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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 01-09300
[Coca-Cola Enterprises Inc. Logo]
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 58-0503352
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
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ONE COCA-COLA PLAZA, N.W., ATLANTA, GEORGIA 30313
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(404) 676-2100
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Securities registered pursuant to Section 12(b) of the Act:
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NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock, par value $1.00 per share New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports 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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of Common Stock held by nonaffiliates of the
registrant as of March 3, 1995 was $1,222,113,322.
There were 128,932,299 shares of Common Stock outstanding as of March 3,
1995.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Share Owners for the year
ended December 31, 1994, are incorporated by reference in Parts II and IV.
Portions of the registrant's Proxy Statement for the Annual Meeting of
Share Owners to be held on April 17, 1995 are incorporated by reference in Part
III hereof.
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TABLE OF CONTENTS
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PART I
ITEM 1. BUSINESS....................................................... 1
Introduction................................................. 1
Relationship with The Coca-Cola Company...................... 2
Acquisitions and Divestitures................................ 3
Territories.................................................. 3
Products..................................................... 4
Marketing.................................................... 4
Raw Materials................................................ 4
Domestic Bottle Contracts.................................... 5
International Bottler's Agreement............................ 9
Competition.................................................. 10
Employees.................................................... 10
Governmental Regulation...................................... 10
ITEM 2. PROPERTIES..................................................... 12
ITEM 3. LEGAL PROCEEDINGS.............................................. 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............ 14
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY.............................. 14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS........................................................ 17
ITEM 6. SELECTED FINANCIAL DATA........................................ 17
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.......................................... 17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................... 17
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE........................................... 18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT..................................................... 18
ITEM 11. EXECUTIVE COMPENSATION......................................... 18
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT..................................................... 18
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................. 18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K............................................................ 19
SIGNATURES..................................................... 24
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PART I
ITEM 1. BUSINESS
INTRODUCTION
Coca-Cola Enterprises Inc. (the "Company") is in the liquid nonalcoholic
refreshment business and is the world's largest marketer, distributor, and
producer of bottled and canned beverage products of The Coca-Cola Company.
The Company was incorporated in Delaware in 1944 as a wholly owned
subsidiary of The Coca-Cola Company and became a public company in 1986. The
Coca-Cola Company owns approximately 44% of the Company's common stock.
References in this report to the "Company" include the Company and its divisions
and subsidiaries.
The Company's bottling territories, including those acquired in January
1995 (see "Acquisitions and Divestitures" and "Territories" below), contain
approximately 154 million people. The Company sold approximately 1.7 billion
equivalent cases(1) of beverage product throughout its territories in 1994,
approximately 90% of which were beverage products of The Coca-Cola Company.
In the United States, the Company operates in exclusive and perpetual
territories containing approximately 54% of the population and accounting for
approximately 55% of all equivalent cases of bottled and canned products of The
Coca-Cola Company sold. These territories include the five states with the
largest population increases from 1990 to 1994 -- California, Texas, Florida,
Georgia, and Washington.
Domestic Operations
Management estimates that the Company's 1994 total case sales of soft drink
products in the United States and the Caribbean were approximately 1.6 billion
equivalent cases or approximately 18% of the estimated total 1994 case sales of
soft drink products by all bottlers and fountain distributors.
In 1994, approximately 70% of the equivalent case sales of the Company,
excluding products in post-mix (fountain) form, were Coca-Cola Trademark
Beverages,(2) approximately 19% were other beverage products of The Coca-Cola
Company and approximately 11% were beverage products of companies other than The
Coca-Cola Company. The Company's equivalent case sales of products in bottles
and cans, including products of companies other than The Coca-Cola Company,
constituted approximately 86% of the equivalent case sales of the Company in
1994. The remaining 14% of the Company's equivalent case sales in 1994 were in
post-mix form for fountain sales.
The Netherlands Operations
In 1994, The Company's subsidiary in the Netherlands, Coca-Cola Beverages
Nederland B.V. ("CCB Nederland"), sold approximately 80 million equivalent
cases, approximately 99% of which were beverage products of The Coca-Cola
Company.
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(1) As used in this report, the term "equivalent case" refers to 192 ounces of
finished beverage product (24 eight-ounce services).
(2) As used in this report, the term "Coca-Cola Trademark Beverages" refers to
beverages bearing the trademarks "Coca-Cola" or "Coke", and "beverage
products of The Coca-Cola Company" refers collectively to the Coca-Cola
Trademark Beverages and all other beverage products of The Coca-Cola
Company.
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Strategy
The Company expects to accomplish its primary goal -- the enhancement of
share-owner value -- through the implementation and execution of operating and
financial strategies designed to build the value of the Company.
The Company's principal operating goal is to increase long-term operating
cash flow through profitable increases in sales volume. The increased complexity
of the Company's business drives the Company's strategy of developing and
executing innovative marketing programs at the local level. The increased
competitiveness of its business dictates the Company's strategy to obtain
profitable increases in case sales by balancing volume growth with improved
margins and sustainable increases in market share. The realization of short-term
profitability at the expense of market share is inconsistent with the Company's
strategy. The Company intends to increase volume through profitable business
partnerships with its customers and superior marketing to its consumers.
The Company's financial strategies are designed to add value through the
allocation of funds to projects and activities which generate returns in excess
of the Company's cost of capital and which increase share-owner value. One of
the Company's primary financial objectives is to achieve an optimal capital
structure which provides financial flexibility for internal projects, share
repurchases, and appropriately priced acquisitions.
RELATIONSHIP WITH THE COCA-COLA COMPANY
The Coca-Cola Company is the Company's largest share owner. The Chairman of
the Board of Directors and three other directors of the Company are executive
officers or former executive officers of The Coca-Cola Company.
The Company and The Coca-Cola Company are parties to a number of
significant transactions and agreements incident to their respective businesses
and may enter into additional material transactions and agreements from time to
time in the future.
The Company conducts its business primarily under contracts with The
Coca-Cola Company. These contracts give the Company the exclusive right to
market, distribute, and produce beverage products of The Coca-Cola Company in
authorized bottles and cans in specified territories and provide The Coca-Cola
Company with the ability, in its sole discretion, to establish prices, terms of
payment, and other terms and conditions for the purchase of concentrates and
syrups from The Coca-Cola Company. See "Domestic Bottle Contracts" and
"International Bottler's Agreement" below. Other significant transactions and
agreements relate to, among other things, arrangements for cooperative
marketing, advertising expenditures, and purchases of sweeteners.
Since 1979, The Coca-Cola Company has assisted in the transfer of ownership
or financial restructuring of a majority of its United States bottler operations
and has assisted in similar transfers of bottlers operating outside the United
States. Certain bottlers and interests therein have been acquired by The
Coca-Cola Company and certain of those have been sold to bottlers, including the
Company, which are believed by management of The Coca-Cola Company to be the
best suited to manage and develop these acquired operations. The Coca-Cola
Company has advised the Company that it may continue to acquire bottling
companies or interests therein and to assist in the sale of acquired bottlers to
other bottlers, which may or may not include the Company, viewed as those best
suited to promote the interests of The Coca-Cola Company and the Coca-Cola
bottler system. In connection with such transactions, The Coca-Cola Company may
own all or part of the equity interests of acquired bottlers for varying periods
of time. See "Acquisitions and Divestitures" below and "Certain Relationships
and Related Transactions -- Agreements and Transactions with The Coca-Cola
Company -- Purchase of Coca-Cola Bottlers" in the Company's Proxy Statement for
the Annual Meeting of Share Owners to be held April 17, 1995 (the "Company's
1995 Proxy Statement"), which information is incorporated by reference in Item
13 hereof.
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The Company intends to acquire only bottling businesses offering the
Company the ability to produce long-term share-owner value.
ACQUISITIONS AND DIVESTITURES
During 1994, the Company acquired 4% of the outstanding stock of The
Coca-Cola Bottling Company of New York, Inc., additional shares of the preferred
stock of Southeastern Container, Inc. (a packaging manufacturer), Dr Pepper
franchise rights in Yuma, Arizona, and the Coca-Cola Bottling Company of
Shelbyville in Shelbyville, Kentucky. For these acquisitions, the Company paid
an aggregate cost, including assumed and issued debt, where applicable, of
approximately $21 million. In January 1995, the Company purchased The Wichita
Coca-Cola Bottling Company, having territories in Kansas, Colorado, Nebraska,
and Missouri, for $150 million. The total cost of acquisitions since
reorganization in 1986, including assumed and issued debt, where applicable, is
approximately $5.6 billion.
Since reorganization in 1986, the aggregate proceeds to the Company from
the sale of bottlers and other businesses have been approximately $456 million;
of this amount, bottlers representing sales proceeds of approximately $404
million were reacquired by the Company in 1991 as a result of the acquisition of
Johnston Coca-Cola Bottling Group, Inc. ("Johnston Coca-Cola"), now a subsidiary
of the Company. In 1994, the Company sold assets of an office coffee service in
Madison, Wisconsin, vending assets in Jonesboro, Arkansas, and in January 1995,
the Company sold its 50% interest in a Mississippi bottler; aggregate proceeds
from such sales in 1994 and 1995 were approximately $18 million.
TERRITORIES
The Company's bottling territories in the United States, including
territories acquired in January 1995, and the Caribbean, include portions of 38
states, and all of the District of Columbia, the U.S. Virgin Islands, and the
islands of Tortola and Grand Cayman. These territories contain approximately 139
million people and include approximately 54% of the United States population.
Between 1990 and 1994, population in the territories in the United States in
which the Company operates increased by approximately 5.4%, as compared to an
increase of 4.4% for the general United States population during the same
period.
The Company's territory in the Netherlands has a population of
approximately 15 million people.
The following maps identify the territories in which the Company operates:
Appearing here are maps of the
United States, a portion of the Caribbean
and a portion of Western Europe,
outlining the Company's territories.
(MAPS ARE NOT TO SAME SCALE)
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PRODUCTS
The Company markets, distributes, and produces beverage products of The
Coca-Cola Company; these products include Coca-Cola, Coca-Cola classic, caffeine
free Coca-Cola classic, diet Coke, caffeine free diet Coke, Sprite, diet Sprite,
Cherry Coke, diet Cherry Coke, Fanta, Fresca, Fruitopia, Hi-C fruit drinks,
Mello Yello, Minute Maid, and diet Minute Maid brand carbonated and
noncarbonated soft drinks, Mr. PiBB, diet Mr. PiBB, PowerAde, Ramblin' root
beer, and TAB. Additionally, the Company markets, distributes, and produces (or
obtains from contract packers) Nestea, diet Nestea, and Nestea Cool under
license from Coca-Cola Nestle Refreshments Company, USA and various noncola
beverage products under the trademarks of companies other than The Coca-Cola
Company, including, in some markets, Dr Pepper. Substantially all of the
Coca-Cola Trademark Beverages, as well as TAB, Sprite, Minute Maid, and diet
Minute Maid carbonated orange beverages, are available throughout the Company's
domestic territories. Other products of The Coca-Cola Company and of other
companies are available in selected territories. Certain of the Company's
locations supply product to other Coca-Cola bottlers and major fountain
accounts.
The Coca-Cola Company and other companies manufacture concentrates, and in
some cases the finished product, for sale to bottlers and to fountain
wholesalers. Bottling and canning operations combine the concentrate with
sweetener and carbonated water, and package the finished product in authorized
bottles, cans, and post-mix containers for sale to retailers. The Company
obtains certain products, such as PowerAde, Nestea, and Fruitopia, from contract
packers. See "Marketing" and "Raw Materials" below.
Approximately 70% of the Company's domestic equivalent case sales in 1994
(excluding post-mix) represented caloric products and the balance represented
low-calorie products.
MARKETING
The Company sells its products in a variety of packages authorized by The
Coca-Cola Company and other companies. In 1994, domestic and international
equivalent case sales of the Company, excluding post-mix syrup sales, were
packaged approximately 59% in cans, 36% in nonrefillable packaging, 4% in
returnable containers, and 1% in pre-mix containers. Post-mix syrup accounted
for approximately 13% of the Company's equivalent case sales in 1994.
The Company relies extensively on advertising and sales promotion in the
marketing of its products. The Coca-Cola Company and the other beverage
companies that supply concentrates, syrups, and finished product to the Company
join in making substantial advertising expenditures in all major media to
promote sales in the local areas served by the Company. The Company also
benefits from national advertising programs conducted by The Coca-Cola Company
and other beverage companies. In 1994, the Company's local media advertising
expenditures were approximately $34 million, in addition to cooperative media
advertising payments by The Coca-Cola Company of approximately $41 million.
Certain of the marketing expenditures by The Coca-Cola Company are made pursuant
to annual arrangements between The Coca-Cola Company and the Company. Although
The Coca-Cola Company has advised the Company that it intends to continue to
provide marketing support in 1995, it is not obligated to do so under either the
domestic or international bottle contracts between The Coca-Cola Company and the
Company. See "Domestic Bottle Contracts" and "International Bottler's Agreement"
below.
Sales of the Company's products are seasonal, with the second and third
calendar quarters generally accounting for higher sales volumes than the first
and fourth quarters.
RAW MATERIALS
In addition to concentrates, sweeteners, and finished product, the Company
purchases carbon dioxide, glass and plastic bottles, cans, closures, post-mix
packaging (such as plastic bags in cardboard boxes), and other packaging
materials. The Company generally purchases its raw
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materials, other than concentrates, syrups, and sweeteners, from multiple
suppliers. The bottle contracts with The Coca-Cola Company provide that, with
respect to the products of The Coca-Cola Company, all authorized containers,
closures, cases, cartons, and other packages and labels must be purchased from
manufacturers approved by The Coca-Cola Company.
High fructose corn syrup currently is the principal sweetener of the
beverage products, other than low-calorie products, of The Coca-Cola Company.
The Company and The Coca-Cola Company have entered into arrangements for the
purchase by the Company from The Coca-Cola Company of substantially all of the
Company's requirements for sweeteners for 1995. See "Certain Relationships and
Related Transactions -- Agreements and Transactions with The Coca-Cola
Company -- Sweetener Requirements Agreement" in the Company's 1995 Proxy
Statement, which information is incorporated by reference in Item 13 hereof. The
Company does not separately purchase low-calorie sweeteners because sweeteners
for the low-calorie beverage products of The Coca-Cola Company are contained in
the concentrate purchased by the Company from The Coca-Cola Company.
The Company currently purchases a significant portion of its requirements
for plastic bottles from companies jointly owned by it and other Coca-Cola
bottlers. Management of the Company believes that ownership interests in certain
suppliers and the self-manufacture of certain packages serve to reduce or
contain costs.
There are no materials or supplies used by the Company which are currently
in short supply, although the supply of specific materials could be adversely
affected by strikes, weather conditions, governmental controls, or national
emergencies.
DOMESTIC BOTTLE CONTRACTS
The Company purchases concentrate and syrup from The Coca-Cola Company and
markets, distributes, and produces the principal liquid nonalcoholic refreshment
products in its territories within the United States under two basic forms of
bottle contracts with The Coca-Cola Company: bottle contracts that cover the
Coca-Cola Trademark Beverages (the "Cola Bottle Contracts") and bottle contracts
that cover other carbonated beverages of The Coca-Cola Company (the "Allied
Bottle Contracts") (herein referred to collectively as the "Bottle Contracts").
See "Introduction" and "Products" above. The Company and each of its wholly
owned bottling company subsidiaries are parties to one or more separate Cola
Bottle Contracts and to various Allied Bottle Contracts. In this section, unless
the context indicates otherwise, a reference to the Company refers to the legal
entity, which may be either the Company or one of its bottling company
subsidiaries, which is a party to the Bottle Contracts with The Coca-Cola
Company.
The Cola Bottle Contracts
The Cola Bottle Contracts provide that the Company will purchase its entire
requirements of concentrates and syrups for Coca-Cola Trademark Beverages from
The Coca-Cola Company at prices, terms of payment, and other terms and
conditions of supply, as determined from time to time by The Coca-Cola Company
in its sole discretion. The Company has the exclusive right to distribute
Coca-Cola Trademark Beverages for sale in its territories in authorized
containers. The Coca-Cola Company may determine, from time to time in its sole
discretion, what types of containers to authorize for use with products of The
Coca-Cola Company.
Pursuant to the Cola Bottle Contracts, The Coca-Cola Company annually
establishes the prices charged to the Company for concentrates and syrups for
Coca-Cola Trademark Beverages. The Company expects that net prices charged by
The Coca-Cola Company in 1995 for syrup and concentrates will increase
approximately 2.7% as compared to 1994 prices. The Coca-Cola Company has no
rights under the Bottle Contracts to establish the resale prices at which the
Company sells its products.
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The Company is obligated to maintain such plant and equipment, staff,
distribution, and vending facilities as are capable of manufacturing, packaging,
and distributing Coca-Cola Trademark Beverages in accordance with the Cola
Bottle Contracts and in sufficient quantities to satisfy fully the demand for
these beverages in its territories; to undertake adequate quality control
measures prescribed by The Coca-Cola Company; to develop and stimulate the
demand for Coca-Cola Trademark Beverages in those territories; to use all
approved means, and spend such funds on advertising and other forms of
marketing, as may be reasonably required to satisfy that objective; and to
maintain such sound financial capacity as may be reasonably necessary to assure
performance by the Company and its affiliates of their obligations to The
Coca-Cola Company. The Company is required to meet annually with The Coca-Cola
Company to present plans for the following year that set out in reasonable
detail its marketing, management, and advertising plans with respect to the
Coca-Cola Trademark Beverages for the year, including financial plans showing
that the Company and all of its bottler affiliates have the consolidated
financial capacity to perform their duties and obligations to The Coca-Cola
Company. The Coca-Cola Company may not unreasonably withhold approval of such
plans. If the Company carries out its plans in all material respects, it will be
deemed to have satisfied its obligations to develop, stimulate, and satisfy
fully the demand for the Coca-Cola Trademark Beverages and to maintain the
requisite financial capacity. Failure to carry out such plans in all material
respects would constitute an event of default that, if not cured or waived by
The Coca-Cola Company within 120 days of notice of the failure, would give The
Coca-Cola Company the right to terminate the Cola Bottle Contract. If the
Company at any time fails to carry out a plan in all material respects in any
geographic segment of its territory, and if such failure is not cured within six
months after notice of the failure, The Coca-Cola Company may reduce the
territory covered by that Cola Bottle Contract by eliminating the portion of the
territory with respect to which such failure has occurred.
The Coca-Cola Company has no obligation under the Bottle Contracts to
participate with the Company in expenditures for advertising and marketing, but
it may, in its discretion, contribute to such expenditures and undertake
independent advertising and marketing activities, as well as cooperative
advertising and sales promotion programs, that would require the cooperation and
support of the Company. Although The Coca-Cola Company has advised the Company
that it intends to continue to provide various forms of marketing support in
1995 at a comparable level of support as provided in 1994, it is not obligated
to do so under the Bottle Contracts.
If the Company acquires control, directly or indirectly, of any bottler of
Coca-Cola Trademark Beverages in the United States, or any party controlling a
bottler of Coca-Cola Trademark Beverages in the United States, the Company must
cause the acquired bottler to amend its bottle contract for the Coca-Cola
Trademark Beverages to conform to the terms of the Cola Bottle Contract
described above.
The Cola Bottle Contracts are perpetual, except for the contract covering
the U.S. Virgin Islands and the islands of Tortola and Grand Cayman, which has a
term of five years, after which the Company may request an additional five-year
extension, to be granted at the sole discretion of The Coca-Cola Company. All
Cola Bottle Contracts are subject to termination by The Coca-Cola Company in the
event of default by the Company. Events of default with respect to each Cola
Bottle Contract include: (i) production or sale of any cola product not
authorized by The Coca-Cola Company; (ii) insolvency, bankruptcy, dissolution,
receivership, or the like; (iii) any disposition by the Company of any voting
securities of any bottling company without the consent of The Coca-Cola Company;
and (iv) any material breach of any obligation of the Company under the Cola
Bottle Contract that remains uncured for 120 days after notice by The Coca-Cola
Company. If any Cola Bottle Contract is terminated, The Coca-Cola Company has
the right to terminate all other Cola Bottle Contracts held by the bottler which
is a party to the terminated contract, as well as the Cola Bottle Contracts of
any other entity which such bottler controls.
In addition, each Cola Bottle Contract held by the Company provides that
The Coca-Cola Company has the right to terminate that Cola Bottle Contract if a
person or affiliated group (with
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specified exceptions) acquires or obtains any contract, option, conversion
privilege, or other right to acquire, directly or indirectly, beneficial
ownership of more than 10% of any class or series of voting securities of the
Company; however, The Coca-Cola Company has agreed with the Company that this
provision will not apply with respect to the ownership of any class or series of
voting securities of the Company, although it would apply to the voting
securities of each bottling company subsidiary.
The provisions of the Cola Bottle Contracts of the Company which make it an
event of default to dispose of any Cola Bottle Contract or voting securities of
any bottling company subsidiary without the consent of The Coca-Cola Company and
which prohibit the assignment or transfer of the Cola Bottle Contracts are
designed to preclude any person not acceptable to The Coca-Cola Company from
obtaining an assignment of a Cola Bottle Contract or from acquiring any voting
securities of the Company's bottling subsidiaries. These provisions will prevent
the Company from selling or transferring any of its interest in any bottling
operations without the consent of The Coca-Cola Company. These provisions may
also make it impossible for the Company to benefit from certain transactions,
such as mergers or acquisitions, involving any of the bottling operations that
might be beneficial to the Company and its share owners but which are not
acceptable to The Coca-Cola Company.
Supplementary Agreement
In addition to the Cola Bottle Contracts with The Coca-Cola Company
described above, the Company is a party to a supplementary agreement (the
"Supplementary Agreement") with The Coca-Cola Company regarding the exercise by
The Coca-Cola Company of its rights under the Bottle Contracts. Pursuant to the
Supplementary Agreement, The Coca-Cola Company has agreed to exercise good faith
and fair dealing under the Bottle Contracts; offer marketing support and
exercise its rights under the Bottle Contracts in a manner consistent with its
dealings with comparable bottlers; offer to the Company any material written
amendment to such Bottle Contracts which it offers to any other bottler; and,
subject to certain limitations, sell syrups and concentrates to the Company at
prices not greater than those charged to other bottlers which are parties to
agreements substantially similar to the Bottle Contracts. The Supplementary
Agreement provides for a term expiring on March 15, 1999 and may be terminated
by The Coca-Cola Company upon 30 days' notice in the event that The Coca-Cola
Company should cease to own more than 40% of the Company's outstanding common
stock.
The Allied Bottle Contracts
The Allied Bottle Contracts contain provisions that are similar to those of
the Cola Bottle Contracts with respect to pricing, authorized containers,
planning, quality control, transfer restrictions, and related matters, and grant
similar exclusive rights with respect to the distribution of beverages of The
Coca-Cola Company which are neither Coca-Cola Trademark Beverages nor, except
for Hi-C fruit drinks, noncarbonated beverages (the "Allied Beverages") for sale
in authorized containers in specified territories. Under the Allied Bottle
Contracts, the Company likewise has advertising, marketing, and promotional
obligations, but without restriction as to the marketing of competitive products
as long as there is no manufacturing or handling of other products that would
imitate, infringe upon, or cause confusion with, the products of The Coca-Cola
Company. The Coca-Cola Company has the right to discontinue any or all Allied
Beverages, and the Company has a right, but not an obligation, under each of the
Allied Bottle Contracts (except under the Allied Bottle Contracts for Hi-C fruit
drinks and carbonated Minute Maid beverages) to elect to market any new beverage
introduced by The Coca-Cola Company under the trademarks covered by the
respective Allied Bottle Contracts. The Allied Bottle Contracts each have a term
of ten years and are renewable by the bottler for an additional ten years at the
end of each term. The initial term for most of the Company's Allied Bottle
Contracts will expire in 1996 and subsequent years. The Allied Bottle Contracts
are subject to termination in the event of default by the Company. The Coca-Cola
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Company may terminate an Allied Bottle Contract in the event of: (i) insolvency,
bankruptcy, dissolution, receivership, or the like; (ii) termination of the Cola
Bottle Contract of the Company by either party for any reason; or (iii) any
material breach of any obligation of the Company under the Allied Bottle
Contract that remains uncured for 120 days after notice by The Coca-Cola
Company.
Noncarbonated Beverage Agreements
The Company purchases certain noncarbonated beverages such as isotonic,
tea, and fruit drinks in finished form from The Coca-Cola Company, or its
designees, pursuant to Marketing and Distribution Agreements ("Noncarbonated
Beverage Agreements"). The Noncarbonated Beverage Agreements have some
significant differences from the Cola Bottle Contracts.
The Noncarbonated Beverage Agreements each have a term of ten years and are
renewable by the Company for an additional ten years at the end of each term.
The initial term for most of the Noncarbonated Beverage Agreements for PowerAde
will expire in 2004. Unlike the Cola Bottle Contracts, which grant the Company
exclusivity in the distribution of the covered beverages in the territory, the
Noncarbonated Beverage Agreements permit The Coca-Cola Company to test market
noncarbonated beverage products in the territory, subject to the Company's right
of first refusal to do so, and to sell noncarbonated beverages to commissaries
for delivery to retail outlets in the territory where noncarbonated beverages
are consumed on premise, such as restaurants. The Coca-Cola Company shall pay
the Company certain fees for lost volume, delivery, and taxes in the event of
such commissary sales.
The Coca-Cola Company, in its sole discretion, sets the pricing the Company
must pay for noncarbonated beverages but has agreed, under certain
circumstances, to give the Company the benefit of more favorable pricing if
offered to other Coca-Cola bottlers. Under the Noncarbonated Beverage Agreements
for PowerAde, the Company may not sell other isotonic beverages.
In general, except as set forth above, the Noncarbonated Beverage
Agreements contain provisions similar to those in the Bottle Contracts with
respect to pricing, planning, quality control, marketing, and promotional
obligations.
Post-Mix Marketing, Fountain Appointments, and Other Similar Arrangements
The Company has in the past sold and delivered the post-mix products of The
Coca-Cola Company pursuant to one-year post-mix distributorship appointments. In
1994, the Company sold and/or delivered such post-mix products in most of its
major markets. Under the terms of the appointments, the Company is authorized to
distribute such syrups to retailers for dispensing to consumers within the
United States. The appointments are terminable by either party without cause
upon ten days' written notice. Unlike the Bottle Contracts, there is no
exclusive territory, and the Company faces competition not only from sellers of
other post-mix syrups but from other sellers of post-mix syrups of The Coca-Cola
Company (including The Coca-Cola Company). Depending on the market, the Company
is involved in the sale, distribution, and marketing of post-mix syrups in
differing degrees. In some markets, the Company sells syrup on its own behalf,
but the primary responsibility for marketing lies with The Coca-Cola Company. In
other territories, the Company is responsible for marketing post-mix syrup to
certain segments of the market. See "Certain Relationships and Related
Transactions -- Agreements and Transactions with The Coca-Cola Company -- Agency
Billing and Delivery Arrangements" in the Company's 1995 Proxy Statement, which
information is incorporated by reference in Item 13 hereof.
Other Bottle Agreements
The bottle agreements between the Company and other licensors of beverage
products and syrups generally give those licensors the unilateral right to
change the prices for their products and syrups at any time in their sole
discretion. Some of these bottling agreements have limited terms of appointment
and, in most instances, prohibit the bottler from dealing in competitive
products. Those
8
<PAGE>
agreements contain restrictions generally similar in effect to those in the Cola
Bottle Contracts as to trade names, approved bottles, cans and labels, sale of
imitations, and cause for termination.
INTERNATIONAL BOTTLER'S AGREEMENT
CCB Nederland operates in the Netherlands under a Bottler's Agreement dated
December 14, 1992 (the "International Bottler's Agreement") with The Coca-Cola
Company; this agreement has some significant differences from the domestic
Bottle Contracts.
The International Bottler's Agreement expires September 30, 1998, unless
terminated earlier as provided therein. If CCB Nederland has fully complied with
the agreement during the initial term, is "capable of the continued promotion,
development, and exploitation of the full potential of the business" and
requests an extension of the agreement, an additional ten-year term may be
granted at the sole discretion of The Coca-Cola Company. The Coca-Cola Company
is given the right to terminate the International Bottler's Agreement before the
expiration of the stated term upon the insolvency, bankruptcy, nationalization,
or similar condition of CCB Nederland or the occurrence of a default under the
International Bottler's Agreement which is not remedied within 60 days of notice
of the default being given by The Coca-Cola Company. The International Bottler's
Agreement may be terminated by either party in the event foreign exchange is
unavailable or local laws prevent performance.
CCB Nederland has the exclusive right within the Netherlands to sell the
beverages covered by the International Bottler's Agreement in refillable glass
and PET bottles. The covered beverages include the Coca-Cola Trademark and
Allied Beverages. The Coca-Cola Company has retained the rights to produce and
sell, or authorize third parties to produce and sell, the beverages in any other
manner or form, including cans, within the territory. CCB Nederland has been
granted a nonexclusive authorization to purchase finished product in cans from
The Coca-Cola Company or its designee and to distribute them within its
territory. This authorization is granted in connection with the International
Bottler's Agreement and expires on September 30, 1998, with a provision for an
extension of five years at the discretion of The Coca-Cola Company. The
Coca-Cola Company has granted CCB Nederland a nonexclusive authorization to
package and sell post-mix and pre-mix beverages in the territory; this
authorization is terminable by either party with 90 days' prior notice.
CCB Nederland is prohibited from making sales of the beverages outside of
its territory, or to anyone intending to resell the beverages outside the
territory, without the consent of The Coca-Cola Company, except for sales
arising out of an order from a customer in another member state of the European
Union or for export to another such member state. The International Bottler's
Agreement contemplates that there may be instances in which large or special
buyers have operations transcending the boundaries of CCB Nederland's
territories, and in furtherance of this, CCB Nederland and The Coca-Cola Company
are cooperating in sales to such buyers.
The Company believes that the International Bottler's Agreement is
substantially similar to other agreements between The Coca-Cola Company and
European bottlers of Coca-Cola Trademark and Allied Beverages.
Similar to the Bottle Contracts under which the Company and its other
subsidiaries operate, the International Bottler's Agreement provides that the
sales of beverage base and other goods to CCB Nederland are at prices which are
set from time to time by The Coca-Cola Company. The Company expects that net
prices charged in 1995 by The Coca-Cola Company for syrup, concentrate, and
other goods will increase approximately 4% over 1994 prices.
The Coca-Cola Company has no commitment to provide marketing support under
the International Bottler's Agreement, but it has done so in the past and has
advised CCB Nederland that it intends to continue marketing support to CCB
Nederland in 1995 at a similar level as provided in 1994.
9
<PAGE>
COMPETITION
The liquid nonalcoholic refreshment business is highly competitive. Soft
drinks compete with coffee, water, milk, beer, wine, sports drinks, bottled
waters, tea, and juices as well as with noncarbonated soft drinks, citrus and
noncitrus fruit drinks and other beverages. Competitors in this business include
bottlers and distributors of nationally advertised and marketed products,
regionally advertised and marketed products, and chain store and private label
beverages. The Company estimates that in 1994 the products of The Coca-Cola
Company represented approximately 34% of total food store soft drink sales in
all domestic territories in which the Company operates, and that those of
PepsiCo, Inc. represented approximately 30%. The Company also estimates that in
each of its domestic territories, between 50% and 70% of food store soft drink
sales are accounted for by the Company and its major competitor, which in most
territories is the bottler of the soft drink products of PepsiCo, Inc.
Brand recognition and pricing are significant factors affecting the
Company's competitive position, and the trademarks associated with its products
are the most favorable factor for the Company. Other competitive factors among
bottlers are marketing, distribution methods, service to the trade and the
management of sales promotion activities. Vending machine sales, packaging
changes and contracts with fountain customers are also competitive factors.
The introduction of new products has been another major competitive element
in the liquid nonalcoholic refreshment industry. The Company expects The
Coca-Cola Company to introduce an increasing number of new "alternative"
beverages during 1995. These products include teas, fruit drinks, "natural"
sodas, and bottled waters.
EMPLOYEES
As of March 1, 1995, the Company had approximately 30,000 employees, about
850 of whom are in the Netherlands. The Company is a party to collective
bargaining agreements covering approximately 26% of its employees. These
collective bargaining agreements expire at various dates through 1996. The
Company has no reason to believe that it will be unable to renegotiate any of
these agreements on satisfactory terms. Management of the Company believes that
the Company's relations with its employees are generally good.
GOVERNMENTAL REGULATION
Anti-litter measures have been enacted in California, Connecticut,
Delaware, Iowa, Massachusetts, Michigan, New York, Oregon, and the City of
Columbia, Missouri, where some of the Company bottlers operate, prohibiting the
sale of certain beverages, whether in refillable or nonrefillable containers,
unless a deposit is charged by the retailer for the container. The retailer or
redemption center refunds the deposit to the customer upon the return of the
container. The containers are then returned to the bottler, which, in most
jurisdictions, must pay the refund and, in certain others, must also pay a
handling fee. In the past, similar legislation has been proposed but not adopted
elsewhere, although the Company anticipates that additional states or local
jurisdictions may enact such laws.
Massachusetts requires the creation of a deposit transaction fund by
bottlers and the payment to the state of balances in that fund that exceed three
months of deposits received, net of deposits repaid to customers and interest
earned. A portion of the Massachusetts law was held unconstitutional by the
Massachusetts Supreme Judicial Court as it related to deposits escheated to the
state prior to the effective date of the law. Michigan also has a statute,
effective January 1, 1990, requiring bottlers to pay to the state unclaimed
container deposits. In June 1994 the Michigan Court of Appeals upheld the
constitutionality of the Michigan law. The Michigan Soft Drink Association has
petitioned the Michigan Supreme Court to accept an appeal of the case, but under
Michigan law, an appeal to the Michigan Supreme Court is discretionary with the
court.
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Excise taxes on sales of soft drinks have been in place in various states
for several years. The states in which the Company operates currently imposing
such taxes are Arkansas, Louisiana, North Carolina, Tennessee, and Washington.
The Ohio tax on soft drinks was overridden by popular referendum in 1994. In
addition, three local jurisdictions in which the Company operates, Baltimore
City and Montgomery County, Maryland and Honolulu, Hawaii, have imposed a
special tax on nonrefillable soft drink containers. To the knowledge of
management of the Company, no similar legislation has been enacted in any other
markets served by the Company. Proposals have been introduced in certain states
and localities that would impose a special tax on beverages sold in
nonrefillable containers as a means of encouraging the use of refillable
containers. Management of the Company is unable to predict, however, whether
such additional legislation will be adopted.
The Company has taken actions to mitigate the adverse effects resulting
from legislation concerning deposits, restrictive packaging, and escheat of
unclaimed deposits which impose additional costs on the Company. The Company is
unable to quantify the impact on current and future operations which may result
from such legislation if enacted in the future, but any such legislation could
be significant if widely enacted.
The domestic production, distribution, and sale of many of the Company's
products are subject to the Federal Food, Drug, and Cosmetic Act; the
Occupational Safety and Health Act; the Lanham Act; various federal, state, and
local environmental statutes and regulations; and various other federal, state,
and local statutes regulating the production, packaging, sale, safety,
advertising, labeling, and ingredients of such products.
A California law, enacted in 1986 by ballot initiative, requires that any
person who exposes another to a carcinogen or a reproductive toxicant must
provide a warning to that effect. Because the law does not define quantitative
thresholds below which a warning is not required, virtually all manufacturers of
food products are confronted with the possibility of having to provide warnings
due to the presence of trace amounts of defined substances. Regulations
implementing the law exempt manufacturers from providing the required warning if
it can be demonstrated that the defined substances occur naturally in the
product or are present in municipal water used to manufacture the product. The
Company has assessed the impact of the law and its implementing regulations on
the Company's soft drink and other products and has concluded that none of the
Company's products currently requires a warning under the law. The Company
cannot predict whether or to what extent food industry efforts to minimize the
law's impact on food products will succeed, nor can the Company predict what
impact, either in terms of direct costs or diminished sales, imposition of the
law may have.
Substantially all of the facilities of the Company are subject to federal,
state, and local provisions regulating above-ground and underground fuel storage
tanks and the discharge of materials into the environment. Compliance with these
provisions has not had, and the Company does not expect such compliance to have,
any material effect upon the capital expenditures, net income, financial
condition, or competitive position of the Company. The Company's beverage
manufacturing operations do not use or generate a significant amount of toxic or
hazardous substances. Management believes that its current practices and
procedures for the control and disposition of such wastes comply with applicable
federal and state requirements. The Company has been named as a potentially
responsible party in connection with certain landfill sites where the Company
may have been a de minimis contributor. Under current law, the Company's
liability for cleanup costs may be joint and several with other users of such
sites, regardless of the extent of the Company's use in relation to other users.
However, in the opinion of management of the Company, the potential liability of
the Company in connection with such activity is not significant and will not
have a material adverse effect on the financial condition or results of
operations of the Company.
Several underground fuel storage tanks used by the Company may be found to
be in noncompliance with applicable federal and state requirements for the
continued maintenance and use of such tanks. The Company has adopted a plan for
the testing, removal, replacement, and
11
<PAGE>
repair, if necessary, of underground fuel storage tanks at Company bottlers and
remediation of their sites, if necessary. The Company spent approximately $25
million pursuant to such plan in 1991, $8 million in 1992, $9 million in 1993
and $12 million in 1994. The Company estimates it will spend approximately $5
million in each of 1995 and 1996 pursuant to this plan. In the opinion of
management of the Company, any liabilities associated with such underground
fuel storage tanks will not have a material adverse effect on the financial
condition or results of operations of the Company.
The business of the Company, as the exclusive manufacturer and distributor
of bottled and canned beverage products of The Coca-Cola Company and other
manufacturers within specified geographic territories, is subject to federal and
state antitrust laws of general applicability. Under the federal Soft Drink
Interbrand Competition Act, the exercise and enforcement of an exclusive
contractual right to manufacture, distribute, and sell a soft drink product in a
geographic territory is presumptively lawful if the soft drink product is in
substantial and effective interbrand competition with other products of the same
class in the market. Management of the Company believes that there is such
substantial and effective competition in each of the exclusive geographic
territories in which the Company operates.
ITEM 2. PROPERTIES
The executive offices of the Company occupy approximately 28,000 square
feet in an office building in Atlanta, Georgia leased from The Coca-Cola
Company. See "Certain Relationships and Related Transactions -- Agreements and
Transactions with The Coca-Cola Company -- Lease of Office Space" in the
Company's 1995 Proxy Statement, which information is incorporated by reference
in Item 13 hereof.
The principal properties of the Company include production facilities,
distribution facilities, administrative offices, and service centers. The
Company operates 45 beverage production facilities, 17 of which are solely
production facilities and 28 of which are combination production/distribution
facilities, and also operates 223 principal distribution facilities. The Company
owns 44 of its production facilities, owns 193 of its principal distribution
facilities, and leases the others. In the aggregate, the Company's owned and
leased facilities cover approximately 22 million square feet. Management of the
Company believes that its production and distribution facilities are generally
sufficient to meet present operating needs.
Seventeen of the facilities owned by the Company are subject to liens to
secure indebtedness in an aggregate principal amount of approximately $10
million at December 31, 1994. Excluding expenditures for bottler acquisitions,
the Company's capital expenditures in 1994 were approximately $366 million.
The Company also owns and operates approximately 24,000 vehicles of all
types used in the sale, production, and distribution of its products. The
Company also owns approximately 860,000 coolers, beverage dispensers, and
vending machines.
ITEM 3. LEGAL PROCEEDINGS
Immediately prior to the acquisition of Johnston Coca-Cola by the Company
in 1991, a derivative suit (i.e., one which is purportedly brought on behalf of
the Company) was filed by Three Bridges Investment Group in the Chancery Court
of the State of Delaware against The Coca-Cola Company, Johnston Coca-Cola, and
the directors of the Company then in office. The suit is seeking, among other
things, a declaration that it is a proper class action, an injunction or
rescission of the acquisition of Johnston Coca-Cola, damages, costs, and
attorneys' fees. The complaint alleged breaches of fiduciary duties on the part
of The Coca-Cola Company and the directors, and asserted a claim against
Johnston Coca-Cola for allegedly aiding and abetting the alleged wrongdoing.
Johnston Coca-Cola has since been dismissed from the claim, and the remaining
defendants have
12
<PAGE>
filed answers denying all substantive allegations. The suit is still in the
process of discovery. Management of the Company believes this action to be
without merit and is defending it vigorously.
The Company and several of its bottling subsidiaries or divisions have been
named as potentially responsible parties ("PRPs") at several federal "Superfund"
sites. In 1992, the Florida Coca-Cola Bottling Company ("Florida CCBC") was
named by the Environmental Protection Agency ("EPA") as a PRP at the Peak Oil
site in Tampa, Florida, formerly the location of a refiner of used motor oil.
Other PRPs have claimed that the amount of waste oil contributed by Florida CCBC
was such that its ultimate liability for cleanup cost would be from $600,000 to
$1.4 million. Florida CCBC has contested the amount of waste oil attributable to
it, and it is not known whether Florida CCBC's ultimate liability, if any, will
be material. In 1992, another PRP at the West Memphis Landfill site in West
Memphis, Arkansas brought The Coca-Cola Bottling Company of Memphis, Tenn.
("CCBC Memphis") into the remediation proceedings as an additional PRP with
respect to that site, which is alleged to have been used in the 1950s and 1960s
as a dump site for the by-products from the reprocessing of used motor oil. The
EPA is still investigating the site and has not issued an estimate for the cost
of remediation, although the PRP naming CCBC Memphis has estimated the total
cost to be as much as $45 million. The involvement of CCBC Memphis has not yet
been determined; accordingly, CCBC Memphis does not yet know whether its
liability, if any, would be material. In November 1994, the EPA notified the
Coca-Cola Bottling Company of Northeast Arkansas ("CCBC NEARK"), a bottler
acquired by the Company in December 1993, that it was also considered to be a
PRP with respect to the West Memphis Landfill site. It is believed that CCBC
NEARK had no connection with this site, and in any event the Company has the
right of indemnification against the former owners of CCBC NEARK. In April 1994,
the Company was notified by a PRP group at the Waste Disposal Engineering site
in Andover, Minnesota, that one of its predecessor companies, Midwest Coca-Cola
Bottling Company ("Midwest CCBC") could be a PRP at such site, a former
landfill. The claim against the Company is approximately $100,000; however, if
this site is a "qualified landfill" under Minnesota law, the entire cost of
remediation may be paid by the state without contribution from any PRP. In
November 1994, Florida CCBC received notice from a PRP group at the Petroleum
Products Corporation site in Pembroke Park, Florida, that it could be a PRP at
such site, the former location of a used oil recycling facility. Total cleanup
for the site is believed to be as much as $40 million. The PRP group has stated
that it is its intention to sue Florida CCBC and approximately 1,000 other PRPs
to contribute to the remediation. However, Florida CCBC and the PRP group have
entered into a tolling agreement with respect to the statute of limitations, the
effect of which is to delay the filing of the suit until Florida CCBC has
completed its investigation of its involvement, if any, with the site. In
November 1994, Florida CCBC received notice from a PRP group at the Bay Drums
site in Tampa, Florida, that it could be a PRP at such site, the former location
of a drum recycling facility that operated from 1960 to 1984. Total cleanup for
the site is believed to be as much as $20 million. Florida CCBC is currently in
the process of investigating its connection, if any, with the site, and it is
not known whether Florida CCBC's ultimate liability, if any, will be material.
In January 1995, Florida CCBC received notice from a PRP group at the Taylor
Road Landfill site in Tampa, Florida that it could be a PRP at such site.
