June 30, 1996 and December 29, 1996 to June 29, 1997.
The Company reported net income of $9.1 million or $1.09 per share for the
second quarter of 1997 compared with net income of $9.5 million or $1.03 per
share for the same period in 1996. For the first half of 1997, net income was
$9.2 million or $1.09 per share compared to net income of $10.5 million or $1.13
per share for the first half of 1996.
The results for interim periods are not necessarily indicative of the results to
be expected for the year due to seasonal factors.
Results of Operations:
Net sales for the second quarter of 1997 decreased by about 2% from the second
quarter of 1996. The decrease in net sales for the second quarter was primarily
attributable to unseasonably cool and wet weather and highly competitive
pricing. Contract sales declined by $5.0 million and $8.6 million from the
second quarter and first half of 1996, respectively. A significant portion of
the reduction in contract sales reflects lower sales to Piedmont Coca-Cola
Bottling Partnership, which is purchasing more of its product from South
Atlantic Canners, Inc.
Net sales for the first half of 1997 increased approximately 1% over the same
period in 1996. The Company experienced 4.5% case volume sales growth in
franchise sales in the first half of 1997 over the first half of 1996. The
increase in franchise sales volume was offset by a 2.5% decrease in franchise
net selling price per case. The decrease in franchise net selling price per case
was due to extremely competitive market conditions. The Company's flagship
brand, Coca-Cola Classic, showed solid growth during the first half of 1997.
Sprite continued its strong performance with double-digit volume growth over the
first half of 1996. The Company also had significant growth in non-carbonated
products, including POWERaDE and Cool from Nestea. Franchise selling prices in
the second quarter and first half of 1997 decreased approximately 2.5% from
comparable periods in 1996 due to highly competitive pricing.
Gross margin on net franchise sales for the second quarter of 1997 was basically
unchanged from the second quarter of 1996. Gross margin for the first half of
1997 increased by approximately 3% as compared to the same period in 1996. Gross
margin for both the second quarter and first half of 1997 was positively
impacted by a decline in the cost of sales. Cost of sales on a per unit basis
for the second quarter and first half of 1997 declined by 2.7% and 2.8%,
respectively, from the same periods in 1996. The reduction in cost of sales was
attributable to lower costs for sweetener, cans and PET bottles.
<PAGE>
For the second quarter of 1997, selling expenses decreased 3.2% from the same
quarter in 1996. The decline in selling expenses in the second quarter of 1997
was due to lower net marketing program costs and a reduction in equipment lease
expense. The reduction in net marketing program costs is primarily due to
additional funding from The Coca-Cola Company for support of cold drink
activities. Selling expenses for the first six months of 1997 increased by 2.2%
over the first half of 1996.
General and administrative expenses in the second quarter increased by 4.6% from
the second quarter of 1996. General and administrative expenses for the first
six months of 1997 increased by 7.2% over 1996 first half levels. The increase
in general and administrative expenses was impacted by higher employment costs.
Depreciation expense increased 17% between the second quarter and first half of
1997 and the comparable periods in 1996. This increase was due primarily to
depreciation expense on vending equipment that was previously leased. The
Company bought out $66.3 million of vending equipment leases in January 1997. As
a result of this transaction, lease expense declined by 15% for the second
quarter and 13% for the first half of 1997 from the same periods in 1996.
Interest expense in 1997 increased 26% from the second quarter of 1996 and 22%
from the first half of 1996 primarily due to several transactions that increased
outstanding long-term debt from June 30, 1996 to June 29, 1997. The Company
repurchased approximately 930,000 shares of its Common Stock in three separate
transactions between December 1996 and February 1997 for $43.6 million. The
Company repurchased vending leases for $66.3 million during January 1997.
Additionally, the Company suspended its arrangement to sell trade accounts
receivable in the fourth quarter of 1996. As of June 30, 1996 the Company had
sold $35 million of its trade accounts receivable under this program. The
Company's overall weighted average interest rate decreased from an average of
7.0% during the first half of 1996 to an average of 6.9% during the first half
of 1997.
Other expense for the first half of 1997 decreased by $1.8 million over the same
period in 1996. This decrease in other expense is primarily due to the
suspension of the program to sell trade accounts receivable. The discount on the
sale of trade accounts receivable was included in other expense while the
program was active.
CHANGES IN FINANCIAL CONDITION:
Working capital increased $1.6 million from December 29, 1996 and $27 million
from June 30, 1996 to June 29, 1997. The change from December 29, 1996 is
attributable to a seasonal increase in inventory and an increase in amounts due
from The Coca-Cola Company, offset by an increase of $12 million in the current
portion of long-term debt. The increase from June 30, 1996 was due principally
to an increase in trade accounts receivable of $34.1 million, offset partially
by the $12 million increase in the current portion of long-term debt. The
Company had sold trade accounts receivable of $35 million as of June 30, 1996
under an agreement to sell up to $40 million
<PAGE>
of its trade accounts receivable. The trade accounts receivable sales agreement
was suspended during the fourth quarter of 1996 and no trade accounts receivable
had been sold as of December 29, 1996 or June 29, 1997.
Capital expenditures in the first half of 1997, excluding the $66.3 million
purchase of previously leased equipment, were $15.3 million as compared to $14.7
million in the first half of 1996.
The Company entered into an agreement in April 1997 that will provide up to $61
million for the leasing of equipment in 1997. This agreement has a favorable
overall cost structure and will be used to obtain the majority of the Company's
capital requirements for fleet and vending assets in 1997. As of June 29, 1997,
the Company had leased $45.0 million of equipment under this agreement.
Long-term debt increased by $100 million from June 30, 1996 and increased $76.4
million from December 29, 1996. The significant increase in long-term debt is
primarily due to the repurchase of approximately 930,000 shares of the Company's
Common Stock during December 1996 and the first quarter of 1997 for $43.6
million; the buyout of leases from Coca-Cola Financial Corporation in January
1997 for approximately $66.3 million and the suspension of the arrangement to
sell trade accounts receivable. The Company used its informal lines of credit
for the additional borrowings as of June 29, 1997.
During July 1997, the Company issued $100 million of 7.20% debentures due 2009
pursuant to the $400 million shelf registration filed in October 1994. The
proceeds from the issuance of the debentures were used to pay down borrowings
under the Company's lines of credit. The lines of credit had been used to fund
the repurchase of Common Stock and the purchase of assets previously leased, as
discussed above. The Company entered into floating rate interest swap agreements
on the $100 million of debentures issued. Additionally, the Company extended the
maturity dates on its $170 million Term Loan Agreement such that $85 million
matures in 2004 and $85 million matures in 2005.
It is the Company's intent to renew any borrowings under its $170 million
revolving credit facility and the informal lines of credit as they mature and,
to the extent that any borrowings under the revolving credit facility and the
informal lines of credit do not exceed the amount available under the Company's
$170 million revolving credit facility, they are classified as noncurrent
liabilities. As of June 29, 1997, the Company had no amounts outstanding under
the revolving credit facility and had approximately $132.3 million outstanding
under the informal lines of credit.