Florida CCBC believes that its only connection to this site is to have sent
nonhazardous waste (scrap wooden shells) and has asked the PRP group for
information as to why it has received such notice. The Company or its bottling
subsidiaries have been named PRPs at eight other federal and five state
"Superfund" sites where management of the Company has concluded either (i) that
the Company will have no further liability because there was no responsibility
for having deposited hazardous waste; (ii) that payments made to date would be
sufficient to satisfy all liability; or (iii) that the Company's ultimate
liability, if any, for such site would be less than $100,000.
There are various other lawsuits and claims pending against the Company.
Included among such litigation are claims for injury to persons or property.
Management of the Company believes that such claims are covered by insurance
with financially responsible carriers or adequate provisions for losses have
been recognized by the Company in its consolidated financial statements.
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In the opinion of management of the Company, the losses that might result from
such litigation will not have a material adverse effect on the financial
condition or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 4(A). EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information as of March 5, 1995 regarding the executive
officers of the Company:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Summerfield K. Johnston, Jr. .... 62 Mr. Johnston has been the Vice Chairman of the Board
and Chief Executive Officer of the Company since
December 1991. From 1979 to December 1991, he served
as Chairman of the Board and Chief Executive Officer
of Johnston Coca-Cola and served as President of
Johnston Coca-Cola prior to that time.
Henry A. Schimberg............... 62 Mr. Schimberg has been the President, Chief Operating
Officer, and a director of the Company since December
1991. From 1984 to December 1991, he served as
President and Chief Operating Officer of Johnston
Coca-Cola.
John R. Alm...................... 49 Mr. Alm has been Senior Vice President and Chief
Financial Officer of the Company since December 1991.
From 1985 to December 1991, he served as Senior Vice
President -- Finance and Administration of Johnston
Coca-Cola.
Norman P. Findley................ 50 Mr. Findley has been Vice President, Domestic and
International Marketing of the Company since July
1993. From 1989 to July 1993, he served as Vice
President, Marketing of the Company. From 1987 to
1989, he served as Vice President and Account Manager
of the Coca-Cola USA division of The Coca-Cola
Company.
Robert F. Gray................... 47 Mr. Gray has been Vice President, Information Systems
of the Company since February 1992. Mr. Gray was a
partner with KPMG Peat Marwick (accounting firm) from
1984 to 1992.
John C. Heinrich................. 53 Mr. Heinrich has been Vice President, Operations of
the Company since February 1992. He was the Vice
President for Operations of Johnston Coca-Cola from
1988 to 1991, and served as Vice President,
Operations from 1985 to 1988 of the Central States
Coca-Cola Bottling Company division of Johnston
Coca-Cola.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Summerfield K. Johnston III...... 41 Mr. Johnston has been Vice President, Regional
Operations of the Company since July 1993. He was
Vice President and General Manager, West Central
Region from December 1992 to July 1993 and served as
Vice President, Human Resources of the Company from
February 1992 to December 1992. From 1987 to 1991,
Mr. Johnston served as Executive Vice President and
General Manager of the Midwest Coca-Cola Bottling
Company division of Johnston Coca-Cola.
Jarratt H. Jones................. 41 Mr. Jones has been Vice President, Human Resources of
the Company since October 1993. Mr. Jones was a
General Manager for International Business Machines
Corporation from 1989 to 1993.
Lowry F. Kline................... 54 Mr. Kline has been General Counsel of the Company
since December 1991. He has been a partner in the law
firm of Miller & Martin, Chattanooga, Tennessee,
since 1970.
Vicki G. Roman................... 41 Ms. Roman has been Vice President and Treasurer of
the Company since December 1993. She was Treasurer of
the Company from February 1992 to December 1993 and
was an Assistant Treasurer of the Company from 1986
to February 1992.
Philip H. Sanford................ 41 Mr. Sanford has been Vice President, Finance and
Administration of the Company since February 1993. He
had been Vice President and Executive Assistant to
the Chief Executive Officer of the Company since
February 1992. From 1985 to 1991, he was Senior Vice
President and Treasurer of Johnston Coca-Cola.
Gary P. Schroeder................ 49 Mr. Schroeder has been Vice President, Regional
Operations of the Company since December 1994. He was
Regional Vice President, General Manager of the
Southwest Region from January 1992 to December 1994
and served as Division General Manager of the
Cincinnati Division of Johnston Coca-Cola from 1988
to 1992.
G. David Van Houten, Jr. ........ 45 Mr. Van Houten has been Vice President, Regional
Operations of the Company since July 1993. He was
Regional Vice President and General Manager, Texas
Region from 1992 to 1993 and served as Area Vice
President, Texas Area from 1989 to 1991.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AGE THE PAST FIVE YEARS
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Bernice H. Winter................ 46 Ms. Winter has been Vice President and Controller of
the Company since December 1993 and principal
accounting officer since April 1994. She was Vice
President, European Community Group of Coca-Cola
International from 1991 to December 1993 and was
President of the Coca-Cola Financial Corporation from
1988 to 1991.
</TABLE>
Summerfield K. Johnston, Jr. is the father of Summerfield K. Johnston III.
The officers of the Company are elected annually by the Board of Directors
for terms of one year or until their successors are elected and qualified,
subject to removal by the Board of Directors at any time.
16
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
LISTED AND TRADED: New York Stock Exchange
TRADED: Boston, Cincinnati, Midwest,
Pacific, and Philadelphia Exchanges
Share owners of common stock of record as of March 3, 1995: 8,943
STOCK PRICES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
<S> <C> <C>
1994 HIGH LOW
- --------------------------------------------------------------------------------------------
Fourth Quarter 19 1/2 16 3/8
Third Quarter 18 3/8 16
Second Quarter 18 7/8 15 1/2
First Quarter 19 1/4 14
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
<S> <C> <C>
1993 HIGH LOW
- --------------------------------------------------------------------------------------------
Fourth Quarter 15 5/8 13 1/2
Third Quarter 15 5/8 13 3/4
Second Quarter 15 7/8 12 3/4
First Quarter 15 3/4 11 3/4
- --------------------------------------------------------------------------------------------
</TABLE>
DIVIDENDS
Quarterly dividends in the amount of $0.0125 per share were paid during the
fiscal years 1993 and 1994.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial Data" for the years 1986 through 1994, on pages 46 and
47 of the Company's Annual Report to Share Owners for the year ended December
31, 1994, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
"Management's Financial Review" on pages 18 through 29 of the Company's
Annual Report to Share Owners for the year ended December 31, 1994, is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries are incorporated herein by reference to the Company's Annual Report
to Share Owners for the year ended December 31, 1994, at the pages indicated:
Consolidated Statements of Operations -- Years ended December 31, 1994,
1993 and 1992 (page 21)
Consolidated Statements of Cash Flows -- Years ended December 31, 1994,
1993 and 1992 (page 23)
Consolidated Balance Sheets -- December 31, 1994 and 1993 (page 25)
17
<PAGE>
Consolidated Statements of Share-Owners' Equity -- Years ended December
31, 1994, 1993 and 1992 (page 26)
Notes to Consolidated Financial Statements (pages 30-43)
Report of Independent Auditors (page 45)
"Quarterly Financial Data," on page 43 of the Company's Annual Report to
Share Owners for the year ended December 31, 1994, is also incorporated herein
by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the Company is set forth under the
captions "Election of Directors -- Nominees" and "Election of Directors --
Information Concerning Directors" on page 3 and on pages 4 through 6,
respectively, of the Company's 1995 Proxy Statement. Such information is
incorporated herein by reference. Pursuant to Instruction 3 of Item 401(b) of
Regulation S-K and General Instruction G(3) of Form 10-K, information relating
to the executive officers of the Company is set forth at Item 4(A) of this
report under the caption "Executive Officers of the Company." Information
regarding compliance with the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, by the Company's executive officers
and directors, persons who own more than ten percent of the Company's common
stock and their affiliates who are required to comply with such reporting
requirements is set forth in "Election of Directors -- Compliance with Section
16(a) of the Securities Exchange Act of 1934" on page 10 of the Company's 1995
Proxy Statement. Such information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is set forth under the
captions "Election of Directors -- Compensation of Directors" and "Election of
Directors -- Executive Compensation" on pages 7 and 8 and pages 12 through 21,
respectively, of the Company's 1995 Proxy Statement. Such information is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding ownership of the Company's common stock by certain
persons is set forth under the captions "Voting -- Principal Share Owners" and
"Election of Directors -- Security Ownership of Directors and Officers" on pages
2 and 3 and pages 8 through 10, respectively, of the Company's 1995 Proxy
Statement. Such information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain transactions between the Company, The
Coca-Cola Company and their affiliates and certain other persons is set forth
under the caption "Election of Directors -- Certain Relationships and Related
Transactions" on pages 22 through 26 of the 1995 Proxy Statement. Such
information is incorporated herein by reference.
18
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) (1) Financial Statements. The following consolidated financial statements
of the Company and subsidiaries, included in the Company's Annual Report to
Share Owners for the year ended December 31, 1994, are incorporated by reference
in Part II, Item 8 of this report:
Consolidated Statements of Operations -- Years ended December 31, 1994,
1993 and 1992.
Consolidated Statements of Cash Flows -- Years ended December 31, 1994,
1993 and 1992.
Consolidated Balance Sheets -- December 31, 1994 and 1993.
Consolidated Statements of Share-Owners' Equity -- Years ended December 31,
1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
(2) Financial Statement Schedules. The following financial statement
schedule of the Company and its subsidiaries is included in this report on the
page indicated:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors................................................ F-2
Schedule II -- Valuation and Qualifying Accounts for the fiscal years ended
December 31, 1994, 1993 and 1992............................... F-3
</TABLE>
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted either because they are not required under the related instructions or
because they are inapplicable.
(3) Exhibits.
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- -----------------------------------------------
<C> <C> <S> <C>
3.1 -- Restated Certificate of Incorporation of Exhibit 28.2 to the Company's Quarterly
Coca-Cola Enterprises, as amended on Report on Form 10-Q as filed May 11,
April 15, 1992. 1992.
3.2 -- Bylaws of Coca-Cola Enterprises, as Exhibit 3.2 to the Company's Annual
amended through February 18, 1992. Report on Form 10-K for the fiscal year
ended December 31, 1991.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- -----------------------------------------------
<C> <C> <S> <C>
4.1 -- Indenture dated as of July 30, 1991, Exhibit 4.1 to the Company's Current
together with the First Supplemental Report on Form 8-K (Date of Report: July
Indenture thereto dated January 29, 30, 1991); Exhibit 4.01 to the Company's
1992, between Coca-Cola Enterprises and Current Report on Form 8-K (Date of
Manufacturers Hanover Trust Company, as Report: January 29, 1992); Exhibit 4.02
Trustee, with regard to certain to the Company's Current Report on Form
unsecured and unfunded debt securities 8-K (Date of Report: January 29, 1992);
of Coca-Cola Enterprises, and forms of Exhibit 4.01 to the Company's Current
notes and debentures issued thereunder. Report on Form 8-K (Date of Report:
September 8, 1992); Exhibits 4.01 and
4.02 to the Company's Current Report on
Form 8-K (Date of Report: November 12,
1992); Exhibit 4.01 to the Company's
Current Report on Form 8-K (Date of
Report: January 4, 1993); Exhibit 4.02
to the Company's Current Report on Form
8-K (Date of Report: September 15,
1993).
4.2 -- Medium-Term Notes Issuing and Paying Filed herewith.
Agency Agreement dated as of October 24,
1994, between Coca-Cola Enterprises and
Chemical Bank, as issuing and paying
agent, including as Exhibit B thereto
the form of Medium-Term Note issuable
thereunder.
4.3 -- Indenture dated as of November 15, 1989 Exhibit 4.01 to the Company's Current
between Coca-Cola Enterprises and Report on Form 8-K (Date of Report:
Bankers Trust Company, as Trustee, with December 12, 1989); Exhibit 4.4(a) to
regard to certain unsecured and the Company's Annual Report on Form 10-K
unsubordinated debt securities of for the fiscal year ended December 29,
Coca-Cola Enterprises, and forms of 1989; Exhibit 4.4(b) to the Company's
Fixed Rate Medium Term Note and Floating Annual Report on Form 10-K for the
Rate Medium Term Note, each issuable fiscal year ended December 29, 1989.
commencing December 18, 1989 pursuant to
the above-referenced Indenture.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- -----------------------------------------------
<C> <C> <S> <C>
4.4 -- Credit Agreement dated as of December 7, Filed herewith.
1994 among Coca-Cola Enterprises; Bank
of America National Trust and Savings
Association; Citibank, N.A.; The First
National Bank of Chicago; NationsBank of
Texas, National Association; Union Bank
of Switzerland, New York Branch; Texas
Commerce Bank National Association;
Trust Company Bank; Wachovia Bank of
Georgia, N.A.; Canadian Imperial Bank of
Commerce; Toronto Dominion (Texas),
Inc.; Swiss Bank Corporation, New York
Branch and Cayman Islands Branch; Mellon
Bank, N.A.; The Northern Trust Company;
ABN AMRO Bank, N.V., Atlanta Agency.
Certain instruments which define the rights of holders of long-term debt of the
Company and its subsidiaries are not being filed because the total amount of
securities authorized under each such instrument does not exceed 10% of the total
consolidated assets of the Company and its subsidiaries. The Company and its
subsidiaries hereby agree to furnish a copy of each such instrument to the
Commission upon request.
10.1 -- 1986 Stock Option Plan of Coca-Cola Exhibit 10.1 to the Company's Annual
Enterprises, as amended through February Report on Form 10-K for the fiscal year
12, 1991.* ended December 31, 1991.
10.2 -- Form of Stock Option Agreement between Exhibit 10.5 to the Company's
Coca-Cola Enterprises and certain of its Registration Statement on Form S-1, No.
officers.* 33-9447.
10.3 -- Coca-Cola Enterprises 1991 Stock Option Exhibit 10.11 to the Company's Annual
Plan, as amended and restated through Report on Form 10-K for the fiscal year
February 18, 1992.* ended December 31, 1992.
10.4 -- Coca-Cola Enterprises 1994 Stock Option Exhibit 4.3 to the Company's
Plan.* Registration Statement on Form S-8, No.
33-53221.
10.5 -- Coca-Cola Enterprises 1992 Restricted Exhibit 4.3 to the Company's
Stock Award Plan (as amended and Registration Statement on Form S-8, No.
restated effective February 7, 1994).* 33-53219.
10.6 -- 1992 and 1993 Long-Term Incentive Plan Filed herewith.
of Coca-Cola Enterprises, as amended.*
10.7 -- Coca-Cola Enterprises 1994-1996 Long- Filed herewith.
Term Incentive Plan.*
10.8 -- Coca-Cola Enterprises 1994 Executive Filed herewith.
Management Incentive Plan (Effective
January 1, 1994).*
10.9 -- 1991 Amendment and Restatement of the Filed herewith.
Coca-Cola Enterprises Supplemental
Retirement Plan, as amended effective
July 1, 1993.*
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
NUMBER DESCRIPTION
- ------ ---------------------------------------- -----------------------------------------------
<C> <C> <S> <C>
10.10 -- Form of Stock Option Agreements between Exhibit 10.36 to the Company's
Coca-Cola Enterprises and certain of its Registration Statement on Form S-1, No.
directors.* 33-9447.
10.11 -- Coca-Cola Enterprises 1988 Stock Exhibit 10.10 to the Company's Annual
Appreciation Rights Plan, as amended Report on Form 10-K for the fiscal year
through February 12, 1991.* ended December 31, 1991.
10.12 -- Coca-Cola Enterprises Officer Severance Exhibit 10.12 to the Company's Annual
Plan.* Report on Form 10-K for the fiscal year
ended December 31, 1991.
10.13 -- Amended and Restated Deferred Exhibit 10.16 to the Company's Annual
Compensation Agreement between Johnston Report on Form 10-K for the fiscal year
Coca-Cola Bottling Group and Henry A. ended December 31, 1993.
Schimberg dated December 16, 1991, as
amended.*
10.14 -- 1993 Amendment and Restatement of Exhibit 10.17 to the Company's Annual
Deferred Compensation Agreement between Report on Form 10-K for the fiscal year
Johnston Coca-Cola Bottling Group and ended December 31, 1993.
John R. Alm as of April 30, 1993.*
10.15 -- Retirement Plan for the Board of Exhibit 10.33 to the Company's Annual
Directors of Coca-Cola Enterprises, Report on Form 10-K for the fiscal year
effective April 11, 1991.* ended December 31, 1991.
10.16 -- Deferred Compensation Plan for Non- Filed herewith.
Employee Director Compensation, as
amended and restated effective April 1,
1994.*
10.17 -- Tax Sharing Agreement dated November 12, Exhibit 10.1 to the Company's
1986 between Coca-Cola Enterprises and Registration Statement on Form S-1, No.
The Coca-Cola Company. 33-9447.
10.18 -- Registration Rights Agreement dated Exhibit 10.3 to the Company's
November 12, 1986 between Coca-Cola Registration Statement of Form S-1, No.
Enterprises and The Coca-Cola Company. 33-9447.
10.19 -- Registration Rights Agreement dated as Exhibit 10 to the Company's Current
of December 17, 1991 among Coca-Cola Report on Form 8-K (Date of Report:
Enterprises, The Coca-Cola Company and December 18, 1991).
the share owners of Johnston Coca-Cola
Bottling Group named therein.
10.20 -- Registration Rights Agreement dated as Exhibit 10.25 to the Company's Annual
of December 15, 1993 among Coca-Cola Report on Form 10-K for the fiscal year
Enterprises, The Coca-Cola Company and ended December 31, 1993.
the share owners of the Coca-Cola
Bottling Company of Northeast Arkansas,
Inc.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY REFERENCE OR FILED HEREWITH
(THE COMPANY'S CURRENT, QUARTERLY, AND ANNUAL
EXHIBIT REPORTS ARE FILED WITH THE SECURITIES AND
NUMBER DESCRIPTION EXCHANGE COMMISSION UNDER FILE NO. 01-09300)
- ------ ---------------------------------------- ----------------------------------------------
<C> <C> <S> <C>
10.21 -- Form of Bottle Contract, as amended. Exhibit 10.24 to the Company's Annual
Report on Form 10-K for the fiscal year
ended December 10, 1988.
10.22 -- Letter Agreement dated March 15, 1989 Exhibit 10.23 to the Company's Annual
between Coca-Cola Enterprises and The Report on Form 10-K for the fiscal year
Coca-Cola Company with respect to the ended December 31, 1991.
Bottle Contracts, as amended by letter
agreement dated December 18, 1991.
10.23 -- Form of Tolling Agreement between The Exhibit 10.41 to the Company's Annual
Coca-Cola Company and various Company Report on Form 10-K for the fiscal year
bottlers. ended January 2, 1987.
10.24 -- Sweetener Sales Agreement -- Bottler Exhibit 10.30 to the Company's Annual
between The Coca-Cola Company and Report on Form 10-K for the fiscal year
various Company bottlers. ended December 31, 1992.
10.25 -- Second Lease Amendment to Lease Filed herewith.
Agreement dated July 1, 1987 by and
between The Coca-Cola Company and
Coca-Cola Enterprises, as Tenant, as
previously amended June 19, 1992.
10.26 -- Share Repurchase Agreement dated January Exhibit 10.44 to the Company's Annual
1, 1991 between The Coca-Cola Company Report on Form 10-K for the fiscal year
and Coca-Cola Enterprises. ended December 28, 1990.
11 -- Statement re computation of per share Filed herewith.
earnings.
12 -- Statement re computation of ratios. Filed herewith.
13 -- 1994 Annual Report to Share Owners. Filed herewith.
(Pages 18-43, 45-47)
21 -- Subsidiaries of the Registrant. Filed herewith.
23 -- Consent of Independent Auditors. Filed herewith.
24 -- Powers of Attorney. Filed herewith.
27 -- Financial Data Schedule. Filed herewith.
</TABLE>
- ---------------
* Management contracts and compensatory plans as arrangements required to be
filed as an exhibit to this form pursuant to Item 14(c).
(B) REPORTS ON FORM 8-K.
On November 4, 1994, the Company filed a Current Report on Form 8-K, the
date of which report was October 18, 1994, regarding the Company's financial
results for the third quarter and the first nine months of 1994.
(C) EXHIBITS
See Item 14(a)(3) above.
(D) FINANCIAL STATEMENT SCHEDULES
See Item 14(a)(2) above.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
By: /s/ S. K. JOHNSTON, JR.
------------------------------------
S. K. Johnston, Jr.
Vice Chairman and Chief Executive
Officer
Date: March 15, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<C> <S> <C>
/s/ S. K. JOHNSTON, JR. Vice Chairman, Chief March 15, 1995
- --------------------------------------------- Executive
(S. K. Johnston, Jr.) Officer and a Director
(principal executive
officer)
/s/ JOHN R. ALM Senior Vice President and March 15, 1995
- --------------------------------------------- Chief Financial Officer
(John R. Alm) (principal financial
officer)
/s/ BERNICE H. WINTER Vice President and Controller March 15, 1995
- --------------------------------------------- (principal accounting
(Bernice H. Winter) officer)
* Chairman of the Board of March 15, 1995
- --------------------------------------------- Directors
(M. Douglas Ivester)
* President, Chief Operating March 15, 1995
- --------------------------------------------- Officer and a Director
(Henry A. Schimberg)
* Director March 15, 1995
- ---------------------------------------------
(Howard G. Buffett)
* Director March 15, 1995
- ---------------------------------------------
(John L. Clendenin)
* Director March 15, 1995
- ---------------------------------------------
(Johnnetta B. Cole)
* Director March 15, 1995
- ---------------------------------------------
(T. Marshall Hahn, Jr.)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<C> <S> <C>
* Director March 15, 1995
- ---------------------------------------------
(Claus M. Halle)
* Director March 15, 1995
- ---------------------------------------------
(L. Phillip Humann)
* Director March 15, 1995
- ---------------------------------------------
(E. Neville Isdell)
* Director March 15, 1995
- ---------------------------------------------
(John E. Jacob)
* Director March 15, 1995
- ---------------------------------------------
(Robert A. Keller)
* Director March 15, 1995
- ---------------------------------------------
(Scott L. Probasco, Jr.)
* Director March 15, 1995
- ---------------------------------------------
(Francis A. Tarkenton)
*By: /s/ LOWRY F. KLINE
- ---------------------------------------------
Lowry F. Kline
Attorney-in-Fact
</TABLE>
25
<PAGE>
INDEX TO FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors........................................................ F-2
Schedule II -- Valuation and Qualifying Accounts for the fiscal years ended December
31, 1994, 1993 and 1992................................................ F-3
</TABLE>
F-1
<PAGE>
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the consolidated financial statements of Coca-Cola
Enterprises Inc. listed in Part IV, Item 14 (a)(1). Our audits also included the
financial statement schedule listed in Part IV, Item 14 (a)(2). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Coca-Cola Enterprises Inc. at December 31, 1994 and 1993, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
As discussed in the notes to consolidated financial statements, in 1992 the
Company changed its methods of accounting for income taxes and postretirement
benefits other than pensions.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 30, 1995
F-2
<PAGE>
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
COCA-COLA ENTERPRISES INC.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ---------------------------------- ---------- ----------------------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
ADDITIONS
-----------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER ACCOUNTS-- DEDUCTIONS -- AT END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- ---------------------------------- ---------- ---------- ---------------- ------------ ---------
(IN MILLIONS)
FISCAL YEAR ENDED:
DECEMBER 31, 1994
Allowance for losses on trade
accounts.................... $ 33 $ 11 $ -- $ 10(b) $ 34
Valuation allowance for
deferred tax assets......... 105 7 -- -- 112
DECEMBER 31, 1993
Allowance for losses on trade
accounts.................... $ 31 $ 13 $ 5(a) $ 16(b) $ 33
Valuation allowance for
deferred tax assets......... 86 19 -- -- 105
DECEMBER 31, 1992
Allowance for losses on trade
accounts.................... $ 22 $ 13 $ 4(a) $ 8(b) $ 31
Valuation allowance for
deferred tax assets......... -- 9 77(c) -- 86
</TABLE>
- ---------------
(a) Principally represents allowances for losses on trade accounts of acquired
companies at date of acquisition and recoveries of amounts previously
charged off.
(b) Charge off of uncollectible accounts.
(c) Adoption of FAS 109 as of January 1, 1992.
F-3
<PAGE>
EXHIBIT 4.2
MEDIUM-TERM NOTES
ISSUING AND PAYING AGENCY AGREEMENT
THIS AGREEMENT dated, as of October 24, 1994 is between Coca-Cola
Enterprises Inc. (the "Company") and Chemical Bank (the "Issuing and Paying
Agent").
INTRODUCTION
In 1987, the Company authorized the issuance and began selling notes
due from nine months to ten years from date of issue (the "Notes"), and has
appointed Salomon Brothers Inc. ("Salomon Brothers"), and Merrill Lynch Capital
Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
as the placement agents for such Notes (the "Placement Agents") pursuant to the
terms of a Private Placement Agreement, dated June 15, 1988, between the
Company and the Placement Agents. Fifty-two million two hundred fifty thousand
dollars ($52,250,000) in principal amount of the Notes remains outstanding.
Morgan Guaranty Trust was originally appointed to act as Issuing and Paying
Agent for the Notes, and the Company wishes to appoint Chemical Bank to replace
Morgan Guaranty Trust as Issuing and Paying Agent.
DEFINED TERMS
Terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Private Placement Agreement, including the
Exhibits thereto.
SECTION 1. APPOINTMENT OF ISSUING AND PAYING AGENT. The Company
hereby appoints Chemical Bank, effective October 31, 1994 to act on the terms
and conditions specified herein, as issuing and paying agent for the Notes,
replacing Morgan Guaranty Trust.
SECTION 2. NOTE FORM; SIGNATURE. The Company will from time to
time furnish the Issuing and Paying Agent with an adequate supply of registered
Notes, without coupons, serially numbered, which will have the principal
amount, date of issue, maturity date, rate of interest and the name and address
of the Registered Owner (as hereinafter defined) left blank. Each Note will be
signed manually or by facsimile by an Authorized Representative (as hereinafter
defined) included in Group I on Exhibit A hereto. The Notes will be
substantially in the form of Exhibit B hereto and shall have a maturity of not
less than nine months from date of issue and not more than thirty years from
date of issue, and shall be issued in the order of the serial numbers imprinted
thereon in denominations of $150,000 and any larger denominations in integral
multiples of $1,000. The Issuing and Paying Agent will hold such blank Notes
in safekeeping.
<PAGE>
The aggregate principal amount of Notes to be originally issued and
authenticated hereunder shall at no time exceed $1,000,000,000 (One Billion
Dollars) in aggregate amount outstanding at any time.
SECTION 3. AUTHORIZED REPRESENTATIVES. The Company hereby certifies
that each person named in Exhibit A hereto is a duly authorized representative
of the Company and that the signature set forth opposite such representative's
name is his or her true and genuine signature (each such representative and
each other representative as to which the Company may hereafter so certify in
writing being referred to herein as an "Authorized Representative"). The
Issuing and Paying Agent shall be entitled to rely on the information set forth
in Exhibit A for purposes of determining an Authorized Representative until
such time as the Issuing and Paying Agent receives a subsequent certificate
from the Company deleting or amending any of the information set forth therein.
The Issuing and Paying Agent shall not have any responsibility to the Company
to determine whether any signature on a Note purporting to be that of an
Authorized Representative in Group I of Exhibit A is genuine, so long as such
signature resembles the specimen signature set forth in Group I of Exhibit A or
in a subsequent certificate delivered to the Issuing and Paying Agent. Any
Note bearing the signature of a person who is an Authorized Representative in
Group I of Exhibit A on the date he signs such Note shall be a binding
obligation of the Company upon the completion and countersignature thereof by
the Issuing and Paying Agent, notwithstanding that such person shall have
ceased to be an Authorized Representative on the date such Note is completed,
countersigned or delivered by the Issuing and Paying Agent.
SECTION 4. COMPLETION, AUTHENTICATION AND DELIVERY OF NOTES.
(a) From time to time, the Issuing and Paying Agent shall receive
instructions from an Authorized Representative included in Group II on Exhibit
A hereto regarding the completion and delivery of Notes. The Issuing and
Paying Agent may rely on such instructions if they are received by one of the
duly authorized representatives of the Issuing and Paying Agent or their
successors which may be named by the Issuing and Paying Agent (of which the
Company shall be notified in writing) from time to time, through the use of a
facsimile transmission or by telephone from any person purporting to be any of
the individuals included in Group II on Exhibit A hereto. Such instructions
shall include:
(i) Exact name of the person in whose name a Note
is to be registered (the "Registered Owner");
(ii) Exact address of the Registered Owner;
(iii) Exact address of the Registered Owner for
interest payments (including the location and account number
of any bank account designated by the Registered Owner to
receive payments) if different from (ii) above;
(iv) Taxpayer identification number of the
Registered Owner;
<PAGE>
(v) Principal amount of such Note;
(vi) Interest rate to be borne by such Note;
(vii) Date of maturity of such Note;
(viii) Issue date ("Settlement Date") of such Note;
(ix) Amount to be received in payment of such
Note;
(x) Delivery instructions; and
(xi) The Placement Agent with respect to such
Note.
(b) Upon receipt of the information set forth in subsection (a)
above, the Issuing and Paying Agent will confirm by telephone to the Company
the principal amount of the Notes issued as of such date hereunder after giving
effect to such transaction and to all other transactions of which the Company
has given instructions to the Issuing and Paying Agent but which have not yet
been settled.
(c) Upon receipt of such instructions, the Issuing and Paying
Agent shall:
(i) complete each Note as to its Registered
Owner, principal amount, interest rate, date of maturity and
issue date;
(ii) cause each Note to be manually countersigned
by any one of the officers or employees of the Issuing and
Paying Agent duly authorized for such purpose;
(iii) deliver each Note to the Placement Agent,
which delivery may be made, in accordance with the custom
prevailing in the market, before actual receipt of payment for
the Notes as provided in Section 5 hereof; and
(iv) retain one copy of each Note for its record
and send to the Company another copy of each such Note.
(d) Instructions regarding the completion of a Note must be
received by the Issuing and Paying Agent not later than 3:00 P.M., New York
City time, on the business day next preceding the date on which settlement for
the Note is to occur. Telephone instructions given by an Authorized
Representative to the Issuing and Paying Agent will be electronically
voice-recorded by the Issuing and Paying Agent, and the Company hereby consents
to such recording. Should any discrepancy develop with respect to such
telephonic instructions, the instructions as recorded and understood by the
Agent will be deemed the controlling and proper instructions. All instructions
will be confirmed the same day that they are given in writing signed by an
Authorized Representative included in Group II on Exhibit A hereto and
transmitted by facsimile, telephonically or by other electronic means, but the
Issuing and Paying Agent shall not delay in taking any action hereunder pending
receipt of such written confirmation.
<PAGE>
Notwithstanding the foregoing, the Issuing and Paying Agent shall not be
required to authenticate any original issuance of Notes under this Agreement
until it has received a legal opinion from counsel to the Company to the effect
that such Notes do not require registration under the Securities Act of 1933,
as amended (the "Securities Act"), and that the qualification of an indenture
with respect to the Notes under the Trust Indenture Act of 1939 (the "Trust
Indenture Act") is not required.
SECTION 5. PROCEEDS OF SALE OF THE NOTES. The Issuing and Paying
Agent will deliver Notes to the Placement Agent on or prior to the settlement
date as provided in Section 4(c) (iii) hereof. Payment for Notes shall be made
on the settlement date in immediately available funds and shall be credited to
the designated bank account maintained by the Company with the Issuing and
Paying Agent for that purpose. The Issuing and Paying Agent shall remit to the
Company advices reflecting all debits and credits to such bank account.
SECTION 6. PAYMENT OF INTEREST. Interest payments will be made on
each May 1 and November 1 and at maturity. All such interest payments (other
than interest due at maturity) will be paid to the registered holder of such
Note at the close of business on the April 15 or October 15 next preceding the
May 1 or November 1, as applicable, on which an interest payment is due.
Notwithstanding the foregoing, if a Note is dated between the fifteenth day of
the month next preceding a May 1 or November 1 interest payment date and such
interest payment date, the first payment of interest on such Note will be made
on the next succeeding May 1 or November 1, respectively. Interest will begin
to accrue on the settlement date and not from the previous interest payment
date. Interest (including payments for partial periods) will be calculated on
the basis of a 360-day year of twelve 30-day months. All interest payments on
any Note (other than interest due at maturity) will be made by the transfer of
immediately available funds to such account at a bank in New York City (or
other bank consented to by the Company) as the holder of such Note shall have
designated, or at such holder's option or in the absence of any such
designation, by check of the Issuing and Paying Agent mailed by the Issuing and
Paying Agent to the person in whose name the Note is registered at such
holder's address as shown in the register referred to in Section 11, or at such
other place as such holder shall designate to the Issuing and Paying Agent in
writing. The Issuing and Paying Agent will withhold taxes, if any, on interest
to the extent that such agent has been instructed by the Company that any taxes
should be withheld.
SECTION 7. PAYMENT OF PRINCIPAL. Upon maturity of any Note and upon
presentation of any Note on or after the maturity date thereof, the Issuing and
Paying Agent shall pay, subject to the receipt of funds as provided in Section
10 hereof, the principal amount of the Note together with accrued interest due
at maturity either (i) by transfer of immediately available funds to such
account at a bank in New York City (or other bank consented to by the Company)
as the holder of such Note shall have designated, or (ii) by check of the
Issuing and Paying Agent payable to the order of the Registered Owner of the
Note or its properly designated assignee or custodian. The Issuing and Paying
Agent will cancel the Note and remit it directly to the Company.
<PAGE>
SECTION 8. DESIGNATION OF ACCOUNTS TO RECEIVE PAYMENT. A bank
account may be designated to the Issuing and Paying Agent to receive payments
of interest and principal under Sections 6 and 7 hereof either (i) by an
Authorized Representative in the authentication instructions given by it to the
Issuing and Paying Agent under Section 4(a) hereof in respect of a particular
purchase of Notes, or (ii) in the event that the authentication instructions
make no designation, or that the Registered Owner wishes to change a
designation previously made, by written notice from the Registered Owner to the
Issuing and Paying Agent. Such written notice must be provided to the Issuing
and Paying Agent not later than fifteen days prior to any payment date.
SECTION 9. INFORMATION REGARDING AMOUNTS DUE. The Issuing and Paying
Agent shall provide to the Company, at least five business days before each May
1 and November 1 on which interest is payable, a list of interest payments to
be made on the following May 1 and November 1 for each Note and in total. The
Issuing and Paying Agent will provide to the Company by the fifteenth day of
each month a list of the principal and interest to be paid on Notes maturing in
the next succeeding month.
SECTION 10. DEPOSIT OF FUNDS. The Company shall, at least one
business day prior to each May 1 or November 1 on which interest is payable (an
"Interest Payment Date"), pay to the Issuing and Paying Agent an amount in New
York Clearing House or similar next day funds sufficient to pay all interest
due on Notes on such Interest Payment Date and shall, at least one business day
prior to the maturity date of any Note, pay to the Issuing and Paying Agent an
amount in New York Clearing House or similar next day funds sufficient to pay
the principal of any such Note and interest accrued to the maturity date;
PROVIDED, HOWEVER, that the Company may make such payments to the Issuing and
Paying Agent on an Interest Payment Date or maturity date, if made in
immediately available funds.
SECTION 11. REGISTRATION; TRANSFER.
(a) The Issuing and Paying Agent shall maintain a register in
which it shall register the names, addresses and taxpayer identification
numbers of the holders of the Notes and shall register the transfer of Notes.
(b) The Issuing and Paying Agent shall not register the attempted
transfer of any Note unless it has received (i) the written consent of the
Company or a Placement Agent to such transfer which consent shall contain a
representation that such transfer complies with clause (ii) below, and then
shall register such transfer only in accordance with the conditions of such
consent and (ii) if transfer is to be made other than to the Company or a
Placement Agent or through a Placement Agent to an institutional purchaser
which is an "accredited investor" (as defined in Regulation D under the
Securities Act) and whose name appears on a list maintained by the Placement
Agent, a legal opinion from counsel to the transferor satisfactory to the
Issuing and Paying Agent that such Note is not a note requiring registration
under the Securities Act and that this Agreement is not an indenture requiring
qualification under the Trust Indenture Act.
<PAGE>
(c) All Notes presented for registration of transfer shall be duly
endorsed or be accompanied by appropriate written instruments of transfer.
(d) If any Note is presented for transfer the new Note shall be
dated as of the Interest Payment Date immediately following the most recent
Record Date, except as provided below.
(i) If no interest has been paid on the Note to be
transferred, the Note to be issued upon transfer shall be dated as of
the date of the Note presented for transfer; and
(ii) If interest is overdue on the Note to be transferred
(other than a Note on which no interest has been paid), the Note to be
issued upon transfer shall be dated as of the last Interest Payment
Date to which interest has been paid or duly provided for.
SECTION 12. PERSONS DEEMED OWNERS. Prior to due presentment of a
Note for registration of transfer, the Company, the Issuing and Paying Agent
and any agent of the Company or the Issuing and Paying Agent may treat the
person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Company, the Issuing and Paying Agent nor any agent of the Company
or the Issuing and Paying Agent shall be affected by notice to the contrary.
SECTION 13. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. In case any
Note shall become mutilated or destroyed, lost or stolen, and upon the
satisfaction by the applicant of the requirements of this Section for a
substituted Note, the Company shall execute, and upon its request the Issuing
and Paying Agent shall authenticate and deliver, a new Note having a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Note or in lieu of any substitution for the Note destroyed, lost or stolen. In
the case of loss, theft or destruction, the applicant for a substituted Note
shall furnish to the Company and to the Issuing and Paying Agent such security
or indemnity as may be required by them to save each of them harmless. Such
applicant shall also furnish to the Company and to the Issuing and Paying Agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof. In the case of mutilation, the applicant for a
substituted Note shall surrender such mutilated Note to the Company or to the
Issuing and Paying Agent for cancellation thereof. The Issuing and Paying
Agent may authenticate any such substituted Note and deliver the same upon the
written request or authorization of any Authorized Representative. Upon the
issuance of any substituted Note, the Company may require the payment of a sum
sufficient to cover any expense connected therewith. In case any Note which
has matured or is about to mature shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substituted Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a Mutilated Note) if the applicant for such payment shall furnish the
Company and the Issuing and Paying Agent with such security or indemnity as may
be required by them to save each of them harmless, and, in the case of
destruction, loss or theft, evidence to the satisfaction of the Company of the
destruction,
<PAGE>
loss or theft of such Note and of the ownership thereof. All applications
under this Section shall be processed by the Issuing and Paying Agent.
SECTION 14. RETURN OF UNCLAIMED FUNDS. Any money deposited with the
Issuing and Paying Agent and remaining unclaimed for two years after the date
upon which the last payment or principal or interest on any Note to which such
deposit relates shall have become due and payable, shall be repaid to the
Company by the Issuing and Paying Agent on demand, and the Holder of any Note
to which such deposit related entitled to receive payment shall thereafter look
only to the Company for the payment thereof, and all liability of the Issuing
and Paying Agent with respect to such money shall thereupon cease.
SECTION 15. RESIGNATION OR REMOVAL OF ISSUING AND PAYING AGENT. The
Issuing and Paying Agent may at any time resign as such agent by giving written
notice to the Company of such intention on its part, specifying the date on
which its desired resignation shall become effective; PROVIDED, HOWEVER, that
such date shall not be less than three months after receipt of such notice by
the Company. The Issuing and Paying Agent may be removed at any time by the
filing with it of an instrument in writing signed on behalf of the Company and
specifying such removal and the date when such removal is intended to become
effective. Such resignation or removal shall take effect upon such date
provided above.
SECTION 16. RELIANCE ON INSTRUCTIONS. The Issuing and Paying Agent
shall incur no liability to the Company in acting hereunder upon instructions
contemplated hereby which the Issuing and Paying Agent believed in good faith
to have been properly given. In the event a discrepancy exists between the
instructions as originally received by the Issuing and Paying Agent and any
subsequent written confirmation thereof, such original instructions will be
deemed controlling provided the Issuing and Paying Agent gives notice to the
Company of such discrepancy promptly upon receipt of such written confirmation.
SECTION 17. CANCELLATION OF UNISSUED NOTES. Promptly upon the
written request of the Company, the Issuing and Paying Agent shall cancel and
return to the Company all unissued Notes in its possession.
SECTION 18. REPRESENTATION AND WARRANTIES OF THE COMPANY. Each
instruction given to the Issuing and Paying Agent in accordance with Section 4
hereof shall constitute a representation and warranty to the Issuing and Paying
Agent by the Company that the issuance and delivery of the Notes have been duly
and validly authorized by the Company and, when completed, countersigned and
delivered pursuant hereto, the Notes will constitute the valid and legally
binding obligations of the Company.
SECTION 19. FEES. For its services under this Agreement, the Issuing
and Paying Agent shall be entitled to compensation established in accordance
with the schedule set forth as Exhibit C hereto, which schedule may be subject
to revision from time to time by the Issuing and Paying Agent upon thirty days'
prior written notice to the Company.
SECTION 20. NOTICES.
<PAGE>
(a) All communications by or on behalf of the Company relating to
the completion, delivery or payment of the Notes are to be directed to the
Issuing and Paying Agent, Chemical Bank, 450 West 33rd Street, Medium Term Note
Department, New York, NY 10001. The Company will send all Notes to be
completed and delivered by the Issuing and Paying Agent to such Corporate Trust
Security Window. The Issuing and Paying Agent will advise the Company from
time to time of the individuals generally responsible for the administration of
this Agreement.
(b) Notices and other communications hereunder shall (except to
the extent otherwise expressly provided) be in writing and shall be addressed
as follows, or to such other address as the party receiving such notice shall
have previously specified:
if to the Company:
Coca-Cola Enterprises Inc.
P.O. Box 723040
Atlanta, Georgia 31139-0040
Attention: Treasurer
if to the Issuing and Paying Agent:
Chemical Bank
450 West 33rd Street
15th Floor
Agency Administration
New York, New York 10001
SECTION 21. INFORMATION FURNISHED BY THE ISSUING AND PAYING AGENT.
Upon the reasonable request of the Company, given at any time and from time to
time, the Issuing and Paying Agent shall promptly provide the Company with
information with respect to Notes issued hereunder to the extent such
information is reasonably available.
SECTION 22. LIABILITY. Neither the Issuing and Paying Agent nor its
officers or employees shall be Liable to the Company for any act or omission
hereunder except in the case of negligence or willful misconduct. The duties
and obligations of the Issuing and Paying Agent, its officers and employees
shall be determined by the express provisions of this Agreement and they shall
not be Liable except for the negligent performance of such duties and
obligations as are specifically set forth herein and no implied covenants shall
be read into this Agreement against them. Neither the Issuing and Paying Agent
nor its officers or employees shall be required to ascertain whether any
issuance or sale of Notes (or any amendment or termination of this Agreement)
is in compliance with any other agreement to which the Company is a party
(whether or not the Issuing and Paying Agent is also a part. to such other
agreement). Anything in this agreement to the contrary notwithstanding, in no
event shall Chemical Bank be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if Chemical Bank has been advised of the likelihood of such loss or damage
and regardless of the form of action.
<PAGE>
SECTION 23. INDEMNIFICATION. The Company agrees to indemnify and
hold harmless the Issuing and Paying Agent, its officers and its employees from
and against all liabilities, Losses and expenses (including reasonable legal
fees and expenses) relating to or arising out of their actions or inactions in
any capacity hereunder, except Liabilities, Losses and expenses caused by the
negligence or willful misconduct of the Issuing and Paying Agent, its officers
or its employees. This indemnity shall survive termination of this Agreement.
SECTION 24. APPOINTMENT OF PLACEMENT AGENTS. Merrill Lynch and
Salomon Brothers are appointed as Placement Agents for the Notes.
SECTION 25. PRIVATE PLACEMENT AGREEMENT. The Company has entered
into the Private Placement Agreement with Merrill Lynch and Salomon Brothers,
and the Private Placement Distribution Agreement between the Company and
Merrill Lynch dated November 10, 1987 has been terminated.
SECTION 26. BENEFIT OF AGREEMENT. This Agreement is solely for
the benefit of the parties hereto and the Note holders and their successors and
assigns and no other person shall acquire or have any rights under or by virtue
hereof.
SECTION 27. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their officers duly authorized thereunto, as of
the day and year first above written.
COCA-COLA ENTERPRISES INC.
VICKI G. ROMAN
By:-----------------------------
Vicki G. Roman
Vice President and Treasurer
CHEMICAL BANK OF
NEW YORK
LISA J. PRICE
By:-----------------------------
Vice President
[Name & Title]
<PAGE>
EXHIBIT A
AUTHORIZED REPRESENTATIVES
OF COCA-COLA ENTERPRISES INC.
Group I
Name Signature
John R. Alm JOHN ALM
------------------------------
Group II
Name Signature
Vicki G. Roman VICKI G. ROMAN
------------------------------
Joyce King-Lavinder JOYCE KING-LAVINDER
------------------------------
<PAGE>
EXHIBIT B
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
NOTE NUMBER | AGENT'S NAME |
FXR- | |
- -------------------------------------------------------------------------------| COCA-COLA ENTERPRISES INC.
PRINCIPAL AMOUNT | ORIGINAL ISSUE DATE | AGENT'S COMMISSION|
$ | | |
- --------------------------------------------------------------------------------------------------------------
MATURITY DATE | TRADE DATE | INTEREST RATE | TAXPAYER'S ID | TRANSFERRED
| | | OR SOC. SEC. NO. |
| | | OF PURCHASER |
| | | |
- --------------------------------------------------------------------------------------------------------------
REDEMPTION DATE(S) | REDEMPTION PRICE(S) | REPAYMENT DATE(S) | REPAYMENT PRICE(S)| FIXED RATE
| | | | MEDIUM-TERM
- ------------------------------------------------------------------------------------| NOTE
NAME AND ADDRESS OF REGISTERED OWNER |
|PAYING AGENT-TRUSTEE
| CHEMICAL BANK
| 55 WATER STREET
| NEW YORK, N.Y. 10041
- -------------------------------------------------------------------------------------------------------------
CUSTOMER COPY RETAIN FOR TAX PURPOSES THE TIME OF THE TRANSACTION PLEASE SIGN AND RETURN SEE REVERSE
WILL BE FURNISHED UPON ENCLOSED RECEIPT SIDE
WRITTEN REQUEST OF THE CUSTOMER
- -------------------------------------------------------------------------------------------------------------
</TABLE>
No. FXR-
COCA-COLA ENTERPRISES INC.
FIXED RATE MEDIUM-TERM NOTE
INTEREST RATE: ORIGINAL ISSUE DATE: MATURITY DATE:
PRINCIPAL AMOUNT:
COCA-COLA ENTERPRISES INC. (the "Company"), FOR VALUE RECEIVED, hereby
promises to pay to:
or registered assigns, the Principal Amount of DOLLARS
on the Maturity Date shown above and to pay interest in arrears (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount
hereof, from the Original Issue Date of this Note until the Principal Amount
hereof has been paid in full, at the Interest Rate per annum shown above, in
consecutive semiannual payments on the 1st day of November in each year, and at
maturity, commencing with the interest payment date next succeeding the Original
Issue Date. Notwithstanding the foregoing, the first payment of interest on
this Note, if it is issued and dated after the 15th day of the calendar month
next preceding a May 1 or November 1 interest payment date and such interest
payment date, will be due and payable on the next succeeding November 1 or May
1.
Interest payable on any interest payment date other than at maturity
shall be payable to the person in whose name this Note is
<PAGE>
registered at the close of business on the 15th day of the month next preceding
the month in which such interest payment is due. Interest payable at maturity
shall be payable to the person to whom the principal of this Note shall be
payable.
Payments of principal and interest shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts. Payments of interest other
than interest payable at maturity will be made by check mailed to the
registered holder hereof at the address shown in the register maintained by the
Company at the office of Chemical Bank (the "Issuing and Paying Agent") for
such purpose or, at the option of the registered holder hereof, to such other
place in the United States of America as the registered holder hereof shall
designate to the Company in writing.
The principal amount hereof and interest due at maturity, will be paid
upon maturity in immediately available funds against presentation of this Note
at the office of the Issuing and Paying Agent in New York, New York (as of the
date of this Note, such office being located at Chemical Bank/Geoserve,
Corporate Trust Securities Window, 55 Water Street, Room 234, North Bldg. New
York, NY 10041), or at such other office or agency of the Company as the
Company shall designate by written notice to the registered holder of this
Note. The Company may treat the person in whose name this Note is registered
as the owner of such Note for the purpose of receiving payments of principal
and interest on this Note and for all other purposes whatsoever. The Company
shall not be obligated to register any transfer of this Note made without
compliance with the restrictions on transfer set forth above.
In any case where any interest payment date or the Maturity Date shall
not be a Business Day then payment of interest or principal need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the interest payment date or the Maturity Date,
and no interest shall be payable on the amount so payable for the period from
and after such interest payment date or the Maturity Date, as the case may be.
This Note has been issued by the Issuing and Paying Agent on behalf of
the Company pursuant to the Issuing and Paying Agency Agreement dated as of
October 24, 1994 between the Issuing and Paying Agent and the Company (the
"Issuing and Paying Agency Agreement"). Notes which have been or may be issued
pursuant to the Issuing and Paying Agency Agreement are referred to herein as
the "Notes."
This Note is not redeemable or subject to voluntary prepayment.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
All notices to the Company under this Note shall be in writing and
addressed to the Company at One Coca-Cola Plaza, N.W., Atlanta, Georgia
<PAGE>
30313, Attention: Treasurer, or to such other address of the Company as the
Company may notify the registered holder of this Note.
This Note is not valid for any purpose unless countersigned by Chemical
Bank, as Issuing and Paying Agent.
This Note shall be governed by the laws of the State of New York.
Dated: COCA-COLA ENTERPRISES INC.
COUNTERSIGNED FOR AUTHENTICATION ONLY:
CHEMICAL BANK, JOHN R. ALM
AS ISSUING AND PAYING AGENT
BY CHIEF FINANCIAL OFFICER
AUTHORIZED OFFICER
COCA-COLA ENTERPRISES INC.
CORPORATE SEAL 1986
DELAWARE
<PAGE>
[REVERSE SIDE OF NOTE]
Restrictions on Liens: The Company will not, nor will it permit any
Restricted Subsidiary (as defined below) to, create, incur, issue, assume or
guarantee any Secured Debt (as defined below) without in any such case
effectively providing, concurrently with the creation, incurrence, issuance,
assumption or guaranty of any such Secured Debt, that this Note (together with,
if the Company shall so determine, any other indebtedness of or guaranteed by
the Company or such Restricted Subsidiary ranking equally with this Note and
then existing or there after created) shall be secured equally and ratably with
or prior to such Secured Debt so long as such Secured Debt shall be secured.
The term "Secured Debt" means notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed secured by any Mortgage. The term
"Mortgage" or "Mortgages" means any mortgage, pledge, lien, security interest
or other encumbrance upon any Principal Property (as defined below) or on any
shares of stock or indebtedness of any Restricted Subsidiary (whether such
Principal Property, shares of stock or indebtedness are now owned or hereafter
acquired). The foregoing restrictions shall not apply to:
(1) Mortgages on property, shares of stock or indebtedness of
any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(2) Mortgages on property or shares of stock existing at the
time of acquisition of such property or stock by the Company or a
Restricted Subsidiary or existing as of October 2, 1987;
(3) Mortgages to secure the payment of all or any part of the
price of acquisition, construction or improvement on such property or
stock by the Company or a Restricted Subsidiary, or to secure any
Secured Debt incurred by the Company or a Restricted Subsidiary, prior
to, at the time of, within 90 days after the later of the acquisition or
completion of construction (including any improvements on an existing
property), which Secured Debt is incurred for the purpose of financing
all or any part of the purchase price thereof or construction of
improvements thereon; provided, however, that, in the case of any such
acquisition, construction or improvement the Mortgage shall not apply to
any property theretofore owned by the Company or a Restricted
Subsidiary, other than, in the case of any such construction or
improvement, any theretofore substantially unimproved real property on
which the property or improvement so constructed is located;
(4) Mortgages securing Secured Debt of a Restricted
Subsidiary owing to the Company or to another Restricted Subsidiary;
(5) Mortgages on property of a corporation existing at the
time such corporation is merged into or consolidated with the Company or
a Restricted Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation or firm as an entirety or
substantially as an entirety in the Company or a
<PAGE>
Restricted Subsidiary;
(6) Mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any state
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any state thereof, or in
favor of any other country or any political subdivision thereof, or any
department, agency or instrumentality of such country or political
subdivision, to secure partial progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Mortgages; or
(7) any extension, renewal or replacement for successive
extensions, renewals or replacements in whole or in part of any Mortgage
referred to in the foregoing clauses (1) through (6), inclusive;
provided, however, that the principal amount of Secured Debt secured
thereby shall not exceed the principal amount of Secured Debt so secured
at the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a part of
the property which secured the Mortgage so extended, renewed or replaced
(plus improvements and construction on such property).
Notwithstanding the foregoing provisions, the Company and any one or
more Restricted Subsidiaries may, without securing this Note, create, incur,
issue, assume or guarantee Secured Debt secured by a Mortgage which would
otherwise be subject to the foregoing restrictions in an aggregate amount
which, together with all other Secured Debt of the Company and its Restricted
Subsidiaries which (if originally created, incurred, issued, assumed or
guaranteed at such time) would otherwise be subject to the foregoing
restrictions (not including Secured Debt permitted to be secured under clause
(1) through (7) above), does not at the time exceed 10% of the stockholders'
equity of the Company and its consolidated Subsidiaries as shown on the
financial statements of the Company as of the end of the fiscal year preceding
the date of determination.
Restrictions on Sale and Leaseback Transactions: The Company will not,
nor will it permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction (as defined below) unless:
(1) the Company or such Restricted Subsidiary would be
entitled, pursuant to the above restrictions with respect to the
creation of liens ("Lien Restrictions"), to create, incur, issue, assume
or guarantee indebtedness secured by a Mortgage upon such property at
least equal in amount to the Attributable Debt (as defined below) in
respect of such arrangement without equally and ratably securing this
Note; provided, however, that from and after the date on which such
arrangement becomes effective, the Attributable Debt in respect of such
arrangement shall be deemed for all purposes under the Lien Restrictions
to be Secured Debt subject to the provisions of the Lien Restrictions;
or
<PAGE>
(2) since October 2, 1987 and within a period commencing
twelve months prior to the consummation of such Sale and Leaseback
Transaction and ending twelve months after the consummation of such Sale
and Leaseback Transaction, the Company or such Restricted Subsidiary, as
the case may be, has expended, or will expend, for the Principal
Property an amount equal to (A) the net proceeds of such Sale and
Leaseback Transaction, and the Company elects to designate such amount
as a credit against such Sale and Leaseback Transaction, or (B) a part
of the net proceeds of such Sale and Leaseback Transaction and the
Company elects to designate such amount as a credit against such Sale
and Leaseback Transaction and applies an amount equal to the remainder
of the net proceeds as provided in clause (3) of this paragraph; or
(3) such Sale and Leaseback transaction does not come
within the exceptions provided by clause (1) of this paragraph and the
Company does not make the election permitted by clause (2) of this
paragraph or makes such election only as to a part of such net proceeds,
in either of which event the Company shall apply an amount in cash equal
to the Attributable Debt in respect of such arrangement (less any amount
elected under clause (2) of this paragraph) to the retirement, within 90
days of the effective date of any such arrangement, of indebtedness for
borrowed money of the Company or any Restricted Subsidiary (other than
indebtedness for borrowed money of the Company which is subordinated to
the Notes) which by its terms matures at or is extendible or renewable
at the sole option of the obligor without requiring the consent of the
obligee to a date more than twelve months after the date of the creation
of such indebtedness for borrowed money (it being understood that such
retirement may be made by prepayment of such indebtedness for borrowed
money, if permitted by the terms thereof, as well as by payment at
maturity and that, at the option of the Company, such indebtedness may
include the Notes).
The term "Attributable Debt" in respect of a Sale and Leaseback
Transaction means the present value (discounted at the interest rate borne by
the Notes compounded semiannually) of the obligation of a lessee for net rental
payments during the remaining term or any lease (including any period for which
such lease has been extended).
The term "Business Day" as used in this Note means any day which is not
a Saturday or a Sunday and which is neither a legal holiday nor a day on which
bank institutions are authorized or required by law or regulation to close in
the City of New York.
The term "Principal Property" means each bottling plant or facility of
the Company or a Restricted Subsidiary located within the United States of
America (other than its territories and possession) or Puerto Rico, except any
such bottling plant or facility which the Board of Directors of the Company by
resolution reasonably determines not to be of material importance to the total
business conducted by the Company and its Restricted Subsidiaries.
The term "Subsidiary" means any corporation of which stock having
<PAGE>
by its terms ordinary voting power to elect at least a majority of the board of
directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned by the Company or by the Company and one or more
Subsidiaries or by one or more Subsidiaries.
The term "Restricted Subsidiary" means any Subsidiary (i) substantially
all the property of which is located or substantially all of the business of
which is carried on, within the United States of America, the District of
Columbia or Puerto Rico and (ii) which owns or leases any Principal Property.
The term "Sale and Leaseback Transaction" means any arrangement with any
person providing for the leasing by the Company or any Restricted Subsidiary of
any Principal Property, whether such Principal Property is now owned or
hereafter acquired (except for temporary leases for a term, including renewals
at the option of the lessee, of not more than three years and except for leases
between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries) which property has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such person with the intention of
taking back a lease of such property.
Events of Default: The registered holder of this Note may, by notice in
writing to the Company, accelerate the maturity of this Note upon the
occurrence of one or more of the following Events of Default. An "Event of
Default" occurs if:
(1) the Company defaults in the payment of interest on any
Note when the same becomes due and payable and the Default continues for
a period of 30 days;
(2) the Company defaults in the payment of the principal of any
Note when the same becomes due and payable at maturity;
(3) the Company fails to comply with any of its other
agreements in this Note and the Default continues for the period and
after the notice specified below;
(4) there shall be a default under any bond, debenture,
note or other evidence of indebtedness for borrowed money or under any
mortgage, indenture or other instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or under any guarantee of payment by the Company
of indebtedness for money borrowed, whether such indebtedness or
guarantee now exists or shall hereafter be incurred or created, and as a
result of such default such indebtedness has by acceleration or
otherwise under the terms of such bond, debenture, note, mortgage,
indenture, guarantee of payment or such other evidence of indebtedness,
become due prior to its stated maturity and such default continues for a
period of 7 days after the date upon which such indebtedness has
<PAGE>
become due prior to its stated maturity; provided, however, that no
Default shall exist if all such defaults do not relate to such
indebtedness or such guarantees with an aggregate principal amount in
excess of $15,000,000;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law;
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors: or
(6) a court of competent jurisdiction enters an order of decree
under any Bankruptcy Law that;
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90 days.
The term "Default" means any event which is, or after notice or passage
of time would be, an Event of Default. The term "Bankruptcy Law" means Title
11, U.S. Code or any similar Federal or State law for the relief of debtors.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Holders
of at least 25% in principal amount of the outstanding Notes notify the Company
of the Default and the Company does not cure the Default within 80 days after
receipt of the notice. The notice must specify the default, demand that it be
remedied and state that the notice is a "Notice of Default". When a Default is
cured, it stops continuing.
The Company shall not consolidate with or merge with or into, or
transfer all or substantially all of its assets to, any person unless:
(1) either the Company shall be the resulting or surviving
entity, or such successor person is a corporation organized and existing
under the laws of the United States, a State thereof or the District of
Columbia and such person expressly assumes all the obligations of the
Company under the Notes (in which case all such
<PAGE>
obligations of the Company shall terminate upon the assumption of such
obligations by the successor person), and
(2) immediately before and immediately after giving effect
to such transaction and treating any indebtedness which becomes an
obligation of the Company as a result of such transaction as having been
incurred by the Company at the time of such transaction, no Default or
Event of Default shall have occurred and be continuing.
<PAGE>
EXHIBIT C
FEE SCHEDULE FOR
COCA-COLA ENTERPRISES INC.
PRIVATE PLACEMENT PROGRAM
I. Acceptance Fee Waived
II. Annual Administration Fee
A. Current Outstanding $3,000
B. Additional Issues or Shares $1,500/Issue
The annual fee covers the administrative responsibilities as Registrar
and Paying Agent and duties under the provisions of the agreements.
Payable annually in advance.
C. Out of Pocket Expenses As Incurred
III. Transaction Fees
Assumes less than 20 bondholders and less than 10 transfers
per year.
IV. Notes
1. Our proposed fees are contingent upon standard review and
acceptance of the appropriate documentation.
2. Our proposed fees assumes that funds for interest and
principal payments are received by the bank in available
funds no later than on payment date.
3. Fees for services not contemplated on this schedule will be
provided upon request.
4. Out-Of-Pocket expenses include, but are not limited to legal
expenses, postage, special stationery, telecommunications,
etc.
<PAGE>
EXHIBIT 4.4
- --------------------------------------------------------------------------------
$1,000,000,000
CREDIT AGREEMENT
DATED AS OF
DECEMBER 7, 1994
AMONG
COCA-COLA ENTERPRISES INC.
AND
THE BANKS LISTED HEREIN
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Notice of Syndicated Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.03. Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.04. Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.05. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.06. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.07. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.08. Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.09. Optional Termination or Reduction of
Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10. Mandatory Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.14. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.15. Regulation D Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.02. First Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE>
<TABLE>
ARTICLE V
COVENANTS OF THE BORROWER
<S> <C>
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.01. Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.03. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.04. Prime Loans Substituted for Affected Fixed
Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.05. Borrower's Election to Substitute or
Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.02. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.03. Expenses; Documentary Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.04. Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.05. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.06. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.07. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.09. New York Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.10. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
EXHIBIT A Domestic Note
EXHIBIT B Euro-Dollar Note
EXHIBIT C Money Market Note
EXHIBIT D Invitation for Money Market Quotes
EXHIBIT E Money Market Quote
EXHIBIT F Opinion of Counsel for the Borrower
EXHIBIT G Opinion of Counsel for the Banks
</TABLE>
ii
<PAGE>
CREDIT AGREEMENT
Agreement dated as of December 7, 1994 among COCA-COLA ENTERPRISES
INC., a Delaware corporation and the BANKS listed on the signature pages
hereof.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"ABSOLUTE RATE AUCTION" means a solicitation of Money Market Quotes
setting forth Money Market Rates pursuant to Section 2.03.
"AVAILABLE COMMITMENT" means, with respect to each Bank, the amount
equal to (i) such Bank's Commitment less (ii) such Bank's Existing Advances.
"BANK" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns.
"BORROWER" means Coca-Cola Enterprises Inc., a Delaware corporation,
and its successors.
"BORROWING" has the meaning set forth in Section 1.03.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMMITMENT" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 2.09.
"CONSOLIDATED" refers to the consolidation of the financial statements
of the Borrower and its Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation.
"DEBT" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, other than (x) trade accounts payable
on customary terms in the ordinary course of business and (y) financial
obligations under management consulting contracts or noncompete agreements with
unaffiliated Persons entered into in connection with the acquisition of the
bottling
<PAGE>
businesses of such Persons, (ii) financial obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) financial obligations as
lessee under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases and (iv)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or financial
obligations of others of the kinds referred to in clauses (i) through (iii)
above.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located
at its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Domestic Lending Office) or such other office as
such Bank may hereafter designate as its Domestic Lending Office by notice to
the Borrower.
"DOMESTIC LOANS" means Prime Loans.
"DOMESTIC NOTES" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Domestic Loans.
"EFFECTIVE DATE" has the meaning set forth in Section 8.09.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means, as of any date, any trade or business
(whether or not incorporated) which (as of such date) is a member of a group of
which the Borrower is a member and which, as of such date, is under common
control within the meaning of either Section 414(b) or Section 414(c) of the
Code, and the regulations promulgated and rulings issued thereunder.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth on the signature pages
hereof (or identified on the signature pages hereof
2
<PAGE>
as its Euro-Dollar lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar lending Office by
notice to the Borrower.
"EURO-DOLLAR LOAN" means a Loan to be made by a Bank pursuant to
Section 2.01 as a Euro-Dollar Loan in accordance with the applicable Notice of
Borrowing.
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.07(b).
"EURO-DOLLAR NOTES" means promissory notes of the Borrower,
substantially in the form of Exhibit B hereto, evidencing the obligation of the
Borrower to repay the Euro-Dollar Loans.
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of
Citibank, N.A, Union Bank of Switzerland, and Swiss Bank Corporation, and each
such other bank as may be appointed pursuant to Section 8.06(d).
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.15.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXISTING ADVANCES" means, with respect to each Bank, the principal
amount of outstanding Loans (as defined in the Existing Credit Agreement), if
any, of such Bank under the Existing Credit Agreement.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of
April 12, 1993 among the Borrower and the banks named therein.
"FIXED RATE LOANS" means Euro-Dollar Loans or Money Market Loans
(excluding Money Market Loans bearing interest at the Prime Rate pursuant to
Section 7.01) or any combination of the foregoing.
"HIGH RATING" means, with respect to any Rating Agency, that such
agency shall have rated the commercial paper of the Borrower, as set forth
below:
Rating Agency Rating
------------- ------
Standard & Poor's Corporation A-1 or higher
Moody's Investors Service, Inc. P-1
Fitch Investors Service, Inc. F-1 or higher
Substitute Rating Agency equivalent to above
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
by which the present value of the vested benefits under such Plan exceeds the
fair market value of the assets of such Plan
3
<PAGE>
allocable to such benefits, as determined using such reasonable actuarial
assumptions and methods as are specified in the Schedule B (Actuarial
Information) to the most recent annual report (Form 5500 Series) filed with
respect to such Plan.
"INTEREST PERIOD" means for any Borrowing, the period commencing on
the date of such Borrowing and ending, with respect to a Euro-Dollar Borrowing
or a Money Market Borrowing, 1, 2, 3 or 6 months thereafter, as the Borrower
may elect in the applicable Notice of Borrowing, and, with respect to a Prime
borrowing, 30 days thereafter; in each case, provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (c) below, end
on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which begins before December 8,
1999 and would otherwise end after such date shall end on December 8,
1999.
"LENDING OFFICE" means as to any Bank its Domestic Lending Office, its
Euro-Dollar Lending Office or its Money Market Lending Office, as the context
may require.
"LIBOR AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"LOAN" means a Domestic Loan, a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans, Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.07(b).
"LOW RATING" means, with respect to any Rating Agency, that such
agency shall have rated the commercial paper of the Borrower, as set forth
below:
Rating Agency Rating
------------- ------
Standard & Poor's Corporation A-3 or below
4
<PAGE>
Moody's Investors Service, Inc. P-3 or below
Fitch Investors Service, Inc. F-3 or below
Substitute Rating Agency equivalent to above
"MAJORITY BANKS" means at any time Banks having 66 2/3% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"MIDDLE RATING" means, with respect to any Rating Agency, that such
agency shall have rated the commercial paper of the Borrower, as set forth
below:
Rating Agency Rating
------------- ------
Standard & Poor's Corporation A-2
Moody's Investors Service, Inc. P-2
Fitch Investor Services, Inc. F-2
Substitute Rating Agency equivalent to above
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower; provided that any Bank may from time to time by notice to the
Borrower designate separate Money Market Lending Offices for its Money Market
LIBOR Loans and/or its Money Market Rate Loans, in which case all references
herein to the Money Market Lending Office of such Bank shall be deemed to refer
to any one or more of such offices, as the context may require.
"MONEY MARKET LIBOR LOAN" means a Loan to be made by a Bank pursuant
to a LIBOR Auction (including such a Loan bearing interest at the Prime Rate
pursuant to Section 7.01).
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market
Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section
2.03(c)(ii)(C).
"MONEY MARKET NOTES" means promissory notes of the Borrower,
substantially in the form of Exhibit C hereto, evidencing the obligation of the
Borrower to repay the Money Market Loans.
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"MONEY MARKET RATE" has the meaning set forth in Section
2.03(c)(ii)(D).
"MONEY MARKET RATE LOAN" means a Loan to be made by a Bank
5
<PAGE>
pursuant to an Absolute Rate Auction.
"MULTIEMPLOYER PLAN" means, as of any date, a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
affiliate is making or accruing an obligation to make contributions, or has
within the current plan year or any of the immediately preceding two plan years
made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means, as of any date, an employee benefit
plan, other than a Multiemployer Plan, (i) which is subject to Title IV of
ERISA, (ii) to which the Borrower or an ERISA Affiliate, and one or more
employers other than the Borrower or an ERISA Affiliate, is making or accruing
an obligation to make contributions or, in the event that any such plan has
been terminated, to which the Borrower or any ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan and (iii) either (A) whose assets have a
market value as of such date, as reasonably determined by Borrower in good
faith, in excess of $100,000,000 or (B) under which an Insufficiency exists and
the amount of such Insufficiency which is allocable to the Borrower or any
ERISA Affiliate as of such date, as reasonably determined by the Borrower in
good faith, exceeds $5,000,000.
"NOTE" means a Domestic Note or a Euro-Dollar Note or a Money Market
Note, and "Notes" means the Domestic Notes or the Euro-Dollar Notes or the
Money Market Notes or any combination of the foregoing.
"NOTICE OF BORROWING" means a Notice of Syndicated Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(d)).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PRIME LOAN" means a Loan to be made by a Bank pursuant to Section
2.01 as a Prime Loan in accordance with the applicable Notice of Borrowing or
pursuant to Article VII.
"PRIME RATE" means the rate of interest publicly announced by
Citibank, N.A. in New York City from time to time as its Prime Rate.
6
<PAGE>
"RATING AGENCY" means any of Standard & Poor's Corporation, Moody's
Investors Services, Inc., Fitch Investor Services, Inc., or any substitute
rating agency designated by the Borrower and acceptable to the Majority Banks
(the latter sometimes referred to herein a "Substitute Rating Agency"). When
reference is made herein to "Rating Agencies" it is to more than one Rating
Agency.
"REFERENCE BANKS" means the Euro-Dollar Reference Banks, and
"Reference Bank" means any one of such Reference Banks.
"REFUNDING BORROWING" means a Borrowing which, after application of
the proceeds thereof, results in no net increase in the outstanding principal
amount of Loans made by any Bank (but, without limiting the generality of the
foregoing, shall not include any Borrowing the proceeds of which are applied to
repay Money Market Loans).
"REGULATION U' means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"SINGLE EMPLOYER PLAN" means, as of any date, an employee benefit
plan, other than a Multiemployer Plan or a Multiple Employer Plan, (i) which is
subject to Title IV of ERISA, (ii) which is (or, in the event that any such
plan has been terminated within five years after a transaction described in
Section 4069 of ERISA involving the Borrower or any ERISA Affiliate, was)
maintained for employees of the Borrower or any ERISA Affiliate and (iii) whose
assets have a market value as of such date, as reasonably determined by the
Borrower in good faith, in excess of $100,000,000 or which has an Insufficiency
as of such date, as reasonably determined by the Borrower in good faith, in
excess of $5,000,000.
"SUBSIDIARY" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions are at
the time directly or indirectly owned by the Borrower.
"SUBSTITUTE RATING AGENCY" has the meaning set forth in the definition
of "Rating Agency."
"SYNDICATED LOAN" means a Domestic Loan or a Euro-Dollar Loan made by
a Bank pursuant to Section 2.01.
"TERMINATION EVENT" means (i) a "reportable event", as such term is
described in Section 4043(b) of ERISA other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC, with respect to a Plan,
or an event described in Section 4062(e) of ERISA involving a Plan, or (ii) the
withdrawal within the meaning of Section 4063(a) of ERISA) of the Borrower or
7
<PAGE>
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which
it was a "substantial employer", as such term is defined in Section 4001(a)(2)
of ERISA, or the incurrence of liability by the Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple Employer Plan,
or (iii) the distribution of a notice of intent to terminate a Plan pursuant to
Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041(e) of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA or (v)
any other event or condition which, as reasonably determined by the Borrower in
good faith, might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"UNCONTESTED WITHDRAWAL LIABILITY" means as of any date, Withdrawal
Liability for which the Borrower has not provided the Banks with evidence
reasonably satisfactory to the Banks that there are reasonable grounds for
contesting, and the Borrower is in fact contesting in a timely and appropriate
manner, such Withdrawal Liability.
"WITHDRAWAL LIABILITY" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes required by the accounting
profession or changes concurred in by the Borrower's independent public
accountants) with the most recent audited Consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the Banks.
SECTION 1.03. TYPES OF BORROWINGS. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article II on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Syndicated Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Available Commitments, while a "Money Market Borrowing" is a Borrowing
under Section 2.03 in which the Bank participants are determined by the
Borrower in accordance therewith).
ARTICLE II
8
<PAGE>
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to lend to the Borrower
pursuant to this Section from time to time amounts such that the aggregate
principal amount of Syndicated Loans by such Bank at any one time outstanding
shall not exceed the amount of its Available Commitment. Each Borrowing under
this Section shall be in an aggregate principal amount of $25,000,000 or any
larger multiple of $5,000,000 (except that any such Borrowing may be in the
aggregate amount of the unused Available Commitments) and shall be made from
the several Banks ratably in proportion to their respective Available
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.11, prepay Loans and
reborrow at any time.
SECTION 2.02. NOTICE OF SYNDICATED BORROWINGS. The Borrower shall
give each of the Banks notice (a "NOTICE OF SYNDICATED BORROWING") not later
than 10:00 AM. (New York City time) on (x) the date of each Prime Borrowing,
and (y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) every Bank's ratable share of such Borrowing,
(d) whether the Loans comprising such Borrowing are to be
Prime Loans or Euro-Dollar Loans, and
(e) in the case of a Euro-Dollar Borrowing, the duration
of the Interest Period applicable thereto, subject to the provisions
of the definition of Interest Period.
SECTION 2.03. MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. In addition to Syndicated
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in
this Section, request the Banks to make offers to make Money Market
Loans to the Borrower. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation
to, accept any such offers in the manner set forth in this Section.
(b) MONEY MARKET QUOTE REQUEST. When the Borrower wishes
to request offers to make Money Market Loans under this Section, it
shall transmit to each Bank by facsimile an
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Invitation for Money Market Quotes substantially in the form of
Exhibit D hereto so as to be received no later than 10:00 AM. (New
York City time) on (x) the fourth Euro-Dollar Business Day prior to
the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in any
such case, such other time and date as the Borrower and all Banks may
agree), specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR Auction
or a Domestic Business Day in the case of an Absolute Rate
Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $25,000,000 or a larger multiple of $5,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period,
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market Rate, and
(v) any Borrower request for modification to the
procedures otherwise applicable to the requested Money Market
Quotes or Money Market Loans.
The Borrower may request offers to make Money Market Loans for more than one
(but not more than three) Interest Periods in a single Invitation for Money
Market Quotes. No Invitation for Money Market Quotes shall be given within
five Euro-Dollar Business Days (or such other number of days as the Borrower
and all Banks may agree) of any other Invitation for Money Market Quotes.
(c) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.
(i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (c) and must be submitted to the Borrower by
facsimile at its offices specified in or pursuant to Section
8.01 not later than (x) 11:00 A.M. (New York City time) on the
third Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:00 A.M.
(New York City time) on the proposed date of Borrowing, in the
case of an Absolute Rate Auction (or, in any such case, such
other time and date as the Borrower and all Banks may agree).
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Subject to Articles III and VI, any Money Market Quote so made
shall be irrevocable except with the written consent of the
Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit E hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money
Market Loan for which each such offer is being made
(and if such Money Market Quote is in response to an
invitation for Money Market Quotes specifying more
than one Interest Period, the maximum aggregate
principal amount of Money Market Loans for which
offers are being made), which principal amount as to
each Money Market Loan (x) may be greater than or
less than the Available Commitment of the quoting
Bank, (y) must be $1,000,000 or a larger multiple
thereof and (z) may not exceed the principal amount
of Money Market Loans for which offers were
requested,
(C) in the case of a LIBOR Auction, the
margin above or below the applicable London Interbank
Offered Rate (the "Money Market Margin") offered for
each such Money Market Loan, expressed as a
percentage (rounded to the nearest 1/10,000th of 1%)
to be added to or subtracted from the applicable
London Interbank Offered Rate,
(D) in the case of an Absolute Rate
Auction, the rate of interest per annum (rounded to
the nearest 1/10,000th of 1%) (the "Money Market
Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
(iii) Each Money Market Quote must:
(A) be substantially in the form of
Exhibit E hereto and specify all of the information
required by subsection (c)(ii);
(B) not contain qualifying, conditional
or similar language;
(C) not propose terms other than or in
addition to those set forth in the applicable
Invitation for Money Market Quotes; and
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(D) arrive by the time set forth in
subsection (c)(i).
Any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by any Bank
with respect to the same Invitation for Money Market Quotes shall be
disregarded by the Borrower unless such subsequent Money Market Quote
is submitted solely to correct a manifest error in such former Money
Market Quote.
(d) ACCEPTANCE AND NOTICE BY BORROWER. Not later than
(x) 2:00 P.M. (New York City time) on the third Euro- Dollar Business
Day prior to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 10:00 A.M. (New York City time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in any such
case, such other time and date as the Borrower and all Banks may
agree), the Borrower shall notify all Banks of its acceptance or
nonacceptance of the offers so received by it pursuant to subsection
(c); provided that in the case of an Absolute Rate Auction, the
Borrower shall have at least 30 minutes to accept or reject a Money
Market Quote after receiving such quote from each Bank pursuant to
subsection (c). In the case of acceptance, such notice (a "NOTICE OF
MONEY MARKET BORROWING") shall specify the aggregate principal amount
of offers for each Interest Period that are accepted. The Borrower
may accept any Money Market Quote in whole or in part, provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Invitation for Money Market Quotes,
(ii) the principal amount of each Money Market
Borrowing must be $25,000,000 or a larger multiple of
$5,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market Rates,
as the case may be, and
(iv) the Borrower may not accept any offer that
fails to comply with subsection (c)(iii) or otherwise fails to
comply with the requirements of this Agreement.
(e) ALLOCATION BY BORROWER. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Rates,
as the case may be, for a greater aggregate principal amount than the
amount in respect of which offers are accepted for the related
Interest Period, the principal amount of Money Market Loans in respect
of which such offers are accepted shall be allocated by the Borrower
among such Banks as nearly as possible (in such multiples, not greater
than $100,000, as
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the Borrower may deem appropriate) in proportion to the aggregate
principal amount of such offers; provided, however, that no Bank shall
be required, as a result of such allocation, to make a Money Market
Loan in an original principal amount equal to less than the greater of
(i) $1,000,000 and (ii) the minimum amount, if any, specified in such
Bank's Money Market Quote (which minimum amount shall not be greater
than $5,000,000.00). Determinations by the Borrower of the amounts of
Money Market Loans shall be conclusive in the absence of manifest
error.
SECTION 2.04. FUNDING OF LOANS.
(a) Upon receipt of a Notice of Borrowing by a Bank, such
Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Unless a Bank determines that any applicable
condition specified in Article III has not been satisfied, not later
than 12:00 Noon (New York City time) on the date of each Borrowing,
each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its ratable share of
such Borrowing, in federal or other funds immediately available in New
York City, to the Borrower at the Domestic Lending Office of such Bank
and, as soon as practicable thereafter, shall credit such amount to a
regular deposit account maintained by the Borrower in New York City or
shall credit, or arrange for appropriate transfer of, such amount to
such other account in New York City as the Borrower and such Bank may
agree.
(c) If any Bank makes a new Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding Loan
from such Bank, such Bank shall apply the proceeds of its new Loan to
make such repayment and only an amount equal to the difference (if
any) between the amount being borrowed and the amount being repaid
shall be made available by such Bank to the Borrower as provided in
subsection (b), or remitted by the Borrower to such Bank as provided
in Section 2.12, as the case may be.
SECTION 2.05. NOTES.
(a) The Domestic Loans of each Bank shall be evidenced by
a single Domestic Note payable to the order of such Bank for the
account of its Domestic Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Domestic Loans.
(b) The Euro-Dollar Loans of each Bank shall be evidenced
by a single Euro-Dollar Note payable to the order of such Bank for the
account of its Euro-Dollar Lending Office in
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an amount equal to the aggregate unpaid principal amount of such
Bank's Euro-Dollar Loans.
(c) The Money Market Loans of each Bank shall be
evidenced by a single Money Market Note payable to the order of such
Bank for the account of its Money Market Lending Office in an amount
equal to the aggregate unpaid principal amount of such Bank's Money
Market Loans.
(d) Each Bank may, by notice to the Borrower (to be given
not later than two Domestic Business Days prior to the first
Borrowing) request that its Money Market Rate Loans be evidenced by
separate Money Market Notes, in each case in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such Note shall
be in substantially the form of Exhibit C hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Notes" or
"Money Market Note" of such Bank shall be deemed to refer to and
include either or both of such Notes, as the context may require.
(e) Upon receipt of each Bank's Notes pursuant to Section
3.02(a), each Bank shall record, and prior to any transfer of its
Notes shall endorse on the schedules forming a part thereof
appropriate notations to evidence, the date, amount and maturity of
each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto; provided that the
failure of any Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the
Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
SECTION 2.06. MATURITY OF LOANS. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. INTEREST RATES.
(a) Each Prime Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the
Prime Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of and,
to the extent permitted by law, overdue interest on any Prime Loan
shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 1% plus the Prime Rate for such
day.
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(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate plus the Euro-Dollar Margin. Such interest
shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than three months, at intervals of
three months after the first day thereof.
The "EURO-DOLLAR MARGIN" applicable to any Interest
Period means the following margin percentages of one percent (1%)
determined by the ratings of Borrower's commercial paper by the Rating
Agencies in effect at all times during such Interest Period in
accordance with the following table:
High Rating of three Rating
Agencies .16
High Rating of two Rating
Agencies and Middle Rating of
one Rating Agency or High
Rating of one Rating Agency
and Middle Rating of two Rating
Agencies .16
Middle Rating of three Rating
Agencies .1875
Low Rating of one or two (but no more
than two) Rating Agencies .225
Low Rating of three Rating
Agencies .225
The "LONDON INTERBANK OFFERED RATE" applicable to any
Interest Period means the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the respective rates per annum at
which deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00
A.M. (London time) two Euro-Dollar Business Days before the first day
of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference
Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
(c) Any overdue principal of and, to the extent permitted
by law, overdue interest on any Euro-Dollar Loan shall bear interest,
payable on demand, for each day from and including the date payment
thereof was due to, but excluding, the date of actual payment, at a
rate per annum equal to the
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sum of 1% plus the Euro-Dollar Margin plus the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (i) the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the respective rates per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than
three months as each Bank may elect) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the
Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference
Bank in the London interbank market for the applicable period
determined as provided above by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage (or, if the circumstances described in clause (a)
or (b) of Section 7.01 shall exist, at a rate per annum equal to the
sum of 1% plus the rate applicable to Prime Loans for such day).
(d) Subject to Section 7.01, each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to
the sum of the London Interbank Offered Rate for such Interest Period
(determined in accordance with Section 2.07(b) as if each Euro-Dollar
Reference Bank were to participate in the related Money Market
Borrowing ratably in proportion to its Available Commitment) plus (or
minus) the Money Market Margin quoted by the Bank making such Loan in
accordance with Section 2.03. Each Money Market Rate Loan shall bear
interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Money
Market Rate quoted by the Bank making such Loan in accordance with
Section 2.03. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day
thereof. Any overdue principal of and, to the extent permitted by
law, overdue interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal
to the sum of 1% plus the Prime Rate for such day.
(e) The Borrower shall determine each interest rate
applicable to the Loans hereunder and shall give prompt notice thereof
to each participating Bank by telex or facsimile. Any Bank disputing
any such rate of interest so determined shall give prompt notice of
the interest rate determined by such Bank to the Borrower and each
other participating Bank by telex or facsimile, and its determination
thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Borrower and the other Banks as contemplated
by this Section. If any Reference Bank does not
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furnish a timely quotation to the Borrower or any Bank seeking a
quotation, such Bank shall determine the relevant interest rate on the
basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 7.01 shall apply.
SECTION 2.08. FACILITY FEES. As long as Commitments hereunder are
outstanding, the Borrower shall pay to each Bank a facility fee at the
following rates of one percent (1%) per annum, computed on the daily average
amount of its Commitment for each day on which the commercial paper of the
Borrower has the applicable ratings by the Rating Agencies shown in the
following table:
High Rating of three Rating
Agencies .07
High Rating of two Rating
Agencies and Middle Rating of
one Rating Agency or High
Rating of one Rating Agency
and Middle Rating of two Rating
Agencies .09
Middle Rating of three Rating
Agencies .125
Low Rating of one or two (but no more
than two) Rating Agencies .15
Low Rating of three Rating
Agencies .20
Such facility fees shall be payable in arrears quarterly on each March 31, June
30, September 30 and December 31 and on the termination of the Commitments in
their entirety. Such facility fee shall accrue from and including the date
this Agreement becomes effective in accordance with Section 8.09, to but
excluding the date Commitments are terminated hereunder.
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. The
Borrower may, upon at least three Domestic Business Days' notice to each Bank,
terminate at any time, or ratably reduce from time to time by an aggregate
amount of $25,000,000 or any larger multiple of $5,000,000, the aggregate
amount of the Commitments in excess of the aggregate outstanding principal
amount of the Loans.
SECTION 2.10. MANDATORY TERMINATION OF COMMITMENTS. The Commitments
shall terminate on December 8, 1999, and any Loans then
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outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.11. OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least three Domestic
Business Days' notice to each Bank, prepay any Prime Loans comprising
a single Borrowing in whole at any time, or from time to time in part
in amounts aggregating $25,000,000 or any larger multiple of
$5,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Prime Loans
comprising a single Borrowing of the several Banks included in such
Borrowing.
(b) Except as provided in Section 7.02 the Borrower may
not prepay all or any portion of the principal amount of any Fixed
Rate Loan prior to the maturity thereof.
(c) Any notice of prepayment pursuant to this Section shall
not thereafter be revocable by the Borrower.