As of June 29, 1997 the debt portfolio had a weighted average interest rate of
approximately 6.8% and approximately 59% of the total debt portfolio of $528.0
million was subject to changes in short-term interest rates.
Management believes that the Company, through the generation of cash flow from
operations and the utilization of unused borrowing capacity, has sufficient
financial resources available to maintain its current operations and provide for
its current capital expenditure requirements. The Company considers the
acquisition of additional franchise territories on an ongoing basis.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of the Company's shareholders was held on May 14, 1997.
(b) The meeting was held to consider and vote upon (i) fixing the number of the
Company's directors at ten, (ii) electing three directors, each for a term
of three years or until his successor shall be elected and shall qualify,
and (iii) approving the performance goals under the Company's Annual Bonus
Plan in order to permit bonuses paid thereunder to qualify as "performance
based" compensation within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended.
The votes cast on the question of fixing the number of directors at ten are
summarized as follows:
For Abstain Total Votes
32,547,173 6,141 32,553,314
The votes cast with respect to each director are summarized as follows:
Director Name For Abstain Total Votes
------------- --- ------- -----------
H.W. McKay Belk 32,521,020 32,295 32,553,315
H. Reid Jones 32,521,355 31,960 32,553,315
John W. Murrey, III 32,520,799 32,516 32,553,315
The votes cast for approving the performance goals under the Company's
Annual Bonus Plan are summarized as follows:
For Against Abstain Total Votes
32,429,033 49,524 59,651 32,538,208
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
1.1 Underwriting Agreement dated July 1, 1997 among the Company,
Citicorp Securities, Inc. and BancAmerica Securities, Inc.
4.1 Amendment, dated as of July 22, 1997, to Loan
Agreement dated November 20, 1995, between the
Company and LTCB Trust Company, as Agent, and other
banks named therein.
4.2 Form of the Company's 7.20% Debentures Due 2009.
27 Financial data schedule for period ended June 29, 1997.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)
Date: August 13, 1997
By: /s/ David V. Singer
-------------------------------------
David V. Singer
Principal Financial Officer of
the Registrant
and
Vice President - Chief Financial Officer
Exhibit 1.1
Coca-Cola Bottling Co. Consolidated
UNDERWRITING AGREEMENT
New York, New York
July 1, 1997
Tothe Representative
named in Schedule I
hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
Coca-Cola Bottling Co. Consolidated, a Delaware
corporation (the "Company"), proposes to sell to the
underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, (1) the principal amount, if
any, of its debt securities (including debt securities convertible into common
stock or preferred stock of the Company ("Convertible Debt") identified in
Schedule I hereto (such debt securities, including Convertible Debt, the "Debt
Securities"), to be issued under an indenture (the "Indenture") dated as of July
20, 1994, between the Company and NationsBank of Georgia, National Association,
as trustee (the "Trustee"), as supplemented and restated by a Supplemental
Indenture dated March 3, 1995 between the Company and the Trustee (all
references herein to the "Indenture" are to the Indenture as so supplemented,
and all references to the "Trustee" are to Citibank, N.A., which succeeded to
all of the rights, powers, duties and obligations of the initial Trustee under
the Indenture by agreement of all parties, effective September 15, 1995); (2)
the shares of common stock, $1.00 par value, of the Company, if any, identified
in Schedule I hereto (the Common Stock"); (3) the shares of Class C common
stock, $1.00 par value, of the Company, if any, identified in Schedule I hereto
(the "Class C Common Stock"); (4) the shares of preferred stock, $0.01 par
value, of the Company, if any, identified in Schedule I hereto (the "Preferred
Stock"); (5) the shares of convertible preferred stock, $100.00 par value, of
the
<PAGE>
Company, if any, identified in Schedule I hereto (the "Convertible Preferred
Stock"); and/or (6) the shares of non-convertible preferred stock, $100.00 par
value, of the Company, if any, identified in Schedule I hereto (the
"Nonconvertible Preferred Stock"). The Debt Securities, Common Stock, Class C
Common Stock, Preferred Stock, Convertible Preferred Stock, and Nonconvertible
Preferred Stock may be sold either separately or as units (the "Units") together
with any of the foregoing. The Debt Securities, Common Stock, Class C Common
Stock, Preferred Stock, Convertible Preferred Stock, and Nonconvertible
Preferred Stock described in Schedule I hereto shall collectively be referred to
herein as the "Securities". The Common Stock, Class C Common Stock, Preferred
Stock, Convertible Preferred Stock, and Nonconvertible Preferred Stock described
in Schedule I hereto shall collectively be referred to herein as the "Equity
Securities." If the firm or firms listed in Schedule II hereto include only the
firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein, shall each be deemed to refer to such firm or
firms.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Under-
writer as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in paragraph (c) hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if the
offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (the file number
of which is set forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto, and may
have used a Preliminary Final Prospectus, each of which has previously been
furnished to you. Such registration statement, as so amended, has become
effective. The offering of the Securities is a Delayed Offering and, although
the Basic Prospectus may not include all the information with respect to the
Securities and the offering thereof required by the Act and the rules thereunder
to be included in the Final Prospectus, the Basic Prospectus includes all such
information required by the Act and the rules thereunder to be included therein
as of the Effective
2
<PAGE>
Date. The Company will next file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included in such
registration statement relating to the Securities and the offering thereof. As
filed, such final prospectus supplement shall include all required information
with respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that contained in
the Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(ii) The Company meets the requirements for the use of Form S-3 under
the Act and has filed with the Commission a registration statement (the file
number of which is set forth in Schedule I hereto) on such Form, including a
basic prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto, including
a Preliminary Final Prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either (x) a final
prospectus supplement relating to the Securities in accordance with Rules 430A
and 424(b)(1) or (4), or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement, including the form of
final prospectus supplement. In the case of clause (x), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with respect to the Securities
and the offering thereof. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, with respect to
the Securities and the offering thereof and,
3
<PAGE>
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance Rule 424(b)
and on the Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the Act, the
Securities Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture Act
of 1939 (the "Trust Indenture Act") and the respective rules thereunder; on the
Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did or
will comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and on
the date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or the Final Prospectus
(or any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term
4
<PAGE>
"the Effective Date" shall mean each date that the Registration Statement and
any post-effective amendment or amendments thereto became or become effective
and each date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in paragraph
(a) above contained in the Registration Statement at the Effective Date
including, in the case of a Non-Delayed Offering, any Preliminary Final
Prospectus. "Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus. "Final
Prospectus" shall mean the prospectus supplement relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities, including the Basic Prospectus, included in the
Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S- K" refer to such rules or regulation under the Act. "Rule 430A
Information" means information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, any Preliminary Final
5
<PAGE>
Prospectus or the Final Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed
to be incorporated therein by reference. A "Non-Delayed Offering" shall mean an
offering of securities which is intended to commence promptly after the
effective date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information) with
respect to the securities so offered must be included in such registration
statement at the effective date thereof. A "Delayed Offering" shall mean an
offering of securities pursuant to Rule 415 which does not commence promptly
after the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed Offering or a
Delayed Offering shall be set forth in Schedule I hereto.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Schedule I hereto the principal amount or number of shares or Units
of Securities set forth opposite such Underwriter's name in Schedule II hereto,
except that, in the case of Debt Securities, if Schedule I hereto provides for
the sale of such Debt Securities pursuant to delayed delivery arrangements, the
respective principal amount of Securities to be purchased by the Underwriters
shall be as set forth in Schedule II hereto less the respective amounts of
Contract Securities determined as provided below. Securities to be purchased by
the Underwriters are herein sometimes called the "Underwriters' Securities" and
Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter
provided are herein called "Contract Securities".