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS. The Borrower shall
make each payment of principal of, and interest on, the Loans and of additional
compensation hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in federal or other funds immediately available in New York
City, to the Banks to which such amounts are due at their respective Domestic
Lending Offices. Whenever any payment of principal of, or interest on, the
Domestic Loans or of additional compensation shall be due on a day which is not
a Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
SECTION 2.13. FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article VI or VII or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or the end of an applicable period fixed pursuant to Section 2.07(c),
or if the Borrower fails to borrow any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.02 or 2.03(d), the
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Borrower shall reimburse each Bank on demand for any resulting loss or expense
incurred by it (or by an existing or prospective participant in the related
Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow, provided
that such Bank shall have delivered to the Borrower a certificate as to the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error, and provided further that in cases where a Bank has
granted a participation in a Loan, the aggregate amount of losses and expenses
demanded by such Bank shall not exceed the aggregate amount of losses and
expenses that such Bank would have incurred had it not granted such
participation.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES. Interest based on the
Prime Rate and facility fees hereunder shall be computed on the basis of a year
of 365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
SECTION 2.15. REGULATION D COMPENSATION. Each Bank that is subject
to reserve requirements of the Board of Governors of the Federal Reserve System
(or any successor) may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the
related Euro-Dollar Loan of such Bank at a rate per annum equal to the excess
of (i) (A) the applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate specified in clause
(i)(A). Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least five Euro-Dollar Business Days after the giving of such notice and (y)
shall notify the Borrower at least five Euro-Dollar Business Days prior to each
date on which interest is payable on the amount then due it under this Section.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes Loans by a non-United States office of any Bank to
United States residents).
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ARTICLE III
CONDITIONS TO BORROWINGS
The obligation of any Bank to make a Loan on the occasion of any
Borrowing is subject to the satisfaction of the following conditions:
SECTION 3.01. ALL BORROWINGS. In the case of each Borrowing:
(a) receipt by each Bank of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case maybe;
(b) the fact that, immediately after giving effect to
such Borrowing, the aggregate outstanding principal amount of the
Loans and Existing Advances will not exceed the aggregate amount of
the Commitments;
(c) the fact that, both before and immediately after
giving effect to such Borrowing, no Default shall have occurred and be
continuing; and
(d) the fact that the representations and warranties of
the Borrower contained in this Agreement (except (i) in the case of a
Refunding Borrowing, the representations and warranties set forth in
the second sentence of Section 4.01(e) and in Section 4.01(f) as to
any material adverse change which has theretofore been disclosed in
writing by the Borrower to the Banks and in Sections 4.01(i) and
4.01(j) and (ii) after the termination of the Existing Credit
Agreement, 4.01(1)) shall be true in all material respects on and as
of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
SECTION 3.02. FIRST BORROWINGS. In the case of the first Borrowing:
(a) receipt by each Bank of a duly executed Domestic
Note, Euro-Dollar Note and Money Market Note, each dated on or before
the date of such Borrowing, complying with the provisions of Section
2.05;
(b) receipt by each Bank of an opinion of Miller &
Martin, counsel for the Borrower, substantially in the form of Exhibit
F hereto;
(c) receipt by each Bank of an opinion of Sutherland,
Asbill & Brennan, special counsel or the Banks, substantially
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in the form of Exhibit G hereto;
(d) receipt by each Bank of a certificate signed by the
Chief Financial Officer or, if unavailable, the Treasurer of the
Borrower, to the effect set forth in clauses (b), (c) and (d) of
Section 3.01;
(e) receipt by each Bank of (i) a copy of the Borrower's
certificate of incorporation, bylaws and board of director resolutions
authorizing the Borrower to incur indebtedness, certified by the
Borrower's corporate secretary or assistant secretary; (ii) a
certificate of the Borrower's corporate secretary or assistant
secretary as to the incumbency and specimen signatures of the officers
of the Borrower who are authorized to execute and deliver this
Agreement and the Notes on the Borrower's behalf; and (iii) all other
documents it may reasonably request relating to the existence of the
Borrower, the corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant hereto, all in
form and substance reasonably satisfactory to each Bank; and
(f) evidence satisfactory to each Bank that the Borrower
has complied with Section 5.01(e) hereof.
The documents referred to in this Section 3.02 shall be delivered to
each Bank no later than two Domestic Business Days (if such Borrowing
is pursuant to a Domestic Loan) or two Euro-Dollar Business Days (if
such Borrowing is pursuant to a Euro-Dollar Loan) prior to the date
of the first Borrowing. The certificate and opinions referred to in
clauses (b), (c), (d) and (f) above shall be dated the date of the
first Borrowing and the continuing accuracy and effectiveness of each
such item on and as of the date of the first Borrowing shall be
confirmed to each Bank on the date of the first Borrowing by facsimile
notice from Borrower, counsel to Borrower and special counsel for the
Banks, respectively.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated at the beginning of this Agreement. The Borrower is duly
qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction (other than the jurisdiction of its
incorporation) in which the nature of its activities or the character
of the
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properties it owns or leases makes such qualification necessary and in
which the failure so to qualify would have a materially adverse effect
on the Borrower and its Subsidiaries taken as a whole.
(b) The execution, delivery and performance by the
Borrower of this Agreement and the Notes are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate
action and do not contravene (i) the Borrower's charter or by-laws or
(ii) any law, rule, regulation or contractual restriction in any
material contract or, to the knowledge of the Chief Financial Officer
of the Borrower, any other contract binding on or affecting the
Borrower.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by
the Borrower of this Agreement or the Notes.
(d) This Agreement is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their
respective terms.
(e) The consolidated financial statements of Borrower and
its Consolidated Subsidiaries as of December 31, 1993 and the related
Consolidated statements of income, Consolidated balance sheets,
Consolidated statements of shareholders' equity and Consolidated
statements of cash flows for the fiscal year then ended, reported on
by Ernst & Young and set forth in the Borrower's 1993 Form 10-K, a
copy of which has been delivered to each of the Banks, fairly
represent, in accordance with generally accepted accounting
principles, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries at such date and their consolidated
results of operations for such fiscal year then ended. Compared with
December 31, 1993, there has been no material adverse change in the
business, financial position, results of operations or prospects of
the Borrower and its consolidated Subsidiaries, taken as a whole.
(f) There is no pending or, to the best of the Borrower's
knowledge, threatened action or proceeding involving the Borrower or
any of its Subsidiaries before any court, governmental agency or
arbitrator, which is likely to materially adversely affect the
financial condition or operations of the Borrower and its Subsidiaries
taken as a whole or which purports to affect the legality, validity or
enforceability of this Agreement or any Note.
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(g) No proceeds of any Loan will be used to acquire any
equity security of a class which is registered pursuant to Section 12
of the Securities Exchange Act of 1934, other than immaterial
quantities of equity securities held in the investment portfolio of a
Person whose stock is acquired with the proceeds of such Loan.
(h) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U), and no proceeds of any
Loan will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock.
(i) No Default described in Sections 6.01(g) 6 01(h) or
6.01(i) has occurred and is continuing, or is reasonably expected to
occur within sixty days.
(j) A copy of the Schedule B (Actuarial Information) to
the most recent annual report (Form 5500 Series) of the Borrower or
any ERISA Affiliate with respect to each Plan has been filed with the
Internal Revenue Service, and each such Schedule B fairly presents the
funding status and financial condition of such Plan in all material
respects, and since the date of such Schedule B there has been no
material adverse change in such funding status or financial condition.
(k) The Borrower is not an "investment company", or a
company "controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(l) No event has occurred and is continuing that would
constitute an Event of Default under the Existing Credit Agreement.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Note shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower will,
unless the Majority Banks shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each
of its Subsidiaries to comply, with all applicable laws, rules,
regulations and orders (including, without limitation, ERISA and the
rules and regulations thereunder), noncompliance with which would
materially adversely affect the business or
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financial condition of the Borrower and its Consolidated Subsidiaries,
taken as a whole, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to
the extent contested in good faith.
(b) REPORTING REQUIREMENTS. Furnish to the Banks:
(i) as soon as available and in any event not
later than 55 days after the end of each of the first three
quarters of each fiscal year of the Borrower, commencing with
the fiscal quarter ending March 31, 1995, Consolidated balance
sheets of the Borrower and its Consolidated Subsidiaries as of
the end of such quarter, and related Consolidated statements
of income of the Borrower and its Consolidated Subsidiaries
for such quarter and for the period commencing at the end of
the previous fiscal year and ending with the end of such
quarter, and Consolidated statements of cash flows of the
Borrower and its Consolidated Subsidiaries for such quarter
and for such period, in each case signed by the chief
financial officer of the Borrower, together with (A) the
representation and warranty of the Borrower to the effect that
no Default has occurred and is continuing or, if an Event of
Default or such event has occurred and is continuing, a
statement as to the nature thereof and the action which the
Borrower has taken and proposes to take with respect thereto
and (B) a schedule in form satisfactory to the Majority Banks
of the computations used by the Borrower in determining
compliance with the covenants contained in Sections 5.02(a)
and 5.02(b);
(ii) as soon as available and in any event not
later than 110 days after the end of each fiscal year of the
Borrower, a copy of the annual report for such year for the
Borrower and its Consolidated Subsidiaries, containing the
Consolidated financial statements for such fiscal year with a
report thereon by Ernst & Young or other independent public
accountants acceptable to the Majority Banks stating that such
Consolidated financial statements fairly present the
Consolidated financial position of the Borrower and its
Consolidated Subsidiaries as at the date indicated and the
Consolidated results of their operations and cash flows for
the period indicated in conformity with generally accepted
accounting principles applied on a consistent basis (except
for changes required by the accounting profession or changes
concurred in by the Borrower's independent public accountants)
and that the audit by such accountants in connection with such
Consolidated financial statements has been made in accordance
with
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generally accepted auditing standards, together with (A) the
representation and warranty of the Borrower to the effect that
no Default has occurred and is continuing or, if an Event of
Default or Default has occurred and is continuing, a statement
as to the nature thereof and the action which the Borrower has
taken and proposes to take with respect thereto and (B) a
schedule in form satisfactory to the Majority Banks of the
computations used by the Borrower in determining compliance
with the covenants contained in Sections 5.02(a) and 5.02(b);
(iii) as soon as possible and in any event within
five days after the chief financial officer of the borrower
has knowledge of the occurrence of each Default continuing on
the date of such statement, a statement of such chief
financial officer setting forth details of such Default and
the action which the Borrower has taken and proposes to take
with respect thereto;
(iv) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its security
holders (other than reports furnished only to The Coca-Cola
Company), and copies of all reports and registration
statements which become effective which the Borrower or any
Subsidiary files with the Securities and Exchange Commission
or any national securities exchange;
(v) as soon as possible and in any event (A)
within sixty Domestic Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that any
Termination Event described in clause (i) of the definition of
Termination Event with respect to any Plan has occurred and
(B) within thirty Domestic Business Days after the Borrower or
any ERISA Affiliate knows or has reason to know that any other
Termination Event with respect to any Plan has occurred, a
statement of the chief financial officer of the Borrower
describing such Termination Event and the action, if any,
which the Borrower or such ERISA Affiliate proposes to take
with respect thereto;
(vi) promptly and in any event within ten domestic
Business Days after receipt thereof by the Borrower or any
ERISA Affiliate, copies of each notice received by the
Borrower or any ERISA Affiliate from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed
to administer any Plan;
(vii) promptly and in any event within thirty
Domestic Business Days after receipt thereof by the Borrower
or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by the
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Borrower or any ERISA Affiliate concerning (A) the imposition
of Withdrawal Liability by a Multiemployer Plan, (B) the
determination that a Multiemployer Plan is, or is expected to
be, in reorganization within the meaning of Title V of ERISA,
(C) the termination of a Multiemployer Plan within the meaning
of Title IV of ERISA, or (D) the amount of liability incurred,
or expected to be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause
(A), (B) or (C) above; and
(viii) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Bank may from time
to time reasonably request.
(c) MAINTENANCE OF PROPERTIES, ETC. Cause all properties
used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and
working order and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried
on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this
Section 5.01(c) shall prevent the Borrower or an Subsidiary from
discontinuing the operation or maintenance of any of such properties
if such discontinuance is not materially adverse to the Banks and, in
the judgment of the Borrower, is desirable in the conduct of its
business or the business of any Subsidiary.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates, provided that
the Borrower may self-insure, or insure through captive insurers or
insurance cooperatives, to the extent consistent with prudent business
practices.
(e) EXISTING CREDIT AGREEMENT.
(i) If there are any Existing Advances on the
Effective Date, the Borrower shall (A) on the Effective Date
and on each later date of repayment or prepayment of any such
Existing Advances comprising a Syndicated Loan (as defined in
the Existing Credit Agreement), if any, reduce the aggregate
commitments under the Existing Credit Agreement, pursuant to
Section 2.09 thereof, to an amount equal to the aggregate
principal amount of
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Existing Advances comprising such Syndicated Loans outstanding
on each such date, after giving effect to any such repayment
or prepayment, and (B) terminate the Existing Credit Agreement
not later than the date that is the latest maturity date of
any such Existing Advance.
(ii) If there are no Existing Advances on the
Effective Date, then the Borrower shall terminate the Existing
Credit Agreement effective as of the Effective Date.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Note shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Banks:
(a) LIENS, ETC. Create, incur, issue, assume or
guarantee, or permit any Restricted Subsidiary to create, incur,
issue, assume or guarantee, any Secured Debt. The term "SECURED DEBT"
means notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed secured by any Mortgage. The term
"MORTGAGE" or "MORTGAGES" means any mortgage, pledge, lien, security
interest or other encumbrances upon any Principal Property or on any
shares of stock or indebtedness of any Restricted Subsidiary (whether
such Principal Property, shares of stock or indebtedness are now owned
or hereafter acquired). "RESTRICTED SUBSIDIARY" means any Subsidiary
(i) substantially all the property of which is located, or
substantially all of the business of which is carried on, within the
fifty states of the United States, the District of Columbia, or Puerto
Rico, and (ii) which owns or is the lessee of any Principal Property.
"PRINCIPAL PROPERTY" means each bottling plant or facility of the
Borrower or a Restricted Subsidiary located within the United States
of America (other than its territories and possessions) or Puerto
Rico; except any such bottling plant or facility which the Board of
Directors of the Borrower by resolution reasonably determines not to
be of material importance to the total business conducted by the
Borrower and its Restricted Subsidiaries. The foregoing restrictions
shall not apply to:
(1) Mortgages on property, shares of stock or
indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary;
(2) Mortgages on property or shares of stock
existing at the time of acquisition of such property or stock
by the Borrower or a Restricted Subsidiary or existing as of
September 30, 1994;
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(3) Mortgages to secure the payment of all or any
part of the price of acquisition, construction or improvement
of such property or stock by the Borrower or a Restricted
Subsidiary, or to secure any Secured Debt incurred by the
Borrower or a Restricted Subsidiary, prior to, at the time of,
or within 90 days after the later of the acquisition or
completion of construction (including any improvements on an
existing property), which Secured Debt is incurred for the
purpose of financing all or any part of the purchase price
thereof or construction of improvements thereon; provided,
however, that, in the case of any such acquisition,
construction or improvement, the Mortgage shall not apply to
any property theretofore owned by the Borrower or a Restricted
Subsidiary, other than, in the case of any such construction
or improvement, any theretofore substantially unimproved real
property on which the property or improvement so constructed
is located;
(4) Mortgages securing Secured Debt of a
Restricted Subsidiary owing to Borrower or to another
Restricted Subsidiary;
(5) Mortgages on property of a corporation
existing at the time such corporation is merged into or
consolidated with the Borrower or a Restricted Subsidiary or
at the time of a sale, lease or other disposition of the
properties of a corporation or firm as an entirety or
substantially as an entirety to the Borrower or a Restricted
Subsidiary;
(6) Mortgages on property of the Borrower or a
Restricted Subsidiary in favor of the United States of America
or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States
of America or any state thereof, or in favor of any other
country or any political subdivision thereof, or any
department, agency or instrumentality of such country or
political subdivision, to secure partial progress, advance or
other payments pursuant to any contract or statute or to
secure any indebtedness incurred for the purpose of financing
all or any part of the purchase price or the cost of
construction of the property subject to such Mortgages; or
(7) any extension, renewal or replacement (or
successive extensions, renewals or replacements) in whole or
in part of any Mortgage referred to in the foregoing clauses
(1) through (6), inclusive, provided, however, that the
principal amount of Secured Debt secured thereby shall not
exceed the principal amount of Secured Debt so secured at the
time of such extension, renewal or
28
<PAGE>
replacement, and that such extension, renewal or replacement
shall be limited to all or a part of the property which
secured the Mortgage so extended, renewed or replaced (plus
improvements and construction on such property).
Notwithstanding the foregoing provisions of this Section 5.02(a), the
Borrower and any one or more Restricted Subsidiaries may create,
incur, issue, assume or guarantee Secured Debt secured by a Mortgage
which would otherwise be subject to the foregoing restrictions in an
aggregate amount which, together with all other Secured Debt of the
Borrower and its Restricted Subsidiaries which (if originally created,
incurred, issued, assumed or guaranteed at such time) would otherwise
be subject to the foregoing restrictions (not including Secured Debt
permitted to be secured under clauses (1) through (7) above), does not
at the time exceed 10% of the shareholders' equity of the Borrower and
its Consolidated Subsidiaries as shown on the financial statements of
the Borrower as of the end of the fiscal year preceding the date of
determination.
(b) LEVERAGE RATIO. Permit Consolidated Debt less Cash
to be at any time more than 75% of Total Capital, where "Cash" means
cash and cash equivalents and interest bearing assets with maturities
of one year or less; and "Total Capital" means the sum of
Shareholders' Equity, Deferred Income Taxes and Consolidated Debt less
Cash. All such terms shall be as they appear on the Borrower's
published Consolidated financial statements and calculated under the
generally accepted accounting principles and practices applied by the
Borrower on the date hereof in the preparation of its Consolidated
financial statements.
(c) MERGERS, ETC. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all
of its assets (whether now owned or hereafter acquired) to, any
Person, or permit any of its Subsidiaries to do so, except that (i)
any Subsidiary of the Borrower may merge or consolidate with or into,
or dispose of assets to, any other Subsidiary of the Borrower and (ii)
any Subsidiary of the Borrower may merge into or dispose of assets to
the Borrower or any other Person, provided in each case that,
immediately after giving effect to such proposed transaction, no
Default would exist, and, in the case of any such merger to which the
Borrower is a party the Borrower is the surviving corporation.
(d) AFFILIATE TRANSACTIONS. Engage in, or permit any of
its Subsidiaries to engage in any transaction (other than
29
<PAGE>
transactions between the Borrower and any Subsidiary or between
Subsidiaries of the Borrower) involving payments, or property having a
fair market value, in excess of $15,000,000 with The Coca-Cola Company
or any Person controlling, controlled by, or under common control with
the Borrower, on terms less favorable to it or such Subsidiary than
would be available in an arms' length transaction with an unrelated
Person.
(e) COMPLIANCE WITH ERISA. Terminate, or permit any
ERISA Affiliate to terminate, any Plan so as to result in any
liability of the Borrower or any ERISA Affiliate to the PBGC in excess
of $15,000,000, or permit to exist an event or condition which
reasonably presents a material risk of a termination by the PBGC of
any Plan with respect to which the Borrower or any ERISA Affiliate
would, in the event of such termination, incur liability to the PBGC
in excess of $15,000,000.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any
Note when the same becomes due and payable, or shall fail to pay any
interest on any Note or any fees payable under Section 2.08 for a
period of five days after the same becomes due and payable; or
(b) any representation or warranty made or deemed to have
been made by the Borrower herein or by the Borrower (or any of its
officers) in connection with this Agreement shall prove to have been
incorrect or misleading in any material respect when made or deemed to
have been made; or
(c) the Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.01(b)(iii) or (v)
or 5.02, or (ii) any other term, covenant or agreement contained in
this Agreement on its part to be performed or observed if such failure
shall remain unremedied for 30 days after written notice thereof shall
have been given to the Borrower by any Bank; or
(d) there shall be a default under any bond, debenture,
note or other evidence of indebtedness for borrowed money or under any
mortgage, indenture or other instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness
for borrowed money by the Borrower
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or any Subsidiary or under any guarantee of payment by the Borrower or
any Subsidiary of indebtedness for borrowed money, whether such
indebtedness or guarantee now exists or shall hereafter be incurred or
created (but excluding Indebtedness evidenced by the Notes), and (i)
with respect to a payment default, as a result of such payment default
such indebtedness has, by acceleration or otherwise under the terms of
such bond, debenture, note, mortgage, indenture, guarantee or payment
or such other evidence of indebtedness, become due prior to its stated
maturity or the effect of such payment default is to permit such bond,
debenture, note, mortgage, indenture, guarantee or payment or such
other evidence of indebtedness, to become due prior to its stated
maturity, or (ii) with respect to any default other than a payment
default, as a result of such default such indebtedness has, by
acceleration or otherwise under the terms of such bond, debenture,
note, mortgage, indenture, guarantee of payment or such other evidence
of indebtedness, becomes due prior to its stated maturity and such
default continues for a period of 4 Domestic Business Days after the
date upon which such indebtedness has become due prior to its stated
maturity (and, with respect to any guarantee, such default continues
for a period of 4 Domestic Business Days after the Borrower has
received written demand for payment under any such guarantee);
provided, however, that no default under this Section 6.01(d) shall
exist if all such defaults do not relate to such indebtedness or
guarantees with an aggregate principal amount in excess of
$15,000,000.00.
(e) the Borrower or any Subsidiary pursuant to or within
the meaning of any Bankruptcy Law: (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case, (iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property, (iv) makes a
general assignment for the benefit of creditors; or (v) a court of
competent jurisdiction enters an order or decree under any Bankruptcy
Law that (A) is for relief against the Borrower or any Subsidiary in
an involuntary case, (B) appoints a Custodian of the Borrower or any
Subsidiary or for all or substantially all of its property, or (C)
orders the liquidation of the Borrower or any Subsidiary, and the
order or decree remains unstayed and in effect for 45 days; (vi) is
the subject of an involuntary case which is not dismissed within 45
days after the filing thereof; (vii) fails to pay its debts generally
as they become due or admits in writing its inability to pay its debts
generally as they become due; or (viii) takes any corporate action to
authorize the Borrower's taking of any of the actions set forth in
clauses (i), (ii), (iii) or (iv) above. "BANKRUPTCY LAW" means Title
11, U.S. Code or any similar federal or state law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee,
liquidator
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or similar official under any Bankruptcy Law.
(f) any judgment or order for the payment of money in
excess of $15,000,000 shall be rendered against the Borrower or any of
its Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(g) any Termination Event with respect to a Plan shall
have occurred and, 30 days after notice thereof shall have been given
to the Borrower by any Bank, (i) such Termination Event shall still
exist and (ii) the sum (determined as of the date of occurrence of
such Termination Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which a
Termination Event shall have occurred and then exist (or in the case
of a Multiple Employer Plan with respect to which a Termination Event
shall have occurred and then exist, the liability of the Borrower or
any ERISA Affiliate related to such Termination Event) is equal to or
greater than $30,000,000; or
(h) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Uncontested Withdrawal Liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Uncontested Withdrawal
Liabilities (determined as of the date of such notification), exceeds
$50,000,000 or requires payments exceeding $5,000,000 per annum; or
(i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if solely as a result of such
reorganization or termination the aggregate annual contributions of
the Borrower and its ERISA Affiliates to all Multiemployer Plans which
are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the immediately preceding plan years of the respective plans by an
amount exceeding $5,000,000;
then, and in every such event, each Bank shall (i) if requested by the Majority
Banks, by notice to the Borrower (with notice to the other Banks) terminate its
Commitment and each Commitment shall thereupon terminate, and (ii) if requested
by Banks holding Notes evidencing more than 66 2/3% in aggregate principal
amount of the Loans, by notice to the Borrower (with copies to the other Banks)
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declare the Notes (together with accrued interest thereon and any and all
amounts payable by the Borrower hereunder or under the Notes) to be, and the
Notes shall thereupon become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived the
Borrower, provided that in the case of any of the Events of Default specified
in clause (e) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Banks, the Commitments shall thereupon
terminate and the outstanding principal amount of the Notes (together with
accrued interest thereon and any and all amounts payable by the Borrower
hereunder or under the Notes) shall become immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VII
CHANGE IN CIRCUMSTANCES
SECTION 7.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) any Bank is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Banks in the relevant market for such Interest
Period, or
(b) Banks having 50% or more of the aggregate amount of
the Commitments determine that the London Interbank Offered Rate will
not adequately and fairly reflect the cost to such Banks of funding
their Euro-Dollar Loans, for such Interest Period,
each such affected Bank shall forthwith give notice thereof to the Borrower and
to the other Banks, whereupon until the Banks which gave such notice
subsequently notify the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make Euro-Dollar
Loans shall be suspended unless the Borrower notifies the Banks at least two
Domestic Business Days before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, (i) if such Fixed Rate Borrowing is a Syndicated Borrowing, such
Borrowing shall instead be made as a Prime Borrowing and (ii) if such Fixed
Rate Borrowing is a Money Market LIBOR Borrowing the Money Market Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Prime Rate for such day.
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SECTION 7.02. ILLEGALITY. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro- Dollar Loans or Money Market LIBOR Loans (excluding
such Loans bearing interest at the Prime Rate pursuant to Section 7.01) such
Bank shall so notify the Borrower, whereupon until such Bank notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligation of such Bank to make Euro-Dollar Loans shall be suspended.
Before giving any notice to the Borrower pursuant to this Section, such Bank
shall designate a different Euro-Dollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans or Money Market LIBOR Loans (excluding such Loans bearing
interest at the Prime Rate pursuant to Section 7.01) to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Loan and Money Market
LIBOR Loan (excluding any such Loan bearing interest at the Prime Rate pursuant
to Section 7.01), together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan and Money Market LIBOR Loan (excluding any
such Loan bearing interest at the Prime Rate pursuant to Section 7.01), the
Borrower shall borrow a Prime Loan in an equal principal amount from such Bank
(on which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans or Money Market LIBOR Loans (excluding such Loans
bearing interest at the Prime Rate pursuant to Section 7.01) of the other
Banks), and such Bank shall make such a Prime Loan, unless the Borrower elects
pursuant to Section 7.05 not to borrow such Prime Loan.
SECTION 7.03. INCREASED COST AND REDUCED RETURN.
(a) If after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any
Bank (or its Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject any Bank (or its Lending
Office) to any tax, duty or other charge with respect to its
34
<PAGE>
Fixed Rate Loans, its Notes or its obligation to make Fixed
Rate Loans, or shall change the basis of taxation of payments
to any Bank (or its Lending Office) of the principal of or
interest on its Fixed Rate Loans or any other amounts due
under this Agreement in respect of its Fixed Rate Loans or
its obligation to make Fixed Rate Loans (except for changes
in franchise taxes on the overall net income of such Bank or
its Lending office imposed by any jurisdiction in which such
Bank's principal executive office or Lending Office is
located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System but excluding with
respect to any Euro-Dollar Loan any such requirement included
in an applicable Euro-Dollar Reserve Percentage) against
assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Lending Office) or shall impose
on any Bank (or its Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans, its
Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such
Bank (or its Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by
such Bank (or its Lending Office) under this Agreement or under its
Notes with respect thereto by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank, the Borrower
shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If after the date hereof, any Bank shall have
determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any
request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a
level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such
Bank to be
35
<PAGE>
material, then from time to time, within 15 days after demand by such
Bank, the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section
and will designate a different Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise disadvantageous
to such Bank. A certificate of any Bank claiming compensation under
this Section and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest
error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 7.04. PRIME LOANS SUBSTITUTED FOR AFFECTED FIXED RATE LOANS.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 7.02 or (ii) any Bank has demanded compensation under
Section 7.03(a) and the Borrower shall, by at least three Euro-Dollar Business
Days' prior notice to such Bank, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank
as Euro-Dollar Loans shall be made instead as Prime Loans (on which
interest and principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid,
all payments of principal which would otherwise be applied to repay
such Fixed Rate Loans shall be applied to repay its Prime Loans
instead.
SECTION 7.05. BORROWER'S ELECTION TO SUBSTITUTE OR TERMINATE. If (i)
the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 7.02 or (ii) any Bank has demanded compensation under
Section 7.03, the Borrower may either (a) seek a substitute bank or banks
(which may be one or more of the Banks) to purchase the Notes and assume the
Commitment of such Bank, without the approval of the other Banks or (b) elect
to terminate this Agreement as to such Bank, and in connection therewith not to
borrow any Prime Loan provided for in Section 7.02 or to prepay any Prime Loan
made pursuant to Section 7.02 or 7.04; provided, in the case of an election
under clause (b), that the Borrower (x) notifies such Bank of such election at
least three Euro-Dollar Business Days before any date fixed for such a
36
<PAGE>
borrowing or such a prepayment, as the case may be, and (y) repays all of such
Bank's outstanding Loans at the end of the respective Interest Periods
applicable thereto or as otherwise required by Section 7.02. Upon receipt by
any Bank of such notice, the Commitment of such Bank shall terminate, provided
that the Borrower shall continue to pay such Bank a facility fee at the rate
set forth in Section 2.08 on the daily average aggregate principal amount of
such Bank's outstanding Loans, until such Loans are repaid.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile or similar writing) and shall be given to such party at its address
or telex or facsimile number set forth on the signature pages hereof or such
other address or telex or facsimile number as such party may hereafter specify
for the purpose by notice to the other Banks and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by facsimile,
when such facsimile is transmitted to the facsimile number specified in this
Section and telephonic confirmation is received; (iii) if given by mail, five
Domestic Business Days after such communication is deposited in the mails with
first class postage prepaid addressed as aforesaid or (iv) if given by any
other means, when delivered at the address specified in this Section. Any
notice, request or other communication given by facsimile shall also be given
by personal delivery or by mail, but such notice, request or other
communication given by facsimile shall be effective as set forth in clause (ii)
above.
SECTION 8.02. NO WAIVERS. No failure or delay by any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.03. EXPENSES; DOCUMENTARY TAXES. The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Banks, including fees and
disbursements of special counsel for the Banks, in connection with the review
of this Agreement, review or preparation of any waiver or consent hereunder or
any amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by any Bank,
including fees and disbursements of counsel (or the
37
<PAGE>
reasonable allocable costs and disbursements of any Bank's in-house counsel),
in connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this
Agreement or the Notes. The obligations of the Borrower under this Section 8.03
shall survive the termination of this Agreement.
SECTION 8.04. SET-OFFS.
(a) Upon (i) the occurrence and during the continuance of
any Event of Default and (ii) the making of the request specified in
Section 6.01 to authorize the Banks to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Bank is
hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this
Agreement and the Notes held by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement or any
such Note and although such obligations may be unmatured. Each Bank
agrees promptly to notify the Borrower after any such set-off and
application made by such Bank, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
The rights of each Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of
set-off) which such Bank may have.
(b) Each Bank agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest due with
respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other
Bank (a "non-pro rata payment"), the Bank receiving such non-pro rata
payment shall promptly purchase such participations in the Notes held
by the other Banks, and such other adjustments shall be made, as may
be required so that all such non-pro rata payments shall be shared by
the Banks (i) pro rata in accordance with the principal amounts of
their Notes (other than Money Market Notes) to the extent that such
non-pro rata payment does not exceed the aggregate amount of principal
and interest due with respect to such Notes and (ii) pro rata in
accordance with the principal amount of their Money Market Notes, to
the extent that such non-pro rata payment exceeds the amount referred
to in clause (i); provided that nothing in this Section shall
38
<PAGE>
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any holder
of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower
in the amount of such participation. Each Bank receiving any non-pro
rata payment shall notify the Borrower and the other Banks of such
payment within five Domestic Business Days after receipt.
SECTION 8.05. AMENDMENTS AND WAIVERS. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Majority Banks; and
provided that no such amendment, waiver or modification shall, unless signed by
all the Banks, (i) increase the Commitment of any Bank or subject any Bank to
any additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder (including,
without being limited to, any amendment to the definition of "Interest Period"
having such effect) or (iv) change the percentage of the Commitments, Available
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement.
SECTION 8.06. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(i) the Borrower may not assign or otherwise
transfer any of its rights under this Agreement;
(ii) no Bank may assign or otherwise transfer
(including,without being limited to, by means of granting
participations therein) (each such assignment, grant of
participation, or other transfer, a "Transfer") any part of
its Commitment to any other Person without the prior written
consent of the Borrower, which consent shall not be
unreasonably withheld, other than
(x) to a Person which controls, is
controlled by, or is under common control with, or is
otherwise substantially affiliated with, such Bank,
39
<PAGE>
or
(y) if, after giving effect to such
Transfer, all Transfers by such Bank to Persons other
than those described in clause (x) above do not
exceed, in the aggregate, 40% of such Bank's
Commitment and each such Transfer is in an amount at
least equal to $5,000,000;
and, provided further, that except in the case of a Transfer
of its Commitment pursuant to clause (x) or (y) above, no Bank
shall be relieved of any of its obligations under this
Agreement by virtue of any Transfer made without the prior
written consent of the Borrower, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing
provisions of this Section 8.06(a), each Bank may make
Transfers of all or any part of its Loans to any other Person
without the consent of the Borrower or any other Bank.
(iii) as a condition to the effectiveness of any
Transfer by any Bank of any part of its Commitment or any part
of its Loans pursuant to the foregoing provisions of
subparagraph (ii), such Bank or such transferee shall pay to
the Borrower a fee for such Transfer in the amount of $2,000;
provided, however, that no such fee shall be payable upon the
pledge of a Note to any Federal Reserve Bank, the grant of a
participation interest nor as a result of a Transfer to a
Person which controls, is controlled by, or is under common
control with, or is otherwise substantially affiliated with
the Bank making the Transfer.
(b) Each Bank and the Borrower may, for all purposes of
this Agreement, treat any Bank as the holder of any Note drawn to its
order (and owner of the Loans evidenced thereby) until written notice
of assignment, participation or other transfer shall have been
received by them.
(c) No assignee, participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under
Section 7.03 than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 7.02 or 7.03 requiring such Bank to designate a different
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
(d) If any Euro-Dollar Reference Bank assigns its Notes
to an unaffiliated institution the Borrower with the consent of the
Majority Banks, shall appoint another bank to act as a
40
<PAGE>
Euro-Dollar Reference Bank hereunder.
(e) Promptly upon the written request of any Bank
therefor, the Borrower shall deliver to such Bank a list of all of the
Banks then having a Commitment or holding a Note hereunder and, as to
each such listed Bank, the amount of such Bank's Commitment and the
aggregate unpaid principal amount of the Loans owing to such Bank.
SECTION 8.07. COLLATERAL. Each of the Banks represents to each of the
other Banks that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 8.08. INDEMNIFICATION. The Borrower shall indemnify and hold
harmless each Bank from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable attorneys' fees) which may be imposed on, incurred by or
asserted against such Bank relating to or arising out of the Borrower's use of
the proceeds of the Loans; provided, however, that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from such Bank's gross negligence or willful
misconduct. The obligations of the Borrower under this Section 8.08 shall
survive the repayment of the Loans and the termination of the Commitments.
SECTION 8.09. NEW YORK LAW. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of New York.
SECTION 8.10. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective on the Business Day (the
"Effective Date") on which Citibank, N.A shall have received counterparts
hereof signed by all of the parties hereto with instructions to deliver all
such counterparts signed by Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
COCA-COLA ENTERPRISES INC.
By: VICKI G. ROMAN
--------------------------
41
<PAGE>
Vicki G. Roman
Vice President and Treasurer
Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: Vicki G. Roman
Vice President and Treasurer
Facsimile Number: (404) 989-3061
42
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By WAYNE H. RIESS
---------------------------------------
Printed Name: Wayne H. Riess
----------------------------
Title: VICE PRESIDENT
------------------------------------
Domestic Lending Office:
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard
Concord, California 94520
Attention: Aaron Wilson
Telex Number: 34346 Ansbk: BANKAMERSF.
Facsimile Number: 510-675-7531
Telephone Number: 510-675-7485
Euro-Dollar Lending Office:
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard
Concord, California 94520
Attention: Aaron Wilson
Telex Number: 34346 Ansbk: BANKAMERSF.
Facsimile Number: 510-675-7531
Telephone Number: 510-675-7485
with a copy to:
Bank of America National Trust
and Savings Association
Attention: Wayne H. Riess
Suite 3600
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Facsimile Number: 404-249-6938
Telephone Number: 404-249-6914
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 CITIBANK, N.A.
By: BARBARA A. COHEN
-------------------------------------
Printed Name: Barbara A. Cohen
---------------------------
Title: Vice President
-----------------------------------
Domestic Lending Office:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
ABA #021000089
Account No.: 4058-0628
Re: Coca-Cola Enterprises Inc.
with a copy to:
Citibank, N.A.
c/o Citicorp North America, Inc.
Suite 600
400 Perimeter Center Terrace
Atlanta, Georgia 30346
Attention: Horacio Torrendell
Telex Number: 127001 Route ATLAD
Facsimile Number: 404-668-8137
Euro-Dollar Lending Office:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
ABA #021000089
Account No.: 4058-0628
Re: Coca-Cola Enterprises Inc.
with a copy to:
Citibank, N.A.
c/o Citicorp North America, Inc.
Suite 600
400 Perimeter Center Terrace
Atlanta, Georgia 30346
Attention: Horacio Torrendell
Telex Number: 127001 Route ATLAD
Facsimile Number: 404-668-8137
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 THE FIRST NATIONAL BANK OF CHICAGO
By: STEVEN B. FARLEY
-------------------------------------
Printed Name: Steven B. Farley
---------------------------
Title: Vice President
----------------------------------
Domestic Lending Office:
One First National Plaza
Suite 0634 - 10th Floor
Chicago, Illinois 60670
Attention: John Loizzo
Telex Number: 4330253
Facsimile Number: 312-732-4840
Telephone Number: 312-732-4118
Euro-Dollar Lending Office:
One First National Plaza
Suite 0634 - 10th Floor
Chicago, Illinois 60670
Attention: John Loizzo
Telex Number: 4330253
Facsimile Number: 312-732-4840
Telephone Number: 312-732-4118
Wiring Instructions:
The First National Bank of Chicago
Attn: DCS Incoming Clearing Account
A/C# 7521-7653
ABA: 071000013 CHICAGO, IL.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION
By: CHARLES J. JOHNSON
-------------------------------------
Printed Name: Charles J. Johnson
---------------------------
Title: Vice President
----------------------------------
Domestic Lending Office:
901 Main Street
Dallas, Texas 75202
Attention: Geri Lewis
Telex Number: 6829 317-Nations Bk BDL
Facsimile Number: 214-508-2515
Euro-Dollar Lending Office:
901 Main Street
Dallas, Texas 75202
Attention: Geri Lewis
Telex Number: 6829 317-Nations Bk BDL
Facsimile Number: 214-508-2515
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: ROBERT W. CASEY JR.
-------------------------------------
Printed Name: Robert W. Casey Jr.
---------------------------
Title: Vice President
----------------------------------
By: LAURENT CHAIX
-------------------------------------
Printed Name: Laurent Chaix
---------------------------
Title: Assistant Vice President
----------------------------------
Domestic Lending Office:
New York Branch
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telex Number: 426239
Facsimile Number: 212-821-3383
Euro-Dollar Lending Office:
Cayman Island Branch
299 Park Avenue
New York, New York 10171
Attention: Robert W. Casey, Jr.
Telex Number: 426239
Facsimile Number: 212-821-3383
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$100,000,000.00 TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: WILLIAM B. PYLE
--------------------------------------
Printed Name: William B. Pyle
----------------------------
Title: Senior Vice President
-----------------------------------
Domestic Lending Office:
712 Main Street
3-TCBN-59
Houston, Texas 77002-8059
Attention: William Pyle
Telex Number: 516-6350
Facsimile Number: 713-216-6710
Telephone Number: 713-216-5609
Euro-Dollar Lending Office:
712 Main Street
3-TCBN-59
Houston, Texas 77002-8059
Attention: William Pyle
Telex Number: 516-6350
Facsimile Number: 713-216-6710
Telephone Number: 713-216-5609
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$75,000,000.00 TRUST COMPANY BANK
By: KEVIN S. MACDONALD
----------------------------------
Printed Name: Kevin S. MacDonald
------------------------
Title: Assistant Vice President
-------------------------------
By: J. CHRISTOPHER DEISLEY
----------------------------------
Printed Name: J. Christoper Deisley
------------------------
Title: Vice President
-------------------------------
Domestic Lending Office:
25 Park Place
23rd Floor
Atlanta, Georgia 30303
Attention: David H. Eidson
Telex Number: 542210
Facsimile Number: 404-588-8833
Euro-Dollar Lending Office:
25 Park Place
23rd Floor
Atlanta, Georgia 30303
Attention: David H. Eidson
Telex Number: 542210
Facsimile Number: 404-588-8833
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$75,000,000.00 WACHOVIA BANK OF GEORGIA, N.A.
By: BRADLEY S. MARCUS
-------------------------------
Printed Name: Bradley S. Marcus
---------------------
Title: Senior Vice President
-----------------------------
Domestic Lending Office:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Bradley S. Marcus
Facsimile Number: 404-332-5016
Euro-Dollar Lending Office:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Bradley S. Marcus
Facsimile Number: 404-332-5016
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$75,000,000.00 CANADIAN IMPERIAL BANK OF COMMERCE
By: WILLIAM C. HUMPHRIES
-----------------------------------
Printed Name: William C. Humphries
-------------------------
Title: Authorized Signatory
--------------------------------
Domestic Lending Office:
2727 Paces Ferry Road
Two Paces West, Suite 1200
Atlanta, Georgia 30339
Attention: William C. Humphries
Facsimile Number: 404-319-4954
Euro-Dollar Lending Office:
2727 Paces Ferry Road
Two Paces West, Suite 1200
Atlanta, Georgia 30339
Attention: William C. Humphries
Facsimile Number: 404-319-4954
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$60,000,000.00 TORONTO DOMINION (TEXAS), INC.
By: LISA ALLISON
-----------------------------------
Printed Name: Lisa Allison
-------------------------
Title: Vice President
--------------------------------
Domestic Lending Office:
Suite 1700
909 Fannin Street
Houston, Texas 77010
Attention: Lisa Allison
Facsimile Number: 713-951-9921
Euro-Dollar Lending Office:
Suite 1700
909 Fannin Street
Houston, Texas 77010
Attention: Lisa Allison
Facsimile Number: 713-951-9921
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$50,000,000.00 SWISS BANK CORPORATION, NEW YORK BRANCH
AND CAYMAN ISLANDS BRANCH
By: NICOLAS T. ERNI
------------------------------------
Printed Name: Nicolas T. Erni
--------------------------
Associate Director
Title: Credit Risk Management
---------------------------------
By: STEPHANIE W. KIM
------------------------------------
Printed Name: Stephanie W. Kim
--------------------------
Associate Director
Title: Merchant Banking
---------------------------------
Domestic Lending Office:
222 Broadway 4th Floor
New York, New York 10038
Attention: Nicolas Erni
Telex Number: RCA 232432 sbny ur
Facsimile Number: 212-574-3852
Telephone Number: 212-574-3343
Euro-Dollar Lending Office:
Swiss Bank Corporation,
Cayman Islands Branch
222 Broadway 4th Floor
New York, New York 10038
Attention: Nicholas Erni
Telex Number: RCA 232432 sbny ur
Facsimile Number: 212-574-3852
Telephone Number: 212-574-3443
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitments
- -----------
$30,000,000.00 MELLON BANK, N.A
By: CHARLES M. STAUB
------------------------------------
Printed Name: Charles M. Staub
--------------------------
Title: Vice President
---------------------------------
Domestic Lending Office:
Three Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0003
Attention: Jacqueline Lucas
Telex Number: 812367
Facsimile Number: 412-234-5049
Euro-Dollar Lending Office:
Three Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0003
Attention: Jacqueline Lucas
Telex Number: 812367
Facsimile Number: 412-234-5049
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitment
- ----------
$25,000,000.00 THE NORTHERN TRUST COMPANY
By: KRISTINA V. L. WARLAND
----------------------------------
Printed Name: Kristina V. L. Warland
------------------------
Title: Second Vice President
-------------------------------
Domestic Lending Office:
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Kristina V. L. Warland
Facsimile Number: 312-444-3508
Euro-Dollar Lending Office:
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Kristina V. L. Warland
Facsimile Number: 312-444-3508
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Commitment
- ----------
$10,000,000 ABN AMRO Bank, N.W.
Atlanta Agency
By: STEVEN L. HIPSMAN
----------------------------------
Printed Name: Steven L. Hipsman
------------------------
Title: Vice President
-------------------------------
By: PATRICK A. THOM
----------------------------------
Printed Name: Patrick A. Thom
------------------------
Title: Assistant Vice President
-------------------------------
Address for Notices:
One Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Attention: Patrick A. Thom
Telephone Number: (404) 396-0066
Facsimile Number: (404) 395-9188
Telex Number: 682 7258
Answerback: ABNBANKATL
</TABLE>
<PAGE>
EXHIBIT A
DOMESTIC NOTE
New York, New York
19
----------------- --
For value received, Coca-Cola Enterprises Inc., a Delaware corporation
(the "Borrower"), promises to pay to the order of _____________________________
_________________________________ (the "Bank"), for the account of its Domestic
Lending Office, the unpaid principal amount of each Domestic Loan made by the
Bank to the Borrower pursuant to the Credit Agreement referred to below on the
last day of the Interest Period relating to such Loan. The Borrower promises to
pay interest on the unpaid Principal amount of each such Domestic Loan on the
dates and at the rate or rates provided for in the Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the United
States in federal or other immediately available finds at the Domestic Lending
Office of the Bank.
All Domestic Loans made by the Bank, the respective maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof, provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
In addition to interest at the rate or rates provided for in the
Credit Agreement, the Borrower shall pay to the Bank a facility fee at the rate
or rates provided in Section 2.08 of the Credit Agreement.
This note is one of the Domestic Notes referred to in the Credit
Agreement dated as of _______, 1994 among the Borrower and the Banks listed on
the signature pages thereof (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
COCA-COLA ENTERPRISES INC.
By:
-------------------------
Title:
----------------------
<PAGE>
EXHIBIT B
EURO-DOLLAR NOTE
New York, New York
, 19
----------- --
For value received, Coca-Cola Enterprises Inc., a Delaware corporation
(the "Borrower"), promises to pay to the order of _____________________________
____________________________________________________________(the "Bank"), for
the account of its Euro-Dollar Lending Office, the unpaid principal amount of
each Euro-Dollar Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the last day of the Interest Period relating to
such Loan. The Borrower promises to pay interest on the unpaid principal amount
of each such Euro-Dollar Loan on the dates and at the rate or rates provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in federal or other immediately
available funds at the Domestic Lending Office of the Bank.
All Euro-Dollar Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, prior to any transfer hereof, endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof, provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
In addition to interest at the rate or rates provided for in the
Credit Agreement, the Borrower shall pay to the Bank a facility fee at the rate
or rates provided in Section 2.08 of the Credit Agreement.
This note is one of the Euro-Dollar Notes referred to in the Credit
Agreement dated as of _________, 1994 among the Borrower and the Banks listed
on the signature pages thereof (as the same may be amended from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement are used herein
with the same meaning. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
COCA-COLA ENTERPRISES INC.
By:
-------------------------
Title:
----------------------
<PAGE>
EXHIBIT C
MONEY MARKET NOTE
New York, New York
,19
----------- ---
For value received, Coca-Cola Enterprises Inc., a Delaware corporation
(the "Borrower"), promises to pay to the order of ____________________________
_______________________________________________ (the "Bank"), for the account of
its Money Market Lending Office, the aggregate unpaid principal amount of each
Money Market Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the last day of the Interest Period relating to
such Loan. The Borrower promises to pay interest on the unpaid principal amount
of each such Money Market Loan on the dates and at the rate or rates provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the Domestic Lending Office of the Bank.
All Money Market Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, prior to any transfer hereof, endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof, provided that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
In addition to interest at the rate or rates provided for in the
Credit Agreement, the Borrower shall pay to the Bank a facility fee at the rate
or rates provided in Section 2.08 of the Credit Agreement.
This note is one of the Money Market Notes referred to in the Credit
Agreement dated as of __________, 1994, among the Borrower and the banks listed
on the signature ages thereof (as the same may be amended from time to time,
the "Credit Agreement"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
COCA-COLA ENTERPRISES INC.
By:
-------------------------
Title:
----------------------
<PAGE>
EXHIBIT D
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Coca-Cola Enterprises
Inc. (the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of ________,
1994 among the Borrower and the Banks parties thereto, we are pleased on behalf
of the Borrower to invite you to submit Money Market Quotes to the Borrower to
for the following proposed Money Market Borrowing(s):
Date of Borrowing:
Principal Amount Interest Period
---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin] [Rate].
Please respond to this invitation by no later than [11:00 A.M.] [9:00
AM.] (New York City time) on [date].
COCA-COLA ENTERPRISES INC.
By:
-------------------------------
Authorized Officer
<PAGE>
EXHIBIT E
FORM OF MONEY MARKET QUOTE
Coca-Cola Enterprises Inc.
Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention:
------------------------
Re: Money Market Quote to Coca-Cola Enterprises Inc. (the "Borrower")
In response to your invitation dated __________________, we
hereby make the following Money Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing:
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
MONEY MARKET
PRINCIPAL AMOUNT** INTEREST PERIOD*** [MARGIN***] [RATE*****]
$
$
- ------------------------
*As specified in the related Invitation.
**Principal amount bid for each Interest Period may not exceed
principal amount requested. Bids must be made for $1,000,000 or a larger
multiple thereof.
***1,2,3 or 6 months, as specified in the related Invitation.
****Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (rounded to nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS."
*****Specify rate of interest per annum (rounded to the nearest
1/10,000th of 1%).
<PAGE>
EXHIBIT E (Cont.)
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of ________, 1994 among the Borrower and the Banks listed on the
signature pages thereof, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
---------------------- -------------------------------
Authorized Officer
<PAGE>
EXHIBIT F
[FORM OF OPINION OF COUNSEL FOR THE BORROWER]
[Dated as provided in
Section 3.02 of the
Credit Agreement]
To the Banks Referred to Below
COCA-COLA ENTERPRISES INC.
Ladies/Gentlemen:
This opinion is furnished to you at the direction of our client,
Coca-Cola Enterprises Inc. (the "Borrower"), pursuant to Section 3.02(b) of the
Credit Agreement dated as of _______, 1994 (the "Credit Agreement") among the
Borrower and the Banks parties thereto. Terms defined in the Credit Agreement
are used herein as therein defined.
We have acted as counsel for the Borrower in connection with the
preparation, execution and delivery of, and the initial Borrowing made under,
the Credit Agreement.
In that connection we have examined:
(1) the Credit Agreement;
(2) the documents furnished by the Borrower pursuant to
Article III of the Credit Agreement;
(3) the Certificate of Incorporation of the Borrower and
all amendments thereto (the "Charter"); and
(4) the by-laws of the Borrower and all amendments
thereto (the "By-laws").
We have also examined the originals, or copies certified to our satisfaction,
of the documents listed in a certificate of the chief financial officer of the
Borrower, dated the date hereof (the "Certificate"), certifying that the
documents listed in such certificate are all of the indentures, Loan or credit
agreements, leases, mortgages, security agreements, bonds, notes and other
agreements or instruments, and all of the orders, writs, judgments, awards,
injunctions and decrees, which affect or purport to affect the Borrower's right
to borrow money or the Borrower's obligations under the Credit Agreement or the
Notes. In addition, we have examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Borrower, certificates of
<PAGE>
public officials and of officers of the Borrower, and agreements, instruments
and documents, as we have deemed necessary as a basis for the opinions
hereinafter expressed. As to questions of fact material to such opinions, we
have, when relevant facts were not independently established by us, relied upon
certificates of the Borrower or its officers or of public officials (including
telex and telephone confirmations of such certificates), and in such instances
we have made no independent inquiry with respect to such factual matters.
We have assumed that the Banks have all requisite power and authority
to enter into and perform under the Credit Agreement, and that such document
has been duly authorized, executed and delivered by the Banks and constitute
legal, valid and binding obligations of the Banks.
The opinions expressed herein are limited in all respects to the laws
of the State of Georgia, the general corporate law of the State of Delaware,
and the federal laws of the United States, and no opinion is being rendered
herein with respect to the effect, if any, which the laws of any other
jurisdiction may have on the opinions rendered herein.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) the Charter or
the By-laws or (ii) any law, rule or regulation applicable to the
Borrower (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System) or (iii) any contractual or
legal restriction contained in any document listed in the Certificate
or insofar as is known to us, contained in any other similar document
to which the Borrower is a party. The Credit Agreement and the Notes
delivered on the date hereof have been duly executed and delivered on
behalf of the Borrower.
3. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by
the Borrower of the Credit Agreement or the Notes.
4. Insofar as is known to us, there is no pending or
threatened action or proceeding against the Borrower or any
Page 2
<PAGE>
of its subsidiaries before any court, governmental agency or
arbitrator which is likely to have a materially adverse effect upon
the financial condition of the operations of the Borrower and its
Subsidiaries taken as a whole. In rendering the foregoing opinion, we
have assumed that, in any such action or proceeding where the total
damages or other monetary relief sought is not likely to result in a
judgment against the Borrower or its subsidiaries in excess of
$15,000,000, such action or proceeding would not be likely to have any
materially adverse effect on the financial conditions or operations of
the Borrower and its Subsidiaries taken as a whole.
5. Each of the Credit Agreement and the Notes provides
that such document is to be governed by the laws of the State of New
York. Under applicable Georgia case law, if examined by a Georgia
Court or a federal court sitting in Georgia as the forum state and
applying Georgia conflict of laws rules (in either case a "Georgia
Court"), the Georgia Court should give effect to the choice of law
provisions of the parties as contained in the Credit Agreement and the
Notes unless it were to determine that (i) the State of New York has
no substantial relationship to the parties or the transaction, or (ii)
the result obtained from applying New York law would be contrary to
Georgia public policy. Because choice of law issues are decided on a
case-by-case basis, depending on the facts of the particular
transactions, we are unable to conclude with certainty that a Georgia
Court would give effect to those provisions of the Credit Agreement
and the Notes designating New York governing law. Nevertheless, based
on existing Georgia case law and on the facts of this transaction
(including, without limitation, the fact that the Credit Agreement and
the Notes will be executed and delivered to the Banks in New York and
that a substantial amount of the payments under the Credit Agreement
and the Notes are payable to the Banks in New York), we believe that a
Georgia Court should conclude that New York has a substantial
relationship to the parties and transaction. We are aware of no
Georgia laws or current Georgia cases which indicate that giving
effect to the provisions of the Credit Agreement (excluding Section
8.04 as to which we express no opinion) and the Notes designating New
York law (including, without limitation, the usury law of New York) as
the governing law would violate Georgia public policy, except with
respect to (i) the provisions of Article II of the Credit Agreement to
the extent such provisions would require payment of interest (whether
due to acceleration, prepayment or otherwise) in an amount greater
than five percent (5%) per month, or (ii) Section 2.07 of the Credit
Agreement to the extent said section would require payment of interest
on unpaid interest, or would require payment of additional amounts as
a result of the occurrence of any Event of Default and such provision
Page 3
<PAGE>
were deemed to be a penalty (although we believe that under current
Georgia case law, a court should conclude that such provision does not
constitute a penalty).
6. If a court were to determine that, notwithstanding
the provisions of Section 8.08 of the Credit Agreement, the Credit
Agreement and the Notes are governed by, and construed in accordance
with, the internal laws of the State of Georgia, the Credit Agreement
and the Notes would be, under such laws, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except (i) as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general
principles of equity (regardless of whether considered in a proceeding
in equity or at lawn (ii) that enforceability of Section 8.03(ii) of
the Credit Agreement requiring payment by the Borrower of costs of
collection, including attorneys' fees, is subject to compliance by the
Banks with O.C.G.A Section 13-1-11, (iii) that no opinion is
expressed herein with respect to those provisions of the Credit
Agreement referred to in clauses (i) and (ii) in paragraph 5 above,
and (iv) that we express no opinion as to the enforceability of any
provision of the Credit Agreement or the Notes allowing the Banks to
accelerate the maturity of the indebtedness evidenced thereby without
notice to the Borrower, but no such lack of enforceability will, in
our judgment, substantially interfere with the practical realization
by the Banks of the Banks' rights under the Credit Agreement and the
Notes except for the economic consequences of any procedural delay
which may be occasioned by such lack of enforceability.
In expressing the opinion set out above, we have assumed,
without independent inquiry, the following: (i) the rate of interest
payable by the Borrower under the terms of the Credit Agreement and
the Notes, including, without limitation, loan origination fees,
discount points, expenses and other fees and charges (including
amounts payable to the Banks by Borrower for payment in reimbursement
of the Banks' cost and expenses or otherwise to defray the Banks'
costs and expenses), whether or not denominated as interest, will not
under any circumstances, whether by reason of prepayment, acceleration
or otherwise, exceed five percent (5%) per month, and that no such
interest or charges constitute precomputed interest within the meaning
of O.C.G.A Section 7-4-2(b); and (ii) unless the requirements of
O.C.G.A Section 7-4-17 are satisfied, no interest will be payable on
unpaid interest under the Credit Agreement and the Notes.
This letter is furnished by us for the sole benefit of the Banks. No
other person or entity shall be entitled to rely on this
Page 4
<PAGE>
opinion without our express written consent in each instance except that
Messrs. Sutherland Asbill & Brennan, special counsel to the Banks, may rely on
our opinions set forth herein as fully as if such opinions had been addressed
to such counsel for the purpose of rendering such counsel's opinion to the
Banks in connection with the transactions contemplated by the Credit Agreement.
This opinion is limited to the matters expressly stated herein as of the date
hereof, and no other opinions are implied or may be inferred.
Very truly yours,
Page 5
<PAGE>
EXHIBIT G
OPINION OF
SUTHERLAND, ASBILL & BRENNAN, SPECIAL COUNSEL
FOR THE BANKS
[Dated as provided in
Section 3.02 of the
Credit Agreement]
To the Banks Referred to Below
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of -------, 1994 among Coca-Cola Enterprises Inc.,
a Delaware corporation (the "Borrower") and the banks listed on the signature
pages thereof (the "Banks"), and have acted as special counsel for the Banks
for the purpose of rendering this opinion pursuant to Section 3.02(c) of the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this of this opinion. We have also examined the opinion of
Miller & Martin, counsel for the Borrower (the "M&M Opinion"). In our
examination of all documents, we have assumed the authenticity of all such
documents submitted to us as originals, the genuineness of all signatures, the
due authority of the parties, and the conformity to the originals of all such
documents submitted to us as copies. We have also assumed that each of the
Banks has duly executed and delivered, with all necessary power and authority
(corporate and other), the Credit Agreement.
To the extent that our opinion expressed below involves conclusions as
to the matters set forth in paragraphs 1, 2 and 3 of the M&M Opinion, we have
assumed without independent investigation the correctness of the matters set
forth in such paragraphs.
The opinion expressed herein is limited in all respects to the laws of
the State of Georgia, the laws of the State of New York, the General
Corporation Law of the State of Delaware to the extent included in paragraphs
1,2 and 3 of the M&M Opinion, and the federal law of the United States, and no
opinion is being rendered herein with respect to the effect, if any, which the
laws of any other jurisdiction may have on the opinion expressed below.
This opinion letter is governed by, and shall be interpreted
<PAGE>
in accordance with the Legal Opinion Accord (the "Accord") of the ABA Section
of Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith.
Based on the foregoing and upon such other investigation as we have
deemed necessary, we are of the opinion that the Credit Agreement and the Notes
constitute the legal, valid and binding obligations of the Borrower,
enforceable in accordance with their respective terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and to the effect of general
principles of equity (regardless of whether considered in a proceeding in
equity or at law). Further, the M&M Opinion is substantially responsive to the
requirements of the Credit Agreement.
In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction in which any Bank is located
which limits the rate of interest that such Bank may charge or collect.
This letter is furnished, as of its date, for the sole benefit of the
Banks in connection with the transactions contemplated by the Credit Agreement
and may not be relied upon by any other person or for any other purpose.
Very truly yours,
Page 2
<PAGE>
EXHIBIT 10.6
SUMMARY OF
THE COCA-COLA ENTERPRISES INC.
1992-1994 LONG-TERM INCENTIVE PLAN
1993-1995 LONG-TERM INCENTIVE PLAN
The 1992-1994 Long-Term Incentive Plan and 1993-1995 Long-Term
Incentive Plan (each a "Long-Term Incentive Plan") of Coca-Cola Enterprises
Inc. (the "Company") provides for awards of incentive compensation to certain
officers and key employees of the Company if certain objective performance
targets established for the Company over a three-year period are satisfied.
The Compensation Committee of the Board of Directors administers each Long-Term
Incentive Plan, approves the employees eligible to participate and approves the
three-year Company performance targets.
The performance targets reflect the long-range financial goals of the
Company and do not necessarily depend on improvement in the performance of the
Company in one year over the previous year. The three-year performance period
begins on January 1 for each Long-Term Incentive Plan. For each Long-Term
Incentive Plan the performance target is based upon the average annual growth
rate of cash operating profit of the Company over the three-year performance
period.
Continued employment of a participant is required in order to receive
the cash award. Cash awards will be paid in 50% payments in the first year
immediately following the end of the three-year performance period, and the
remaining 50% will be paid during the third year following the end of the
three-year performance period. A participant whose employment terminates
during a performance period for any reason other than death, disability,
retirement or employment with The Coca-Cola Company or its subsidiaries is not
entitled to an award. If the participant dies, retires or becomes disabled
during the three-year performance period, a pro rata portion of the award will
be paid to the participant or the participant's estate. Additional conditions
in the payment of the awards of the Long-Term Incentive Plan are subject to the
discretion of the Compensation Committee.
<PAGE>
EXHIBIT 10.7
COCA-COLA ENTERPRISES INC.
1994-1996 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE.
The purpose of the 1994-1996 Long-Term Incentive Plan (the "Plan") is
to advance the interest of Coca-Cola Enterprises Inc. (the "Company") by
providing key management and sales employees with incentive to assist the
Company in meeting and exceeding its business goals.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Compensation Committee
(the "Committee") appointed by the Board of Directors of the Company (the
"Board") from among its members and shall be comprised of not fewer than two
members who shall be "outside directors" within the meaning of Section 162(m)
and the regulations thereunder, (including the transition rules of Proposed
Treasury Regulations Section 1.162-27) of the Internal Revenue Code of 1986, as
amended.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations or take such action as it deems necessary or
advisable for the proper administration of the Plan. Each determination made or
action taken pursuant to the Plan, including interpretation of the Plan, shall
be final and conclusive for all purposes and upon all persons, including, but
not limited to, the Company, the Committee, the Board, officers, the affected
Participants (as defined in Section 3), and their respective successors in
interest.
In addition to such other rights of indemnification as they have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses (including, but not
limited to, attorneys' fees) incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to which they or
any of them may be a party by reason of any action taken or failure to act in
connection with the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved to the extent required by and in
the manner provided by the certificate of incorporation or bylaws of the
Company relating to indemnification of directors) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member or members did not act in good faith and
in a manner he, she or they reasonably believed to be in or not opposed to the
best interest of the Company.
SECTION 3. ELIGIBILITY.
Cash awards ("Awards") may be made under this Plan to the
<PAGE>
chief executive officer, the chief operating officer, senior vice presidents,
region vice presidents/general managers, corporate vice presidents, region vice
presidents, division general managers, directors of corporate departments, and
division senior staff ("Participants").
SECTION 4. PERFORMANCE GOAL CRITERIA.
Awards made under the Plan shall be paid solely on account of the
attainment of specified compounded increases in cash operating profit ("COP")
over the period of three calendar years (the "Performance Period") beginning
January 1, 1994, as measured on a corporate-wide basis. For the purposes of the
Plan, COP is determined as operating income plus depreciation and amortization,
normalized for acquisitions, divestitures and other significant financial
events.
SECTION 5. CALCULATION OF THE AWARD.
The Committee has established Award levels, described as percentages
by which a Participant's average annual base salary shall be multiplied, to
determine the amount of an Award payable upon the attainment of specified
compounded increases in the corporate-wide COP. The Participant's average
annual base salary used in the calculation of an Award shall be the average of
the base salary in effect on the last day of each year of the three year period
to which the Plan applies ("Average Annual Base Salary"). The Awards payable
upon attainment of specified minimum, target and maximum increases for
Participants are set forth in the following table:
<TABLE>
<CAPTION>
AWARD AS A PERCENTAGE OF AVERAGE
ANNUAL BASE SALARY UPON
ATTAINMENT OF
-------------------------------------
MINIMUM TARGET MAXIMUM
PARTICIPANT INCREASE INCREASE INCREASE
- ----------- -------- -------- --------
<S> <C> <C> <C>
Chief Executive Officer.................................. 20% 40% 80%
Chief Operating Officer.................................. 20% 40% 80%
Senior Vice President.................................... 15% 30% 60%
Region Vice President/General Manager.................... 12.5% 25% 50%
Corporate Vice President................................. 12.5% 25% 50%
Region Vice President.................................... 10% 20% 40%
Division General Manager................................. 10% 20% 40%
Director of a Corporate Department....................... 10% 20% 40%
Division Senior Staff.................................... 7.5% 15% 30%
</TABLE>
SECTION 6. PAYMENT OF AWARD.
(i) Awards shall be paid in cash in two installments. Fifty percent of
the Award shall be paid in the next calendar year after the end of the
Performance Period. The remaining fifty percent shall be paid two years after
the first payment. With the exception of termination due to death, disability
or retirement, a Participant must be employed with the Company on the date each
installment of the Award is paid.
<PAGE>
(ii) For the purposes of this Plan, retirement shall mean a
Participant's voluntary termination of employment on a date which is on or
after the earliest date on which such Participant would be eligible for an
immediately payable benefit pursuant to (A) for those employees eligible for
participation in the Company's Supplemental Retirement Plan, under the terms of
that Plan and (B) for all other Participants, the terms of the Company's
Employee's Pension Plan, assuming such Participants were eligible to
participate or such comparable plan applicable to such Participant.
(iii) A Participant's employment with the Company will be deemed not
to be a termination of employment if the Participant's reason for termination
with the Company is due to immediate employment with any Affiliate, however,
the Participants' Award shall be subject to proration in accordance with
Section 7. For of this Section 6, the term "Affiliate" shall include The
Coca-Cola Company or any corporation or business entity in which The Coca-Cola
Company owns, directly or indirectly, 25% or more of the voting stock or
capital.
(iv) "Disability" shall be determined according to the definition of
"permanent disability" in the Company's health and welfare plan in effect at
the time of the determination.
SECTION 7. PRORATED AND PARTIAL AWARDS.
(i) If during the years to which the Plan applies, an employee is
hired or promoted into a position eligible for participation in the Plan, the
employee shall be eligible to receive a prorated Award for the period of
partial participation. To calculate the average base salary for a prorated
Award, each year's base salary shall be prorated based on the period in which
the employee was employed in the eligible position.
(ii) If a Participant is promoted from one position to another
position eligible for participation under the Plan, the Participant's Award
shall be prorated for the period of time the Participant was employed within
each position. The base salary in effect on the last day of each year shall be
included in the calculation of the Participant's Average Annual Base Salary,
irrespective of the changes of positions. Prorated awards shall be measured
according to the number of months in which a Participant was employed within
each position for which the Award is made.
(iii) Partial Awards shall not be paid to a Participant if the
Participant's employment is terminated prior to the last day of the Performance
Period, unless the Participant's employment is terminated on account of death,
disability, or retirement (as defined in Section 6). Partial Awards shall be
paid in one installment in the year following the Participant's termination of
employment. To determine the Average Annual Base Salary to be used in
calculating a partial Award, each year's base salary shall be prorated for the
period in which the Participant was employed, and the Average Annual Base
Salary shall be determined as the average for the years to which the Plan
applies preceding the year of termination. The partial Award shall be
calculated
<PAGE>
on the basis of the compounded increase in COP through the end of the year
preceding the Participant's termination of employment.
SECTION 9. COMMITTEE CERTIFICATION.
Prior to making an Award under the Plan, the Committee shall present
to the Board written certification that the performance-based goal of Section 4
has, in fact, been satisfied.
SECTION 10. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN.
The Board or the Committee may terminate the Plan in whole or in part,
may suspend the Plan in whole or in part from time to time, and may amend the
Plan from time to time to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in the Awards made thereunder that
does not constitute the modification of a material term of the Plan, without
the approval of the share owners of the Company. No action shall be taken,
however, without the approval of the share owners of the Company unless the
Committee determines that the approval of share owners would not be necessary
to retain the benefits of Section 162(m)(3)(C) of the Internal Revenue Code of
1986, as amended.
SECTION 11. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of Georgia and construed in
accordance therewith.
<PAGE>
EXHIBIT 10.8
COCA-COLA ENTERPRISES INC.
1994 EXECUTIVE MANAGEMENT INCENTIVE PLAN
(EFFECTIVE JANUARY 1, 1994)
SECTION 1. PURPOSE.
The purpose of the 1994 Executive Management Incentive Plan (the
"Plan") is to advance the interest of Coca-Cola Enterprises Inc. (the
"Company") by providing executive officers and managers of the Company with
incentive to assist the Company in meeting and exceeding its business goals.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Compensation Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
from among its members and shall be comprised of not fewer than two members who
shall be "outside directors" within the meaning of Section 162(m) and the
regulations thereunder, (including the transition rules of Proposed Treasury
Regulations Section 1.162-27) of the Internal Revenue Code of 1986, as amended.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations or take such action as it deems necessary or
advisable for the proper administration of the Plan. Each interpretation made
or action taken pursuant to the Plan shall be final and conclusive for all
purposes and binding upon all persons, including, but not limited to, the
Company, the Committee, the Board, the affected Participants (as defined in
Section 3), and their respective successors in interest.
In addition to such other rights of indemnification as they have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses (including, but not
limited to, attorneys' fees) incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to which they or
any of them may be a party by reason of any action taken or failure to act in
connection with the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved to the extent required by and in
the manner provided by the certificate of incorporation or bylaws of the
Company relating to indemnification of directors) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member or members did not act in good faith and
in a manner he, she or they reasonably believed to be in or not opposed to the
best interest of the Company.
<PAGE>
SECTION 3. ELIGIBILITY.
Cash awards ("Awards") may be made under this Plan to executive
officers and the senior executive band ("Participants").
SECTION 4. PERFORMANCE GOAL CRITERIA.
The Committee shall establish specific objective targets in relation
to the cash operating profit, as budgeted by the Company ("budgeted COP") for
each performance unit of the Company, including targets at below 100% of
budgeted COP. Awards made under the Plan shall be paid solely on account of the
attainment of these pre-established targets. For the purposes of the Plan, COP
shall be determined as operating income plus depreciation and amortization,
normalized for acquisitions, divestitures and other significant financial
events. For purposes of the Plan, performance units shall be classified as
corporate or region, or any combination thereof.
SECTION 5. CALCULATION OF AWARDS.
The Committee has established Award levels, described as percentages
by which a Participant's annual base salary shall be multiplied, to determine
the amount of an Award payable upon the attainment of specified targets of
budgeted COP. The annual base salary used in calculating a Participant's Award
shall be that which is in effect on December 31 of the year for which the Award
is made. For example, Awards payable upon the attainment of the target of 100%
of budgeted COP and the maximum amount that may be awarded under the Plan are
set forth in the following table:
<TABLE>
<CAPTION>
AWARD AS A PERCENTAGE OF
ANNUAL BASE SALARY UPON
ATTAINMENT OF GOAL
------------------------------------
AWARD IF 100% OF MAXIMUM
BUDGETED COP AWARD
PARTICIPANT IS ATTAINED UNDER THE PLAN
- ------------------------------------------------------------- ---------------- --------------
<S> <C> <C>
Chief Executive Officer...................................... 65% 115%
Chief Operating Officer...................................... 65% 115%
Senior Vice President........................................ 55% 95%
Region Vice President/General Manager........................ 50% 90%
Corporate Vice President -- Level 1.......................... 50% 90%
Corporate Vice President -- Level 2.......................... 40% 80%
</TABLE>
SECTION 6. PRORATED AND PARTIAL AWARDS.
Persons hired or promoted during the Plan year into positions
identified in Section 3 shall be eligible to receive prorated Awards for
periods of partial participation. If a Participant is promoted from one
eligible position to another eligible position under the Plan, the
Participant's Award shall be prorated for the period of time the Participant
was employed within each position, using the Participant's annual base salary
in effect on December 31 of the year for which the Award is made. Prorated
Awards shall be
<PAGE>
measured according to the nearest whole number of months in which a Participant
was employed in each position for which the Award is made.
Subject to the Committee's discretion, as described in Section 7,
partial Awards shall be made to Participants who are not employed in positions
described in Section 3 on the last day of the year for which Awards are to be
made. A partial Award shall be prorated to the date of the break in service or
change in position with the Company or an Affiliate and shall be calculated on
the basis of the Participant's annual base salary on the last day in which the
Participant is employed in such position. The Committee shall have the
authority to reduce or eliminate Awards to a Participant whose employment
terminates prior to the last day of the Plan year. For the purposes of this
Section 6, "Affiliate" shall include The Coca-Cola Company or any corporation
or business entity in which The Coca-Cola Company owns, directly or indirectly,
25% or more of the voting stock or capital.
SECTION 7. DISCRETION OF THE COMPENSATION COMMITTEE.
All Awards shall be made solely on the basis of the performance goals
set forth by the Committee pursuant to Section 4 and only in accordance with
the standards set forth in Section 5. The Committee shall have no authority to
increase the amount of an Award payable to a Participant which would otherwise
be due upon the attainment of the performance goal. The Committee shall,
however, have the authority to reduce or eliminate any Award under the Plan.
SECTION 8. COMMITTEE CERTIFICATION.
The Committee shall present to the Board written certification that
the performance goal of Section 4 has, in fact, been satisfied for any Award
made under the Plan.
SECTION 9. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN.
The Board or the Committee may terminate the Plan in whole or in part,
may suspend the Plan in whole or in part from time to time, and may amend the
Plan from time to time to correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in the Awards made thereunder that
does not constitute the modification of a material term of the Plan, without
the approval of the share owners of the Company. No action shall be taken,
however, without the approval of the share owners unless the Committee
determines that the approval of share owners would not be necessary to retain
the benefits of Section 162(m)(3)(C) of the Internal Revenue Code of 1986, as
amended.
SECTION 10. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant
thereto shall be governed by the laws of the State of
<PAGE>
Georgia and construed in accordance therewith.
<PAGE>
EXHIBIT 10.9
COCA-COLA ENTERPRISES INC.
SUPPLEMENTAL RETIREMENT PLAN
1991 AMENDMENT AND RESTATEMENT
Article I. Establishment of Plan
1.1 Establishment. COCA-COLA ENTERPRISES INC. hereby amends and
restates, effective as of January 1, 1991, the COCA-COLA ENTERPRISES INC.
SUPPLEMENTAL RETIREMENT PLAN which was initially adopted effective as of
October 3, 1986 and which was amended as of February 13, 1990. Said plan is an
unfunded supplemental retirement plan for key management and highly compensated
employees and shall hereinafter be referred to as the "Plan".
1.2 Purpose. The purpose of the Plan is to supplement for the
eligible executives of the Employer the benefits from the Employer's Qualified
Pension Plan.
1.3 Application of Plan. The terms of the Plan are applicable
only to eligible executives who are in the employ of the Employer on or after
October 3, 1986. Any executive who retires or terminates his employment
relationship prior to such date shall not be covered under the Plan.
1.4 History of Plan. Prior to its amendment and restatement
effective as of January 1, 1991, the Plan provided benefits based on both a
supplemental retirement benefit formula (which applied only to specified
officers and to other employees approved by the Chief Executive Officer) and a
Code Section 415 excess benefit formula (which applied only to salaried
employees). Effective as of January 1, 1991, the Company began providing Code
Section 415 excess benefits under the Excess Benefit Plan, and the effect of
this January 1, 1991 amendment and restatement of the Plan generally is to
remove the Code Section 415 excess benefit formula from the Plan and to
coordinate the remaining benefits provided hereunder with those provided under
the Excess Benefit Plan and the Qualified Pension Plan.
Article II. Definitions
2.1 Definitions. Whenever used in the Plan, the following terms
shall have the respective meanings set forth below unless otherwise expressly
provided herein, and when the defined meaning is intended, the term is
capitalized.
(a) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
<PAGE>
(b) "Committee" or "Management Committee" shall mean the
administrative body designated by the Chief Executive Officer
of the Company to administer the Plan as described in Article
VII.
(c) "Company" shall mean Coca-Cola Enterprises Inc.
(d) "Early Retirement Age" shall mean the first to occur of the
date on which a Participant has (1) both attained age 55 and
completed at least 10 Years of Vesting Service or (2) attained
age 60.
(e) "Employer" shall mean the Company and any corporation,
partnership or other business entity of which the Company,
directly or indirectly, has 25% or more of the voting power
and which is approved by the Committee as a participating
employer.
(f) "Excess Benefit Plan" shall mean the portion of the Coca-Cola
Enterprises Inc. Supplemental Deferred Compensation Plan
(effective as of January 1, 1991, as the same may from time to
time be amended) that provides retirement benefits on the
basis of limitations imposed on the Coca-Cola Enterprises Inc.
Employees' Pension Plan and that is referred to under Article
IV of said supplemental plan (as of its effective date) as the
"Supplemental Pension Plan Portion".
(g) "Final Average Pay" shall mean the monthly average of a
Participant's Pay for the period of the 5 consecutive calendar
years out of the last 10 calendar years prior to his
termination of employment with the Employer during which he
received the largest total amount of Pay. The average shall
only be of the months in which Pay was received, plus the
number of months during which Pay was not received remaining
in the calendar year in which occurs the Participant's
termination of employment if Pay for such calendar year is
included in the average.
(h) "Normal Retirement Age" shall mean the date on which a
Participant attains age 65.
(i) "Participant" shall mean any executive of the Employer who has
met the eligibility requirements of the Plan, as set forth in
Article III hereof, to be and become a Participant.
(j) "Pay" shall mean, with respect to a Participant while he is an
employee of an Employer, the total of (1) the Participant's
"Compensation" as such term is defined in the Qualified
Pension Plan for purposes of determining his Accrued Benefit
under said plan, plus (2) any amounts which would have been
included in clause (1) hereof but for the limits imposed by
Code Section 401(a)(17), plus (3) any amounts not included in
-2-
<PAGE>
clause (1) because the Participant elected to defer them under
a nonqualified deferred compensation plan; provided, the
amounts counted pursuant to clause (3) shall be counted only
in the year of deferral and not in any subsequent year,
including the year(s) of receipt. In addition, "Pay" shall
mean, with respect to a Participant while he was an employee
of The Coca-Cola Company prior to becoming a Participant
hereunder, the amounts treated as pay under The Coca-Cola
Company Supplemental Retirement Plan (or any successor plan
thereof).
(k) "Plan" shall mean the supplemental retirement plan described
in this instrument as the same may from time to time be
amended.
(1) "Qualified Pension Plan" shall mean the Coca-Cola Enterprises
Inc. Employees' Pension Plan and any other defined benefit
pension plan maintained by the Employer, as such plan(s) may
from time to time be amended.
(m) "Year of Benefit Service" shall have the same meaning in the
Plan as is found in the Qualified Pension Plan. In addition,
a Participant's prior service (that is, his service prior to
becoming an employee of the Employer) with The Coca-Cola
Company or any of its affiliates that would have constituted a
year of service (or that would have counted towards a year of
service) for purposes of benefit accrual under the Qualified
Pension Plan if the Participant had been an employee of the
Company during such period shall constitute (or be counted
towards) a Year of Benefit Service hereunder; provided, no
period of service shall be taken into account towards more
than 1 Year of Benefit Service.
(n) "Years of Vesting Service" shall have the same meaning in the
Plan as is found in the Qualified Pension Plan. In addition, a
Participant's service with The Coca-Cola Company or any of its
affiliates that would have constituted a year of service (or
that would have counted towards a year of service) for
purposes of vesting under the Qualified Pension Plan, if the
Participant had been an employee of the Company during such
period shall constitute (or be counted towards) a Year of
Vesting Service hereunder; provided, no period of service
shall be taken into account towards more than 1 Year of
Vesting Service.
2.2 Gender and Number. Except when otherwise indicated by the
context, any masculine terminology herein shall also include the feminine and
neuter, and the definition of any term herein in the singular may also include
the plural.
Article III. Participation
-3-
<PAGE>
3.1 Eligibility for Participation. The Chief Executive Officer
and each Key Executive or Senior Vice President in charge of a major functional
group as defined by the Chief Executive Officer of the Company and each other
employee of the Employer approved by the Chief Executive Officer shall be
eligible to participate in the Plan.
3.2 Date of Participation. Each executive who is eligible to
become a Participant under section 3.1 shall become a Participant on the later
to occur of (a) October 3, 1986 or (b) the date he meets the eligibility
requirements.
3.3 Duration of Participation. An executive who becomes a
Participant shall continue to be a Participant until the termination of
employment with the Employer or, if later, the date he is no longer entitled to
benefits under the Plan.
Article IV. Benefits
4.1 Normal Retirement Benefit.
(a) Eligibility. A Participant whose employment with the Employer
terminates on or after he has attained his Normal Retirement
Age shall be eligible for a normal retirement benefit under
the Plan subject to the forfeitability provisions of section
5.1. For purposes of this subsection (a), if a Participant
becomes employed by The Coca-Cola Company or one of its
affiliates immediately after his employment with the Employer
terminates, his employment termination date shall be the later
of the date his employment with the Employer or The Coca-Cola
Company terminates.
(b) Amount. A Participant who is eligible pursuant to section
4.1(a) above shall be entitled to a monthly normal retirement
benefit in an amount equal to the excess, if any, of (1) over
(2) below:
(1) the sum of (A) and (B) below:
(A) 20 percent of his Final Average Pay; and
(B) 1 percent of his Final Average Pay
multiplied by his Years of Benefit Service
not in excess of 35 years;
(2) the total of the monthly retirement benefit amounts
he would be entitled to receive at his Normal
Retirement Age (or later retirement) under (A) the
Qualified Pension Plan, (B) the Excess Benefit Plan,
and (C) The Coca-Cola Company Supplemental Retirement
Plan (or any successor thereto), with the monthly
benefit amount under each of said plans being
calculated for purposes hereof, on an
-4-
<PAGE>
actuarial equivalent basis applying the definitions
of actuarial equivalence applicable to each of said
respective plans, as if payment of such benefit
amount was to commence at the same time as the
benefit payable hereunder, and as if payment of such
benefit amount was to be made in the same form of
distribution as is elected or otherwise payable under
each of said respective plans.
(c) Commencement and Duration. Monthly normal retirement benefit
payments shall be made in the form of a single life annuity
and shall commence at the same time as the normal retirement
benefit payable from the Qualified Pension Plan. Once
payments begin, they shall be paid monthly thereafter as of
the first day of each succeeding month during the
Participant's lifetime.
(d) Annual Adjustment. Any benefit payable pursuant to section
4.1(b) of this Article shall be adjusted in accordance with
new limitations, if any, that may be established by the
Internal Revenue Service and that may affect the aggregate
amount of payments that may be made from the Qualified Pension
Plan, the Excess Benefit Plan and The Coca-Cola Company
Supplemental Retirement Plan (or any successor plan thereto).
4.2 Early Retirement Benefit.
(a) Eligibility. A Participant whose employment with the Employer
terminates on or after the date he first has attained his
Early Retirement Age but before he attains Normal Retirement
Age shall be eligible for an early retirement benefit under
the Plan subject to the forfeitability provisions of section
5.1. For purposes of this subsection (a), if a Participant
becomes employed by The Coca-Cola Company or one of its
affiliates immediately after his employment with the Employer
terminates, his employment termination date shall be the later
of the date his employment with the Employer or The Coca-Cola
Company terminates.
(b) Amount. A Participant who is eligible pursuant to section
4.2(a) shall be entitled to a monthly early retirement benefit
in an amount equal to the excess, if any, of (1) over (2)
below:
(1) the amount computed under section 4.1(b) (1) reduced
by applying, for each month by which the
Participant's first payment under the Plan precedes
age 60, the same reduction factors as are in use
under the Qualified Pension Plan for determining
early retirement benefits payable thereunder;
(2) the total of the monthly retirement benefit amounts
he actually receives from the Qualified Pension Plan,
the
-5-
<PAGE>
Excess Benefit Plan and The Coca-Cola Company
Supplemental Retirement Plan (or any successor
thereto); provided, when the benefits from the
Qualified Pension Plan, the Excess Benefit Plan
and/or The Coca-Cola Company Supplemental Retirement
Plan (or any successor thereto) commence (whether at
the same or a later time than the early retirement
benefit payments hereunder), the benefit payable from
the Plan shall be reduced by the total amount of such
benefits received.
(c) Commencement and Duration. Monthly early retirement benefit
payments shall be made in the form of a single life annuity
and shall commence at the same time as the early retirement
benefit payable from the Qualified Pension Plan. Once
payments begin, they shall be paid monthly thereafter as of
the first day of each succeeding month during the
Participant's lifetime.
(d) Annual Adjustment. Any benefit payable pursuant to section
4.2(b) of this Article shall be adjusted in accordance with
new limitations, if any, that may be established by the
Internal Revenue Service and that may affect the aggregate
amount of payments that may be made from the Qualified Pension
Plan, the Excess Benefit Plan and The Coca-Cola Company
Supplemental Retirement Plan.
4.3 Pre-Retirement Surviving Spouse Benefit.
(a) Eligibility. The surviving spouse of a Participant, who dies
(1) while employed by the Employer, (2) after completing 5
Years of Vesting Service and/or attaining age 60, and (3)
after electing a l00% pre-retirement survivor annuity payable
to his surviving spouse as the distribution form for his pre-
retirement survivor benefit under the Qualified Pension Plan,
shall be eligible for a surviving spouse benefit under the
Plan; provided, if a deceased Participant was not yet eligible
at the time of his death to elect a 100% survivor annuity
under the Qualified Pension Plan, solely for the purposes of
determining his surviving spouse's eligibility for a survivor
annuity hereunder, the Participant shall be deemed to have
made such an election. For purposes of this subsection (a),
if a Participant becomes employed by The Coca-Cola Company or
one of its affiliates immediately after his employment with
the Employer terminates, he shall be considered employed by
the Employer until the later of the date his employment with
the Employer or The Coca-Cola Company terminates.
(b) Amount. A surviving spouse who is eligible pursuant to
section 4.3(a) above shall be entitled to a monthly surviving
spouse benefit in an amount equal to the excess, if any, of
(1) over (2) below:
-6-
<PAGE>
(1) the amount computed under section 4.1(b)(1) with
respect to the Participant as of his date of death
reduced by applying, for each full calendar month, if
any, to occur between (A) the later of (i) the date
the Participant would have attained age 55 or (ii)
the date of his death, and (B) the calendar month in
which the Participant would have attained age 60, the
same reduction factors as are in use under the
Qualified Pension Plan for determining early
retirement benefits payable thereunder;
(2) the total of the monthly pre-retirement survivor
benefit amounts actually received by the surviving
spouse from the Qualified Pension Plan, the Excess
Benefit Plan and The Coca-Cola Company Supplemental
Retirement Plan (or any successor thereto); provided,
when the benefits from the Qualified Pension Plan,
the Excess Benefit Plan and/or The Coca-Cola Company
Supplemental Retirement Plan (or any successor
thereto) commence (whether at the same or a later
time than the pre-retirement survivor benefit
payments hereunder), the benefit payable from the
Plan shall be reduced by the total amount of such
benefits received.