(b) If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts"), substantially in the
form of Schedule II hereto but with such changes therein as the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements
and, as compensation therefor, the Company will pay to the Representatives, for
the account of the Underwriters, on the Closing Date, the
6
<PAGE>
percentage set forth in Schedule I hereto of the principal amount of the Debt
Securities for which such Delayed Delivery Contracts are made. Delayed Delivery
Contracts are to be with institutional investors, including commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions. The Company will enter into Delayed
Delivery Contracts in all cases where such sales of Contract Securities arranged
by the Underwriters have been approved by the Company (it being understood that
the Company may reasonably withhold such approval) but, except as the Company
may otherwise agree, each such Delayed Delivery Contract must be for not less
than the minimum principal amount set forth in Schedule I hereto and the
aggregate principal amount set forth in Schedule I hereto and the aggregate
principle amount of Contract Securities may not exceed the maximum aggregate
principal amount set forth in Schedule I hereto. The Underwriters will not have
any responsibility in respect of the validity or performance of Delayed Delivery
Contracts. The principal amount of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an amount
which shall bear the same proportion to the total principal amount of Contract
Securities as the principal amount of Securities set forth opposite the name of
such Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction shall be
otherwise than in such proportion and so advise the Company in writing;
provided, however, that the total principal amount of Securities to be purchased
by all Underwriters shall be the aggregate principal amount set forth in
Schedule II hereto less the aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriter's Securities shall be made on the date and at the time specified in
Schedule I hereto (or such later date not later than five business days after
such specified date as the Representatives shall designate), which date and time
may be postponed by agreement between the Representatives and the Company or as
provided in Section 8 hereof (such date and time of delivery and payment for the
Underwriter's Securities being herein called the "Closing Date"). Delivery of
the Underwriter's Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by certified or official bank check or checks
drawn on or by a New York Clearing House bank and payable in next day funds.
Delivery of the Underwriter's Securities shall be made at such location as the
Representatives shall reasonably designate at least one business day in advance
of the Closing Date and payment for the Securities shall be made at
7
<PAGE>
the office specified in Schedule I hereto. Certificates for the Underwriter's
Securities shall be registered in such names and in such denominations as the
Representatives may request not less than three full business days in advance of
the Closing Date.
The Company agrees to have the Underwriter's Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereto, to
become effective. Prior to the termination of the offering of the Securities,
the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final Prospectus)
to the Basic Prospectus unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing sentence,
the Company will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (i) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Final Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b), (iii) when,
prior to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv) of any
request by the Commission for any amendment of the Registration Statement or
supplement to the Final Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop
8
<PAGE>
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (i) prepare and file
with the Commission, subject to the second sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such statement or
omission or effect such compliance and (ii) supply any supplemented Prospectus
to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the Securities
and any Debt Securities, Common Stock, Class C Common Stock, Preferred Stock,
Convertible Preferred Stock, or Nonconvertible Preferred Stock that may be
issuable pursuant to the exercise, conversion or exchange, as the case may be,
of the Securities offered by the Company, for sale under the laws of such
jurisdictions as the Representatives may designate (provided, however, that in
connection therewith, the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it is not then so qualified, (ii)
subject itself to taxation in any such
9
<PAGE>
jurisdiction or (iii) consent to general service of process in any such
jurisdiction where it is not then so subject), will maintain such qualifications
in effect so long as required for the distribution of the Securities, will
arrange for the determination of the legality of the Securities for purchase by
institutional investors, and will pay the fee of the National Association of
Securities Dealers, Inc., in connection with its review, if any, of the
offering.
(f) Until the business date set forth on Schedule I hereto, the Company
will not, without the consent of the Representatives, offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or announce the offering
of, any securities issued or guaranteed by the Company (other than the
Securities) and other than (i) as specified in Schedule I, or (ii) sales of
Equity Securities to The Coca-Cola Company pursuant to its rights under the
Stock Rights and Restrictions Agreement (the "Stock Agreement") dated as of
January 27, 1989.
(g) The Company will arrange for the listing of any Equity Securities
upon notice of issuance on any national securities exchange or automated
quotation system designated in Schedule I hereto.
(h) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba, and the Company further
agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Securities and Exchange
Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as appropriate,
in a form acceptable to the Department.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its
10
<PAGE>
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 PM New York
City time, on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the public
offering price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus,
and any such supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives the opinion
of Witt, Gaither & Whitaker, P.C., counsel for the Company, dated the Closing
Date, to the effect that:
(i) each of the Company, Coca-Cola Bottling Company of Mobile, LLC,
CCBC of Nashville, L.P., Coca-Cola Bottling Company of North Carolina, LLC,
Coca-Cola Bottling Company of Roanoke, Inc., Columbus Coca-Cola Bottling
Company, Panama City Coca-Cola Bottling Company, Tennessee Soft Drink Production
Company, Thomasville Coca-Cola Bottling Company, Coca-Cola Ventures, Inc., CCBC
of Wilmington, Inc., The Coca-Cola Bottling Company of West Virginia, Inc.,
Metrolina Bottling Company, COBC, Inc., ECBC, Inc., MOBC, Inc., NABC, Inc.,
PCBC, Inc., ROBC, Inc., TOBC, Inc., WCBC, Inc., and WVBC, Inc. (individually a
"Subsidiary" and collectively the "Subsidiaries"), is duly incorporated and
validly exists as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own, lease and operate its properties, and conduct its business
as described in the Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material properties
or conducts material business, other than jurisdictions, except where the
failure
11
<PAGE>
so to qualify would not have a material adverse effect.
(ii) the Company's 50% owned general partnership, Piedmont Coca-Cola
Bottling Partnership ("Piedmont") is duly organized and validly existing under
the laws of the State of Delaware, with full power and authority to own, lease
and operate its properties, and to conduct its business as described in the
Final Prospectus and each of its corporate partners is duly registered and
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction which requires such qualification wherein Piedmont
owns or leases material properties or conducts material business, other than
jurisdictions, except where the failure so to qualify would not have a material
adverse effect.