(c) Commencement and Duration. Monthly surviving spouse benefit
payments shall commence on the first of the month following
the Participant's death. Once payments begin, they shall be
paid monthly thereafter as of the first day of each succeeding
month until the first to occur of the surviving spouse's death
or remarriage, and shall be subject to adjustment in
accordance with the terms of section 4.1(d) of this Article.
4.4 Post-Retirement Surviving Spouse Benefit.
(a) Eligibility The surviving spouse of a retired Participant, who
is receiving a benefit from the Qualified Pension Plan in the
form of a 100 percent joint and survivor annuity with his
spouse as his joint annuitant and who dies while receiving, or
while entitled to in the future receive, a benefit under
section 4.1 or 4.2, shall be eligible for a surviving spouse
benefit under the Plan.
(b) Amount. A surviving spouse who is entitled pursuant to
section 4.4(a) above shall be entitled to a monthly surviving
spouse benefit equal to the amount being received, or the
amount that could have been received, by the Participant from
the Plan at the time of his death.
(c) Commencement and Duration. Monthly surviving spouse benefit
payments shall commence on the first of the month following
the Participant's death. Once payments begin, they shall be
paid monthly thereafter as of the first day of each succeeding
month during the surviving spouse's lifetime and shall be
-7-
<PAGE>
subject to adjustment in accordance with the terms of section
4.1(d).
Article V. Forfeitability
5.1 Forfeitability of Benefits. Any benefits under the Plan which
a Participant is receiving shall cease, and all rights under the Plan shall be
extinguished, if a Participant terminates employment with the Employer and,
without the Employer's consent, is subsequently (a) employed by or in any
manner provides services for any business organization that is in direct
competition with the Employer or (b) personally engages in direct competition
with the Employer. If a court of competent jurisdiction finds that the
restrictions provided for in (a) and (b) of this section 5.1 are unenforceable,
then such benefits shall be forfeited if a Participant competes either as an
employee or directly in the widest geographical area and for the longest period
of time that are legally enforceable. Further, all rights under the Plan shall
be extinguished and forfeited if a Participant (x) terminates employment with
the Employer prior to his Early Retirement Age for any reason other than death
or (y) dies before attaining age 60 or completing 5 Years of Vesting Service,
unless otherwise expressly provided in writing by the Compensation Committee of
the Board of Directors. Solely for the purpose of determining whether or not a
Participant satisfies the vesting requirements in clause (x) or (y) hereof and
such other purposes as may be specifically provided in the Plan, if a
Participant becomes employed by The Coca-cola Company or one of its affiliates
immediately after his employment with the Employer terminates, his employment
termination date shall be the later of the date his employment with the
Employer or The Coca-Cola Company terminates.
Article VI. Financing
6.1 Financing. The benefits under the Plan shall be paid out of
the general assets of the Employer. The Employer shall not be required in any
way to fund in advance any payments hereunder.
6.2 No Trust Created. Nothing contained in the Plan, and no
action taken pursuant to the provisions of the Plan, shall create or be
construed to create a trust of any kind or a fiduciary relationship between the
Employer and any Participant, his spouse or any other person.
6.3 Unsecured Interest. No Participant hereunder shall have any
interest whatsoever in any specific asset of the Employer. To the extent that
any person acquires a right to receive payments under the Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Employer.
Article VII. Administration
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<PAGE>
7.1 Administration. The Plan shall be administered by the
Management Committee. The Committee shall consist of not less than three
members who shall be appointed by the Chief Executive Officer of the Company.
The members of the Committee shall remain in office at the will of the Chief
Executive Officer of the Company, and the Chief Executive Officer may from time
to time remove any of said members with or without cause and shall appoint
their successors. Any member of the Committee may resign by delivering his
written resignation to the Chief Executive Officer, and such resignation shall
become effective upon the date specified therein. The Committee shall have the
general responsibility for administration of the Plan and for carrying out its
provisions. The Committee shall be authorized to construe and interpret all of
the provisions of the Plan, to adopt rules and practices concerning the
administration of the same, and to make any determinations necessary hereunder,
which shall be binding and conclusive on all parties; provided, if a member of
the Committee is a Participant in the Plan, he shall not participate in any
decision that affects solely his own benefit hereunder. The Committee may
appoint one or more persons from members of management whose functions shall be
to act for the Committee in the administration of the Plan and to establish
rules and regulations for such administration.
7.2 Expenses. The cost of payment from the Plan and the expenses
of administering the Plan shall be borne by the Employer.
7.3 Tax Withholding. The Employer may withhold, or require the
withholding of, from any payment which it is required to make, any federal,
state or local taxes required by law to be withheld with respect to such
payment and such sum as the Employer may reasonably estimate as necessary to
cover any taxes for which the Employer may be liable and which may be assessed
with regard to such payment. Upon discharge or settlement of such tax
liability, the Employer shall distribute the balance of such sum, if any, to
the Participant from whose payment it was withheld or, if such Participant is
then deceased, to the beneficiary of such Participant. Prior to making any
payment hereunder, the Employer may require such documents from any taxing
authority, or may require such indemnities or surety bond, as the Employer
shall reasonably deem necessary for its protection.
Article VIII. Claims
8.1 Claims for Benefits. Claims for benefits under the Plan may
be filed in writing with the Management Committee. The Committee shall furnish
to the claimant written notice of the disposition of a claim within 90 days
after the application therefor is filed; provided, if special circumstances
require an extension of time for processing the claim, the Committee shall
furnish written notice of the extension to the claimant prior to the
termination of the initial 90 day period, and such extension shall not exceed
one additional, consecutive 90 day period. In the event the claim is denied,
the notice of the disposition of the claim shall provide the specific reasons
for the denial,
-9-
<PAGE>
citations of the pertinent provisions of the Plan, and, where appropriate, an
explanation as to how the claimant can perfect the claim and/or submit the
claim for review.
8.2 Appeals. Any Participant, or his designated beneficiary, if
applicable, who has been denied a benefit shall be entitled, upon written
request to the Management Committee, to appeal the denial of his claim. The
claimant (or his duly authorized representative) may review pertinent documents
related to the Plan and in the Committee's possession in order to prepare the
appeal. The written request for review, together with a written statement of
the claimant's position, must be filed with the Committee no later than 60 days
after receipt of the written notification of denial of a claim provided for in
section 8.1. The Committee's decision shall be made within 120 days following
the filing of the request for review. If unfavorable, the notice of the
decision shall explain the reasons for denial and indicate the provisions of
the Plan or other documents used to arrive at the decision.
Article IX. Miscellaneous
9.1 Nontransferability. In no event shall the Employer make any
payment under the Plan to any assignee or creditor of a Participant or of a
beneficiary. Prior to the time of a payment hereunder, a Participant or a
beneficiary shall have no rights by way of anticipation or otherwise to assign
or otherwise dispose of any interest under the Plan, nor shall rights be
assigned or transferred by operation of law.
9.2 Amendment or Termination. The Plan may be amended or
terminated at any time by the Committee; provided, without the written consent
of a Participant or beneficiary of a deceased Participant with an interest in
the Plan (if applicable), no amendment or termination may reduce the value of
such Participant's benefit hereunder to an amount that is less than his benefit
amount (whether or not vested) calculated by taking into account (a) his Years
of Benefit Service and (b) his Final Average Pay, on the date the Committee
acts to amend or terminate the Plan. Notwithstanding the foregoing, a
Participant's benefit hereunder shall remain subject to forfeiture in
accordance with the terms of section 5.1. Notice of any such amendment or
termination shall be given in writing to each Participant and beneficiary of a
deceased Participant with an interest in the Plan.
9.3 Applicable Law. This instrument shall be construed in
accordance with and governed by the laws of the United States and, to the
extent not preempted by federal law, by the laws of the State of Georgia.
-10-
<PAGE>
SUMMARY OF AMENDMENT TO
COCA-COLA ENTERPRISES INC.
SUPPLEMENTAL RETIREMENT PLAN
Effective Date: July 1, 1993.
Eligibility: Any employee who:
1. Incurs a benefit limitation under ERISA
limits, or
2. Makes a nonqualified deferral under any
Company sponsored plan.
Accrued Benefit: A benefit calculated under the appropriate
defined benefit pension plan assuming no limits
applied and no nonqualified deferrals had been
made minus the amount of any benefit paid from
the qualified defined benefit pension plan.
Total benefit (qualified plus nonqualified) may
not exceed two times applicable Code Section
415 limit.
Vested Benefit: Earned after five years of vesting service.
Other Provisions: All other provisions of the supplemental
retirement plan mirror the qualified defined
benefit pension plan.
Transition Rule:
- - Former Johnston Coca-Cola For the 14 employees covered by this
Bottling Group, Inc. Plan plan, a minimum accrued benefit will apply
calculated as follows:
1. Final five year average salary, benefit
service, vesting service and age will be
determined as of June 30, 1993.
2. This data will be used to determine the
retirement age at which a retirement benefit
would have the greatest value for the
participant.
3. The benefit calculated under step 2 will be
multiplied by the ratio of benefit service
as of June 30, 1993 over 20 years.
-11-
<PAGE>
4. The vested percent based on vesting service
as of June 30, 1993 will be applied to the
minimum accrued benefit.
No special medical or death benefits will any
longer be provided.
-12-
<PAGE>
EXHIBIT 10.16
COCA-COLA ENTERPRISES INC.
DEFERRED COMPENSATION PLAN
FOR
NON-EMPLOYEE DIRECTOR COMPENSATION
(As Amended and Restated Effective April 1, 1994)
1. Purpose. The purpose of the Deferred Compensation Plan for
Non-employee Directors of Coca-Cola Enterprises Inc. (the "Plan") is to
provide Non-employee Directors of Coca-Cola Enterprises Inc. (the
"Corporation") a vehicle for nonelective and elective deferrals of their
compensation as a Director.
2. Effective Date. The Plan shall become effective, as amended
and restated, as of April 1, 1994 following approval by the Board of
Directors of the Corporation.
3. Eligibility. All Directors of the Corporation who are not
employees of the Corporation or of any subsidiary of the Corporation shall
participate in the Plan; provided, however, that solely with respect to
Automatic Deferrals (as defined), the Chairman of the Board of Directors
shall always participate in the Plan regardless of whether he or she is an
employee of the Corporation or any of its subsidiaries.
4. Nonelective Deferral of Compensation. Directors in office or
who have consented to serve as a Director on or before March 1, 1994 shall
have their "1994 Fee Increase" deferred under the Plan. The "1994 Fee
Increase" shall mean, in the case of the amounts paid under the annual
retainer fee for services rendered after March 31, 1994,
<PAGE>
$7,500, and with respect to the meeting fee for any meeting held after
March 31, 1994, $200. Effective January 1, 1995, 33% of all annual
retainer and meeting fees payable to the Director shall be deferred under
the Plan. All nonelective deferred compensation under this paragraph 4
shall be payable in the form and at the time elected on the election form
attached as Exhibit A, as described in subparagraphs 5(c)(ii) and (iii)
below. Deferrals under this paragraph 4 should be known as "Automatic
Deferrals."
5. Elective Deferral of Compensation.
(a) Time of Eligibility. An election to defer Net
Compensation (as defined) may be made by a nominee for election as a
Director who was not then serving as a Director before the time of
election to the Board for the relevant elected term and before the right
to receive any compensation with respect to such term.1 An election made
under this paragraph 5 shall continue in effect until the end of the
participant's service as a Director or until the end of the calendar
quarter during which the Director gives the Corporation written notice of
the discontinuance of the election, whichever shall occur first. Such a
notice of discontinuance shall operate prospectively from the first
day of the calendar quarter following the giving of notice
-------------------
(1)Directors in office or who consented to serve as a Director on or
before October 30, 1986 were permitted, before October 30, 1986, to elect
to defer compensation receivable by such Director on or after October 30,
1986.
2
<PAGE>
referred to in the preceding sentence, and compensation payable during any
subsequent calendar quarter shall not be deferred, but compensation
theretofore deferred shall continue to be withheld and shall be paid in
accordance with the notice of election pursuant to which it was withheld.
A Director who has not previously elected to defer receipt of compensation
or who has subsequently discontinued such election may elect to defer
compensation under this paragraph 5 by giving notice before January 1 of
each year or before the reelection of such Director, but any such election
shall only be effective for compensation payable during the calendar
quarter following such notice and thereafter. Deferrals under this
paragraph 5 shall be known as "Elective Deferrals."
(b) Amount of Deferral. A participant may elect to defer receipt
of all or a specified portion of the annual retainer and meeting fees
receivable by such Director for service as a Director of the Corporation
after deduction of Automatic Deferrals ("Net Compensation"), but not any
other compensation or expense reimbursement.
(c) Manner of Electing Deferral. A participant shall elect to
make an Elective Deferral by giving written notice to the Corporation in
the form attached hereto as Exhibit A. Such notice shall include:
(i) the percentage or amount of the Elective Deferral;
3
<PAGE>
(ii) an election of a lump-sum payment or of a number of
annual installments (not to exceed five) for the payment of the
Automatic and Elective Deferrals; and
(iii) the date of the lump-sum payment or the first
installment payment. If such notice calls for any payment on a date
that is less than six months after the most recent Automatic or
Elective Deferral is credited to the Stock Account, such payment shall
be made on the first date that is at least six months after the date
of the credit; provided, however, that no date of payment shall be
earlier than a date fixed by resolution of the Board of Directors from
time to time.
6. Deferred Compensation Account. The Corporation shall
establish one or more deferred compensation accounts for each participant
as provided below.
(a) Basic Account. Unless the participant shall elect to
have all or a portion of his or her deferred compensation credited to a
Stock Account as provided in paragraph (b) below, the Corporation shall
credit Elective Deferrals to a Basic Account maintained in the name of the
participant on the books and records of the Corporation. At the end of
each calendar year or initial or terminal portion of a year, such Basic
Account will be credited with interest, at an annual rate equivalent to
the weighted
4
<PAGE>
average prime lending rate of Trust Company Bank for the relevant year or
portion thereof (the "Interest Equivalents"), upon the average daily
balance in the Account during such year or portion thereof.
(b) Stock Account. All Automatic Deferrals shall be
credited to a Stock Account subject to the terms and conditions set forth
below. In addition, the participant may elect in writing, by completing
the appropriate portions of the election form attached as Exhibit A, with
respect to amounts of retainer fees and meeting fees otherwise payable
during the calendar quarter commencing after the date of such election, to
have all or a portion of his or her Elective Deferrals credited to a Stock
Account subject to the terms and conditions set forth below. The
Corporation shall credit to the Stock Account that number of whole shares
of common stock of the Corporation that could be purchased with the
portion of each deferred amount that is credited pursuant to an Automatic
Deferral or that the participant has elected to be so credited with
respect to Elective Deferrals, determined on the basis of the average of
the high and low market prices at which a share of common stock of the
Corporation sold on the trading day preceding the date such compensation
would otherwise be payable, as reported on the New York Stock Exchange
Composite Transactions Listing. After crediting such number of whole
shares, any amount subject to such election which represents
5
<PAGE>
a fractional share shall be credited to the participant's Basic
Account.
(c) Dividend Reinvestment in Basic Account. Unless the
participant elects otherwise as provided in paragraph (d) below with
respect to Elective Deferrals, on each date on which dividends are paid on
shares of common stock of the Corporation, the Corporation shall credit to
the participant's Basic Account an amount equal to the dividends that
would have been paid on the shares of common stock then credited to the
participant's Stock Account and representing Elective Deferrals if such
shares had been outstanding on the record date of such dividend.
(d) Dividend Account. Any amounts equal to all
hypothetical dividends that would have been paid on shares of common stock
credited to a participant's Stock Account representing Automatic Deferrals
(had they been outstanding shares) shall be credited automatically to a
Dividend Account established and maintained on the books of the
Corporation. In addition, a participant may, at the time he or she elects
to have all or a portion of his or her Elective Deferrals credited to the
Stock Account, also elect to have amounts equal to all hypothetical
dividends that would have been paid on shares of common stock so credited
(had they been outstanding shares), credited instead to the Dividend
Account. Interest credits shall be added to the balance in the
Dividend Account at annual intervals at the
6
<PAGE>
same manner and time as interest is credited under paragraph 5(a) of the
Plan, calculated at the interest rate provided in said paragraph. On the
second Wednesday in February of each year during the term of this
Agreement (the "Dividend Conversion Date"), any credit balance in the
Dividend Account on such date shall be treated as if it had been used to
purchase additional whole shares of common stock of the Corporation, and
such additional whole shares shall be credited to the participant's Stock
Account under the following procedure:
(i) There shall first be credited to the Dividend
Account interest, at a rate determined in the manner specified
above, on the credit balance in the Dividend Account from the
date of the most recent annual date on which interest was
credited to the Dividend Conversion Date.
(ii) The balance in the Dividend Account after the
crediting of interest as provided in subparagraph (i) above
shall be converted into that number of whole shares of common
stock of the Corporation that could be purchased with such
credit balance based upon the average of the high and low
market prices at which a share of common stock of the
Corporation sold on the trading day preceding the Dividend
Conversion Date as reported
7
<PAGE>
on the New York Stock Exchange Composite Transactions Listing.
(iii) The number of whole shares so determined
shall be credited to the participant's Stock Account.
(iv) Any amounts remaining in the Dividend Account
shall continue to be held in such account and be credited with
interest as provided herein until applied or paid out as
required by the Plan.
7. Value of Deferred Compensation Accounts. A
participant's Basic Account, Stock Account and Dividend Account shall be
referred to collectively as his or her Accounts. The value of each
participant's Accounts shall consist of the total balance in all such Accounts.
As promptly as practicable following the close of each calendar year a
statement will be sent to each participant as to the balance in the
participant's Accounts as of the end of such year, including the number of
shares credited to the Stock Account and the value of such shares, based upon
the average of the high and low market prices at which a share of common stock
of the Corporation sold on the trading day coincident with or immediately
preceding the end of such calendar year, as reported on the New York Stock
Exchange Composite Transactions Listing.
8. Payment of Deferred Compensation.
(a) Amount Payable Pursuant to Election. The balance in
a participant's Accounts shall be paid in cash in the manner elected in
accordance with the provisions of paragraph 5(c) above; provided, however, that
the balance, if any, in the
8
<PAGE>
participant's Stock Account at April 1, 1994 (the "Pre-Amendment Balance")
shall be paid in that number of whole shares of common stock of the Corporation
credited at April 1, 1994 to such Stock Account. If annual installments are
elected, the amount of the first payment shall be a fraction of the balance in
the participant's Accounts, the numerator of which is one and the denominator
of which is the total number of installments elected. The amount of each
subsequent payment shall be a fraction of the balance in the participant's
Accounts, the numerator of which is one and the denominator of which is the
total number of installments elected minus the number of installments
previously paid. Each payment pursuant to this paragraph 8(a) from the
participant's Accounts shall include Interest Equivalents on the Basic Account
and the Dividend Account, but only on the amount being paid from the preceding
December 31 to the date of payment.
(b) Accounts From Which Paid. In the event the
participant elects to receive the credit balances in his or her Accounts in
installments, the participant may designate as part of such election what
portion of each payment shall be debited to and be deemed paid from the
Pre-Amendment Balance of the Stock Account in the form of shares of common
stock and what portion shall be debited to and be deemed paid from the Stock
Account (less the Pre-Amendment Balance), the Basic Account and the Dividend
Account in cash, provided that any such designation must be made no later than
the time prescribed by paragraph 5(c) for electing the form of distribution.
If no such designation is made before payments are to
9
<PAGE>
begin, the Corporation shall debit benefit payments proportionately from the
Basic Account, the Dividend Account and the Stock Account, with the
Pre-Amendment Balance of the Stock Account being paid in shares of common
stock, with cash being paid for any fractional shares credited thereto. During
any such installment payment period, the Corporation shall continue to maintain
the Stock Account and the Dividend Account as provided above and shall on each
Dividend Conversion Date transfer the credit balance from the Dividend Account
to the Stock Account as provided above. In the event the participant has not
made an election to have the balance in his or her Stock Account paid in
installments before the time the credit balance in his or her Accounts becomes
payable, the Pre-Amendment Balance of his or her Stock Account shall be paid in
a lump sum in shares of common stock, with cash being paid for any fractional
shares credited thereto, and the Corporation shall have the option of paying
the credit balance in the Stock Account (less the Pre-Amendment Balance), Basic
Account and the Dividend Account in equal monthly installments over a period of
no more than five (5) years.
9. Amount Payable on Death. In the event of a participant's
death, the balance in the participant's Accounts (including Interest
Equivalents in relation to the elapsed portion of the year of death) shall be
determined as of the date of death, and the balance shall be paid as soon as
reasonably possible thereafter to the beneficiary or beneficiaries previously
designated by the participant. Any such designation shall be in writing and
delivered to the Secretary of the Corporation and may be changed by a later-
10
<PAGE>
dated designation. If there is no designation in effect, the balance shall be
paid to the participant's estate.
10. Discretionary Lump Sum Payment. In the event of a
participant's resignation from the Board of Directors, such participant may, at
the discretion of and with the consent of the Board of Directors or its
Committee on Directors, within ninety days thereafter, revoke any prior
election and elect to receive (A) a single distribution of that number of whole
shares in the Pre-Amendment Balance in the participant's Stock Account, with
cash being paid for any fractional shares credited thereto, and (B) a single
cash payment of the balance of such participant's Accounts, excluding the
Pre-Amendment Balance in the Stock Account, which distribution shall include
Interest Equivalents on the participant's Basic Account and Dividend Account
through the date immediately before such date of payment.
11. Unfunded Promise to Pay: No Segregation of Funds or
Assets. Neither anything contained in the Agreement nor the establishment or
maintenance of the Basic Account, the Stock Account or the Dividend Account
shall require the segregation of any assets of the Corporation or any type of
funding by the Corporation of such Accounts or the amounts payable therefrom,
it being the intention of the parties that the Plan be an unfunded arrangement
for federal income tax purposes. No participant shall have any rights to or
interest in any specific assets or shares of common stock of the Corporation by
reason of the Plan, and his or her only rights to enforce payment of the
obligations of the Corporation hereunder shall
11
<PAGE>
be those of a general creditor of the Corporation. In the event the
Corporation establishes a trust or any other method of providing for its
payment of the obligations created hereunder, such trust shall conform to the
terms of the model trust, as described in Rev. Proc. 92-64, 1992-33 I.R.B. 11,
and it is expressly understood that no participant will have any interest
therein other than as a general creditor of the Corporation. It is further
understood that the shares credited to the Stock Account shall be only a means
for measuring the amount of deferred compensation payable under the Plan and
shall not constitute or represent outstanding shares of common stock of the
Corporation for any purpose.
12. Changes in Capitalization. The number of shares of
common stock credited to each participant's Stock Account shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of common stock of the Corporation resulting from a
subdivision or combination of shares or the payment of a stock dividend in
shares of common stock of the Corporation to holders of outstanding shares or
any other increase or decrease in the number of such shares effected without
receipt of consideration by the Corporation. Appropriate adjustments shall
also be made to reflect any recapitalization, reclassification of shares or
reorganization affecting the capital structure of the Corporation. In the
event of a merger or consolidation in which the Corporation is not the
surviving corporation or in which the Corporation survives only as a subsidiary
of another corporation, and in such transaction the holders of common stock of
the Corporation become entitled to
12
<PAGE>
receive shares of stock or securities of the surviving corporation, the
participant's Stock Account shall be credited with that number of hypothetical
shares of securities of the surviving corporation that would be exchanged for
the shares of common stock of the Corporation in such transaction if they had
been outstanding shares, and any cash or other consideration that would be
receivable if such shares had been outstanding shall be credited to the
participant's Basic Account.
13. Participant's Rights Unsecured. The right of a
participant to receive any unpaid portion of the participant's Accounts shall
be an unsecured claim against the general assets of the Corporation.
14. Nonassignability. The right of a participant to
receive any unpaid portion of the participant's Accounts shall not be assigned,
transferred, pledged or encumbered or be subject in any manner to alienation or
anticipation.
15. Administration. This Plan shall be administered by
the Secretary of the Corporation, who shall have the authority to adopt rules
and regulations for carrying out the Plan and to interpret, construe and
implement the provisions thereof.
16. Amendment and Termination. This Plan may be
amended, modified or terminated at any time by the Board of Directors of the
Corporation; provided, however, that no such amendment, modification or
termination shall, without the consent of a participant, adversely affect such
participant's rights with respect to amounts theretofore accrued to the
participant's Accounts.
13
<PAGE>
17. Effective Date of Elections. Any election to defer a portion
of the annual retainer fee under paragraph 5 shall be effective as of the first
calendar quarter commencing after receipt of the election by the Corporation.
Any election hereunder to defer meeting fees under paragraph 5 shall be
effective with respect to compensation paid for attendance at the first meeting
following receipt of the election by the Corporation.
14
<PAGE>
ELECTION
TO THE SECRETARY OF COCA-COLA ENTERPRISES INC. (the "Corporation"):
Pursuant to the Deferred Compensation Plan for Non-Employee Director
Compensation of the Corporation (the "Plan"), I hereby elect to defer
__________% of all future payments with respect to the annual retainer fees for
service on the Board of Directors of the Corporation and _________% of all
future payments with respect to meeting fees for such service. The percentages
are applied to the fees net of Automatic Deferrals.
1. I hereby elect that _________% of the amounts so deferred be
credited to my Basic Account and thereafter credited with Interest Equivalents
as provided in the Plan and _________% of the amounts so deferred be credited
to a Stock Account and treated as if invested in shares of common stock of the
Corporation. [I understand that unless amounts are specifically deferred into
a Stock Account, all deferred amounts will be put into my Basic Account.]
2. (To be completed only if amounts are to be deferred into a
Stock Account.) I hereby elect to have any hypothetical dividends paid on
shares of common stock credited to my Stock Account treated as follows (check
one):
_____ credited to my Basic Account and thereafter credited with
Interest Equivalents as provided in the Plan.
<PAGE>
_____ credited to a Dividend Account and treated as reinvested in
shares of common stock of the Corporation each February as
provided in the Plan. (I understand that if I do not elect
this option all hypothetical dividends will be credited with
Interest Equivalents as provided in the Plan.)
3. The compensation deferred is to be paid to me in the following
manner (check and complete one):
_____ single lump-sum payment to be paid on
______________________________________________________
_____ installment payments in ________ (insert number up to
five) annual installments, commencing ________________
(date).
4. (To be completed only if installments are elected.) I hereby
elect that amounts payable to me in installments be debited to and deemed paid
from my Basic Account, my Stock Account and my Dividend Account (if any) (check
one):
_____ proportionately based on the balances in said
Accounts.
_____ first from my Stock Account until it is exhausted and
then from my remaining Accounts.
_____ first from my Basic Account until it is exhausted and
then from my remaining Accounts.
_____ Other (Specify)______________________________________
5. In the event of my death before I have received payment
of all deferred compensation payable to me, payments from the
<PAGE>
Plan are to be made to (check one):
my estate
-----
the following:
----- ---------------------------------------
(I understand that if I do not elect this option, the
payments from the Plan after my death will be paid to
my estate.)
I hereby acknowledge that this election is subject to all the terms of
the Plan, amended and restated effective April 1, 1994.
-----------------------------------------
Signature of Director
Name:
-----------------------------------
Date: , 19 .
--------------------- ----
RECEIVED on the day of , 19 , on behalf of
the Corporation. ---- ---------------------- ----
-----------------------------------------
Secretary
<PAGE>
EXHIBIT 10.25
SECOND LEASE AMENDMENT
TO LEASE AGREEMENT DATED JULY 1, 1987
BY AND BETWEEN THE COCA-COLA COMPANY ("LANDLORD")
AND COCA-COLA ENTERPRISES INC. ("TENANT")
AS PREVIOUSLY AMENDED BY LETTER AGREEMENT
DATED JUNE 19, 1992 (THE "FIRST AMENDMENT").
THE LEASE AS AMENDED HEREINAFTER
REFERRED TO AS THE "LEASE"
This Second Lease Amendment is made this _____ day of September 1994 and is
effective as of May 15, 1994. The Lease is hereby amended as follows:
The leased premises shall exclude the following floor space:
<TABLE>
<CAPTION>
Net Rentable Area
-----------------
<S> <C>
Floor 7 Complete
Floor 8 Complete
Floor 9 Complete
Floor 10 13,846.00 (out of 20,452 sq ft.)
Lobby 3,545.00
Tenant's Allocation of
Common Area 6,132.63
---------
Total 87,417.38
</TABLE>
Both parties shall remain subject to all terms and conditions of the Lease
except as follows:
1. Effective as of May 15, 1994, the above listed floors, containing
87,417.38 square feet, shall be released from the leased premises.
2. Effective as of May 15, 1994, the net rentable area of the leased
premises, as set forth in Sections 1.01(a) and 1.01(c) and in Exhibit
C of the Lease shall be 27,932 square feet, calculated as follows:
<TABLE>
<CAPTION>
Net Rentable Area
-----------------
<S> <C>
Floor 10 Common Area 697.00
Floor 10 5,908.00
Floor 11 20,452.00
Tenant's Allocation of
General Common Area 875.00
---------
27,932.00
</TABLE>
<PAGE>
3. Effective as of May 15, 1994, the Base Rent payable under the Lease
will be $418,980.00 annually, due and payable in monthly installments
of $34,915.00 each on the first day of each calendar month during the
remainder of the Lease term.
4. Effective as of May 15, 1994, the escalation cost will be $32,121.80
annually, payable in monthly installments of $2,676.82, calculated by
multiplying the rentable square footage by a factor of $1.15 per
square foot.
5. Tenant shall be responsible for surrendering the above listed floor
space in accordance with the terms and conditions of the Lease
pertaining to surrender of the leased premises at termination of the
Lease.
LANDLORD:
THE COCA-COLA COMPANY
BY: DALLAS A. HURSTON
-------------------------------
Assistant Vice President and
Director, Corporate Real Estate
TENANT:
COCA-COLA ENTERPRISES INC.
BY: JOHN R. ALM
----------------------------------
JOHN R. ALM, SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
<TABLE>
EXHIBIT 11
EARNINGS PER SHARE
COCA-COLA ENTERPRISES INC.
(In millions except per share data)
<CAPTION>
1994 1993 1992
----------------- ----------------- -----------------
Fully Fully Fully
Primary Diluted Primary Diluted Primary Diluted
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income:
Income (Loss) Before Cumulative
Effect of Accounting Changes $ 69 $ 69 $ (15) $ (15) $ (15) $ (15)
Cumulative effect of accounting
changes:
Postretirement benefits (net
of income taxes of $91) - - - - (148) (148)
Income taxes - - - - (23) (23)
----- ----- ------ ------ ------ ------
Net Income (Loss) 69 69 (15) (15) (186) (186)
Preferred stock dividend
requirements 2 2 - - - -
----- ----- ------ ------ ------ ------
Net Income (Loss) Applicable
to Common Share Owners $ 67 $ 67 $ (15) $ (15) $ (186) $ (186)
===== ===== ====== ====== ====== ======
Number of Shares:
Weighted Average
Shares Outstanding (a) 130 130 129 129 129 129
===== ===== ====== ====== ====== ======
Per Share Data (b):
Income (loss) before
cumulative effect of
accounting changes $0.53 $0.53 $(0.11) $(0.11) $(0.11) $(0.11)
Cumulative effect of
accounting changes:
Postretirement benefits - - - - (1.15) (1.15)
Income taxes - - - - (0.18) (0.18)
Preferred stock dividends 0.01 0.01 - - - -
Net income (loss) applicable
to common share owners 0.52 0.52 (0.11) (0.11) (1.45) (1.45)
(a) Weighted average shares as presented are unchanged for the effect
of incremental shares related to outstanding stock options.
(b) Primary and fully diluted earnings per share do not differ from
simple earnings per share by more than 3%; accordingly, disclosure
on the face of the statement of operations of earnings per share
reflects only simple earnings per share.
</TABLE>
<TABLE>
EXHIBIT 12
COMPUTATIONS OF RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
COCA-COLA ENTERPRISES INC.
(In millions except ratios)
<CAPTION>
Fiscal Year
--------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Computation of Earnings:
Earnings (loss) from continuing
operations before income taxes
and cumulative effect of
accounting changes $127 $ 55 $(12) $(92) $184
Add:
Interest expense 314 332 315 216 207
Amortization of
capitalized interest 1 1 1 1 -
Amortization of debt
premium/discount and expenses 2 3 2 3 4
Interest portion of rent expense 9 8 8 8 9
---- ---- ---- ---- ----
Earnings as adjusted $453 $399 $314 $136 $404
==== ==== ==== ==== ====
Computation of Fixed Charges
and Combined Fixed Charges
and Preferred Stock Dividends:
Interest expense $314 $332 $315 $216 $207
Capitalized interest 3 1 1 2 3
Amortization of debt
premium/discount and expenses 2 3 2 3 4
Interest portion of rent expense 9 8 8 8 9
---- ---- ---- ---- ----
Fixed Charges 328 344 326 229 223
Preferred stock dividends (a) 3 - - 9 32
---- ---- ---- ---- ----
Combined Fixed Charges and
Preferred Stock Dividends $331 $344 $326 $238 $255
==== ==== ==== ==== ====
Ratio of earnings to fixed
charges 1.38 1.16 (b) (c) 1.81
==== ==== ==== ==== ====
Ratio of earnings to combined
fixed charges and preferred
stock dividends 1.37 1.16 (b) (c) 1.59
==== ==== ==== ==== ====
(a) Preferred stock dividends have been increased to an amount representing
the pretax earnings which would be required to cover such dividend
requirements.
(b) Earnings for 1992 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $12 million.
(c) Earnings for 1991 were insufficient to cover fixed charges and combined
fixed charges and preferred stock dividends by $93 million and
$102 million, respectively.
</TABLE>
EXHIBIT 13
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
BUSINESS STRATEGIES FOR ENHANCING SHARE-OWNER VALUE
Through the implementation and execution of operating and financial
strategies designed to build value in our Company, we expect to
accomplish our primary goal -- the enhancement of share-owner value.
OPERATING STRATEGIES
Our principal operating goal is to increase long-term operating cash
flow through profitable increases in sales volume. The liquid
nonalcoholic refreshment business is becoming increasingly complex and
competitive as products, packages, customers and marketing channels
become more sophisticated and diverse. This increased complexity drives
our strategy of developing and executing innovative marketing programs
at the local level. The competitive environment dictates our strategy to
obtain profitable increases in case sales by balancing volume growth
with improved margins and sustainable increases in market share. The
realization of short-term profitability at the expense of market share
is inconsistent with our strategy. We will grow our volume through
profitable business partnerships with our customers and superior
marketing to our consumers.
FINANCIAL STRATEGIES
Our financial strategies add value through the allocation of funds to
projects and activities which generate returns in excess of our cost of
capital and increase share-owner value. One of our primary financial
objectives is to achieve an optimal capital structure which provides the
financial flexibility for internal projects, share repurchases and
appropriately priced acquisitions.
-18-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
BUSINESS OVERVIEW
Coca-Cola Enterprises Inc. ("the Company") is the world's largest
marketer, distributor and producer of bottle and can beverage products
of The Coca-Cola Company. Including our most recent acquisition in
January 1995, we are the Coca-Cola bottler within 38 states, the
District of Columbia, the U.S. Virgin Islands, the Islands of Tortola
and Grand Cayman, and the Netherlands. In the United States, we operate
through exclusive and perpetual rights in territories containing
approximately 54% of the population and accounting for approximately
55% of all bottle and can products of The Coca-Cola Company sold.
Approximately 90% of our product sales volume is generated through
the sale of products of The Coca-Cola Company. We are the principal
Coca-Cola bottler in the five states in the United States with the
largest increases in population between 1990 and 1994.
EMPLOYEE OWNERSHIP
The goal of increasing long-term share-owner value is the primary
mission of our management. Summerfield K. Johnston, Jr., our chief
executive officer and vice chairman of our Board of Directors, and his
family hold approximately 9% of our outstanding shares. Through
incentive stock award plans, savings and investment plans, and direct
personal ownership, directors and employees of the Company own more than
15% of the Company's outstanding shares. We have guidelines for share
ownership by members of management and also encourage share ownership at
all levels throughout our organization. In addition to share ownership,
we have implemented incentive compensation programs which align our
managers' economic interests with those of our share owners.
PARTNERSHIP WITH THE COCA-COLA COMPANY
The Coca-Cola Company is an integral business partner in our success.
The Coca-Cola Company is the sole supplier of syrup used in the majority
of our products, providing national advertising and a variety of local
media advertising and marketing program support. The chairman and three
other members of our Board of Directors are current or former executives
of The Coca-Cola Company, complementing other accomplished individuals
who comprise directors elected by our share owners. The Coca-Cola
Company is our largest single share owner, holding approximately 44% of
our outstanding shares. The Company's success, while principally
dependent on our operating expertise in the beverage industry, is
enhanced by this relationship.
-19-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
OPERATIONS REVIEW
- -----------------
The following review of the results of operations, financial condition
and cash flows of the Company should be read in conjunction with the
Consolidated Financial Statements and the accompanying Notes to
Consolidated Financial Statements ("Notes"). References are made in the
following discussions to specific Notes for additional information.
1994 in Review
Comparable Results: In the opinion of management, the most meaningful
comparison of operating results between 1994 and 1993 reflects 1993 (i)
excluding the impact of the Omnibus Budget Reconciliation Act on
deferred income taxes (as discussed later), and (ii) including the
effect of 1993 acquisitions as if they occurred on January 1, 1993.
Accordingly, we refer to "comparable" results in this section as the
results of operations adjusted for these items.
Operating income and earnings per share increased significantly over
1993 levels. Volume increases, continued net revenues per case
increases, and moderate cost of sales per case increases generated
favorable operating profit performance in 1994. This performance,
combined with reduced net interest expense and a lower effective tax
rate, produced significant earnings per share growth. Comparable 1994
operating income increased approximately 13% over 1993 results, with
comparable earnings per share applicable to common share owners
increasing 165% over 1993.
Cash operating profit (operating income before the deduction for
depreciation and amortization) is the standard by which management
measures its operating performance on both a local and consolidated
level. Actual 1994 cash operating profit increased approximately 12%
over 1993, with comparable results increasing approximately 9%. We
believe that in 1995 we will again achieve our stated long-term
objective of 8% comparable cash operating profit growth. We plan to
achieve this objective through the successful implementation of our
operating strategies.
Net operating revenues are comprised principally of wholesale sales to
retailers which account for approximately 95% of our net sales and
approximately 97% of our gross profit. Net operating revenues for 1994
increased approximately 10% over 1993, while comparable net operating
revenues for 1994 increased approximately 6%. The increase in
comparable net revenues results from an approximate 1/2% increase in
domestic net revenues per case and an approximate 4 1/2% increase in
bottle and can case sales volume.
Volume growth in 1994 resulted primarily from strong carbonated beverage
growth in our core brands, and was also aided by the introduction of new
products. Significant growth in noncarbonated products also contributed
to total volume growth in 1994; however, noncarbonated beverages
represent less than 5% of our total bottle and can case sales. While we
expect continued volume growth in 1995, we do not anticipate that we
will achieve the growth equal to the full-year comparable growth of
4 1/2% experienced in 1994. We also experienced growth in 1994
comparable fountain gallon volume of 3 1/2% over 1993. This increase
in fountain gallon volume did not have a significant effect on our
operating results as operating margins on fountain sales are relatively
low.
Net revenues per case increases in 1994 reflected a combination of net
selling price increases and a product mix shift into higher priced
products, packages and distribution channels. Trends within fourth-
quarter 1994 compared to fourth-quarter 1993 reflected steadily
increasing net revenues per case growth, with December 1994 selling
prices ahead of December 1993 levels by approximately 2 1/2%. Fourth-
quarter 1994 selling price increases were introduced as part of a
strategy to counter the significant packaging cost increases which
occurred in January 1995, as discussed further below. Our strategies
for net revenues per case increases include varying levels of net
selling price increases and effective management of our product, package
and distribution channel mix. Reflecting our decentralized organization
and operating philosophy, these net revenues per case dynamics will be
managed locally, based on individual market conditions and
opportunities.
Cost of wholesale sales per physical case for 1994 increased moderately
from 1993 levels. Actual cost of wholesale sales per case for 1994
increased approximately 1/2% over 1993, while comparable domestic cost
of sales decreased approximately 1/2%. This decrease is primarily
attributable to favorable packaging cost decreases which more than
offset ingredient cost increases. The cost of aluminum increased
significantly effective January 1, 1995, representing the most
significant increase in our industry in 20 years. This increase will
affect all beverage bottling industry participants in 1995 in varying
degrees. Based on January 1995 cost increases, we estimate that total
cost of sales per case for the first quarter of 1995 will increase by
approximately 5% to 7% over 1994 levels. This increase would be
approximately 8% to 10% without the favorable effect resulting from the
depletion of year-end 1994 inventory with carrying costs significantly
below our
-20-
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except per share data)
1994 1993 1992
------ ------ ------
Net Operating Revenues $6,011 $5,465 $5,127
Cost of sales (purchases from
The Coca-Cola Company -- $1,683,
$1,392 and $1,308, respectively) 3,703 3,372 3,219
------ ------ ------
Gross Profit 2,308 2,093 1,908
Selling, general and administrative
expenses 1,868 1,708 1,602
------ ------ ------
Operating Income 440 385 306
Interest expense, net 310 328 312
Other nonoperating deductions, net 3 2 6
------ ------ ------
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Changes 127 55 (12)
Income taxes:
Expense excluding rate change 58 30 3
Rate change - federal - 40 -
------ ------ ------
Income (Loss) Before Cumulative Effect of
Accounting Changes 69 (15) (15)
Cumulative effect of accounting changes:
Postretirement benefits (net of income
taxes of $91) - - (148)
Income taxes - - (23)
------ ------ ------
Net Income (Loss) 69 (15) (186)
Preferred stock dividend requirements 2 - -
------ ------ ------
Net Income (Loss) Applicable to
Common Share Owners $ 67 $ (15) $ (186)
====== ====== ======
Average Common Shares Outstanding 130 129 129
====== ====== ======
Per Share Data:
Income (loss) before cumulative
effect of accounting changes $ 0.53 $(0.11) $(0.11)
Cumulative effect of accounting changes:
Postretirement benefits - - (1.15)
Income taxes - - (0.18)
Preferred stock dividend requirements 0.01 - -
Net income (loss) applicable to
common share owners 0.52 (0.11) (1.45)
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
- ------------------------------------------------------------------------
first quarter 1995 costs. Compared to 1994 levels, cost of sales
increases due to aluminum costs after the first quarter of 1995 will be
approximately 8% to 10%, dependent on aluminum market conditions in the
remainder of the year. To the extent such cost increases cannot be
offset by net revenues per case increases, our results of operations
could be negatively impacted. Based on current market conditions, we
believe that 1995 cost increases can be offset with the attainment of
net revenues per case increases; however, there is no assurance this
will occur.
Selling, general and administrative expenses for 1994 increased
approximately 9% from 1993, primarily as a result of the increased case
sales volume and acquisitions during 1994 and 1993. Selling, general
and administrative expenses as a percentage of sales decreased slightly
from 31.3% in 1993 to 31.1% in 1994.
Interest expense decreased in 1994 when compared to 1993, reflecting the
decreased debt balance in 1994 and a lower weighted average borrowing
rate of 7.2% for 1994 compared to 7.6% for 1993. We anticipate that
interest expense will increase approximately 10% in 1995 due to higher
interest rates combined with a higher debt balance resulting from
acquisitions and share repurchases.