(iii) all the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final Prospectus, all
outstanding shares of capital stock of the Subsidiaries and the 50% partnership
interest in Piedmont are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iv) the Company's authorized equity capitalization is as set forth in
the Final Prospectus; the Securities conform to the description thereof
contained in the Final Prospectus; and, if the Securities are to be listed on
any securities exchange or automated quotation system, authorization therefor
has been given, subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a preliminary listing
application and all required supporting documents with respect to the Securities
with such securities exchange or automated quotation system and such counsel has
no reason to believe that the Securities will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution;
(v) in the case of an offering of Debt Securities, the Indenture has
been duly authorized, executed and delivered, and has been
12
<PAGE>
duly qualified under the Trust Indenture Act; the Indenture constitutes a legal,
valid and binding instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or other laws
relating to or affecting the enforcement of creditors' rights generally from
time to time in effect and by general equitable principles, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether such enforceability is considered in equity or at
law); and the Debt Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to this Agreement, in the case of
the Underwriters' Securities, or by the purchasers thereof pursuant to Delayed
Delivery Contracts, in the case of any Contract Securities, will constitute
legal, valid and binding obligations of the Company, be convertible or
exercisable for other securities of the Company in accordance with their terms
as set forth in the Final Prospectus, as the case may be, and will be entitled
to the benefits of the Indenture; if the Debt Securities are convertible or
exercisable into Equity Securities, the shares of Equity Securities issuable
upon such conversion or exercise will have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion, will be
validly issued, fully paid and nonassessable; the outstanding shares of such
Equity Securities will have been duly authorized and issued, will be fully paid
and nonassessable and will conform to the description thereof contained in the
Final Prospectus; and the holders of outstanding capital stock of the Company
have no preemptive rights with respect to any of such shares of Equity
Securities issuable upon such conversion, except as provided in the Stock
Agreement;
(vi) in the case of an offering of Common Stock or Class C Common
Stock, the shares of Common Stock or Class C Common Stock have been duly and
validly authorized and, when issued and delivered and paid for by the
Underwriters pursuant to this agreement, will be fully paid and nonassessable
and will conform to the description thereof contained in the Final Prospectus;
the Common Stock has been duly authorized for listing, subject to official
notice of issuance, on the
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National Association of Securities Dealers Automated Quotation National Market
System; the certificates for the Common Stock or Class C Common Stock are in
valid and sufficient form; and the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to subscribe
for the Common Stock or Class C Common Stock, except as provided in the Stock
Agreement.
(vii) in the case of an offering of Preferred Stock, Convertible
Preferred Stock or Nonconvertible Preferred Stock, the Company has authorized
capital stock as set forth in the Final Prospectus; the shares of Preferred
Stock, Convertible Preferred Stock, or Nonconvertible Preferred Stock being
delivered at such Closing Date have been duly and validly authorized and, when
issued and delivered and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the shares of Preferred Stock,
Convertible Preferred Stock, or Nonconvertible Preferred Stock conform to the
descriptions thereof contained in the Final Prospectus; and the stockholders of
the Company have no preemptive rights with respect to any of such shares of
Preferred Stock, Convertible Preferred Stock or Nonconvertible Preferred Stock,
except as provided in the Stock Agreement. If the shares of Preferred Stock or
Convertible Preferred Stock being delivered at such Closing Date are convertible
or exchangeable into Common Stock or other securities (including Securities),
such shares of Preferred Stock or Convertible Preferred Stock are, and the
Contract Securities, when so issued, delivered and sold, will be, convertible or
exchangeable into Common Stock or such other securities in accordance with their
terms; the shares of such Common Stock or other securities initially issuable
upon conversion or exchange of such shares of Preferred Stock or Convertible
Preferred Stock will have been duly authorized and reserved for issuance upon
such conversion or exchange and, when issued upon such conversion or exchange,
will be duly issued, fully paid and nonassessable; the outstanding shares of
such Common Stock have been duly authorized and issued, are fully paid and
nonassessable and conform to the description thereof contained in the Final
Prospectus;
(viii) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
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agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries or Piedmont, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final Prospectus, or
to be filed as an exhibit, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus describing any legal
proceedings or material contracts or agreements relating to the Company, its
subsidiaries and Piedmont fairly summarize such matters;
(ix) the Registration Statement has become effective under the Act; any
required filing of the Basic Prospectus, any Preliminary Final Prospectus and
the Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b); to
the best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened, and the Registration Statement and the Final
Prospectus (other than the financial statements and other financial and
statistical information contained therein as to which such counsel need express
no opinion) comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to believe that at
the Effective Date the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Final Prospectus includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(x) this Agreement has been duly authorized, executed and delivered
by the Company;
(ix) any Delayed Delivery Contracts have been duly authorized, executed
and delivered by the Company and are valid and binding agreements of the Company
enforceable in accordance with their
15
<PAGE>
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or other laws
relating to or affecting the enforcement of creditors' rights generally from
time to time in effect and by general equitable principles, including, without
limitation, concepts of materiality, good faith and fair dealing, regardless of
whether such enforceability is considered in equity or at law);
(xii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated herein or in any Delayed Delivery Contracts, except such as have
been obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(xiii) neither the execution and delivery of the Indenture, the issue
and sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof or of
any Delayed Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default under any law or the charter or by-laws of
the Company or the terms of any indenture or other agreement or instrument known
to such counsel and to which the Company or any of its subsidiaries or Piedmont
is a party or bound or any judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries or Piedmont of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries or Piedmont;
(xiv) the information, if any, in the Final Prospectus under
"Taxation", has been reviewed by them and constitutes a complete and accurate
summary of the matters disclosed thereunder;
(xv) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement; and
(xvi) such other legal opinions as are set forth on Schedule I hereto.
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In rendering such opinion, Witt, Gaither & Whitaker, P.C. may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
States of Delaware and Tennessee or the United States, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials.
References to the Final Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date.