Income taxes decreased as a percentage of earnings before income taxes
in 1994 when compared to 1993, reflecting a lower effective tax rate of
approximately 46% for 1994, compared to 55% (excluding the one-time
charge) for 1993. The change in the effective tax rate from 1993 to
1994 is principally due to the level of pretax income in each period and
the relationship of nondeductible expenses to pretax income.
-21-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
CASH FLOW AND LIQUIDITY REVIEW
- ------------------------------
Capital Resources
Our external sources of capital include, but are not limited to, the
issuance of public or private placement debt, bank borrowings and the
issuance of equity securities. We believe that adequate long-term and
short-term capital resources, exclusive of our operating cash flows, are
available to satisfy our capital expenditure, acquisition and share
repurchase programs; and to satisfy scheduled debt maturities, interest
payments, income tax obligations, and dividend payments to our share
owners.
Long-term Capital Resources: In addition to the availability of equity
markets as a source of long-term financing, the Company has registered
debt securities with the Securities and Exchange Commission under a
shelf registration enabling the Company to issue debt as necessary up to
the amount registered for issuance. Approximately $871 million of this
shelf registration remains unissued and may be issued from time to time
at fixed or floating interest rates, as selected by the Company at the
time of issuance.
Short-term Capital Resources: We satisfy seasonal working capital needs
and other financing requirements with short-term borrowings under our
commercial paper program. Our commercial paper program is supported by
a revolving bank credit agreement maturing in December 1999 and two
short-term credit facilities aggregating $1.2 billion. An aggregate
$828 million of commercial paper borrowings supported by these
agreements were outstanding at December 31, 1994. The Company intends
to refinance borrowings under its commercial paper program on a long-
term basis, either through continued short-term borrowings or through
other available sources of long-term financing.
Summary of Cash Activities
Cash and cash equivalents increased approximately $11 million in 1994.
Our principal sources of cash consisted of those provided from
operations of $631 million and the issuance of debt aggregating $355
million. Our primary uses of cash were for capital expenditures
totaling $366 million and payments on debt aggregating $562 million.
Cash Operating Activities
Net cash provided by operating activities in 1994 increased
approximately 28% over 1993, primarily resulting from a higher income
level in 1994 and favorable working capital cash changes. The increase
in depreciation expense in 1994 reflects the results of capital spending
and acquisitions. The increase in amortization expense in 1994
primarily reflects (i) franchise amortization resulting from the full-
year effect of the June 1993 acquisitions (refer to Note 2), (ii)
additional restricted stock grants (refer to Note 9), and (iii) first-
time grants of performance-vested executive stock options (refer to Note
9).
Cash Taxes: During 1987, the Company filed elections under Section 338
of the Internal Revenue Code relating to various bottling companies
acquired in 1986. Tax operating loss carryforwards (which can be used
to reduce future taxable income) aggregating $840 million have arisen
principally from accelerated franchise amortization for tax purposes and
the additional tax deductions resulting from such elections. This
acceleration begins declining in 1995. Because of declining deductions
and anticipated future increases in earnings, the Company expects its
cash income tax obligations to increase significantly beginning in 1996.
In 1996, we estimate cash tax payments to be in the range of $75 million
to $100 million; however, this estimate will vary based on actual levels
of future earnings and the availability of future deductions related to
certain business activities, including acquisitions.
Investing Activities
Our capital expenditure requirements are expected to be financed
primarily with funds generated from operating activities. Generally,
cash flows from operations and proceeds from the sale of assets during
the past three years have been sufficient to finance our capital
expenditure requirements.
Cash used in investing activities decreased approximately 40% in 1994
primarily as a result of acquisition activity during 1993. Capital
expenditures in 1994 increased approximately 4% over 1993. We expect
capital expenditures in 1995 to approximate $400 million.
Acquisition Cash Expenditures: In the past nine years, the Company has
acquired numerous bottlers for an aggregate purchase price of
approximately $5.6 billion. Our sources of capital allow us to maintain
flexibility for acquisitions that offer opportunities to implement our
operating strategies and to achieve an acceptable rate of return. We
will continue domestic and international acquisitions provided such
opportunities are expected to increase share-owner value over the long
term.
In January 1995, we purchased The Wichita Coca-Cola Bottling Company in
Wichita, Kansas, for an aggregate purchase price of $150 million in
cash. The acquired
-22-
<PAGE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
1994 1993 1992
------ ------ ------
Cash Flows From Operating Activities
Net income (loss) $ 69 $(15) $(186)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Cumulative effect of accounting
changes - - 171
Depreciation 282 254 227
Amortization 179 165 162
Deferred income taxes 46 60 (21)
Changes in current assets and
current liabilities 58 22 (116)
Other nonoperating cash flows (3) 7 42
---- ---- -----
Net cash provided by operating
activities 631 493 279
---- ---- -----
Cash Flows From Investing Activities
Capital expenditures (366) (353) (291)
Proceeds from the sale of property,
plant and equipment 18 19 20
Acquisitions of and investments in
businesses, net of cash acquired
(amounts paid to The Coca-Cola
Company were $260 in 1993 and
$11 in 1992) (20) (287) (27)
Other investing activities (6) - -
---- ---- -----
Net cash used in investing activities (374) (621) (298)
---- ---- -----
Cash Flows From Financing Activities
Proceeds from the issuance of debt 355 822 2,218
Payments on debt (562) (668) (2,251)
Purchase of treasury stock (28) (17) -
Dividends on common and preferred stock (7) (6) (6)
Proceeds from issuance of common stock 15 2 -
Other financing activities (19) - -
---- ---- -----
Net cash provided by (used in)
financing activities (246) 133 (39)
---- ---- -----
Net Increase (Decrease) in Cash and
Cash Equivalents During the Year 11 5 (58)
Cash and cash equivalents at
beginning of year 11 6 64
---- ---- -----
Cash and Cash Equivalents at
End of Year $ 22 $ 11 $ 6
==== ==== =====
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
- ------------------------------------------------------------------------
territories cover much of Kansas and portions of Colorado, Nebraska
and Missouri. Also in January 1995, we sold our investment in Jackson
Coca-Cola Bottling Company in Jackson, Mississippi for $17 million in
cash resulting in a pretax gain of approximately $9 million ($0.04 per
common share) in 1995.
Financing Activities
In 1994, we used $246 million for financing activities compared with
1993 when $133 million in cash funds were provided from financing
activities. This difference results primarily from using available cash
to reduce our debt balance by $207 million in 1994, compared to a net
increase in debt of $154 million in 1993. Stock options exercised
throughout 1994 provided cash of $15 million. In August 1994, we began
a share repurchase program under which we may repurchase up to ten
million shares of our outstanding common stock. The amount of shares
repurchased and the length of time required to repurchase such shares,
will depend on our level of capital expenditures, acquisition
opportunities, other alternative uses of cash, and market conditions.
We repurchased common stock at a cost of $28 million under our share
repurchase program in 1994 when compared to $17 million during 1993.
Other financing activities primarily include a collateral deposit
related to interest rate swaps, and changes in the market value of
Eurodollar futures contracts (refer to Note 5).
-23-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
FINANCIAL POSITION
- ------------------
Assets
The increase in trade accounts receivable results primarily from
increased revenues in December 1994 when compared to December 1993.
Increased December 1994 production levels resulted in an increase in
ending inventories, and accounts payable and accrued liabilities when
compared to 1993. The decrease in franchise and other noncurrent assets
results primarily from amortization of franchise assets.
Liabilities and Equity
Amounts due to The Coca-Cola Company in 1994 represent amounts payable
for purchases of ingredients and are net of $17 million in amounts
receivable for marketing support payments. Because of the timing of
receipts for marketing support payments in 1993, we had an amount due
from The Coca-Cola Company at December 31, 1993, of $13 million, net of
$37 million in amounts payable for purchases of ingredients. Total long-
term debt decreased during 1994 reflecting a $306 million increase in
commercial paper, more than offset by net payments of long-term debt
aggregating $510 million. Lower debt balances decreased our net debt to
total capital ratio from approximately 59% at year-end 1993 to
approximately 56% at year-end 1994. Deferred income taxes increased $53
million in 1994 when compared to 1993, primarily as a result of
increased earnings during 1994. The favorable change in the cumulative
translation adjustment results from the strength of the Dutch florin
versus the dollar during 1994.
Contingencies
Legislation: We are subject to laws and regulations pertaining to
special soft drink taxes, forced deposit legislation, restrictive
packaging measures and escheats/unclaimed deposits. We have taken
actions to mitigate the adverse effects resulting from legislation which
imposes additional costs on the Company and to inform consumers of the
resulting effects on product pricing. Such laws and regulations are
receiving increased attention by the legislatures of states and by the
Congress of the United States. We are presently unable to quantify the
impact on current and future operations which may result from
legislation enacted in the future, but we view this legislation to be
potentially significant if widely enacted.
Environmental Contingencies: We are responsible for the required
removal, replacement, or modification of underground fuel storage tanks,
and any required soil and groundwater remediation resulting from leaking
tanks, to satisfy regulations which go into effect in varying stages
through 1998. The Company estimates completion of its tank removal and
replacement program in 1995, with related soil and groundwater
remediation continuing through 2002. Expenditures for tank removal,
replacement and remediation are estimated to aggregate between $20
million to $25 million through 2002. Ongoing environmental compliance
costs, including routine maintenance, monitoring and similar costs, are
not significant. The Company also incurs costs in connection with other
environmental programs covering the discharge of materials and waste
water treatment. The Company expects to spend an aggregate $15 million
over the next two years related to such programs. Long-term
expenditures for these programs are not currently estimable.
Expenditures aggregating $12 million, $9 million and $8 million were
made in 1994, 1993 and 1992 in connection with the above environmental
programs. The Company believes that any amount it may be required to
pay in excess of amounts recorded or disclosed above would not have a
material adverse effect on its financial condition, cash flow or
results of operations.
The Company has been named as a potentially responsible party (PRP) for
the costs of remediation of hazardous waste at federal or state
"Superfund" sites. At January 30, 1995, there were six federal sites
where the Company's involvement or liability as a PRP was unresolved.
In addition, there were eight other federal and five state sites at
which it had been concluded that the Company has no responsibility,
ultimate liability amounts would be less than $100,000 or payments made
to date by the Company would be sufficient to satisfy all liability of
the Company. Under current law, the Company's liability for clean-up of
"Superfund" sites may be joint and several with other PRPs, regardless
of the extent of the Company's use in relation to other users. As to
any site where the Company may be liable, the Company has determined
that there are other PRPs who are financially solvent as well, and that
any hazardous waste deposited by the Company is minimal compared to
amounts deposited by financially solvent PRPs. The Company believes
that any ultimate additional liability to the Company will not have a
material effect on its financial position or results of operations.
<PAGE> -24-
COCA-COLA ENTERPRISES INC.
CONSOLIDATED BALANCE SHEETS
(In millions except share data)
December 31
-------------------
1994 1993
------ ------
ASSETS
CURRENT
Cash and cash equivalents, at cost $ 22 $ 11
Amounts due from The Coca-Cola Company - 13
Trade accounts receivable, less allowances
of $34 and $33, respectively 467 442
Inventories:
Finished goods 170 134
Raw materials 41 48
Other 25 18
------ ------
236 200
Prepaid expenses and other assets 85 80
------ ------
Total Current Assets 810 746
PROPERTY, PLANT AND EQUIPMENT
Land 170 163
Buildings and improvements 661 622
Machinery and equipment 2,390 2,132
------ ------
3,221 2,917
Less allowances for depreciation 1,352 1,121
------ ------
1,869 1,796
Construction in progress 94 94
------ ------
1,963 1,890
FRANCHISE AND OTHER NONCURRENT ASSETS 5,965 6,046
------ ------
$8,738 $8,682
====== ======
LIABILITIES AND SHARE-OWNERS' EQUITY
CURRENT
Accounts payable and accrued expenses $ 795 $ 699
Amounts due to The Coca-Cola Company 3 -
Current maturities of long-term debt 291 308
------ ------
Total Current Liabilities 1,089 1,007
LONG-TERM DEBT 3,896 4,083
DEFERRED INCOME TAXES 1,884 1,831
OTHER LONG-TERM OBLIGATIONS 530 501
SHARE-OWNERS' EQUITY
Preferred stock, $35 stated value --
1,000,000 shares authorized and issued 29 29
Common stock, $1 par value --
Authorized - 500,000,000 shares;
Issued 143,841,182 shares and
142,182,183 shares, respectively 144 142
Paid-in capital 1,301 1,280
Reinvested earnings 70 9
Cumulative translation adjustment 21 (3)
Common stock in treasury, at cost
(14,636,598 shares and
13,004,598 shares, respectively) (226) (197)
------ ------
1,339 1,260
------ ------
$8,738 $8,682
====== ======
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
-25-
<PAGE>
<TABLE>
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF SHARE-OWNERS' EQUITY
(In millions except per share data)
<CAPTION>
Three Years Ended Preferred Common Paid-in Reinvested Translation Treasury Share-Owners'
December 31, 1994 Stock Stock Capital Earnings Adjustment Stock Equity
- ---------------------------- --------- ------ ------- ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991 $ - $141 $1,264 $224 $ - $(187) $1,442
Issuance of shares
under stock award plan - 1 11 - - - 12
Unamortized cost of
restricted shares issued - - (12) - - - (12)
Amortization of restricted
shares cost - - 4 - - - 4
Dividends on common stock
(per share-$0.05) - - - (6) - - (6)
Net loss - - - (186) - - (186)
---- ---- ------ ---- ---- ----- ------
Balance at December 31, 1992 - 142 1,267 32 - (187) 1,254
Issuance of shares under
stock award plan - - 6 - - - 6
Unamortized cost of
restricted shares issued - - (6) - - - (6)
Amortization of restricted
shares cost - - 2 - - - 2
Conversion of executive
deferred compensation
to equity - - 9 - - - 9
Purchase of common stock
for treasury - - - - - (17) (17)
Issuance of preferred
stock to effect
acquisition 29 - - - - - 29
Issuance of treasury
stock to effect
acquisition - - - (2) - 7 5
Exercise of employee
stock options - - 2 - - - 2
Translation adjustment - - - - (3) - (3)
Dividends on common stock
(per share-$0.05) - - - (6) - - (6)
Net loss - - - (15) - - (15)
---- ---- ------ ---- ---- ----- ------
Balance at December 31, 1993 29 142 1,280 9 (3) (197) 1,260
Issuance of executive
stock options - - 10 - - - 10
Unamortized cost of
executive stock options - - (10) - - - (10)
Issuance of shares under
stock award plan - 1 20 - - - 21
Unamortized cost of
restricted shares issued - - (21) - - - (21)
Amortization of restricted
shares and executive
stock options cost - - 7 - - - 7
Forfeiture of restricted
shares issued - - 1 - - (1) -
Purchase of common stock
for treasury - - - - - (28) (28)
Exercise of employee
stock options - 1 14 - - - 15
Translation adjustment - - - - 24 - 24
Dividends on common stock
(per share-$0.05) - - - (6) - - (6)
Dividends on preferred
stock (see Note 7) - - - (2) - - (2)
Net income - - - 69 - - 69
---- ---- ------ ---- ---- ----- ------
Balance at December 31, 1994 $ 29 $144 $1,301 $ 70 $ 21 $(226) $1,339
==== ==== ====== ==== ==== ===== ======
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</TABLE>
<PAGE>
-26-
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
INTEREST RATE AND CURRENCY RISK MANAGEMENT
- ------------------------------------------
Interest Rates: The Company uses interest rate swaps and other risk
management instruments to manage its fixed/floating debt profile (refer
to Note 5). The use of interest rate swaps and other risk management
instruments had a favorable impact on interest expense of $12 million
and $7 million in 1994 and 1993, respectively. A 1% increase or
decrease in market interest rates would have increased or decreased
interest expense for 1994 and 1993 by $8 million and $4 million,
respectively.
Interest rate derivatives generally involve exchanges of interest
payments based upon fixed and floating interest rates without exchanges
of underlying face (notional) amounts of the designated hedges. The
Company continually evaluates the credit quality of counterparties on
interest rate swaps and other risk management instruments and does not
currently believe that there is a significant risk of nonperformance by
any of the counterparties.
Currency: Our international operations represented less than 5% of
consolidated net revenues and assets in 1994. However, as a result of
our Netherlands operations, we are exposed to fluctuations in the
exchange rate for the Dutch florin. We attempt to reduce our exposure
to currency fluctuations through the use of currency forwards and
options which hedge certain intercompany interest payments denominated
in Dutch florins (refer to Note 5). During 1994 and 1993, losses on
currency forwards and options were less than $1 million in each year.
As currency exchange rates fluctuate, translation of the statements of
operations of international businesses into U.S. dollars affects
comparability of revenues and expenses between years. None of the
components of consolidated results of operations were materially
affected by exchange rate fluctuations in 1994 and 1993.
COMPARISONS OF PREVIOUSLY REPORTED FISCAL PERIODS
- -------------------------------------------------
Operations Review -- 1993 to 1992
Comparable Results: Operating results for 1993 and 1992 included
significant one-time charges and acquisitions which materially affected
reported results of operations and net income per common share.
1993: In 1993, (i) we amended our postretirement benefit plans
resulting in a decrease to postretirement benefit expense in 1993 of $31
million ($0.15 per common share); (ii) the Omnibus Budget Reconciliation
Act was signed into law resulting in a one-time, noncash earnings charge
of $40 million ($0.31 per common share) to adjust deferred taxes (refer
to Note 12); and (iii) we acquired significant bottling businesses in
June 1993.
1992: In 1992, we adopted Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
(FAS 106), and Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (FAS 109). The cumulative effect of adopting FAS 106 and
FAS 109 resulted in one-time, noncash earnings charges of $148 million
($1.15 per common share) and $23 million ($0.18 per common share),
respectively (refer to Notes 11 and 12). Also in 1992, the additional
expense resulting from FAS 106 totaled $30 million ($0.14 per common
share).
In the opinion of management, the most meaningful comparison of
operating results between 1993 and 1992 reflects (i) 1993 excluding the
one-time income tax charge and the results of operations of significant
1993 acquisitions; and (ii) 1992 excluding one-time charges resulting
from the adoption of FAS 106 and FAS 109, and increased expense
resulting from FAS 106. Accordingly, we refer to "comparable" results
in this section as the results of operations adjusted for these items.
-27-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
Operating income, earnings per share and cash operating profit increased
significantly in 1993 over 1992 levels. Operating income and cash
operating profit increased approximately 26% and 16% over 1992,
respectively. Comparable operating income and cash operating profit
increased approximately 12% and 8% over 1992, respectively. Comparable
earnings per share increased from $0.03 in 1992 to $0.20 in 1993.
Net operating revenues for 1993 increased approximately 7% over 1992,
driven primarily by an approximate 5 1/2% increase in actual bottle and
can physical case sales volume in 1993 achieved through volume increases
and the effects of acquisitions in 1993 and 1992. Comparable net
operating revenues for 1993 increased approximately 4% over 1992,
resulting from an approximate 1/2% increase in net revenues per case and
an approximate 2% increase in bottle and can case sales volume. Net
revenues per case increased in 1993 partially from shifts into higher
priced products and packages. Volume growth in 1993 was aided by the
introductions of new products in 1993 and our marketing efforts for
these products. Volume growth in 1993 for The Coca-Cola Company products
and the soft drink industry was significantly influenced by the fountain
segment of the business. We experienced comparable growth in fountain
sales of approximately 8 1/2% in 1993.
Cost of wholesale sales per physical case for 1993 decreased
approximately 1 1/2% from 1992, primarily attributable to favorable
packaging and ingredient costs. Comparable cost of sales per case for
1993, excluding fountain sales, decreased approximately 2% from 1992.
Selling, general and administrative expenses for 1993 increased
approximately 6 1/2% over 1992, resulting primarily from increased case
sales volume and acquisitions during the year. Comparable selling,
general and administrative expenses as a percentage of sales increased
from 30.8% in 1992 to 31.3% in 1993. Increases in administrative
expenses are attributable to achievement during 1993 of our fully
implemented decentralized organizational structure.
Interest expense increased in 1993 when compared to 1992, reflecting an
increase in the average debt balance resulting from acquisitions and a
higher weighted average borrowing rate resulting principally from fixed-
rate financings which occurred during 1992.
Income taxes increased in 1993 principally as a result of the Omnibus
Budget Reconciliation Act which increased the corporate marginal income
tax rate by 1%, from 34% to 35%. This rate change resulted in a one-
time, noncash charge of approximately $40 million ($0.31 per common
share) necessary to adjust deferred income taxes to the higher rate.
Our effective tax rates for 1993 and 1992 were approximately 55%
(excluding the one-time noncash charge) and 25%, respectively. The
change in the effective tax rate for 1993 from 1992 was principally due
to the level of pretax income in each period and the relationship of
nondeductible expenses to pretax income.
Cash Flows Review -- 1993 to 1992
Summary: Cash and cash equivalents increased approximately $5 million
in 1993. Our principal sources of cash in 1993 consisted of those
provided from operations of $493 million and the issuance of debt
aggregating $822 million. Our primary uses of cash were capital
expenditures totaling $353 million, acquisitions of bottling companies
for $287 million, and payments on debt aggregating $668 million.
Cash Operating Activities: Net cash provided by operating activities in
1993 increased approximately 77% over 1992, primarily resulting from a
decreased net loss and favorable working capital cash changes. The
increase in depreciation and amortization expense in 1993 reflects the
results of capital spending and 1993 acquisitions. The 1993 increase in
the deferred income tax provision primarily reflects the $40 million
one-time adjustment of deferred taxes, in addition to pretax earnings
during 1993.
Investing Activities: In 1993, we acquired bottling companies for an
aggregate purchase price of approximately $426 million, and at a cash
cost of $287 million (refer to Note 2).
Financing Activities: In 1993, net cash was provided from financing
activities in the amount of $133 million, while we used $39 million for
net financing activities in 1992. The use of funds in 1992 results
primarily from a net reduction in our debt balance of $33 million.
-28-
<PAGE>
COCA-COLA ENTERPRISES INC.
MANAGEMENT'S FINANCIAL REVIEW
OUTLOOK
Our merger with Johnston Coca-Cola Bottling Group, Inc. in 1991 initiated
a dramatic and strategic reorganization of the combined companies. In
early 1992, our new management team determined that the significant
organizational and operational changes required for the Company to
operate successfully would take approximately two years to implement.
The basics of this reorganization were substantially complete in 1993.
Competitive pressures from within the marketplace, and the unpredictable
economic environment, present a constant challenge to our industry. We
believe our strong operating performance during the two-year
restructuring period, and in 1994, demonstrates that under constantly
changing business, economic and industry conditions, we are able to
achieve and even exceed our operating and financial objectives over the
long term. We also believe that positive trends in revenues, gross
profit, earnings per share and other important financial measures,
demonstrate that we are focused on, and capable of, providing value to
our share owners into the future.
-29-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Significant Accounting Policies
Basis of Presentation: The consolidated financial statements
include the accounts of the Company and its majority-owned
subsidiaries. All significant intercompany accounts and
transactions are eliminated in consolidation. The Company's fiscal
year ends on December 31. Certain previously reported amounts have
been reclassified to conform to the 1994 presentation.
Net Income (Loss) Per Common Share: Net income (loss) per common
share is computed by dividing net income (loss) applicable to common
share owners by the weighted average number of common shares
outstanding.
Cash Equivalents: Cash equivalents include all highly liquid debt
instruments purchased with original maturities less than three
months. The fair value of cash and cash equivalents approximates
their carrying amount.
Concentrations of Credit Risk: The Company sells products to chain
store and other customers and extends credit based on an evaluation
of the customer's financial condition, generally without requiring
collateral. Exposure to losses on receivables is principally
dependent on each customer's financial condition. The Company
monitors its exposure to credit losses and maintains allowances for
anticipated losses.
Inventories: In the second quarter of 1994, the Company changed its
method of accounting for inventories from the last-in, first-out
(LIFO) method to the first-in, first-out (FIFO) method. The change
did not have a significant effect on results of operations for 1994,
nor is it anticipated that it will have a material effect on future
periods. Prior to this change, the Company's inventory costs would
not have differed significantly under the two methods. The FIFO
method is the predominant accounting method used in the Company's
industry.
Property, Plant and Equipment: Property, plant and equipment are
stated at cost, less allowances for depreciation. Depreciation
expense is computed using the straight-line method over the
estimated useful lives of the related assets. The annual rates of
depreciation are 3% to 5% for buildings and improvements and 7% to
34% for machinery and equipment. Leasehold improvements are
amortized over the remaining lease term.
Franchise Assets: The Company operates under franchise agreements
with The Coca-Cola Company and certain other licensers of
nonalcoholic beverage products. These agreements include certain
production, distribution and marketing performance obligations and
give the Company the right to distribute and sell products of the
franchiser within a specified territory. The majority of our
products are covered by agreements which are perpetual in nature and
reflect a long and ongoing relationship with The Coca-Cola Company
and other franchisers. The Company's agreement covering its
operations in the Netherlands is not perpetual solely due to the
fact that none of The Coca-Cola Company's franchise agreements
outside the United States are perpetual. The Company believes this
agreement will continue to be renewed upon expiration and that the
economic period of benefit is ongoing.
Franchise assets, which are stated at cost, are amortized on a
straight-line basis generally over the maximum allowed estimated
period of benefit of 40 years. Accumulated amortization amounted to
$895 million and $738 million at December 31, 1994 and 1993,
respectively.
Impairment of Long-Lived Assets: In the event that facts and
circumstances indicate that the cost of franchise assets or other
assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future
undiscounted cash flows associated with the asset would be compared
to the asset's carrying amount to determine if a write-down to
market value or discounted cash flow value is required.
Self Insurance: The Company is generally self-insured for losses
and liabilities related primarily to workers' compensation, health
and welfare claims, physical damage to property, business
interruption resulting from certain events, and comprehensive
general, product and vehicle liability. Losses are accrued based
upon the Company's estimates of the aggregate liability for claims
incurred using certain actuarial assumptions followed in the
insurance industry and based on Company experience.
Environmental Compliance and Remediation: Environmental compliance
costs include ongoing maintenance, monitoring and similar costs.
Such costs are expensed as incurred. Environmental remediation
costs are accrued, except to the extent costs can be capitalized,
when environmental assessments and/or remedial efforts are probable,
and the cost can be reasonably estimated. Environmental costs which
improve the condition of a property as compared to the condition
when constructed or acquired are capitalized.
-30-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Postretirement Benefits Other Than Pensions: In 1992, the Company
adopted FAS 106, a method of accounting for postretirement benefits
by accrual of the costs of such benefits during the periods
employees provide service to the Company. The Company previously
accounted for such costs as expense when incurred. The effect on
years prior to 1992, representing that portion of future retiree
benefit costs related to past service of both active and retired
employees at the date of adoption, was reported in 1992 as the
cumulative effect of an accounting change.
Income Taxes: In 1992, the Company changed its method of accounting
for income taxes from the deferred method under Accounting
Principles Board Statement No. 11 to the liability method by
adopting FAS 109. FAS 109 requires that deferred tax liabilities
and assets be established based on the difference between the
financial statement and income tax bases of assets and liabilities
using existing tax rates. The effect on years prior to 1992 of
adopting FAS 109 was reported in 1992 as the cumulative effect of an
accounting change.
Currency Translation: Assets and liabilities of the Netherlands
operations are translated from Dutch florins into dollars at the
rate of exchange in effect at the balance sheet date. Revenues and
expenses are translated at average monthly exchange rates prevailing
during the year. Resulting translation adjustments are reflected in
share-owners' equity.
Derivative Financial Instruments: The Company employs (i) interest
rate swaps, futures, and options, and (ii) currency forwards and
options in the management of interest rate and currency exposures.
The Company designates interest rate swaps, futures and options as
hedges of specific debt instruments and recognizes interest
differentials as adjustments to interest expense as the
differentials occur. Realized and unrealized gains and losses
arising from currency forwards and options are recognized in income
as offsets to gains and losses resulting from the underlying hedged
transactions. The Company does not hold or issue financial
instruments for trading purposes.
Marketing Costs: The Company participates in various advertising
and marketing programs with The Coca-Cola Company and other
franchisers. Certain of the Company's costs incurred in connection
with these programs are reimbursed. All costs related to marketing
and advertising the Company's products are expensed in the period
incurred or expensed ratably over the year in relation to revenues
or certain other performance measures.
Note 2 - Acquisitions and Divestitures -- Upon acquisition of
companies having franchise agreements, the Company owns the right to
market, distribute and produce beverage products of The Coca-Cola
Company and/or other beverage products in the territories of the
acquired companies. All the Company's acquisitions in 1994, 1993
and 1992 have been accounted for under the purchase method of
accounting. Under the purchase method of accounting, the results of
operations of acquired companies are included in the consolidated
statements of operations of the Company as of their respective
acquisition dates. The assets and liabilities of acquired companies
are included in the Company's consolidated balance sheets at their
estimated fair values on the date of acquisition.
In 1994, the Company acquired a bottling operation in Shelbyville,
Kentucky for an aggregate purchase price of approximately $6
million. In January 1994, the Company purchased approximately 4% of
the outstanding common stock (9% of the voting shares) of The Coca-
Cola Bottling Company of New York, Inc. ("KONY") for $6 million in
cash. The Company has a five year right of first refusal on the
KONY shares held by The Coca-Cola Company, with the option to enter
into negotiations with The Coca-Cola Company for its remaining
shares after two years. During 1994, the Company purchased
approximately $8 million of the preferred stock of a manufacturer
supplying certain packaging used in the Company's manufacturing
process (refer to Note 15).
-31-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On June 30, 1993, the Company acquired, from The Coca-Cola Company,
the stock of (i) Coca-Cola Beverages Nederland B.V. in the
Netherlands; (ii) Roddy Coca-Cola Bottling Company, Inc. in
Knoxville, Tennessee; and (iii) Coca-Cola Bottling Company of
Johnson City, in Johnson City, Tennessee for an aggregate purchase
price of $366 million in cash and assumed debt. The following
presents unaudited pro forma results of operations of the Company
assuming these acquisitions occurred as of January 1, 1992 (in
millions except per share amounts):
1993 1992
------ ------
Net Operating Revenues $5,667 $5,538
Cost of sales 3,535 3,547
------ ------
Gross Profit 2,132 1,991
Selling, general and administrative
expenses 1,741 1,670
------ ------
Operating Income 391 321
Interest expense, net 334 325
Other nonoperating deductions, net 2 7
------ ------
Income (Loss) Before Income Taxes
and Cumulative Effect of
Accounting Changes 55 (11)
Income taxes:
Expense excluding rate change 30 4
Rate change - federal 40 -
------ ------
Income (Loss) Before Cumulative
Effect of Accounting Changes (15) (15)
Cumulative effect of accounting
changes - (171)
------ ------
Net Income (Loss) $ (15) $ (186)
====== ======
- -----------------------------------------------------------------
Income (Loss) Before Cumulative
Effect of Accounting Changes
Per Common Share $(0.11) $(0.11)
Net Income (Loss)
Per Common Share (0.11) (1.45)
- -----------------------------------------------------------------
Depreciation $ 266 $ 248
Amortization 172 175
- -----------------------------------------------------------------
The foregoing summary of pro forma information reflects adjustments
to give effect to (i) interest expense on acquisition financing
through issuance of commercial paper at an annual interest rate of
3.8% for 1992 and 3.1% for the preacquisition period in 1993; (ii)
repayment of assumed debt; (iii) amortization of the franchise
assets acquired in the acquisition; and (iv) the income tax effect
of such pro forma adjustments.
Also in separate transactions in 1993, the Company acquired bottling
operations in Arkansas and a design and engineering company. The
aggregate purchase price for these acquisitions approximated $60
million in common stock, preferred stock and debt.
In separate transactions in 1992, the Company acquired bottling
operations in Quincy, Illinois; Manchester, Georgia; Erie,
Pennsylvania; and Laredo, Texas. The aggregate purchase price for these
acquisitions approximated $40 million in cash and debt.
Subsequent Acquisition and Divestiture Events - In January 1995, the
Company acquired the bottling operations of The Wichita Coca-Cola
Bottling Company ("Wichita") for $150 million in cash. The Wichita
bottling operations are located in portions of Colorado, Kansas,
Missouri and Nebraska. Also in January 1995, the Company sold its
investment in Jackson Coca-Cola Bottling Company for $17 million in
cash, resulting in a pretax gain of approximately $9 million which will
be recognized in 1995.
-32-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Accounts Payable and Accrued Expenses consists of the
following at December 31 (in millions):
1994 1993
---- ----
Trade accounts payable $224 $185
Deposits on containers and shells 62 53
Accrued advertising payable 110 98
Accrued compensation payable 98 78
Accrued insurance payable 73 62
Accrued interest payable 84 98
Other accrued expenses 144 125
---- ----
$795 $699
==== ====
Note 4 - Long-Term Debt, including current maturities, consists of the
following at December 31 (in millions):
1994 1993
------ ------
Commercial Paper $ 828 $ 522
8.20% Notes, due 1994 - 243
8.35% Notes, due 1995 250 250
6.50% and 7.875% Notes, due 1997 300 550
7.00% Notes, due 1999 200 200
7.875% Notes, due 2002 500 500
8.00% Notes, due 2005 250 250
8.50% Debentures, due 2012 250 250
8.75% Debentures, due 2017 154 154
8.00% and 8.50% Debentures, due 2022 1,000 1,000
6.75% Debentures, due 2023 250 250
Other long-term obligations 205 222
------ ------
$4,187 $4,391
====== ======
Aggregate maturities of long-term debt during the next five years are
as follows (in millions): 1995 - $291; 1996 - $36; 1997 - $306; 1998 -
$9; and 1999 - $1,030.
The Company's commercial paper program is supported by a revolving bank
credit agreement maturing in December 1999 and two short-term credit
facilities, aggregating $1.2 billion. An aggregate $828 million of
commercial paper supported by these agreements was outstanding at
December 31, 1994. The weighted average interest rates of borrowings
under the commercial paper program were approximately 4.5% and 3.2% for
1994 and 1993, respectively.
The revolving bank credit agreement and/or the outstanding notes and
debentures contain various provisions which, among other things,
require the Company to (i) maintain a defined leverage ratio and (ii)
limit the incurrence of certain liens or encumbrances in excess of
defined amounts. None of these restrictions negatively impact the
Company's liquidity or capital resources at this time.
Note 5 -- Derivative Financial Instruments
Interest Rate Risk Management - The Company uses interest rate swaps
and other risk management instruments to manage its fixed/floating debt
profile. The use of interest rate swaps and other risk management
instruments had a favorable impact on interest expense of $12 million
and $7 million in 1994 and 1993, respectively. Significant instruments
held by the Company at December 31, 1994 and 1993, are described below.
At December 31, 1994 and 1993, the Company was party to an interest
rate swap with a notional amount of $150 million. This swap, which
expires in December 1996, changes the floating interest rate exposure
on $150 million of commercial paper to fixed interest rate exposure.
At December 31, 1994 and 1993, the Company was party to two additional
interest rate swaps with notional amounts totaling $493 million and
$500 million, respectively, which changed fixed interest rate exposure
on certain debentures to floating interest rate exposure. These swaps
change the interest rate exposure of (i) the $250 million 8% debentures
due 2022 and (ii) $243 million and $250 million at December 31, 1994
and 1993, respectively, of the $750 million 8.5% debentures due 2022.
The notional amounts of these swaps are amortized (i.e., reduced)
quarterly based on interest rate fluctuations. The notional amount
($250 million) of the swap entered into in 1991, with a final maturity
date in 2013, began being amortized in 1994, while the notional amount
($250 million) of the swap entered into in 1993, with a final maturity
date in 2023, will begin to amortize in 1996. The expiration dates
of these swaps are the earlier of (i) the notional amounts
being reduced to zero or (ii) the final maturity dates.
-33-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fixed to floating swaps are subject to a bilateral security
agreement allowing one party to the agreement to require the second
party to the agreement to establish a cash collateral account equal to
the fair value of the swap adjusted by a threshold amount. Collateral
amounts deposited by the Company totaled $31 million at December 31,
1994.
The Company uses Eurodollar futures contracts to hedge its floating
interest rate exposure on portions of the above swaps. At December 31,
1994 and 1993, the Company was party to Eurodollar futures contracts
with notional amounts aggregating $250 million extending through June
1996. At December 31, 1993, the Company had additional Eurodollar
futures contracts outstanding with notional amounts aggregating $250
million through September 1994. Deferred gains/(losses) were $8
million and ($5) million at December 31, 1994 and 1993, respectively.
Deferred gains or losses are amortized as adjustments to interest
expense over the three-month contract period which begins at the final
settlement date of each contract.
The Company uses LIBOR caps to reduce the potential impact of increases
in interest rates on commercial paper. LIBOR caps effectively limit
the Company's interest costs on specified amounts of commercial paper
to a maximum rate. Premiums paid for LIBOR caps are amortized to
interest expense over the terms of the LIBOR caps. During 1994 and
1993, the Company had LIBOR caps outstanding with notional amounts
ranging from $50 million to $600 million. At December 31, 1994 and
1993, the Company had $50 million and $300 million, respectively, of
LIBOR caps outstanding. No amounts were received during 1994 or 1993
under LIBOR cap agreements.
Currency Risk Management - The Company uses currency forwards and
options to hedge intercompany interest payments from the Netherlands.
At December 31, 1994 and 1993, the Company had currency forwards and
options, all having maturities of less than one year, to exchange Dutch
florins for U.S. dollars in the amount of $1 million and $4 million,
respectively. During 1994 and 1993, currency forwards and options to
exchange Dutch florins for U.S. dollars in the amount of $15 million
and $4 million, respectively, settled or expired resulting in realized
losses of less than $1 million each year. Amounts deferred at December
31, 1994 and 1993, for currency forwards and options were not
significant.
Credit Risk - The Company is exposed to credit losses in the event of
nonperformance by counterparties on interest rate swaps and other risk
management instruments. The Company does not believe that there
currently is a significant risk of nonperformance by any of the parties
to the interest rate swaps and other risk management instruments.
Amounts due to the Company under these agreements were not significant
at December 31, 1994.
Note 6 - Fair Values of Financial Instruments -- The carrying amounts
and fair values of the Company's financial instruments at December 31
were as follows (in millions; (liability)/asset):
1994 1993
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------- -------- -------
Cash and cash equivalents $ 22 $ 22 $ 11 $ 11
Long-term debt (4,187) (4,060) (4,391) (4,783)
Warrants - (8) - (58)
Futures contracts - 8 - (5)
Interest rate swaps - (49) - (5)
The following methods and assumptions were used by the Company in
estimating fair values for financial instruments:
Cash and cash equivalents: The carrying amount reported in the balance
sheets for cash and cash equivalents approximates fair value.
Long-term debt and warrants: The carrying amounts of commercial paper,
variable rate debt and other short-term borrowings approximate their
fair values. The fair values of the Company's long-term debt,
representing the amount at which the debt could be exchanged on the
open market, are determined based on the Company's current incremental
borrowing rate for similar types of borrowing arrangements. The
Company does not anticipate any significant refinancing activities
which would settle long-term debt at fair value. The fair values of
the Company's warrants are estimated based on valuations from major
investment banks.
Derivatives: The fair values of the Company's futures contracts are
estimated based on current settlement values. The fair values of the
Company's interest rate swaps are estimated based on valuations from
major investment banks.
-34-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Preferred Stock -- In connection with the 1993 acquisition
of the Coca-Cola Bottling Company of Northeast Arkansas, Inc., the
Company issued 1,000,000 shares of nonvoting convertible preferred
stock with a stated value of $35 per share. Each share is convertible
into one share of common stock at any time at the option of the holder.
The preferred stock may be called by the Company at any time for cash
equal to its stated value plus accrued dividends. The preferred stock
pays cumulative cash dividends of 3% per annum for the first five
years, 4.29% per annum for the following five years, adjusting to an
annual rate equal to LIBOR plus 1% thereafter. Adjustment of the
stated value of the preferred stock to its estimated fair value at date
of issuance of approximately $29 million, results in an annual dividend
cost of approximately 6%.
Note 8 - Share Repurchases -- In August 1994, the Company began a
share repurchase program under which the Company may repurchase up to
ten million shares of its outstanding common stock. The amount of
shares repurchased and the length of time required to repurchase such
shares will depend on the Company's level of capital expenditures,
acquisition opportunities, other alternative uses of cash, and market
conditions. As of December 31, 1994, the Company had repurchased
1,558,000 shares of common stock under the program for an aggregate
cost of approximately $28 million. In a separate program during 1993,
the Company repurchased 1,153,900 shares of its common stock for an
aggregate cost of approximately $17 million.
Repurchased shares are added to treasury stock and are available for
general corporate purposes including the funding of various employee
benefits and compensation plans. On October 18, 1994, the Company's
Board of Directors approved the establishment of a flexible employee
grantor trust to fund future stock-related compensation and benefit
obligations including, but not limited to, a savings investment plan,
restricted stock awards and stock option exercises. As of December 31,
1994, there were no transactions related to the trust.
Note 9 - Stock Options and Other Stock Plans -- The Company's 1994
Stock Option Plan (the "1994 Plan") provides for the granting of
nonqualified stock options to certain officers and key employees of the
Company to purchase up to two million shares of the Company's common
stock. The Company's 1991 Stock Option Plan (the "1991 Plan") provides
for the granting of nonqualified stock options to officers and certain
key employees to purchase up to three million shares of the Company's
common stock, prior to the plan's expiration in 1996. The Company's
1990 Management Stock Option Plan (the "Management Option Plan")
provides for the granting of nonqualified stock options to purchase up
to two million shares of the Company's common stock. Generally,
options awarded under the 1994 Plan, the 1991 Plan and the Management
Option Plan (i) are granted at prices which equate to or are above fair
market value on the date of grant; (ii) vest ratably over either a
three or four year period; and (iii) expire ten years subsequent to
award. For certain senior executives receiving awards under the 1994
Plan, the options are performance-vested and become exercisable solely
upon attainment of certain increases in the market price of the
Company's common stock within five years from the date of grant.
In addition to the plans noted above, included in options outstanding
at December 31, 1994 and 1993, are various options granted under
previous plans with similar terms. A summary of stock option activity
follows:
1994 1993
--------- ---------
Options outstanding at beginning of year 6,041,767 5,680,333
Options granted 1,606,900 1,109,900
Options exercised (916,799) (149,921)
Options canceled (399,301) (598,545)
--------- ---------
Options outstanding at end of year 6,332,567 6,041,767
========= =========
Options exercisable at end of year
(Option price - $13.125 to $21.225
per share) 2,922,806 3,034,534
========= =========
Shares available for future grant 679,600 286,500
========= =========
On initial offering of stock to the public, each of the seven directors
who was not an officer of the Company or The Coca-Cola Company was
awarded options to acquire up to 1,500 shares of common stock, and
certain officers of
-35-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the Company were granted options to purchase 245,000 shares of the
Company's common stock at $16.50 per share (the initial public
offering price). Since that time, new directors, upon election, who
were not officers of the Company or The Coca-Cola Company were awarded
options to acquire up to 1,500 shares of common stock at $16.50 per
share. Options to purchase 198,000 shares under this plan have
subsequently been canceled, and 50,000 options have been exercised
(35,000 during 1994). The remaining 10,500 exercisable options
outstanding expire in November 1996 if not exercised.