(c) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the Indenture,
any Delayed Delivery Contracts, the Registration Statement, the Final Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement
are true and correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Final Prospectus (exclusive of any supplement thereto),
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<PAGE>
there has been no material adverse change in the condition (financial
or other), earnings, business affairs, properties or business prospects of the
Company and its subsidiaries or Piedmont, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(e) At the Closing Date, Price Waterhouse shall have furnished to the
Representatives a letter or letters (which may refer to letters previously
delivered to one or more of the Representatives), dated as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder and
that they have performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information in
accordance with, and as described in, Statement of Auditing Standards No. 71 for
the latest unaudited financial statements in or incorporated in the Registration
Statement or the Final Prospectus and stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules and any pro forma financial statements of the Company and
its subsidiaries and of Piedmont included or incorporated in the Registration
Statement and the Final Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their limited
review in accordance with standards established by the American Institute of
Certified Public Accountants under Statement of Auditing Standards No. 71, of
the unaudited interim financial information of the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the stockholders, directors and the
executive, finance, audit, pension and compensation
18
<PAGE>
committees of the Company and the Subsidiaries and of the partnership
proceedings of Piedmont; and inquiries of certain officials of the Company and
Piedmont who have responsibility for financial and accounting matters of the
Company and its subsidiaries and of Piedmont as to transactions and events
subsequent to the date of the most recent audited financial statements in or
incorporated in the Final Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or incorporated in the
Registration Statement and the Final Prospectus do not comply in form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect to financial statements
included or incorporated in quarterly reports on Form 10-Q under the Exchange
Act; or that said unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated in the Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to the date of the most
recent financial statements (other than any capsule information), audited or
unaudited, in or incorporated in the Registration Statement and the Final
Prospectus, there were any increases, at a specified date not more than five
business days prior to the date of the letter, in the long-term debt of the
Company and its subsidiaries and of Piedmont or capital stock of the Company, or
decreases in the stockholders' equity of the Company as compared with the
amounts shown on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Final Prospectus, or for the
period from the date of the most recent financial statements included or
incorporated in the Registration Statement and the Final Prospectus to such
specified date there were any decreases, as compared with the corresponding
period in the preceding year in net sales, gross margin, income from operations,
income before income taxes and effect of accounting changes or in total or
19
<PAGE>
per share amounts of net income applicable to common stockholders of
the Company and its subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the Representatives;
(3) the information included in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is not in
conformity with the applicable disclosure requirements of Regulation S-K; or
(4) the amounts included in any unaudited "capsule" information
included or incorporated in the Registration Statement and the Final Prospectus
do not agree with the amounts set forth in the unaudited financial statements
for the same periods or were not determined on a basis substantially consistent
with that of the corresponding amounts in the audited financial statements
included or incorporated in the Registration Statement and the Final Prospectus;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Company, its subsidiaries and Piedmont) set forth in the Registration Statement
and the Final Prospectus and in Exhibit 12 to the Registration Statement,
including the information included or incorporated in Items 1, 2, 6, 7 and 11 of
the Company's Annual report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included or incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Registration Statement and the Final Prospectus, agrees with
the accounting records of the Company, its subsidiaries and Piedmont, excluding
any questions of legal interpretation; and
20
<PAGE>
(iv) if unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Final Prospectus, on the
basis of a reading of the unaudited pro forma financial statements, carrying out
certain specified procedures, inquiries of certain officials of the Company and
the acquired company who have responsibility for financial and accounting
matters, and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe that the pro forma
financial statements do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that the
pro forma adjustments have not been properly applied to the historical amounts
in the compilation of such statements.
References to the Final Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, Price Waterhouse shall have furnished to the Representatives a
letter or letters, dated as of the Execution Time, in form and substance
satisfactory to the Representatives, to the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (e) of this Section 5 or (ii) any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company, its subsidiaries and Piedmont the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purpose
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such
21
<PAGE>
rating or of a possible change in any such rating that does not indicate the
direction of the possible change.
(h) At the Execution Time, the Company shall have furnished to the
Representatives a letter from each officer and director of the Company and
certain major shareholders specified in Schedule I hereto, addressed to the
Representatives, in which each such person agrees not to offer, sell or contract
to sell, or otherwise dispose of, directly or indirectly, or announce an
offering of, any shares of Equity Securities beneficially owned by such person
or any securities convertible into, or exchangeable for, shares of such
Securities for a period specified in Schedule I hereto following the Execution
Time without the prior written consent of the Representatives.
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further legal opinions, information, certificates and
documents as the Representatives may reasonably request.
(j) The Company shall have accepted Delayed Delivery Contracts in any
case where sales of Contract Securities arranged by the Underwriters have been
approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not con- summated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by
22
<PAGE>
any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of one Underwriters' counsel and one local counsel in each
juris- diction) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Under- writer, the directors, officers,
employees and agents of each Underwriter and each person who controls any Under-
writer within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration
of the Securities as originally filed or in any amendment thereof, or in the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein, and (ii) such indemnity
with respect to any Preliminary Final Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a copy
of the Final Prospectus (or the Final Prospectus as supplemented), excluding
documents incorporated therein by reference, at or prior to the confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in such Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as supplemented). This indemnity
23
<PAGE>
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page, under the heading
"Underwriting" or "Plan of Distribution" and, if Schedule I hereto provides for
sales of Securities pursuant to delayed delivery arrangements, in the last
sentence under the heading "Delayed Delivery Arrangements" in any Preliminary
Final Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the documents referred to in the foregoing indemnity, and you, as the
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ one separate counsel (including
24
<PAGE>
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no such case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be
25
<PAGE>
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Final Prospectus. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or the Underwriters. The
Company and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
or number of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount or number of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount or number of Securities set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the event
of a default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding seven
26
<PAGE>
days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the Company's Common Stock or Class C Common Stock shall
have been suspended by the New York Stock Exchange or National Association of
Securities Dealers Automated Quotation National Market System or trading in
securities generally on the New York Stock Exchange or National Association of
Securities Dealers Automated Quotation National Market System shall have been
suspended or limited or minimum prices shall have been established on [either
of] such Exchange or market system, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Final Prospectus (exclusive
of any supplement thereto).
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 6 and 7 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telecopied and confirmed to them, at the address specified
in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 1900 Rexford Road, Charlotte, NC 28211,
attention of the Treasurer, with a copy sent to the Company's counsel, Witt,
Gaither & Whitaker, P.C., at 1100 American National Bank Building, Chattanooga,
Tennessee 37402.
27
<PAGE>
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be
governed by and construed in accordance with the laws of the
State of New York without reference to principles of
conflicts of laws.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
Coca-Cola Bottling Co.
Consolidated,
/s/ William B. Elmore
By: ..........................
Name: William B. Elmore
Title: Vice President & Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Citicorp Securities, Inc.
BancAmerica Securities, Inc.
By: Citicorp Securities, Inc.
/s/ Donald J. Donahue
By: ...........................
Name: Donald J. Donahue
Title: Vice President
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
28
<PAGE>
SCHEDULE I
Underwriting Agreement dated July 1, 1997
Registration Statement No. 33-54657
Representative(s): Citicorp Securities, Inc.
BancAmerica Securities, Inc.
Title, Purchase Price and Description of Securities:
Title: 7.20% Debentures 2009
Principal Amount: $100,000,000
Purchase price (include accrued interest or amortization, if any):
$99,180,000 (99.855% or Principal Amount, less a discount of 0.675%).
Sinking fund provisions: None
Redemption provisions: None
Other provisions: Notwithstanding Section 3, payment will be made by
wire transfer or immediately available funds
Closing Date, Time and Location: 10:00 a.m. New York City Time on July 7,
1997 at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New
York, New York 10019
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: None
Fee:
Minimum principal amount of each contract: $
Maximum aggregate principal amount of all contracts: $
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s): July 15, 1997
Modification of items to be covered by the letter from Price Waterhouse LLP
delivered pursuant to Section 5(e) at the Execution Time: None
<PAGE>
SCHEDULE II
Principal Amount
of Securities to
Underwriters be Purchased
Citicorp Securities, Inc..................... $ 50,000,000
BancAmerica Securities, Inc.................. 50,000,000
-----------
Total................................ $100,000,000
============
Exhibit 4.1
EXECUTION COPY
AMENDMENT NO. 1, dated as of July 22, 1997, to the LOAN AGREEMENT,
dated as of November 20, 1995 (the "Loan Agreement"), among COCA-COLA BOTTLING
CO. CONSOLIDATED, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "Company"); the financial institutions named
therein as lenders (the "Banks"); and LTCB TRUST COMPANY, a trust company
organized under the laws of the State of New York, as agent on behalf of the
Banks (in such capacity, the "Agent").
WHEREAS, pursuant to the Loan Agreement, the Banks have made loans to
the Borrower in an aggregate principal amount of $170,000,000;
WHEREAS, the Company has requested that the Banks agree to extend the
maturity of said loans; and
WHEREAS, the Banks are willing to extend such maturity on the terms
and conditions set forth in this Amendment No. 1;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
SECTION 1. Certain Defined Terms. Except as otherwise expressly
provided in this Amendment No. 1, capitalized terms defined in the Loan
Agreement and used herein shall have their respective defined meanings when used
herein.
SECTION 2. Amendments. Effective upon the Amendment No. 1 Effective
Date (as defined in Section 3 of this Amendment No. 1), the Loan Agreement is
hereby amended as follows:
1. In Section 1.01 of the Loan Agreement, the definition of the term
"Indebtedness" shall be amended to add to the end of clause (a) thereof but
before the semicolon the following phrase:
, except that indebtedness and obligations of the Company or any
Subsidiary of the type described in this clause (a), to the extent
held by the Company or another Subsidiary, shall not be included in
the definition of "Indebtedness" for any purpose of this Agreement
other than Sections 7.11 and 8.07 hereof
2. In Section 1.01 of the Loan Agreement, the definition of the term
"Interim Maturity Date" shall be amended to read in its entirety as follows:
"Interim Maturity Date" shall mean July 22, 2004; provided that
if such date is not a Business Day, the Interim Maturity Date shall be
the next succeeding Business Day, unless such next succeeding Business
Day falls in a subsequent
<PAGE>
calendar month, in which case the Interim Maturity Date shall be the
next preceding Business Day.
3. In Section 1.01 of the Loan Agreement, the definition of the term
"Loan Documents" shall be amended to read in its entirety as follows:
"Loan Documents" shall mean this Agreement (including, without
limitation, Amendment No. 1 hereto), the Notes, the fee letter dated
November 20, 1995 between the Agent and the Company, and the Letter of
Authorization dated April 11, 1997 between the Agent and the Company.
4. In Section 1.01 of the Loan Agreement, the definition of the term
"Maturity Date" shall be amended to read in its entirety as follows:
"Maturity Date" shall mean July 22, 2005; provided that if such
date is not a Business Day, the Maturity Date shall be the next
succeeding Business Day, unless such next succeeding Business Day
falls in a subsequent calendar month, in which case the Maturity Date
shall be the next preceding Business Day.
5. In Section 1.01 of the Loan Agreement, the definition of "Voting
Shares" shall be amended to read in its entirety as follows:
"Voting Shares" shall mean (a) with respect to a corporation,
Capital Stock of the class or classes having general voting power
under ordinary circumstances for the election of the board of
directors, managers or trustees or similar governing body thereof
(irrespective of whether at the time stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency); (b) with respect to a limited
partnership or a general partnership, the interest of each general
partner therein; (c) with respect to a limited liability company, such
membership interests as are empowered either to vote with respect to
the management of such limited liability company or to elect or
appoint the manager of the limited liability company; and (d) with
respect to any other type of entity, such voting interests therein as
may be comparable to the Capital Stock of a corporation of the class
or classes described in clause (a) of this definition (irrespective of
whether at the time interests of any other class or classes shall have
or might have voting power by reason of the happening of any
contingency).
6. In Section 7.02 of the Loan Agreement, each reference to "January
2, 1995" shall be amended to read "December 29, 1996", and each reference to
"July 2, 1995" shall be amended to read "March 30, 1997".
7. Section 7.01 of the Loan Agreement shall be amended to read
in its entirety as follows:
2
<PAGE>
7.01 Existence. Each of the Company and each of its Subsidiaries:
(a) if it is a corporation, is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
and if it is any other type of entity, is duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it has been established; (b) has all requisite power and has all
governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being
conducted; and (c) if it is (1) a limited partnership or a general
partnership, either it or its general partner or general partners (as
required by the law of each applicable jurisdiction) is qualified to
do business in all jurisdictions in which the nature of the business
conducted by the Company or such Subsidiary, as the case may be, makes
such qualification necessary, and (2) any other type of business
entity (including, without limitation, a corporation or a limited
liability company), it is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary. The Company is qualified to do
business in Virginia, Tennessee, North Carolina and South Carolina,
and each of the Subsidiaries listed in Schedule 1 is qualified to do
business in the states indicated for such Subsidiary in Schedule 1.
8. Sections 7.03, 7.08, 7.10, 7.15, 7.18 and 7.19 of the Loan
Agreement are hereby replaced in their entirety as follows:
7.03 Litigation. Except as disclosed in Schedule 2 hereto, there
are no legal or arbitral proceedings or any proceedings by or before
any governmental or regulatory authority or agency, now pending or (to
the best knowledge of the Company) threatened against the Company or
any Subsidiary that could reasonably be expected to have a material
adverse effect on the consolidated financial condition, business or
results of operations taken as a whole, of the Company and its
consolidated Subsidiaries or on the Company's ability to perform its
obligations hereunder and under the Notes.
7.08 ERISA. Each of the Company and the ERISA Affiliates has
fulfilled all obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan, has paid, or, in accordance
with ERISA and the Code, has accrued a liability for, all
contributions requested on behalf of each Multiemployer Plan, is in
compliance in all substantial respects with all applicable provisions
of ERISA and the Code, and has not incurred any liability to the PBGC
in excess of $25,000, except for premiums due, or any Plan or
Multiemployer Plan except for claims for benefits or requirements for
contributions, in either case made in accordance with the terms of
such Plan or Multi-Employer Plan. Except as disclosed in Schedule 3
hereto, there are no disputes relating to ERISA or employee benefits
or relations to which the Company or any of its Restricted
Subsidiaries is a party and which if adversely determined would
subject the Company or any of its Restricted Subsidiaries to any
material liability.