The Company's 1992 Restricted Stock Award Plan ("the 1992 Plan")
provides for awards to certain officers and other key employees of the
Company of up to an aggregate 1.5 million shares of the Company's
common stock. Awards under the 1992 Plan vest (i) when a participant
dies, retires or becomes disabled; (ii) when the Compensation Committee
of the Board of Directors elects, in its sole discretion, to remove
certain restrictions; or (iii) based on the attainment of certain
market price levels of the Company's stock.
The Company's 1992 Restricted Stock Award Plan was amended and restated
in February 1994 (the "Amended 1992 Plan"), with respect to grants
after that date. The Amended 1992 Plan provides for the award of up to
725,000 shares of the Company's common stock to certain officers and
other key employees of the Company. Awards under the Amended 1992 Plan
vest only upon attainment of certain increases in the market price of
the Company's common stock within five years from the date of grant, at
which time the ownership restrictions on the shares are removed.
All restricted stock awards entitle the participant to full dividend
and voting rights. Shares are restricted as to disposition and subject
to forfeiture under certain circumstances. Upon issuance of restricted
shares, unearned compensation, equal to the market value of the shares
at the date of grant, is charged to share-owners' equity and amortized
to expense ratably over the vesting or performance periods, as
applicable. An aggregate 74,000 and 22,400 outstanding restricted
shares were forfeited during 1994 and 1993, respectively, and returned
to treasury. A summary of award activity follows:
1994 1993
------- -------
Awards available for grant-beginning of year 185,800 648,900
New awards authorized 725,000 -
Available awards terminated (185,800) -
Restricted shares awarded (685,000) (463,100)
------- -------
Awards available for grant-end of year 40,000 185,800
======= =======
The Company's Stock Appreciation Rights Plan provides for the award of
an aggregate one million stock appreciation rights ("units") to
qualified participants prior to the plan's expiration in 1996. In
1992, units available for future grants under all stock appreciation
rights plans were terminated. Each unit entitles the holder to receive
cash based on the difference between the market value of a share of the
Company's common stock on the date of award and the fair market value
of such stock on the date of exercise. Included in stock appreciation
rights outstanding at December 31, 1994 and 1993, are various units
awarded under a prior plan with similar terms. A summary of stock
appreciation rights activity follows:
1994 1993
------- ---------
Units outstanding at beginning of year 878,377 1,070,572
Units exercised (405,293) (58,027)
Units canceled (37,250) (134,168)
------- -------
Units outstanding at end of year
(base value - $14.50 to $17.50 per unit) 435,834 878,377
======= =======
-36-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Pension and Certain Benefit Plans -- The Company sponsors
various qualified and nonqualified defined benefit pension plans, and
participates in certain multiemployer pension plans, covering
substantially all U.S. employees. The benefits related to Company-
sponsored plans are based on years of service and employee
compensation. The Company's policy is to fund at least the minimum
contribution required by applicable regulations. Company-sponsored
qualified benefit plans are insured by the Pension Benefit Guaranty
Corporation ("PBGC").
In addition to U.S. plans, the Company sponsors a supplemental defined
benefit plan and an unfunded voluntary early retirement plan for
certain international employees, and participates in a multiemployer
pension plan covering a majority of its international employees.
Total pension expense for multiemployer plans was $7 million in 1994,
and $6 million in 1993 and 1992. The components of net pension expense
for Company-sponsored plans are as follows (in millions):
1994 1993 1992
---- ---- ----
Service cost $ 22 $ 20 $ 14
Interest cost on projected benefit
obligation 32 30 29
Actual return on assets (11) (62) (36)
Net amortization and deferral (26) 26 6
---- ---- ----
Net pension expense $ 17 $ 14 $ 13
==== ==== ====
The following table reconciles the funded status of Company-sponsored
plans to amounts recognized in the consolidated balance sheets at
December 31, segregated by (i) plans whose assets exceed the
accumulated benefit obligation ("ABO") and (ii) plans whose ABO exceeds
assets (in millions):
<TABLE>
<CAPTION>
PBGC Insured Plans Other Plans
--------------------------------- ------------------
1994 1993 1994 1993
--------------- ---------------- ------- --------
Assets ABO Assets ABO ABO ABO
Exceed Exceeds Exceed Exceeds Exceeds Exceeds
ABO Assets ABO Assets Assets Assets
------ ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Actuarial present value of benefit
obligations:
Vested benefit obligation $(279) $(32) $(303) $(22) $(23) $(24)
===== ==== ===== ==== ==== ====
Accumulated benefit obligation $(297) $(39) $(325) $(25) $(30) $(29)
===== ==== ===== ==== ==== ====
Projected benefit obligation $(340) $(40) $(367) $(25) $(41) $(39)
Plan assets at fair value,
primarily listed stocks, bonds
and government securities 377 28 402 18 19 17
----- ---- ----- ---- ---- ----
Plan assets in excess of (less
than) projected benefit obligation 37 (12) 35 (7) (22) (22)
Unrecognized net (gain) loss (29) 6 (14) 3 (1) 2
Unrecognized prior service cost (11) 4 (12) 2 (8) (9)
Unrecognized net transition
(asset) liability and other (11) 1 (12) - 2 2
----- ---- ----- ---- ---- ----
Pension liability included in
the consolidated balance sheets $ (14) $ (1) $ (3) $ (2) $(29) $(27)
===== ==== ===== ===== ==== ====
</TABLE>
-37-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Significant actuarial assumptions used in developing the projected
benefit obligation at December 31 were as follows:
1994 1993 1992
---- ---- ----
Domestic Plans:
Discount rate 8.25% 7.5% 8.25%
Expected return on plan assets 8.5% 8.5% 9.5%
Rate of increase in future compensation 5% 5.5% 6%
International Plans:
Discount rate 7.5% 7.5%
Expected return on plan assets 7.5% 7.5%
Rate of increase in future compensation 3.5% 3.5%
The Company also sponsors a qualified defined contribution plan
covering all full-time nonunion employees in the U.S. The Company
matches 50% of a participant's voluntary contributions up to a maximum
of 6% of a participant's compensation. The Company's contribution
expense was $11 million in 1994 and $10 million in 1993 and 1992.
Note 11 - Postretirement Benefit Plans -- The Company sponsors
various unfunded defined benefit postretirement plans that provide
healthcare and life insurance benefits to substantially all nonunion
and certain union U.S. retirees who retire with a minimum period of
service.
Effective January 1, 1993, the Company amended its postretirement
benefit plans resulting in a reduction in the accumulated benefit
obligation, and generation of related excess prior service cost, of
$148 million in 1993. Full-year 1993 postretirement benefits expense
was reduced by approximately $31 million as a result of the plan
amendments. The excess prior service cost is being amortized over the
average service life of plan participants (approximately 17 years).
Net postretirement benefits expense includes the following components
(in millions):
1994 1993 1992
---- ---- ----
Service cost attributed to service during the year $ 4 $ 6 $14
Interest cost on accumulated postretirement
benefit obligation 13 14 24
Net amortization and deferral (9) (9) -
--- --- ---
Net postretirement benefits expense $ 8 $11 $38
=== === ===
Amounts recognized in the consolidated balance sheets at December 31
consist of unfunded obligations relating to the following (in
millions):
1994 1993
---- ----
Accumulated postretirement benefit obligation:
Retirees $116 $105
Fully eligible active plan participants 9 11
Other active plan participants 54 63
---- ----
179 179
Unamortized excess prior service cost asset 131 140
Unrecognized net gain (loss) 5 (2)
---- ----
Accrued postretirement benefit obligation $315 $317
==== ====
Actuarial assumptions used in determining postretirement benefit cost
and the accumulated postretirement benefit obligation include a
discount rate of 8.25% and 7.5% in 1994 and 1993, respectively. The
assumed weighted average annual rate of increase in the per capita cost
of covered benefits (the health care cost trend rate) was 11.7% pre-
Medicare and 9.3% post-Medicare for 1994, and 15% pre-Medicare and 11%
post-Medicare for 1993. The postretirement benefit plan, as amended
effective January 1, 1993, is a defined dollar benefit plan which
limits the effect of medical inflation to a maximum of 4% per year
after 1995. Because the amended postretirement medical plan has
established dollar
-38-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
limits for determining company contributions, the effect of a 1%
increase in the assumed healthcare cost trend rate is not significant.
Effective January 1, 1992, the Company adopted FAS 106 which changed
the method of accounting for postretirement benefits from expensing
claims as incurred to accruing the costs of such benefits during the
periods employees provide service to the Company. The effect on years
prior to 1992 of adopting FAS 106, representing that portion of
unrecognized future retiree benefit costs related to past service of
both active and retired employees as of the date of adoption, was
reported as the cumulative effect of an accounting change in 1992 and
prior periods were not restated. The cumulative effect of adopting FAS
106 increased the 1992 net loss by approximately $148 million (net of
income taxes of $91 million) or $1.15 per common share.
Note 12 - Income Taxes -- The current income tax provision represents
the amount of income taxes paid or payable for the year. The deferred
income tax provision represents the change in deferred tax liabilities
and assets and, for business combinations, the change in such tax
liabilities and assets since the date of acquisition. Significant
components of the provision for income taxes, excluding the cumulative
effect of accounting changes in 1992, are as follows (in millions):
1994 1993 1992
---- ---- ----
Current:
United States
Federal $ 4 $ - $ 6
State and local 6 9 18
International 2 1 -
--- --- ---
Total current provision 12 10 24
--- --- ---
Deferred:
United States
Federal 38 20 (9)
State and local 9 2 (12)
Rate change - federal - 40 -
International (1) (2) -
--- --- ---
Total deferred provision 46 60 (21)
--- --- ---
Total provision for income taxes $58 $70 $ 3
=== === ===
The Omnibus Budget Reconciliation Act was signed into law in August
1993. The Company was principally affected by an increase in the
corporate marginal income tax rate from 34% to 35%. The Company's
deferred income taxes were adjusted during the third quarter of 1993 to
reflect the effect of the new rate, resulting in a one-time charge of
approximately $40 million ($0.31 per common share). Additionally, the
Company's annual estimated effective tax rate was increased by an
amount approximating the 1% marginal rate increase. A reconciliation
of the expected income tax expense (benefit) at the statutory federal
rate to the Company's actual income tax provision is as follows (in
millions):
1994 1993 1992
---- ---- ----
Statutory expense (benefit) $45 $19 $(4)
State expense - net of federal 10 7 4
State net operating loss benefits -
net of federal (7) (8) (8)
State benefits valuation allowance
provision 7 8 8
Nondeductible items 2 2 1
Rate change - federal - 40 -
Other, net 1 2 2
--- --- ---
$58 $70 $ 3
=== === ===
-39-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred income taxes are recognized for tax consequences of temporary
differences between the financial reporting and the tax bases of
existing assets and liabilities, by applying enacted statutory tax
rates applicable to future years to such differences. Significant
components of the Company's deferred tax liabilities and assets as of
December 31 are as follows (in millions):
1994 1993
------ ------
Deferred tax liabilities:
Franchise assets $2,241 $2,210
Property, plant and equipment 184 180
------ ------
Total deferred tax liabilities 2,425 2,390
------ ------
Deferred tax assets:
Net operating loss carryforwards (353) (378)
Employee and retiree benefit accruals (203) (186)
Other, net (97) (100)
------ ------
Total deferred tax assets (653) (664)
Valuation allowance for deferred tax assets 112 105
------ ------
Net deferred tax liabilities $1,884 $1,831
====== ======
Deferred tax assets are recognized for the tax benefit of deductible
temporary differences and federal and state net operating loss and tax
credit carryforwards. Valuation allowances are recognized if it is
more likely than not that some or all of the deferred tax assets will
not be realized. Management believes that it is more likely than not
that the majority of deferred tax assets will be realized through
future taxable income resulting from the reversal of existing taxable
temporary differences and depletion of certain significant tax
deductions. Valuation allowances of $112 million and $105 million as
of December 31, 1994 and 1993, respectively, were established for the
remaining deferred tax assets. In the event the Company realizes tax
benefits for net operating loss carryforwards of acquired companies for
which a valuation allowance has been established, such benefits would
reduce recorded franchise values. Included in the valuation allowance
as of December 31, 1994 and 1993, was $62 million for net operating
loss carryforwards of acquired companies.
Tax operating loss carryforwards, aggregating $840 million, have arisen
principally from the additional tax deductions resulting from elections
filed under Section 338 of the Internal Revenue Code relating to
various bottling companies acquired in 1986. These carryforwards are
available to offset future federal taxable income through their
expiration in varying amounts aggregating $7 million in 1996 through
1998; $161 million in 1999 through 2003; and $672 million in 2004
through 2008.
Effective January 1, 1992, the Company adopted FAS 109, changing its
method of accounting for income taxes by requiring that deferred tax
liabilities and assets be established based on the difference between
financial statement and income tax bases of assets and liabilities,
using existing tax rates. The effect on years prior to 1992 of
adopting FAS 109, representing previously unrecognized net tax
liabilities, was reported as the cumulative effect of an accounting
change in 1992 and prior periods were not restated. The cumulative
effect of adopting FAS 109 increased the 1992 net loss by approximately
$23 million ($0.18 per common share).
Note 13 - Related Party Transactions -- The Company and The Coca-Cola
Company have entered into various transactions and agreements related
to their respective businesses. The Coca-Cola Company owns
approximately 44% of the Company's outstanding common shares and the
Company generates approximately 90% of its product sales volume from
the sale of the products of The Coca-Cola Company. Various significant
transactions and agreements entered into between the Company and The
Coca-Cola Company are disclosed in other sections of the accompanying
financial statements and related notes. The following items represent
other significant transactions between the Company and The Coca-Cola
Company, and its affiliates:
Fountain Syrup and Package Product Sales: Certain of the Company's
operations sell fountain syrup to The Coca-Cola Company and deliver
this syrup on behalf of The Coca-Cola Company to certain major or
national accounts of The Coca-Cola Company. In addition, the Company
sells bottle/can products to The Coca-Cola Company at prices that
equate to amounts charged by the Company to its major customers.
During 1994, 1993 and 1992, The Coca-Cola Company paid the Company
approximately $235 million, $220 million and $193 million,
respectively, for fountain syrups, bottle/can products and delivery and
billing services.
Marketing Support Arrangements: The Coca-Cola Company engages in a
variety of marketing programs, local media advertising and other
similar arrangements to promote
-40-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the sale of products of The Coca-Cola Company in territories operated
by the Company. For 1994, 1993 and 1992, total direct marketing support
paid or payable to the Company or on behalf of the Company by
The Coca-Cola Company approximated $319 million, $256 million and $253
million, respectively. In addition, The Coca-Cola Company committed to
provide approximately $34 million in 1994 to assist in the construction
of an infrastructure to support an increased rate of cold drink
equipment placement. Pursuant to a cooperative advertising and trade
arrangement with The Coca-Cola Company, the Company paid The Coca-Cola
Company an additional $71 million, $65 million and $63 million in 1994,
1993 and 1992, respectively, for local media and marketing program
expense.
Note 14 - Environmental Matters -- The Company is responsible for the
required removal, replacement, or modification of underground fuel
storage tanks, and any required soil and groundwater remediation
resulting from leaking tanks, to satisfy regulations which go into
effect in varying stages through 1998. The Company estimates
completion of its tank removal and replacement program in 1995, with
related soil and groundwater remediation continuing through 2002.
Ongoing environmental compliance costs, including routine maintenance,
monitoring and similar costs, are not significant. The Company also
incurs costs in connection with other environmental programs covering
the discharge of materials and waste water treatment. Expenditures
aggregating $12 million, $9 million and $8 million were made in 1994,
1993, and 1992 in connection with the Company's environmental programs.
The Company believes that any amount it may be required to pay in
excess of amounts recorded above would not have a material adverse
effect on its financial condition, cash flows or results of operations.
The Company has been named as a potentially responsible party (PRP) for
the costs of remediation of hazardous waste at federal or state
"Superfund" sites. At January 30, 1995, there were six federal sites
where the Company's involvement or liability as a PRP was unresolved.
In addition, there were eight other federal and five state sites at
which it had been concluded that the Company had no responsibility,
ultimate liability amounts would be less than $100,000 or payments made
to date by the Company would be sufficient to satisfy all liability of
the Company. Under current law, the Company's liability for clean-up
of "Superfund" sites may be joint and several with other PRPs,
regardless of the extent of the Company's use in relation to other
users. As to any site where the Company may be liable, the Company has
determined that there are other PRPs who are financially solvent as
well, and that any hazardous waste deposited by the Company is minimal
compared to amounts deposited by financially solvent PRPs. As a
result, the Company believes that any ultimate liability will not have
a material effect on its financial position or results of operations.
Note 15 - Commitments and Contingencies -- The Company has guaranteed
payment of up to $194 million of indebtedness owed by a manufacturer
supplying certain packaging used in the Company's manufacturing
process; at December 31, 1994, this manufacturer had approximately $82
million of indebtedness outstanding guaranteed by the Company. The
Company entered into a similar guarantee of up to $45 million for a
second manufacturer in January 1995. In addition, the Company has
provided letters of credit aggregating approximately $89 million
primarily in connection with self-insurance programs.
The Company has entered into long-term purchase agreements with various
suppliers. Subject to the supplier's quality and performance, the
purchases covered by these agreements aggregate approximately $755
million in 1995, $774 million in 1996, $749 million in 1997, $721
million in 1998 and $670 million in 1999.
The Company leases office and warehouse space, computer hardware, and
machinery and equipment under lease agreements which expire at various
dates through 2019. At December 31, 1994, future minimum lease
payments under noncancellable operating leases aggregate approximately
$40 million. Rent expense was approximately $28 million, $25 million
and $25 million during 1994, 1993 and 1992, respectively.
The Company is involved in various claims and legal proceedings which
have arisen in the ordinary course of its business. In addition, a
complaint was filed in December 1991 against the Company, each of the
directors of the Company and Johnston Coca-Cola Bottling Group, Inc.
("Johnston") seeking, among other things, to disallow the Johnston 1991
acquisition. The complaint alleges that The Coca-Cola Company, as the
holder of approximately 49% (prior to the Johnston acquisition) of the
outstanding common stock of the Company, breached its fiduciary duties
by exerting influence over the Company in connection with the
acquisition in order to maximize its financial interests at the expense
of the Company and the Company's public share owners. The complaint
also alleges that the directors of the Company breached their fiduciary
duties to the Company and its public share owners. Management believes
that the complaint is without merit. While the ultimate outcome of the
lawsuits, claims and legal proceedings described above cannot be
determined, management believes these matters will not have a material
adverse effect on the financial position, cash flows or results of
operations of the Company.
-41-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16 - Supplemental Disclosures of Cash Flow Information -- Cash
payments during the year were as follows (in millions):
1994 1993 1992
---- ---- ----
Interest (net of capitalized amount) $328 $330 $255
Income taxes 3 10 36
Changes in current assets and liabilities pertaining to operating
activities were as follows (in millions):
1994 1993 1992
---- ---- ----
Trade accounts and other receivables $(12) $ 1 $ (30)
Inventories (35) 28 (16)
Prepaid expenses and other assets (9) 6 (13)
Accounts payable and accrued expenses 114 (13) (57)
---- ---- -----
Increase (decrease) cash from operations $ 58 $ 22 $(116)
==== ==== =====
In conjunction with the acquisitions of bottling companies, liabilities
were assumed as follows (in millions):
1994 1993 1992
---- ---- ----
Fair value of assets acquired $ 16 $ 774 $ 48
Cash paid (12) (287) (27)
Equity issued - (34) -
Debt issued - (1) (15)
---- ----- ----
Liabilities assumed $ 4 $ 452 $ 6
==== ===== ====
-42-
<PAGE>
COCA-COLA ENTERPRISES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 17 - Quarterly Financial Data -- Unaudited quarterly financial
data follows (in millions except per share data):
Fiscal
1994 First Second Third Fourth(b) Year
------ ------ ------ --------- ------
Net Operating Revenues $1,320 $1,610 $1,595 $1,486 $6,011
Gross Profit 521 623 601 563 2,308
Net Income (Loss) Applicable
to Common Share Owners (7) 38 25 11 67
Net Income (Loss) Per
Common Share (a) (0.06) 0.29 0.19 0.09 0.52
- -----------------------------------------------------------------------------
Fiscal
1993 First(b) Second Third(c) Fourth(d) Year
-------- ------ -------- --------- ------
Net Operating Revenues $1,208 $1,448 $1,487 $1,322 $5,465
Gross Profit 477 556 541 519 2,093
Net Income (Loss) Applicable
to Common Share Owners (5) 16 (30) 4 (15)
Net Income (Loss) Per
Common Share (a) (0.04) 0.13 (0.23) 0.03 (0.11)
- -----------------------------------------------------------------------------
(a) Due to the method used in calculating per share data as prescribed
by Accounting Principles Board Opinion No. 15 and the timing of
share repurchases by the Company, the per share data does not sum
in certain instances to the per share data as computed for the
quarter and the year.
(b) Each quarter presented includes ninety-one days, except the first
quarter of 1993 and the fourth quarter of 1994, which include
ninety-two days.
(c) The third quarter of 1993 included a one-time charge of
approximately $40 million ($0.31 per common share) to increase the
Company's deferred tax liability as a result of a 1% increase in
the corporate marginal income tax rate.
(d) The fourth quarter of 1993 included a favorable year-end inventory
(LIFO) adjustment of approximately $7 million of which
approximately $5 million ($0.03 per common share) applied to
previous quarters.
-43-
<PAGE>
COCA-COLA ENTERPRISES INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
Coca-Cola Enterprises Inc.
We have audited the accompanying consolidated balance sheets of
Coca-Cola Enterprises Inc. as of December 31, 1994 and 1993, and
the related consolidated statements of operations, share-owners'
equity, and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Coca-Cola Enterprises Inc. at December 31,
1994 and 1993, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted
accounting principles.
As discussed in the notes to consolidated financial statements,
in 1992 the Company changed its methods of accounting for income
taxes and postretirement benefits other than pensions.
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
January 30, 1995
-45-
<PAGE>
<TABLE>
COCA-COLA ENTERPRISES INC.
SELECTED FINANCIAL DATA
(In millions except per share data)
<CAPTION>
Fiscal Year
----------------------------------------------------------------------------------------------
1991 1986(G)
------------------- -------
Pro Pro
1994 1993(A) 1992(B) Forma(C) Reported 1990(D) 1989(E) 1988(F) 1987 Forma
------ ------- ------- -------- -------- ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS SUMMARY
Net operating revenues $6,011 $5,465 $5,127 $5,027 $3,915 $3,933 $3,822 $3,821 $3,327 $3,191
Cost of sales 3,703 3,372 3,219 3,170 2,420 2,400 2,350 2,303 1,953 1,872
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit 2,308 2,093 1,908 1,857 1,495 1,533 1,472 1,518 1,374 1,319
Selling, general and
administrative expenses 1,868 1,708 1,602 1,535 1,223 1,199 1,162 1,137 1,037 1,024
Provision for restructuring - - - 152 152 9 - 27 - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Operating income 440 385 306 170 120 325 310 354 337 295
Interest expense, net 310 328 312 312 210 200 193 202 160 188
Other nonoperating income
(deductions), net (3) (2) (6) (3) (2) 3 10 12 (4) (9)
Gain on sale of bottling
operations - - - - - 56 11 104 - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before income
taxes and cumulative effect
of changes in accounting
principles 127 55 (12) (145) (92) 184 138 268 173 98
Income taxes:
Expense (benefit) excluding
rate change 58 30 3 (17) (9) 91 66 115 85 77
Rate change - federal - 40 - - - - - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before cumulative
effect of changes in
accounting principles 69 (15) (15) (128) (83) 93 72 153 88 21
Cumulative effect of changes
in accounting principles - - (171) - - - - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss) 69 (15) (186) (128) (83) 93 72 153 88 21
Preferred stock dividend
requirements 2 - - 9 9 16 18 10 - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss) applicable
to common share owners $ 67 $ (15) $ (186) $ (137) $ (92) $ 77 $ 54 $ 143 $ 88 $ 21
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
- ------------------------------------------------------------------------------------------------------------------------------
OTHER OPERATING DATA
Depreciation expense $ 282 $ 254 $ 227 $ 205 $ 160 $ 150 $ 148 $ 143 $ 123 $ 108
Amortization expense 179 165 162 125 91 86 81 82 72 65
- ------------------------------------------------------------------------------------------------------------------------------
SHARE AND PER SHARE DATA
Average common shares
outstanding 130 129 129 129 116 119 130 139 140 140
Net income (loss) per common
share before cumulative
effect of changes in
accounting principles $ 0.52 $(0.11) $(0.11) $(1.06) $(0.79) $ 0.65 $ 0.41 $ 1.03 $ 0.63 $ 0.15
Net income (loss) applicable
to common share owners 0.52 (0.11) (1.45) (1.06) (0.79) 0.65 0.41 1.03 0.63 0.15
Dividends per common share 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 -
Closing stock price 18.00 15.25 12.25 15.38 15.38 15.50 16.00 15.00 14.25 14.25
- ------------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION
Property, plant and equipment,
net $1,963 $1,890 $1,733 $1,706 $1,706 $1,373 $1,286 $1,180 $1,038 $ 850
Franchise and other noncurrent
assets 5,965 6,046 5,651 4,265 4,265 3,153 2,952 3,001 2,760 2,539
Total assets 8,738 8,682 8,085 6,677 6,677 5,021 4,732 4,669 4,250 3,811
Long-term debt 4,187 4,391 4,131 4,091 4,091 2,537 2,305 2,211 2,157 1,804
Share-owners' equity 1,339 1,260 1,254 1,442 1,442 1,627 1,680 1,808 1,526 1,448
- ------------------------------------------------------------------------------------------------------------------------------
The Company changed its fiscal year end in 1991, from the Friday nearest
December 31 to a calendar year end. Accordingly, fiscal years presented are the
periods ended December 31, 1994, 1993, 1992 and 1991, December 28, 1990,
December 29, 1989, December 30, 1988, January 1, 1988 and January 2, 1987. The
Company acquired subsidiaries in each year presented and divested subsidiaries
in certain periods. Such transactions, except for (i) the acquisition of
Johnston, (ii) gains from the sale of certain bottling operations, and (iii)
acquisitions in 1986, did not significantly affect the Company's operating
results in any one fiscal period. All acquisitions and divestitures have been
included in or excluded from (as appropriate) the consolidated operating results
of the Company from their respective transaction dates.
(A) A one-time charge of $40 million ($0.31 per common share) to increase
deferred income taxes resulted from a 1% increase in the corporate marginal
income tax rate in connection with the Omnibus Budget Reconciliation Act of
1993.
(B) The adoption of FAS 106 and FAS 109 resulted in one-time charges to income.
Fiscal periods prior to 1992 were not restated for these accounting
changes.
(C) The pro forma Operations Summary, Other Operating Data and Share and Per
Share Data give effect to the acquisition of Johnston in December 1991, as
though it had been completed at the beginning of 1991.
(D) In June 1990, the Company sold its interest in Coca-Cola Bottling Company
of Ohio and Portsmouth Coca-Cola Bottling Company. These operations were
sold to Johnston and, as a result of the 1991 acquisition of Johnston, were
reacquired by the Company.
(E) In February 1989, the Company sold its wholly owned subsidiaries, Goodwill
Bottling Ltd. and Goodwill Bottling North Ltd.
(F) In December 1988, the Company sold a wholly owned subsidiary, The Coca-Cola
Bottling Company of Mid-America. The Mid-America operations were sold to
Johnston and, as a result of the 1991 acquisition of Johnston, were
reacquired by the Company.
(G) The Operations Summary, Other Operating Data and Share and Per Share Data
reflect pro forma amounts which give effect to 1986 acquisitions as though
they had been completed at the beginning of 1986.
</TABLE>
-46- and -47-
<PAGE>
EXHIBIT 21
COCA-COLA ENTERPRISES INC.
1994 FORM 10-K
REGISTRANT AND ITS SUBSIDIARIES(1)
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
Coca-Cola Enterprises Inc. (Registrant) ("CCE"). . . . . Delaware N/A The Atlanta Coca-Cola Bottling Company
Atlanta Ice Makers
Coca-Cola Bottling Company of New England
Coca-Cola Bottling Company of West Point-
LaGrange
CCE Bottling Group
Denver Coca-Cola Bottling Company
Austin Coca-Cola Bottling Company
("Austin") . . . . . . . . . . . . . . . . . . . Texas CCE Beaumont Coca-Cola Bottling Company
Coca-Cola Bottling Company of Leesville
Coca-Cola Bottling Company of North Texas
Dallas Coca-Cola Bottling Company
Houston Coca-Cola Bottling Company
Tyler Coca-Cola Bottling Company
Valley Coca-Cola Bottling Company
Waco Coca-Cola Bottling Company
The Laredo Coca-Cola Bottling Company, Inc.. . . Texas Austin CCE Bottling Group
McAllen Coca-Cola Bottling Company
BCI Coca-Cola Bottling Company of Los Angeles. . . . . . Delaware CCE Coca-Cola Bottling Company of California
Coca-Cola Bottling Company of
Eureka, California
Coca-Cola Bottling Company of Hawaii
Coca-Cola Bottling Company of Klamath Falls
Coca-Cola Bottling Company of Las Vegas
Coca-Cola Bottling Company of Los Angeles
Coca-Cola Bottling Company of Marysville
Coca-Cola Bottling Company of
Northern California
Coca-Cola Bottling Company of Oregon
Coca-Cola Bottling Company of Port Angeles
Coca-Cola Bottling Company of San Diego
Coca-Cola Bottling Company of Spokane
CCE Bottling Group
CCE Vending Services
Diamond Head Beverages
Enterprises Media
Medford Coca-Cola Bottling Company
Ore-Cal Coca-Cola Bottling Company
Pacific Coca-Cola Bottling Company
Phoenix Coca-Cola Bottling Company
Bottling Holdings (International) Inc. ("BHI").. . . . . Delaware CCE
Bottling Holdings (Netherlands) B.V. ("BHN") . . Netherlands BHI
Coca-Cola Beverages Nederland B.V. . . . . . . . Netherlands BHN
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ --------------- -------------------------
<S> <C> <C> <C>
CCT Acquisition Corporation, Inc. ("CCT"). . . . . . . . Delaware CCE
Coca-Cola Bottling Company of Johnson City . . . Tennessee CCT (75.06%)
Roddy Coca-Cola Bottling Company, Inc. . . . . . Tennessee CCT (59.8%) Dr Pepper Bottling Company of Knoxville
Dr Pepper Company of Knoxville
Knoxville Coca-Cola Bottling Company
The Coca-Cola Bottling Company of
Memphis, Tenn. ("Memphis"). . . . . . . . . . . . . Delaware CCE CCE Bottling Group
Canners of Eastern Arkansas, Inc.
The Coca-Cola Bottling Company of
Brownsville
The Coca-Cola Bottling Company of Marianna
The Coca-Cola Bottling Company of
Mississippi
The Coca-Cola Bottling Company of Clarksdale
Coca-Cola Bottling Company of Flippen
Coca-Cola Bottling Company of Little Rock
Coca-Cola Bottling Company of Morrilton
Coca-Cola Bottling Company of Searcy
Coca-Cola Bottling Company of Shreveport . . . . Arkansas Memphis CCE Bottling Group
Enterprises Media
Coca-Cola Bottling Company of Texarkana. . . . . Texas Memphis CCE Bottling Group
Enterprises Media
Memphis Beverage Production Company. . . . . . . Tennessee Memphis CCE Bottling Group
Delaware Coca-Cola Bottling Company, Inc.. . . . . . . . Delaware CCE CCE Bottling Group
Coca-Cola Bottling Company of Annapolis
Coca-Cola Bottling Company of Rhode Island
Dover Coca-Cola Bottling Company
Enterprises Media
The Mid-Atlantic Coca-Cola Bottling Company
Enterprises Consulting, Inc. ("ECI") . . . . . . . . . . Delaware CCE
DM Management of Ohio, Inc.. . . . . . . . . . . Ohio ECI
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ ----------------- -------------------------
<S> <C> <C> <C>
Florida Coca-Cola Bottling Company ("Florida") . . . . . Tennessee CCE Apalachicola Coca-Cola Bottling Company
Perry Coca-Cola Bottling Company
Punta Gorda Coca-Cola Bottling Company
Sarasota Coca-Cola Bottling Company
Palatka Coca-Cola Bottling Company
Orlando Coca-Cola Bottling Company
North-Flor Beverage Co.
Ocala Coca-Cola Bottling Company
St. Augustine Coca-Cola Bottling Company
St. Petersburg Coca-Cola Bottling Company
CCE-South
CCE Bottling Group
Valdosta Coca-Cola Bottling Company
West-Flo Beverage Co.
Tallahassee Coca-Cola Bottling Company
Tampa Coca-Cola Bottling Company
Marianna Coca-Cola Bottling Company
Leesburg Coca-Cola Bottling Company
Coca-Cola Bottling Co. of the Virgin Islands
(St. Thomas)
Coca-Cola Bottling Co. of the Virgin Islands
(St. Croix)
Coca-Cola Bottling Company of Miami
Brooksville Coca-Cola Bottling Company
Cent-Flo Beverage Co.
Daytona Coca-Cola Bottling Company
Ft. Pierce Coca-Cola Bottling Company
Fort Myers Coca-Cola Bottling Company
Lake City Coca-Cola Bottling Company
Lakeland Coca-Cola Bottling Company
Jacksonville Coca-Cola Bottling Company
Highlands Coca-Cola Bottling Company
Florco Financial Corp.
Gainesville Coca-Cola Bottling Company
Brevard Coca-Cola Bottling Company
Johnston Coca-Cola Bottling Group, Inc. ("JCCBG"). . . . Delaware CCE Alabama Coca-Cola Bottling Company
Burlington Coca-Cola Bottling Company
Central States Coca-Cola Bottling Company
Centralia Coca-Cola Bottling Company
Champaign Coca-Cola Bottling Company
Cincinnati Coca-Cola Bottling Company
Coca-Cola Bottling Company of St. Louis
Coca-Cola Bottling Company of Bloomington
Coca-Cola Bottling Company of Mt. Pleasant
Coca-Cola Bottling Company of Muskegon
Coca-Cola Bottling Company of Michigan
Coca-Cola Bottling Company of Ottumwa
Danville Coca-Cola Bottling Company
Dayton Coca-Cola Bottling Company
Decatur Coca-Cola Bottling Company
Duquoin Coca-Cola Bottling Company
Erie Coca-Cola Bottling Company
Galesburg Coca-Cola Bottling Company
Johnston Coca-Cola Bottling Company
Mid-America Packaging Company
Midwest Coca-Cola Bottling Company
Olney Coca-Cola Bottling Company
Peoria Coca-Cola Bottling Company
Peru Coca-Cola Bottling Company
Portsmouth Coca-Cola Bottling Company
Springfield Coca-Cola Bottling Company
The Coca-Cola Bottling Company of Mid-America
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Owner of Shares
(*unless
Jurisdiction otherwise
in which noted ownership Other names under
Name organized is 100%) which engaged in business
---- ------------ ----------------- -------------------------
<S> <C> <C> <C>
Bluegrass Coca-Cola Bottling Company . . . . . . Kentucky JCCBG Coca-Cola Bottling Company of Louisville
Evansville Coca-Cola Bottling Company
Hopkinsville Coca-Cola Bottling Company
Jasper Coca-Cola Bottling Company
Mid-States Coca-Cola Bottling Company
The Coca-Cola Bottling Company of
Northern Ohio . . . . . . . . . . . . . . . . Delaware JCCBG The Akron Coca-Cola Bottling Company
Circleville Coca-Cola Bottling Company
Coca-Cola Bottling Company of Columbus
Coca-Cola Bottling Company of Toledo
Elyria Coca-Cola Bottling Company
Findlay Coca-Cola Bottling Company
Great Lakes Canning
Mansfield Coca-Cola Bottling Company
Newark Coca-Cola Bottling Company
Twinsburg Production
Youngstown Coca-Cola Bottling Company
Goal Standard Company. . . . . . . . . . . . . . Michigan JCCBC
Johnston Technology Investments Inc . . . . . . Delaware JCCBG
Mid-America Waste Water Treatment, Inc.. . . . . Delaware JCCBG
Midwest Canners, Inc.. . . . . . . . . . . . . . Delaware JCCBG
Pacific Western Group, Inc.. . . . . . . . . . . Delaware JCCBG
The Louisiana Coca-Cola Bottling Company, Ltd.
("Louisiana"). . . . . . . . . . . . . . . . . . Louisiana CCE Dr Pepper Bottling Company of New Orleans
The Coca-Cola Bottling Company of New Iberia
CCE Bottling Group
Hygeia Coca-Cola Bottling Company. . . . . . . . Florida Louisiana CCE Bottling Group
Enterprises Media
Vending Holding Company. . . . . . . . . . . . . . . . . Georgia CCE
The Wave Insurance Company . . . . . . . . . . . . . . . Bermuda CCE (99%)
The Wichita Coca-Cola Bottling Company . . . . . . . . . Kansas CCE
</TABLE>
- -----------------
(1) This Exhibit omits certain subsidiaries which, considered in the aggregate
as a single subsidiary, would not constitute a significant subsidiary.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements of
Coca-Cola Enterprises Inc. listed below of our report dated January 30, 1995,
with respect to the consolidated financial statements and schedule of Coca-Cola
Enterprises Inc. included and/or incorporated by reference in this Annual
Report (Form 10-K) for the year ended December 31, 1994.
- Registration Statement No. 33-18039 on Form S-8 dated October 19, 1987
and related Prospectus
- Registration Statement No. 33-18495 on Form S-8 dated November 13, 1987
and related Prospectus
- Registration Statement No. 33-38771 on Form S-8 dated January 31, 1991
and related Prospectus
- Registration Statement No. 33-44448 on Form S-8 dated December 17, 1991
and related Prospectus
- Registration Statement No. 33-46675 on Form S-8 dated May 26, 1992 and
related Prospectus
- Registration Statement No. 33-48482 on Form S-8 dated June 17, 1992 and
related Prospectus
- Registration Statement No. 33-53219 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-53221 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-53223 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-53225 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-53227 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-53229 on Form S-8 dated April 22, 1994 and
related Prospectus
- Registration Statement No. 33-54951 on Form S-8 dated August 5, 1994 and
related Prospectus
- Registration Statement No. 33-54953 on Form S-8 dated August 5, 1994 and
related Prospectus
/s/ ERNST & YOUNG LLP
Atlanta, Georgia
March 10, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, M. DOUGLAS IVESTER, Chairman
of the Board of Directors of Coca-Cola Enterprises Inc. (the "Company"), do
hereby appoint Summerfield K. Johnston, Jr., Vice Chairman and Chief Executive
Officer of the Company, John R. Alm, Senior Vice President and Chief Financial
Officer of the Company, Lowry F. Kline, General Counsel of the Company and J.
Guy Beatty, Jr., Secretary of the Company, or any one of them, my true and
lawful attorney for me and in my name for the purpose of executing on my behalf
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
or any amendment or supplement thereto, and causing such Annual Report or any
such amendment or supplement to be filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
M. DOUGLAS IVESTER
-------------------------------------
Chairman of the Board of Directors
Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HENRY A. SCHIMBERG, President,
Chief Operating Officer and a Director of Coca-Cola Enterprises Inc. (the
"Company"), do hereby appoint Summerfield K. Johnston, Jr., Vice Chairman and
Chief Executive Officer of the Company, John R. Alm, Senior Vice President and
Chief Financial Officer of the Company, Lowry F. Kline, General Counsel of the
Company, and J. Guy Beatty, Jr., Secretary of the Company, or any one of them,
my true and lawful attorney for me and in my name in any and all capacities for
the purpose of executing on my behalf the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, or any amendment or supplement thereto,
and causing such Annual Report or any such amendment or supplement to be filed
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
HENRY A. SCHIMBERG
----------------------------------
President, Chief Operating Officer
and Director
Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HOWARD G. BUFFETT, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
HOWARD G. BUFFETT
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHN L. CLENDENIN, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
JOHN L. CLENDENIN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHNNETTA B. COLE, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
JOHNNETTA B. COLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, T. MARSHALL HAHN, JR., a
Director of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint
Summerfield K. Johnston, Jr., Vice Chairman and Chief Executive Officer of the
Company, John R. Alm, Senior Vice President and Chief Financial Officer of the
Company, Lowry F. Kline, General Counsel of the Company, and J. Guy Beatty,
Jr., Secretary of the Company, or any one of them, my true and lawful attorney
for me and in my name for the purpose of executing on my behalf the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, or any
amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
T. MARSHALL HAHN, JR.
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, CLAUS M. HALLE, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
CLAUS M. HALLE
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, L. PHILLIP HUMANN, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name in any and all capacities for the purpose of executing on my behalf the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, or
any amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
L. PHILLIP HUMANN
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, E. NEVILLE ISDELL, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name in any and all capacities for the purpose of executing on my behalf the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, or
any amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
E. NEVILLE ISDELL
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JOHN E. JACOB, a Director of
Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
JOHN E. JACOB
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, ROBERT A. KELLER, a Director
of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint Summerfield K.
Johnston, Jr., Vice Chairman and Chief Executive Officer of the Company, John
R. Alm, Senior Vice President and Chief Financial Officer of the Company, Lowry
F. Kline, General Counsel of the Company, and J. Guy Beatty, Jr., Secretary of
the Company, or any one of them, my true and lawful attorney for me and in my
name for the purpose of executing on my behalf the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, or any amendment or supplement
thereto, and causing such Annual Report or any such amendment or supplement to
be filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
ROBERT A. KELLER
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, SCOTT L. PROBASCO, JR., a
Director of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint
Summerfield K. Johnston, Jr., Vice Chairman and Chief Executive Officer of the
Company, John R. Alm, Senior Vice President and Chief Financial Officer of the
Company, Lowry F. Kline, General Counsel of the Company, and J. Guy Beatty,
Jr., Secretary of the Company, or any one of them, my true and lawful attorney
for me and in my name for the purpose of executing on my behalf the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, or any
amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
SCOTT L. PROBASCO, JR.
------------------------------------
Director, Coca-Cola Enterprises Inc.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, FRANCIS A. TARKENTON, a
Director of Coca-Cola Enterprises Inc. (the "Company"), do hereby appoint
Summerfield K. Johnston, Jr., Vice Chairman and Chief Executive Officer of the
Company, John R. Alm, Senior Vice President and Chief Financial Officer of the
Company, Lowry F. Kline, General Counsel of the Company, and J. Guy Beatty,
Jr., Secretary of the Company, or any one of them, my true and lawful attorney
for me and in my name for the purpose of executing on my behalf the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, or any
amendment or supplement thereto, and causing such Annual Report or any such
amendment or supplement to be filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of
February, 1995.
FRANCIS A. TARKENTON
------------------------------------
Director, Coca-Cola Enterprises Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF COCA-COLA ENTREPRISES INC. FOR THE YEAR ENDED DECEMBER
31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<CASH> 22
<SECURITIES> 0
<RECEIVABLES> 501
<ALLOWANCES> 34
<INVENTORY> 236
<CURRENT-ASSETS> 810
<PP&E> 3315
<DEPRECIATION> 1352
<TOTAL-ASSETS> 8738
<CURRENT-LIABILITIES> 1089
<BONDS> 3896
<COMMON> 144
0
29
<OTHER-SE> 1166
<TOTAL-LIABILITY-AND-EQUITY> 8738
<SALES> 6011
<TOTAL-REVENUES> 6011
<CGS> 3703
<TOTAL-COSTS> 3703
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 310
<INCOME-PRETAX> 127
<INCOME-TAX> 58
<INCOME-CONTINUING> 69
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 69
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