3
<PAGE>
7.10 Ownership. 29.67% of the shares of the Common Stock of the
Company issued and outstanding as of the date hereof are owned, both
beneficially and of record and free and clear of all Mortgages,
directly by The Coca-Cola Company. All such shares of Common Stock
have been legally and validly issued and are fully paid and
non-assessable. Except as disclosed in Schedule 4 hereto, there are no
outstanding options, warrants, rights, agreements, contracts, calls,
commitments or demands of any character obligating or entitling either
the Company or The Coca-Cola Company to sell, issue, redeem or
repurchase any Capital Stock of the Company.
7.15 Voting Agreement. Based upon information furnished to the
Company by the parties to the Voting Agreement (as defined below in
this Section 7.15), pursuant to the terms of a voting agreement among
The Coca-Cola Company, J. Frank Harrison, Jr., J. Frank Harrison, III
and Reid M. Henson, in his capacity as co-trustee of certain trusts
holding shares of the Company's Class B Common Stock, dated January
27, 1989 (the "Voting Agreement"), The Coca-Cola Company granted an
irrevocable proxy with respect to any shares of Class B Common Stock
or Common Stock owned by The Coca-Cola Company and any shares of
Common Stock into which shares of Class B Common Stock are converted
or exchanged to J. Frank Harrison, III, for life, and thereafter to J.
Frank Harrison, Jr. Schedule 4 hereto contains a true and complete (in
all material respects) description of the Voting Agreement.
7.18 Bottle Contracts and Allied Bottle Contracts. The agreements
identified in Schedule 5 are all of the material Bottle Contracts and
Allied Bottle Contracts to which the Company or any Restricted
Subsidiary is a party as of the date hereof. Each Bottle Contract and
Allied Bottle Contract is in full force and effect and the Company and
each of its Restricted Subsidiaries are in substantial compliance with
the terms and conditions applicable to them contained in such Bottle
Contracts and Allied Bottle Contracts.
7.19 Debt Instruments. The agreements identified in Schedule 6
are all of the agreements, bonds, debentures, notes and other
instruments evidencing Debt in an original principal amount of greater
than or equal to $5,000,000 of the Company or any of its Restricted
Subsidiaries and in respect of which any of them is obligated,
directly or contingently, as of the date hereof. Each of the Company
and each of its Subsidiaries is in full compliance with the terms and
conditions applicable to them contained in each such agreement, bond,
debenture, note or other instrument.
9. In Section 8.01(a) of the Loan Agreement, the words "the chief
financial officer of the Company" shall be amended to read "the chief financial
officer or (if authorized by the Company for such function) the vice
president/treasurer of the Company".
10. In Section 8.01(c) of the Loan Agreement, the words "the chief
financial officer of the Company" shall be amended to read "the chief financial
officer or (if authorized by the Company for such function) the vice
president/treasurer of the Company".
4
<PAGE>
11. The heading of Section 8.02 of the Loan Agreement shall be changed
to read "Legal Existence, Etc.", and in clause (a) of said Section, the words
"its corporate existence" shall be amended to read "its legal existence as a
corporation, general partnership, limited partnership or limited liability
company, as the case may be for the Company or such Subsidiary,".
12. The proviso to the first sentence of Section 11.06(b) of the Loan
Agreement shall be amended to read in its entirety as follows:
provided that any assignment of less than the full Commitment, Loans
or Notes held by a Bank, if made to a Person that was not a Bank (or
an affiliate of a Bank) immediately prior to such assignment, shall be
in an aggregate principal amount of not less than $10,000,000.
13. Schedules 1, 2, 3, 4, 5 and 6 to the Loan Agreement are hereby
replaced by Schedules 1, 2, 3, 4, 5, and 6, respectively, to this Amendment No.
1.
14. Each reference in the Loan Agreement to "this Agreement" and the
words "hereof", "herein", "hereto" and the like shall be deemed to refer to the
Loan Agreement as amended by this Amendment No. 1, but references to "the date
hereof" and "the date of this Agreement" shall continue to refer to the date of
the Loan Agreement (being November 20, 1995), except that in the definition of
"Common Stock" in Section 1.01, and in Sections 7.10, 7.18 and 7.19 of the Loan
Agreement, references to "the date hereof" shall refer to the date of this
Amendment No. 1, and in the definition of "Restricted Subsidiary" in Section
1.01, the last reference to "the date hereof" shall refer to the date of this
Amendment No. 1.
SECTION 3. Conditions Precedent. The effectiveness of the amendments
set forth in Section 2 of this Amendment No. 1 is subject to the fulfillment of
the following conditions precedent to the satisfaction of the Agent Bank (the
date on which all of the foregoing conditions are so fulfilled being called the
"Amendment No. 1 Effective Date"):
A. The Agent Bank shall have received each of the following documents,
each of which shall be satisfactory to the Agent in form and substance, and
(except for the New Notes, as defined below) shall be accompanied by sufficient
copies for the Agent and each Bank.
1. Counterparts of this Agreement which, when taken together, bear the
signatures of the Company, the Agent and all of the Banks.
2. New Notes in substantially the form of Exhibit A to this Amendment
No. 1, duly executed and delivered by the Company to the order of each Bank
and otherwise appropriately completed (said Notes being referred to in this
Amendment No. 1 as the "New Notes").
3. An Officers' Certificate (which shall include the signature thereon
of the Secretary of the Company), dated the Amendment No. 1 Effective Date,
containing certified copies of the certificate of incorporation and bylaws
and all other organizing documents of the Company and all corporate action
taken by the Company approving this
5
<PAGE>
Amendment No. 1, the Loan Agreement as amended hereby and the New
Notes and the performance of its obligations hereunder and thereunder
(including, without limitation, a certificate setting forth the resolutions
of the Board of Directors of the Company adopted in respect of the
transactions contemplated hereby and thereby and any shareholder action
taken in respect thereof). The foregoing corporate documents and/or
corporate action shall include evidence of the authority of the vice
president/treasurer of the Company to issue the certificates contemplated
by Sections 8.01(a) and 8.01(c) of the Loan Agreement as amended hereby.
4. Good standing certificates for the Company from the States of
Delaware, Tennessee, Virginia, North Carolina and South Carolina and good
standing certificates for each of the Subsidiaries listed in Schedule 1 to
the Loan Agreement from the states of their respective incorporation and
from each state in which such Subsidiary is doing business, as set forth in
said Schedule 1.
5. An Officers' Certificate (which shall include the signature thereon
of the Secretary of the Company), dated the Amendment No. 1 Effective Date,
in respect of each of the officers who is authorized to sign this Amendment
No. 1 and the New Notes on its behalf.
6. An Officers' Certificate to the effect set forth in Section 3(B)
hereof.
7. An opinion of Witt, Gaither & Whitaker, special counsel to the
Company, substantially in the form of Exhibit B hereto.
8. Evidence of the payment to the Agent of all fees described in the
Letter of Authorization dated April 11, 1997 between the Agent and the
Company.
9. An Officers' Certificate stating that the Senior Debt Rating of the
Company by Moody's is at least Baa3 and by S&P is at least BBB-.
10. Such other opinions and other documents as the Agent or any Bank
may reasonably request.
B. On and as of the Amendment No. 1 Effective Date, and both before
and after giving effect to the amendments provided for in Section 2 hereof, as
of the date of the Loans to be made as part of such borrowing and after giving
effect thereto: (a) no Default or Rating Decline shall have occurred and be
continuing; and (b) the representations and warranties made by the Company in
the Agreement as remade pursuant in Section 4 of this Amendment No.
1 shall be true and correct in all material respects.
SECTION 4. Representations and Warranties. The Borrower hereby
remakes, on and as of the Amendment No. 1 Effective Date, both before and after
giving effect to each of the amendments provided for in this Amendment No. 1,
each of the representations and warranties of the Borrower in the Loan Agreement
as amended hereby and in each other document referred to herein or therein.
6
<PAGE>
SECTION 5. Miscellaneous.
1. Acknowledgment of Principal Amount of Debt. The Company hereby
acknowledges that the Banks have made Loans to it under the Loan Agreement in
the aggregate principal amount of $170,000,000, all of which aggregate principal
amount is outstanding and unpaid on the date hereof.
2. Governing Law. This Amendment No. 1 and the Loan Agreement as
amended hereby shall be governed by, and construed in accordance with, the laws
of the State of New York.
3. Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may executed this Amendment No. 1 by
signing any such counterpart.
4. Full Force and Effect. Except as expressly provided in Section 2 of
this Amendment No. 1, the Loan Agreement shall remain unmodified and in full
force and effect.
5. Expenses. Without limiting the obligations of the Company under the
Loan Agreement, the Company agrees to pay and to reimburse the Agent for paying,
forthwith upon any request therefor by the Agent, all fees and disbursements of
special counsel to the Agent in connection with the preparation, execution,
delivery and administration of this Amendment No. 1, the Loan Agreement as
amended hereby and each of the other documents contemplated hereby and thereby
(including, without limitation, all drafts of documents, whether or not
utilized) and the consummation of the transactions contemplated hereby and
thereby.
6. New Notes. The Company acknowledges and agrees that the New Notes
are "Notes" as defined in the Loan Agreement as amended hereby, and are subject
to all the benefits thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 as of the day and year first above written.
COCA-COLA BOTTLING CO. CONSOLIDATED
By /s/ William B. Elmore
Title: Vice President & Treasurer
LTCB TRUST COMPANY, as Agent
By /s/ John A. Krob
Title: Senior Vice President
7
<PAGE>
LTCB TRUST COMPANY, as lender
By /s/ John A. Krob
Title: Senior Vice President
SUNTRUST BANK, as lender
By /s/ Charles J. Johnson
Title: Vice President
By /s/ Donald M. Lynch
Title: Group Vice President
THE SAKURA BANK, LIMITED, as lender
By /s/ Toshihiko Ogata
Title: Joint General Manager
DEUTSCHE GENOSSENSCHAFTSBANK, as lender
By /s/ William J. Bartlett
Title: Assistant Vice President
By /s/ Bobby Ryan Oliver, Jr.
Title: Assistant Vice President
<PAGE>
CREDIT LYONNAIS CAYMAN ISLANDS
BRANCH, as lender
By /s/ David M. Cause
Title: First Vice President
SOCIETE GENERALE, as lender
By /s/ Richard M. Lewis
Title: Vice President
THE CHIBA BANK, LTD., as lender
By /s/ Masamichi Abe
Title: General Manager
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as lender
By /s/ Kazuo Iida
Title: General Manager
Exhibit 4.2
Unless this certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
COCA-COLA BOTTLING CO. CONSOLIDATED
7.20% DEBENTURES DUE 2009
CUSIP No. 191098 AC6
(Hereinafter "Securities")
$100,000,000
COCA-COLA BOTTLING CO. CONSOLIDATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of One Hundred Million Dollars
($100,000,000) on July 1, 2009, and to pay interest thereon from July 7,1997 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on January 1 and July 1 in each year,
commencing January 1, 1998 at the rate of 7.20% per annum, until the principal
hereof is paid or made available for payment, and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of 7.20% per
annum on any overdue principal and premium and on any overdue installment of
interest. Interest payments on this Security will be calculated on the basis of
a 360-day year consisting of twelve 30-day months. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the December 15 or
June 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 11 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
Payment of the principal of (and premium, if any) and any such interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
<PAGE>
The defeasance provisions of Sections 1302 and 1303 of the Indenture
will apply to this Debenture.
This Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of July 20, 1994, as supplemented and restated by a Supplemental Indenture
dated March 3, 1995 (as supplemented, herein called the "Indenture"), between
the Company and NationsBank of Georgia, National Association, as Trustee (herein
called the "Trustee", which term includes Citibank, N.A., which succeeded to all
of the rights, powers, duties and obligations of the initial trustee under the
Indenture by agreement of all parties, effective September 15, 1995, as well as
any subsequent successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof limited in aggregate
principal amount to $100,000,000.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the right of the Holder of this
Security, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
<PAGE>
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiples of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: July 7, 1997
Certificate of Authentication:
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Citibank, N.A., as Trustee
/s/ Wafaa Orfy
By: ____________________________
Authorized Officer
COCA-COLA BOTTLING CO. CONSOLIDATED
/s/ David V. Singer
By: ____________________________
David V. Singer
Chief Financial Officer
Attest:
/s/ Patricia A. Gill
----------------------------
Patricia A. Gill
Assistant Secretary
[SEAL]
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------
(Name and address of assignee, including zip code, must be printed
or typewritten)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
the within Debenture, and all rights thereunder, hereby irrevocably
constituting and appointing
- ---------------------------------------------------------------------------
Attorney to transfer said Debenture on the books of the within Company, with
full power of substitution in the premises.
Dated:__________________ _______________________________
NOTICE: The signature to this assignment must
correspond with the name as it appears
upon the face of the within or attached
Debenture in every particular, without
alteration or enlargement or any change
whatever.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> *
This schedule contains summary financial information extracted from
the financial statements as of and for the six months ended June 29, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> JUN-27-1997
<CASH> 3,733
<SECURITIES> 0
<RECEIVABLES> 52,517
<ALLOWANCES> 420
<INVENTORY> 37,265
<CURRENT-ASSETS> 124,638
<PP&E> 422,391
<DEPRECIATION> 170,982
<TOTAL-ASSETS> 780,861
<CURRENT-LIABILITIES> 89,130
<BONDS> 515,847
0
0
<COMMON> 12,055
<OTHER-SE> (4,724)
<TOTAL-LIABILITY-AND-EQUITY> 780,861
<SALES> 386,569
<TOTAL-REVENUES> 389,569
<CGS> 213,843
<TOTAL-COSTS> 213,843
<OTHER-EXPENSES> 138,734
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,509
<INCOME-PRETAX> 14,698
<INCOME-TAX> 5,453
<INCOME-CONTINUING> 9,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,245
<EPS-PRIMARY> 1.09
<EPS-DILUTED> 0.00
</TABLE>
